EU preparing to give UK worse trade deal terms than Canada or Japan – The Telegraph

During late-Tuesday, The Telegraph came out with the news that the European Union (EU) is preparing to offer the UK a trade deal on tougher terms than its deals with Canada, Japan and a host of other leading trade partners.

Key quotes

The European Commission has warned EU member states that it would be a mistake to allow some UK industry bodies to be allowed to certify that goods conform to EU standards. 

The so-called Mutual Recognition Agreements (MRAs) are granted to other key EU trade partners to facilitate the smooth movement of goods in key sectors but could be withheld from the UK if it only seeks a basic trade deal. 

The uncompromising European Commission stance surprised even some EU member states when they met on January 10 to discuss future goods trade with the UK.

FX implications

While news like this generally weighs on the British Pound (GBP), the GBP/USD pair seems to shrug it off while trading modestly changed to 1.3050. The reason could be traced from the UK’s latest upbeat Average Earnings data.