EU Leaders Prepare for Brexit Summit, UK Officials Debate Deal Text

22 November 2018

European leaders are preparing for a landmark summit on Sunday 25 November, where they are expected to sign off on a draft Brexit deal reached by EU and UK negotiators last week. Meanwhile, debate continues among UK political officials over the accord’s final terms and whether it will gain the necessary approval from domestic lawmakers. 

Since the withdrawal text was released last week, EU negotiators have now published an outline for the political declaration on the future EU-UK relationship, the basis for ongoing talks in Brussels on the subject. 

The political declaration aims to set the scope of the economic and security partnership between the UK and the 27 remaining EU member states, which would be turned into legally binding agreements following the UK’s withdrawal in March 2019.

The conclusion of the Brexit deal last week sparked domestic challenges for UK Prime Minister Theresa May, who is campaigning for political support behind the accord. In the days since, several cabinet ministers and other officials have stepped down, including Dominic Raab, the UK’s Secretary of State for Exiting the EU. (See Bridges Weekly, 15 November 2018)

The European Commission has touted the package as ensuring that the “withdrawal will happen in an orderly manner,” and offering legal certainty once EU law ceases to apply to the UK, according to a press release from the bloc’s executive arm. They also stressed that having this accord in place is preferable to defaulting to a “no deal” scenario at the March deadline.

Should the deal be endorsed officially by the European Council in an exceptional meeting scheduled for this coming Sunday, it will then need the sign off from the European Parliament. Domestic procedures in the UK require the House of Commons to vote to approve the package and a “take note” motion in the Lords. For implementation of the withdrawal agreement in the UK, domestic legislation will need to be passed before the March deadline. 

“I expect us to hammer out the full and final details of the framework that will underpin our future relationship and I am confident that we can strike a deal at the Council that I can take back to the House of Commons,” said May on 19 November in a speech to the Confederation of British Industry (CBI). 

Main ingredients

The agreement provides for a transition period up to the last day of 2020, reserving the possibility of extension if mutually agreed to by both parties. During that timeframe the UK will continue to be treated as an EU member state, though it will not be able to participate in EU decision-making. The 31 December deadline coincides with the end of the multi-year EU budget spanning 2014-2020. 

“This will allow citizens, administrations and businesses, in particular SMEs, to prepare and adapt – but only once – to this change before the future relationship is in place,” said Michel Barnier, chief European negotiator for Brexit, following the publication of the agreement text last week. The term SMEs refers to small and medium-sized enterprises.

The deal contains provisions aimed at safeguarding the rights of the 1.2 million UK nationals residing in EU jurisdictions, as well as the 3.2 million EU citizens settled in the UK, once the transition period draws to a close. The agreement would allow citizens to continue to live, work, and study under the same conditions as under EU law, protecting the recognition of professional qualifications, access to public services, and the rights of family members to join them in the future. 

In the UK, EU citizens and family members will be required to apply for new residence status through an EU Settlement Scheme. EU host states will be able to choose whether to instate obligatory registration for beneficiaries of the agreement. Both parties have underlined as priority simple administrative procedures in order to provide evidence of lawful residence. 

It also includes arrangements intended to guarantee a smooth transition, minimise disruption, and ensure stability, for example the continued protection throughout transition period of intellectual property rights, and the over 3000 geographical indications protected under EU law. The term geographical indications refers to a type of intellectual property rights protection used for drink and foodstuffs, linking the good to the name of their region of origin, and thus connoting reputational and quality-related characteristics. Common examples include Parma ham or Champagne. 

In addition, the agreement guarantees the continued circulation of goods placed on the market prior to the end of the transition period until they reach their destination, without needing to conform to additional product requirements. 

The deal also ensures the protection of data exchanged throughout the transition period, as well as the completion of public procurement procedures pending before end of transition period under the same conditions they were initiated in. 

The UK will be bound through the transition period by the obligations in all EU international agreements, including the EU single market, which will continue to govern the UK relationship with non-EU countries. The transition period also extends the applicability of the Common Fisheries Policy (CFP) to the UK, keeping access to waters and catch shares the same up until a future framework is reached, and providing for consultation with the United Kingdom in the interim. 

The agreement includes enforcement mechanisms, including dispute settlement provisions, and “common provisions” for consistent interpretation of the agreement, underpinned by the principle of “direct effect” to ensure the provisions have the same legal applications in the UK and in EU jurisdictions. 

Finally, London and Brussels have agreed to core principles to compute the UK’s financial exit obligations, including the UK’s delivery of its share of the commitments undertaken during EU membership. This would not exceed the amount due if the UK had remained a member state. The final settlement could potentially be as high as US$50 billion, with potential future costs. 

Border backstop solution

Negotiators agreed to a contingency plan for the border between the Republic of Ireland, an EU member state, and Northern Ireland, which is part of the United Kingdom. The backstop would apply in a scenario where no agreement on the future relationship has been reached by the conclusion of the transition period. 

The “backstop” solution reached in a Protocol to the withdrawal agreement would create a single EU-UK customs territory effective from 2021, entailing no tariffs, quotas, or rules of origin checks between the two, with the exception of fishery and aquaculture products. 

In order to ensure a “level playing field” for business in the customs territory, the EU has pushed for the inclusion of provisions for harmonisation regarding competition, taxation, state aid, and labour and environmental standards. 

Raab criticised the outcome as the UK being held to a blend between EU customs union and single market obligations. Critics warn that the backstop, if enacted, would preclude the UK from signing its own free trade agreements with non-EU countries, even after leaving the bloc. 

May, however, defended the agreement in remarks at the Confederation of British Industry this week. “It fulfils the wishes of the British people as expressed in the 2016 referendum,” she said, citing increased control over borders, discretion over budgeting and channelling resources, restored UK sovereignty, and the removal of ties with EU programmes that she argued run counter to the interests of the UK, including the Common Agricultural Policy and Common Fisheries Policy. 

“Let me repeat that this backstop is not meant to be used. Our objective remains to reach a new agreement between the EU and the UK before the end of the transition,” underlined Barnier, pledging the use of “best endeavours” to conclude a future agreement by summer 2020. Provisions have been made for a joint review mechanism to assess the backstop’s continued necessity. 

The Protocol also contains commitments not to breach the rights and equality of opportunity set out in the 1998 Good Friday (Belfast) Agreement. This would aim to protect cooperation between the Republic of Ireland and Northern Ireland, ensure the continuation of common travel area arrangements between the Republic of Ireland and the UK, and allow for the maintenance of a Single Electricity Market on the Irish isle. 

ICTSD reporting; “Here's What You Need To Know About Brexit After A Tumultuous Week In The U.K.,” NPR, 17 November 2018; “At long last, there's a draft Brexit 'deal' – here's what we know so far,” CNBC, 14 November 2018; “Theresa May's Brexit deal: everything you need to know,” THE GUARDIAN, 15 November 2018; “Brexit weekly briefing: May digs in after week of turmoil,” THE GUARDIAN, 20 November 2018; “What happens next if Theresa May's Brexit deal passes?” THE GUARDIAN, 15 November 2018.

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