Barnier rejects key UK trade demand in fresh row – despite EU offering same terms to Japan

BARNIER has sparked fury from British negotiators after rejecting a key trade demand – despite the European Union having already given the same agreement to Japan.

The Brussels bureaucrat ruled out so-called “diagonal cumulation” to help businesses that rely on global supply chains. Downing Street has accused him off singling the UK out for unfair treatment in a fresh blow to the post-Brexit trade talks. The move has also prompted concerned companies to call for the Frenchman to rethink his position in the coming days.

A senior EU official said: “This is an area where we do not in any way see any margin of compromise.

British negotiators believe their request is fair because it features in several of the EUs other free-trade agreements.

A UK official said: “The UKs rules of origin proposals are appropriate and modern.

“They are based on substantial dialogue with the UK and EU industry on their needs, and would facilitate legitimate trade under the FTA without circumventing the payment of tariffs.

“Cumulation already features in many of the EUs FTAs, such as its agreement with Singapore.”

British and European firms, including car makers and food producers, would be dealt a blow if the UK and EU fail to reach an agreement.

Powerful lobby group Chocolate, Biscuits and Confectionary of Europe have urged Mr Barnier to rethink his opposition.

It called on him to “protect the close and integrated supply chains between UK and EU food and drink producers have built over the last decades”.

Chocolate, sweets and biscuits are among the EUs top food and drinks exports to the UK – worth £4.5 billion a year.

The UK wants an agreement with the EU that would allow manufacturers to benefit where the two sides have a trade deal with the same country.

The rules of origin fix would allow businesses to use components sourced from mutual partners without them counting towards a maximum quota of foreign materials used in production.

Goods traded between the UK and EU after the transition period will attract a tariff unless the market can prove how much of their value was produced domestically.

Such a clause has already been inserted into the EUs free-trade agreements with Japan and Singapore.

Trade experts, however, said the pact is not a standard feature in most of the blocs global deals.

They said the UK was having to ask for an exceptional catch-all solution because of the short timetable the Government is hoping to conclude the talks in.