The Future Relationship between the United Kingdom and the European Union

Negotiations on future EU-UK relations

The UK’s future relations with the EU will be detailed in a separate agreement from the withdrawal agreement currently being negotiated, but the withdrawal agreement will contain a political declaration on the framework for future EU-UK relations.

We don’t know yet what that will look like, but there is support from the European Parliament and from the UK Government in its July White Paper for an Association Agreement (AA) between the EU and the UK. This was also discussed in reports by the House of Lords European Exit Committee and the European Parliament’s Constitutional Affairs Committee.

EU Association Agreements

An association agreement is a treaty between the EU and a non-EU country that creates a framework for co-operation between them. Its legal basis is Article 217 of the Treaty on the Functioning of the EU (TFEU), which provides for “an association involving reciprocal rights and obligations, common action and special procedures”.  AAs can involve setting up a free trade area or creating broader economic and political co-operation in areas of mutual interest – in defence and security, migration, environmental protection, energy, science and education, for example. Typically, Article 127 TFEU requires the following:

1. Privileged linksbetween the EU and the third country that aim to foster wide-ranging co-operation between them;
2. Reciprocal rights and obligations;
3. Institutions to implement and monitor the agreement; e.g. an Association Council (ministerial level) and an Association Committee.

Typically, AAs have the following features:

1. They contain some kind of free trade arrangement with the EU;
2. In return for some access to the EU’s Single Market, the third country is usually required to adopt some relevant EU laws;
3. There may be cooperation beyond tradein areas of mutual interest;
4. They include a clause on respect for human rights and democratic principles.

AAs were originally created to prepare non-member countries for accession to the EU. In the context of Brexit, European Council President Donald Tusk has said Brexit is about “disassociation, not association”.

Government White Paper on future relations

Economic partnership

The White Paper published on 12 July set out the Government’s proposals for the UK’s future relations with the EU. It proposes that the economic partnership include the following elements:

• A common rulebook for goods including agri-food. This would cover only those rules required for frictionless trade at the border. The UK would commit by Treaty to ongoing harmonisation with relevant EU rules. The UK Parliament would be free not to maintain harmonisation in the future but this would be in the knowledge that there would be consequences (e.g. for market access);
• UK to participate in EU agencies which provide authorisations for goods in heavily regulated sectors, such as the European Chemicals Agency and the European Aviation Safety Agency;
• A new Facilitated Customs Arrangement, introduced in phases, removing the need for customs checks/controls between the UK and the EU “as if they were a combined customs territory”. The UK would apply the EU’s tariffs and trade policy for goods destined for the EU and its own trade policy for those destined for the UK market;
• No tariffs on goods trade between the UK and EU;
• Regulatory freedom for services, recognising that this will lead to reduced access for the UK and EU to each other’s markets;
• A new framework allowing UK and EU citizens to continue to travel to each other’s countries, and businesses and professionals to provide services – in line with those the UK might wish to offer other close trading partners in future;
• Measures that guarantee an open and fair trading environment, through, for example, common rules on state aid and agreement to maintain high standards in areas such as the environment and employment.

Governance

The proposed institutional arrangements would draw on precedents from other international agreements, which all have some form of institutional architecture. For instance, the EU-Canada Comprehensive Economic and Trade Agreement (CETA) and the EU-Ukraine Association Agreement. 

The proposed future relationship is likely to consist of a number of separate agreements, each covering different elements of economic, security and cross-cutting cooperation. The details of each individual agreement will be subject to negotiation with the EU, but some should be legally binding – components of the economic partnership such as a core Free Trade Agreement (FTA) and of the security partnership such as internal security – for instance; while others should be based on political commitments – components of external security cooperation, for example.

The majority of these individual agreements would sit within an overarching institutional framework, with a Governing Body providing political direction and a Joint Committee to underpin its technical and administrative functions.

The Governing Body would set the direction for the future relationship; discuss and determine if, how and when changes to the relationship were necessary, and provide transparency and accountability. It would meet biannually at leader level, including at least once between the UK Prime Minister and the EU heads of state and governments, as well as the presidents of the EU institutions, with additional ad hoc formal and informal ministerial dialogue as necessary.  This would also involve discussion of coordinated action beyond the UK-EU relationship. This could relate to foreign policy, defence or development objectives, or international standards, where the UK and the EU may choose to coordinate activity.

The Joint Committee would work under the direction of the Governing Body, bringing together officials from the UK and the EU, to manage and monitor the implementation of the future relationship, resolve disputes related to the future relationship and provide additional administrative functions related to the future relationship.  This would meet more regularly, with more specialised sub-committees working to it where appropriate.  Where the UK and EU had agreed to maintain a common rulebook, there would be a technical dialogue in the Joint Committee to oversee the application of legislative and regulatory commitments, and the UK would commit by treaty that its courts would pay “due regard” to Court of Justice of the EU (CJEU) case law, insofar as this was relevant to the matter before them

Where discussions did not resolve a difference in interpretation of how rules should apply, a formal dispute would be raised in the Joint Committee. There could be a reference to an independent arbitration panel with an option of referral to the CJEU for an interpretation (where the UK had agreed to adhere to the common rulebook).  Where there was continued non-compliance with a decision, there could be a financial penalty, suspension of specific obligations or, as a last resort, suspension of part of the agreement.

Statement of Secretary of State for Exiting the EU

Presenting the White Paper to the House of Commons, the new Secretary of State for Exiting the EU, Dominic Raab, said it was a blueprint for a “principled, pragmatic and ambitious future partnership between the UK and the EU”, and:

This White Paper sets out the right Brexit deal, delivering on the result of the referendum; taking back control over our money, laws and borders; supporting the economy by maintaining a strong trading relationship after we have left; ending free movement while avoiding a hard border between Northern Ireland and Ireland, or indeed between Northern Ireland and Great Britain; restoring sovereignty to Parliament and the authority of the UK Supreme Court; seizing the opportunity to forge new trade deals around the world; and maintaining co-operation with the EU in the many other areas that we prize, including security co-operation to keep our ​people safe. This is our vision for a bold, ambitious and innovative new partnership with the EU. Principled and practical, faithful to the referendum, it delivers a deal that is good for the UK and good for our EU friends.

Mr Raab said “Now it is time for the EU to respond in kind”.

What now?

The Commission’s chief Brexit negotiator, Michel Barnier, has said the European Commission will “analyse the Brexit White Paper… in light of the European Council guidelines”. EU negotiations resume on 16-18 July 2018 and it is possible that the Commission’s position on the White Paper will be made known in the coming days. The Government would like its negotiating team, on the basis of its proposal, “to engage with the EU’s at pace, working to reach a substantive agreement on the Future Framework alongside the Withdrawal Agreement later this year”. Given that there are still several outstanding issues to be resolved in the withdrawal negotiations, it is not clear whether this can be achieved.