The UK cannot have the “highest quality access” to the European market unless it accepts the free movement of people and maintains a ‘level playing field’ on regulation, the head of the EU Commission has warned.
Speaking ahead of her first talks with Boris Johnson yesterday, commission president Ursula von der Leyen also said it would be “impossible” to strike a comprehensive post-Brexit trade deal by the end of the year.
Before going into Downing Street, Mrs von der Leyen said only a “distant” relationship could be agreed before the 11-month transition phase elapses in December 2020, which would carry economic “consequences”.
Mr Johnson has insisted the UK will exit EU trade rules by the end of next year, despite the tight timescale to negotiate a future relationship, leading to fears of a new ‘cliff edge’ to a hard Brexit.
Speaking at an event at the London School of Economics, where Mrs von der Leyen studied in the 1970s, the German politician warned “the more divergence there is, the more distant the partnership has to be”.
“Without an extension of the transition period beyond 2020, you cannot expect to agree on every single aspect of our new partnership,” she said. “Without the freedom of movement of people, you cannot have the free movement of capital, goods and services. Without a level playing field on environment, labour, taxation and state aid, you cannot have highest-quality access to the world’s largest single market.”
The commission president said they would need to “prioritise” those areas where there were no international agreements to fall back on to avoid a damaging “hard Brexit” because the timetable was “very, very tight”.
“Without an extension of the transition period beyond 2020, you cannot expect to agree on every single aspect of our new partnership,” she said.
Mr Johnson was expected to use their talks in Downing Street to underline his insistence that, while he wants an “ambitious” free trade deal, UK “alignment” with EU rules must finish at the end of the year.
Mrs von der Leyen said while the EU was ready to sign up to an agreement based on “zero tariffs, zero quotas”, there also had to be “zero dumping” of cheap exports on European markets.
“The European Union is ready to negotiate a truly ambitious and comprehensive new partnership with the United Kingdom, but the truth is that our partnership cannot and will not be the same as before,” she said. “There can be no compromise on this.”
Brexit secretary Stephen Barclay, who also took part in the talks along with the EU’s chief negotiator Michel Barnier, said he was confident an agreement could be reached by the end of year.