The UK cannot enjoy both "full sovereignty" and "full access" to the EU's internal market, says Germany's ambassador to the EU. London and Brussels hope to reach a new Brexit deal before the end of 2020.
Image: picture-alliance/dpa/K. O'Connor
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With time running out for the UK and the EU to settle their post-Brexit ties, Germany's EU envoy Michael Clauss on Thursday warned that "no real progress" was being made.
The UK officially left the bloc on January 31, but maintains its travel and trade connections with the EU under a transitional deal set to expire by the end of the year.
Speaking to European Policy Center think-tank in Brussels, Clauss called on the UK to adopt a "more realistic approach."
While reaching the deal was "absolutely" possible, Clauss warned that it was not possible for Britain to have "full sovereignty and at the same time full access to the EU's internal market."
UK officials have an option to demand an extension of the transitional period, but would need to submit the request before the end of June. However, London has repeatedly rejected this possibility.
Last week, the UK's chief Brexit negotiator, David Frost, said that "we are not going to ask for an extension and if the EU asks for one, we will not a agree to that." Brexit supporters in the UK have grown frustrated with delays that have been plaguing the divorce proceedings since the Brexit referendum in June 2016.
On Thursday, Ambassador Clauss confirmed that the EU was working on an assumption that London would not ask for more time. Under these circumstances, a deal would need to be reached by October this year in order to be ratified and ready to go into force on January 1. Otherwise, the UK could face a so-called cliff-edge scenario which would effectively cut trade with the bloc.
EU Commission head Ursula von der Leyen, EU Council chief Charles Michel and UK Prime Minister Boris Johnson are set to meet later in June in an attempt to break the deadlock.
Deal or no deal? Brexit options boiled down
There's a spectrum of options on Britain's future relationship with the EU, each with a distinct set of advantages and disadvantages. While euroskeptic purists favor a clean "hard Brexit," others favor a softer landing.
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Hard or soft options
It's essentially a choice of a harder or softer Brexit. Harder prioritizes border control over trade. UK firms would pay tariffs to do business in the EU, and vice versa. The softest Brexit would see access to the single market, or at least a customs union, maintained. That would require concessions — including the payment of a hefty "divorce bill" — to which the UK has provisionally agreed.
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A leap into the unknown
Businesses have expressed concern about a "cliff edge" scenario, where Britain leaves the EU with no deal. Even if an agreement is reached at the EU bloc level, the worry is that it could be rejected at the last minute. Each of the 27 remaining countries must ratify the arrangements, and any might reject them. That could mean chaos for businesses and individuals.
If there is no agreement at all, a fully sovereign UK would be free to strike new trade deals and need not make concessions on the rights of EU citizens living in the UK or pay the financial settlement of outstanding liabilities. However, trade would be crippled. UK citizens in other parts of the EU would be at the mercy of host governments. There would also be a hard EU-UK border in Ireland.
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Divorce-only deal
The EU and the UK could reach a deal on Britain's exiting the bloc without an agreement on future relations. This scenario would still be a very hard Brexit, but would at least demonstrate a degree of mutual understanding. Trade agreements would be conducted, on an interim basis, on World Trade Organization rules.
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Limited arrangement, like with Canada
Most trade tariffs on exported goods are lifted, except for "sensitive" food items like eggs and poultry. However, exporters would have to show their products are genuinely "made in Britain" so the UK does not become a "back door" for global goods to enter the EU. Services could be hit more. The City of London would lose access to the passporting system its lucrative financial business relies on.
Under the Swiss model, the UK would have single market access for goods and services while retaining most aspects of national sovereignty. Switzerland, unlike other members of the European Free Trade Area (EFTA), did not join the European Economic Area (EEA) and was not automatically obliged to adopt freedom of movement. Under a bilateral deal, it agreed to do so but is still dragging its feet.
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The Norway way
As part of the European Economic Area, Norway has accepted freedom of movement – something that no Brexit-supporting UK government would be likely to do. Norway still has to obey many EU rules and is obliged to make a financial contribution to the bloc while having no voting rights. Some see this as the worst of both worlds.
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A Turkey-style customs union
Turkey is the only major country to have a customs union with the EU, as part of a bilateral agreement. Under such an arrangement, the UK would not be allowed to negotiate trade deals outside the EU, instead having the bloc negotiate on its behalf. Many Brexiteers would be unwilling to accept this. It would, however, help minimize disruption at ports and, crucially, at the Irish border.
