What should be the future trade agreement between Britain and the EU? Recently, the EU has tried to compare a free trade agreement with “bare bones” to something deeper and more comprehensive. If the UK wants a “quick” deal, the EU says, it must be of the nature of “bare bones”: a simple no-tariff and no-quota deal. A deeper and more comprehensive agreement will take much longer, we are told, and will require many potentially uncomfortable compromises on the British side. The EU therefore argues that the UK must be prepared to extend the transition period, perhaps for many years, if it wants the supposedly greater benefits of a deep and comprehensive free trade agreement. Don`t be fooled. The EU`s intention is the same as it has been since the beginning of the Brexit process – to try to place the UK in a submissive economic status and maintain it as a “captive market” for EU goods. The potential additional benefits of a “deep and comprehensive” trade deal over a more fundamental trade deal are quite limited and, in any case, the EU has no real intention of negotiating such a deal, at least as the Briton has understood. Let us first look at the EU`s motives and, in the abstract, it seems reasonable that the future relationship between the EU and the UK should preserve as much free trade as it is reasonably compatible with separate legal systems and independent trade and regulatory policy. But from the EU`s point of view, this is not what is at stake in the discussions on future relations. As Raoul Ruparel, a former special adviser to Dexeu, recently revealed, the EU has told British negotiators that the future relationship “has nothing to do with economic rationality.” On the contrary, the main objectives of the EU are: • to extract the maximum amount of financial resources from the United Kingdom. Either by continuing to contribute to the British coffers as part of a trade agreement, or by extending the transition period as long as possible.
Or, ideally, both. • linking the UK to a dynamic and sustainable alignment of legislation with the EU. Looking at the EU`s discussions on the future relationship, we keep noticing that EU governments (mainly, but not exclusively France) seem to be afraid that a Britain free to set its own rules will prevail over the EU and withdraw jobs and investment. The UK`s attachment to the EU`s regulatory system – without any scrutiny – deflects this perceived problem and also allows the EU to use the regulatory changes to reverse the trend and undermine UK businesses. • maintaining the UK as a linked market for EU products. At present, the EU has a massive trade surplus with the UK (£94 billion in merchandise trade in 2018). This is the result of the UK`s accession to the EU Customs Union and the internal market, which grant large trade preferences to EU producers to other suppliers in the UK market, particularly in areas such as agriculture. A UK with a truly independent trade policy would likely sign agreements that would seriously undermine these preferences, causing EU suppliers in the UK to lose market share to suppliers from the rest of the world. . .