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This article appears in the April 2018 edition of Valemus Law's THE BRIEF, a monthly email newsletter containing the latest legal news and opinion from our lawyers. To download your copy, please click on the button above. To subscribe to our monthly news round-ups, please email info@valemuslaw.com with 'Subscribe to The Brief' in the subject line.

Brexit: House of Commons Library publishes briefing paper on framework for future UK-EU relationship

Reproduced by kind permission of Practical Law

On 23 March 2018, the European Council adopted negotiating guidelines on the framework for the future UK-EU relationship. This second phase of Article 50 negotiations aims to identify an “overall understanding of the framework for the future relationship”, which will be elaborated on in a political declaration accompanying and referred to in the withdrawal agreement. The future relationship agreement itself is outside the scope of Article 50. It will be founded on a different legal basis, and will be finalised and concluded after the UK has left the EU.

On 19 April 2018, the House of Commons Library published a briefing paper, Brexit: new guidelines on the framework for future EU-UK relations. This briefing paper looks at how the UK and the EU envisage their relationship after Brexit. It summarises the UK and EU positions in relation to areas such as the economic relationship, climate change and cross-border pollution, free movement, transport, regulatory alignment, and enforcement and dispute settlement. It also compares the Prime Minister’s speech given on 2 March 2018 to the European Council negotiating guidelines and identifies areas of agreement and disagreement.Political declaration on framework for future relationship

The briefing paper explains that the political declaration on the framework for the future UK-EU relationship:

  • Will form the basis for detailed negotiations on the future relationship once the UK has left the EU in March 2019 and the transition period has ended.
  • Will not in itself be legally binding on the signatories. The penalties for breaking an agreement reached by way of a political declaration can only be political. However, the briefing paper considers that the risk of an overt breach of a political declaration may be small.
  • Should be clear and contain sufficient detail. According to the paper, the greater risk is that the language of a political declaration may gloss over
    difficult issues, leading to arguments later about the intended meaning.

Areas of agreement

The briefing paper compares the Prime Minister’s speech of 2 March 2018 to the European Council negotiating guidelines of 23 March 2018 and identifies several broad areas of agreement. These suggest that 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.

The negotiating guidelines refer several times to the need to ensure a level playing field. The briefing paper explains that the EU wants to prevent the UK gaining an unfair competitive advantage by undercutting EU standards in areas such as competition, state aid, regulation and environmental protection.
The briefing paper concludes that the agreement appears likely to cover the following areas:

  • Trade in goods, with a specific commitment to no tariff barriers.
  • Customs co-operation.
  • Modes 3 and 4 of services provision (establishment abroad under host state rules, and temporary provision of services abroad under host state rules).
  • Rules on the movement of people that may exceed standard trade agreement rules.
  • Recognition of respective qualifications.
  • Civil judicial co-operation in matters of family law.
  • All forms of transport.
  • Research and innovation (suggesting Horizon 2020 and other research links).
  • Education and cultural programmes (suggesting Erasmus).
  • Law enforcement, security and judicial co-operation in criminal matters (suggesting a replacement of the European Arrest Warrant).

Areas of no agreement

The briefing paper’s comparison between the Prime Minister’s speech and the European Council negotiating guidelines reveals various areas proposed by one of the parties that the other has either not addressed, or has explicitly ruled out.

For example, the briefing paper notes that although the European Council negotiating guidelines refer to trade in services, they make no explicit reference to financial services.

The briefing paper identifies the following areas of disagreement between the UK and the EU:

Mutual recognition

The UK has suggested a system of mutual recognition as the basis for future UK-EU trade and co-operation, under which UK law may not necessarily be identical to EU law, but it should achieve the same outcomes.

The briefing paper explains that while the UK has proposed that the EU recognises the outcome of distinct UK rules as being equivalent, the EU position continues to suggest that deep access is only possible where the UK and the EU not only have identical rules but also “common institutions and a shared legal system”. This indicates to the authors of the briefing paper that the EU would only be willing to consider granting deep access on the condition of a shared legal and institutional structure that resembles at least the European Economic Area (EEA).

In the field of data protection, the EU wants unilateral “adequacy” rulings, where the EU can determine whether or not the UK’s data protection regime remains “adequate” for EU law purposes at any point in time. In contrast, the UK argues that this does not provide legal certainty and wants a “firmer” solution.

Agency participation

The UK has indicated a willingness to sign up to all EU rules and institutional enforcement in order to remain a party to certain EU agencies. The paper notes that the EU so far appears to be ruling out agency participation for non-member states. It adds that this may be an overstated position, as some EU agencies explicitly allow for third party status, though many do not.

Dispute settlement

While the UK has explicitly requested an arbitration system, the EU has only noted that any agreed dispute settlement system must respect the depth of the partnership and the autonomy of the Court of Justice of the European Union (CJEU).

The paper explains that the CJEU’s autonomy doctrine makes it unclear if it would find arbitration a reasonable mechanism to resolve disputes that are likely to require interpretation of EU law unless those determinations can be appealed to a court able to refer questions to the CJEU. The paper considers that under the current design of the withdrawal agreement, such a referral will not generally be possible from within the UK.