The European parliament could veto any trade deal between the UK and the European Union that lacks “robust” safeguards to ensure fair competition and strong standards on the environment and workers’ rights, according to a leaked document.
A draft resolution, seen by the Guardian, which will be put to a vote on Friday, underlines the implicit threat to block the EU-UK trade deal. Urging the British government to “revise its negotiation position”, the text states that a level playing field is the “necessary condition for the European parliament to give its consent to a trade agreement with the UK”.
The level playing field – common standards on environment, workers’ rights and state subsidies for companies – is one of the main stumbling blocks of Brexit talks that has contributed to the current deadlock.
The parliament’s text underlines the narrow room for manoeuvre available to the EU chief negotiator, Michel Barnier, who last week hinted at a possible concession on state aid – the rules that limit government subsidies for companies. Barnier declined to back publicly the EU’s opening demand that European rules on state aid must be written into UK law.
The parliament resolution, however, states that EU standards must be safeguarded to avoid a “race to the bottom”, while revealing little slack to escape the EU’s opening position of matching EU rules on state aid – so-called “dynamic alignment”.
Brussels sources have played down talk of imminent compromise on the crucial issue of state aid.
(January 31, 1961) Brefusal
The French president, Charles de Gaulle, vetoes Britain’s entry to EEC, accusing the UK of a “deep-seated hostility” towards the European project.
(January 31, 1973) Brentry
With Sir Edward Heath having signed the accession treaty the previous year, the UK enters the EEC in an official ceremony complete with a torch-lit rally, dickie-bowed officials and a procession of political leaders, including former prime ministers Harold Macmillan and Alec Douglas-Home.
(January 31, 1975) Referendum
The UK decides to stay in the common market after 67% voted "yes". Margaret Thatcher, later to be leader of the Conservative party, campaigned to remain.
(January 31, 1984) 'Give us our money back'
Margaret Thatcher negotiated what became known as the UK rebate with other EU members after the "iron lady" marched into the former French royal palace at Fontainebleau to demand “our own money back” claiming for every £2 contributed we get only £1 back” despite being one of the “three poorer” members of the community.
It was a move that sowed the seeds of Tory Euroscepticism that was to later cause the Brexit schism in the party.
(January 31, 1988) The Bruges speech
Thatcher served notice on the EU community in a defining moment in EU politics in which she questioned the expansionist plans of Jacques Delors, who had remarked that 80% of all decisions on economic and social policy would be made by the European Community within 10 years with a European government in “embryo”. That was a bridge too far for Thatcher.
(January 31, 1989) The cold war ends
Collapse of Berlin wall and fall of communism in eastern Europe, which would later lead to expansion of EU.
(January 31, 1990) 'No, no, no'
Divisions between the UK and the EU deepened with Thatcher telling the Commons in an infamous speech it was ‘no, no, no’ to what she saw as Delors’ continued power grab. Rupert Murdoch’s Sun newspaper ratchets up its opposition to Europe with a two-fingered “Up yours Delors” front page.
(January 31, 1992) Black Wednesday
A collapse in the pound forced prime minister John Major and the then chancellor Norman Lamont to pull the UK out of the Exchange Rate Mechanism.
(January 31, 1993) The single market
On 1 January, customs checks and duties were removed across the bloc. Thatcher hailed the vision of “a single market without barriers – visible or invisible – giving you direct and unhindered access to the purchasing power of over 300 million of the world’s wealthiest and most prosperous people".
(January 31, 1993) Maastricht treaty
Tory rebels vote against the treaty that paved the way for the creation of the European Union. John Major won the vote the following day in a pyrrhic victory.
(January 31, 1997) Repairing the relationship
Tony Blair patches up the relationship. Signs up to social charter and workers' rights.
(January 31, 1999) Ukip
Nigel Farage elected an MEP and immediately goes on the offensive in Brussels. “Our interests are best served by not being a member of this club,” he said in his maiden speech. “The level playing field is about as level as the decks of the Titanic after it hit an iceberg.”
(January 31, 2003) The euro
Chancellor Gordon Brown decides the UK will not join the euro.
(January 31, 2004)
EU enlarges to to include eight countries of the former eastern bloc including Poland, Hungary and the Czech Republic.
(January 31, 2007)
EU expands again, allowing Romania and Bulgaria into the club.
(January 31, 2015) Migrant crisis
Anti-immigration hysteria seems to take hold with references to “cockroches” by Katie Hopkins in the Sun and tabloid headlines such as “How many more can we take?” and “Calais crisis: send in the dogs”.
(February 1, 2016)
David Cameron returns from Brussels with an EU reform package - but it isn't enough to appease the Eurosceptic wing of his own party
(June 23, 2016) Brexit referendum
The UK votes to leave the European Union, triggering David Cameron's resignation and paving the way for Theresa May to become prime minister
(January 31, 2020) Britain leaves the EU
After years of parliamentary impasse during Theresa May's attempt to get a deal agreed, the UK leaves the EU.
EU officials want to see a common approach on state aid that means the UK and EU would move together in adapting rules in response to the economic outlook.
In recent weeks, many EU restrictions on company bailouts and subsidies have been lifted in response to the coronavirus pandemic. Brussels wants to ensure similar coordination between EU and UK state aid rules in future.
“But the substance doesn’t exist right now,” an EU official said. “We made important commitments in the political declaration. The UK has not followed up on this. And it is also worrying that we have no idea what the UK state aid control system will look like as of 1 January 2021.”
State aid was one of the most difficult issues, said an EU diplomat, who added it was too early to speak of a compromise.
EU sources said the absence of strong international rules makes state aid especially complex. “You have the [World Trade Organization] agreement on subsidies but it is an old agreement and it is not easy to use. So it’s not really enough. You would need to find something else.”
British officials have also played down talk of a breakthrough on state aid – and there were no detailed discussions in the latest round of talks.
In a recent letter to Barnier, the UK chief negotiator, David Frost, described the EU’s demand that the UK accept state aid rules as “egregious”. Sources say the government cannot be constrained in its ability to run its own rules on state aid.
“We cannot accept any alignment with EU rules, the appearance of EU law concepts, or commitments around internal monitoring and enforcement that are inappropriate for [a free trade agreement],” Frost has said.
Meanwhile, Brussels has low expectations of a reset emerging from a meeting between Boris Johnson and the EC president, Ursula von der Leyen, expected later this month. Attention is focusing instead on whether the next round of talks – pencilled in for early July – can proceed in a different way to help the search for compromise.
The European parliament’s trade and foreign affairs committees will vote on the draft resolution on Friday, while all MEPs will be able to have their say next week.
