Brexit: Hammond and Davis tell EU to avoid 'unnecessary barriers' to trade with UK

Chancellor and Brexit Secretary make a pitch to German business leaders as part of bid for 'ambitious' future trade deal

European leaders have been told to avoid creating “unnecessary barriers” to trade between the EU and the UK after Brexit.

Chancellor Philip Hammond and Brexit Secretary David Davis have made a pitch to German business leaders, where they called for a bespoke post-Brexit trade deal with the EU which would be the “most ambitious in the world”.

The Cabinet ministers launched a charm offensive with trips to Germany on Wednesday, which came after EU chief Brexit negotiator Michel Barnier told European companies to start preparing for increased “friction” in trade with the UK.

In a joint article for the Frankfurter Allgemeine newspaper, Mr Hammond and Mr Davis said: “As two of Europe’s biggest economies, it makes no sense to either Germany or Britain to put in place unnecessary barriers to trade in goods and services that would only damage businesses and economic growth on both sides of the Channel.”

German exports to Britain are worth €113bn per year – amounting to a quarter of all EU exports – while trade between the UK and EU 27 is worth €750bn a year.

In the joint article the two Cabinet ministers acknowledged that Germany and other EU members want to protect the integrity of the single market “and that without all the obligations of EU membership third countries cannot have all the benefits”.

But they insisted that “those priorities are not inconsistent with ours, a deep and special partnership with our closest trading partners and allies”.

The Government has made it clear that the UK wants a bespoke trade deal covering both goods and services after Brexit, with the UK leaving the single market and customs union.

Mr Davis has previously told MPs that he wants the deal to deliver the “exact same benefits” that the UK has as a member of the EU.

The pair said negotiators “should not restrict ourselves to models and deals that already exist”, rejecting Brussels’ view that a Canada-style free-trade deal was the only available option for the UK if it leaves the single market.

Both ministers called for financial services to be covered by the new “economic partnership” – despite opposition to this idea from Brussels – and called for a deal that “supports collaboration within the European banking sector, rather than forcing it to fragment”.

In a speech on Tuesday, Mr Barnier said a trade deal could include regulatory co-operation on financial services but he warned that the EU would not be willing to give up protections drawn up in the wake of the 2008 financial crisis.