French trade minister warns UK on Brexit level playing field

French trade minister warns UK on Brexit level playing field

France’s new minister for external trade has warned that a Brexit deal remains unattainable so long as the UK remains unwilling to be bound by rules that would ensure a “level playing field” in trade with the EU.

Speaking after the UK confirmed it planned legislation to redefine parts of the withdrawal agreement affecting Northern Ireland, Franck Riester said a free trade deal was still possible provided the agreement was comprehensive and enforceable, did not allow for social or fiscal “dumping”, and included access for EU boats to fish in British waters. 

“There’s a game of bluff going on,” he said in an interview with the Financial Times. “We’ll try to stay calm and serene but firmly behind the line of the EU27 . . . In any deal, in the end there is a compromise that can come into play. But that is unattainable for the moment because the UK is not moving on the essential matter, which is the ability to ensure that trade is fair.”

Mr Riester added that the same need for a level playing field lay behind France’s push for the EU to adopt a frontier carbon tax so that its trade partners cannot compete unfairly with European manufacturers that may be bound by tighter environmental regulations and pay more for cleaner energy.

Opinions were “changing fast in Europe on the need to become a power that ensures respect for a certain number of principles such as reciprocity, the fight against global warming, mobilising for biodiversity, and so on,” Mr Riester said. “I think the [coronavirus] crisis has accelerated the awareness in public opinion and among different leaders.” 

The pandemic had also hastened French “reshoring” of strategic industries and a European rethink of globalisation, he added. But he insisted this did not signal a retreat from international trade.

Mr Riester, who himself fell ill from Covid-19 in early March, defended France’s decision to allocate €1bn of its €100bn recovery plan to helping companies start production at home of medical equipment such as protective face masks as well as other items such as electronics, food products and industrial inputs.

“Of course it’s not about making everything in Europe or saying there will never again be a need to import raw materials, products or services,” he said. “It’s about ensuring that we are self-sufficient in certain sectors or for certain products that seem to us essential.”

Even before the pandemic, President Emmanuel Macron and his finance minister Bruno Le Maire said France and the EU needed to reduce their dependence on Asia and the US for key products and services, especially in emerging or fast-growing technologies such as artificial intelligence and electric vehicles. 

Acute shortages of masks and certain medicines, including paracetamol painkillers, when the pandemic filled hospitals earlier this year prompted the government to add medical ingredients and equipment to the list of strategic items to be manufactured in France or nearby in the EU. 

Mr Riester ruled out the kind of drastic economic “decoupling” from China suggested by US president Donald Trump in his re-election campaign, but said the EU did “need to rethink globalisation somewhat” to ensure self-sufficiency in key sectors and guarantee that its values were incorporated into its trading relationships. 

“We have to rethink it in looking at those strategic sectors in which we should be able to continue to have some sort of autonomy in Europe, and so that globalisation is not to the detriment of certain common goods: biodiversity, climate, child protection, the things that seem to us essential to the world we live in.”

He said: “We want to have more trade with South America. But even so, we can’t compromise on the Paris [climate] accord or on the fact that the Amazon rainforest is in the process of burning and that has major consequences for the whole planet.” 

Mr Riester, who is also minister for the “attractiveness” of France to investors, acknowledged that French exports, especially by Airbus and other companies in aerospace, had been hard hit by the coronavirus crisis. He said a future rebound in trade would depend partly on continuing to boost the performance of small and medium companies in a range of sectors from IT and environmental services to food processing. 

“Yes, we are reshoring, and yes we fight for European sovereignty. But we want to keep the spirit of winning. We want to expand internationally,” he said. “We do not want to retreat and look inward.”