Britain’s latest plan for the financial services industry post-Brexit has been rejected by Brussels, which accused the plan of being at odds with the spirit of the EU.
Michel Barnier, the EU’s chief Brexit negotiator, questioned the UK’s plans to remain in the EU’s single market for goods while leaving it for services.
“In products that you use every day, like your telephone, between 20 to 40% of the value of the product is linked to services. How do we avoid unfair competition on services?”
He went on: “The UK says it is ready to align on goods, but only for standards controlled at the border,” he said. “The UK will not align to agri-food rules, for example, on pesticides or GMOs because compliance is not policed at the frontier. So how can we protect the European consumer?”
Another concern for the EU hinges on Britain’s proposals to access to the single market for goods yet without having to apply all of the bloc’s product standards.
The UK’s long-awaited white paper, published earlier this month, sought to set out a workable road-map for Britain’s future relations with the EU.
The asset management industry has long proposed an enhanced “equivalence” model, which has already enabled countries such as America and Singapore to simplify trade with the EU. Yet Barnier said the current proposal from Westminster is incompatible with the Brussels’ line that such equivalence policy decisions must be made centrally by Brussels.