To extend or not to extend the transition period
With the third round of post-Brexit negotiations between the UK and the EU ending in apparent deadlock on 15th May 2020 , the chances of a “no deal” post-Brexit outcome have increased and with it reports that the UK is re-directing some government planning resources back from Covid-19 duties to “no-deal” Brexit modelling. In particular, according to an article in The Sunday Times of 17th May 2020, the UK Government’s XO (exit operations) no-deal planning committee chaired by Michael Gove, the Minister for the UK Cabinet Office, will now meet more regularly and will be supported by a larger complement of civil servants than before.
One of the huge sticking points to a new trade deal and a new post-Brexit relationship between the UK and the EU has been the widely differing positions of the two sides on fisheries .
According to reports of the UK position, the EU is demanding full access to UK waters after the transition period expires on 31st December 2020 as if the UK were still part of the EU . The UK on the other hand is reported as claiming that it is only being reasonable in insisting that the EU treats the UK as the EU treats Norway or any other independent neighbouring coastal state and that the EU and the UK negotiate annual fish quotas on a year by year basis in the normal way.
The reported EU position is that the UK cannot have all the benefits of substantial tariff-free access to the EU single market without being prepared to offer something in return – and that taking a more open attitude on fisheries policy is one of the main areas where the EU would expect more co-operation from the UK side in return for the benefits that the UK would get from a new post- Brexit relationship deal.
The non-binding Political Declaration agreed between the two sides in January 2020, at the same time as the UK-EU Withdrawal Agreement, contains some noble phrases about fish conservation and both parties working to ensure fishing at “sustainable levels” but on more specific arrangements simply states in paragraph 73 that “within the overall of the overall economic partnership the Parties should establish a new fisheries agreement on, inter alia, access to fisheries and quota shares”. Paragraph 74 does, however, recognise the urgency of the matter by placing a non-binding obligation on both sides to use their “best endeavours” to conclude and ratify their new fisheries agreement by 1st July 2020. That date is fast approaching!
The Times of 18th May 2020 does report, however, that the EU possibly for the first time now seems “ready to back down from its hard line on fishing rights next month [ie in June 2020]” once the EU member states’ leaders get involved in post-Brexit trade negotiations. The Times article explains that the chief EU negotiator, Michel Barnier, has up to now had his hands tied by the “maximalist” position on fisheries demanded by certain most affected EU countries and in particular, France, Spain, Belgium and the Netherlands. However, the thinking is that the EU may begin to show more flexibility as Covid-19 preoccupations hopefully become less pressing with both the UK and the EU emerging slowly from lockdown (though, of course, there can be no guarantees in this regard) and the EU as a whole wants to get the post-Brexit relationship with the UK sorted so that both sides can move on.
There is also a suggestion in The Times article that the EU for the same reasons may well be prepared to show more flexibility on the “level playing field” and the “role of the European Court of Justice “ issues where the two sides seem far apart.
The UK for its part may well need to show more flexibility too on a number of issues where it has been adamant.
Whether all this is wishful thinking on the part of those who are anxious to see a UK-EU deal done before the end of the year for a new post-Brexit relationship remains to be seen but it does seem that both sides have a mutuality of interest in agreeing a deal rather than leaving the whole issue as a hostage to fortune.
Is China the UK’s new Brexit divide?
The Times of 19th May 2020 published an opinion article by its correspondent, Rachel Sylvester, suggesting that attitudes to China within the UK Conservative Party are beginning to polarise in a way similar to that which divided UK Remainers and Brexiteers previously over the question of continued UK membership of the EU.
Concerns about alleged human rights abuses in China and about alleged cover-ups in China over the real origins of the Covid-19 pandemic as well as persistent reports of alleged Chinese cybersecurity infringements have led to the setting-up of a new informal China Research Group of more than 50 Conservative MPS to monitor and help formulate policy about China. On the other hand, according to The Times article, the UK Prime Minister, Boris Johnson MP, and his supporters may be concerned to keep on the good side of the Chinese Government because of the implications for trade and investment, particularly bearing in mind the UK’s perceived vulnerabilities on the trade and investment front following Brexit – hence, so it is suggested, the UK Government’s earlier albeit conditional support for the Chinese telecommunication company, Huawei’s limited involvement in the UK’s 5G mobile phone upgrade project.
The UK Labour Party is reported in The Times Article to be preparing to take a tougher line on China under Sir Keir Starmer’s leadership following the more relaxed approach under its previous leader, Jeremy Corbyn.
It will be interesting to see where all this leads and whether it has an impact on the UK’s approach to its current negotiations with the EU for a new post-Brexit relationship .
Proposals for a new €500 billion EU recovery fund
Meanwhile, France and Germany are reported to have put forward proposals for a new €500 billion EU recovery fund (on top of another €500 billion already promised agreed by EU finance ministers in April 2020) to be financed from borrowings on international finance markets, for the repayment of which Germany would bear the biggest portion of responsibility. These new funds would be incorporated into the EU’s budget between 2021 and 2027 and be available to help particularly the hardest hit southern EU countries recover from the economic ravages caused by the Coronavirus. It does seem clear, however, that these proposals will not go unchallenged, particularly from countries such as the Netherlands and Austria and certain Eastern European countries, which do not stand to benefit as much directly from the proposals as some of the southern European states which have suffered greater losses in the pandemic. The UK would not participate in or benefit from these arrangements as a non-EU country in any event, which does underline the need for the UK to plan for how its own recovery will be financed.
The UK publishes texts of draft UK-EU legal agreements
On 19th May 2020 the UK Government published 10 draft legal agreements with supporting schedules, which it had previously only published privately to Michel Barnier and his EU negotiating team. Their format reflects the UK ‘s desire to have one comprehensive Free Trade Agreement (based so far as possible on the wide-ranging Canada- EU free trade agreement) and separate agreements on specific topics such as fishing rights and criminal law enforcement. The published drafts were accompanied by a letter dated of the same date from the UK’s chief negotiator, David Frost, to Michel Barnier in unusually forthright terms complaining that the EU was seeking to extract from the UK commitments that go far beyond what would be normal in free trade agreement. (Mr Barnier was subsequently reported to have criticised the wording of Mr Frost’s letter by saying to Mr Frost that Mr Barnier “would not like the tone that you have taken to impact the mutual trust and constructive attitude that is essential between us”. This is what is known as a diplomatic put-down!)
On the contentious area of competition law, the UK seems ready to commit itself to only very general wording to safeguard the “level playing field” in respect of competition policy, monopolies and mergers, subsidies and market access – the UK Government appears to take the view that anything more solid would be an unacceptable infringement of the UK’s sovereignty.
There is little new in the UK’s current arguments – what is new is the sudden weight of paper that has suddenly been unleashed into the debate, which perhaps shows a recognition on the UK side that the UK needs to win over public opinion both in the UK and the EU as well as the support of individual EU member state governments to what the UK is proposing.
The UK Government has also been active in publishing a revised list of import tariffs which would apply in the event of “no deal” being achieved with the EU before the end of the transition period, currently due to end on 31st December 2020. Some goods in the revised tariff list (such as foreign motor cars and food and drink such as parmesan cheese, champagne, prosciutto ham and tins of tomatoes) could be more expensive in the UK as a result of the new tariffs list and some could be less expensive (such as dishwashers, freezers, paint and Christmas trees). The rhyme and reason behind this are not necessarily very obvious to the uninitiated but, according to The Times report of 20th May 2020 on the subject, the net result of the changes could be that about 60% of trade coming into the UK would be tariff-free under the revised schedule as opposed to 87% under earlier plans. That does sound like a significant change, about which we may well hear more.
The Ireland/Northern Ireland Protocol
On 20th May 2020 , the UK Government published Command Paper 226 on “The UK’s Approach to the Northern Ireland Protocol” and the Rt. Hon. Michael Gove MP, the Chancellor for the Duchy of Lancaster and the Minister for the UK Cabinet Office, made a statement to the UK House of Commons describing how the Ireland/ Northern Ireland Protocol would be implemented in the UK and particularly between Northern Ireland and Great Britain. He insisted that there would be no new customs infrastructure and no internal customs border between Northern Ireland and Great Britain but accepted that there would need to be a certain amount of form-filling in relation to goods coming from Great Britain into Northern Ireland (and even some form-filling on goods passing from Northern Ireland into Great Britain). The provisions concerning agri-foods coming into Northern Ireland from Great Britain and elsewhere would require particular monitoring because of the need to avoid disease and to ensure that health and hygiene requirements were complied with and there would be strengthened border inspection posts for agri-food arrivals at Belfast port, Belfast international airport, Belfast City airport and Warrenpoint port. There would also be spot checks on other goods coming into Northern Ireland from Great Britain.
According to The Times report of 21st May 2020, the Command Paper accepts that businesses operating in Northern Ireland would have to abide by EU state aid rules on trade in goods (but, contrary to the EU position, not on services), whilst businesses in Great Britain would not have to do so. Whether this is a concession or a public acceptance of reality on the part of the UK Government may not matter in practice.
The EU is reported as having given a cautious welcome to the proposals in the Command Paper, with a source close to Mr Barnier being quoted in The Times as saying that the plan “could have been worse”.
Mr Gove did make it clear, however, that in line with the terms of the Protocol that if the people of Northern Ireland people did not like the proposals there were ways in which they could be modified or removed.
All in all, it does seem that some progress is being made towards a agreed implementation of one of the most sensitive areas of the UK-EU Withdrawal Agreement.
A House of Commons Library Research Report on the UK-EU Future Relationship Negotiations
On 20th May 2020 the House of Commons Library published a very useful report and comparison list summarising the respective positions of the UK and the EU on 16 subject categories which one side or the other or both sides want to debate in their current future relationship negotiations. It is worth listing the headings which appear in the research paper – Trade in Goods; Level Playing Field; Fisheries; Trade in Services; Financial Services; Sanitary and Phytosanitary (PTS) Measures; Climate Change; Public Procurement; Mobility; Geographical Indications; Transport; Energy; Civil Nuclear Co-operation; Participation in EU Programmes; Law Enforcement and Judicial Co-operation in Criminal Matters; Foreign Affairs and Defence; and Governance – and the comparisons between the two sides’ positions on each of those subject categories do reveal significant differences between them. The House of Commons Library is a source of very considerable erudition when seeking to navigate the complexities of Brexit.
The new Immigration and Social Security Co-ordination (EU Withdrawal) Bill 2020
The UK Home Secretary, the Rt. Hon. Priti Patel MP, brought back the UK Government’s Immigration and Social Security Co-ordination (EU Withdrawal) Bill 2020 to the House of Commons for its second reading in 18th May 2020, which (thanks to the UK Government’s large majority in the House of Commons) it easily passed.
The Bill seeks to abolish the right of free movement of persons from the EU into the UK with effect from the end of the transition period (currently due to occur on 31st December 2020) and to repeal the associated EU-derived legislation from UK domestic law. The old system will be replaced by an Australian-style skills-based points system so as allegedly to ensure that the UK has access to the best and most useful foreign immigrants according to the country’s needs.
This is a highly controversial area of politics and law, much exacerbated by the current Covid-19 practice and the need for foreign workers in the UK to support not only the National Heath Service (the NHS) but also agriculture and vital industries.
The Bill and its consequences may well be at the forefront of debate both in the UK and elsewhere for years to come but the UK Government insists that the virtue of the new system is that it is adaptable and can cater for changing UK needs as and when they arise. What sort of knock-on effect this approach will have on UK citizens seeking to live and work in the EU and elsewhere remains to be seen.
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