Members' Research Service By / September 25, 2018

The future partnership between the European Union and the United Kingdom: Negotiating a framework for relations after Brexit

Following the European Council’s additional guidelines of March 2018, the European Union (EU) and the United Kingdom (UK) have begun discussions on their future relations, after the UK’s withdrawal from the EU (Brexit).

© momius / Fotolia

Written by Carmen-Cristina Cîrlig and Laura Puccio,

© momius / Fotolia

Following the European Council’s additional guidelines of March 2018, the European Union (EU) and the United Kingdom (UK) have begun discussions on their future relations, after the UK’s withdrawal from the EU (Brexit). Negotiations continue, in parallel, to agree the terms of a Withdrawal Agreement, the purpose of which is to sort out the main issues regarding the UK’s separation from the EU, in accordance with Article 50 TEU on the procedure for the withdrawal of a Member State from the EU. The negotiating teams currently aim at identifying a political framework for the future partnership, to be annexed to the Withdrawal Agreement and adopted simultaneously. The treaty or treaties governing the future relations between the UK and the EU would only be concluded once the UK leaves the Union and becomes a third country – after the currently scheduled Brexit date of 30 March 2019. At EU level, the treaty or treaties would be subject to the ratification procedure for international agreements under Article 218 TFEU.

Both the EU and the UK have stated their desire for a close partnership in the future. However, a fundamental difference has surfaced in the talks. Whereas the UK has consistently called for a special status, going further and deeper than any existing third-country relationship, the EU has instead based its approach on existing models underpinning its relations with third countries. In particular, the EU assessed the various models used in previous EU agreements against the ‘red lines’ originally set by the UK government: no membership of the customs union or the internal market, no free movement of persons; no jurisdiction of the Court of Justice of the EU (CJEU); and the regaining of regulatory autonomy. In line with those red lines, the EU has explored what could be offered, in the area of trade, within the framework of a free-trade agreement (FTA) comparable to the EU-South Korea and the EU-Canada agreements. Similarly, the EU is looking at possible arrangements in the fields of justice and home affairs, and foreign policy and defence, based on how the EU cooperates with other third countries. Furthermore, several aspects of the special treatment that were requested by the UK either clash with the above-mentioned UK red lines or with the guiding principles set down in the European Council guidelines for the negotiations. These include: protection of the EU’s interests; preserving the integrity of the internal market and customs union; safeguarding the EU’s decision-making autonomy, including the role of the CJEU; ensuring a balance of rights and obligations and a level playing field; respecting the principle that a third country cannot have the same rights and benefits as a Member State; and safeguarding the EU’s financial stability, as well as its regulatory and supervisory regime and standards. While the objectives of the negotiations might be similar on both sides, the EU and UK perspectives remain divergent, and their positions differ in many areas on the means to achieve those objectives in the context of the future partnership.

In trade and economics, the parties seem to agree on maintaining duty- and quota-free market access in goods, even though for the EU preferential rules of origin would need to be introduced as a result of the UK leaving the customs union. Instead, the UK advocates a facilitated customs arrangement, whereby the UK would apply UK or EU tariff duties at its external border depending on the destination intended for the good (UK or EU internal market) and a common rulebook for goods’ standards checked at the borders, which would eliminate the need for an internal border for goods (including the need for preferential rules of origin) between the EU and the UK. However, the Commission has repeatedly indicated it considers these proposals to be unrealistic. Different approaches have also been suggested with regard to access to fishing waters and sustainable fisheries. Other controversial areas for negotiation will include access to the services market and regulatory cooperation. Greater market access is permitted in some sectors only if regulatory alignment is achieved. Whenever alignment to EU law is required, agreements also entail a role for the CJEU. Further market access in an FTA can only be granted within the constraints of other EU FTAs (most favoured nation (MFN) clauses in previously concluded EU agreements, which may require extending the benefits to other EU partners), and within the constraints of EU law (preserving the integrity of the internal market and the EU decision-making system, including CJEU jurisdiction). Finally, the EU is adamant that strong provisions are introduced to ensure the maintenance of a level playing field (LPF), such as in the areas of competition and state-aid, taxation and environmental and labour standards. Violations of these LPF measures should be subject to a dispute settlement mechanism and sanctions.

In the area of justice and home affairs, the UK has proposed to conclude an internal security treaty with the EU. Such a treaty would be based on the existing EU measures regarding: exchange of information, including access to EU databases; operational cooperation through mutual recognition tools, such as the European arrest warrant; and multilateral cooperation through the EU agencies, Europol and Eurojust. This would avoid any operational gaps post-Brexit and take account of the important contribution the UK has made to date in providing intelligence and analysis under current EU tools. The EU, however, although agreeing to the main areas of future cooperation with the UK – exchange of information; operational police cooperation and judicial cooperation in criminal matters – is offering the UK a relationship based on the model of third countries that do not participate in Schengen, rather than a special status. The UK would thereby lose direct access to the EU’s databases and participation rights in the managing bodies of the EU agencies, Europol and Eurojust. Furthermore, the EU mutual recognition instruments recognised as extremely valuable for UK law enforcement – such as the European arrest warrant – would cease to apply. Moreover, data sharing and protection arrangements would need to be agreed to allow the exchange of information to continue in the future.

In addition, in foreign policy and defence, the UK is seeking a special status, including some influence in the EU decision-making process, proportional to its contribution to CFSP and CSDP. However, here again, the EU takes the third-country model of cooperation as a starting point in the talks, although some special arrangements may be possible, inter alia, in light of the UK’s status as a permanent member of the United Nations Security Council and as a significant European military power. The negotiations on the framework for future dialogue, cooperation and coordination in CFSP/CSDP aim at agreeing arrangements as soon as possible after Brexit.

The European Council meeting of 29 June 2018 evaluated the progress made both with respect to the legal provisions of the Withdrawal Agreement, in particular the contentious issue of the border between Northern Ireland and Ireland, and with regard to the framework for future relations. The conclusions adopted on that occasion stated that further efforts were needed on both issues.

The European Parliament has already provided essential input to the European Council discussions and guidelines, through its March 2018 resolution on the EU-UK future framework for relations. In particular, it suggested the form of an association agreement for the future treaty with the UK that would be based on four pillars: trade and economic relations; foreign policy, security and defence, and development cooperation; internal security; and thematic cooperation (fisheries, aviation, etc.). A single governance structure and dispute resolution mechanism established by the association agreement would cover the entire EU-UK relationship. On many of the issues under discussion, the European Parliament has to give consent (meaning it has the right of veto) for the conclusion of the EU-UK future relationship agreement(s). However, should the parties conclude an agreement relating exclusively to CFSP/CSDP matters, then the Parliament would not have to give consent nor would it have formal consultation rights on that specific agreement.

Read the complete study on ‘The future partnership between the European Union and the United Kingdom: Negotiating a framework for relations after Brexit’ on the Think Tank pages of the European Parliament.

Visit the European Parliament homepage on Brexit negotiations.

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