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European Parliament Seeks Aligned EU-UK Rules

by Ulrika Lomas, Tax-News.com, Brussels

20 February 2020


Members of the European Parliament (MEPs) want the EU and UK to reach an ambitious new free trade agreement, but have stressed that there must be a "level playing field."

On February 12, the European Parliament adopted a resolution providing MEPs' initial input to the negotiations on a new EU-UK partnership after the Brexit transition period. The text was adopted by 543 votes to 39, with 69 abstentions.

Parliament said that the association agreement should be as deep as possible, and based on three main pillars: an economic partnership, a foreign affairs partnership, and specific sectoral issues. MEPs emphasized that a non-EU country cannot enjoy the same rights as a member state and that the integrity of the single market and the customs union must be preserved at all times.

Regarding the negotiation of a new trade agreement, MEPs broadly agreed with the lines along which the Commission has proposed to proceed. The Commission has said that the "envisaged partnership should include an ambitious, wide-ranging, and balanced economic partnership," which should "aim at establishing a free trade area ensuring no tariffs, fees [or] or charges... provided that a level playing field is ensured through robust commitments."

MEPs said that given the size of the UK's economy and its proximity to the EU, future competition with the EU must be kept open and fair through a "level playing field." This would entail guarantees for equal rules on tax, state aid, consumer protection, social, environmental, and climate matters.

According to MPs, to maintain quota-free, tariff-free trade relations, the British Government should pledge to update its rules on competition, labor standards, and environmental protection. The intention should be to secure "dynamic alignment" of EU-UK laws.

MEPs also made clear that to gain Parliament's consent, any EU-UK free trade agreement must be conditional on a prior agreement on fisheries being reached by June 2020. If the UK does not comply with EU laws and standards, the Commission should evaluate possible quotas and tariffs for the most sensitive sectors.

Under the transition period, EU law will continue to apply to the UK until at least December 31, 2020. The transition period can be extended if a decision is made on this issue by July 1, 2020.

Parliament's resolution is based on the European Commission's draft negotiating directives, which were published on February 3. These directives need to be signed off by the 27 EU member states' representatives in the Council, which is expected to happen on February 25.

TAGS: environment | tax | European Commission | free trade agreement (FTA) | value added tax (VAT) | export duty | law | tariffs | United Kingdom | fees | import duty | standards | trade | European Union (EU) | Europe

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