The Government has published a policy paper on its approach to the future relationship with the EU. It sets out the Government’s suite of proposals, based around the desire for a comprehensive Free Trade Agreement, based closely on the Canadian model and drawing on other examples. On financial services, the key is to achieve a “predictable, transparent and business-friendly environment for cross-border financial services business” and should include legally binding obligations on market access and fair competition, like CETA. It should also build on the recent Japanese example of trust and understanding through regulatory co-operation as regulatory systems evolve and could include appropriate consultation and structured processes for the withdrawal of equivalence findings. The paper notes that the equivalence assessments should be distinct from the free trade agreement.
Meanwhile Michel Barnier spoke on co-operation in the age of Brexit. His high level speech mainly noted the shift in priorities from the time when the UK was joining the EU. He stressed also that there is no single template solution and, in particular, said there could not be a “Canada” solution because the relationships between the EU and Canada on the one hand and the UK on the other are “worlds apart”. He said the EU is ready to offer “super-preferential” access to markets but can only do so with a firm guarantee that the UK will respect a level playing field and avoid unfair competitive advantages. He spoke specifically of the loss of the financial services passport – and noted the ability of firms already to set up in the EU, with others having the possibility of benefiting from equivalences, although any equivalence will never be either global or permanent.