Scope of the agreement
The UK and the EU were negotiating a single comprehensive partnership agreement, based on the Political Declaration of 2019 (see below). The scope of EU/UK partnership covered five main components:
- Institutional arrangements
- Economic partnership
- Level playing field
- Free Trade Agreement (FTA)
- Movement of citizens
- Security partnership
- Police and judicial cooperation
- Foreign, security and defence policy
- Basis for participation in programmes (e.g. Erasmus, Horizon Europe)
- EU autonomous measures (e.g. granting of equivalence)
There were also to be “supplementing agreements” embedded in the partnership agreement. The UK and the EU could agree these during the transition period or later. Brexit would not be ‘done’ until all these are in place. Given how little time was available in 2020, the negotiation of supplementals would inevitably extend into 2021 and possibly beyond.
Figure 14.2 shows how the European Commission grouped the detailed elements of the partnership under the three components. While separate negotiations focus on individual elements, there are links and interdependencies between them. The Single Market operates as a complex ecosystem, so the overall partnership was expected to involve much more than a simple ‘no-tariff FTA’.
The Commission held a series of seminars in January 2020 that summarised the main issues – fisheries, transport, mobility of citizens, data exchange, intelligence exchanges etc. The slides for each seminar included bullet-point summaries of the key issues for negotiation.
Figure 14.2 : EU/UK future partnership.
Source: European Commission, Michel Barnier’s presentation slides, 3 February 2020
Opening negotiating positions
As expected, there were several differences in the UK and EU opening negotiating positions. In general, the EU adopted a comprehensive and integrated position whereas the UK position was to negotiate each item independent of others. Please Table 14.1 for details.
Table 14.1: Opening negotiating positions
| Table 14.1: Opening negotiation positions | |||
|---|---|---|---|
| Issue | Areas of agreement | Differences | |
| General principles | Reflect sovereignty of both parties. | EU wants to protect integrity of Single Market. UK wants to negotiate sector-by-sector deals. |
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| EU wants to safeguard rules-based international order. UK threatens to disregard the Northern Ireland Protocol in the Withdrawal Agreement Treaty. |
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| Governance and dispute resolution | Need for a governance and dispute-settlement arrangement. | EU wants a single institutional framework. UK wants separate arrangements for each deal. |
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| There should be an independent arbitration panel to resolve disputes. | EU wants arbitration panel to refer to ECJ for any dispute relating to matters of EU law. UK does not want a role for ECJ in decisions relating to the future relationship. |
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| 1 | Trade in goods | Remove tariffs and quotas. | EU says this is contingent on UK making ‘robust commitments’ to level playing field (LPF) provisions. UK sees it as a reciprocal commitment, which should recognise existing precedents. |
| Cooperate to minimise regulatory barriers. | UK wants mutual recognition of regulatory standards but EU has not offered it. Rules of Origin: EU wants to offer a more restrictive approach than UK wants. |
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| 2 | Trade in services (and investment) | Provide access to EU for UK services (and vice versa) in excess of WTO minimum access. | Most FTAs do not liberalise services much. EU does not see UK-EU FTA as an exception – envisaging restricted access compared to EU membership. UK is more ambitious and seeks to go beyond EU precedents in areas, such as in digital, professional and business services and equivalence. |
| Financial services: grant equivalence | UK wants structured process for withdrawal to increase certainty. EU intends to use normal unilateral withdrawal at short notice. |
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| Audio-visual services: UK wants exceptions to be granted. EU does not. |
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| Intellectual property | FTA should exceed WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and World Intellectual Property Organization (WIPO) conventions. | EU wants trade deal to preserve existing high standards protection. UK wants a more flexible, less well-defined approach. |
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| Public procurement | EU wants to include public procurement. UK does not. |
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| 3 | Level playing field | UK wants LPF commitments to be limited to those found in existing EU agreements with distant trade partners, such as Canada. EU says UK should be treated differently due to proximity and scale of UK-EU economic interdependence. |
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| EU wants UK to maintain current standards, and UK public bodies to take place of EU Commission to enforce standards. UK does not want its commitments to be enforceable by dispute resolution. |
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| 4 | Transport | Air: EU believes UK should have less access to EU air space than now. UK favours bilateral agreements in accordance with EU precedent. |
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| Road freight: EU envisages bilateral access. UK seeks greater regulatory freedom and rejects need for restrictions on freight numbers. |
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| EU says UK must accept LPF commitments and further alignment on “common levels of protection” (in the form of non-regression clauses). |
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| 5 | Energy and civil nuclear cooperation | Gas and electricity: EU wants LPF rules agreed before deeper co-operation on electricity and gas. UK wants energy agreement to allow UK to have an independent energy policy. |
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| Nuclear: broad agreement on nuclear provisions and shared interest in preserving research co-operation. | |||
| 6 | Fisheries | EU sees fisheries rights as linked to agreement on trade. UK preferred option is in line with EU precedent for other coastal states. |
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| EU wants to manage fisheries same as now. UK wants annual negotiations on access to waters. |
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| EU wants to agree provisions on fisheries by 1 July 2020, but UK ignores this. | |||
| 7 | Mobility and social security cooperation (including visas for travel and work) | Mobility and social security: similar opening positions. | |
| 8 | Law enforcement and judicial cooperation | UK and EU want to agree mechanisms to allow criminal justice and policing co-operation to continue. | EU says UK will be limited as a third country outside the Schengen area. EU wants to make some exceptions: no other non-Schengen country is part of Prüm, and the proposal for reciprocal exchange of PNR data would go further than arrangements for other third countries. |
| 9 | Thematic cooperation (including cybersecurity and migration) | Security and foreign policy: limited cooperation | UK is open to substantial foreign policy co-operation but sees no need for an institutional framework. |
| Data: UK seeks and EU is expected to grant a ‘data adequacy’ ruling for UK. | |||
| 10 | Participation in EU programmes | Open to UK participation in other programmes, subject to general rules on implementation and financial contribution. | |
| 11 | Horizonal arrangements and governance. | Need for a governance and dispute-settlement arrangement. | UK wants governance and dispute-settlement arrangements for every deal struck. EU wants one framework to cover the whole agreement. |
| Independent arbitration panel to resolve disputes. | EU wants independent arbitration panel and reference to ECJ for any dispute relating to matters of EU law. UK wants arrangements to reflect regulatory and judicial independence of UK. UK wants no role for the ECJ in decisions relating to the future relationship. |
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Source: Institute for Government, UK–EU future relationship: UK and EU mandates
Scope of 2019 Political Declaration
Despite the UK’s frequent focus on tariffs, there are many other items mentioned in the extensive Political Declaration of October 2019. To spell out the PD’s broad scope, Table 14.2 lists its 53 headings, of which tariffs was just a sub-heading.
| Table 14.2: Political Declaration headings | |
|---|---|
| Introduction | |
| Part I. Initial Provisions (4) | |
| 1. Basis for cooperation | A. Core values |
| B. Data Protection | |
| 2. Areas of shared interest | A. Participation in Union programmes |
| B. Dialogues | |
| Part II. Economic partnership (25) | |
| 1. Objectives and principles | |
| 2. Goods | A. Objectives and principles |
| B. Tariffs | |
| C. Regulatory aspects | |
| D. Customs | |
| E. Implications for checks and controls | |
| 3. Services and investment | A. Objectives and principles |
| B. Market access and non-discrimination | |
| C. Regulatory aspects | |
| 4. Financial services | |
| 5. Digital | |
| 6. Capital movements and payments | |
| 7. Intellectual property | |
| 8. Public procurement | |
| 9. Mobility | |
| 10. Transport | A. Aviation |
| B. Road transport | |
| C. Rail transport | |
| D. Maritime transport | |
| 11. Energy | A. Electricity and gas |
| B. Civil Nuclear | |
| C. Carbon pricing | |
| 12. Fishing opportunities | |
| 13. Global cooperation | |
| 14. Level playing field for open and fair competition | |
| Part III Security partnership (17) | |
| 1. Objectives and principles | |
| 2. Law enforcement and judicial cooperation in criminal matters | A. Data exchange |
| B. Operational cooperation between law enforcement competent authorities and judicial cooperation in criminal matters | |
| C. Anti-money laundering and counter-terrorism financing | |
| 3. Foreign policy security and defence | A. Consultation and cooperation |
| B. Sanctions | |
| C. Operations and missions | |
| D. Defence capabilities development | |
| E. Intelligence exchanges | |
| F. Space | |
| G. Development cooperation | |
| 4. Thematic cooperation | A. Cyber security |
| B. Civil protection | |
| C. Health security | |
| D. Illegal migration | |
| E. Counter terrorism and countering violent extremism | |
| 5. Classified and sensitive not classified information | |
| Part IV Institutional and other horizontal arrangements (6) | |
| 1. Structure | |
| 2. Governance | A. Strategic direction and dialogue |
| B. Management administration and supervision | |
| C. Interpretation | |
| D. Dispute settlement | |
| 3. Exceptions and safeguards | |
| Part V Forward process (1) |