The UK’s chief negotiator with the EU, David Frost, has written a strongly-worded letter to Michel Barnier calling on the EU to stop pursuing an “unbalanced and unprecedented” deal.

The UK this week published legal details of its proposal for a ‘Canada-style’ deal but accuses the EU of requiring closer alignment than would normally be required of a sovereign nation in a trade agreement.

The letter goes through three key areas of dispute in the negotiation:

1. The EU is refusing to countenance the UK replicating parts of agreements the EU has signed with other third-party countries, including trade deals with Japan and Canada and an agreement on fisheries with Norway.
2. The EU is not willing to offer the additional provisions it has offered to other trading partners. Examples include mutual recognition of conformity assessment with Canada, USA, New Zealand and the US, and provisions for regulatory co-operation for financial services agreed with Japan.
3. For ‘level playing field’ rules, Frost says the UK has set out proposals to “prevent distortions of trade and unfair competitive advantages”, but the EU is asking for “novel and unbalanced proposals which would bind this country to EU law or standards.”

Perplexed

In the letter he writes:

“Overall, we find it hard to see what makes the UK, uniquely among your trading partners, so unworthy of being offered the kind of well-precedented arrangements commonplace in modern FTAs.”

The UK, meanwhile, has been accused of simply ‘cherry picking’ the best parts of pre-existing deals.

David Henig, director of the UK trade policy project and a former trade negotiator, told the FT this morning that the UK is “looking for more than Canada, Korea or Japan in exchange for the same — or probably even less — in terms of level playing field provisions.”

Business response

As businesses grapple with the potential implications of the planned import tariffs for goods coming into the UK after the transition period, announced yesterday, industry leaders have urged government to quickly agree a deal with the EU.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, told the Guardian this morning that these tariffs “compound” the importance of the UK securing a trade deal. A 10% tariff will be put on imports of cars into the UK.

“The majority of components that help build British vehicles come from overseas, while nine out of every 10 cars bought in the UK are imported – seven of which being from the EU,” he said.

Clarity welcomed

The tariff announcement yesterday does at least provide clarity for businesses, according to Stephen Phipson, CEO of Make UK.

“Today’s tariff announcement goes some way to providing clarity for business on what a post-Brexit trading environment will look like,” he said.