UK: Trade agreement should not require UK to follow EU standards

The trade agreement with the European Union should not require the UK to follow the EU standards, the UK noted in its negotiating mandate that was published on Thursday.

"The agreement should include reciprocal commitments not to weaken or reduce the level of protection afforded by labour laws and standards in order to encourage trade or investment," the UK said in the statement. "In line with the precedent of the EU-Canada agreement, the deal should recognise the right of each party to set its labour priorities and adopt or modify labour laws."

GBP/USD reaction

The British pound came under renewed selling pressure following the UK's remarks and the GBP/USD pair was last seen trading at 1.2877, down 0.2% on the day. The UK's stance about shifting the focus to no-deal preparations if they fail to have a broad outline of an agreement by June seems to the primary trigger. 

Additional takeaways

"There is sufficient but limited time for the UK and the EU to reach an agreement."

"The UK  hopes to have a clear broad outline of an agreement by the time of high-level meeting in June."

"Broad outline should be capable of being finalised by September."

"If an agreement is not looking likely by June meeting, the UK will decide whether to switch focus to domestic preparation for an orderly end to the transition period."

"There will be no role for the Court of Justice of the European Union in dispute resolution mechanism."

"The agreement should not constrain tax sovereignty in any manner."

"The agreement should provide for streamlined customs arrangements covering all trade in goods."

"The uk will have its own regime of subsidy control, the agreement should include an obligation on both parties to notify the other every two years on any subsidy granted."