Brexit will mean more complicated and costly trade, EU chief warns
Trade between the EU and UK will be "more complicated and costly" under any outcome of upcoming negotiations, the president of the European Council has warned, adding: "That is the essence of Brexit".
Donald Tusk was unveiling draft guidelines for the negotiations, due to be adopted at a summit later this month by the 27 remaining members of the EU.
The guidelines say that Brussels wants "as close as possible a partnership" with the UK after Brexit, but expects there will be "negative economic consequences".
Speaking at a press conference in Luxembourg just hours after sending the guidelines to the EU27 capitals, Mr Tusk said Brussels hoped for an "ambitious and advanced" free trade agreement (FTA) with zero tariffs on goods but limited access for services.
But he added: "This positive approach doesn't change the simple fact that because of Brexit we will be drifting apart."
Mr Tusk said: "Our agreement will not make trade between the UK and EU frictionless or smoother.
"It will make it more complicated and costly than today for all of us. This is the essence of Brexit."
After Theresa May set out her vision for the future EU/UK relationship in her Mansion House speech on Friday, Mr Tusk said that the only option available in negotiations was an FTA of the type signed with Canada.
And in a clear demonstration of Brussels's reluctance to deliver the kind of bespoke deal outlined by the Prime Minister last week, he said: "I fully understand and of course I respect Theresa May's political objective, to demonstrate at any price that Brexit could be a success and was the right choice.
"But sorry, it is not our objective."
Mr Tusk was speaking shortly before a keynote speech from Philip Hammond, in which the Chancellor was due to make the case for preferential access for Britain's financial services industry to the single market.
Rejecting the arguments of "sceptics" who claim there has never been an FTA including financial services, Mr Hammond was set to say: "I am clear not only that it is possible to include financial services within a trade deal but that it is very much in our mutual interest to do so."
The draft European Council guidelines call for zero-tariff trade in goods but warn that access for services will be limited by the fact that Britain will be outside the EU and will no longer share a common regulatory and judiciary framework.
And they warn that there can be "no cherry-picking" of participation in the single market for particular sectors, such as financial services.
Existing reciprocal rights of access to fishing waters should be maintained, and there should be "appropriate" customs co-operation, the guidelines state.
Speaking alongside Mr Tusk, Luxembourg's Prime Minister Xavier Bettel, who will meet Mrs May in London next week, said that the goal of a post-Brexit FTA would be "minimising the losses and limiting the negative impacts as much as possible".
But he added: "There will be no winners after Brexit. Both sides will be losing."
Former Ukip leader Nigel Farage said: "Unless we take back full ownership and control of our waters, Brexit will have been betrayed."