LONDON — The European Union’s chief Brexit negotiator Michel Barnier has cautioned the UK that “frictionless trade” is “not possible” following Brexit.
Speaking in Brussels on Thursday, Barnier said that it was his “duty” to say that “the decision taken by the UK to leave the EU will have major consequences.”
The EU’s chief negotiator said that the UK government’s position made it clear that the UK is leaving both the Customs union and the Single market, and this would not allow “frictionless trade.”
Barnier said: “I have heard some people in the UK argue that one can leave the single market and keep all of its benefits. That is not possible. I have heard some people in the UK argue that one can leave the Single Market and build a Customs Union to achieve frictionless trade. That is not possible.”
This will be a blow for both the Conservative minority government and Labour, who have both argued that trade will continue as usual post-Brexit.
The government set out its plans to continue towards a ‘hard Brexit’ in the Queen’s Speech, which made it clear that they intend to take the UK out of the Single Market and Customs Union.
The Labour party has pledged to leave the single market in order to end free movement of people, but officials say they are in favour of a “jobs-first” Brexit.
Barnier said that”you cannot leave the Single Market and then opt into the sectors you like the most… the free movement of goods, services and capital are indivisible, we cannot let the Single Market unravel.”
He continued “only the combination of a Single Market and a Customs Union allows good to move around freely… by choosing to leave the EU you are moving yourself deliberately outside that border and those rules.”
Reflecting on the UK’s vote to leave the EU, he said: “The decision to leave the EU has consequences and I have to explain to citizens, businesses and civil society on both sides of the Channel what those consequences mean for them.”
In a clear retort to the UK’s prime minister, Theresa May, Barnier said: “a fair deal is far better than no deal,” and “no deal would worsen the loser/loser situation which will necessarily be the result of Brexit and objectively the UK would have rather more to lose than its partners.”
The idea of a trading relationship with “friction” could impact the UK most directly on the border between Northern Ireland and the Republic of Ireland, which would become a hard border were the UK to not be in a customs union, causing problems for both trade and peace in Ireland.
Barnier also said that the EU would not seek to punish the UK: “There is no punishment for Brexit and of course no spirit of revenge. But Brexit has a cost, also for business in the EU27, and businesses should assess with lucidity the negative consequences of the UK choice on trade and investment and prepare to manage that.”
The international trade secretary, Liam Fox, criticised the media for being too negative on Brexit in the House of Commons on Thursday. Fox told MPs: “Some elements of our media would rather see Britain fail than Brexit succeed. I cannot recall a single time in recent times when I have seen good economic news that the BBC did not describe as ‘despite Brexit’.”