Stairway to Brexit: Barnier maps out UK's Canadian path

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BRUSSELS, Dec 19 (Reuters) - A free trade deal with the European Union similar to those it has with Canada and South Korea is the logical outcome of Britain's Brexit "red lines" and EU rules, according to a graphic issued by EU negotiator Michel Barnier on Tuesday.

Illustrating points Barnier made to EU leaders at a summit on Friday at which they gave him approval to start negotiating a post-Brexit trading relationship with London, the chart shows a series of descending steps associated with different countries' levels of access to the EU single market.

At the top is EU membership, which Britain will give up in March 2019; next is membership of the European Economic Area (EEA), in which Norway, Iceland and Liechtenstein enjoy much the same access as EU states but which Britain has ruled out because it rejects the jurisdiction of the EU court, big payments to the EU budget, free EU migration and following most EU rules.

Turkey occupies the next level down, with its membership of a customs union with the EU - but again Britain has ruled that out in the interests of cutting its own trade deals with other countries. That leaves the final British choice, in Barnier's view, as a free trade pact like that with South Korea or Canada.

As a warning of what will happen if talks break down, the graphic includes a final stage, marked "No deal", in which Britain is limited to trading with the EU on tariff terms set by the World Trade Organization, an outcome some Brexit supporters favour but which business say would badly crimp their profits.

"CANADA PLUS"

Britain's Brexit Secretary David Davis has called for a "Canada Plus Plus Plus" deal, implying better access than the Canadians in some areas. Prime Minister Theresa May says she will use Britain's size and importance to its European neighbours to negotiate the most favourable future relationship.

However, in an interview with several European newspapers on Monday, Barnier stressed that any deal would not replicate the kind of access London financial services firms have now and he has repeatedly said that while a trade pact will be tailored to the specifics of the British economy, it will follow the broad outlines of the Canada treaty, without "bespoke" advantages.

The EU executive Commission will agree a set of negotiating directives for Barnier on Wednesday to start talks early in the new year on a status-quo transition period after Brexit. EU leaders want Britain to offer more detail on what it wants after that before they will give Barnier a more detailed set of guidelines in March for an outline free trade agreement.

Barnier aims to have a "political declaration" on what the future will look like by around October next year, at the same time as a draft withdrawal treaty. Full trade talks will start only after Brexit in March 2019 and, Barnier says, could be completed to take effect in January 2021, when the transition period ends. But many think that is a tight deadline.

Graphic on EU-UK future relationship

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