Michel Barnier has said he is “strongly opposed” to the prime minister’s Chequers proposals on future trade, as he advised European car manufacturers that they will have to use fewer British-made parts after Brexit.

In his most damning condemnation yet of the UK government’s plans, the EU’s chief Brexit negotiator said the British offer on customs was illegal and its suggestion of a “common rulebook” on goods would kill the European project.

Instead, in an intervention that will concern the 186,000 people directly employed by the car industry in the UK, Barnier warned European manufacturers that the streamlined system of imports and exports between the UK and the rest of Europe would come to an end.
The former French minister added that in order for EU carmakers to enjoy low tariffs on their exports around the world, they would need to shun British manufacturers.

“Outside of the internal market and the customs union, this involves customs formalities and controls that hinder ‘just in time’ production,” Barnier said. “In order for EU carmakers to benefit from the tariff benefits of the EU-Korea agreement (pdf), only a certain proportion of the services may be provided in a car in a third country. Businesses have to be careful not to use too many parts of Britain in their vehicles in the future.”

Brussels has, until now, raised questions, in public and in private, about the UK government’s vision on trade after Brexit, but fallen shy of its outright dismissal.

But speaking to the Frankfurter Allgemeine Zeitung newspaper during a visit to Germany, Barnier did not hold back.

The European commission official said there were overlapping interests in the fields of security and foreign policy. In response to the 100 pages of the UK’s white paper, the EU offer on the future trade deal would likely only come to “15 to 20 pages” due to a lack of common ground on the economic relationship, he suggested.

“I am often accused in the United Kingdom of being dogmatic,” Barnier told the newspaper. “In fact, I only fulfil our fundamental interests.”

Under the Chequers deal there would be a “free trade area for goods”, under which the UK would in effect retain existing regulatory and customs arrangements by becoming a rule-taker.

In order to avoid border checks, Britain is also seeking a “facilitated customs arrangement”. The UK could control its own tariffs to allow it to pursue an independent trade policy, but its customs officials would collect and pass on the higher EU tariff to Brussels for goods passing through the UK en route to the continent.

No-deal Brexit is only alternative to Chequers plan, says Lidington

May’s de facto deputy prime minister, David Lidington, has recently said the Chequers proposals would protect both the British and European economies from damage, and is the only alternative to a no-deal scenario.

However, Barnier has seemingly ruled out any such arrangement, insisting that the only option that could maintain something like the current economic relationship would be to follow the Norway model, under which there would be free movement of people and large payments to Brussels.

Barnier said of the UK’s customs proposals: “We cannot relinquish control of our external borders and the revenue there to a third country – that’s not legal.

“By the way, infringement proceedings against London are ongoing because, according to the commission, Chinese textile imports have not been properly cleared.

“Moreover, the British proposal is not practical. It is impossible to tell exactly where a product ends up, on the UK market or in the internal market. For example, sugar is transported by the tonne in 25-kilo sacks, so you cannot trace every sack to its destination. That would only be possible with insane and unjustifiable bureaucracy. Therefore, the British proposal would be an invitation to fraud if implemented.”

He said the “common rulebook” idea in the white paper did not reflect the modern world of trade.

Barnier added: “The interest of Europeans is to preserve the integrity of the common market. That is our special strength and the reason why we are respected throughout the world, even in the United States.

“We have a coherent market for goods, services, capital and people – our own ecosystem that has grown over decades. You cannot play with it by picking pieces. There is another reason why I strongly oppose the British proposal. There are services in every product. In your mobile phone, for example, it is 20 to 40% of the total value ...

“As a former minister of agriculture, I can tell you that agricultural products are created under laws governing hygiene, health and environmental issues in the production process. There are services in every litre of milk and every apple.

“We must therefore prevent unfair competition if the United Kingdom has weaker legal requirements than we do. Otherwise we would discriminate and weaken our own companies.”

British and EU negotiators are due to re-engage this week, following six hours of talks on Friday between Barnier and Dominic Raab, the UK Brexit secretary. However, EU sources said the substance of the Chequers deals was effectively “history” as far as Brussels was concerned.

Barnier said in his interview, published on Sunday: “By the way, the British have a choice. They could stay in the single market, like Norway, which is also not a member of the EU – but they would then have to take over all the associated rules and contributions to European solidarity. It is your choice.

“But if we let the British pick the raisins out of our rules, that would have serious consequences. Then all sorts of other third countries could insist that we offer them the same benefits. That would be the end of the single market and the European project.”