The UK and EU begin negotiations over their future relationship this week. This paper outlines the UK and EU's objectives, the main issues of contention and the process being followed in the negotiations

Background

Following the ratification of the Withdrawal Agreement (WA), the UK left the EU on 31 January 2020. The WA dealt with the orderly exit of the UK from the EU, including, for example, the financial settlement. The WA also included the Protocol on Ireland/Northern Ireland which ensures no return to a hard border in Ireland.

The UK and EU agreed a Political Declaration (PD) alongside the WA. This non-binding document sets out the broad framework for the future relationship between the parties. The details of the UK’s future relationship with the EU are still to be agreed. The purpose of the forthcoming negotiations is to finalise that future relationship.

Having left the EU, the UK is now in a transition period. This transition period is expected to run to the end of December 2020. The UK is still subject to EU rules during this period even though it is no longer a Member State. While the WA allows for the transition period to be extended, the Government has said that it does not want an extension (and has legislated to prevent one). Negotiations, at least on an initial agreement, will therefore have to be completed before the end of year and ratified in time for new arrangements to be in place for the beginning of 2021.

Scope of the negotiations

The negotiations are expected to cover a range of issues such as the future trade relationship, fisheries, aviation, security co-operation, governance and dispute resolution.

Timetable

Assuming there is no extension to the transition period, an agreement between the UK and EU must be negotiated and ratified by the end of 2020. Many have commented that this is a very tight timetable and have contrasted it with other trade agreements which have taken several years to negotiate. Not all commentators agree with this assessment, however, and the UK’s chief negotiator David Frost has pointed to the Treaty of Rome of 1957 (establishing the European Economic Community), which was negotiated in nine months. The European Commission has published a timetable which envisages an initial agreement by October 2020, leaving time for ratification at the end of the year, and with negotiations on outstanding issues to continue in 2021. 

The Government has said that it hopes the broad outline of an agreement will be clear by the high level meeting in June between the parties envisaged by the Political Declaration and that the agreement could be finalised by September. If this is not the case, the Government may walk away from the negotiations.

The Role of Parliament

Parliament will have a limited formal role in negotiating and approving the future relationship with the EU. The provisions of the Constitutional Reform and Governance Act 2010 (CRAG) will apply. While in theory this gives the House of Commons the power to delay ratification of a Treaty indefinitely, in practice the CRAG powers are widely regarded as being limited. No Treaty has ever been blocked using these powers.

The original (October 2019) version of the EU (Withdrawal Agreement) Bill included provisions giving the House of Commons a role in approving the Government’s negotiating mandate and the agreements themselves. These provisions were removed from the later version of the Bill which passed into law as the EU (Withdrawal Agreement) Act 2020.

EU procedures for negotiations

The EU is conducting negotiations on the same legal basis as its other negotiations with non-EU countries. Future agreements will require approval by Member States in the Council of the EU and the European Parliament. Where agreements go beyond the EU’s exclusive competences they will also require ratification by national and (in some cases) regional parliaments.

UK objectives

The Government is aiming for a relationship with the EU “based on friendly co-operation between sovereign equals”. The Government is looking for a free trade agreement with the EU similar to that which the EU has agreed with other countries, such as Canada. This would involve no tariffs or quotas on UK-EU trade, although a few tariffs remain on EU-Canada trade under their trade agreement. The UK is ruling out regulatory alignment with the EU, jurisdiction of the Court of Justice of the EU (CJEU) and supranational control over the UK in any area of the proposed agreements. In particular, the UK will not agree to be bound by “level playing field” obligations, such as, for example, rules on government subsidies to industry, workers’ rights and environmental protection.  

The Government has made it clear that the UK is leaving the EU single market and customs union and, as noted, will not agree to regulatory alignment. This will allow the UK greater economic and regulatory freedom, including an independent trade policy. It will also mean, however, greater friction in relation to trade with the EU. The Government has confirmed that there will be checks on imports into Great Britain from the EU.

The Government proposes that agreements in other areas, for example on fishing, aviation, nuclear co-operation and law enforcement and judicial co-operation, would be separate to the trade agreement.

It foresees all these agreements as distinct with their own governance arrangements—as opposed to a single overarching ‘framework’ agreement. The Government does not view foreign affairs co-operation as requiring a treaty framework.

The UK’s detailed negotiating position was published on 27 February 2020.

EU objectives

The EU has said it wants to have a partnership with the UK which is “as close as possible”. This would involve an economic partnership, a security partnership and co-operation on other issues. These would be under a single overarching governance structure with a dispute resolution system in which the CJEU provides interpretations of questions of EU law.

The EU agrees that the aim of the negotiations should be to ensure zero-tariff and zero-quota trade between the UK and EU. The EU is, however, only prepared to grant this “privileged” access to its market if the UK agrees to “robust” level playing field commitments and an agreement on fisheries providing continuity in access to UK waters.

The EU’s proposed security partnership would involve co-operation in foreign affairs and defence matters, as well as law enforcement and judicial co-operation.

The EU’s detailed objectives are set out in its Negotiating Directives of 25 February 2020.

Contentious areas

The inclusion of level playing field commitments is likely to be one of the main areas of contention. The UK argues that it is simply asking for the same type of deal as the EU has concluded with countries such as Canada and Japan. Furthermore, the UK argues that it has used state aid less than other EU countries and has higher standards than the EU in some areas.

The EU views the level playing field commitments as particularly important due to the size of the UK economy, its closeness to the EU and the integration between the EU and UK economies. The EU is concerned that the UK could gain an “unfair” advantage if its regulations diverge from those of the EU. The EU argues that its economic relationship with the UK is much closer than that with Canada so the Canadian agreement cannot simply be replicated for the UK.  

Fisheries is also likely to be a contentious area. The EU has linked access to the single market to an agreement on fisheries in which continued reciprocal access would be upheld. The UK Government negotiating objectives document proposed annual negotiations with the EU and other neighbouring countries. These would be based on the principle of zonal attachment rather than historical fishing activity, as is currently the case.

Another point of contention could be the EU’s proposal that the security partnership provide for termination of law enforcement and judicial co-operation if the UK were to denounce the European Convention on Human Rights or abrogate domestic law giving effect to it. The UK Government has said the agreement should not specify how the UK or EU protect and enforce human rights within their legal systems.

There are differing approaches to the proposed governance of the relationship, with the EU seeking an overarching institutional structure and the UK preferring separate agreements with their own governance structures. The role of the CJEU could be contentious, depending on whether the UK accepts a role for the court in matters of interpretation of EU law (as is the case with the WA) as distinct from an enforcement or dispute resolution role.