Michel Barnier told MPs that crucial elements of Theresa May’s Chequers plan are “unworkable”, it has been revealed.
The EU’s Brexit chief addressed the House of Commons Brexit select committee at a behind-closed-doors evidence session in Westminster on Monday.
Stephen Kinnock, one of the MPs present, caused a storm afterwards by claiming the French politician had declared the Chequers proposals “morts” (dead) at the meeting.
His claim was denied by Barnier and a transcript of the session published by the committee Friday proves that he did not use that phrase. He was invited to use the word “dead” by three separate MPs but declined to do so.
However, the transcript shows Barnier did deliver a killer blow to the prime minister’s plans for post-Brexit trade, declaring them “unworkable.”
Chequers sets out the government’s desire to maintain frictionless trade with the continent through a “free trade area” for goods – a proposal which would effectively see Britain remain in the single market but only for goods and not services, capital or labour.
The other element is a complex customs arrangement which would see the UK collecting some tariffs on behalf of the EU.
Responding to the proposals, Barnier told MPs that the EU was “prepared to discuss a customs arrangement” that would simplify trade between the UK and the EU post-Brexit.
But he said: “We have two major problems, two issues that we cannot accept.
“Our customs union, our customs system, as it works, is a fully integrated system that cannot be undermined and we cannot split up the four freedoms of the single market … Your proposal does not seem workable to us, basically.”
He added: “When it comes to those two proposals, there is a real problem of substance for us, because they would weaken and would lead to the unravelling of the single market.
“That is why they are not acceptable, so you cannot ask us to make concessions on the very foundations of the European Union.”
Despite his clear rejection, UK negotiators insist their plans are not a threat to the single market and are making a renewed push to convince the EU of their merits.
Privately, British diplomats argue that the proposals in the Chequers plan would be welcomed by the EU if it were the starting point of a trade deal with any other country.
Yahoo Finance UK reported on Thursday warnings that an end to frictionless trade with the EU could jeopardise the supply of fresh food and car production.
Barnier told MPs that those problems could not be solved by a free trade agreement, however ambitious, but a formal customs union. He did say though that were “positive things” in the Chequers plan, especially on security cooperation. The details of the future trading relationship do not have to be agreed in order to conclude the Withdrawal Agreement, which is so-far 80% complete.
However, May had hoped securing frictionless trade would help break the stand-off over the biggest issue left to resolve – how to avoid a hard border in Ireland.