May 1, 2018

On 7 March new draft guidelines were published for the next phase of the negotiations on the framework for future relations between the EU and the UK. On 23 March 2018 the European Council adopted the new guidelines.

The research paper notes that a solution to the problem of how to avoid a hard border between Ireland and Northern Ireland remains an outstanding issue for this phase of the negotiations.

The EU’s guidelines on future relations set out the following framework:

• “as close as possible a partnership with the UK”;
• the EU “will preserve its autonomy in decision-making”, so the UK will be excluded from participation in EU institutions and decision-making of EU bodies, offices and agencies;
• the role of the Court of Justice of the European Union (CJEU) will be “fully respected”;
• a future free trade agreement will be “balanced, ambitious and wide-ranging” and finalised once the UK has left the EU;
• trade in goods should cover all sectors, maintain zero tariffs and rules of origin;
• reciprocal access to fishing waters and resources;
• customs co-operation, preserving regulatory and jurisdictional autonomy of parties and the integrity of the Customs Union;
• disciplines on technical barriers to trade, and sanitary and phytosanitary measures;
• a framework for voluntary regulatory co-operation;
• market access to provide services under host state rules;
• provisions on access to public procurement markets, investments and the protection of intellectual property rights;
• “close co-operation” on global challenges, e.g. climate change, sustainable development and cross-border pollution;
• “ambitious” free movement provisions: reciprocity and non-discrimination, co-ordination of social security, recognition of professional qualifications and adherence to human rights;
• connectivity in transport services via agreements on air transport, aviation safety, security and other modes of transport;
• UK participation in e.g. research and innovation, education and culture programmes, subject to conditions for third country participation;
• “robust guarantees which ensure a level playing field” by alignment of UK rules with EU and international standards;
• law enforcement and judicial co-operation in criminal matters;
• exchanges of information, operational co-operation between law enforcement authorities, judicial co-operation in criminal matters;
• “strong co-operation” in foreign, security and defence policy;
• dialogue, consultation, co-ordination, exchange of information, and co-operation mechanisms, including a Security of Information Agreement;
• adherence to EU rules on data protection; and
• overall management and supervision, dispute settlement and enforcement mechanisms, taking into account need for legal certainty and the autonomy of the EU legal order.

In her Mansion House speech on 2 March 2018, the Prime Minister acknowledged that neither side “can have exactly what we want”, but she envisaged the following for the future EU-UK relationship:

• “the same regulatory outcomes over time” for when UK banks lose “passporting” rights to trade across EU;
• associate membership of the European Medicines Agency, European Chemicals Agency and European Aviation Safety Agency, accepting their rules and making financial contribution;
• participation in EU science, education and cultural programmes;
• a “close association with Euratom”;
• possible UK participation in the EU internal energy market;
• an independent arbitration mechanism for trade disputes to replace the jurisdiction of the CJEU;
• fairer terms for UK fishermen based on reciprocal access to waters and shared stocks management;
• mutual recognition of broadcasting rules allowing UK channels to continue transmitting in the EU;
• rail, maritime, aviation and hauliers’ access to EU markets; and
• UK regulatory standards to be “as high as the EU’s”, though “not identical”, to allow continued trade.

The research briefing shows, therefore, that there are several broad areas of agreed pursuit, which suggest the parties will seek to agree to a future partnership that is as close as possible while recognising the autonomy of the EU legal order, and to create a “level playing field”, which at least covers state aid and competition law.

However, this leaves several matters proposed by one of the parties that the other has either not addressed or has explicitly ruled out. The areas where there are clear disagreements on both approach and form are:

• mutual recognition as a viable mechanism by which to govern future UK-EU trade and co-operation in both goods and services (specifically, financial services), recognition of UK workers’ rights; environmental protection, and social standards as guaranteeing a “level playing field”;
• data protection: the EU wants unilateral “adequacy” rulings, while the UK wants a “firmer” solution;
• agency participation: the UK is willing to sign up to all EU rules and institutional enforcement in order to remain a party to certain EU agencies. The EU so far appears to be ruling out agency participation for non-Member States. However, some EU agencies explicitly allow for third party status; and
• dispute settlement: the UK wants an arbitration system; the EU says a dispute settlement system must respect the depth of the partnership and the autonomy of the CJEU.

To read the Library’s summary of its research briefing in full and for a link to the full paper, click here.