May said she remained “confident” of reaching a deal with the European Union, while admitting Britain needed to resolve the tension.
Prime Minister Theresa May on Friday called for a wide-ranging free trade deal with the EU after Brexit but said it was time to face up to “hard facts” about the economic consequences of leaving the bloc.
In a detailed speech just weeks before starting negotiations on the future partnership with Brussels, May confirmed Britain would leave the European Union’s single market and customs union after Brexit in March 2019.
She called for the “broadest and deepest possible agreement, covering more sectors and cooperating more fully than any free trade agreement anywhere in the world today.”
But she acknowledged for the first time that Britain may suffer new trade barriers as a result of her move, which is driven by a desire to end mass migration and throw off EU regulations.
“I want to be straight with people because the reality is we all need to face up to some hard facts … In certain ways our access to each other’s markets will be different,” she said.
She promised to commit to some regulations and minimum standards on goods in a bid to maintain close trade ties, while reserving the option for Britain to diverge in the future.
The EU has already dismissed this as “cherry-picking”, but May pointed out that each of the bloc’s existing trade deals with other countries was slightly different.
“We both need to face the fact that this is a negotiation and neither of us can have exactly what we want,” she said in London.
‘Stay close but innovate’
EU leaders had been pressing the prime minister to clarify what she wants before they agree their position on the future economic partnership at a summit later this month.
EU President Donald Tusk criticised May’s approach on Thursday, saying, “There can be no frictionless trade outside of the customs union and the single market.”
But Foreign Secretary Boris Johnson, a leading eurosceptic, said May set out a “clear and convincing vision”.
“We will remain extremely close to our EU friends and partners – but able to innovate, to set our own agenda, to make our own laws and to do ambitious free trade deals around the world,” he wrote on Twitter.
However, pro-European Labour lawmaker Chuka Umunna said the prime minister had her “head in the sand”.
Brussels raised the pressure this week with a draft treaty suggesting Northern Ireland could stay in a customs union with the EU while the rest of Britain remained outside.
The proposal is a fall-back option if London fails to come up with a better solution to avoid new customs checks between Northern Ireland and Ireland, where some fear a “hard border” could upset the fragile peace.
But May warned it threatened the integrity of her country and was something that “no UK prime minister would ever agree to.”
She repeated her opposition Friday to a hard border but said an arrangement was possible that would also leave Britain free to strike its own trade deals.
Irish Prime Minister Leo Varadkar on Friday said he remained concerned that British Prime Minister Theresa May did not fully recognise the implications of leaving the European Union’s customs union and single market.
“She (May) has given a number of important reassurances today, which I welcome,” Varadkar said. “However I remain concerned that some of the constraints of leaving the Customs Union and the Single Market are still not fully recognised.”
Varadkar said he particularly welcomed May’s “clear commitment” to Northern Ireland’s 1998 peace agreement and to a December agreement to avoid a hard border between the region and the Republic of Ireland.
Britain’s opposition Labour party this week came out in favour of a new customs union, which is already backed by the main business lobby groups.
Their change in stance raises the stakes in parliament, which will vote on the final exit deal where May has only a slim majority.
While rejecting a new customs union governing the movement of goods, May highlighted the need to protect complex supply chains that had built up over the last four decades of EU membership.
To this end, Britain would “make a strong commitment that its regulatory standards will remain as high as the EU’s.”
It would also commit to remaining in part of agencies vital to the chemicals, medicines, and aerospace industries and making a financial contribution.
May said the trade deal would require “reciprocal binding commitments” to ensure fair competition, as well as an independent arbitration mechanism, a clear rejection of the European Court of Justice.
“In all these areas, bold and creative thinking can deliver new agreements that are in the very best interests of all our people – both in the UK and across the EU,” she said.