EU warns that barriers to trade after Brexit will likely ‘deepen further’

The EU’s Brexit Negotiator warned that trade barriers between the UK & EU will likely increase despite a resolution to a diplomatic standoff over Northern Ireland bringing a “new attitude” in the relations.

“Trade cannot be as fluid and frictionless as it used to be.” “This will inevitably mean additional costs for both businesses,” said Maros SEFCIOVIC, vice-president at the European Commission.

He told the EU – UK Forum’s annual conference that “over time, increased divergence could bring even more costs as well as further deepening the barriers to trade” between the EU and UK.

The UK has said repeatedly that it wants to establish its own regulations, such as in the areas of artificial intelligence and financial service. Brussels says this would require more checks and controls for imports.

The UK government had hoped the recent Framework agreement to resolve a post-Brexit dispute regarding trading arrangements in Northern Ireland, would pave the way for closer relations between the UK and Brussels.

James Cleverly (UK Foreign Secretary) told the conference that he wanted to work more closely with Brussels in areas such as migration, security and climate change.

He said, “I would like us to continue in the same spirit as mutual confidence and ambition and work with you closely on other areas of common interest.”

Brussels has been clear in several areas that the UK is treated like any other non-member country. The EU has also agreed to collaborate with the UK on several areas, including science programmes, electric vehicles tariffs and the repatriation of euro clearing into the EU.

Mujtaba Rahman, Europe managing Director at Eurasia Group consultancy, said that the EU did not agree with the UK’s belief that, since Prime Minister Rishi Sunak delivered the Windsor Framework, the EU should demonstrate goodwill elsewhere.

“Brussels does not see any reason to reward the UK for fulfilling its treaty obligations. “The fact is that life is hard for a ‘third-country’ outside of the EU, as ongoing frictions over ePassport Gates, Horizon, Euro Clearing and rules of Origin clearly demonstrate,” he said.

The UK and EU have not been able to reach an agreement on the cost of the “associate member” status for the EU’s €95.5bn research programme. This was agreed as part the post-Brexit Trade and Cooperation Agreement.

Two years after joining, the UK joins 2021-27 flagship programme for research. Brussels offered to reduce Britain’s participation fees to compensate for the two years lost, but London demanded a larger discount.

We bring a great deal to the table. Cleverly said that the benefits of collaboration were obvious. Sefcovic, however, insisted on the “very good” EU offer.

Sefcovic squelched hopes that the TCA review in 2026 – which Labour often touts as an opportunity to improve economic ties – would result in a significant change. He said that the review “doesn’t constitute an commitment to reopening the TCA or renegotiate supplementary agreements”.

Both main UK political parties have rejected joining the EU single-market or forming customs unions with the EU.

Sefcovic expressed concerns over the Rights of EU Citizens in the UK, and the protection of “level playing fields”, a commitment made under the treaty that UK companies would not undercut rivals in EU Countries by lowering standards or providing business support.

The EU negotiator said there are still concerns over the Retained EU Law Bill, which would remove EU laws from UK legislation. Sunak has stopped the progress of the Bill but it is not a complete scrap.

Sefcovic stated that if the legislation was passed, fundamental parts of the Withdrawal Agreement (WA) and TCA would be “thrown in the shredder”. This is a reference from a Sunak campaign video where he pledged to shred EU-era law.

A powerful committee of the European Parliament will warn on Thursday that it is “highly worried” about recent UK legislation loosening regulations on genetically modified food.

“Regulatory Divergence” . . A draft report says that this could lead to the introduction of genetically engineered products in the EU without the proper labeling or with inconsistent safety controls.

Despite progress in other areas, such as the activation last week of an EU-UK Memorandum of Understanding on Financial Services, officials from the Commission are clear that there will not be any special deals.

Stefan Fuehring said that the rules are clear when asked at the conference how the UK can improve access to professional and financial services.

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