EU-UK future economic ties could be ambitious, but only be trade agreement

BRUSSELS - "The only remaining possible model (for EU-Britain future economic relationship) is a free trade agreement. I hope that it will be ambitious and advanced ... but anyway it will only be a trade agreement," Donald Tusk, president of the European Council, told reporters Wednesday in Luxembourg.

Tusk insisted the EU "does not want to build a wall", but Brexit means "we will be drifting apart", BBC reported.

British Prime Minister Theresa May had confirmed that Britain will leave the Single Market, leave the customs union and leave the jurisdiction of the European Court of Justice.

Therefore, the only remaining possible model left is a free trade agreement, Tusk explained during a joint press conference with Prime Minister of Luxembourg Xavier Bettel.

For the European Union (EU), the trade agreement should cover all sectors and with zero tariffs on goods. Like other free trade agreements, it should address services. And in fisheries, reciprocal access to fishing waters and resources should be maintained, said Tusk.

Calling the upcoming agreement to be the first FTA in history that loosens economic ties, instead of strengthening them, Tusk noted that the agreement "will not make trade between the UK and the EU frictionless or smoother. It will make it more complicated and costly than today, for all of us."

"This is the essence of Brexit," he added.

The joint press conference marked the president's first stop in a long journey to consult EU27 on the draft guidelines for the EU side about the framework for the future relationship with Britain.

Commenting the draft guidelines, an official spokesman of May said, "We look forward to seeing the final guidelines when published and hope they will provide the flexibility to allow the EU to think creatively and imaginatively about our future economic partnership."

In a keynote speech at the City of London's Mansion House Friday, May said, "What I am seeking is a relationship (future economic partnership with the EU) that goes beyond the transactional to one where we support each other's interests."

"I want the broadest and deepest possible agreement, covering more sectors and co-operating more fully than any Free Trade Agreement anywhere in the world today."

In a word, Britain is seeking a future relationship with the EU as a "Canada-plus" (i.e. plus services, including financial services) or a "Norway-minus" (i.e. minus free movement of labor) agreement.

But Tusk made it clear that this approach is impossible.

"The EU cannot agree to grant the UK the rights of Norway with the obligations of Canada," said Tusk.

"No Member State is free to pick only those sectors of the Single Market it likes, nor to accept the role of the ECJ only when it suits their interest. By the same token, a pick-and-mix approach for a non-member state is out of the question. We are not going to sacrifice these principles. It's simply not in our interest," he added.

In her speech, May set five tests for the 2nd phase negotiation -- implementing the decision of the British people; reaching an enduring solution; protecting British security and prosperity; delivering an outcome that is consistent with the kind of country Britain wants to be and bringing the country together, and strengthening the precious union of all our people.

But, "the draft guidelines are expected to firmly rebuff Theresa May's proposal of 'managed divergence' from EU rules and regulations and effectively present Britain with a binary choice: a limited free trade deal a la Canada, or binding membership of EU institutions a la Norway," said Jack Blanchard from the POLITICO magazine.

However, "this is only a draft. The EU27 will now discuss and revise the proposals, before agreeing a final position at the EU Council summit on March 23. And only then do negotiations with Britain actually begin," Blanchard added.