Donald Tusk unveils EU draft negotiating guidelines: Brexit News for Thursday 8 March

Donald Tusk unveils EU draft negotiating guidelines: Brexit News for Thursday 8 March
Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team

Donald Tusk unveils EU draft negotiating guidelines, saying Brexit means “drifting apart” but we don’t want to “build a wall”…

Donald Tusk has insisted the EU “does not want to build a wall”, but Brexit means “we will be drifting apart”. The EU Council president said Theresa May wanted to “demonstrate at any price that Brexit could be a success”, but that was not the EU’s objective. He was unveiling draft guidelines for the EU side of Brexit trade talks. Mr Tusk said the EU wanted an “ambitious and advanced” free trade deal – and continued access to UK waters for EU fishing vessels… The draft European Council guidelines call for zero-tariff trade in goods – where the EU has a surplus… The draft guidelines also say that the EU will “preserve its autonomy as regards its decision-making, which excludes participation of the United Kingdom as a third-country to EU Institutions, agencies or bodies”… although BBC Research has found several examples of non-EU members participating – as a member or observer – in EU agencies and bodies, such as the European Environment Agency and the European Medicines Agency. – BBC News

  • Tusk: ‘We do not want to build a wall between the EU and Britain’ – Sky News
  • Donald Tusk rejects Theresa May’s Brexit vision – Politico
  • Theresa May calls for Brussels rethink as EU’s Donald Tusk outlines inflexible blueprint for Brexit – The Sun
  • May demands ‘imagination’ from Brussels after EU rejects trade plan – Express
  • UK-EU trade hinges on choice between mutual recognition and equivalence – Alex Barker for the FT (£)
  • ‘No single market-lite’ – the EU’s opening trade gambit explained – James Crisp for the Telegraph (£)
  • Mighty EU needs nothing from UK, apart from £40bn, our fish, tariff-free trade, and security – Iain Martin for Reaction (£)
  • The EU guidelines give some grounds for hope over Brexit – it turns out they also want to cherrypick – Independent editorial

> Hugh Bennett today on BrexitCentral: What the EU’s draft guidelines mean for the negotiations

…as the EU is accused of double standards over fishing rights…

Brussels faced accusations of cherry picking yesterday after demanding that Britain allow access to its fishing waters after Brexit while pledging to limit the ability of UK finance firms to operate on the Continent. Senior ministers suggested that the European Union was guilty of double standards as it published draft negotiating objectives for a new post-Brexit partnership with the UK… “It doesn’t surprise me that their position is ‘We would like a great deal of the thing that the British will be reluctant to concede’ and very little at all on offer of the things that the British will regard as most important,” Philip Hammond, the chancellor, said… The draft negotiating mandate published yesterday avoids a direct confrontation with proposals set out by the prime minister last week but it limits any future deal to a trade agreement, excluding untrammelled access to Europe’s markets for the City. – The Times (£)

…with Scottish fishermen reacting with fury to EU demand for unchanged access to UK waters

Scotland’s fishing leaders have reacted with fury to the EU’s guidelines for the next phase of Brexit trade talks after the blueprint demanded unchanged access to the UK’s waters. The Scottish Fishermen’s Federation (SFF) demanded that Theresa May reject the EU’s forthcoming demand for “existing” access to the UK’s fishing waters to be maintained. Shetland fishermen said the request was “arrogant, absurd and nonsensical.” The Prime Minister has said “reciprocal access” would be discussed, but there would need to be “a fairer allocation” for UK fleets when the country has left the hated Common Fisheries Policy (CFP)… Michael Gove, the Environment Secretary, has said that Brexit will enable the UK to assert control over its 200-mile Exclusive Economic Zone. More than half the fish caught in British waters are currently landed by trawlers from the rest of the EU. – Telegraph (£)

  • Theresa May warned not to use fishing industry as Brexit bait – Express

Philip Hammond warns City of London’s EU rivals that Brexit is ‘not a zero sum game’…

Mr Hammond warned the “real beneficiaries” of any loss of market share in London would not be financial centres on the continent, but the likes of New York, Singapore and Hong Kong. In a keynote Brexit speech at the HSBC building in London’s Docklands, Mr Hammond said: “I want to challenge the assertion that financial services can’t be part of a free trade agreement, to set out why it is in the interests of both the UK and the EU27 to ensure that EU businesses and citizens can continue to access the UK financial services hub… Describing the City of London as a “European asset”, Mr Hammond claimed any trade deal which undermined it would backfire on the EU… Fleshing out his argument in more detail, the Chancellor said the existing equivalence regime through which third countries deal with the EU would be “wholly inadequate” given the scale of the UK’s relationship with Brussels. – Sky News

  • EU trade deal must include financial services, says Hammond – BBC News
  • Hammond: UK could reject any Brexit deal excluding financial services – Guardian
  • Philip Hammond warns EU will hurt itself if it punishes the City – FT (£)
  • City of London ‘impossible’ to replicate, Hammond warns rival European cities – Telegraph
  • Hammond says regulators can help make Brexit transition smoother – Bloomberg
  • The hidden message in Hammond’s EU speech – Kamal Ahmed for BBC News
  • Philip Hammond’s blueprint for the City of London after Brexit – FT View (£)
  • At last, a blast of good sense from Philip Hammond – Express editorial
  • Let others grapple with Brexit, the chancellor must tackle our domestic problems now – Nicky Morgan MP for The Times (£)

READ: Full text of Philip Hammond’s speech on financial services

…as he is accused of bartering Britain’s fishing industry for the sake of better Brexit deal

Philip Hammond has been accused of bargaining with Britain’s fishing industry to get a better Brexit deal for the City after he said he was “open” to allowing EU trawlers into UK waters… Alan Hastings, of the pressure group Fishing for Leave, said: “The Government has consistently said fishing rights and the trade deal would not be linked, and it now seems they are trying to soften us up for a big disappointment.” …Mr Hammond’s stance was also attacked by the Scottish Conservatives, who won seats in coastal constituencies in last year’s general election after convincing voters that Brexit would bring billions of pounds back to fishing ports. David Duguid, the Tory MP for Banff and Buchan, which includes the major fishing ports of Peterhead and Fraserburgh, said it was “clear” the proposal was “totally unacceptable to our fishermen.” He added: “It should surprise no-one, however, that the European Council is taking this position. The UK Government must strongly defend our fishermen and coastal communities across the country who voted to take back control of our waters.” – Telegraph (£)

  • Philip Hammond risks Brexiteers’ wrath as he offers EU trawlers access to UK waters ‘for a good City deal’ – The Sun
  • Brexiteers tear into Philip Hammond for ‘betraying referendum’ over UK fishing waters – Express

May and Hammond to meet European bosses for Brexit talks

The Prime Minister and Chancellor have called in executives from some of Europe’s biggest corporate employers in the UK for talks about the post-Brexit trade relationship with the EU. Sky News has learnt that bosses from companies including Bank of Ireland, BMW, Bosch and Kingfisher, the owner of B&Q, have been invited to meet Theresa May and Philip Hammond in Downing Street on Thursday… A person familiar with the agenda said that Mr Hammond would lead a discussion on the implementation period, while Mrs May will focus on the future trade relationship. – Sky News

UK and Saudi Arabia target £65bn of mutual investment in Brexit “vote of confidence”

The U.K. and Saudi Arabia agreed a goal of 65 billion pounds ($90 billion) of mutual trade and investment in the coming years, with Prime Minister Theresa May’s office calling it a “vote of confidence” in the economy before Britain leaves the European Union. The target was set at a meeting between May and Crown Prince Mohammed bin Salman in London on Wednesday, the prime minister’s office said in an emailed statement. The prince also met Queen Elizabeth II as he embarked on a three-day visit aimed at burnishing his overseas credentials as a leader in waiting. He will also travel on to meet President Donald Trump in Washington. – Bloomberg

Laura Kuenssberg: A conversation to be had over the shape of Brexit

Again, Mr Tusk has said that the UK’s overall hope to pick and choose bits of the European apparatus is a non-starter. But before the next formal round of negotiations have begun it would be a genuine shock if he were to say anything else. On the UK side, the EU has what one insider suggested were “significant’ cojones”, to suggest for example that the EU retains fishing rights in UK waters. And while not exactly jumping for joy, nor is the government in meltdown over the EU’s opening gambit. But is this a giant two fingers to Theresa May’s entire approach that really changes things for the negotiations? Have they today completely torn up the Mansion House speech? There are significant differences of course, and I’m not suggesting for one second that the way forward is clear. But no one in government will be hugely surprised by the publication today, nor do they believe that it is time to run up the white flag. In fact, the two sides notionally agree that they are both looking for an ambitious trade deal. Having repeatedly ruled out staying in the Single Market or the Customs Union, that is what the prime minister says she wants. And the EU has said it is willing to talk on the basis of there being no tariffs or quotas either. – Laura Kuenssberg for BBC News

Asa Bennett: Brussels wants Remainers to help it out by forcing Theresa May to betray Brexit voters

Brussels chiefs would clearly welcome a successful rebellion. Not only would it mean the negotiations were much less demanding, as they would have fewer bespoke arrangements to thrash out, but also they would have Britain tied in close (potentially as part of a relationship even the CBI calls “vassal state”). They have effectively given would-be Tory rebels the green light by indicating that they would change their position if any of Mrs May’s red lines were changed. European officials may hope her vulnerability in the Commons will work in their favour, but it is obviously a high-risk strategy on their part. Such a high-scale revolt would send an earthquake through the Government. The Prime Minister would struggle to survive the aftershock. That is why President Tusk wasn’t afraid to outline a vision for the EU’s future relationship with the UK talks that was much less than Mrs May wanted. Rather than trying to sell that prospectus to the British, he is relying on Tory Remainers to make his job easier by forcing Mrs May to back down in her Brexit ambitions. – Asa Bennett for the Telegraph (£)

  • EU draft throws down gauntlet to May to soften Brexit plan – Bloomberg

The Sun: The EU’s response to Theresa May’s speech shows that waiting for Brussels to see reason is hopeless and a waste of time

Michel Barnier and Donald Tusk aren’t putting their citizens and economies first. They care only about the sanctity of the EU and its institutions, which they cannot weaken or even adjust. They are STILL trying to browbeat us into staying in the single market and customs union, rendering Brexit meaningless and crippling us forever. They know our future prosperity lies outside their borders and rules and they fear it. Time and again the PM has told them we will leave both. But our logic has hit the brick wall of their pseudo-religion. And since we will not ignore or rerun our referendum either, unlike so many before us, we must be punished as a deterrent. The EU fears others would leave given the chance. It never asks why. Britain cannot just plod on in hope. Time is too short. We should refocus every effort on a no-deal, while leaving the door ajar. We have given as much ground as we ever should. It’s their turn. Unless the other 27 EU nations instruct Brussels to radically change its stance, our Government is wasting its energy. – The Sun says

  • The EU isn’t treating Britain as a valuable partner, but as a weak, helpless victim – Michael Deacon for the Telegraph (£)

John Rentoul: Donald Tusk sounded tough but it was worth listening to what he didn’t say

So much for the standard EU rhetoric. Brexit is going to hurt, and it is going to hurt you more than us. We’ll be as helpful as we can be, but we won’t compromise on the sanctity of the single market and you will have to live with the consequences. On the other hand, what was significant was what Tusk didn’t say, and what wasn’t in the draft guidelines for negotiating the trade deal that he published just before he spoke. He didn’t mention the Irish border, and nor did the document. Nor did he mention financial services, and the document only mentioned services in general. Those are two of the most difficult areas, so the implication could be that the EU side is willing to compromise on them… Although Tusk and his draft guidelines formally set out the EU’s hardline opening negotiating position, both his comments and the document were short and unspecific. – John Rentoul for the Independent

Comment in brief

  • The EU and democracy don’t mix – Fergus Kelly for the Express
  • The UK is running a goodwill deficit on Brexit – Guardian editorial
  • Dublin is the UK’s best ally in the Brexit negotiations – and May can’t afford to forget it – Barry Colfer for Reaction
  • Business must bust the myths of hard left and Brexit right – BCC Director General Adam Marshall for The Times (£)
  • The rest of the world must fill the void left by Trump’s protectionism – Jean Stephens for City A.M.
  • Trump’s trade war spells trouble for Brexit Britain – Ben Roback for ConservativeHome
  • Two trade wrongs don’t make a right – Ryan Bourne for CapX
  • Britain should rise above Trump’s trade war – Matthew Lynn for the Spectator
  • The EU’s Italy calamity is the UK’s big Brexit opportunity – Brian Monteith for City A.M.
  • In Italy, the battle is now between tax-paying and tax-eating populists – Garvan Walshe for ConservativeHome
  • My fellow Brexiteers should not embrace Italy’s crackpot populists – Michael Fabricant MP for the Telegraph (£)

News in brief

    • Workers have seen wage growth of up to 5.2 per cent since the Brexit vote – The Sun
  • Hammond to reveal impact of Brexit bill on UK public finances in Spring Statement – FT (£)
  • Jolyon Maugham has another Brexit legal case thrown out – Guido Fawkes
  • Europol head warns of security ‘impediments’ after Brexit – FT (£)
  • Euroclear confirms headquarters move from London to Brussels – Independent
  • Technology cannot make post-Brexit Irish border frictionless, claims sociologist – Guardian
  • Hungary blasts Commission’s double standards on Selmayr – Politico
  • MEPs to debate Martin Selmayr’s appointment – Politico
  • EU throws kitchen sink at Trump as trade-war tiff escalates – The Sun
  • Fears of global trade war as Trump stands his ground – The Times (£)
  • Mexico, Canada ‘and others’ could be temporarily exempt from Trump metal tariffs – City A.M.
  • Fears over Trump’s economic nationalism rock the stock market after Gary Cohn quits – Telegraph