Speech by Michel Barnier to the students at ESCP Europe: Cooperation in the Age of Brexit

Met dank overgenomen van , gepubliceerd op woensdag 26 februari 2020.

Ladies and gentlemen,

Dear ESCP students,

For many reasons, I am happy to be here before you today in this chamber that is the heart of European democracy.

And I should like to congratulate you on coming here to work on the climate issue, one of the foremost challenges that the European Union must address, and the priority of the European Commission presided by Ursula von der Leyen.

I want to talk to you today about another European challenge: our relationship with the United Kingdom.

When I graduated from the ESCP in 1972, the UK was preparing to join the European Union.

At the time, our school was beginning to expand in Europe. Its first foreign campus opened in London in 1974.

When I see what the ESCP has become, not just in Paris and London but also in Berlin, Madrid, Turin and Warsaw, I sometimes tell myself that my degree has gained in value!

And I'm sure that my years as a student on avenue de la République helped to strengthen my commitment to Europe.

In 1972, that commitment led me to campaign for the UK to join the European Union.

Of course, I regretted the British people's decision in 2016 to leave the EU, even though I have always respected it.

With the 27 Member States, the European Parliament, the European Commission and the exceptional team I have around me, we have sought - and found - arrangements to ensure the orderly withdrawal of the UK, a country with which we wish to maintain a strong relationship.

I was recently invited to speak on the morning show of a French radio station.

The first listener asked me a question, which he said was ironic: ‘You've explained to us that you've just spent three years negotiating an agreement with the United Kingdom. So why are you talking about opening a new negotiation?'

It's a good question!

It took us three years to negotiate the separation.

We endeavoured to address many uncertainties directly linked to this separation.

-

For EU citizens living in the UK and British nationals living in EU countries.
-

For promoters of projects financed by the EU.
-

And, crucially, for Ireland and Northern Ireland, where what was at stake was not just the economy and trade but peace and stability too.

The Withdrawal Agreement that came into force on 1 February 2020 settles all these points. It will allow the orderly dismantling of 47 years of economic and political integration, which is what the UK wanted.

Since 1 February, the UK is a third country. It no longer has members in this Parliament, no longer has a seat in the Council of Ministers and no longer has a European Commissioner.

But we have made provision for a transition period until 31 December 2020, during which the UK will remain in the single market and the customs union and benefit from all European policies.

During this period of status quo, nothing will therefore change for citizens, consumers or businesses on either side.

We must now make the best possible use of this short period of stability.

-

To implement the Withdrawal Agreement precisely and rigorously, in particular the provisions concerning citizens and Ireland and Northern Ireland.
-

To prepare for the new situation that will come into being on 1 January 2021.
-

And to conduct a second negotiation, one on our future relationship with the UK.

Ladies and gentlemen,

That is the objective of this new negotiation that we are going to open next week and for which the Member States yesterday gave us a detailed mandate.

We will need to rebuild everything; build an ambitious and lasting partnership with a great country that will remain our friend, our ally and our partner. This is also the spirit of the resolution that has been voted here in the European Parliament.

[I - AN AMBITIOUS AND LASTING PARTNERSHIP]

What does this new partnership consist of?

The political declaration, which we agreed with Boris Johnson's government on 17 October 2019, just four months ago, is unprecedented in its scope and ambition.

-

It covers not just economic aspects but also security and defence issues.
-

On the economic front, it envisages a partnership going well beyond trade in goods and covering services, investment, intellectual property and public procurement, as well as energy, transport and fisheries, among other areas.
-

Lastly, at the heart of this economic partnership it provides for:

o On the one hand, an ambitious free trade agreement, with no tariffs or quotas on any goods, including agricultural and fishery products.

o On the other, solid guarantees for a level playing field.

Ladies and gentlemen,

We are no longer in the 1970s, when the main purpose of trade agreements was to take down tariff walls.

A modern trade agenda is about more than boosting economic exchanges and commercial opportunities.

Modern trade is sustainable trade.

It is about ensuring high standards, from social or environmental to health and safety.

This is even more true with a very close partner like the UK, with whom we should develop a common ambition.

As a member of the EU, the UK was central in reshaping the EU's trade policy, turning it into a tool to lift millions out of poverty, and to promote sustainability and fairness around the world.

-

How would we explain it if our future partnership with the UK did not now follow this same philosophy?
-

How credible would we be going into the next COP26 meeting, in Glasgow, if our future agreement allows businesses to cut corners on environmental and social rights for the sake of gaining market shares?

Of course, we have heard Prime Minister Johnson's assurances that the UK would never engage in a race to the bottom;

that it would not seek to undermine European standards;

that the UK would in fact maintain higher standards than the EU.

And we are ready to believe this.

In fact, I do not believe that the UK will become some sort of ‘Singapore on Thames'.

But that means it should not be a problem for the UK to agree on a number of ground rules.

I want to be very clear here:

We understand that the UK wants its own rulebook.

We respect that choice - the UK's sovereign choice.

We know that was the whole point of leaving the EU.

However, there are no two ways about it:

Every preferential trade agreement sets terms and conditions for opening up markets.

Our agreements with Turkey and Ukraine, and the recent one with Switzerland, include comprehensive provisions on competition and state aid.

Our deals with Canada, Japan, Korea foresee non-regression clauses on environmental and labour standards, as well as rules on subsidies and safeguards.

Each of these agreements contains tailored provisions, targeting specific areas of cooperation - or concern - with that partner.

And each of these agreements has enforcement mechanisms that are proportionate to the level playing field risks posed by that partner.

The logic is simple:

-

If you are a member of the EU, you get frictionless access to a market of 450 million consumers.
-

If you have no preferential trade agreement with the EU, you get access like any third country under standard WTO regime.
-

If you're somewhere in between, you get something in between.

But there is no single template. There never was and there never will be.

The UK says it wants ‘Canada'. But the problem with that is that the UK is not Canada.

And, by the way, Canada never told us they wanted a ‘South Korea' deal.

Our relationships with the UK and with Canada are worlds' apart:

-

A flight from Brussels to London takes 70 minutes.
-

A flight from Brussels to Ottawa takes over 10 hours.
-

EU27 trade with Canada reached 55 billion euro in 2018.
-

That sounds like a lot. But our trade with the UK was worth well over 500 billion euro. Nearly ten times more!

So, of course, our deals with Canada or with other countries give us reference points.

But we need to tailor each agreement to the reality of our relationship with each partner.

We are ready to offer the UK ‘super-preferential' access to our markets:

A level of access that would be unprecedented for a developed country.

And this with a direct competitor that is right on our doorstep,

and whose supply chains are today deeply intertwined with our own after decades of single market integration.

Is this really something we can do without firm guarantees that the UK will respect a level playing field and avoid unfair competitive advantages?

The answer, I'm afraid, is simple: We cannot.

We want competition in the future, but it must be fair. Fair and free; free and fair.

That is why, we are asking that the EU and the UK lay down, together, a number of rules, building on our current high standards, in specific areas:

State aid; environmental protection and the fight against climate change; social and labour rights; and taxation issues.

This way, we will make sure that, somewhere down the road, perhaps in years to come, neither side will use unfair subsidies - nor grant derogations on industrial emissions or on labour standards - to win industries from the other.

Because this would not just create unfair competition.

It would also cause damage to the environment.

And it would harm EU and UK workers.

The simple fact is that a modern and sustainable trade policy requires ground rules.

[II - TWO SOVEREIGN PARTNERS]

Ladies and gentlemen,

In the ongoing debate, the UK is insisting a lot on its own sovereignty.

-

On its sovereign power to set its own rules for its own benefit;
-

to define its own budget;
-

to secure its own borders;
-

to conclude its own trade deals;
-

and to set its own standards - standards that may well go beyond those of the EU - as the British government claims it wants to do.

Let me be very clear: Nobody contests this!

Of course, we respect the UK's sovereignty.

Of course, we respect its choices.

But this is not a just a point of philosophy.

It is also a question of pragmatism.

Firstly, because, as of January 2021, there will be real, tangible change in every domain.

-

In very important areas, such as trade, transport, energy or our mutual security.
-

Many of these changes will be mechanical, automatic.
-

So we will need to rebuild a relationship - one that is different to what we had before, because the UK is no longer a Member State.
-

In this context, the more the UK seeks to distance itself from the common framework of rules that we had built together over the years, the more our relationship will be distant, across sectors.

Secondly, it is a question of pragmatism because international cooperation - whether economic or security-driven - is always based on a degree of rule‑sharing, resource pooling and common governance.

This is not about giving up sovereignty.

It is not about ‘losing control'.

It is about using your sovereignty to further the interests of your country.

[A - The consequences of Brexit]

Ladies and gentlemen,

During its 47 years of membership, the UK built up a privileged position in a number of strategic areas:

financial services, of course, but also as a regulatory and certification hub, and a major entry point into the EU single market.

In great part, this was made possible by the fact that the UK was an EU Member State, within the single market.

But the UK has decided to leave this single market, the customs union, and all the EU's international agreements.

It no longer wishes to participate to our common ecosystem of rules, supervision and enforcement mechanisms.

This choice will have consequences as of 1January 2021, even if we reach a deal with the UK on our future relationship.

Consequences that businesses in the EU and in the UK must anticipate.

Readiness will be key.

Allow me to give you three concrete examples:

1/ First of all, regarding imports from the UK:

On 1 January 2021, whatever the outcome of the negotiation, there will be checks and controls on all UK goods entering the single market - as there are for any third country.

The EU must be able to assess risks on any product coming into its market and, if necessary, activate physical controls.

These checks are particularly important given the UK's position as a major entry point into the single market.

As part of these checks, we will need to pay the greatest attention to the rules of origin that we will put in our trade agreement.

Of course we love made in Britain!

But wemust have guarantees that the goods we import from the UK - tariff- and quota-free - really are British.

We cannot take the risk that the UK becomes an assembly hub for goods from all over the world, allowing them to enter the single market as British goods.

2/ Second example: financial services:

As of 1 January 2021, UK firms will lose the benefit of the financial services passport. Indeed, no firm from a country outside the Single market has such a passport.

This means that UK financial services firms will no longer be able to offer their services in all EU Member States based on their UK authorisation.

Those UK financial institutions that want to continue working in all certainty across the Single Market know that they can establish themselves in an EU Member State.

For the rest, in a number of sectors, such as in the area of Credit Rating Agencies, the EU will have the possibility to grant equivalences.

We will do so when it is in the interest of the EU; our financial stability; our investors and our consumers.

But these equivalences will never be global nor permanent. Nor will they be subject to joint management with the UK. They are, and will remain, unilateral decisions.

I read in the Financial Times recently that London must retain its primacy as a hub for wholesale financial markets without becoming a rule-taker of European regulation.

As a former Commissioner in charge of financial services, allow me to question that.

Why should we accept that the profits stay in London while the EU carries the risks?

The UK may not want to be a rule-taker. But we do not want to be the risk-taker.

When the next financial crisis strikes, who will foot the bill? I doubt the UK will foot it for the EU.

That is why the EU must take the responsibility for its financial regulation, supervision and stability.

3/ Third example: the authorisation and certification of goods for circulation in the EU Single Market.

As of 1 January 2021, as a third country, the UK will no longer be able to grant marketing authorisations for pharmaceuticals or type-approvals for cars for the EU market.

In addition, goods certified by UK bodies will no longer be allowed to be placed on the EU market.

Indeed, the EU cannot accept, whatever the sector, to be reliant on the UK - as a third country that is no longer participating in the internal market - for key regulatory, supervisory and certification tasks.

Especially when we are talking about very large volumes. And even more so when we are talking about critical products, such as medical devices.

Aside from possible supply risks, this would raise enforcement issues.

That is why these functions must be carried out in the EU in the future.

[B - The need for a framework of shared rules]

Ladies and gentlemen,

The UK's decision to leave the single market and customs union on 1 January 2021, in ten months' time, will therefore have mechanical and inevitable consequences. However, that will not prevent us from building an ambitious partnership together.

It was a great American president, Franklin Roosevelt, who said:

‘Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off.'

For me, there is no doubt that we must rebuild an ambitious partnership with the UK.

And we must do this in so many areas!

-

To ensure the continuity of air connectivity and road freight transport;

-

To seek an arrangement other than Euratom to ensure cooperation on the peaceful use of nuclear energy;

-

To put in place new arrangements to ensure the rights of mobility and residence of both EU and UK citizens.

The reality today, according to Roosevelt and Churchill (whom I could also have quoted), is that cooperation requires agreement on common rules, and also on a common governance framework.

This is true not just for the economy but also for our security, which must be a key element of our partnership.

In a changing world, the UK and the EU have a common interest in cooperating on the global level and in preserving stability in our neighbourhood, to the East and to the South. We face the same threats, whether abroad - in the Sahel, for instance - or at the heart of our democracies.

Terrorism, cyber attacks, organised crime, money laundering. In the face of these challenges, we must set up an efficient cooperation framework to ensure the security of our citizens - both UK and EU.

There can be no trade-off between trade and security.

However, the UK is a third country outside Schengen.

From 1 January 2021 it will no longer be affected by free movement of people.

The mutual security of our citizens therefore requires us to find new cooperation mechanisms for extradition, passenger data exchange and the sharing of information on wanted and missing persons, criminal records and offenders' DNA profiles.

How can our Member States agree to transfer such sensitive information, and even to extradite their citizens, without having guarantees on the treatment of these persons or these data?

The answer is, of course, that we cannot.

Any future cooperation with the UK on internal security will entail the UK:

-

committing to continue to apply the European Convention on Human Rights;
-

durably guaranteeing adequate data protection standards.

In addition, any cooperation must be subject to an effective dispute resolution mechanism.

And in this context, the EU's view is that where the partnership is based on concepts derived from European law, the European Court of Justice must continue to play a full role.

Finally, just as we must cooperate on internal security, it is in our interest to set up mechanisms for dialogue, consultation, information exchange and cooperation to address external threats.

To tackle conflicts and regional instability, or the proliferation of weapons of mass destruction, which concern all of us. But also to work together to promote peace, development and security worldwide.

In this area, we are ready to negotiate to find the right framework for cooperation, provided that is what the UK wants too.

Ladies and gentlemen,

An ambitious and lasting partnership between two sovereign partners: that is the EU's objective in these negotiations.

The key question is whether the UK still shares this ambition.

Recent statements by the Prime Minister and his government, including the Prime Minister's Written Statement, raise questions. Do the British still wish to use our Political Declaration as the starting point for this negotiation?

These declarations call into question various aspects of a fair and balanced agreement and a common ambition, in particular:

-

the level playing field;
-

cooperation in a common foreign and security policy;
-

the role, which we regard as crucial, of the EU Court of Justice in the area of cooperation on internal security and in interpreting concepts deriving from EU law;
-

and, lastly, the objective of a comprehensive institutional agreement, with a horizontal governance framework ensuring the proper implementation of that agreement and effective dispute resolution.

It goes without saying that we do not wish to judge the other side's intentions before the negotiations have even started.

But we can't make progress in these negotiations if we take three steps back even before beginning.

Ladies and gentlemen,

The European Union remains determined to reach a good deal.

But our responsibility to EU citizens and businesses is also to prepare for a no‑deal scenario concerning the future relationship by 31 December 2020.

In that case, the economic consequences would be serious:

-

For the countries of the European Union, 15% of whose exports are to the UK.
-

But above all for the UK, almost 50% of whose exports are to the EU.

Why? Because in that case all our trade would be subject to quotas and customs tariffs as well as the mandatory checks.

That is not what we want, but we are prepared for it.

In the meantime, the objective today is to start this negotiation, to conduct it without aggression or naivety; to do everything possible to build at least the basis of this future relationship.

But the future of Europe, the European project, goes beyond this new and different relationship with the United Kingdom.

Europeans have so many reasons to act together, if they look at the world lucidly, with open eyes.

We must see the world as it is and as it will be.

In this world, the EU's main priority is to build the future of the EU 27.

It is with that aim in mind that initiatives have been taken by the European Commission, and its President Ursula von der Leyen, to develop European defence, make the capital markets union a reality and build an industrial strategy for the digital and artificial intelligence sectors.

That is also the aim of the major project we are concerned with today - to build the Green Deal that will make Europe the world's first climate-neutral continent by 2050.

In the face of this major challenge that is keeping you busy, and all of us worried, allow me to quote some words of the British philosopher, historian and Nobel prize winner Bertrand Russell:

‘The only thing that will redeem mankind is cooperation… it is common to wish well to oneself, but in our technically unified world, wishing well to oneself is sure to be futile unless it is combined with wishing well to others'.

To do this, Europe will need each and every one of you and all your energy, not just today but in the years to come!

*Original version*

Mesdames et Messieurs,

Chers étudiants de l'ESCP,

Pour beaucoup de raisons, je suis heureux de me trouver devant vous aujourd'hui, dans cet hémicycle qui est le cœur de la démocratie européenne.

Et je vous félicite d'être venus ici pour travailler sur la question du climat, l'un des tout premiers défis que doit relever l'Union européenne, et la priorité de la Commission européenne, présidée par Ursula von der Leyen.

Pour ma part, je veux vous parler aujourd'hui d'un autre enjeu européen : notre relation avec le Royaume-Uni.

Lorsque j'ai été diplômé de l'ESCP en 1972, le Royaume-Uni s'apprêtait à entrer dans l'Union européenne.

C'était d'ailleurs le début de l'européanisation de notre école, qui a inauguré son premier campus étranger, à Londres, en 1974.

Quand je vois ce qu'est devenue l'ESCP, à Paris et à Londres, mais aussi à Berlin, Madrid, Turin, et Varsovie, je me dis parfois que mon diplôme a pris de la valeur !

Et aussi que mes années d'étudiant avenue de la République ont sans doute contribué à consolider mon engagement européen.

En 1972, cet engagement m'avait poussé à faire campagne pour l'entrée du Royaume-Uni dans l'Union européenne.

En 2016, j'ai évidemment regretté la décision des Britanniques de quitter l'Union européenne, même si je l'ai toujours respectée.

Et avec les 27 Etats membres, le Parlement européen, la Commission européenne et l'équipe exceptionnelle qui m'entoure, nous avons cherché - et trouvé - les voies d'un retrait ordonné de ce pays, avec lequel nous voulons maintenir une relation forte.

J'étais récemment invité de la matinale d'une radio française.

Et le premier auditeur m'a posé à l'antenne une question qu'il a qualifiée d'ironique : « Vous nous expliquez que vous venez de passer trois ans à négocier un accord avec le Royaume-Uni. Pourquoi donc parlez-vous d'ouvrir une nouvelle négociation ? »

C'est une bonne question !

Pendant trois ans, nous avons négocié la séparation.

En faisant en sorte de répondre à un grand nombre d'incertitudes directement liées à cette séparation.

-

Pour les citoyens européens vivant au Royaume-Uni et les Britanniques qui résident dans les pays de l'Union.
-

Pour les porteurs de projets financés par l'Union européenne.
-

Et, crucialement, pour l'Irlande et l'Irlande du Nord, où il n'était pas seulement question d'économie et de commerce, mais de paix et de stabilité.

L'accord de retrait entré en vigueur le 1^er février 2020 règle tous ces points. Il permettra de détricoter en bon ordre 47 années d'intégration économique et politique, comme le voulait le Royaume-Uni.

Depuis le 1^er février, le Royaume-Uni est un pays tiers, qui n'a plus de députés dans ce Parlement, ne siège plus au Conseil des ministres, n'a plus de Commissaire européen.

Mais jusqu'au 31 décembre 2020, nous avons prévu une période de transition, pendant laquelle le Royaume-Uni reste dans le marché unique et l'union douanière, et bénéficie de toutes les politiques européennes.

Pendant cette période de statu quo, rien ne change donc pour les citoyens, les consommateurs et les entreprises des deux côtés.

Nous devons maintenant faire le meilleur usage possible de cette désormais courte période de stabilité.

-

Pour mettre en œuvre de manière précise et rigoureuse l'accord de retrait, et notamment les dispositions portant sur les citoyens et sur l'Irlande et l'Irlande du Nord.
-

Pour nous préparer à la situation qui sera de toute façon nouvelle le 1^er janvier 2021.
-

Mais aussi pour mener une seconde négociation qui portera, elle, sur notre future relation avec le Royaume-Uni.

Mesdames et Messieurs,

Voilà donc l'objectif de cette nouvelle négociation que nous allons ouvrir la semaine prochaine. Et pour laquelle les Etats membres nous ont confié hier un mandat détaillé.

Il nous faut tout reconstruire ; bâtir un partenariat ambitieux et durable, avec un grand pays qui restera notre ami, notre allié et notre partenaire. C'est aussi l'esprit de la résolution qui a été votée ici dans ce Parlement européen.

[I - UN PARTENARIAT AMBITIEUX ET DURABLE]

En quoi consiste ce nouveau partenariat ?

La déclaration politique, que nous avons agréée avec le gouvernement de Boris Johnson le 17 octobre 2019, il y a seulement quatre mois, est sans précédent par son champ et par son ambition.

-

Elle couvre non seulement les aspects économiques mais aussi les questions de sécurité et de défense.
-

En matière économique, elle prévoit un partenariat qui aille bien au-delà du commerce des marchandises, et qui couvre les services, l'investissement, la propriété intellectuelle et les marchés publics, mais aussi l'énergie, les transports et la pêche, entre autres domaines.
-

Enfin, au cœur de ce partenariat économique, elle prévoit :

o D'un côté, un accord de libre-échange ambitieux, avec une absence de tarifs douaniers et de quotas sur tous les biens, y compris les produits agricoles et de la pêche.

o De l'autre, de solides garanties pour une concurrence équitable.

Ladies and gentlemen,

We are no longer in the 1970s, when the main purpose of trade agreements was to take down tariff walls.

A modern trade agenda is about more than boosting economic exchanges and commercial opportunities.

Modern trade is sustainable trade.

It is about ensuring high standards, from social or environmental to health and safety.

This is even more true with a very close partner like the UK, with whom we should develop a common ambition.

As a member of the EU, the UK was central in reshaping the EU's trade policy, turning it into a tool to lift millions out of poverty, and to promote sustainability and fairness around the world.

-

How would we explain it if our future partnership with the UK did not now follow this same philosophy?
-

How credible would we be going into the next COP26 meeting, in Glasgow, if our future agreement allows businesses to cut corners on environmental and social rights for the sake of gaining market shares?

Of course, we have heard Prime Minister Johnson's assurances that the UK would never engage in a race to the bottom;

that it would not seek to undermine European standards;

that the UK would in fact maintain higher standards than the EU.

And we are ready to believe this.

In fact, I do not believe that the UK will become some sort of ‘Singapore on Thames'.

But that means it should not be a problem for the UK to agree on a number of ground rules.

I want to be very clear here:

We understand that the UK wants its own rulebook.

We respect that choice - the UK's sovereign choice.

We know that was the whole point of leaving the EU.

However, there are no two ways about it:

Every preferential trade agreement sets terms and conditions for opening up markets.

Our agreements with Turkey and Ukraine, and the recent one with Switzerland, include comprehensive provisions on competition and state aid.

Our deals with Canada, Japan, Korea foresee non-regression clauses on environmental and labour standards, as well as rules on subsidies and safeguards.

Each of these agreements contains tailored provisions, targeting specific areas of cooperation - or concern - with that partner.

And each of these agreements has enforcement mechanisms that are proportionate to the level playing field risks posed by that partner.

The logic is simple:

-

If you are a member of the EU, you get frictionless access to a market of 450 million consumers.
-

If you have no preferential trade agreement with the EU, you get access like any third country under standard WTO regime.
-

If you're somewhere in between, you get something in between.

But there is no single template.

The UK says it wants ‘Canada'. But the problem with that is that the UK is not Canada.

And, by the way, Canada never told us they wanted a ‘South Korea' deal.

Our relationships with the UK and with Canada are worlds' apart:

-

A flight from Brussels to London takes 70 minutes.
-

A flight from Brussels to Ottawa takes over 10 hours.
-

EU27 trade with Canada reached 55 billion euro in 2018.
-

That sounds like a lot. But our trade with the UK was worth well over 500 billion euro. Nearly ten times more!

So, of course, our deals with Canada or with other countries give us reference points.

But we need to tailor each agreement to the reality of our relationship with each partner.

We are ready to offer the UK ‘super-preferential' access to our markets:

A level of access that would be unprecedented for a developed country.

And this with a direct competitor that is right on our doorstep,

and whose supply chains are today deeply intertwined with our own after decades of single market integration.

Is this really something we can do without firm guarantees that the UK will respect a level playing field and avoid unfair competitive advantages?

The answer, I'm afraid, is simple: We cannot.

We want competition in the future, but it must be fair.

That is why, we are asking that the EU and the UK lay down, together, a number of rules, building on our current high standards, in specific areas:

State aid; environmental protection and the fight against climate change; social and labour rights; and taxation issues.

Because this would not just create unfair competition.

It would also cause damage to the environment.

And it would harm EU and UK workers.

The simple fact is that a modern and sustainable trade policy requires ground rules.

[II - DEUX PARTENAIRES SOUVERAINS]

Ladies and gentlemen,

In the ongoing debate, the UK is insisting a lot on its own sovereignty.

-

On its sovereign power to set its own rules for its own benefit;
-

to define its own budget;
-

to secure its own borders;
-

to conclude its own trade deals;
-

and to set its own standards - standards that may well go beyond those of the EU - as the British government claims it wants to do.

Let me be very clear: Nobody contests this!

Of course, we respect the UK's sovereignty.

Of course, we respect its choices.

But this is not a just a point of philosophy.

It is also a question of pragmatism.

Firstly, because, as of January 2021, there will be real, tangible change in every domain.

-

In very important areas, such as trade, transport, energy or our mutual security.
-

Many of these changes will be mechanical, automatic.
-

So we will need to rebuild a relationship - one that is different to what we had before, because the UK is no longer a Member State.

In this context, the more the UK seeks to distance itself from the common framework of rules that we had built together over the years, the more our relationship will be distant, across sectors.

Secondly, it is a question of pragmatism because international cooperation - whether economic or security-driven - is always based on a degree of rule-sharing, resource pooling and common governance.

This is not about giving up sovereignty.

It is not about ‘losing control'.

It is about using your sovereignty to further the interests of your country.

[A - Les conséquences du Brexit]

Ladies and gentlemen,

During its 47 years of membership, the UK built up a privileged position in a number of strategic areas:

financial services, of course, but also as a regulatory and certification hub, and a major entry point into the EU single market.

In great part, this was made possible by the fact that the UK was an EU Member State, within the single market.

But the UK has decided to leave this single market, the customs union, and all the EU's international agreements.

It no longer wishes to participate to our common ecosystem of rules, supervision and enforcement mechanisms.

This choice will have consequences as of 1January 2021, even if we reach a deal with the UK on our future relationship.

Consequences that businesses in the EU and in the UK must anticipate.

Readiness will be key.

Allow me to give you three concrete examples:

1/ First of all, regarding imports from the UK:

On 1 January 2021, whatever the outcome of the negotiation, there will be checks and controls on all UK goods entering the single market - as there are for any third country.

The EU must be able to assess risks on any product coming into its market and, if necessary, activate physical controls.

These checks are particularly important given the UK's position as a major entry point into the single market.

As part of these checks, we will need to pay the greatest attention to the rules of origin that we will put in our trade agreement.

Of course we love made in Britain!

But wemust have guarantees that the goods we import from the UK - tariff- and quota-free - really are British.

We cannot take the risk that the UK becomes an assembly hub for goods from all over the world, allowing them to enter the single market as British goods.

2/ Second example: financial services:

As of 1January 2021, UK firms will lose the benefit of the financial services passport. Indeed, no firm from a country outside the Single market has such a passport.