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Donald Tusk insists on "Ireland first" approach to Brexit negotiations

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British industrial production

"Our free trade agreement will not make trade between Britain and the European Union frictionless".

Britain's International Trade Secretary Liam Fox delivers a speech on Brexit and Britain's future as a global trading nation, at the Bloomberg London Building, London, Tuesday Feb. 27, 2018.

Tusk suggested a Canada-style free trade deal was the only one on the cards, which would be likely not to include comprehensive coverage of services.

I want the broadest and deepest possible agreement-covering more sectors and co-operating more fully than any Free Trade Agreement anywhere in the world today.

Prime Minister Theresa May fleshed out proposals for the post-Brexit relationship in a speech last week.

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Speaking alongside Irish PM Leo Varadkar he acknowledged the "very critical" reaction to the bloc's attempts to keep Northern Ireland in the Customs Union. "What I've said is that the EU's model of equivalence, which is unilateral and withdrawable on no notice in some cases. would not work", Hammond said. And, going back to the food metaphor, Cabinet minister Michael Gove recently talked of a recipe for success: Britain "freeing itself from the table d'hote (fixed menu) of European Union membership" and striking its own trade deals around the world or "dining a la carte across the globe". Here, the example of Switzerland may set a precedent, with Swiss Foreign Minister Ignazio Cassis recently stating that Switzerland could agree to an independent arbitration panel as part of a deal that would also allow Swiss laws to change in line with EU legislation, moving closer toward the EU's plans for a three-person arbitration panel to resolve Swiss-EU disputes.

During a recent trip to Britain, France's finance minister, Bruno Le Maire stated that financial institutions would have to depend on a legal mechanism called equivalence. Mrs May also said "associate membership of [such] agencies is the only way to meet our objective of ensuring that these products only need to undergo one series of approvals, in one country". She said that she understood that this would involve abiding by the rules of the EMA and "making an appropriate financial contribution". This will enable a single series of regulatory approvals, in one country only, as well as permitting United Kingdom firms to resolve certain challenges in the United Kingdom courts instead of the ECJ. Of course, associate members typically do not have voting power and have to rely on soft influence.

"Refusing to include financial services as part of a final trade agreement would undoubtedly damage the whole European economy, limiting growth and risking jobs", she said.

"We are discussing these issues with the UK Government but it remains unclear as to how much discussion is underway in Europe".

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