The level playing field remains one of the three major obstacles to a deal alongside fishing rights and governance arrangements for any agreement. But economist Roger Bootle said not accepting the level playing field was the very “essence” of the economic case for Brexit.
He said the term was simply EU-speak for for “being tied into Brussels’ rules and regulations”.
And he said potential gains from Brexit would come when the UK started doing business under rules and regulations that differ from the EU’s.
He said: “Far from being an arcane sideshow, this is the essence of the economic case for Brexit.
“Of course, it will be advantageous not to have to lob tribute across the channel each year to fund our lords and masters.
“Equally, we stand to gain from operating an independent trade policy, fashioned according to the UK’s interests.
“But the really big potential gains from Brexit derive from operating rules and regulations different from the EU’s.”
Mr Bootle, chairman of independent macroeconomic research consultancy Capital Economics, said this was why EU leaders were so keen for the UK to accept the level playing field.
He said: “This is precisely why so many on the continent, including Angela Merkel, are anxious about Brexit.
“They are worried about us becoming a super-competitor.”
Mr Bootle also said it was important for the UK to operate outside the jurisdiction of the European Court of Justice once the Brexit transition period expires on December 31.
He wrote in the Daily Telegraph: “How can the UK claim to be fully sovereign if it has to submit to the judgment of the other party’s courts?
“In the end this could prove to be highly significant economically as well, depending upon the outcome of the level playing field issue.”
Post-Brexit trade talks are continuing in London this week as Downing Street warned “time is very short” to bridge the “significant” gaps between the two sides.
The EU’s chief negotiator Michel Barnier has delayed his return to Brussels and is expected to remain in the UK until Wednesday to carry on intensive discussions with his British counterpart Lord Frost.
The Prime Minister’s official spokesman said: “We are in now what is an intensive phase of negotiations.
“I wouldn’t wish to pre-empt what’s being discussed.
“It’s the first time that we have been negotiating on legal texts and across all areas at the same time and we have welcomed that fact.
“But there is also much work to be done if we are going to bridge what are the significant gaps that remain between our positions in the most difficult areas and time is very short.”
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The UK and the EU had previously said they would need to get a deal by mid-October if it was to be implemented in time, but reports from Brussels have suggested mid-November might be the latest an agreement could be reached.
Mr Johnson has said if there is no agreement, Britain will start trading with the bloc on “Australian terms”, shorthand for World Trade Organisation rules without a formal deal.
But the prospect of the imposition of tariffs and quotas has alarmed many businesses already reeling from the fallout from the coronavirus pandemic.