conditions that the Union grants under the free trade area will be guided by the terms on access and
quota shares in the fisheries agreement to be established by 1 July 2020. .
Without an FTA in place by the end of the transition period, tariffs and quotas will apply to all trade in
goods between the EU and the UK. In this scenario, we must apply what is known as “MFN tariffs” to
the UK. Indeed, under the WTO Most Favoured Nation (MFN) principle, benefits given to one trading
partner need to be extended to all other WTO members, unless a preferential trade arrangement, such
as an FTA, allows this. Therefore, without an FTA in place as of 1 January 2021, economic operators
and consumers should not expect privileged treatment when dealing with the UK.
What does “level playing-field” mean?
The EU is ready to offer a high-ambition trade deal, with zero tariffs and zero quotas on all goods
entering our single market of 450 million people. However, because of our high levels of economic
inter-connectedness, the volume of trade and geographical proximity, the draft negotiating directives
also make clear that this offer is conditional on robust level playing field safeguards to prevent unfair
competitive advantages the UK could derive from regulatory divergence (via lowering of standards or a
“race to the bottom”) or subsidisation of UK operators. In the Political Declaration, the EU and the UK
already agreed that they would prevent distortions of trade and unfair competitive advantages. We
must now agree on effective assurances to guarantee common high standards and corresponding high
standards over time on social, environmental, tax, state aid and competition matters. Union standards
in these areas will serve as a point of reference to establish these guarantees. Robust level playing
field commitments will entail also the establishment of adequate mechanisms to ensure effective
enforcement and monitoring, dispute settlement and the possibility to adopt appropriate remedies,
including autonomous measures to react quickly to disruptions of the equal conditions of competition in
relevant areas..
What if the UK will not commit to any level playing field guarantees?
We agreed in the Political Declaration that the scope and depth of the future relationship will depend
on the level playing field commitments that the UK is willing to undertake. The EU will not agree on an
FTA without solid level playing field guarantees and an agreement on fisheries. Our geographic
proximity, volume of trade and economic interconnectedness are such that it is in our mutual interest
to agree on fair competition standards between us, as well as on their effective enforcement. Given the
current very close integration of British companies with the Single Market and the UK's desire for a
comprehensive free trade agreement, it is only fair that the EU requires commensurately strong level
playing field guarantees. This will also be in the interest of British consumers and businesses. The EU is
by far the greatest export market for UK businesses and most UK imports come from the EU.
Will sanitary and phytosanitary requirements (SPS) change?
There will be no changes to the Union's food safety standards. Union law, including systematic
controls, will fully apply to imported food, animals and plants without exceptions or equivalency. High-
level SPS standards will be safeguarded. As in existing FTAs, relations will be built on and will go
beyond existing multilateral instruments [World Trade Organization (WTO), Codex Alimentarius,
International Plant Protection Convention (IPPO) and World Organisation for Animal Health (OIE)]
recommendation and requirements. Co-operation should be ensured in combating antimicrobial
resistance as well as protecting animal welfare and ensuring sustainable food systems.
Will the EU allow for mutual recognition of rules and standards?
By choosing to leave the Single Market, the UK has opted to have the status of a third country
regarding EU law. The EU and UK will therefore form separate markets and distinct legal orders, after
the end of the transition period. The future relationship will therefore result in a lower level of
integration than is the case today. The future economic partnership on goods will seek to facilitate
trade as far as possible but this cannot be expected to replicate the same frictionless conditions of
trade that exist between EU Member States. Such conditions are based on adherence, by Member
States, to a full ‘ecosystem' of rules, including the Treaties, and their supervision and enforcement,
including the jurisdictional system under the Court of Justice of the EU. Mutual recognition can only be
granted between participants to that ecosystem.
What can be achieved on services in the context of an FTA?
We can aim at a level of liberalisation of trade in services beyond the baseline provided by our existing
WTO GATS commitments, similarly to the approach in our most recent FTAs. As required under GATS
rules, the FTA would need to cover most services sectors, such as telecommunication services or
business services to name a few. But, as in any FTA negotiated by the EU, there will be exceptions. For
example, the EU proposes to exclude audiovisual services from the scope of the Agreement.. It is also
important to recall that, under its FTAs, the EU maintains its right to regulate its own markets and its
full regulatory autonomy. We will be particularly attentive to include provisions that preserve the EU's