EU’s Barnier cites major hurdles to post-Brexit deal with UK

The European Union’s chief Brexit negotiator demanded “clear and concrete signals” from the U.K. that it will compromise to reach a free-trade accord.

Michel Barnier said the U.K. would crash out of the European single market on Jan. 1 unless the British government scales back opposition to key EU demands. These include the bloc’s insistence that any deal include provisions on fishing rights, fair competition and dispute settlement.

“There are still major hurdles ahead of us,” Barnier told an EU advisory panel on Wednesday in Brussels. “We can find the necessary compromises on the condition that the U.K. changes its approach and accepts a proper balance of rights, benefits, obligations and legally binding constraints.”

Under the terms of the U.K.’s withdrawal from the EU earlier this year, a transition period preserving the economic status quo runs until the end of 2020 and can be prolonged by as long as two years while both sides negotiate a free-trade deal.

A decision to prolong the transition phase—something U.K. Prime Minister Boris Johnson has ruled out—would have to be taken before the end of this month. Barnier said the EU would like to prolong the transition.

Failure to seal an accord by Dec. 31 without a longer transition would mean the return of tariffs and quotas for EU-U.K. commerce. Those trade barriers would be in addition to extra red tape for businesses that’ll emerge in any case because the U.K. will be leaving the European single market.

Michael Clauss, Germany’s ambassador to the EU, signaled last week the push for a free-trade deal with the U.K. would rise to the top of the bloc’s agenda after the summer break.

“This Brexit issue is going to absorb most of the political attention we expect in September and October,” Clauss told a June 4 online event organized by the European Policy Centre.