24 January 2020

Financial Times: EU seeks power to sanction UK over any breaches of Brexit deal

The EU will demand the right to rapidly sanction the UK for breaching any deal on a future relationship as it seeks to prevent “competitive undercutting or freeriding” by British companies after Brexit, according to an internal document seen by the FT.

EU governments want to be able to take “flexible” and “interim” measures against Britain if it breaks commitments given as part of any future trade agreement.

The EU’s tough negotiating position, set out in a series of slides discussed by diplomats in Brussels on Friday, is that the UK must agree to stick closely to the bloc’s rules in areas such as labour rights and environmental protection in exchange for a trade deal with few restrictions on trade in goods. [...]

The documents underline the EU’s insistence that a tariff-free, quota-free trade deal will hinge on Britain’s willingness to stick closely to a “level playing field” of “common high standards and rules”. Guaranteeing the level playing field is one of a number of “imperishable EU principles” for the talks.

The slides present the EU’s conclusions from almost 50 hours of seminars that national officials have held with the European Commission in Brussels over the past two weeks, as the bloc prepares for what are expected to be gruelling negotiations with the UK. Around 200 people participated in the meetings, which have covered everything from trade relations to co-operation in criminal justice and the fight against terrorism.

The slides are intended to feed into the commission’s fine tuning of a formal mandate for the negotiations that it will propose in the first week of February, and that EU27 governments will sign off by the end of that month. Negotiations with the UK on future relations would then begin in March.

The document says that the entire agreement, including the level playing field, would be governed by a rigorous dispute-settlement system. Enforcement measures should include “the possibility of full suspension/termination” of the agreement.

The UK would have equivalent rights to act against breaches by the EU — meaning either side could take steps to restrict market access even before a dispute-settlement panel has reached its decision. [...]

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