Following Theresa May’s speech about Brexit on 02 March 2018, which was heralded as giving the UK’s definitive approach to Brexit, there still seem to be few concrete proposals to latch onto and nothing definitive in writing.
Meanwhile on the 7th March 2018 the EU published its draft negotiating guidelines. Prepared by Donald Tusk, the President of the European Council in consultation with member of the European Council representing the Member State holding the six-monthly Presidency of the Council and the President of the Commission, this document is to be discussed and if agreed will be the ultimate framework for the EU’s negotiating position when the future trading relationship of the EU and the UK in a post Brexit world will be due to be discussed in June this year.
No-one can say the EU does not like to put everything in writing nor that it lacks transparency in its negotiating positions.
Once again, the EU has produced a pithy Annex, no more than five and a half pages, detailing the reasoning for its stance on a number of issues relating to the forthcoming future relationship talks.
Early on it reiterates what it desires the best outcome to be and then balances that against some factors that may place some limitations on this hoped for end result.
The European Council restates the Union’s determination to have as close as possible a partnership with the UK in the future. Such a partnership should cover trade and economic cooperation as well as other areas, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy.
At the same time, the European Council has to take into account the repeatedly stated positions of the UK, which limit the depth of such a future partnership. Being outside the Customs Union and the Single Market will inevitably lead to frictions. Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU Single Market as well as of the UK market. This unfortunately will have negative economic consequences.
The EU says it is against this background that these guidelines have been drawn up so that there can be an understanding of the framework for the ensuing negotiations relating to the future relationship between the EU and the UK as an outside third country, non-member of the Union. The document lays down certain stipulations that it believes will underpin the negotiations.
Firstly, it lays down its own number one ground rule:
A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member.
Secondly, it reiterates its originating and oft repeated principle:
The European Council recalls that the four freedoms of the Single Market are indivisible and that there can be no “cherry picking” through participation based on a sector-by-sector approach, that would undermine the integrity and proper functioning of the Single Market.
Thirdly it reinforces its stance in relation to EU Institutions and the role of the ECJ:
The European Council further reiterates that the Union will preserve its autonomy as regards its decision-making, which excludes participation of the United Kingdom as a third-country to EU Institutions, agencies or bodies. The role of the Court of Justice of the European Union will also be fully respected.
The document welcomes the opportunity and confirms the EU’s readiness to work towards a Free Trade Agreement with the UK once it is no longer a member state but goes on to warn:
Such an agreement cannot offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof.
It continues to outline what such an agreement would cover which includes trade in goods covering all sectors and which should be subject to zero tariffs in the future. It mentions the requirement for appropriate rules of origin to be included and in an early warning of its intentions regarding access to the UK’s fishing waters it states that it believes:
existing reciprocal access to fishing waters and resources should be maintained.
This may be seen as an ambitious opening gambit by the EU but at least it is unambiguous and it is in writing and published for everyone to see.
Matters of customs cooperation, sanitary and phytosanitary standards, trade in services, the fact that the UK will no longer share a common regulatory, enforcement and judicial oversight and other matters like intellectual property rights and geographical indications are also included as areas that need to be clarified during the upcoming negotiations.
The document highlights the importance of achieving an agreement relating to aviation whose aim should be to ensure ongoing “connectivity” between the EU and the UK post Brexit. However, it warns frequently throughout the document the importance of ensuring a “strong level playing field” in the realm of its future trading relationship.
The document stipulates:
This will require a combination of substantive rules aligned with EU and international standards, adequate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement mechanisms in the agreement as well as Union autonomous remedies, that are all commensurate with the depth and breadth of the EUUK economic connectedness.
The Draft Negotiating Guidelines states it has been drafted to reflect what the EU has interpreted to be:
“the level of rights and obligations that is compatible with the positions stated by the UK.”
The document continues that if these positions were to evolve the EU could reconsider its offer in line with the guidelines already published on 29th April and 15th December 2017.
This is apparently called the “evolution clause”.
Over to you UK.
Everyone awaits the detail.