MEPs want to tie Britain to ‘binding convergence in return for deal on trade’
respond accordingly,” a diplomat said. Another diplomat said it was a “very open formulation”.
In a rebuff to the UK Government, a draft resolution of the European Parliament called for measures to curtail Mrs May’s proposal that Britain could adopt different regulations in some areas.
The document, parts of which have been seen by the Standard, calls for “as close as possible a partnership with the UK” going beyond trade and economic policy. However, the bloc warns in the text that trade talks will not take place until the UK gives further assurances on outstanding issues such as citizens’ rights, the Northern Irish border and a post-Brexit transition phase.
“Negotiations can only progress as long as all commitments undertaken so far are respected in full,” the text says, It calls for “intensified efforts” on the remaining issues.
The bloc said there should be a “binding convergence mechanism” to ensure permanent alignment with EU laws as the price for a “deep and comprehensive” trade deal. “A third country [cannot] have the same benefits as a member state of the European Union,” it said.
This morning Pascal Lamy, the former head of the World Trade Organisation, dismissed a planned speech by Chancellor Philip Hammond calling for financial services to be included in a trade deal as “a bit vague”.
Mr Lamy told BBC Radio 4 that the UK was bound to end up with an inferior system and less access to the European marketplace. “Whatever they get, this will be much more fragile, much less business-stable, than the present regime we have, which is an aligned regulation,” he told the Today programme.
He said that at best Britain would have a financial regulation system that was “sort of aligned” with the EU, adding: “What’s for sure is whatever option is agreed will be worse than what we have for the present, for both sides.”
Mr Hammond was making a speech this afternoon in which he was expected to argue that including Britain’s lucrative financial services sector in a Brexit deal was in the “mutual interest” of both sides. Last night, however, French economy minister Bruno Le Maire said this was “not possible” and that the best the UK could hope for was an “equivalence regime”, seen as more fragile.
In his speech, the Chancellor was due to say there was a precedent for financial services being almost included in a free trade agreement, pointing to the EU’s attempts to seek “ambitious financial services co-operation” with Canada and the US. He was to say: “If it could be done with Canada or the USA, it could be done with the UK — the EU’s closest financial services partner by far.”