UK, EU Confirm “Political” Deal on Brexit Transition, Including on Trade and Fisheries

22 March 2018

Officials representing the UK and the remaining 27 EU member states have reached a political deal that will govern the transition period after Brexit, releasing the draft text on Monday 19 March. Along with setting the terms for their relationship from March 2019 through December 2020, the document also covers topics such as whether the UK can negotiate trade deals with non-EU partners in that timeframe. 

The 130-page text features sections covering a wide range of topics, including the rights of EU citizens in the UK and vice versa, access to the EU’s single market, the UK’s financial obligations to the EU, and the application of EU law, among others. 

While it recognises the importance of addressing the special situation involving Northern Ireland and Republic of Ireland, and has said that the “legal backstop” agreed previously under a joint report should be ready if necessary, it has left the final resolution of the subject up for further negotiation. This backstop would keep Northern Ireland within the single market and customs union if negotiators cannot reach another outcome. 

The text also recognises that more work remains in some other areas. The document clarifies that while many provisions are formally agreed, there are some others that have been resolved at a political level but will need further clarification, as well as a few sections which still require further discussion and negotiation. These are colour-coded in the text in green, yellow, and white, respectively. 

“What David [Davis] and I are presenting today is a joint legal text which, in my view, marks a decisive step… covering a large part of what will make up the international agreement for an orderly UK exit,” said Michel Barnier, the EU’s chief negotiator for Brexit. 

David Davis is the UK’s Secretary of State for Exiting the European Union and is his country’s lead on the Brexit talks. 

Barnier is due to present the deal to the European Council in its “Article 50” formation on Friday 23 March for their approval. Article 50 refers to the provision for exiting the EU in the bloc’s Treaty of the European Union, and Article 50 formation refers to all EU member states except the United Kingdom. 

Davis, for his part, told reporters on Monday that the deal “gives a certainty demanded by businesses and citizens across the European Union and United Kingdom.” In a letter to European Council President Donald Tusk, UK Prime Minister Theresa May similarly called the result “further proof that, with political will and collaboration, we can find answers to difficult issues together.” 

Trade agreements with external partners

One of the questions throughout the negotiation had been whether London would be able to ink trade deals with external partners during the transition period, and if so whether it would require EU sign off to do so. 

Under the terms of the draft deal, the UK would be empowered to enter into new international accords during the transition period regarding areas of EU “exclusive competence,” so long as these agreements take effect from 2021 onward. Specifically, the UK is allowed to move ahead on negotiation, signature, and ratification within the 21-month timeframe from the 29 March 2019 Brexit date. 

In the nearly two years since UK voters endorsed an exit from the European Union, UK officials have been meeting with their counterparts from countries such as Australia, New Zealand, and the United States to test the waters on prospects for future trade agreements and begin some of the preparatory work. (See Bridges Weekly, 6 April 2017

These meetings have not involved formal negotiations, however, in light of the UK’s current EU membership. Trade falls within the EU’s exclusive competence, meaning that the bloc’s institutions are tasked with the negotiation, signature, and ratification of trade deals on behalf of its member states. There are cases, however, where some of the content of EU trade accords has fallen with the bloc’s shared competence with member states and have thus required approval of member state legislatures. (See Bridges Weekly, 18 May 2017

During the transition period, the UK will still have access to the EU’s single market and customs union. However, it will no longer be able to weigh in on decisions affecting the single market, unless requested to do so and under certain conditions. Meanwhile, the UK and EU will need to negotiate the terms of a trade agreement that will set the terms of their future relationship after the transition period expires. 

Fisheries: CFP result

The document also clarifies how the UK and EU will handle the Common Fisheries Policy (CFP) until the end of the transition period. 

The CFP governs the management of shared fisheries resources among the EU’s 28 member states. Among other provisions, the CFP ensures that EU fleets can access all EU waters, meaning that UK fishers can fish in the waters of other EU member states, and vice versa. It also sets out other terms, such as how Total Allowable Catch (TAC) of fish stocks should be allocated on a country level, which is based around historical shares for each member state. 

Officials had debated whether the UK should be able to leave the CFP entirely upon its exit from the European Union; whether the UK should remain within the CFP for that period; or whether there would be some other form of interim arrangement during the transition. (See Bridges Weekly, 15 March 2018

In response to this issue, Article 125 of the draft deal says that the EU must consult the UK “in respect of the fishing opportunities related to the United Kingdom, including in the context of the preparation of relevant international consultations and negotiations,” regarding periods that fall within the transition timeframe.

Among other provisions, it also indicates that the UK will be able to give its feedback “on the Commission Annual Communication on fishing opportunities, the scientific advice from the relevant scientific bodies and the Commission proposals for fishing opportunities for any period falling within the transition period.”

The rest of the article refers to keeping the “relative stability keys” for allocating fishing quotas, specifically for time periods during the transition. The term “relative stability key” refers to the percentage allocated to each EU member state for different fish stocks. 

ICTSD reporting.

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