The EU has published its draft negotiating objectives and the UK has set out its own opening position in a written ministerial statement. This explainer compares these opening positions (both published on 3 February 2020).
Read our summary of the Political Declaration agreed in October 2019.
EU draft mandate
What does this mean?
|Coverage and format
The government wants a balanced agreement that:
The UK wants a comprehensive free trade agreement (FTA) covering substantially all trade, an agreement on fisheries and an agreement to co-operate in the area of internal security.
It also wants some more technical agreements covering areas such as aviation or civil nuclear co-operation. These should all have governance and dispute settlement arrangements.
The final legal basis and voting requirements will depend on the shape of any deal.
Currently, it is proposing an association agreement using Article 217 of the EU Treaty. This would require unanimity in the European Council and the consent of the European Parliament, but not necessarily the approval by national and regional parliaments.
Rather than sectoral deals, the EU is proposing a broad agreement with three components:
The UK and EU want the final agreement to cover more than trade and to have a working dispute-settlement mechanism.
The UK wants several agreements covering different sectors. The EU wants one deal and has ruled out sectoral deals.The EU draft mandate also talks about a separate agreement on Gibraltar, legal basis and voting requirements.
There should be no tariffs and quotas (quantitative restrictions on imports).
There should be regulatory co-operation to address technical barriers to trade, but in a speech given on 3 February Boris Johnson underlined that the UK will maintain its own rules and regulations.
This suggests the possibility of ‘equivalence’ in food safety in some areas.There should be “modern rules of origin” to facilitate trade.
The draft mandate aims to remove all tariffs and quotas.
It also underlines the importance of legal commitments to the level playing field.
The EU expects regulatory co-operation on technical barriers to trade and food safety rules.
The EU wants to maintain its standard approach to rules of origin – the mechanism through which traders prove their goods are eligible for preferential tariffs.
Both sides agree that the aim should be to remove tariffs and quotas. But the EU makes clear that its offer is contingent on level playing field provisions, whereas the UK sees it as a reciprocal commitment.
Both sides want to co-operate to minimise regulatory barriers. But that approach would not commit either party to any binding adoption of particular regulations above and beyond what has already been agreed as part of global treaties.
|The agreement should include measures to minimise barriers to cross-border trade in services.
The agreement should go “beyond” existing commitments made to the rest of the World Trade Organization (WTO).
Taking into account the EU’s previous FTAs, the deal should have broad coverage but also provide for exceptions and limitations. Audio-visual services would be excluded.
|Most FTAs do not liberalise services much beyond global commitments and the EU does not see this as an exception. The commitment to cover a lot of sectors also doesn’t suggest meaningful access – and the EU is clear that there will be limitations.
|Not covered in the statement.
The FTA should go beyond the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and World Intellectual Property Organization (WIPO) conventions.It should preserve current high levels of protection of intellectual property, with mechanisms for co-operation and exchange of information. It should also keep the same level of protection for geographical indications as set out in the Withdrawal Agreement.
Geographical indication was a contentious issue during the first phase of negotiations and the EU has made clear that it wants to continue to protect those.This is likely to be key ask from the EU.
|The UK will develop a separate and independent policy for public procurement. It is open to co-operation but does not think a joint institutional framework is required.
|The EU wants to negotiate an agreement that goes beyond the WTO Government Procurement Agreement (GPA) to include other sectors such as utilities.
|The EU wants the final deal to cover public procurement; the UK does not.
The UK is prepared to co-operate on border-crossing arrangements and social security co-ordination. All agreements must be mutually beneficial and reciprocal.The UK also wants agreement on mutual recognition of professional qualifications.
Any mobility agreement must treat every member state equally and must be reciprocal. Social security arrangements should be agreed.The EU also wants agreement on mutual recognition of professional qualifications.
Both sides have broadly similar opening positions.The EU will oppose any move to award visas on a differential basis to individual member states.
An aviation agreement would be one of the main suite of agreements the UK seeks to negotiate.
There should be a reciprocal agreement that allows UK and EU road vehicles to operate within each other’s territories. The UK and EU should co-operate to monitor and enforce any agreements that allow this to take place.The UK has said nothing on rail transport.
On aviation, the UK will not enjoy the same access as member states. But the UK could maintain closer access if it adopts certain obligations (above and beyond the level playing field) on open and fair competition. One area left open is the ‘fifth freedom’ of the sky, allowing UK carriers to fly between the UK and EU, including one stop off.
There should be bilateral access for UK–EU road freight, but the UK’s rights and benefits will not be at the same level as between EU member states – particularly on cabotage and the ability to operate within member states.
In addition to level playing field rules, there should be a common level of rights and protections that is no lower than what is in place at the end of the transition period.The UK and EU should, if necessary, address issues arising from the Channel Tunnel.
The UK prioritises an aviation agreement. The EU believes the UK should have less access to EU air space than currently, but could have more than other third countries if it abides by certain rules.
Both the UK and EU envisage bilateral access for UK–EU road freight.However, the EU places two caveats on any transport deal: the UK must accept level playing field commitments as well as further alignment on “common levels of protection” (in the form of non-regression clauses).
The UK has said nothing on electricity or gas, or energy more generally.It has said co-operation on civil nuclear matters is beneficial; a civil nuclear agreement would be one of the main suite of agreements the UK seeks to negotiate.
The UK and EU should work together to address double pricing and establish an open, non-discriminatory and stable energy market. Both parties should co-operate to provide sustainable energy solutions.
The UK will leave the EU internal market on electricity, but mechanisms should be put in place to allow trade in electricity across borders. There should be non-discriminatory access to energy networks and a framework to allow for technical co-operation. An agreement requires UK acceptance of level playing field requirements.Civil nuclear provisions should respect international treaties and maintain high safety standards. Any agreement should facilitate trade in nuclear materials and equipment between the UK, the European Atomic Energy Community (Euratom) and member states. There should be a free exchange of necessary information.
The EU makes agreement on level playing field rules a prerequisite for co-operation on electricity and gas.
|The agreement should reflect the fact that the UK will become an independent coastal state. There should be annual negotiations with the EU on access to waters (as is the case for Norway, Iceland and the Faroe Islands currently).
The UK and EU should build on existing reciprocal access, setting stable quota shares (which can only be adjusted with the consent of both parties) and either annual or multi-annual total allowable catches.
Partnership should reflect ‘continued responsible fisheries’ in line with principles of EU law, in particular those underpinning the Common Fisheries Policy.
Access to waters and quota shares will affect other aspects of the economic relationship, in particular the extent to which the UK and EU can agree tariff-free and quota-free trade in goods.
There is a clear gulf between the UK’s and the EU’s positions. The EU wants to manage fisheries in the same way as now; the UK wants annual negotiations on access to waters.
The EU has also reiterated a desire to agree provisions on fisheries by 1 July 2020. The UK government ignores this.The EU sees an agreement on fishing rights as a fundamental part of the economic relationship.
|Level playing field
|The UK will not agree to measures that go beyond a typical FTA. The government will make commitments to international standards and avoid distorting trade.
The EU makes clear that the UK’s proximity and economic interdependence means there must be robust level playing field commitments. It also says that they should be commensurate with the overall partnership.
The language is particularly strong on state aid. It says EU rules should apply to the UK through dynamic alignment.In other areas, the draft mandate states that EU’s broad regulatory approaches should be maintained and that the UK should not go below these.
The level playing field appears to be the starkest areas of difference between the UK’s and EU’s opening positions.
The UK doesn’t want commitments that go beyond normal agreements with EU partners; the EU argues that the UK should be treated differently due to its geographic proximity and the economically interdependence of the two sides.
The EU consistently stresses the importance of the level playing field as a precondition of other commitments.
For environment and labour rules, the EU appears to want something close to what Theresa May agreed to as part of the previous Withdrawal Agreement: for environment and labour protections, non-regression of current standards, and for the UK public bodies taking the place of the EU Commission to enforce them.State aid would also require a new UK public body, but the EU Commission would have a role in overseeing its decisions.
|The UK expects an EU data adequacy assessment to determine how the UK will operate in the same regulatory framework as the EU.
The EU expects both parties to commit to a high level of personal data protection and to respect the EU’s decision making on adequacy decisions.
If adequacy is given by the EU, it would facilitate exchange of information, particularly for criminal justice and policing co-operation.
|The UK accepts that the EU will decide whether to give the UK data adequacy, but expects this to be granted as it currently follows EU rules.
The UK wants a framework for law enforcement and criminal justice co-operation focusing on operational capability.The European Court of Justice (ECJ) and EU legal order “must not constrain the autonomy of the UK’s legal system in any way”.
The EU wants close law enforcement and criminal justice co-operation, although it should take into account the UK’s status as a non-Schengen third country.
The partnership should be unpinned by commitments to fundamental rights.
The EU wants to allow for exchange of Passenger Nation Record (PNR) data and on DNA and fingerprints of suspected and convicted individuals (Prüm).
There should also be simplified exchanges of information and intelligence between UK and member states’ law enforcement authorities.
The UK should be able to co-operate with Europol and Eurojust in line with arrangements for other third countries. The EU also proposes streamlining the extradition process and supplementing relevant Council of Europe conventions.If the UK ever left the European Convention on Human Rights (ECHR) then any co-operation should be terminated. It should also be suspended if the EU ever repeals the data adequacy provision.
Both the UK and EU want to agree mechanisms to allow criminal justice and policing co-operation to continue.
The EU is very firm that the UK will be limited by its status as a third country, and by its being outside the Schengen area. Despite this, in certain areas it is willing to go further: no other non-Schengen country is part of Prüm, and the proposal for reciprocal exchange of PNR data would go further than the arrangement for other third countries.
In Theresa May’s Chequers white paper, she committed to remaining part of the ECHR – but the current government hasn’t publicly made the same commitment.
|Foreign policy, security and defence
The UK is ready to discuss co-operation in areas of mutual interest, including on asylum and illegal migration.
It is ready to consider participation in certain EU programmes, if it is in its interest to do so.The UK is open to substantial foreign policy co-operation but does not see the need for an institutional framework.
The UK and EU should explore new dialogues on foreign policy and be prepared to share information, including on sanctions – these dialogues could be set up before the end of the transition period.
The UK could participate in EU defence missions and projects on a case-by-case basis. The UK and EU should explore opportunities for joint research in the area of defence.
Any participation in EU projects and programmes must accept ECJ oversight for matters of EU law.The EU is open to UK access to the EU’s Galileo space programme – but only if the UK grants the EU access to its own navigation satellite system.
The EU and UK are open to UK participation in EU programmes and instruments.
Any agreement must respect the sovereignty of both parties and the autonomy of their legal orders.
It cannot include any regulatory alignment, any jurisdiction for the ECJ over UK laws or any supranational control in any area, including the UK’s borders and immigration policy.The UK government wants governance and dispute settlement arrangements for its trade deal with the EU as well as for separate agreements covering specific sectors.
The EU wants an institutional framework that covers all areas of co-operation. This should include:
This framework must respect the legal orders of the UK and the EU.
The EU proposes a dispute resolution mechanisms where the UK and EU should seek to resolve disputes by mutual consent. If they cannot, they would refer the dispute to an independent arbitration panel. The decision will become binding on both parties. If the dispute covers a matter of EU law, the EU would refer the dispute to the ECJ, whose ruling would be binding on the arbitration panel.
The UK and EU could seek financial compensation if either side has failed to comply with the decision of the arbitration panel within a reasonable timeframe. They also would reserve the right to suspend parts of the agreement in case of gross breach of the agreement.
The EU and UK agree on the need for a governance and dispute-settlement arrangement. The government wants appropriate governance and dispute-settlement arrangements for every deal it strikes with the EU. The EU is more specific, wanting one framework to cover the whole agreement.
The EU and UK agree that there should be an independent arbitration panel to resolve disputes.
The EU wants the arbitration panel to refer to the ECJ for any dispute relating to matters of EU law. The UK does not want to accept EU law and therefore wants no role for the ECJ in decisions relating to the future relationship.