President of the European Council, Donald Tusk, has today released the EU’s guidelines for the upcoming Brexit negotiations.
We’ve been thrashing through the documents, here are the main points:
Single Market access
The document states that the European Union wishes “to have the United Kingdom as a close partner in the future.” But goes on to say that in order to preserve the “integrity of the Single Market”, Britain will not be allowed access on a sector-by-sector approach, which is what some Cabinet Ministers had hoped for.
“A non-member of the Union that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member.
“In this context, the European Council welcomes the recognition by the British Government that the four freedoms of the Single Market are indivisible and that there can be no “cherry picking,” the document states.
Theresa May recognised this fact in her Lancaster House speech, where she said controls on immigration would mean Britain’s departure from the Single Market.
EU nations will be working as a collective group, rather than individual states, in the negotiating period.
Downing Street had hoped to appeal to different member states individually, as each have their own interests. For example, Poland would want EU and British citizens’ rights protected due to the large number of Polish citizens in the UK.
But the draft guideline has rejected that, stating “individual items cannot be settled separately.”
“The Union will approach the negotiations with unified positions, and will engage with the United Kingdom exclusively through the channels set out in these guidelines and in the negotiating directives.”
Rather than starting talks on Britain’s exit and a future trade deal simultaneously, the European Union will opt for a phased approach to negotiations.
This means that though it will be forbidden at the beginning, Britain will be allowed to start negotiating on a future trade deal before exit negotiations are over, so long as the European Council is happy with progress made in the first (exit) phase.
The document states that the first phase of negotiations “will aim to:
“Settle the disentanglement of the United Kingdom from the Union and from all the rights and obligations the United Kingdom derives from commitments undertaken as a Member State;
“Provide as much clarity and legal certainty as possible to citizens, businesses, stakeholders and international partners on the immediate effects of the United Kingdom’s withdrawal from the Union.
Once the European Council is happy with the progress made on the first phase, the document states, negotiations can also begin on a future trade deal, stating that “a new understanding on the framework for the future relationship could be identified during a second phase of the negotiations under Article 50.”
The Union will be open to discussing a transitional agreement with the UK, according to draft guidelines, but that “must be clearly defined, limited in time, and subject to effective enforcement mechanisms.”
In a transitional agreement, the UK would have to adhere by Single Market rules, including freedom of movement, which raises the potential of uncontrolled immigration after Britain’s departure in 2019.
“Should a time-limited prolongation of the Union acquit be considered, this would require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply.”
- Protected EU citizen rights: the Union will make “agreeing reciprocal guarantees to settle the status and situations at the date of withdrawal of EU and UK citizens, and their families, affected by the United Kingdom’s withdrawal from the Union will be a matter of priority for the negotiations.”
- Legal contracts: As UK businesses have entered contracts with EU businesses and likewise, the negotiations should “seek to prevent a legal vacuum once the treaties cease to apply to the United Kingdom and, to the extent possible, address uncertainties.”
- Financial obligations: The United Kingdom and the European Union should respect their financial obligations to each other, which would inevitably mean Britain paying a ‘Brexit bill’ before its departure. “The settlement should cover all legal and budgetary commitments as well as liabilities, including contingent liabilities.”
- Northern Ireland border: The European Union will work to keep the frictionless border between Northern Ireland and the Republic of Ireland, to support the Good Friday Agreement. “In view of the unique circumstances on raw island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order.”
- International agreements: Following Britain’s exit, the European Union will no longer act on its behalf when making international agreements, but a “common approach towards third country partners and international organisations” should be discussed.
- Court of Justice of the European Union: While the UK will be leaving the jurisdiction of the court, all of its decisions before Britain’s exit, and relating to circumstances before the exit, should be adhered to by the United Kingdom. The exit agreement should also include “dispute settlement mechanisms regarding the application and interpretation of the withdrawal agreement.”
Future free-trade agreement
A free-trade agreement with Britain will be welcomed by the European Union, to be finalised and concluded once “the United Kingdom is no longer a Member State.”
But any future free-trade agreement cannot amount to access to the single market, the document outlines, as “this would undermine its integrity and proper functioning.”
The European Union will also welcome future cooperation on areas beyond trade, such as terrorism and international crime. This comes after Theresa May was accused of ‘playing the security card’ and threatening less coordination on terrorism and crime if a good deal isn’t delivered.
It should be noted that these guidelines are a draft and may be amended by EU member states in the coming months. While some parts may be tweaked, we expect the general theme to remain the same.
Downing Street has responded to the draft guidelines, saying the government “looks forward to beginning negotiations once they have been formally agreed by the 27 member states.”
“It is clear both sides wish to approach these talks constructively, and as the Prime Minister said this week, we wish to ensure a deep and special partnership between the UK and the European Union.”