EU figures say they are baffled by the UK government’s announcement of an “ambitious” reset while insisting restrictive red lines remain in place after Brexit.
A recent working paper outlining the EU’s interests said there would be “limited economic benefits” from Britain ruling out re-entry into the EU’s customs union or single market or agreeing to the free movement of people.
Some in the EU suspect that the UK government believes it can get a quid pro quo for defense trade. This, as they say, will never happen.
“The UK is wrong to think it can use the defense deal as a backdoor to get us nice trade deals,” an EU diplomat told me.
“It’s like a weird tug-of-war for us. With a devil on one shoulder in the EU and an angel on the other. In terms of values, we have more in common with the UK than we do apart.
“The EU wants to take steps to bring the UK closer together, but on the other hand we cannot get rid of the technicalities that are the basis of the EU. We cannot make special deals, even if it restricts relations with Great Britain.’
In order for economic relations to improve significantly, both sides will have to make compromises.
Brussels has no appetite to tear up the TCA, the already existing trade agreement between the EU and the UK. But you see the openness of the EU to start negotiations on different economic sectors at the same time.
“We can walk and chew gum at the same time,” insisted one EU diplomat.
There is also recognition from the UK that sectoral agreements may need to provide for alignment with EU rules in these sectors.
