knowledge | 20 March 2018 |
Brexit - EU-UK Withdrawal Agreement – A Slow Progress
Always read the title
It always pays to read the title or subject matter of any document, particularly a document which is or may become a legally binding agreement.
The document published on 19 March 2018 by the EU Commission is titled “Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community highlighting the progress made in the negotiation round with the UK of 16-19 March 2018”.
Thus, it is a draft agreement only; and it highlights the progress made (and not made) in this most recent negotiation round of the Brexit talks.
Remind me of the sequence
On 8 December 2017 a ‘Joint Report’ from the EU and UK negotiators on “progress during phase 1 of negotiations” under Article 50 on the UK’s orderly withdrawal from the EU, as well as a ‘Joint Technical Note’ expressing the detailed consensus on citizens’ rights were published. Together, both reports serve as a detailed blueprint for the draft Withdrawal Agreement.
On 28 February 2018, the first draft of the Withdrawal Agreement was published.
The current draft of the Withdrawal Agreement is that referred to above published on 19 March 2018.
A final version of the Withdrawal Agreement should be agreed by the EU and the UK by October 2018 to allow for the timely ratification by the European Parliament, the Council (Article 50) and the UK, according to its own constitutional requirements.
Brexit will occur – and the UK will leave the EU - on 30 March 2019.
The Transition Period will commence immediately upon Brexit and end on 31 December 2020. The end of the Transition Period will coincide with the end of the current Multiannual Financial Framework (which sets the limits for the annual general budgets of the EU).
The Transition Period will be the time to finalise the future EU-UK relationship. It is a short amount of time, and so this negotiation will likely be “intense and demanding”. The EU’s intention is to advance as quickly as possible and to begin on all the future relationship topics in parallel.
A new Tricolour….
Green, yellow and white (and not, perhaps, designedly, green, white and orange).
Perhaps, uniquely, the published text of the latest draft Withdrawal Agreement is in three colours: in green, where the text is agreed at negotiators' level and will only be subject to technical legal revisions in the coming weeks. In yellow, where the text is agreed on the policy objective but drafting changes or clarifications are still required. And, in white, where the text corresponds to text proposed by EU on which discussions are ongoing as no agreement has yet been found.
Most of Part 1 (Common Provisions) and Part Two (Citizens’ Rights) is in green text. Part Three (Separation Provisions), the longest part, has plenty of green, lots of white and just some yellow. Parts Four (Transition) and Five (Financial Provisions) are all in green. Part Six (Institutional and Final Provisions) starts in green but moves to white with a yellow finish.
And Ireland/Northern Ireland?
In paragraph 49 of the Joint Report of 8 December 2018 the UK said it “remained committed to protecting North-South co-operation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements.” The UK’s “intention” was to achieve these objectives through the new “overall EU-UK relationship” - Option 1. If that wasn’t possible, then the UK would propose specific solutions - Option 2. Finally, in the absence of agreed solutions, the UK undertook to maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South co-operation, the all-island economy and the protection of the 1998 Agreement - Option 3.
The first draft of the Withdrawal Agreement was based on the Joint Report. However, given that two of the three options can only be made operational in the context of discussions on the future relationship, a Protocol was included setting out, in legal terms, how Option 3 may be operationalised.
Why include the ‘Irish section’ in a Protocol rather than in the body of the Withdrawal Agreement? Where a solution/option is found that is different to the Protocol – and which addresses the overarching objectives of avoiding a hard border and protecting the Good Friday Agreement in all its parts – this solution/option could in principle supersede the Protocol. In legal terms, a protocol forms an integral part of an international agreement and has exactly the same effect as any other part of the agreement.
In the latest draft of the Withdrawal Agreement, the ‘Irish section’ remains in a Protocol. However, the colour coding also applies to the Protocol. Thus, starting in yellow, with elements in green and plenty in white, there is agreement on some elements only of the draft Protocol. Although it is now agreed that “a legally operative version” of the “backstop solution” or Option 3, in line with paragraph 49 of the Joint Report, “should be agreed as part of the legal text of the Withdrawal Agreement, to apply unless and until another solution is found”.
There is further agreement that the full set of issues related to avoiding a hard border covered in the draft agreement reflect those that need to be addressed in any solution. There is as yet no agreement on the right operational approach, but the parties have agreed to engage urgently in the process of examination of all relevant matters.
In other words, all three Options remain on the table.
A decisive step?
Yes. There is now agreement on a number of important issues:
- citizens' rights
- the financial settlement
- a transition or implementation period - which will start on the date of entry into force of the Withdrawal Agreement and end on 31 December 2020
- the UK may “negotiate, sign and ratify” new trade deals with third countries during the Transition Period, but which may apply or come into force only after the Transition Period – but how likely is it that third countries will wish to engage seriously without knowing the final terms of the EU-UK trade agreement?
- the Ireland/UK common travel area and areas of North-South co-operation.
On citizens’ rights, the UK has accepted that EU citizens arriving in the country after Brexit will "obtain a new status of residence from the start of the Transition Period" that will follow Brexit in March 2019. This will give them "immediate certainty on their rights after the transition" - which will end on 31 December 2020.
On the financial settlement, the UK could pay over €37bn until 2064, according to figures released last week by the UK's Office for Budget Responsibility.
However, as Michel Barnier has pointed out, the UK "will not participate in [the EU] decision-making process" during the Transition Period. It will “maintain nonetheless all the advantages and benefits of the Single Market, the Customs Union, and EU policies, and should therefore also respect all the EU's rules, as if it were a Member State”.
The draft agreement provides that during the Transition Period the UK shall be bound by the obligations stemming from the international agreements concluded by the EU, or by Member States acting on its behalf, or by the EU and its Member States acting jointly. A footnote provides that the EU will “notify” the other parties to these agreements that during the Transition Period the UK “ is to be treated as a Member State” for the purposes of these agreements. However, unless each such agreement already provides for its unilateral amendment by way of notification, there can be no reliance on such wording as each trading partner of the EU may or will have its own views on the matter and “notification” is simply that, and does not create a legal requirement or obligation on the partner so notified.
During the Transition Period, UK representatives may not participate in the work of any bodies set up by international agreements unless the UK participates in its own right or, the EU exceptionally invites the UK to attend meetings, as part of its delegation, where the EU considers that the UK’s presence is necessary and in EU’s interest.
In accordance with the “principle of sincere co-operation”, the UK must refrain, during the Transition Period, from any action or initiative which is likely to be prejudicial to the EU's interests, in particular in the framework of any international organisation, agency, conference or forum of which the UK is a party in its own right.
There is also no suggestion in the draft Withdrawal Agreement of any possible extension of the Transition Period (reported to have been requested by the UK). Thus, for business and the UK there is the possibility of a new so-called ‘cliff edge’?
But "nothing is agreed until everything is agreed"?
Correct. There will be a transition arrangement only if the Withdrawal Agreement is fully agreed, including the Protocol on Ireland/Northern Ireland.
Other important outstanding matters still requiring agreement include:
- methods and principles relating to the effect, implementation and application of the Withdrawal Agreement
- making available information held by certain bodies established in the UK or EU
- certain intellectual property (including protection of registration) and data protection matters
- ongoing police and judicial co-operation in criminal matters
- ongoing judicial co-operation in civil and commercial matters (including jurisdiction, recognition and enforcement of judicial decisions)
- judicial procedures regarding cases before the Court of Justice of the EU (CJEU) and the UK courts; administrative procedures and co-operation
- settlement of disputes relating to, and non-compliance with, the Withdrawal Agreement
- suspension of benefits during the Transition Period.
Is Ireland/Northern Ireland (and the Border issues) slipping down the list of priorities in the talks as the EU and UK start to focus on the future relationship?
The European Council on Friday, 23 March 2018, will evaluate and judge the state of the negotiations and the latest draft of the Withdrawal Agreement – following a series of meetings involving M Barnier with ministers of the 27 Member States (on whose behalf he is negotiating), the Brexit Steering Group of the European Parliament and the College of the European Commission.
On Ireland and Northern Ireland, M Barnier has said again that “we must have a workable and practical solution to avoid a hard border and protect North-South cooperation”. He has added that “Ireland and Northern Ireland form a distinct strand within the framework of the negotiations of the UK's orderly withdrawal from the EU. I repeat within the framework of the withdrawal”.
In this context, the EU has agreed with the UK on a detailed agenda for discussions over the coming weeks.
Who are the parties to the Withdrawal Agreement?
The European Union and the European Atomic Energy Community, on the one part, and the United Kingdom of Great Britian and Northern Ireland, on the other part.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.