EU warns of tough post-Brexit talks with UK

[LONDON] The EU's top official told Britain on Wednesday that it could lose its open access to the European market if it refused to extend post-Brexit partnership talks beyond 2020.

Ursula von der Leyen's warning to Prime Minister Boris Johnson came ahead of their first meeting in her capacity as European Commission president - and with Brexit just three weeks away.

Both sides are eager to move on from the more than three years of tumult and acrimony that followed Britain's decision in a 2016 referendum to end its decades-long membership of the bloc.

Mr Johnson secured a comfortable majority in parliament in a December election and is virtually assured that his divorce deal will finally be approved by Jan 31.

But that leaves just 11 months until the end of 2020 for London and Brussels to agree a new economic partnership covering everything from trade to data protection rules.

"There will be tough talks ahead and each side will do what is best for them," Mrs von der Leyen said in a keynote speech at the London School of Economics.

Downing Street said late Tuesday that Mr Johnson would tell Mrs von der Leyen that "there will be no extension" to the deadline.

Britain will keep following EU rules and paying its membership fees during the transition talks.

"Having waited for over three years to get Brexit done, both British and EU citizens rightly expect negotiations on an ambitious free trade agreement to conclude on time," Downing Street said.

Mr Von der Leyen countered on Wednesday that this meant Britain would probably lose unfettered access to its closest trading partner after 2020.

"With every choice comes a consequence. With every decision comes a trade-off," she said.

"The more divergence there is the more distant the partnership has to be.

"And without an extension of the transition period beyond 2020, you cannot expect to agree on every single aspect of our new partnership," she cautioned. "We will have to prioritise."

The European Union has never reached a trade agreement with any of its partners in less than a year, most often the process taking much longer.

But Mr Johnson is eager to brandish his Brexit credentials and reap what he considers to be the benefits of independence from Brussels.

Britain's refusal to align itself with the bloc on issues such as environmental standards and workers' rights could see UK companies face EU tariffs.

But it would also give Britain much more leeway in negotiating a new free trade agreement with the United States and growing countries in Asia down the line.

London's booming financial district would also be free from outside oversight that some in the sector fear, including the outgoing head of the Bank of England, Mark Carney.

"It is not desirable at all to align our approaches, to tie our hands and to outsource regulation and effectively supervision of the world's leading complex financial system to another jurisdiction," he told the Financial Times.

Eurasia Group analyst Mujtaba Rahman predicted that "Johnson will politely dismiss EU warnings that his timetable is unrealistic".

"Extending the transition, and thereby remaining in the single market and customs union with no say over their rules while handing over wads more cash, would seriously anger eurosceptic MPs and some voters," Mr Rahman wrote in The Guardian newspaper.

Mrs Von der Leyen stressed that Brussels preferred to keep close relations that avoided disruptions to global supply chains and are "unprecedented in scope".

"We are ready to design a new partnership with zero tariffs, zero quotas, zero dumping," she said.

"And we are ready to work day and night to get as much of this done within the timeframe we have."

Yet she insisted that any new deal must "uphold the integrity of the EU, its single market and its customs union. There can be no compromise on this".

AFP