In two blogs published today , we look at the EU’s draft negotiating mandate and the UK Government’s priorities for the future relationship. This second blog looks at the UK Government’s approach to the negotiations. The first blog on the EU’s negotiating mandate for the negotiations can be found here.
Shortly after Michel Barnier published the European Commission’s draft negotiating mandate, the Prime Minister provided a written statement to the UK Parliament setting out the Government’s proposed approach to the negotiations with the EU about the future relationship.
The Prime Minister also made a speech in Greenwich where he made reference to the negotiations on the future relationship.
The Prime Minister’s written statement indicates the UK Government sees the nature of the future relationship as a choice between either:
- a free trade agreement along the lines of that agreed between the EU and Canada or;
- the terms of the Withdrawal Agreement providing the only basis of any negotiated settlement between the UK and the EU.
Given the UK will leave the Single Market and Customs Union, the future relationship will see economic barriers erected between the UK and the EU compared to the current position during the transition period.
The Prime Minister’s written statement outlined the UK Government’s overarching approach to the negotiations, stating that the final agreement must be balanced and in the interests of both sides but at the same time must “respect the sovereignty of both parties and the autonomy of our legal orders”. Consequently, the written statement explicitly rules out any regulatory alignment between the UK and the EU.
In contrast to the EU’s desire for an overarching Association Agreement, the Prime Minister’s written statement indicates that the UK will seek several different agreements. These would include:
- a comprehensive free trade agreement.
- an agreement on fisheries.
- an agreement to cooperate in the area of internal security.
- a number of more technical agreements covering areas such as aviation or civil nuclear cooperation.
The EU’s draft negotiating mandate stated that Gibraltar would not be in the territorial scope of the new relationship. In contrast the Prime Minister suggested it was the UK Government’s view that Gibraltar, along with all the UK’s Crown Dependencies and Overseas Territories would be within the scope of the new UK-EU relationship.
Free Trade Agreement
The Prime Minister has proposed that a UK-EU Free Trade Agreement should include a focus on the following areas:
- No tariffs, fees, charges or quotas between the UK and the EU.
- Tackling technical barriers to trade such as regulatory divergence building on World Trade Organisation rules.
- Whilst the UK will maintain its own independent sanitary and phytosanitary (SPS) regime to protect human, animal and plant life and health and the environment, in certain areas it may be possible to agree equivalence provisions with the EU to reduce practical barriers to trade at the border.
- Customs and trade arrangements, covering all trade in goods, should be put in place to smooth trade between the UK and the EU.
- The agreement should include measures to minimise barriers to the cross-border supply of services and investment, on the basis of each side’s commitments in existing free trade agreements. In areas of key interest, such as professional and business services, there may be scope to go beyond these commitments.
- The agreement should provide for the mutual recognition of professional qualifications between the UK and EU, underpinned by regulatory cooperation, so that qualification requirements do not become an unnecessary barrier to trade.
- The agreement should require both sides to provide for a predictable, transparent, and business friendly environment for financial services firms, ensuring financial stability and providing certainty for both business and regulatory authorities, and with obligations on market access and fair competition.
Level playing field issues
The EU’s negotiating mandate along with the words of its chief negotiator Michel Barnier have focussed on the need for the future relationship to include level playing field provisions due to the close proximity of the UK and the EU. However, the Prime Minister’s written statement makes clear that whilst the UK Government is committed to maintaining high standards in level playing field areas such as social and environmental regulations, it will not agree level playing field measures which go beyond a traditional free trade agreement.
Speaking in Greenwich, the Prime Minister referred to the UK Government’s level playing field position:
We will not engage in some cut-throat race to the bottom.
We are not leaving the EU to undermine European standards, we will not engage in any kind of dumping whether commercial, or social, or environmental, and don’t just listen to what I say or what we say, look at what we do.
And I say respectfully to our friends that in all those three crucial areas the anxiety should really be on our side of the Channel not yours.
The Prime Minister gave examples in the areas of State Aid, social policy, environmental and animal welfare policy where he said the UK was ahead of EU countries. He added that despite the UK being more advanced in a number of level playing field areas, the UK Government had no intention of forcing the EU to match UK rules to ensure a zero tariffs trade deal.
The other priority area raised by the EU in its negotiating mandate was fisheries where the EU is seeking a permanent arrangement as part of the overall future relationship. On this, the Prime Minister’s written statement was clear that the UK will become an independent coastal state. In addition, he wrote that the UK will undertake bilateral annual negotiations with the EU that will focus on access to waters and fishing opportunities whilst stating that the UK Government would be prepared to consider a mechanism for cooperation on fisheries matters.
Given the Prime Minister’s commitment to negotiate fisheries arrangements on an annual basis with the EU, this would counter the EU position that a fisheries agreement should be in place by 1 July 2020 if negotiation on economic matters are to progress.
The Prime Minister wrote that it is “in the UK’s and EU’s mutual interest to reach a pragmatic agreement to provide a framework for law enforcement and judicial cooperation in criminal matters between the UK and the EU”. However, he added that the European Court of Justice and the EU’s legal order must not constrain the UK in any way.
EU funding programmes
The Prime Minister indicated that the UK Government is prepared to consider participation in some EU programmes once the EU agree their funding for the 2021-27 financial framework. However, he gave no indication which programmes the UK Government was considering participating in.
Role of the devolved administrations
It is not clear from the UK Government’s written statement, the extent to which the devolved administrations were consulted. Whilst international relations are reserved, the breadth of any future relationship negotiated with the EU is likely to include obligations in devolved policy areas.
The Welsh Government has published its Negotiating priorities for Wales which calls for a free trade agreement with level playing field provisions and dynamic regulatory alignment, running counter to the proposals set out in the Prime Minister’s written statement.
The Scottish Government has yet to publish specific priorities for the future relationship though it did publish an assessment of the revised EU withdrawal agreement and political declaration which set out its belief that reduced regulatory alignment compared to that enjoyed as an EU member state would be economically damaging and that a lack of commitment on level playing field provisions may “pave the way for a deregulation agenda by the UK Government”. The Scottish Government also highlighted the benefit of annual fisheries negotiations between the EU and the UK as it would remove the explicit link between market access and access to waters. This approach to fisheries appears to have been adopted by the UK Government in its written statement.
Given the EU’s negotiating mandate closely mirrors the text agreed in the non-binding Political Declaration on the Future Relationship, the UK Government’s response in particular on level playing field issues and fisheries is perhaps worth noting.
However, as Raoul Ruparel, a former adviser to Prime Minister Theresa May on Europe has argued, both the EU and the UK appear to be working to the same end point of a free trade agreement and there is the broad outline of a deal. He does however acknowledge that big differences remain, including on level playing field provisions, fish and on the structure of the agreement.
Whether either side is prepared to move its position in pursuit of a final deal will be worth observing in the lead up to the first big date in the negotiations at the end of June.
Finally, what, if any, role the devolved administrations will have in the negotiations is yet to be made clear by the UK Government.
Iain McIver, SPICe Research