Professor Steve Peers, University of Essex
Formal negotiations for the future UK-EU relationship commenced last week. The EU published its proposed negotiating strategy, while the UK government released a parliamentary statement. Notably, Prime Minister Boris Johnson’s speech on the matter, aimed at a domestic audience, lacked substance concerning trade policy. It is crucial to clarify that the existing withdrawal agreement doesn’t govern trade between the UK (excluding Northern Ireland) and the EU post-transition period. Furthermore, characterizing the basic trade arrangements between the EU and Australia as an “Australia deal” is inaccurate, as Australia itself seeks to enhance these through a free trade agreement (FTA) with the EU.
This analysis summarizes the proposed EU negotiation mandate and compares it to the jointly agreed upon political declaration on the future UK-EU relationship. It highlights deviations and elaborations from the political declaration, acknowledging expected negotiation difficulties stemming from differing EU and UK positions.
Legal basics
The EU’s proposal is a starting point for negotiations, requiring approval from Member States. After their review, the Council of the European Union is expected to finalize this mandate by February’s end. While modifications are possible, substantial changes are unlikely. The European Commission will then negotiate based on this mandate, reporting to a dedicated committee of Member State representatives. The European Parliament currently holds no formal role but can issue non-binding resolutions and will ultimately hold veto power over the final agreement. Whether national parliaments need to ratify the agreement depends on its content.
Timing of the talks
With the transition period ending this year, the UK’s current treatment as an EU Member State will cease. While provisions on citizen rights and Northern Ireland remain, most UK-EU relations will end unless replaced by new agreements. Although the transition period can be extended, the UK opposes this. The EU aims to achieve as much as possible within the given timeframe, aiming to reach a new fisheries treaty by July 2020, as per the political declaration.
The EU proposes a comprehensive “single package” encompassing general provisions, economic arrangements, and security arrangements. This could indicate a single, overarching treaty, though the exact form remains flexible. The EU leans towards negotiating an association agreement, potentially requiring unanimous Council approval, European Parliament consent, and, depending on content, national parliament ratifications.
Territorial scope
The proposed mandate excludes Gibraltar from negotiations, consistent with the EU’s 2018 stance. This is not a territorial claim, but a matter of requiring a separate agreement involving Spain. Each Member State retains veto power over the final UK agreement.
Data protection
The mandate aims for an adequacy decision on UK data protection law, enabling data flows between the UK and EU. This echoes the political declaration’s objective, seeking a decision by 2020’s end. Cooperation between regulators, while present in the political declaration, is absent from the mandate.
EU programmes
The mandate addresses UK participation in EU programs like research funding and Erasmus, aligning with the political declaration. It mentions Northern Ireland peace funding but omits association with European research infrastructure, present in the declaration. The EU has yet to finalize terms for non-EU country participation in the next program phase.
The core of the economic partnership is a free trade agreement (FTA) covering both goods and services, contrary to claims that no services FTA is intended. However, this falls short of single market participation. The mandate links the economic partnership with fisheries and a level playing field, unlike the political declaration.
Free trade in goods
The mandate proposes no tariffs or quotas between the UK and EU. However, unlike during EU membership, rules of origin will determine product origin, adding complexity. The EU suggests using its standard preferential rules of origin for simplicity. Additionally, the mandate introduces anti-dumping, anti-subsidy, and economic safeguard measures between the UK and EU, aligning with WTO rules. These measures, present in most FTAs, are not punitive but a consequence of the UK’s decision to leave the single market.
The mandate also addresses customs facilitation and non-tariff barriers, going beyond WTO provisions. However, it omits potential UK links with EU agencies for medical, chemical, and aviation safety, which were present in the political declaration.
Free trade in services
The mandate proposes an FTA in services exceeding WTO commitments, excluding audio-visual services. While not explicitly stated in the political declaration, this exclusion is expected. The mandate mirrors the declaration by mentioning free trade in specific sectors like professional, business, telecommunications, courier and postal, distribution, environmental, financial, and transport services. This includes service provider movement but falls short of free movement of people. While both mention investment agreements, details are scant. The mandate incorporates recognition of professional qualifications, echoing the political declaration, and maintains unilateral financial services equivalence decisions.
Intellectual property
As usual for FTAs, the mandate includes intellectual property provisions exceeding WTO and international rules. The EU seeks protection for future “geographical indications,” regulating product origin. While the withdrawal agreement protects existing designations, this negotiation focuses on future ones. The mandate also aims to preserve current protection in other IP areas covered by EU legislation. It remains silent on the UK’s role in hosting part of the planned Unified Patent Court, linked to a unified EU patent. Specific IP references from the political declaration (databases, resale rights, exhaustion of rights) are absent. Applying EU standards could be contentious regarding the recent EU copyright law, which the UK supported but now plans to disregard.
Public procurement
The mandate proposes opening public procurement markets beyond WTO obligations, reflecting the political declaration. However, the UK’s conflicting “Buy British” and “Global Britain” slogans highlight the tension between economic nationalism and export-oriented policies. The UK’s commitment to the WTO procurement agreement and potential demands from non-EU countries for procurement obligations in FTAs complicate the “Buy British” approach.
Mobility
Falling short of free movement, the mandate proposes waiving visa requirements for short-term travel, a step the EU has unilaterally taken, contingent on reciprocity. A visa waiver treaty could expand this, waiving requirements for paid activities, benefiting sectors like the music industry. The mandate’s mobility section complements service negotiations, which include some movement of people.
It also mentions establishing conditions for student and researcher migration, areas where the EU has legislation on non-EU migration. Social security coordination for future UK-EU migration is possible. Notably, this excludes those covered by the withdrawal agreement, which addresses movement before the transition period ends. There is no mention of negotiating continued free movement rights for UK citizens in the EU pre-transition period.
Facilitating travel and family law civil judicial cooperation, present in the political declaration, are absent from the mandate.
Transport
The mandate states that the UK won’t have the same aviation market access as EU Member States but is open to negotiation. It also touches upon aviation safety standards. For land transport, it mentions market access for road haulage, excluding cabotage (transport within a single Member State/multiple Member States). This links to maintaining social rules for drivers and tachograph regulations. While the political declaration referenced private motorists, the mandate does not.
The mandate’s reference to international coach transport law suggests no additional provisions. On rail transport, it mentions the Channel Tunnel, with an expected addition from the Council regarding Dublin/Belfast rail links, mirroring the political declaration.
While maritime transport is absent, the Council will likely add it, aligning with the political declaration. It’s unclear if the reference to cooperation with the EU maritime safety agency will remain.
Energy
The mandate includes references to renewable energy, a level playing field on carbon pricing, and a Euratom deal maintaining nuclear safety standards and addressing isotope issues. An expected addition from the Council concerns nuclear waste, potentially addressing concerns about Sellafield.
Fisheries
The mandate prioritizes EU fishing rights in UK waters, connecting it to the broader economic partnership. It sets a target date of July for an agreement, though this is likely not an absolute requirement. The Council will likely strengthen the EU’s position. Fisheries, along with the next topic, could potentially derail negotiations.
Level playing field
In this context, “level playing field” refers to state aid, competition law, and aspects of tax, labor, and environmental law. The EU commonly includes such provisions in FTAs. The question is whether to go beyond standard provisions in the EU-UK FTA, given its more comprehensive tariff elimination.
The political declaration already commits both sides to a level playing field “commensurate with the scope and depth of the future relationship.” This entails upholding “common high standards” in areas like state aid, competition, social and employment standards, environment, climate change, and relevant tax matters. It emphasizes preventing trade distortions and unfair competitive advantages.
The mandate reiterates this but adds specifics. On enforcement, it states that the EU should be able to “apply autonomous interim measures” to address disruptions in the level playing field. On future measures, it aims for a commitment to continuous improvement, empowering the governing body to adapt and expand the level playing field over time.
Specific provisions include applying EU State aid rules in the UK, enforced by an independent UK body, with disputes subject to a dispute settlement mechanism. For competition law, it suggests provisions akin to EU law, ensuring effective enforcement and limiting special rights for state-owned enterprises.
On tax, the mandate promotes adherence to international standards and calls for the UK to maintain common standards applied within the EU and UK at the end of the transition period. This encompasses areas like exchanging information on income, financial accounts, tax rulings, country-by-country reports, beneficial ownership, and cross-border tax planning arrangements. It emphasizes combating tax avoidance and public country-by-country reporting by financial institutions.
Regarding employment law, the mandate opposes reducing standards below those applicable within the EU and UK at the transition’s end. This includes fundamental rights at work, occupational health and safety, fair working conditions and employment standards, and information and consultation rights. It calls for effective enforcement within the UK.
On the environment, the mandate stresses maintaining the level of protection provided by laws, regulations, and practices. It lists specific areas like access to environmental information, public participation, environmental impact assessment, industrial emissions, air quality, biodiversity conservation, waste management, water protection, chemical safety, and climate change.
The mandate advocates for minimum commitments reflecting existing standards, including targets, and adherence to the precautionary principle and the polluter pays principle. It calls for a transparent UK system for monitoring, reporting, and enforcing these obligations by an independent body.
Specific climate change provisions include maintaining a carbon pricing system at least as effective as those within the EU and considering linking a UK emissions trading system with the EU’s system, ensuring integrity and a level playing field. Beyond carbon pricing, the UK should not lower its level of protection below EU standards.
The mandate also encourages adherence to international rules like ILO conventions, the European Social Charter, and multilateral environmental agreements, including the Paris Agreement. It aims to prevent the lowering of higher standards to encourage trade and investment.
The EU’s interpretation of the level playing field commitment in the political declaration, while expectedly maximalist, cannot be dismissed as lacking basis. The details of the future treaty, particularly regarding dispute settlement, are crucial for understanding the actual implications.
The mandate lacks specifics on dispute settlement beyond mentioning EU retaliation. This is significant because the first withdrawal agreement, containing similar provisions, had limitations. Only certain issues qualified for dispute settlement, excluding the substance of labor and environmental commitments. This meant the Court of Justice of the European Union (CJEU) had no jurisdiction over those areas.
Furthermore, retaliation was limited to issues within the dispute settlement system. While the mandate mentions potential EU retaliation for breaching level playing field rules, it remains unclear if limitations on retaliation from the first withdrawal agreement will apply. The UK will likely demand reciprocal powers to retaliate against EU breaches.
Security cooperation
The proposal delinks security cooperation from the level playing field and fisheries but makes it contingent on the UK’s adherence to the European Convention on Human Rights (ECHR), the Human Rights Act (HRA), and a data protection adequacy decision, acknowledging potential CJEU challenges. The ECHR and data protection aspects reflect the political declaration, while the HRA requirement goes beyond it. Fair trial and double jeopardy standards are also included.
For police cooperation, the proposal references passenger name records, DNA/fingerprint/vehicle information exchange, and case-by-case information sharing. It omits the Schengen Information System, currently used by the UK for criminal law data. Regarding PNR, it references a CJEU case setting limits on data exchange with non-EU countries. While the proposal aligns with the political declaration on PNR and DNA data, it deviates by explicitly mentioning individual information exchanges instead of relying on the Schengen Information System.
On criminal justice cooperation, it proposes fast-track extradition, potentially modeled after the EU-Norway-Iceland agreement, which closely resembles the European Arrest Warrant but with exceptions. It also suggests exchanging evidence and criminal records similar to existing EU laws, minimizing the impact of the UK’s departure. This likely surpasses cooperation levels with other non-EU countries.
Foreign policy
The proposal emphasizes “alignment” on sanctions. It allows for case-by-case involvement in defense missions or defense industry projects, reflecting the political declaration’s emphasis on voluntary UK participation in EU defense cooperation. Access to Galileo will be limited.
Governance and dispute settlement
The proposal outlines a joint committee to oversee and implement the future relationship treaties, a standard practice in international agreements. Dispute resolution would involve consultation followed by binding arbitration. The CJEU’s involvement is limited to interpreting EU law, as explicitly stated in the political declaration. Notably, there is NO broader CJEU involvement, aligning with the political declaration’s explicit exclusion.
Dispute settlement mechanics are not detailed but might draw from the withdrawal agreement’s provisions. It is possible that certain areas might be excluded from dispute settlement entirely, rendering CJEU involvement or other remedies irrelevant. The CJEU would only have jurisdiction if the agreement references EU law AND allows for dispute settlement. This was not the case for parts of the level playing field in the first withdrawal agreement. The future treaty’s specifics are therefore crucial.
Barnard & Peers: chapter 26
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