Under what is understood to be Mays preferred model, the UK would be in regulatory alignment with the EU in some areas while finding different ways to achieve the same outcomes in other sectors. In the so-called third basket of sectors, the UK would in time diverge from the EU and go its own way under the model.
Yet, with something close to incendiary timing, the European commission, hours abefore the cabinet get-together, has published a document ruling out the model.
It is claimed by Brussels that such an approach would breach an agreement among EU27 leaders to prevent cherry-picking by the UK that it is said would pose a risk to the integrity of the single market.
The document says: “UK views on regulatory issues in the future relationship including ‘three basket approach’ are not compatible with the principles in the [European council] guidelines.”
The paper, discussed and agreed among member state diplomats, claims the model proposed by the UK would also appear to give the UK a say in EU decision-making. The paper responds that “no EU-UK co-decision” is possible and that the UK is either “in or out”.
The document adds that the approach proposed by the UK would also have to involve a central role for the European court of justice. Even if the UK weakened its stance to allow this, the paper claims, there would be a problem in enforcing the court’s decisions without the rest of EU law being applicable.
“If UK aspires to cherry-pick: risk for integrity and distortions to proper functioning of internal market, aggravated by absence of full EU ‘ecosystem’,” the document says.
The paper, produced by the commission’s Brexit taskforce, led by the EU’s chief negotiator, Michel Barnier, further emphasises the limits of what the UK can expect in a future trade deal.
There will be customs controls at the borders, although waiting times may be mitigated. There will be no mutual recognition of rules in financial services, for example, to give businesses on both sides of the channel confidence they will be able to continue to operate.
The paper warns there is “no escaping from significant impact on trading conditions”.
The intervention by the EU will only add to the pressure on May to rethink her insistence that the UK will leave both the single market and the customs union when the country leaves the EU. [...]
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