The EU will reject Theresa May's single market for goods Brexit proposal

  • The European Union will not let the UK keep single market privileges for goods.
  • Theresa May is considering a Brexit proposal based on keeping the UK in the single market for goods but nothing else, according to multiple recent reports.
  • However, the EU will not accept that arrangement, a source close to chief negotiator Michel Barnier told Business Insider.
  • “As soon as you give the UK the single market for goods, the market begins to unravel,” they said.
  • Prime Minister May is in Brussels for the European Council summit, with Brexit on the agenda.

BRUSSELS – The European Union will reject any Brexit deal which allows the UK to remain in the single market for goods, a source close to the bloc’s negotiating team has told Business Insider.

The UK government is reportedly considering a Brexit policy which would see Britain retain single market membership for goods in order to minimise disruption to UK-EU trade, and go some way to preserving the invisible Irish border.

This week, a source close to Michel Barnier, the EU’s chief Brexit negotiator, told BI that the European Commission would reject this proposal. “We would say no to that. The UK is not going to get that,” they said.

“We’ve always been clear that it’s about protecting the integrity of the single market. As soon as you give the UK the single market for goods, the market begins to unravel. That’s where we are.”

Under the proposed model, the UK would remain fully aligned with EU rules and regulations on goods. That approach would be welcomed by businesses, who want to see tariff-free, frictionless trade continue.

However, the UK would diverge from EU rules in other areas, including services. Crucially, the arrangement would allow the UK to terminate its subscription to the EU’s freedom of movement policy, which allows EU citizens to travel, work, and live freely across the bloc.

The rejection adds to an early chorus of warnings from European counterparts that the proposals would be rejected out of hand. The Spanish foreign minister this week said the EU’s most powerful member states – Germany, France and Spain – would veto the arrangement on the basis that it would amount to cherry-picking.

“Germany will say no, France will say no, Spain will say no,” Josep Borrell said on Tuesday.

“We need this to be something we can actually use in negotiations”

European leaders are in Brussels for the latest European Council summit. Although not top of the agenda, Brexit remains a key talking point, with talks at an impasse over the thorny issue of the Irish border.

Theresa May’s Cabinet will convene next Friday in an attempt to reach a united position on Brexit before explaining its conclusions in a long-awaited white paper, expected to be published on the week beginning Monday, July 9.

The white paper has been billed as the most important and detailed piece of literature the UK government will produce on Brexit.

However, the 100-page draft version currently sitting in Westminster fails to answer some key questions, particularly what specific post-Brexit customs model the government wants to pursue, according to Channel 4.

The source close to Barnier and the EU’s negotiating team said the European side would be “very p****d off” if the white paper doesn’t deliver details, adding: “We need this to be something we can actually use in negotiations.”

They also stressed that recent suggestions that May is considering an association agreement amount to “basically talking about nothing” until the UK side clarifies what it would like to include in the agreement.

This approach, endorsed by the European Parliament, would help the UK avoid a complex array of bilateral agreements like those between the EU and Switzerland, by bringing all cooperation together into one agreement.

A spokesperson for the People’s Vote campaign told BI: “The Government is stumbling from one unworkable Brexit proposal to the next, and all the time the clock continues to tick down and the cliff edge gets ever closer.

“Despite the growing number of warnings from businesses, despite the concerns of citizens, the ideologues in government keep insisting they can have their cake and eat it.”

They added: “Rather than drive our country off the edge of the cliff in pursuit of a fantasy, we need a People’s Vote on the final Brexit deal, so that the people of this country can decide whether or not the deal on offer is good enough.”

The European Commission hopes to have the beginnings of a final deal on the table by the end of July in order to give both sides nearly two months to negotiate prior to the October European Council summit.

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