Advertisement

Why the EU has rebuffed Theresa May’s trade plan

As I warned yesterday, the EU’s draft guidelines on the parameters of a future trade deal with the UK are a serious rebuff for Theresa May and the UK.

They are an unambiguous “no” to her plan for a trade deal that would deliver little friction and cost to commerce between the UK and EU single market.

They say the best we can expect is a relatively bog standard Free Trade Agreement or FTA, in goods, similar to what Canada has recently negotiated - and not the broader, deeper more special arrangement, that would embrace our dominant service sector, she explicitly seeks.

Even her most conspicuous attempts to show to the EU that she is really on their side, namely her desire for associate membership of EU agencies regulating medicines, aviation and chemicals, have been rejected.

This is particularly humiliating for the PM, given that she proposed this over the almost prone and writhing bodies of the arch Brexiters in the Cabinet, Johnson and Gove.

The EU’s decision to face May down is both serious and completely predictable. And don’t be fooled by the status of today’s EU statement as only a “draft”.

It has been written after consultations with the EU’s governments, and represents their almost settled position. If it changes much between now and the important EU summit in a fortnight, that would be miraculous.

And if you doubt the intent of Germany, France et al, all you need to do is read paragraph 4, which acknowledges that the only trade deal available to the UK will have “negative economic consequences”, for them and us.

In preserving the purity and integrity of their single market, the rest of the EU have their eyes open.

Which presents May with the hideous political choice that I also mentioned yesterday - namely to follow the will of parliament, and drop some of her red lines, such as her insistence the UK must be able to negotiate trade deals with third parties - and see her party tear itself apart in the process - or somehow present this minimalist trade arrangement as what she really wanted all along.

This Brexit malarkey doesn’t get easier for her.