An association agreement is a treaty between the European Union and a non-EU country that creates a framework for co-operation between them. Its legal basis is defined in Article 217 of the Treaty of the Functioning of the EU (TFEU), which provides for “an association involving reciprocal rights and obligations, common action and special procedures”.
The EU has more than 20 association agreements, mainly with its neighbours, from Morocco to Ukraine.
The EU uses an association agreement to create “privileged links” with a non-member country. These privileged links can involve setting up a free trade area between them, or creating broader economic and political co-operation of areas of mutual interest – for example, on defence and security, migration, environmental protection and energy, science, and education.
Association agreements were originally created by the EU to prepare non-member countries for accession. The very first such agreement was signed by Greece in 1961. But the EU has since used these agreements for far wider reasons, from improving trade with non-member countries such as Morocco, to developing deeper, long-term political relations with countries who are not candidates for accession such as Ukraine.
The EU also has special types of association agreements including ‘stabilisation and association agreements’ with Western Balkan countries and a so-called ‘Deep and Comprehensive Free Trade Area’ (DCFTA) with Ukraine, Georgia and Moldova.
It is too early to tell. Both the UK and EU have said they want a deep, comprehensive trade agreement, and to co-operate on issues of mutual interest such as defence and security. In the past, the EU has used association agreements to provide a legal framework for this level of co-operation.
The European Parliament’s March 2018 resolution on the future EU-UK relationship – which sets out the EU’s negotiating position on the UK’s withdrawal from the bloc – recommends using an association agreement as a model for the future relationship with the UK. This was also hinted in both the European Council draft guidelines and the European Parliament's previous Brexit resolution on 5 April 2017. Having an EU-UK association agreement has been also discussed in reports from the House of Lords European Exit Committee and the European Parliament’s Constitutional Affairs Committee.
One example considered is the 2014 EU-Ukraine Association Agreement, because it provides opportunities for unprecedented levels of access to the EU’s Single Market – particularly in financial services – for a non-EU country. It also creates a framework for co-operation on defence and security, such as counter-terrorism and cybersecurity – areas in which the UK wants to continue co-operating with the EU after Brexit.
The European Parliament’s resolution on the EU-UK relationship stresses the advantages of an association agreement’s flexible framework, which would allow for “varying degrees of co-operation across a wide variety of policy areas”, which is desired by both parties. However, the resolution repeatedly emphasises that the UK’s current position is “only compatible with a trade agreement pursuant to Article 207 TFEU”, reasserting the European Parliament’s readiness to negotiate an associate agreement model if the UK reconsiders its red lines.
Most rights and obligations that come with an association agreement arise from the exact content of an individual agreement. However, Article 217 states three main criteria for an association agreement:
- The agreement must create privileged links between the EU and non-EU country that aim to foster wide-ranging co-operation between them.
- Both the EU and a third country must have reciprocal rights and obligations in their partnership.
- The agreement creates institutions designed to implement and monitor the agreement, such as an Association Council (ministerial-level group) and an Association Committee.
In addition to these broad principles, association agreements are typically characterised by four other features:
- They contain a free trade agreement with the EU. But these free trade agreements tend to vary country by country.
- In return for some access to the Single Market, a non-EU country is often required to share part of relevant EU regulations – so-called EU acquis.
- They create opportunities to co-operate beyond trade in areas of mutual interest, from defence and security, to environment and energy, to science and education.
- They include a clause on the respect of human rights and democratic principles.
That depends on the exact content of an agreement, and political buy-in from all EU member states.
More generally, association agreements are so-called ‘mixed agreements’ – agreements that fall under both EU and member state competence. That means they must be ratified by the European Parliament, Council of the EU, and all 27 member states. The process follows the national procedures for ratification of international agreements, including regional parliaments where that is required.
This puts an association agreement in the same category as a comprehensive trade deal like the EU free trade agreement with Canada (CETA), which took seven years to negotiate.
Would an association agreement make it easier to negotiate the UK’s future relationship with the EU?
Association agreements show that there are precedents for linking trade and security in one agreement as Prime Minister Theresa May proposed in her Article 50 letter to Donald Tusk, the President of the European Council.
One practical advantage is that it provides a ready legal framework, which could shorten the time necessary for legal drafting of a comprehensive agreement between the UK and EU. Much of the technical legal drafting could be carried over from the EU’s existing agreements if a similar structure was adopted.
However, the substance would still be for negotiation, and an association agreement still requires the same ratification process as any other ‘mixed agreement’. The question would therefore be whether either or both sides find it more politically palatable to present a future UK-EU relationship as an association agreement.
The European Parliament March 2018 resolution reiterates the EU’s negotiating position in all the areas addressed. Its recommendation of an association agreement is therefore unlikely to have a big impact on the negotiations aside from facilitating the drafting of the legal text for the agreement on the future UK-EU relationship.
The resolution wording also highlights that any options for co-operation are conditional on the UK’s compliance to EU regulations, and flags that a DCFTA does not allow “cherry-picking sectors of the internal market”. Clause 12, in particular, rules out the possibility of a sector-by-sector approach for a DCFTA, although the DCFTA established in the association agreement with Ukraine is an example of “cherry-picking” sectors of the internal market (including goods, services and capital but excluding labour).
The European Parliament has stressed the EU’s focus on protecting the integrity of the Single Market and ensuring a level playing field., It has also clarified that the recommendation of an association agreement framework would not imply any concessions from the EU side, and thus provides no new incentive for the UK to reconsider its red lines in order to pursue one.