The European Union offered Britain a free trade agreement on Wednesday for what will be their post-Brexit relationship. Britain was not able to obtain everything they wanted that was set out by Prime Minister Theresa May, especially in the financial sector. The members of the EU leaders said that they wanted to foster a good partnership with Britain, but that would be limited by the fact that Britain was the one choosing to leave the European Union. The chairman of the European Union Leaders Donald Tusk gave a news conference on Wednesday, and made a statement that was the exact opposite of Theresa May’s request the future of trade between Britain and the EU be as “friction-less as possible.”
During the conference, he said “Because of Brexit, we will be drifting apart. In fact, this will be the first free-trade agreement in history that loosens economic ties instead of strengthening them. Our agreement will not make trade between the UK and the EU frictionless or smoother. It will make it more complicated and costly than today for all of us.” He continued on to say that Britain will not receive any special treatment and that it will be treated like any other country when it comes to financial services. More than 10% of Britain’s output are financial services, and it is the only area that Britain has a trade surplus with the European Union. Being treated as a third country will limit banks’ current access to other countries who are in the European Union.
Canada and the United States
Philip Hammond, the British finance minister is expected to insist that the EU drop its current stance and let Britain’s financial services sector to become a part of the post-Brexit trade deal. He is expected to use the argument that since Brussels originally wanted to include financial services in a free trade deal with Canada and the United States, that they should offer Britain the same deals as well.