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UK can't enjoy 'frictionless' trade with EU after Brexit, Barnier warns


Brexit Secretary David Davis with the European Commission's chief negotiator Michel Barnier

Brexit Secretary David Davis with the European Commission's chief negotiator Michel Barnier

Brexit Secretary David Davis with the European Commission's chief negotiator Michel Barnier

Britain will not be able to continue "frictionless" trade with its former EU partners after Brexit, the European Commission's chief negotiator has warned.

Michel Barnier told an EU committee in Brussels there will be "negative" consequences to Brexit, which will prevent the UK from enjoying the full benefits of the single market.

His comments, which amount to a stark rejection of the negotiating position set out by Theresa May and Brexit Secretary David Davis, came as British business leaders appealed for a transitional deal to keep the UK in the single market and customs union beyond the expected date of withdrawal in March 2019.

CBI director-general Carolyn Fairbairn said it was "impossible" to imagine a trade deal would be in place by that date and urged negotiators to act as soon as possible to avoid a "cliff-edge" departure.

"Our proposal is for the UK to seek to stay in the single market and a customs union until a final deal is in force," she said. "This would create a bridge to the new trading arrangement that, for businesses, feels like the road they are on."

Meanwhile, European Council President Donald Tusk said a new free trade deal between the EU and Japan showed that Brexit's backers were wrong to claim it was "easier to do global trade outside of the EU".

Labour leader Jeremy Corbyn revealed he is to have an "extended meeting" with Mr Barnier next Thursday to discuss his party's position on Brexit, in what was seen as a further attempt to depict the opposition party as a "government in waiting".

Speaking to the European Economic and Social Committee, Mr Barnier gave a clear rebuff to Mrs May's claims that Britain can achieve "frictionless" customs arrangements with the remaining EU after Brexit, and Mr Davis's assertion that a free trade deal could deliver the "exact same benefits" as the single market.

Warning the EU's position appeared not to have been "fully understood" by some in London, Mr Barnier said: "I have heard some people in the UK argue that one can leave the single market and keep all of its benefits. That is not possible.

"I have heard some people in the UK argue that one can leave the single market and build a customs union to achieve frictionless trade. That is not possible."

In direct contradiction of the Prime Minister's claim that "no deal is better than a bad deal", Mr Barnier said there was "no reasonable justification" for withdrawal without agreement on future trade relations.

"No deal would worsen the loser/loser situation which will necessarily be the result of Brexit and objectively the UK would have rather more to lose than its partners," said Mr Barnier.

Downing Street said the Government did understand the EU's position and was focused on "getting a deal that works for both sides" but acknowledged there were "strong feelings" in Brussels about the result of the Brexit referendum.

"It isn't new that some on the EU side have strong feelings about the decision the British people took last year but the UK Government is focused on getting the best possible deal for our whole country and a deep and special partnership that's in the interests of the whole continent," said the PM's official spokesman.

Figures released by Liam Fox's Department for International Trade showed the number of overseas investment projects in the UK rose from 2,213 in 2015/16 to 2,265 in the year after the EU referendum.

But the number of jobs created or made safe in the UK by overseas investment dropped by 7% from 116,000 in 2015/16 to 108,000 after the Brexit vote.

Dr Fox said the UK remains "extremely attractive to foreign investors", but Liberal Democrat leader Tim Farron described the jobs figure as a "disaster".

The International Trade Secretary criticised BBC coverage of the economic impact of Brexit, telling the House of Commons that "some elements of our media would rather see Britain fail than see Brexit succeed".

He was backed by Leader of the Commons Andrea Leadsom, who last month called on journalists to be more "patriotic". She told MPs: "What we all want to see is balance in reporting, and to giving as much time to the opportunities of leaving the EU as is given to the other side of the argument."

Downing Street distanced itself from Dr Fox's comments, saying Mrs May had "always been clear" on the need for a free press in the UK.

Meanwhile a YouGov poll of 1,661 Britons found 46% would now vote to remain in the EU, against 42% who want to leave, in the latest of a string of surveys suggesting last year's majority for Brexit has been reversed.

Former Conservative leader Lord (William) Hague issued a plea for the UK to maintain close foreign and defence policy links with the remaining EU after withdrawal.

Brexit "will be damaging to our ability to work with other EU countries on foreign affairs and to influence their outlook overall," the former foreign secretary told a House of Lords committee.

Liberal Democrat Brexit spokesman Tom Brake said Mr Barnier's comments had exposed the Government's "fingers-in-ears" approach to Brexit.

Labour MP Ben Bradshaw, a leading supporter of the Open Britain campaign, said: "Far from having our cake and eating it, we're in danger of having slices taken away from us unless the Government starts putting the economy and jobs first in the negotiations."

But Ukip Brexit spokesman Gerard Batten said: "This is an early negotiation position from the EU, so of course they are trying to sound harsh. What else would we expect from them?"