LONDON (Reuters) - Britain published on Thursday its proposals for future trade with the European Union after it leaves the bloc next March, seeking a new arrangement that would offer less generous access than under today’s EU “passporting” regime.
The government said it wants trade in financial services to be based on a “stabler” and more “transparent” and expanded version of the bloc’s existing rules for foreign financial firms, known as equivalence.
The financial sector had called for broader access under a blueprint known as “mutual recognition”, but despite initial British government backing for it, EU officials have said this model would not work.
Thursday’s proposals form part of Britain’s negotiations with the EU over the future trading links.
The main financial services proposals are:
- New regulatory arrangement, with UK and EU “autonomous” regarding decisions on access to each other’s markets;
- New arrangement would mean that EU’s existing equivalence regime would need to be “expanded” to cover broader range of financial services;
- The UK and the EU would set out a shared intention to avoid adopting regulations that produce divergent outcomes in relation to cross-border financial services;
- Some of these processes in the new arrangement would be bilaterally agreed and treaty-based to make EU equivalence system more predictable and transparent;
- UK recognises that the new arrangement cannot replicate the EU’s passporting regime which gives full access to the bloc’s single market;
- Disputes regarding treaty-based cooperation in the new arrangement should be dealt with by a joint UK-EU committee or arbitration panel, but there should be the option for referral to the European Court of Justice for an interpretation;
- The European court would have a role only in relation to the interpretation of those EU rules to which the UK had agreed to adhere to as a matter of international law.
Reporting by Huw Jones; editing by David Stamp