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UK–EU future relationship: UK and EU mandates

On 25 February 2020, the EU published its mandate for negotiations with the UK on the future relationship.

On 25 February 2020, the EU published its mandate for negotiations with the UK on the future relationship. The UK government published its mandate two days later, on 27 February.

Negotiations will formally begin on 2 March. This explainer compares the mandates and sets out what they mean for the negotiations. 

The two sides' mandates look to build on the Political Declaration, which was agreed in October 2019. 

 

Area

UK mandate

EU mandate

What does this mean?

Coverage and format

The government wants a balanced agreement that:

  • is in the interests of both sides
  • takes account of shared interests
  • respects the legal orders.

The UK wants a comprehensive free trade agreement (FTA) covering substantially all trade to be supplemented with additional agreements. Those separate agreements would cover fisheries, aviation, energy, internal security, irregular migration, mobility and social security, nuclear co-operation and security of information.

Each agreement should have its own governance and dispute settlement arrangement.

Currently, the EU appears to be proposing an association agreement using Article 217 of the EU Treaty. This would require unanimity in the Council and the consent of the European Parliament, but not necessarily the approval by national and regional parliaments.

Rather than sectoral deals, the EU wants a broad agreement with three components:

  • governance framework – i.e. an institutional framework to manage the relationship and resolve any disputes
  • economic partnership covering trade provisions
  • internal and external security co-operation including law enforcement, police co-operation and security and defence co-operation.

The main agreement will not cover Gibraltar. The UK and EU can explore separate agreements for Gibraltar – but this would require Spain’s prior approval.

The content of the final deal will determine the legal basis and voting requirements on the EU side.

The UK and EU want the final agreement to cover more than trade

The UK wants separate agreements covering different sectors. Each agreement would have its own governance arrangement. The EU wants one deal with one governance arrangement and has ruled out any sectoral deals.

 

Goods

There should be no tariffs and quotas (quantitative restrictions on imports).

The UK will maintain its own rules and regulations. There should be regulatory co-operation to address technical barriers to trade. This should include mutual recognition of conformity assessment, allowing UK authorities to assess for EU standards.

The UK suggests the possibility of ‘equivalence’ in some areas of agrifood based on agreements between the EU and New Zealand and the Canada–EU free trade agreement.

There should be “modern rules of origin” based on what has been recently agreed in the EU–Japan FTA.

The mandate aims to remove all tariffs and quotas.

It also underlines the importance of legal commitments to a level playing field over time. The EU wants the UK and the EU to meet “corresponding high standards” using EU standards as a benchmark.

The EU expects regulatory coherence 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.

The EU and UK should work closely to address any issues that impact the island of Ireland.

Both sides want to remove tariffs and quotas. The EU says its offer is contingent on the UK meeting sufficient level playing field provisions over time. The UK sees it as a reciprocal commitment, which should recognise existing precedents.

Both sides want to co-operate to minimise regulatory barriers. But that approach would not commit them to adopting particular regulations above and beyond what has already been agreed as part of global treaties.

The UK’s ask for equivalence agreements and mutual recognition would not remove regulatory barriers completely but they would simplify some requirements around checks and certification. The EU’s mandate does not suggest this is on offer.

On rules of origin, the EU would prefer to offer a standard, more restrictive approach to rules of origin.

Services

The agreement should include measures to minimise barriers to cross-border trade in services based on precedents such as the recently negotiated EU–Japan deal.

It would include provisions on audio-visual services. The UK would also like to build on existing precedents in the area of digital services.

The UK would like “a structured process” for withdrawing equivalence in financial services. This would seek to provide more certainty for business that the EU could not unilaterally remove equivalence without following a proper process.  

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.

The EU would look to grant unilateral equivalence mechanisms and decisions for financial services.

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.

The two sides' asks are broadly compatible but the UK is more ambitious than the EU. The UK is seeking to go beyond global commitments or precedents in a number of areas, such as in digital, professional and business services and equivalence.

Intellectual property

The FTA should go beyond the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and World Intellectual Property Organization (WIPO) conventions.

The UK will “keep its approach under review” when it comes to recognising new geographical indicators (GIs, which are a place-based trademark of certain goods).

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 indicators (GIs) are likely to be key ask from the EU. They were a contentious issue during the first phase of negotiations.

The UK has agreed to recognise EU GIs listed in the Withdrawal Agreement. But it may not continue to do so for new GIs.

Public procurement The UK will develop a separate and independent policy for public procurement. It is not included in the mandate. 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.
Mobility

The UK is prepared to co-operate on border-crossing arrangements and social security co-ordination. All agreements must be mutually beneficial and reciprocal but based on precedent.

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.

Both want an agreement on mutual recognition of professional qualifications.

Transport

Both parties should agree a Comprehensive Air Transport Agreement and Bilateral Aviation Safety Agreement. UK and EU airlines should be able to operate services between both parties without restrictions on frequency and capacity.

The UK and EU should continue to allow commercial road vehicles like hauliers to operate to, from and through each other’s territories with no quantitative restrictions. The UK should not have to follow EU standards on road matters and be free to regulate its own domestic haulage and transport industry. It would do so in a way which will accommodate the situation on the island of Ireland.

The UK has said nothing on rail transport.

On aviation, the final arrangement will be based on what the EU grants other third countries. It could be phased in gradually.

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 should not be at the same level as between EU member states – particularly on cabotage and the ability to operate within member states.

The UK and EU should, if necessary, address issues arising from the Channel Tunnel and the Belfast–Dublin Enterprise Line.

The EU and UK should address market access for the international maritime transport sector.

The EU believes the UK should have less access to EU air space than currently. The UK accepts the need for co-operation in some areas but favours bilateral agreements in accordance with EU precedent.

The EU envisages bilateral access for road freight. The UK is seeking greater regulatory freedom and rejects the need for restrictions on freight numbers.

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).

Energy

The UK will consider an agreement on energy, but will not enter into an agreement if it does not allow the UK to strike an independent energy policy. If an agreement is to be struck, it would allow more efficient trade, more technical co-operation and further work on decarbonisation – but the UK has prepared for the prospect of no agreement.

The UK would consider linking its carbon-trading scheme to that of the EU if it were mutually beneficial.

The UK and EU should uphold international treaties and security standards. There should be an agreement on civil nuclear provisions which would enable UK–EU co-operation, nuclear trade, combined research and the continued supply of medical radioisotopes.

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 facilitate 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, including on radiation. 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 and facilitate exchange of skilled workers.

The EU makes level playing field rules a prerequisite for deeper co-operation on electricity and gas. The UK believes that an energy agreement should be entered into only if the UK can maintain an independent energy policy.

Both parties are in broad agreement on nuclear provisions and have an interest in preserving research co-operation.

Fisheries

Any agreement must reflect the fact that the UK is to become an independent coastal state. The UK wishes to open up annual negotiations on fishing quotas and access and would not accept the ‘relative stability’ mechanism under the Common Fisheries Policy. It would favour a zonal attachment, which is the basis for Norway’s fisheries agreement.

Any EU vessel granted access to UK waters would have to abide by UK rules. The UK will work with the EU to ensure fishing sustainability.

Both parties should share vessel monitoring data.

The UK and EU should uphold existing reciprocal access, stable quota shares (which can only be adjusted with the consent of both parties) and set 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.

The UK has underlined that its preferred option is in line with EU precedent for other coastal states.

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.

In particular, the UK does not want these provisions to be subject to dispute resolution.

The EU has argued that the UK’s proximity and economic interdependence means there must be robust level playing field commitments over time. These should be commensurate with the overall partnership.

The language is particularly strong on state aid.

In other areas, the mandate states that the EU’s broad regulatory approaches should be maintained and that the UK should not go regress from EU standards in place at the end of the transition period.

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 appears to want something close to what Theresa May agreed to as part of the previous Withdrawal Agreement: including non-regression of current standards, and for the UK public bodies taking the place of the EU Commission to enforce them.

The UK on the other hand does not want its commitments to be enforceable by dispute resolution.

Data The UK is seeking an EU data adequacy assessment. It will allow EU data to flow into the UK on a transitional basis while it conducts its own assessment. It wants to seek arrangements for co-operation between regulators.

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. This would be a necessary condition to share information in the area of law enforcement and judicial co-operation.

The EU would look to grant adequacy to facilitate exchange of information.

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.
Internal security

The UK wants a framework for law enforcement and criminal justice co-operation focusing on operational capability. It should include a mechanism for sharing and acting on real-time data, similar to the current system.

The European Court of Justice (ECJ) and EU legal order “must not constrain the autonomy of the UK’s legal system in any way”. Nor should it involve a role for the ECJ in disputes. Finally, the agreement should not require the UK to continue participation in the European Convention on Human Rights (ECHR).

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 EU wants to explore exchange of Passenger Nation Record (PNR) data and on DNA and fingerprints of suspected and convicted individuals (Prüm).

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.

The partnership should be unpinned by commitments to fundamental rights. If the UK ever left the ECHR, then any co-operation should be terminated. It would also be suspended if the EU repealed 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 has said 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 wants to make an exception: 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 appears to be stating it will not commit to remaining part for the purposes of this deal.

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 some aspects of the EU’s Galileo space programme.

The EU and UK should work closely to tackle global pandemics and the fight against climate change.

The EU and UK are open to UK participation in EU programmes and instruments.

Governance

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:

  • regular policy dialogues
  • a joint committee (and sub-committees) with an equal number of UK and EU representatives to oversee, review and manage their relationship – as well as to resolve disputes.

This framework must respect the legal orders of the UK and the EU.

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 would 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 any agreement with the UK 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 a role for the ECJ in decisions relating to the future relationship.

Topic
Brexit
Keywords
Economy
Publisher
Institute for Government

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