Brussels wants to ensure that the UK does not gain a competitive advantage by diverging from EU regulations. In an attempt to pressure the British government, The Daily Telegraph has revealed that the European Commission has threatened to withhold so-called Mutual Recognition Agreements (MRAs) if the UK seeks only a basic trade deal. MRAs are documents certifying that goods conform to European standards and facilitate the smooth movement of goods in key sectors, such as medicine and cars.
Two EU officials confirmed the Commission’s approach, the severity of which has taken many European members by surprise.
One told the Daily Telegraph: “We will not blindly delegate the recognition of EU standards.
“Companies have had plenty of notice about how to get certified in the EU.”
Britain and the European Union have until the end of the year to negotiate a a post-Brexit trade deal.
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The Government is confident of reaching a comprehensive deal with Brussels and to that effect has set up a dedicated negotiating team, headed by the UK’s chief Brexit negotiator David Frost.
However, the EU has said that there will only be time to conclude a very basic deal by December 31.
Brussels insists that it will not grant ‘zero tariff’ access to EU markets if the UK refuses to follow its rules on state subsidies and environmental controls.
Ursula von der Leyen, the EU Commission president also warned on a visit to London earlier this month that the UK will have to make “choices”.
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The threat to withhold MRAs for medicines and other products is seen by industry insiders and experts as a clear sign that Brussels is intending to make those “choices” as hard-edged” as possible.
Alex Stojanovic, a Brexit researcher at the Institute for Government, said: “Ruling out MRAs would send a hard signal to the UK.
“For most sectors it is not vital but it does indicate that only the most bare bones deal is on the table.”
British economists have argued that one way to counter pressure from the European Union would be to negotiate a quick trade deal with the United States.
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Roger Bootle, a leading UK economic expert, said that if the UK can replace European products with American ones, then Europe’s leaders will have greater incentive to do a deal.
He explained: “If we reach a deal with America, leading us to reduce or even abolish tariffs on imports from America, then the pressure on European producers will be even greater.
“As the price of goods imported from the EU went up, so the price of goods imported from America would go down.”
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Consequently, European businesses will put pressure on their governments to ensure a trade deal is reached, even if only limited to the trade in goods.
Donald Trump talked up the chances of Britain reaching a deal with the US, in a major boost to Boris Jonson.
Praising the Prime `Minister during a speech at the Davos World Economic Forum, the US President said that he was looking forward ““to negotiating a tremendous new deal with the United Kingdom.”
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Mr Johnson is reportedly determined to go “hell for leather” to secure an agreement with Donald Trump.
A unit of 70 civil servants has been set up in Whitehall to lead the US trade talks and will be led by the head of the Americas office at the Department for International Trade, Oliver Griffiths.
Teams are also being put together to thrash out trade deals with Japan, Australia and New Zealand.