Brussels chief ‘surprised’ at UK’s Brexit stance as Barnier warns of cliff-edge in trade talks

European Commission President Ursula von der Leyen listens to European Union chief Brexit negotiator Michel Barnier. (Jean-Francois Badias/AP)

Boris Johnson’s suggestion that the UK could be prepared to accept an Australian-style relationship with the EU without a formal trade deal has “surprised” Brussels.

The EU’s chief Brexit negotiator Michel Barnier says the UK could still face a cliff edge if a trade agreement isn’t agreed by the end of the year.

However, European Commission president Ursula von der Leyen pointed out that even Australia wants a better trading relationship with the bloc than the one it currently has.

She said the UK and EU should be “way more ambitious” about reaching a full trade deal.

Fianna Fáil MEP, Barry Andrews, in his maiden speech at the plenary session also said he is surprised by the UK’s tone, but added that they shouldn’t be punished and should be treated as a partner, rather than a competitor.

<figcaption class='imgFCap'>European Commission president Ursula von der Leyen talks to EU chief Brexit negotiator Michel Barnier (Jean-Francois Badias/AP)</figcaption>
European Commission president Ursula von der Leyen talks to EU chief Brexit negotiator Michel Barnier (Jean-Francois Badias/AP)

In a speech setting out the UK’s negotiating objectives, Mr Johnson said the question was whether to seek a Canadian-style deal or an Australian-style relationship, “and I have no doubt that in either case the UK will prosper”.

But speaking in the European Parliament, Ms von der Leyen said both models fell short of a deal which would meet the goals of allowing trade without tariffs and quotas.

That aim, set out in the Political Declaration, would require a “level playing field” with both sides guaranteeing “fair competition and the protection of social, environmental and consumer standards”.

“We are ready to discuss all different models of trade agreement. But all these models, whatever you choose, have one thing in common – they all come not only with rights but also with obligations for both sides.”

The Canada deal eliminates most, but not all, tariffs and quotas and “we still have our standards that have to be respected”, she said.

Ms von der Leyen added: “Honestly, I was a little bit surprised to hear the Prime Minister of the United Kingdom speak about the Australian model.

“Australia, without any doubt, is a strong and a like-minded partner. But the European Union does not have a trade agreement with Australia.

“We are currently trading on WTO terms and, if this is the British choice, well, we are fine with that, without any question.”

But the EU was trying to negotiate a trade deal with Australia to end the current situation.

“Of course the UK can decide to settle for less, but I personally believe that we should be way more ambitious,” she said.

Michel Barnier, also speaking in the European Parliament, setting out the EU's positions for the upcoming talks between the bloc and the UK.

Mr Barnier said: "Any future agreement will need approval from MEPs. The deadline for the transitional period can be extended but the UK is still insisting on a deal being done by December 31st."

He again warned that if there’s no agreement by then, the UK will leave the customs union and single market and go back to WTO terms, meaning quotas and tariffs on British products.

It came as the UK Government set out further details of its plans for January 1, 2021, after the Brexit transition period expires.

British Chancellor Sajid Javid said his Government will aim to conclude a full range of equivalence assessments by June 2020 – allowing the UK and EU to respect each other’s rules.

But he said the UK would also have the freedom to diverge and regulate in a different way from the rules set in Brussels.

Writing in City AM, he said: “Each side will only grant equivalence if it believes the other’s regulations are compatible.

“But compatible does not mean identical, and both the UK and the EU have at different times recognised the importance of focusing on regulatory outcomes.

“We will no longer be rule-takers, but we remain committed to the highest international standards of financial regulation and to shaping global rule-making.”

But Brussels’ chief negotiator Michel Barnier said: “I would like to take this opportunity to make it clear to certain people in the United Kingdom bearing authority that they should not kid themselves about this – there will not be general, open-ended, ongoing equivalence in financial services.”

The EU would “retain a free hand to take our own decisions”.

Senior British Cabinet minister Michael Gove confirmed on Monday that goods coming to Britain from the EU will face import controls from January 1.

The British Retail Consortium (BRC) said the Government would have to move fast to get infrastructure in place for the start of 2021, warning that without adequate preparations the availability of goods on shelves would be disrupted, with fresh fruit and vegetables especially vulnerable.

Mr Barnier told MEPs it would not be “business as usual” after January 1.

“Come what may, on January 1 we will be imposing checks on all products entering the single market, just as we do to every other third country in the world,” he said.