London: EU chief negotiator Michel Barnier warned Monday that Britain faced “unavoidable” trade barriers after Brexit if it also quit the bloc’s single market and customs union, urging Prime Minister Theresa May to make her choice.
After talks with May and Brexit minister David Davis in London, Barnier repeated that the EU needed “clarity” on what they wanted from the future relationship.
“Without customs union and outside the single market, barriers to trade in goods and services are unavoidable,” he said.
“Time has come to make a choice.”
During a visit later to the European Banking Authority, which will relocate to Paris after Brexit, Barnier repeated his warning that financial services would be impacted.
“When the UK leaves the single market, the financial passport is gone,” he tweeted, referring to the rights that allow London banks to offer services across the bloc.
May says Britain will leave the EU’s single market and its customs union after Brexit, to ensure it takes back control of its laws and is free to strike new trade deals.
But critics warn her move will hit the British economy, and the subject is the cause of intense debate between pro-European and pro-Brexit factions in parliament.
As both sides up the pressure on the prime minister, senior ministers will hold two days of talks on Wednesday and Thursday to try to thrash out a plan.
Brexit negotiations resume in Brussels on Tuesday on a two-year transition period after Britain’s withdrawal in March 2019, followed by the start of trade talks in April.
Barnier said he expected an official position from London on the future relationship “in the next few weeks”.
The prime minister’s spokesman said: “We have said that we want the customs arrangement to be as frictionless as possible and that’s what we will be looking to achieve as part of the deep and special partnership we are seeking with the EU.
“We think we can achieve that because it’s in the interests of the UK and the European Union.
“As with all these matters, it’s the beginning of a negotiation.”
‘Play by same rules’
London and Brussels struck a preliminary deal on key separation issues in December, and this week begin technical talks on a transition period to smooth Britain’s withdrawal.
Both sides agree that relations during that period should continue largely as they are now, with Britain maintaining trading ties in return for keeping up its budget contributions, but without having any say in making policy.
However, May risked upsetting Brussels last week by questioning the rights of EU citizens who arrive in Britain during that time.
“The conditions are clear, very clear. Everyone has to play by the same rules during this transition,” Barnier said on Monday.
Having previously set a deadline for October to ratify any deal before Brexit day, he warned there was “not a moment to lose”.
Commanding a majority
The prime minister has been under increasing pressure from pro-Brexit lawmakers in her Conservative party.
Many eurosceptic MPs were angered when finance minister Philip Hammond, who has warned of the impact of Brexit on jobs and growth, last month suggested the British and EU economies would move only “very modestly, apart”.
The Sunday Times newspaper this weekend reported a fresh plot to remove the prime minister if she deviated from her plan to leave the customs union.
“She can only command a majority in parliament on her present policy,” wrote lawmaker Bernard Jenkin in The Sunday Telegraph newspaper.
But pro-European Conservative MP Anna Soubry said the number of MPs who wanted a clean break was “35 tops” out of 650 in the House of Commons.
“PM says she wants ‘frictionless’ trade with EU. She’s right and the only way to achieve that is being in #CustomsUnion,” she tweeted.