European Council President Donald Tusk on Tuesday, last week sent the EU27 Member States the draft Political Declaration setting out the Framework for the Future Relationship between the EU and the UK that has been agreed at negotiators' level and agreed in principle at political level, subject to the endorsement of the Leaders.
Coreper (Art. 50) met last week to assess the document. Friday morning, the EU27 Sherpas met to finalise preparations for the special European Council (Art. 50) on Sunday where the EU agreed on May’s 585-page withdrawal agreement.
Here are the main issues
After 524 days of negotiations, Theresa May and the EU’s other 27 heads of state and government have agreed a deal to be put in front of the UK and European parliaments for ratification ahead of Britain’s withdrawal on 29 March 2019.
There is a 585-page withdrawal agreement, which will form the basis of a legally binding treaty, and a 26-page political declaration on the future relationship. The second document does not have legal force, but it politically binds both sides to some basic parameters in the future talks.
Here is what has been agreed in Brussels:
THE WITHDRAWAL AGREEMENT
The three main issues dealt with in the withdrawal agreement are citizens rights, the £39bn divorce deal and the problem of avoiding a border on the island of Ireland after Brexit.
The deal safeguards the rights for more than 3 million EU citizens in the UK, and over 1 million UK nationals in EU countries to stay and continue their current activities in the place in which they have made their home. Theresa May had sought to limit the scope of the deal to those who arrived in the UK before 29 March 2019, but she lost out. All those arriving to live in the UK at any point up until the end of the transition period, which could last until the end of 2022 should it be extended, will enjoy the rights that EU nationals have today to make Britain their home, to live, work and study.
It had been feared that the UK’s exit bill could scupper the negotiations. David Davis, the former Brexit secretary, told the European commission president, Jean-Claude Juncker, early on in the talks that there was nothing in the EU’s treaties to suggest that the British government owed any money. Juncker responded that the EU was “not a golf club”, and that Britain would have to come good on the spending commitments it made as a member state. Huge figures circulated, with some totting up gross liabilities to be £100bn. That prompted the then foreign secretary, Boris Johnson, to suggest Brussels could “go whistle” for its money. An agreement was finally made last November that the UK would stump up about £39bn, to cover its contribution to the EU budget until 2020, and accumulated other outstanding commitments such as pensions for EU officials.
This has turned out to be the thorniest issue to settle in the Brexit divorce agreement and still causes the most unhappiness among Theresa May’s critics. The UK had initially proposed a technological solution but this was rebuffed by Ireland and EU officials as “magical thinking”. The EU initially proposed that Northern Ireland should in effect stay in the single market and customs union, prompting a furious response from the British prime minister. The EU moved its position. The core of the solution is the so-called backstop, an insurance plan that kicks in if future trade talks fail to avoid a hard border on the island of Ireland. The backstop means the whole of the UK will remain in the EU customs union, while Northern Ireland will have to follow single market rules. Brexit supporters loathe the backstop, fearing it will leave the UK “shackled” to EU rules. Wary EU countries think the plan benefits the UK, so insisted the UK respect EU social and environmental rules to to avoid undercutting their companies.
The UK came into the negotiations determined to get a weighty political declaration that would easily translate into a full-blown trade deal ready to come into force soon after Brexit day. The promise of the “easiest trade deal in history” soon hit the buffers. The UK has agreed a joint paper of just 26 pages outlining the parameters of the future relationship, with the two main pillars being trade and security. The paper offers lots of ideas about what might happen, but few concrete plans.
Trade and the city
The prime minister’s central policy priority in terms of trade was to secure a commitment to frictionless trade in goods through a common rulebook, the centrepiece of the Chequers plan. By stating that the UK and the EU would be “separate markets and distinct legal orders” after Brexit, the political declaration demolished it. British access to European markets will depend on the UK respecting EU standards on competition, tax, environment, as well as social and employment protection, but it is not clear whether that involves non-regression or dynamic alignment. The political declaration says the shared customs territory in the Northern Ireland backstop will be built on and improved in a future trade deal. The UK, bafflingly, insists this does not bind the British government to a customs union. Despite British demands for a bespoke deal on financial services, the UK will be treated like any other non-EU country. Instead of “passports” that allow the City of London to operate across the EU, bankers and traders will have to rely on “equivalence”, allowing market access to be withdrawn by Brussels at 30 days’ notice. There is a commitment to complete equivalence assessments by the middle of June 2020.
Foreign and security policy
The UK had hoped to not only maintain the current level of security and police cooperation but to even opt in to aspects of the EU’s structures that it had previously snubbed. That prompted Luxembourg’s prime minister, Xavier Bettel, to remark: “They were in with a load of opt-outs. Now they are out, and want a load of opt-ins.” The EU is only offering cooperation, rather than membership, of EU police agency Europol and judicial cooperation agency Eurojust. Despite its previous disdain for EU-level defence cooperation, Britain has negotiated clauses that will allow it to participate in EU joint defence projects. A major row during the Brexit negotiations was the European commission’s insistence that the UK defence industries would not be allowed to work on the most sensitive parts the EU’s £8bn Galileo satellite programme, to which British taxpayers have already paid £1bn. The UK has threatened to walk away and build its own satellite. The political declaration, in an example of its many vague clauses, limits its solution to 10 words. “The parties should consider appropriate arrangements for cooperation on space”, it says.
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