LONDON — Britain and the European Union can agree a free trade deal broader in scope than “any the EU has agreed before,” David Davis said, warning negotiators not to block an agreement by putting “politics before prosperity.”
Speaking in Berlin on Thursday, the Brexit secretary said the U.K. was “much closer than Canada, much bigger than Norway,” and should therefore qualify for an unprecedented trade deal covering “goods, agriculture and services, including financial services.”
The U.K. government’s hopes for such a bespoke trade deal were dealt a blow shortly before Davis’ speech, as documents drawn up by EU chief negotiator Michel Barnier revealed that the EU sees a Canada-style “standard FTA” as the only realistic model for post-Brexit trade with the U.K.
Such an agreement would have limited scope for the U.K.’s all-important financial services industry.
“We will not engage in a race to the bottom” — David Davis
However, speaking at an event hosted by the Süddeutsche Zeitung newspaper, Davis insisted that “the future will be brighter” for both the U.K. and Germany if the two sides could achieve the deeper trading partnership Britain wants.
In the interest of frictionless trade, the U.K. would maintain European-style high standards on goods, services and workers’ rights and environmental protections.
“We cannot be cheaper than China. And we will never have more resources than Brazil. And that is why the U.K. is committed not only to protecting high standards, but strengthening them … we will not engage in a race to the bottom,” he said.
The new trading relationship would require “an effective dispute resolution mechanism,” he said, which would be neither the U.K. courts nor the European Court of Justice
U.K. negotiators remain hopeful that Brexit talks will be given the green light to progress to phase two — transition and future trade — after December’s European Council.
Davis said there was an “urgency” around securing a transition deal in particular, not just for the U.K. but for all EU countries, as well as their businesses and citizens. He reiterated that the U.K. would be willing to accept the jurisdiction of the European Court of Justice during such a transition period.
Talks are currently deadlocked on all three key withdrawal issues — the U.K.’s financial obligations to the EU, citizens’ rights and the Northern Irish border.
Davis told his audience he did not want to give a “blow-by-blow” account of the Brexit talks but made a pointed reference to the U.K.’s defense and security commitment to the EU — which it says it will maintain after Brexit — pointing out that if the U.K. spent the EU average of defense and international development, it would be spending £22 billion less a year — a figure close to the one the EU wants the U.K. to commit to on top of commitments already made as part of the so-called “divorce bill.”
“We are the same country we have always been. With the same values and same principles we have always had. A country upon which our partners can rely” — David Davis
Citing reports in the Süddeutsche Zeitung, Davis challenged what he said was the German perception of the U.K. since Brexit, insisting his country was not one of “short-sighted islanders.”
“We are the same country we have always been. With the same values and same principles we have always had. A country upon which our partners can rely,” he said.
Pointing to the successes of U.K-German trade to date, he called on negotiators not to “allow short-term interests to risk those hard-earned gains.”
“Because putting politics above prosperity is never a smart choice,” he added.