UK’s 9 demands for Brexit trade deal – and why they’ll start a fight with the EU

Britain and the EU have kick-started frantic talks on a Brexit trade deal as both sides lay out their demands.

The EU published its 46-page "negotiating directives" on Tuesday – and now the UK has hit back with a 30-page document of its own.

It confirms Boris Johnson's plans to insist on full control over key areas including state aid, workers' rights, environmental standards and fishing rights.

And that means it heralds major rows over areas including business competition – the so-called "level playing field" – after No10 junked previous commitments to Brussels.

What's more, Boris Johnson will threaten to walk away from the talks as soon as June if things are not moving fast enough.

These are only the starting points, of course.


  • Boris Johnson threat to walk out of Brexit talks in June if deal looks unlikely

  • EU's 9 most controversial Brexit trade deal demands – and why they'll start a fight

If there is a trade deal, both sides will probably meet somewhere in the middle. But if they start too far apart, it'll scupper any hope of an agreement and we'll be left high and dry.

These talks are crucial for the future of the UK. If we don't have a trade deal with the EU by 31 December 2020, transitional rules will expire.

That means it'll be harder to travel, new checks will spring up, and billions of pounds worth of goods will be whacked with major tariffs as they pass through ports like Dover.

Yet it's understood the UK government has no plan to publish an impact assessment of today's planned deal. Meaning we'll have little clue the extent of how it hits businesses and your family.

Here's our guide to the key sticking points in the coming talks – the areas where they could fall apart.

1. Fishing

WHAT THE EU SAYS: The EU wants to let EU fishermen continue fishing in UK waters – avoiding any "economic dislocation". It wants a fishing arrangement to follow some EU laws. And crucially, it wants a new fisheries deal to be signed and ratified by 1 July 2020.

EU Brexit chief Michel Barnier said a free trade deal with the UK had to include fishing rights "or there won't be any agreement at all". He added: "Fisheries is part of a package as regards our trade relations, which are to be discussed, and that package is one you can't break up. There will be no ambiguity at all around that."

WHAT THE UK SAYS: The UK says Britain must become an "independent coastal state". That means agreeing annual negotiations on access to fishing waters – and any EU vessels granted access to fish in UK waters would have to follow UK rules. The UK insists it won't trade away fishing rights in return for a trade deal.

2. European courts

WHAT THE EU SAYS: To enforce the overall deal, the EU and the UK will have to agree to a dispute settlement system. The EU insists the European Court of Justice must have the final say on some disputes under this – and the dispute body must agree to follow whatever decision it makes.

WHAT THE UK SAYS: The UK flat-out rejects this. The document says there will be "no role" for the ECJ in the dispute resolution mechanism or any of the arrangements reached between the two sides.

3. Extending the transition period

WHAT THE EU SAYS: The transition period will end on 31 December 2020, but a joint committee can decide before July 1 this year to extend it by up to one or two years. EU chiefs have encouraged an extension, saying there isn't enough time to figure out a full trade deal.

WHAT THE UK SAYS: Britain has totally ruled out extension. Page four of the document states: "The government will not extend the transition period." That effectively means that at the June summit, if a deal doesn't look likely by the end of the year, the UK will prepare to walk away with no trade deal.

4. Business competition

WHAT THE EU SAYS: The EU's big demand is a 'level playing field'. This means having similar trade rules for both sides – and guaranteeing the UK can't use leaving the EU to undercut its former partners to scoop up business. In return, it would mean UK businesses get tariff-free access to EU markets. 

WHAT THE UK SAYS: The phrase "level playing field" doesn't appear anywhere in the 30-page document. Britain says the trade deal should "maintain effective competition laws" – but this does not require "regulatory alignment" or linking the UK's rules to the EU's. The document explicitly adds: "Both parties should have the regulatory freedom to respond to new and emerging challenges in these areas."

If Britain signed up to the EU's request the implications would be far-reaching, limiting its abilities to strike wide-ranging deals with the rest of the world, including potentially the US.

WHAT THE EU SAYS: The EU wants the UK to keep following EU rules on 'state aid' – the amount of government support that can be given to industries like steel. Under EU rules, governments are allowed to provide state aid only with approval from Brussels. Any disputes would have to be dealt with through a joint process.

WHAT THE UK SAYS: Britain rejects the idea of a binding 'level playing field' – and the document proposes a more woolly commitment to be fair to both sides. It says any state-owned enterprises should "operate in a fair and transparent manner" and "not discriminate against businesses in the other party."

Effectively, they're saying they won't sign up to EU rules, but within the terms of the agreement the UK and EU can agree not to drastically undercut each other.

6. Environment

WHAT THE EU SAYS: EU leaders say the UK must uphold all of Brussels' environmental standards that are in force as at 31 December 2020. Britain would also have to commit to the EU's climate change targets "where relevant".

And the UK would need a system of carbon pricing to "cost" pollution that has "at least the same effectiveness and scope" as the EU's. Brussels wants Britain to simply link its emissions trading system to the EU's.

WHAT THE UK SAYS: Again, Britain rejects a binding 'level playing field'. Instead it calls for 'reciprocal commitments not to weaken or reduce' environment standards on either side.

7. Workers' rights

WHAT THE EU SAYS: The document says Britain must not lower any labour or social protection laws below the level of the EU's as at 31 December 2020. Those include workplace rights; health and safety; consultation rules; and fair conditions. This stops short of "dynamic alignment" – following EU rules as they change.

WHAT THE UK SAYS: As with state aid and the environment, Britain agrees to include "reciprocal commitments" not to weaken workers' rights laws. But the UK rejects the demand to follow EU laws, saying "the agreement should recognise the right of each party to set its labour priorities and adopt or modify its labour laws."

8. A security treaty

WHAT THE EU SAYS: The EU wants to include security and defence as part of the talks on a trade deal. That's because the UK has the upper hand in this, as one of the continent's leading powers.

WHAT THE UK SAYS: A UK source confirmed the British government is unwilling to follow that path. "We expect to cooperate closely with our allies, including the EU," the source said. "We don't think we need an institutional treaty framework to achieve this."

The UK is only looking to discuss legal agreements on much narrower elements of security cooperation, including to be able to share sensitive and classified information with the bloc. Britain will also not take part in the European Arrest Warrant and instead develop a new system based on Norway and Iceland.

9. Financial services

 

WHAT THE EU SAYS: The EU has spoken of "voluntary" cooperation in financial regulation – which governs billions of pounds in the City of London. Brussels would want this co-operation to maintain the EU's independence on financial matters.

WHAT THE UK SAYS: Britain wants stronger "legally binding" obligations on access to the EU financial market – with arrangements for keeping trust as rules evolve. The UK wants this to provide a "predictable, transparent, and business-friendly environment" for City firms.

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