Sir Ivan Rogers told MPs on Wednesday that Ms Merkel and other EU leaders “will agree that there will be no sectoral deals within either the single market or the customs unions, and I expect that to appear in either the guidelines or the negotiating mandate [produced by the EU]”.
“All my instincts tell me that people will shy away from doing individual sectoral deals,” he added. Theresa May, prime minister, has raised the prospect of preferential treatment for certain sectors in Brexit negotiations by saying that the UK could seek to maintain “some elements” of the customs union after leaving the EU. Her government has also given guarantees to Nissan that trading conditions for its UK plants would not change after Brexit.
Sir Ivan also told MPs on the Brexit select committee on Wednesday that it was wrong to see World Trade Organisation rules as an obvious alternative to negotiating a free-trade agreement with the EU.
“No other major player trades with the EU on pure WTO-only terms. It’s not true that the Americans do, or the Australians or the Canadians or the Israelis or the Swiss,” he said.
“[For example] a very significant proportion of EU-US trade . . . is actually governed by technical agreements,” he added. “They’re not a full-blown, overarching FTA which covers substantially all trade, but there are loads of agreements . . .[Even the financial services equivalence agreement] took four years.” [...]
Sir Ivan predicted on Wednesday that there was likely to be “a bit of a stand-off at the outset” of Brexit talks, with EU officials currently insisting that Britain’s exit settlement will need to be agreed before negotiations over a future relationship begin.
Sir Ivan also said that negotiations over a potential exit payment, which the European Commission has estimated at between €40 and €60bn, could get “pretty bitter and twisted”.
“Nothing gets more bitter and twisted than EU negotiations on money and I’ve lived a few of them, and sometimes it can be over beans rather than large sums, and these are quite large sums,” he told MPs. “Very large sums if you were to believe the rhetoric from the other side.”
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