{"id":67307,"date":"2018-03-07T16:00:09","date_gmt":"2018-03-07T16:00:09","guid":{"rendered":"http:\/\/www.bnreport.com\/donald-tusk-rejects-theresa-mays-brexit-vision\/"},"modified":"2018-03-07T16:00:09","modified_gmt":"2018-03-07T16:00:09","slug":"donald-tusk-rejects-theresa-mays-brexit-vision","status":"publish","type":"post","link":"https:\/\/www.bnreport.com\/en\/donald-tusk-rejects-theresa-mays-brexit-vision\/","title":{"rendered":"Donald Tusk rejects Theresa May\u2019s Brexit vision"},"content":{"rendered":"<p>There\u2019s only one dish on the EU\u2019s post-Brexit, future relationship menu: a free trade agreement with zero tariffs, covering all goods \u2014 and perhaps services \u201cto an extent.\u201d<\/p>\n<p>European Council President Donald Tusk put forward draft negotiating guidelines Wednesday that seek to maintain \u201cas close as possible a partnership with the U.K.\u201d but that is effectively constrained to a free trade agreement because of London\u2019s insistence on quitting the EU single market and customs union.<\/p>\n<p>Introducing the six-page draft document, a <a href=\"https:\/\/www.politico.eu\/wp-content\/uploads\/2018\/03\/European-council-Art.50-23-March-2018-Draft-Guidelines-1.pdf\" rel=\"noreferrer\" target=\"_blank\">copy of which was obtained by POLITICO<\/a>, Tusk said that the U.K.\u2019s intention to leave the single market and customs union constrained the options for a future relationship. \u201cIt should come as no surprise that the only remaining possible option is a free trade agreement. I hope that it will be ambitious and advanced and we will do our best\u2026 Anyway it will only be a trade agreement.\u201d<\/p>\n<p>\u201cA pick and mix approach for a nonmember state is out of the question. We are not going to sacrifice these principles. It\u2019s simply not in our interest,\u201d he added \u2014 a reference to the U.K.\u2019s desire for privileged access to the single market in some sectors but divergence in others.<\/p>\n<p>The document makes no specific mention of financial services, which the U.K. is keen to include in a future partnership agreement because of London\u2019s lucrative banking industry.<\/p>\n<p>Instead, the document \u2014 which will now undergo intense negotiation and inevitable revisions by the 27 remaining EU countries \u2014 holds out the possibility that the future accord would cover \u201ctrade in services \u2026 to an extent consistent with the fact that the U.K. will become a third country and the [European] Union and the U.K. will no longer share a common regulatory, supervisor, enforcement and judiciary framework.\u201d<\/p>\n<p>EU officials have stated repeatedly in recent days that EU regulation of financial services is now accomplished in a community approach that will make it extremely difficult if not impossible for a broad agreement with a third country. Still, the draft guidelines also do not expressly rule out such a deal with the U.K. if one can be achieved.<\/p>\n<p>While restating the EU\u2019s desire for a close partnership, the draft guidelines state: \u201cThe European Council has to take into account the repeatedly stated positions of the U.K., which limit the depth of such a future partnership. Being outside the customs union and the single market will inevitably lead to  frictions.\u201d<\/p>\n<p>Indeed, the frictions are already quite apparent.<\/p>\n<p>In a <a href=\"https:\/\/www.politico.eu\/article\/theresa-mays-3-brexit-audiences\/\" rel=\"noreferrer\" target=\"_blank\">speech on Friday<\/a>, U.K. Prime Minister Theresa May acknowledged that there would be negative consequences of Brexit for both sides. And in a scathing confidential assessment of her speech, the <a href=\"https:\/\/www.politico.eu\/article\/eu-accuses-theresa-may-of-double-cherry-picking-brexit\/\" rel=\"noreferrer\" target=\"_blank\">EU complained<\/a> that she was engaged in \u201cdouble cherry-picking\u201d  by demanding some benefits of EU membership along with select benefits of a third-country trade accord.<!--more--><\/p>\n<p>The free-trade deal, according to the draft, should include \u201ctrade in goods, with the aim of covering all sectors, which should be subject to zero tariffs and no quantitative restrictions with appropriate accompanying rules of origin. In this context, existing reciprocal access to fishing waters and resources should be maintained.\u201d<\/p>\n<p>Tusk put forward the guidelines as he traveled to Luxembourg for a meeting with Prime Minister Xavier Bettel, part of his regular circuit of meetings with EU leaders.<\/p>\n<p>The draft guidelines state that the EU would be willing to negotiate a different type of relationship in the event that the U.K. changes its stance \u2014 essentially an invitation to May or a future prime minister to stay in the single market under terms to be determined.<\/p>\n<p>Beyond the trade agreement, the draft guidelines say other \u201csocio-economic cooperation \u2026 could be envisaged\u201d including an aviation transport deal \u201cto ensure connectivity\u201d as well as cooperation in research, education and cultural programs.<\/p>\n<p>In addition, the draft guidelines say the European Council wants to continue \u201cpolice and judicial cooperation in criminal matters\u201d and that \u201cin the fields of security, defense and foreign policy there should be no gap in the EU-U.K. cooperation.\u201d<\/p>\n<p>However, the Council rejected the idea of the U.K. participating in EU agencies after Brexit, saying \u201cthe Union will preserve its autonomy as regards its decision-making, which excludes participation of the United Kingdom as a third-country to EU Institutions, agencies or bodies.\u201d May called last week for the U.K. to become an \u201cassociate member\u201d of key EU agencies, specifically the European Medicines Agency, the European Chemicals Agency and the European Aviation Safety Agency.<\/p>\n<p>What the relatively brief and broadly-worded draft guidelines don\u2019t specify is how the framework of the future relationship with the U.K. will be drawn up and agreed during the negotiations.<\/p>\n<p>Officials have said they expect the future agreement will be described in a written \u201cpolitical statement\u201d that will accompany the formal withdrawal treaty, which must be approved by the U.K.\u2019s official March 29, 2019 exit date.<\/p>\n<p>That political statement \u2014 perhaps best described as a \u201cdisassociation agreement\u201d \u2014 might mirror the association agreements that the EU signs with partner countries seeking eventual EU membership. In those cases, of course, the overarching goal is entry into the EU, whereas the agreement with the U.K. will set the parameters for the first-ever departure of a country from the bloc.<\/p>\n<p>London has been adamant that it wants many aspects of the future relationship agreed, at least in principle, before its formal departure. However, EU law makes clear that a trade agreement can only be completed once the U.K. becomes a third country.<\/p>\n<p>The lack of any specific detail on these points in the draft guidelines suggests that a fierce debate could still lie ahead of how, if at all, the two sides might be able to commit to aspects of their new arrangement.<\/p>\n<p>Theresa May\u2019s official spokesman said: \u201cThis is a draft text that has not been formally published, but has been circulated to the EU27 for comment. 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.\u201d<\/p>\n<p>The debate over the draft guidelines among the EU27 is expected to be intense, finally bringing to the forefront some sharp differences in national interests based on which countries will be affected most by Brexit.<\/p>\n<p>Among the most electric topics will be the question of potentially expanding the language on services to specifically address financial services \u2014 a position favored, for instance, by Luxembourg, which has substantial business ties to the City.<\/p>\n<p>A Luxembourg official noted that while there was a potential fallback, to World Trade Organization rules, in the event that no agreement is reached on the trade of goods between the U.K. and EU, there was no such fallback for services.<\/p>\n<p>\u201cIf we don\u2019t include financial services in the trade deal, then we need something else,\u201d the official told POLITICO, \u201cbecause we\u2019ll continue to make business with London.\u201d The official added, \u201cFrance thinks this is an opportunity for her to lure business for Paris, but we doubt that. It could go to other places.\u201d<\/p>\n<p><a href=\"https:\/\/www.politico.eu\/article\/donald-tusk-issues-draft-guidelines-for-post-brexit-trade-deal\/?utm_source=RSS_Feed&amp;utm_medium=RSS&amp;utm_campaign=RSS_Syndication\" rel=\"noreferrer\" target=\"_blank\">Original Article<\/a><\/p>\n<p> [contf] [contfnew]         <img decoding=\"async\" src=\"https:\/\/encrypted-tbn0.gstatic.com\/images?q=tbn:ANd9GcRMd3Tz2gX9xSa6CJyaOj2dokBVcrdaT4yY3R3RI7YmL18vCLZZ\"\/> <\/p>\n<h5><a href=\"http:\/\/www.politico.com\/&gt;Politico&lt;\/a&gt;&lt;\/h5&gt;_&lt;\/p&gt;[contfnewc]_[contfnewc]_&lt;\/body&gt;&lt;\/html&gt;\" rel=\"noreferrer\" target=\"_blank\"><\/a><\/h5>\n","protected":false},"excerpt":{"rendered":"<p>There\u2019s only one dish on the EU\u2019s post-Brexit, future relationship menu: a free trade agreement with..<\/p>\n","protected":false},"author":1,"featured_media":67308,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202],"tags":[],"class_list":["post-67307","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - 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