Draft guidelines published by Brussels yesterday ruled out the Prime Minister’s blueprint for a bespoke trade partnership between the UK and the EU, warning that Britain will suffer “negative economic consequences” as a consequence of leaving the bloc.
And EU Council President Donald Tusk went further in raising tensions between the two sides by insisting that cross-Channel trade will be “more complicated and costly” after Brexit.
“A pick and mix approach for a non-member state is simply not acceptable,” Mr Tusk said.
“Our agreement will not make trade between the UK and EU frictionless or smoother.
“It will make it more complicated and costly than today for all of us. This is the essence of Brexit.”
His downbeat prediction sparked irritation in Downing Street last night, with Mrs May’s officials rejecting the EU’s latest proposals as a “draft” that was not the basis for serious discussions.
“We look forward to seeing the final guidelines when published and hope they will provide the flexibility to allow the EU to think creatively and imaginatively about our future economic partnership,” the Prime Minister’s spokesman said.
Chancellor Philip Hammond later dismissed the EU proposals as more positioning ahead of the next round of talks in Brussels.
“It doesn’t surprise me that their position in their guidelines is ‘we would like a great deal of the thing that, clearly, the British will be reluctant to concede’ and very little at all on offer of the things that the British will regard as most important.
“That is probably not a bad opening strategy for anyone engaged in a negotiation process, and I do think you have to see this as a negotiating strategy,” the Chancellor said.
Mr Hammond also rejected EU threats to exclude Britain’s financial services sector from the eventual trade agreement.
“I am clear not only that it is possible to include financial services within a trade deal but that it is very much in our mutual interest to do so,” he said.
The document published by Brussels yesterday set out draft proposals for a future UK-EU trade deal. Once finalised, they are due to be adopted at an EU summit later this month as the bloc’ss negotiating offer.
It called for “as close as possible a partnership” between Britain and EU after Brexit but warned of costs for the UK.
Speaking at a news conference in Luxembourg shortly after the document was published, MR Tusk said Brussels hoped for an “ambitious and advanced” free trade agreement with zero tariffs on goods but limited access for services.
He added: “This positive approach doesn’t change the simple fact that because of Brexit we will be drifting apart.”
Mr Tusk also rejected the blueprint for a specially-tailored trade deal outlined by Mrs May in a major foreign policy speech at the Mansion House in the City of London last week.
“I fully understand and of course I respect Theresa May’s political objective, to demonstrate at any price that Brexit could be a success and was the right choice. But sorry, it is not our objective,” the EU Council President said.
He claimed the only option available was a copy of the free trade deal the EU recently signed with Canada.
The draft guidelines called for zero-tariff trade in goods but warned that access for services will be limited by Britain quitting the EU’s regulatory framework and the jurisdiction of the EU Court of Justice.
Existing reciprocal rights of access to fishing waters should be maintained, the guidelines added.
Speaking alongside Mr Tusk, Luxembourg’s Prime Minister Xavier Bettel said that the goal of a post-Brexit free trade agreement would be “minimising the losses and limiting the negative impacts as much as possible”.
He added: “There will be no winners after Brexit. Both sides will be losing.”