Michel Barnier has reminded Boris Johnson that he has already agreed in a “very important” declaration to stay true to EU rules on subsidies and standards, as Brussels staked out its opening position on the EU’s future relationship with the UK.

Responding to the prime minister’s claim that there would be no need for Britain to continue to respect EU regulations under a trade deal, the EU’s chief negotiator pointed to the “political declaration” agreed last year with Johnson, while admitting that alignment was a “red rag” to Westminster.

Brussels is demanding that the UK “dynamically aligns” on state aid and competition regulations to prevent the British government from subsidising elements of the economy, such as the steel, aerospace or car industries.

The European court of justice would act as the final arbiter of EU law. The EU is seeking “non-regression” on current environmental, workers and social standards.

“There can’t be possibly any surprise on the British side to hear that, if we are acting in good faith here,” Barnier told reporters at a press conference in Brussels. “I say that because in the text of the political declaration … There are some very clear words there … A full chapter that talks about the description of the level playing field and the objective of having fair and open competition.

“In that text, Boris Johnson and we … both say that we are keen to avoid any distortion of competition and any unfair competitive advantages; that is what we are talking about here,” Barnier said. “There is nothing surprising in that … I can tell you that he and his team paid attention to every word and comma in the text that commits us on both sides.”

Barnier said a level playing field had to be a condition for a “zero-tariffs, zero-quota” deal. “We are in favour of free trade but we are not going to be naive,” he said.

The UK left the EU at midnight central European time on 31 January and negotiations over the future relationship are expected to start on 3 March. An EU official confirmed the Guardian’s report in December that the next phase of talks would take place in both London and Brussels.

Play Video 1:38 'There is no need for a free trade agreement': Boris Johnson outlines UK stance after Brexit – video

As the European commission issued its draft negotiating mandate on Monday morning, to be approved by the member states over the next three weeks, Barnier said there would be three key elements: an economic partnership, a security deal and agreement on how any agreement would be policed.

Later, France’s Europe minister, Amélie de Montchalin, reiterated that the UK must respect EU standards in order to get a free-trade deal. “Free trade is not the absence of control,” she told journalists after meeting Barnier in Brussels.

France has privately pushed the commission to seek dynamic alignment on environmental standards. Citing the EU’s Green Deal – a far-reaching plan to transform Europe’s economy to tackle the climate emergency – De Montchalin said: “The methods of production in Europe are not going to be the same in 20 years’ time. Imagine if the only constraint is that you apply the standards that were in place on 1 January 2021 and then do what you want. It’s not reasonable.”

De Montchalin is one of 27 European ministers who will sign off Barnier’s draft mandate at a meeting on 25 February.

Barnier said that beyond a “level playing field”, a second condition for an unprecedented deal would be the maintenance of “reciprocal access” to fishing waters.

The EU’s negotiating document said the agreement “should aim to avoid economic dislocation for union fishermen that have traditionally fished in the United Kingdom waters” and “build” on the bloc’s common fisheries policy, which the British government says is now irrelevant.

Barnier said such agreement on keeping British seas open to European fishermen would be “inextricably” linked to the wider trade deal and that any agreement should be “stable”, suggesting it would be set for the long term.

The former French minister also confirmed that the British overseas territory Gibraltar would not be covered by the terms of any deal struck with the UK, because of Spanish opposition. British sovereignty over Gibraltar was formalised by the treaty of Utrecht in 1713, but Spain has always bristled at the idea of UK ownership.

Barnier said: “Territorial application of any agreement that we are negotiating will not include the territory of Gibraltar … The kingdom of Spain will have to be involved and give its agreement to a specific agreement on Gibraltar.”

Turning to security, Barnier said the UK would need to adhere to the European convention on human rights, the international agreement that pre-dates the EU and enshrines the European court of human rights, a bête noire for Tory backbenchers. “The envisaged partnership should provide for automatic termination of the law enforcement cooperation and judicial cooperation in criminal matters if the United Kingdom were to denounce the European convention on human rights”, the commission’s document states.

The UK would also need to ensure “adequate” standards on data protection, Barnier said, adding that this was something the European parliament was paying a great deal of attention to.

A third condition is an effective dispute settlement system, where “the European court of justice should be able to continue its role in full”.

The two sides will have about eight months, once negotiations start in earnest in March, to finalise a deal before ratification, which will not require the approval of national parliaments, as the treaty will remain within EU competency.