Johnson and Barnier speeches expose gulf between UK and EU on standards and fishing

The CBI has said the government should not allow business to be “caught in the crossfire” of UK-EU trade talks. Responding to Boris Johnson’s speech, CBI president John Allan said:

Business optimism is returning. The right signals about the UK’s future relationship with the EU will turn confidence into investment.

The Prime Minister’s clear, vocal commitment to global free trade and maintaining high standards through a thriving relationship with the EU will help.

The challenge is to ensure business confidence is not caught in the crossfire of a tough, public negotiation. Talk of a bare bones deal could pause investment.

Michel Barnier's speech and Q&A - Summary

Here are the main points from Michel Barnier’s speech and Q&A summary.

Michel Barnier reminded Boris Johnson that he has already agreed in a “very important” declaration to stay true to EU rules on subsidies and standards, as Brussels staked its opening negotiating position on the UK’s future relationship with the bloc.

Barnier said that the UK would have to meet EU concerns on the level playing field and on fishing if it wants to have an ambitious free trade deal. (See 12.38pm.) He said the EU would be “very demanding” in relation to level playing field provisions. He said:

We don’t want that divergence [being followed by the UK] to become an instrument for unfair competition, whereby there would be disadvantages for EU industry. I can’t get embroiled in the details of the mechanism - that will all be discussed in the negotiation - but we’re going to be paying very close attention, and be very demanding, when it comes to the quality and the credibility of this level playing field mechanism.

But he also claimed that the EU was not looking for “alignment” from the UK. He said:

We are not asking for alignment - I know it is a sort of red rag to the UK. I mention it sparingly if at all. What we are a looking for is consistency.

As the BBC’s Adam Fleming points out, it was not clear who alignment differs from a level playing field, which the EU is insisting on. He said:

Barnier said getting a trade deal would be “inextricably linked” to the UK and the EU reaching a deal on fishing. He said:

It’s clear that the agreement that we wish to have in the interests of UK fishermen and in the interests of European fishermen - I call that reciprocal access to our territorial waters and our markets - that agreement on fisheries will be inextricably linked to the trade agreement, as indeed will be ... the agreement on the level playing field agreed with Boris Johnson.

He said the EU would insist on the European Court of Justice continuing to play a role in certain respects. Referring to security aspects of the negotiation, he said:

The UK should commit itself to applying the European Convention on Human Rights.

Secondly, the British government should set up adequate standards for data protection - this is an essential concern for the Europeans and this is something that the European parliament is paying a great deal of attention to.

Thirdly, any co-operation should be subject to an effective dispute settlement mechanism.

Where a partnership is based on concepts derived from European law, obviously the European Court of Justice should be able to continue its role in full.

He said the main agreement being negotiated would not cover Gibraltar. He said:

Territorial application of any agreement that we are negotiating will not include the territory of Gibraltar … The kingdom of Spain will have to be involved and give its agreement to a specific agreement on Gibraltar.

Level playing field' not a generally accepted concept, says No 10

At a briefing after Boris Johnson’s speech Downing Street said the concept of a “level playing field” was “not a generally accepted one”. The prime minister’s spokesman told reporters:

Level playing field is an EU concept, it’s not a generally accepted one.

Some FTAs [free trade agreements] contain some light provisions on competition, subsidy, environment and the like. Only the EU seeks to export its own laws into these areas and police them itself.

And our position is that there is no need to go further than the sort of provisions that the EU has agreed with countries such as Canada to reduce trade distortions.

The Welsh first minister, Mark Drakeford, has expressed reservations about Boris Johnson’s hardline negotiating position. Speaking at a press conference in Cardiff, Drakeford said:

The red line approach to negotiation has not served us well during the first phase of leaving the European Union. It doesn’t help to create the flexibility and compromise that any negotiation is bound to involve.

Drakeford said Wales would be working hard over the next weeks and months to strengthen its bonds with trading partners.

This would include work around the Wales v Ireland rugby match in Dublin on Saturday and events in Berlin, Paris and Brussels in the spring. Drakeford said work was also being done to boost trade between Wales and Canada and the US. He said:

We recognise that leaving the European Union means we have to work even harder to make sure that Wales is known, promoted and successful around the world.

The pound has fallen sharply today in the light of Boris Johnson’s speech, which has renewed fears of the UK leaving the transition period at the end of the year without a trade deal, my colleague Julia Kollewe reports on the business live blog. Traders clearly aren’t impressed by the notion of an Australian deal, or by the argument that not having a deal is not the same has having no deal.