The government of Gibraltar reacted furiously after it emerged that Spain will in effect have a veto on any UK-EU trade deal after Brexit that affects the territory.
The condition, set out in the European Council’s draft negotiating guidelines published on Friday, means Spain could use the Brexit process to pursue longstanding complaints over air travel, shipping and cigarette smuggling.
Madrid has already signalled it will block UK access to the EU’s single aviation market unless the terms exclude Gibraltar’s international airport, which it argues is illegally located on Spanish land.
The negotiating guidelines, presented by European Council president Donald Tusk, state that no EU-UK agreement will apply to Gibraltar “without the agreement between the Kingdom of Spain and the United Kingdom”.
Fabian Picardo, Gibraltar’s chief minister, said on Friday: “This unnecessary, unjustified and unacceptable discriminatory proposed singling out of Gibraltar and its people was the predictable machination of Spain that the people of Gibraltar foresaw and [was] one of the reasons why we voted so massively to remain in the EU.”
He added that a “predatory” Spain was “trying to get away with mortgaging the future relationship between the EU and Gibraltar to its usual obsession with our homeland. This is a disgraceful attempt by Spain to manipulate the European Council for its own, narrow, political interests. Brexit is already complicated enough without Spain trying to complicate it further.”
Andrew Rosindell, a Conservative MP, raised the prospect of the condition preventing an Brexit trade deal. “An agreement without including Gibraltar means there can be no agreement,” he said.
“That is a very hard line — potentially it’s going to cause a lot of difficulties,” said Mike Gapes, a Labour MP and member of the Commons foreign affairs committee.
Like all EU member states, Spain could veto an ambitious final trade deal. It will be politically easier for Madrid to block any arrangement concerning Gibraltar, however, if it is in effect subject to separate bilateral agreement.
Gibraltar, which voted 96 per cent to remain in the EU, provides thorny practical problems for Theresa May, not least because 40 per cent of its jobs are held by workers who commute from Spain.
George Kerevan, a Scottish National party MP, said the European Council’s provision made it “doubly strange” that the prime minister did not mention Gibraltar in her six-page letter triggering Article 50 this week.
Tim Boswell, chairman of the House of Lords EU select committee, said that Mrs May’s omission may have emboldened the European Council to include Gibraltar in its terms.
On Wednesday, Mrs May did imply that a separate agreement would not be needed. “Gibraltar is not a separate member of the EU, nor is it a part of the UK for the purposes of EU law, but we are clear that it is covered by our exit negotiations,” she told MPs.
Britain rejects Spanish sovereignty over the territory as long as its residents do not want it. In a previous 2002 vote, only 187 votes out of more than 18,000 were cast in favour of shared sovereignty with Spain.
Over the past year, Spain has softened its rhetoric on the issue. Alfonso Dastis, appointed foreign minister in November, has said sovereignty is “up to” the UK and the population of Gibraltar, and that Spain would not take any “drastic measure” such as closing the border if there were no deal.
However, Antonio Barroso, the London-based deputy director of research at Teneo intelligence, a political risk consultancy, said: “Spain has changed the tone on Gibraltar. But not the demand.”
On Friday, the country’s foreign ministry insisted that the clause in draft European Council guidelines reflected “the traditional Spanish position” and “nothing new”.
The disagreement over the airport — which handles up to nine flights a day from the UK and Morocco — is already holding up a number of EU aviation laws. A revision to passenger rights on compensation when flights are delayed or cancelled was first proposed in 2013 but has been frozen since.
Mr Gapes said the Brexit negotiations would not end the tension around Gibraltar. “As soon as we leave the EU, Spain will be in there, pushing, pushing all the time — with no countervailing voice. It’s one of the unintended consequence of the decisions of Theresa May, and of the referendum result,” the MP said.