Donald Tusk talks tough on future trade negotiations between EU and UK

 
Helen Cahill
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The European Parliament is debating the recent agreement on Brexit made by the European Council (Source: Getty)

European Council president Donald Tusk has talked defensively on trade this morning, saying that the EU must take steps to guard itself in future talks with the UK.

Speaking at the European Parliament in Strasbourg, Tusk said a future trade deal with the UK must include "safeguards" for the EU to protect it against any "unfair" regulatory advantages that the UK might gain.

Read more: Meet the four men in charge of the EU’s Brexit negotiations

Peter Bishop, deputy chief executive of the London Chamber of Commerce and Industry, said Tusk was looking for guarantees that Britain would not adopt an aggressive attitude towards trade if talks with the EU break down.

The UK could, for example, dramatically reduce corporation tax or make moves to subsidise exports.

"But that wouldn't be in the interest of anyone," Bishop told City A.M.

Leading European politicians, including German Chancellor Angela Merkel, have said that the EU will not start to discuss its future trading relationship with the UK until after Brexit negotiations are settled. The UK, however, has been pushing for concurrent talks, given that the negotiating period is only two years, and will not start in earnest until after the General Election.

If the UK does not secure a trading relationship with the EU before the end of the negotiating period, it will default to rules set by the World Trade Organisation (WTO). Under the WTO's system, tariffs on some goods would rise dramatically overnight, which some business groups have warned will push up food prices.

Read more: EU chief Tusk warns that Brexit negotiations could become "impossible"

But, in a statement released today, Tusk said:

It is clear that a free trade agreement between the EU and the UK, which is what the UK has chosen, even if it is ambitious and wide-ranging, cannot mean participation in the Single Market or its parts.

And at the same time, the UK must be aware that any free trade agreement will have to ensure a level playing field, and encompass safeguards against unfair competitive advantages through, inter alia, tax, social, environmental and regulatory measures and practices.

He said that this was the position agreed by the remaining 27 EU states at a European Council meeting at the end of April, when all member states agreed unanimously on the broad stance the bloc will take in Brexit negotiations.


Merkel at the European Council meeting to decide Brexit negotiating guidelines on 29 April (Source: Getty)

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