BRUSSELS (Reuters) - The European Union offered Britain on Wednesday a free-trade agreement that is modest compared with what London has called for, and spells out clear limits on the access British banks could have to the bloc after the country leaves.
Below are extracts from the draft joint position of the remaining 27 EU members on their new deal with Britain.
They refer to the European Council, which comprises heads of governments of member states. The EU's four freedoms demand free movement for goods, services, capital and people in the EU's single market.
- The European Council recalls that negotiations can only progress as long as all commitments undertaken so far are respected in full, and calls for intensified efforts on the remaining withdrawal issues. The European Council reiterates that nothing is agreed until everything is agreed.
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- The European Council restates the Union's determination to have as close as possible a partnership with the UK in the future. Such a partnership should cover trade and economic cooperation as well as other areas, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy.
- At the same time, the European Council has to take into account the repeatedly stated positions of the UK, which limit the depth of such a future partnership. Being outside the Customs Union and the Single Market will inevitably lead to frictions. Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU Single Market as well as of the UK market. This unfortunately will have negative economic consequences.
- ...the European Council reiterates in particular that any agreement with the United Kingdom will have to be based on a balance of rights and obligations, and ensure a level playing field.
- The European Council recalls that the four freedoms of the Single Market are indivisible and that there can be no 'cherry picking' through participation based on a sector-by-sector approach, that would undermine the integrity and proper functioning of the Single Market.
- The European Council further reiterates that the 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. The role of the Court of Justice of the European Union will also be fully respected.
- ...the European Council confirms its readiness to initiate work towards a free trade agreement (FTA), to be finalised and concluded once the UK is no longer a Member State. Such an agreement cannot offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof.
- This agreement would address:
- trade 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.
- appropriate customs cooperation, preserving the regulatory and jurisdictional autonomy of the parties and the integrity of the EU Customs Union.
- disciplines on technical barriers to trade (TBT) and sanitary and phytosanitary standards (SPS)
- trade in services, with the aim of allowing market access to provide services under host state rules, including as regards right of establishment for providers, to an extent consistent with the fact that the UK will become a third country and the Union and the UK will no longer share a common regulatory, supervisory, enforcement and judiciary framework. The FTA should include ambitious provisions on movement of natural persons as well as a framework for the recognition of professional qualifications.
- other areas of interest to the Union, for example access to public procurement markets, investments and protection of intellectual property rights, including geographical indications.
- ...regarding aviation, the aim should be to ensure connectivity between the UK and the EU after the UK withdrawal. This would require an air transport agreement, combined with an aviation safety agreement, while ensuring a strong level playing field in a highly competitive sector.
- ....the future relationship will only deliver in a mutually satisfactory way if it includes robust guarantees which ensure a level playing field. The aim should be to prevent unfair competitive advantage that the UK could enjoy through undercutting of current levels of protection with respect to competition and state aid, tax, social, environment and regulatory measures and practices.
- ... police and judicial cooperation in criminal matters should constitute an important element of the future EU-UK relationship... The future partnership should cover effective exchanges of information, support for operational cooperation between law enforcement authorities and judicial cooperation in criminal matters.
- ...in the fields of security, defence and foreign policy there should be no gap in the EU-UK cooperation as a consequence of the UK withdrawal from the Union.
- ... personal data protection should be governed by Union rules on adequacy with a view to ensuring a level of protection essentially equivalent to that of the Union.
(Compiled by Gabriela Baczynska; editing by David Stamp)