Britain once again faces being pushed to the back of the trade deal queue as the European Union moves to open formal talks with English-speaking members of the Commonwealth.
European Commission president Jean-Claude Juncker announced in Strasbourg on Wednesday that he was launching negotiations with Australia and New Zealand on a deal with the EU – giving the 27-nation bloc at least a year's head start on UK negotiators.
Mr Juncker said countries from around the world were “lining up at our door” to do trade deals with the EU and that other accords such as those with Mexico and parts of South America were also on the table.
His decision to press ahead with the talks means EU negotiators will already be locked in discussions with the two former British dominions when the UK leaves the EU – the first opportunity the UK will have to start fully negotiating its own deal.
The early conclusion of a deal between the EU and Australia and New Zealand would leave the UK playing catch-up in developing its trade ties, despite Theresa May’s claim that Brexit “was the moment we chose to build a truly Global Britain”.
Earlier this year the UK’s International Trade Secretary Liam Fox wrote to an Australian parliamentary committee, asking for a trade deal with the country but explaining that he could not sign one until Britain had left the EU. Australian PM Malcolm Turnbull has promised not to “muck around” concluding a deal with the UK but with the nature of the UK’s future outside the EU still uncertain, serious talks are still yet to begin.
Preliminary discussions between Australia and the EU were already completed in April, following an announcement of intention to start a trade deal by both actors in November 2015. The Australian government says the EU is its largest export services market and also the southern hemisphere country’s largest source of foreign investment.
“Europe has always been an attractive place to do business,” Mr Juncker said in his State of the Union speech in Strasbourg on Wednesday morning.
“But over the last year, partners across the globe are lining up at our door to conclude trade agreements with us.
“With the help of the European Parliament, we have just secured a trade agreement with Canada that will provisionally apply as of next week. We have a political agreement with Japan on a new economic partnership.
“By the end of the year, we have a good chance of doing the same with Mexico and South American countries.
“And today, we are proposing to open trade negotiations with Australia and New Zealand.
“I want all of these agreements to be finalised by the end of this mandate. And I want them negotiated in the fullest transparency.”
But the Commission President, who will be in post until 2019, warned that despite its drive for trade, the EU was not composed of “naïve free traders”. “Europe must always defend its strategic interests,” he added.
In the same speech Mr Juncker said he believed Britain would come to "regret" leaving the EU, and that the union would move on without the UK.
The move by the EU comes after it emerged that Britain’s chief trade negotiator backs scrapping UK’s domestic regulations in order to secure a deal with other countries.
The UK is already planning to "piggy back" on an EU trade deal with Japan. A UK-Japan deal would take advantage of Britain's compliance with EU regulations at the point of exit and thus be able to be concluded "immediately" after the EU and Japan concluded theirs, UK Government sources have said.
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