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Conflicting visions of post-Brexit trade

Brussels/London - The European Union and Britain have unveiled competing concepts for their future trade relations, with Prime Minister Boris Johnson pushing back on EU insistence that his country must accept the bloc's rules in exchange for preferential market access.

"Highly ambitious" trade deal

Britain has ended its 47-year membership of the EU. The two sides now have until the end of the year to agree on how they will do business with each other, but also on security and foreign policy cooperation. A transitional phase until then means that little changes in practice.

Much is at stake for both sides: Close to half of British exports are destined for the bloc, while Britain will be one of the EU's most significant foreign trading partners.

The EU is prepared to offer Britain a "highly ambitious" trade deal that rules out tariffs and quotas but in exchange London must sign up to EU standards going forward, the EU's s lead negotiator Michel Barnier said, repeating a long-standing position.

But Johnson has argued that London will maintain high standards "without the compulsion of a treaty," and should push for a trade deal that does not necessitate full regulatory alignment, similar to the one Brussels has inked with Canada.

"There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar any more than the EU should be obliged to accept UK rules," the British premier said.

Superman-style change

Britain will make a Superman-style change to become a "supercharged champion of the right of populations of the Earth to buy and sell freely among each other," Johnson added.

Brussels has repeatedly stressed that British access to the EU market will depend on how fully it signs up to the bloc's rules on issues ranging from free movement of people to environmental and labour standards.

The EU fears that Britain will put itself at a competitive advantage by undercutting its rules.

The European Commission's plan for future relations must still be approved by the bloc's 27 governments and the European Parliament before talks with London can begin.

The plan is due to be signed off by EU member states at a late February meeting of European affairs ministers, Barnier said, meaning that negotiations could begin in early March.

The EU executive wants to wrap up talks by October so that the deal can be finalized for the start of 2021, according to EU officials.

Brexit: The journey from idea to reality

British-EU trade

Brussels warns that the end-of-year timeline is extremely ambitious, and has voiced concern that the transition period could expire before a deal on future relations is in place.

"In the very unlikely event that we do not succeed, then our trade will have to be based on our existing withdrawal agreement with the EU," Johnson said.

The withdrawal agreement does not set out the rules governing British-EU trade after the transition period, however.

Instead, in a no-deal scenario, the two sides would likely revert to minimal World Trade Organization (WTO) rules, meaning that tariffs on many products could be reimposed.

It remains unclear whether Johnson is prepared to stomach leaving the EU single market in 2021 without a deal in place.

Barnier has also named the EU's conditions for a comprehensive trade deal, and warned London that if Britain leaves the customs union and single market as expected, it should not expect "business as usual."

"Goods entering the union will be subject to regulatory checks," he said, and there will be no mutual recognition of rules on financial services.

This means British-based banks and financial institutions would not be able to automatically offer their services anywhere in the EU - a change that could have a major impact on the financial services hub of London.

"These are the mechanical consequences of the United Kingdom's choices," he added.

To secure a trade deal, Britain would also have to agree to granting the EU continued access to its fishing waters - and vice versa - including quota shares, Barnier added.