On Tuesday 13 March, the European Parliament is to discuss its draft resolution on future relations (mainly trade relations) between the European Union and the United Kingdom, before the text is adopted on Wednesday.
The debate comes after European Council President Donald Tusk presented, on Wednesday 7 March, his draft guidelines for future EU/United Kingdom relations (see EUROPE 11977).
According to the draft, the EU27 suggest there should be extended relations for trade in goods and commodities, which should not be subject to customs tariffs or quotas. On the other hand, there should be more limited cooperation in the field of services, especially financial services for which Poland has maintained an air of suspense regarding the inclusion of such services in a future free trade agreement.
The guidelines, which are in response to the speech by Theresa May on 2 March, will be adopted during the European summit on 22 and 23 March (see EUROPE 11973).
The steering committee of the European Parliament on Brexit negotiations stated its position, on 7 March, in favour of an association agreement with the United Kingdom based on four pillars: - economic and trade relations; - foreign policy; - internal security; - and thematic cooperation, for example on crossborder projects relating to research and innovation.
Such a relationship would comprise “a coherent governance framework, together with a robust dispute settlement mechanism”.
With regards financial services, that the United Kingdom will be able to integrate into the free trade agreement, the draft resolution underlines that free trade agreements generally contain limits in this field (when not ruled out all together) due to the need to safeguard the EU’s financial stability and ensure full compliance with European standards.
In addition, Parliament wants the United Kingdom to remain as close as possible but within the limits of its new status, with a free trade agreement being the only existing model that can be contemplated if the British leave not only the internal market but also customs union.
The draft resolution also points out that access to the European market is subject to the degree of regulatory convergence with the EU and alignment with Community technical standards and regulations. Otherwise, bilateral rules would have to be negotiated on regulatory coherence and cooperation, while bearing in mind that such provisions cannot deliver the same advantages as a country belonging to the EU would have, namely trade without any obstacles.
As far as the field of foreign policy is concerned, the text submitted to the plenary session notes that cooperation could continue in the form of a “participation agreement” which would allow London to take part in civil and military operations or in the training of military personnel, including in projects developed as part of common structured cooperation.
When it comes to counter-terrorism, London could benefit from agreements that already exist for third countries or for countries that do not belong to the Schengen Area of freedom of movement in order to benefit from access to databases such as SIS or Europol.
Would EU companies be most affected in the event of no Brexit trade deal? A study published on Monday 12 March by the consultancy and law firms Oliver Wyman and Clifford Chance underlines that EU companies would be the most affected if no free trade deal were found for after Brexit.
They say the bill could amount to €65 billion for companies on both sides of the Channel in tariff and non-tariff barriers. It would cost €30 billion annually for British companies wishing to export to the EU. In the other direction, the increased costs for European companies would amount to around €35 billion per year. (Original version in French by Solenn Paulic)