The key Brexit fight: Who sets the rules

As the EU and U.K. prepare to start trade talks in about two weeks’ time, one issue is already attracting a lot of noise: The so-called level-playing field and its enforcement.

Brussels wants any deal granting the U.K. access to the single market to ensure “zero dumping” — meaning no under-cutting of EU businesses through lower U.K. social, environmental or competition standards. The U.K. side rejects any assumption that U.K. standards should be dictated by Brussels and supervised by the European Court of Justice. Speaking in Brussels yesterday, U.K. chief negotiator David Frost made clear this was not some negotiating posture but a hard red line (ICYMI more analysis on his speech here).

“It is central to our vision that we must have the ability to set laws that suit us — to claim the right that every other non-EU country in the world has,” Frost said at the Université Libre de Bruxelles. “So to think that we might accept EU supervision on so called level playing field issues simply fails to see the point of what we are doing. That isn’t a simple negotiating position which might move under pressure — it is the point of the whole project.”

Frost has a point when he says EU trade deals with other countries such as Canada or Japan do not include supervision by the EU’s top court — instead disputes are referred to a special bilateral arbitration panel. On the other hand, Brussels has never said it wants the Court of Justice to rule on new U.K. laws or other issues that might provoke a dispute with the EU. Instead — as laid out in this chart shared with diplomats last month — the bloc only wants to involve the court when a dispute specifically touches EU law.

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