Ladies and Gentlemen,
Looking beyond a difficult separation, which we hope will be an orderly one, the most important matter, in the common interest of our countries and of economic stability and growth, will be our future relationship with the United Kingdom.
We must now define the outline, the framework and the parameters of that future relationship.
To be clear, once the UK has left the Union the future relationship will be the subject of a new negotiation, in fact several negotiations – undoubtedly about ten parallel negotiating tables – during the transition period, until the end of 2020.
In parallel with the withdrawal agreement, we are therefore working with the UK on a joint political declaration that will describe this future relationship.
Last March, the EU-27 Heads of State or Government, with the President of the European Council, Donald Tusk, and the President of the Commission, Jean-Claude Juncker, clearly expressed the wish for a very ambitious partnership with the UK for the future. This ambition is shared by the European Parliament and its President, Antonio TAJANI.
Obviously, in our discussions with the United Kingdom, we are taking on board the positions set out in the UK's July White Paper. Since July, we have discussed all the chapters of that White Paper with the UK negotiators at both the technical and political level.
This White Paper is useful, as it allows us to benchmark our proposals against the UK proposals and identify points of convergence. We have found many such points. For example:
- In the area of internal security, foreign policy and military cooperation.
- In numerous areas of sectoral cooperation, for instance in aviation and transport.
- In the United Kingdom's participation in Union programmes, for example research programmes, where we will be willing to use all the tools at our disposal for our relations with non‑EU countries in the 2021-2027 Multiannual Financial Framework.
- In areas where we are willing to look at recourse to unilateral equivalence or adequacy decisions. I am thinking for example of financial services and data protection.
Ladies and Gentlemen,
With regard to our future economic partnership, however, certain UK positions set out in the White Paper do not correspond to the European Council's guidelines or to my mandate.
We agree that our future relationship is to be based on a free trade area without tariffs or quotas. This is a very important point.
But we have two points of divergence with the UK proposals, since these two points clearly contradict the foundations of our single market.
First, with regard to customs:
- The United Kingdom would like to preserve an autonomous trade policy, and be able to negotiate its own agreements, while remaining in our customs area.
o This means that it could apply lower tariffs than ours while remaining in a single market for goods with us. From our standpoint, this could cause a serious risk of distortion of trade flows, to the detriment of our enterprises.
- The United Kingdom would like to apply its own external tariffs while collecting European customs duties for us.
o This would mean the Union losing control over the collection of tax revenue, whether customs duties for the European budget or VAT revenue for the Member States.
- We know that the United Kingdom wishes to take back control of its borders, its policies and its money and we respect this choice. But the British Government must in turn accept that we need to retain control over our customs borders.
Another point of divergence concerns the regulatory framework for goods:
- The United Kingdom has asked to be aligned with many – but not all - of our standards for goods, so that it can preserve its current participation in our internal market for those goods alone.
- At the same time, the UK wants to remain free to diverge from the set of regulations governing the factors of production of these goods, whether it be services, labour, capital or social and environmental rules.
All of us here understand that such a system of single market ‘à la carte' would be tantamount to providing the United Kingdom and its companies with a major competitive advantage over companies operating in the single market.
Let's take two examples:
- On the regulatory cost of chemical products:
o 31 % of the regulatory price – I'm not talking about raw materials – is linked to compliance with product standards, which, in any case, all exporters must respect in order to enter our market. An example is the REACH regulation.
o The remainder, 69 %, covers compliance with other Union regulations, such as environmental rules. It's on these regulations that the UK would like to be able to diverge from us. For steel, the figures are even more eloquent.
And, as you know well, in certain economic sectors where the margins are low, minor divergences in regulations can create a significant competitive advantage for the UK if it remains in the single market for goods while diverging for all the rest.
This is why many business leaders, including here in Eurochambres, have asked us clearly, in all the countries of the Union, not to do anything in this negotiation to weaken the internal market – which, after Brexit, will still represent 60 %, in some cases more, of our trade. And the survey you have just done shows clearly your commitment to that internal market.
We have therefore proposed to the UK, taking into account our principles and the UK's red lines, an economic partnership founded on an ambitious free trade agreement, doubtless accompanied by a customs cooperation, a regulatory cooperation, and also a level playing field commensurate with such a free trade agreement.
It is this partnership that we wish to outline in our joint political declaration with the UK and that will be the basis of our future economic relationship.
Nothing will prevent us from enriching this economic relationship in the course of the negotiations, provided that our principles are respected.
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Ladies and Gentlemen,
The negotiations with the United Kingdom are being conducted intensively this week, day and night, with the objective set by the leaders of the 27 Member States that the agreement be within reach at the time of the European Council on 17-18 October, next Wednesday!
In this way we will try to maximise the chances of an orderly withdrawal and minimise the costs of Brexit for our enterprises.
In the event of no deal, these costs would be very high, firstly for the UK but also for some sectors of our economy. That is why ‘no deal' is not, and has never been, our scenario – even if our responsibility is to be prepared for all options.
Ladies and gentlemen,
I would like to be sincere with you: even in the event of an agreement, there will be adjustments for many of your companies as a result of the UK's decision. It can't be business as usual.
To help your enterprises to address these adjustments, the European Commission has published over 70 Brexit preparedness notices. These notices concern numerous economic sectors, from e-commerce to maritime transport, the energy market and financial services. I would like to thank Eurochambres and its members for your support for this preparation. The Task Force that I head is at your disposal.
Ladies and gentlemen,
I would like to conclude on a more personal note in my capacity as the person in charge of this negotiation, under the control of the European leaders and the European Parliament.
I would like to tell you what I think, as someone who voted for the first time, in his country, in 1972, in favour of the UK joining the European Union.
I campaigned for the Yes vote and I have never regretted that vote, because I believe in strength through unity. I believed then – and it is still more true today – that it was better to be together to secure respect and defend our interests and values.
I believe that Brexit has no added value. It is a negotiation with no positive outcome, a lose-lose game.
Its result is important for the future of Europe, beyond our relationship with the UK.
On our side, we will try to reach an agreement that is the fairest and the most precise on the separation and the most ambitious for the future, while defending the rights of European citizens and enterprises and preserving the foundations of the European project.
To achieve this, I will continue to conduct this negotiation to the end on behalf of the Union and respecting the principles set out by European leaders and the European Parliament from the very first day after the referendum.
I will continue to do this calmly, without any aggressiveness, with a lot of respect for a great country that will remain, in any case, our ally and our partner.
Thank you very much for your attention.