No Canada Style Trade Deal Between UK and EU? - Forex News by FX Leaders

No Canada Style Trade Deal Between UK and EU?

Posted Thursday, February 27, 2020 by
Skerdian Meta • 1 min read

Boris Johnson finally passed the Brexit deal in the British parliament after winning UK elections in December by a wide margin. The GBP rallied more than 5 cents higher after the elections. But, the UK still needs a trade deal with the EU by the end of the year, when it is supposed to leave the block. Without a deal, it would be just a plain hard Brexit, which would be terrible for the economy and the GBP.

So, the UK has been hoping for a Canada-style trade deal adjusted for Britain, or a Norway type deal. But, the EU’s chief Brexit negotiator Michel Barnier was talking about UK-EU trade yesterday and he dismissed a Canada type trade deal. This should be negative for the GBP and GBP/USD has made another leg down today. Below are his main comments:

  • EU ready to offer UK super preferential access to EU markets
  • EU-UK trade talks to be complicated, not much time to strike a deal
  • Modern trade deals are about ensuring high standards for social and labor fields
  • Should be no problem for UK to agree on ground rules
  • Every preferential trade deal set terms for opening up markets
  • No single template for EU trade deals
  • UK is not Canada
  • EU cannot give UK market access without strong fair competition guarantees
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