The European Union’s economic policy chief said Britain will not be able to negotiate a new, permanent free trade deal with the bloc after leaving the bloc next year without provisional access to the European air space.
Dieter Reiter said discussions on a comprehensive trade agreement with Britain, which is set to become the United Kingdom’s second largest export market by 2030, are unlikely before the fall of next year. Britain has said that it will not want to wait and that it must have the option of being able to travel freely on EU airspace.
Meanwhile, officials and industry groups in the U.K. are confident that Britain will secure a temporary deal as companies grapple with the potential economic shock of losing aviation access after Brexit. The issue is of particular concern to the City of London, whose financial businesses, particularly aviation, account for 5.4% of the island’s gross domestic product.
EU Rhetoric Is More Flexible than Reality
Europe’s Brexit negotiating team met Tuesday in Brussels to brief its 27 counterparts on the latest talks and the negotiations will resume next week with UK Brexit Secretary David Davis. “I believe we can conclude the negotiations in three or four months,” Reiter said, when asked if EU officials will seek to avoid any trade-access issue or Article 50 withdrawal agreement.
Ryanair said it will be positive about the prospect of a long-term free trade agreement but that the “situation is not an easy one.”
A three-week period of grace will follow the end of talks on a withdrawal agreement this month, when the EU needs the UK to say if it intends to request an extension to the March 29 withdrawal deadline. The bloc is seeking clarity on the broad issue of the future relationship as soon as possible, Reiter said.
“We have to show flexibility,” Reiter said. “There is a good reason why they want to start talking about a potential transitional arrangement.”
Scottish Air Traffic Services said it believes the EU can handle the transition and will have other contingency plans if Britain leaves the bloc without an aviation agreement. “There is no time to waste on a transitional arrangement that fails to address the majority of issues,” it said.
The Association of European Airlines said that the current position is not really an option.
“We now need to get on with the planning for what will be a substantially new UK-EU aviation relationship that will be different in every respect,” it said.
With assistance from Franz Wild and Bernd Debusmann