The Withdrawal Agreement Act: Implementing the Brexit Withdrawal Agreement in the UK

Professor Steve Peers, University of Essex

What are the legal consequences of leaving the EU for the UK? Those consequences are manifold, but some of the key aspects are set out in the Withdrawal Agreement Act (the ‘new Act’), which Parliament passed in January. The main purpose of the new Act is to implement the revised withdrawal agreement in the UK. This was necessary given that the UK is a ‘dualist’ country, where international treaties are not enforceable in the domestic legal system unless there is domestic legislation to give effect to them. For those who wish to enforce rights provided by the withdrawal agreement in the UK, the new Act is the starting point.

In contrast, there is no equivalent to the Act passed by the EU, under the assumption that the withdrawal agreement meets the criteria for ‘direct effect’ of an international treaty in EU law – meaning that it can be enforced by the courts without any EU legislation to that effect. There will be some national measures relevant to UK citizens staying on the basis of the withdrawal agreement, however; and the decision concluding the withdrawal agreement on the EU side contains some procedural rules, as noted below.

The new Act does other things too: partly addressing the future relationship with the EU; partly regulating the UK’s position as regards the joint implementation of the withdrawal agreement with the EU; and most significantly, changing the way in which EU law is dealt with in the UK post-Brexit.

This blog post seeks to provide an overview of how the new Act provides for the application of the withdrawal agreement in the UK. It’s a complex Act, and this post does not claim to be comprehensive. Nor does it offer legal advice. If you are a party to relevant legal proceedings or contemplating litigation under the Act – or under the withdrawal agreement as a UK citizen in an EU Member State – you should consult a lawyer.

Since the new Act is closely related to the revised withdrawal agreement, my earlier analyses of that agreement (overview; transition period; dispute settlement; and citizens’ rights) are relevant in explaining the details of these key issues further (see also my analysis of the jointly agreed political declaration on the future UK/EU relationship). 

It should be noted that the new Act differs somewhat from the Withdrawal Agreement Bill tabled back in October (which I commented on here). That’s because, after the election, the government tabled a different version of the bill (which then passed Parliament without any amendment) than the version initially tabled in October. This was not an amendment of the withdrawal agreement (as agreed with the EU) itself, as some thought, but rather a change to the implementation of that treaty in the UK. If the EU had misgivings about these changes, it nevertheless did not stop the European Parliament and EU Council from concluding the treaty on the EU side in January.

How does the final Act differ from the original version of the bill tabled in October? There’s a useful track changes comparison of the two here. In short, compared to the original bill, the final Act:

-          added a power for ministers to give courts instructions about interpretation of EU law converted into UK law (other than the withdrawal agreement itself);

-          removed parliamentary control over extension of the transition period (replacing it with a ban on extension) and the future relationship negotiations;

-          added a clause on transparency of dispute settlement;

-          removed all provisions on workers’ rights;

-          banned the UK agreeing to a written procedure in the Joint Committee set up by the withdrawal agreement; and

-          repealed an additional chunk of prior legislation related to Brexit, including an obligation to attempt to negotiate on family reunion of unaccompanied child asylum-seekers, as well as the Benn Act (discussed here) which required the final extension of EU membership.

  

Furthermore, the new Act does not simply concern the withdrawal agreement: it also implements in the UK two other treaties relevant to Brexit: the EEA EFTA Separation Agreement and the UK-Swiss Citizens’ Rights Agreement. These two agreements respectively protect acquired citizens’ rights as between the UK and Norway, Iceland and Liechtenstein and the UK and Switzerland, in a very similar way to the citizens’ rights provisions in the main withdrawal agreement. The former treaty also contains a few separation provisions on issues like goods and judicial cooperation (ie where goods from the UK have been placed on the market of the EEA EFTA States, or vice versa, before the end of the transition period) – in this case a truncated form of the separation provisions in the withdrawal agreement.

Finally, it should be noted that a big chunk of the new Act consists of amendments to the EU Withdrawal Act, originally adopted in 2018, which is the main statute governing the domestic legal effects of Brexit. (Here’s the Withdrawal Act before amendment and after amendment, and here’s a track changes version, which also includes the changes to the Withdrawal Act which have not yet been commenced). There are explanatory notes on the bill, and a memorandum on delegated powers.  There’s also some secondary legislation already adopted to implement the new Act – namely the commencement order and rules on appeal rights relating to EU citizens (discussed here). There may be more secondary legislation implementing the new Act in future. (Update, March 24 2020: a second commencement order has been adopted, bringing more of the Act into force).

Approval of the withdrawal agreement

The immediate impact of the new Act was that it provided the domestic legal basis for the UK ratifying the withdrawal agreement in international law. It switched off both the specific rules for approval of the withdrawal agreement in the EU Withdrawal Act (the so-called ‘meaningful vote’, which Theresa May lost three times on the previous version of the withdrawal agreement), and the general rules for approval of international treaties in the Constitutional Reform and Governance Act (CRAGA). (See respectively section 31 and section 32 of the new Act). The effect of this was that as soon as the new Act obtained Royal Assent, the government had the power to ratify the withdrawal agreement without holding a further vote, which it duly did.

The transition period

The Act makes specific provision for the transition period in the withdrawal agreement, which ensures the continued application of EU law to the UK until at least the end of 2020. In particular:

-          section 1 of the new Act inserts a new section 1A into the Withdrawal Act, which switches back on the European Communities Act, the main domestic law basis for EU membership, for the duration of the transition period;

-          section 2 of the new Act inserts a new section 1B into the Withdrawal Act, which keeps in force domestic legislation based on EU membership for the duration of the transition period;

-          section 3 of the new Act inserts a new section 8A into the Withdrawal Act, which gives the government wide powers to adopt secondary legislation in relation to the transition period. This includes “Henry VIII” powers to amend Acts of Parliament (although those powers cannot apply to Acts of Parliament adopted after the end of the transition period). These powers run out two years after the end of the transition period;

-          section 4 of the new Act inserts a new Part (sections 11A to 11F) into the Withdrawal Act, which gives devolved bodies in Scotland, Wales and Northern Ireland powers in relation to implementation of the transition period.  

Although the withdrawal agreement provides for a possible extension of the transition period for one or two years, subject to agreement of both sides and conditional on agreement on other issues relating to budget contributions, it is UK government policy to oppose any extension. That government policy is now set out in section 33 of the Act (inserting a new section 15A of the Withdrawal Act), which prevents the government agreeing to any such extension. Of course, the government could ask Parliament to amend the law if it changed policy, but as it stands the law prevents the government agreeing an extension unless the Act is amended.  As noted above, this is one of the changes made as compared to the original version of the withdrawal agreement bill, which provided for Parliament to approve any government decision to agree to any extension of the transition period, but did not rule such decisions out.

Note that the provisions in the withdrawal agreement on citizens’ rights, the financial settlement, Northern Ireland and other issues will not expire at the end of the transition period. In fact, for the most part that’s when the provisions on citizens’ rights and Northern Ireland kick in. Similarly that’s when most of the changes to the status of EU law in the UK will now apply. Section 25 of the new Act amends a chunk of the Withdrawal Act to delay much of the effect of that Act to the end of the transition period, instead of Brexit day as such.  (Schedule 5 to the new Act makes further amendments to the same end to the Withdrawal Act, secondary legislation and other primary legislation of Westminster and devolved bodies).  

One provision of the new Act deals with the process of adopting new EU legislation during the transition period, given that it will apply to the UK. Section 29 inserts a new section 13A into the Withdrawal Act, which provides for possible parliamentary debate over a new EU measure in some cases. But this is lipstick on a pig squared: the government is not bound by the result of any parliamentary debate, and would have no vote on the issue at EU level even if it were.

Implementing the withdrawal agreement

Section 5 of the Act inserts a new section 7A into the Withdrawal Act: a general clause giving domestic legal effect to the rest of the withdrawal agreement, other than the transition period. It requires those rights to be recognised and enforced in the UK’s legal systems. All legislation must be read and have effect subject to this rule.

There are also specific, more detailed rules on implementing certain parts of the withdrawal agreement such as citizens’ rights (discussed further below), but the new Act uses the words ‘See also’ these other provisions – indicating that any of these more detailed rules apply on top of the more general entrenchment of the withdrawal agreement in domestic law. That means that anyone seeking to enforce the new Act (EU citizens seeking to enforce their rights, for instance) could rely on either these more specific provisions (and the secondary legislation based on them), or the general implementation obligation, or both – depending on which rule in the withdrawal agreement they were trying to enforce. 

In very similar terms, Section 6 of the Act inserts a new section 7B into the Withdrawal Act: a general clause giving domestic legal effect to the EEA EFTA Separation Agreement and the UK-Swiss Citizens’ Rights Agreement. Again, there are more additional, more detailed rules in the rest of the Act.

Citizens’ rights

The citizens’ rights provisions of the withdrawal agreement aim to preserve most of the same status that EU27 citizens in the UK, and UK citizens in the EU27, have on the basis of EU free movement law, if they moved before the end of the transition period in the withdrawal agreement.

The specific provisions in the new Act mainly set out further powers for the government to implement the withdrawal agreement (and the EEA EFTA separation agreement and UK/Swiss citizens’ rights treaty) as regards:

-          the deadline for EU27 citizens to apply for status under the withdrawal agreement, including protection pending the deadline (June 2021 if the transition period is not extended) and while applications are being processed (section 7);

-          frontier workers, and their documentation (section 8)

-          restrictions of entry and residence (section 9);

-          appeals and judicial review (section 11);

-          recognition of professional qualifications (section 12);

-          social security (section 13); and

-          non-discrimination and workers’ rights in the context of free movement (section 14).

All of these provisions refer back to the withdrawal agreement; they are not general power to do anything the government likes, even in breach of it. They confer ‘Henry VIII’ powers to amend Acts of Parliament, and mostly extend beyond those covered by the withdrawal agreement. The last three sets of powers also extend to devolved bodies (see further Schedule 1 to the new Act). Note that the powers in section 11 have already been used to adopt secondary legislation providing for appeal rights for EU27 citizens, as noted above.

Similarly, section 10 of the new Act amends other Acts of Parliament so that the grounds for deportation of EU citizens and their family members are consistent with the withdrawal agreement.

In addition, the withdrawal agreement requires the UK to set up an independent monitoring authority for EU27 citizens’ rights. This is established in section 15 of the new Act, and schedule 2 to the new Act sets out more details. EU27 citizens can complain to this body about their treatment, and it can launch inquiries or court proceedings as a follow-up.

Finally on citizens’ rights, section 16 specifies that for some of the powers mentioned above, the government power to adopt secondary legislation includes power to supplement the general implementation of the withdrawal agreement. Section 17 defines the terms used in the citizens’ rights section. The application scheme for EU27 citizens widely referred to as ‘settled status’ is, in the legalese of Brexit legislation, known as “residence scheme immigration rules”.

Remember that these sections of the new Act, and the secondary legislation adopted under them, come on top of the general implementation of the withdrawal agreement in domestic law discussed above – which may well also be relevant for any EU citizens in the UK who have legal difficulties concerning their status.

Separation issues

Section 18 of the new Act, which inserts a new section 8B into the Withdrawal Act, confers power to adopt secondary legislation to give effect to the lengthy and detailed ‘separation provisions’ of the withdrawal agreement, which deal with issues like what happens to European Arrest Warrants which are pending at the end of the transition period. It also applies to the more limited number of separation issues dealt with by the EEA EFTA separation agreement. This includes ‘Henry VIII’ powers to amend Acts of Parliament, but there is a safeguard ruling out use of this power to amend or repeal the Human Rights Act or the legislation on devolved parliaments or assemblies.

Section 19 of the new Act amends a schedule to the Withdrawal Act to give devolved bodies similar powers to give effect to the separation provisions of the two treaties.

Financial settlement

Section 20 of the new Act is a general authorisation to spend the money required to be spent by Part Five of the Withdrawal Agreement – the participation in the EU budget to the end of 2020, the payment of previously accrued obligations, and sundry other sums like pensions.

Northern Ireland protocol

Section 21 of the new Act inserts a new Article 8C into the Withdrawal Act which confers power to adopt secondary legislation to implement most of the controversial withdrawal agreement protocol on Northern Ireland. Section 22 amends a Schedule to the Withdrawal Act to confer powers on devolved bodies to the same end. (Presumably the Northern Ireland Assembly and Executive are the most important bodies here). Section 23 provides for a new Schedule 3, which sets out details of enforcing the EU equality law which is preserved for Northern Ireland by the protocol. Finally, section 24 amends the Withdrawal Act to limit the UK government from agreeing to any extension of North-South cooperation or creating any new implementation bodies to that effect in the Joint Committee implementing the withdrawal agreement.

As with the rest of the Act, the general implementation of the withdrawal agreement into domestic law may also be relevant here. But some of the controversial aspects of the Northern Ireland protocol refer to further Joint Committee measures, and so unlike other aspects of the withdrawal agreement, the trade provisions of the protocol might need such further measures to give them full effect in domestic law. Also, unlike (say) EU citizens resisting deportation or challenging a refusal of settled status, companies in Northern Ireland do not have an obvious interest in litigating enforcement of the withdrawal agreement, as it might make them worse off (creating a barrier to trade with Great Britain) rather than better off.

Joint Implementation of the withdrawal agreement

The EU and the UK can jointly agree on certain measures to implement the withdrawal agreement within the Joint Committee which the agreement has set up. The new Act regulates some aspects of how this will work, on the UK side. First of all, as noted above, section 33 of the new Act (inserting a new section 15A of the Withdrawal Act) prevents the government agreeing to any extension of the transition period, and section 24 amends the Withdrawal Act to limit what the government can agree to as regards certain Northern Ireland issues.

The new Act also regulates what the UK will agree to as regards the procedure in the Joint Committee. Section 34 of the new Act adds a new section 15B to the Withdrawal Act, which states that the UK co-chair of the Joint Committee must always be a minister acting in person. Furthermore, section 35 of the new Act adds a new section 15C to the Withdrawal Act, which prohibits the UK from agreeing to use the written procedure in the Joint Committee.

These parts of the new Act do have a rough parallel on the EU side, where the decision concluding the withdrawal agreement on the EU side sets out how the EU institutions will deal with some of the procedural issues of implementation.

As regards dispute settlement, the new Act aims to enhance transparency. Section 30 of the new Act adds a new section 13B to the Withdrawal Act, which provides for:

-          information to parliament 14 days after either side requests an arbitration panel to be set up under the dispute settlement system, setting out the details;

-          information to Parliament 14 days after a CJEU ruling interpreting EU law at the request of the arbitrators under the dispute settlement system has been published in the EU Official Journal, setting out the details; and

-          yearly reports on the number of consultations aimed at settling disputes under the dispute settlement system.

Note that this does not give Parliament any power to direct the government’s position during dispute settlement. Furthermore, this provision is a fairly superficial attempt at transparency.  There is no obligation to publish information about final arbitration decisions, which can address a number of issues – not only the substance of the dispute, but the time period to implement a ruling, a failing to implement a ruling, and retaliation for not implementing a ruling.  Information about CJEU judgments published in the Official Journal adds little, since the Official Journal only publishes the operative part of the ruling, not the full text, weeks or months after the judgment, which anyway is usually published immediately on the Court’s website. Information on the number of dispute settlement consultations (rather than the content of the dispute, or the details of any settlement) is not that significant, especially if it is only provided annually.

Future relationship

The first version of the bill contained a lot about the future relationship between the UK and the EU, including a requirement that the government's negotiating strategy must be approved by Parliament, that ratification of the resulting treaties must be approved by Parliament, and that any negotiating guidelines had to be ‘consistent with the political declaration’ on the future relationship. However, the second version of the bill, and hence the final Act, dropped these provisions.

Furthermore, section 37 of the new Act amended section 17 of the Withdrawal Act, which required the government to negotiate with the EU on family reunion for unaccompanied child asylum seekers. Instead the government only needs to give a statement about its policy intentions. This did not remove any rights for asylum-seekers, as some believed – it rather removed an obligation to negotiate, which might not have been successful. (It’s not clear whether the EU is even interested in negotiating on this subject). But it may well have reduced the likelihood that the UK and EU agree upon this issue in the end.

As noted already, the final Act dropped the provision on workers’ rights in the original bill. This means that any retention of such rights will be based on the rules on conversion of EU law into law in the UK post-Brexit (discussed below) – unless the UK makes further commitments to this effect in any future relationship treaties with the EU. (I have discussed the proposed EU position on a ‘level playing field’ in the future relationship talks, including labour law and other issues, here).

The new Act also dropped the requirement in the Withdrawal Act to propose an Environment Bill – given that the government has tabled such a bill in the meantime. Similarly it dropped the requirement for the government to report on a customs arrangement with the EU by October 2018, as that date has passed. The rather pointless provision stating that the UK could optionally align with EU law or sign up to EU agencies has been repealed too.

Conversion of EU law in the UK post-Brexit

The basic idea behind the Withdrawal Act is that EU in force on Brexit day is converted into law in the UK at that point, until it is amended by Parliament, secondary legislation, devolved bodies, or the courts. In the new Act, section 25, as noted already, postpones this effect until the end of the transition period.

The big change here is section 26 of the new Act, which amends the Withdrawal Act rules on the interpretation of retained case law of the CJEU interpreting EU law. Previously, it was possible for the Supreme Court, or the High Court of the Justiciary (the supreme Scottish criminal court) in certain cases, to depart from CJEU case law post-Brexit – in the same limited circumstances in which those courts would depart from their own prior case law.

However, the new Act dramatically widens the possibilities of courts in the UK departing from CJEU case law – and does so by blurring the distinction between the independent judiciary and the executive. It gives power to adopt secondary legislation to do several things:

-          widen the list of courts and tribunals not bound by retained EU case law;

-          regulate ‘the extent to which, or circumstances in which’ a court or tribunal ‘is not to be bound by retained EU case law’,

-          set out ‘the test’ which would apply ‘in deciding whether to depart from any retained EU case law’, including the 'considerations’ are ‘relevant to’ any court applying the ‘test’ for when to depart from such case law. 

This may include not being bound by domestic case law which relates to EU case law, and ‘other matters’ relating to such domestic case law, including the creation of tests when that domestic case law should be disregarded too.  However, before adopting such secondary legislation a minister must consult specified senior judges, and the power to adopt such measures expires at the end of the transition period.

Furthermore, these extensive powers relating to previous case law ‘are subject to relevant separation agreement law’, which is set out in a new section 7C added to the Withdrawal Act. This new section concerns the interpretation of the withdrawal agreement, the EEA EFTA separation agreement and the Swiss citizens’ rights agreement. It provides that any question on ‘the validity, meaning or effect of any relevant separation agreement law’ must be decided ‘in accordance with the withdrawal agreement’ or the other two treaties, ‘having regard…to the desirability of’ interpreting these treaties consistently where they have provisions corresponding to each other.

To this end, the new section refers to ‘(among other things)’:

- Article 4 of the withdrawal agreement, which requires interpreting the agreement consistently with CJEU case law and EU law principles;

- Articles 158 and 160 of the withdrawal agreement, which give the CJEU jurisdiction to interpret the citizens’ rights and financial settlement provisions in relation to the UK, even after the transition period;

- Articles 12 and 13 of the Protocol on Northern Ireland, which again give the CJEU jurisdiction over parts of that protocol, and govern its interpretation consistently with EU law; and

- the clauses on interpretation of the EEA EFTA separation agreement and the Swiss citizens’ rights agreement.

It also defines “relevant separation agreement law” as meaning the provisions on general implementation of the withdrawal agreement, its separation provisions or the Northern Ireland protocol, or any secondary legislation adopted on that basis; or the “citizens’ rights and financial provision” sections of the withdrawal agreement; or anything else which is domestic law related to the rest of the withdrawal agreement (other than the transition period) or the other two treaties.

Taken together, these two chunks of legalese mean that Parliament has given the UK executive extensive power to tell courts in the UK how they may or must depart from CJEU case law. It’s too early to know how the executive will use this power: it could, for instance, be used to determine that courts are free to depart from EU case law relating to weekly working time, holidays or the protection of employees when their employer changes hands.   

On the other hand, this power to tell the courts to disregard case law does not concern the withdrawal agreement or other related treaties, and the jurisdiction of the EU court over the withdrawal agreement in the UK after the transition period is expressly accepted (as regards citizens’ rights and the financial settlement), or accepted by necessary implication (referring to the relevant clauses in the Northern Ireland protocol). The reference to ‘among other things’ arguably captures the CJEU’s jurisdiction over pending cases and proceedings in the withdrawal agreement.

Finally, section 27 of the new Act amends the government’s power to adopt secondary legislation to address ‘deficiencies in EU law’ related to withdrawal from the EU to cover measures adopted during the transition period.

Conclusion

In recent years – and especially recent months – it’s often asserted that the law doesn’t matter that much, given the government’s perceived intentions of disregarding it and of preventing judges from applying it. The application of the new Act in practice will put that assertion to the test.

It’s not so remarkable that the government wanted to remove parliamentary constraints upon its future relationship talks with the EU, and that the provisions in the new Act on accountability regarding the implementation of the withdrawal agreement are limited (besides ruling out an extension of the transition period – but that was government policy anyway). This simply gives effect to the traditional view that the executive’s conduct of international relations is not a matter to be regulated by Parliament.

However, it’s equally traditional that an international treaty which regulates the position of individuals should be given effect by an Act of Parliament so that it fully applies in domestic law. That is the approach taken by the new Act, which contains, as we have seen, provisions which implement the transition period in particular and the rest of the withdrawal agreement in general, giving the government further powers to adopt secondary legislation to implement specific points. While there are bound to be issues of interpretation and application of the withdrawal agreement on the ground (on the EU side too), in principle the UK has met its obligation to give effect to the treaty in domestic law.

The adoption of an Act of Parliament to give effect to the withdrawal agreement limits the ability of the government to renege on its obligations in the agreement, as some fear. Any intention to do so would be dependent upon amending the new Act. How likely is that? Although section 38 of the new Act reasserts the principle of parliamentary sovereignty, suggesting that parliament could choose to breach the UK’s international obligations as a matter of domestic law if it chooses to, and a tame majority in the Commons might well nod along, the House of Lords could at least, under the Parliament Acts, delay such a measure by a year. The Salisbury convention, under which the Lords will not seek to block legislation giving effect to a winning party’s manifesto commitments, hardly applies where that winning party reneges on those commitments, seeking to chuck its own ‘oven ready deal’ in the bin. But after a year, if the Lords did choose to invoke that power of delay (and they rarely do) an amendment to the Act is possible. It would then be up to the dispute settlement system in the withdrawal agreement to address the issues arising from any resulting breach of the agreement.

This may miss the point though, for two reasons. First of all, on the most contentious issue – the Northern Ireland protocol – as discussed above, the obligations might be hard to enforce under the Act anyway, given the reference to implementing measures and a possible reluctance to litigate. It would likely be the dispute settlement system and/or the CJEU’s (implied) jurisdiction over infringement actions under the Northern Ireland protocol that would come into play here.

Secondly, there’s the government’s reported intention to ‘sort out the judges’. Reliance on implementing a treaty via means of domestic law has limited effect if the judges are being told what to do by the executive – or, in effect, pre-emptively censoring their judgments due to fear of executive control. On this point, though, as discussed above, it’s striking that the parts of the new Act with a pronounced ‘nobbling the judges’ vibe concern retained EU law outside the scope of the withdrawal agreement, with the withdrawal agreement itself being safeguarded from the use of such powers. For issues outside the scope of the withdrawal agreement, there will be no legal obligations on the UK once the transition period is over, so it can’t be claimed that these powers undermine any substantive legal obligation. Conversely, there is a genuine concern that these powers might overrule judicial independence, depending on how exactly they are used: a helpful clarification of the limited circumstances where CJEU legal precedents need no longer be followed, or overturning legal certainty to own the libs?  

It seems possible that the new Act was a gateway drug as far as nobbling judges is concerned, and the government might soon wish to go beyond it. And it’s certainly understandable that EU citizens in particular distrust a government full of people involved with a campaign which broke electoral spending law, and who reneged on their campaign’s promise to give all EU citizens automatic indefinite leave to remain. But exactly what the government might do, and what impact that might have on implementation of the withdrawal agreement, remains to be seen.

Barnard & Peers: chapter 27

Photo credit: Mdbeckwith, via Wikicommons

Negotiating the future relationship between the UK and EU: the proposed EU negotiating mandate

Professor Steve Peers, University of Essex

Last week the process of negotiating the future relationship between the UK and the EU formally began. On the EU side, the Commission published the proposed negotiation mandate (an annex to a decision) for the future EU/UK relationship. For the UK, the government published a parliamentary statement.

There was also a speech by the Prime Minister, but this was intended for a domestic audience: amateur dramatics, not professional trade policy. Suffice it to say that: the withdrawal agreement does not govern trade between the UK (other than Northern Ireland) and the EU after the end of the transition period it sets out (discussed here), and the minimal trade arrangements between the EU and Australia cannot honestly be described as an “Australia deal”. One might as well refer to a food bank as an “Australian Waitrose”, or a desperate dash to the bushes as an “Australian toilet”. Indeed, Australia is seeking to improve on these minimal arrangements by negotiating a free trade agreement (FTA) with the EU.

The following analysis summarises the proposed EU negotiating mandate, further comparing it to the mutually agreed political declaration on the future relationship (which I previously annotated here). It explains where the EU position has departed from or elaborated upon the political declaration. Obviously, the EU position differs in some respects – but not all – from the UK position, which is why negotiations are expected to be difficult.

Legal basics

On the EU side, the first thing to notes is that this is a proposal for a negotiation mandate. Under Article 218 TFEU, which sets out how the EU negotiates international treaties, first of all the Commission proposes a mandate to negotiate with a non-EU country. Next, the Council, ie Member States' ministers, decides on adoption of that mandate. Under the Commission’s proposal the ministers would have to act unanimously (more on that below).

The Council is expected to complete this next step later in February, after ministers and national civil servants representing them examine the proposal. It’s possible (and common) for the Council to change the text of a negotiating mandate proposed by the Commission – although such changes are unlikely to be radical.  In fact, it seems certain that the Council will amend this proposal (for the text of the main decision as agreed, see here; the more detailed annex is not yet agreed).

After that point the third step starts – the formal negotiations with the UK, in which the Commission is the negotiator. Note that the Commission will have a mandate from Member States when doing so: Michel Barnier will not be on a frolic of his own. (This point was often missed during the withdrawal agreement negotiations). As the proposed mandate states, during the negotiations the Commission will be reporting back to a 'special committee' of Member States’ officials. In fact this committee was set up recently. It's made up of Member States' officials who keep an eye on the Commission as negotiator. This isn't unique to these talks; it's a requirement in Article 218 of the Treaties as regards all international treaty negotiations.

There's no formal role for the European Parliament at this point, although it can pass non-binding resolutions (such as the one passed earlier this week). It will have a veto over the final agreement. At first sight the proposal doesn't take a view on whether ratification by each national parliament will be needed. This will depend on the content of the final text, as the Commission’s Q and As explicitly point out.

Timing of the talks

The transition period in the withdrawal agreement expires at the end of the year, meaning that the de facto current treatment of the UK as a Member State of the EU will then expire. While the withdrawal agreement’s provisions on issues like citizens’ rights and Northern Ireland will still apply, most of the relationship between the UK and EU will end at that point unless new treaties replace it.

Although the transition period could be extended by one or two years if both sides agree (the deadline to agree this is 30 June 2020), the UK objects in principle to any extension. The negotiation mandate decision mentions a possible extension, but the Commission proposal doesn't discuss the UK objection to extending the transition period. Rather it aims to get as much as possible done during the available time. It does refer to the jointly agreed ‘best endeavours’ to agree a new fisheries treaty by July 2020 (para 74 of the political declaration), saying that a fisheries treaty ‘should’ be agreed by that point. But it does not explicitly make this a condition for further negotiations, and the Q and As refer to ‘parallel’ negotiations, not to negotiations on fisheries exclusively at first.   

Form of the relationship

The Commission proposal refers to a ‘single package’ with general provisions, economic arrangements, and security arrangements. This possibly implies a single treaty, although the Commission does not say so expressly.  It would also be possible to have separate treaties which are linked in some way.

Furthermore, the Commission is seeking legal authority to negotiate an association agreement on the basis of Article 217 TFEU, although it avoids using those actual words. It notes that when it comes to the end of the negotiations, things might be different. (For instance, the scope of the agreement might be narrower, or it might take the form of multiple treaties: either way, this could change the ‘legal base’ of the treaty or treaties concerned).

Legally, an association agreement (if that's what is eventually negotiated) requires unanimity in Council and consent of the European Parliament. It might need ratification by national parliaments but that depends on the content (as the Q and As point out). It can be put in force provisionally (at least partially) if needed.

Territorial scope

The Commission proposes that Gibraltar is outside the scope of the planned negotiations (para 162 of the proposal). This is not a new EU position, and is not a territorial claim: the point has often been misreported. As the Commission points out, the EU position goes back to 2018, when the European Council took the view that any agreement regarding Gibraltar would be separate, and subject to the agreement of Spain:

After the United Kingdom leaves the Union, Gibraltar will not be included in the territorial scope of the agreements to be concluded between the Union and the United Kingdom. However, this does not preclude the possibility to have separate agreements between the Union and the United Kingdom in respect of Gibraltar. Without prejudice to the competences of the Union and in full respect of the territorial integrity of its Member States as guaranteed by Article 4(2) of the Treaty on European Union, those separate agreements will require a prior agreement of the Kingdom of Spain.

In any event, every Member State will have a veto over the future relationship treaty with the UK anyway, if it remains an association agreement as the Commission proposes.

Data protection

The proposed mandate (para 12) refers to an adequacy decision on UK data protection law. Note that an adequacy decision is a unilateral decision by the EU under the GDPR. The political declaration (para 9) referred to an objective to adopt such decisions by the end of 2020. There is another reference to data protection in the security part of the proposed mandate (see below). Cooperation between regulators, which was mentioned in the political declaration (para 10), is not mentioned explicitly in the proposed mandate.

EU programmes

The proposed mandate (para 13) would cover UK participation in EU programmes, such as research funding and Erasmus. The wording of the proposed mandate reflects the political declaration (para 11). Northern Ireland peace funding is also mentioned (para 14, proposed mandate; compare para 13, political declaration). However, there is no explicit mention of association with European research infrastructure (which was mentioned in para 12, political declaration). Note that the EU has not yet agreed the conditions for non-EU countries to access the next phase of EU programmes: for the draft text on this, see Article 16 of the proposed new Erasmus programme.

There’s no explicit mention of negotiation of UK links to the European Investment Bank, although the political declaration (para 15) only referred to the UK’s intention to seek such links, without suggesting that the EU side shared this objective.

Economic partnership

The core of the UK/EU economic partnership would be a free trade agreement (FTA) covering both goods and services (para 16 of the proposed mandate). It's often inaccurately claimed that there's no intention for an FTA in services between the UK and EU, but both sides have always intended to negotiate one (paras 19 and 28 of the political declaration). But note that an FTA falls short of single market participation. Unlike the political declaration, the proposed mandate makes an explicit link between the economic partnership and fisheries and a ‘level playing field’.

Free trade in goods

The proposed mandate (para 19) provides for no tariffs or quotas. However, unlike the position as a Member State (and during the transition period), the mandate refers to rules of origin, to determine where goods come from (para 20). This is an extra burden on trade between the UK and EU compared to EU membership, and is a consequence of the UK's decision not to negotiate a customs union. This reflects the political declaration (para 22); indeed a reference to a need for rules of origin was added to the revised version of the political declaration (whereas the first version of the political declaration ruled them out).

The reference to using the EU’s standard preferential rules of origin is new, and presumably refers to the pan-European rules (PEM Convention) in use between the EU and other countries across Europe, the Middle East and North Africa. Using the standard rules will be simpler and quicker than negotiating from scratch (rules of origin often take some time to negotiate in FTA talks).

Next, the negotiating mandate refers to introducing anti-dumping duties, anti-subsidy duties and economic safeguards between the UK and EU, referring to WTO rules. Again, this is a new possible barrier in UK/EU trade. Such measures are provided for in most FTAs (not just the EU’s: the US applies anti-subsidy duties to some Canadian products, for instance). For EU FTAs, the only exception is the European Economic Area (EEA), which rules out anti-dumping and anti-subsidy duties for most products, because the countries concerned have signed up to EU single market laws. The possibility of such measures is therefore not a ‘punishment’, but the inevitable consequence of the UK’s decision to leave the EU without remaining a participant in the single market.

The possibility of such measures would be there even without an FTA between the UK and EU. The objective of such measures is, respectively, to react to goods sold below their normal value (anti-dumping), subsidised by States (anti-subsidy), or which damage domestic producers (economic safeguard) – subject to more detailed definitions and procedural obligations in the WTO Codes dealing with these issues. 

The proposed negotiation mandate also extends to customs facilitation and agreement on non-tariff barriers (technical and sanitary rules), going beyond WTO provisions. However, it does not mention the possibility of UK links with EU medical, chemical, and aviation safety agencies, even though the political declaration referred to this possibility (para 23).

Free trade in services

The proposed mandate refers to an FTA in services going beyond WTO commitments, but as usual the EU will exclude audio visual services. This exclusion was not mentioned in the political declaration, but is hardly unexpected. On the other hand the proposed mandate mentions free trade in certain services sectors that were also expressly mentioned in the political declaration: professional and business services, telecommunications services, courier and postal services, distribution services, environmental services, financial services and transport services.

This will include movement of service providers (as required by WTO rules on FTAs in services), but this falls short of free movement of people. There is a general reference to agreement on investment (not just in services industries), but as under the political declaration there is little further detail. The proposed mandate also includes recognition of professional qualifications, as referred to in the political declaration (para 34). Financial services equivalence decisions will be unilateral.

Intellectual property

It’s usual for FTAs to include provisions on intellectual property, going beyond WTO and other international rules. Here the big EU ask here is protection for future ‘geographical indications’ (GIs: these are rules which specify that, for example, ‘feta cheese’ must originate from Greece). Note that current GIs are protected in the withdrawal agreement, so the negotiation here would be about future GIs. There’s also a reference to maintaining current protection in many other areas of IP, where there is extensive EU legislation going beyond international IP treaties. There’s no reference to what happens to the plan that the UK hosts part of the planned Unified Patent Court, which is linked to an attempt to create a unified EU patent. Some specific references to IP issues in the political declaration (databases, resale rights, exhaustion of rights) do not appear explicitly in the proposed mandate. The notion of still applying EU standards might be an issue in the case of the controversial recent EU copyright law, which the UK supported when it was adopted but now intends not to apply.

Public procurement

As is common for FTAs, the mandate envisages opening up public procurement markets more than under the WTO procurement agreement. This reflects the political declaration, although note that the rhetoric on this issue in the UK is inconsistent, with an obvious conflict between the competing slogans of "Buy British" economic nationalism on the one hand, and export oriented "Global Britain" on the other. Since the UK is signing up to the WTO procurement agreement in its own name and non-EU countries may also wish to include additional procurement obligations in FTAs, the “Buy British” folks may be disappointed – although opening up markets reciprocally enables exporting British companies to sell their goods and services too.

Mobility

The proposed mandate falls short of free movement of people here. It refers to waiving visa requirements for short term travel, which the EU has done already unilaterally on the condition of reciprocity (see discussion here). A visa waiver treaty between the two sides could go further – most notably waiving visa requirements for paid activities (which is now an option for Member States), which would be useful for the music industry, for instance. But it is not clear if the Commission is referring to a visa waiver treaty.  Note that the section on mobility is in addition to the planned negotiations on services, which would include some movement of people (discussed above).

The proposed mandate also refers to “setting out conditions” relating to migration of students and researchers (areas where the EU has already legislated on non-EU migration, as discussed here). There could also be agreement on social security coordination, but note that this would be for future UK/EU migration. Those who moved before the end of the transition period are covered by the withdrawal agreement (see discussion here), which also covers the common travel area referred to in the proposed mandate. Note that there’s no reference to possible negotiations on retaining free movement rights for UK citizens in the EU before the end of the transition period.

There’s no mention of the political declaration’s reference to facilitating travel (para 53 of the declaration), perhaps because of the UK government’s plan to match the EU’s planned advance travel authorisation system. Nor is there any reference to negotiations on family law civil judicial cooperation as mentioned in the political declaration (para 56), although it is understood that the Council draft of the mandate will insert text on this.

Transport

On air transport, the proposed mandate states that the UK will not have the same market access as an EU Member State, but is willing to negotiate. It also refers to aviation safety standards.

On land transport, it refers to market access for road haulage, but not cabotage (haulage within a single Member State/multiple Member States). This would be linked to a standstill on social rules relating to drivers plus tachograph discussions (this concerns the devices keeping track of how long drivers are driving for). There’s no reference to private motorists, although the political declaration referred to them.

The text refers to international law on coach transport, which suggests that the UK and EU would not negotiate additional provisions. On rail transport, there’s a reference to the Channel Tunnel; it’s understood that the Council will add a reference to Dublin/Belfast rail links here, in accordance with a reference in the political declaration.

There’s no reference to maritime transport, although again it’s understood that the Council will add a reference to possible negotiations on this issue, matching a reference in the political declaration. It remains to be seen whether the reference to cooperation with the EU maritime safety agency in the political declaration will be retained.

Energy

The proposed mandate has a number of references to renewable energy, along with a level playing field on carbon pricing, and a Euratom deal including a standstill on nuclear safety standards and isotope issues. (On post-Brexit relations with Euratom, see my earlier discussion). The Council will likely add a reference to nuclear waste, perhaps reflecting Irish concerns about Sellafield.

Fisheries

The focus of the proposal is EU traditional fishing in UK waters, with a link to the rest of the economic partnership, and a reference to agreed July target date. As noted above, the target date does not seem to be an absolute demand.  The Council is likely to strengthen the EU’s position here. The topic is a prime candidate for crashing the whole negotiations – as is the next topic...

Level playing field

The term ‘level playing field’ might be used differently in other contexts, but for these discussions it refers to law on State aid, competition law, and aspects of tax, labour and environmental law. It’s common for the EU to require some form of LPF clauses in its FTAs, but the question is whether to go beyond the usual provisions in the EU/UK FTA – with the rationale for the EU side being that the FTA would go further in abolishing all tariffs than other EU FTAs go.

The first point to emphasise is that in addition to being in other EU FTAs, the UK signed up to the concept of LPF in the political declaration. Both sides agreed that the LPF:

…should be commensurate with the scope and depth of the future relationship and the economic connectedness of the Parties. These commitments should prevent distortions of trade and unfair competitive advantages. To that end, the Parties should uphold the common high standards applicable in the Union and the United Kingdom at the end of the transition period in the areas of state aid, competition, social and employment standards, environment, climate change, and relevant tax matters. The Parties should in particular maintain a robust and comprehensive framework for competition and state aid control that prevents undue distortion of trade and competition; commit to the principles of good governance in the area of taxation and to the curbing of harmful tax practices; and maintain environmental, social and employment standards at the current high levels provided by the existing common standards. In so doing, they should rely on appropriate and relevant Union and international standards, and include appropriate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement as part of the future relationship. The future relationship should also promote adherence to and effective implementation of relevant internationally agreed principles and rules in these domains, including the Paris Agreement.

So the commitment was to ‘uphold common high standards’ applicable in the EU and UK at the end of the transition period; ‘maintain’ standards ‘at the current high levels provided by the existing common standards’; ‘rely on appropriate and relevant Union and international standards’; and include provisions on implementation, enforcement and dispute settlement. So there were several references to EU rules, most in the context of a standstill, but partly more open-ended (ie possibly application of future rules too); and a general reference to dispute settlement, with no specific reference here to the CJEU (but see the reference to the CJEU role below).

The proposed negotiating mandate partly repeats this text, but also adds many points. On LPF enforcement in general, it states that the EU ‘should also have the possibility to apply autonomous interim measures to react quickly to disruptions of the equal conditions of competition in relevant areas’. On future measures, it states that the ‘envisaged partnership should commit the Parties to continue improving their respective levels of protection with the goal of ensuring high levels of protection’, with the governing body having power to extend the LPF or add to it over time (note that the governing body would have to act jointly).

On specific issues, EU State aid should apply ‘to and in’ the UK, although they would be enforced by an independent UK body, not the Commission; and disputes ‘about the application of State aid rules in the United Kingdom should be subject to dispute settlement’. For competition law, general provisions similar to EU law (although here there is no specific cross-reference to EU law) should apply as regards EU/UK trade, along with a commitment to ‘effective enforcement’. There should be limits on special rights for state-owned enterprises, with no specific reference to EU law or enforcement.

On tax, there should be a commitment to international standards, and also the UK should apply ‘the common standards applicable within the Union and the United Kingdom at the end of the transition period in relation to at least the following areas: exchange of information on income, financial accounts, tax rulings, country-by-country reports, beneficial ownership and potential cross-border tax planning arrangements’, along with ‘the fight against tax avoidance practices and public country-by-country reporting by credit-institutions and investment firms’, and (without reference to common standards) ‘the Parties’ commitment to curb harmful tax measures, taking into account the G20-OECD BEPS Action Plan’ and the UK reaffirming ‘its commitment to the Code of Conduct for Business Taxation’.

On employment law, there should be no reduction ‘below the level provided by the common standards applicable within the Union and the United Kingdom at the end of the transition period in relation to at least the following areas: fundamental rights at work; occupational health and safety, including the precautionary principle; fair working conditions and employment standards; and information and consultation rights at company level and restructuring’. There should also be provision on enforcement within the UK, ‘through adequately resourced domestic authorities, an effective system of labour inspections and effective administrative and judicial proceedings’.

On the environment, again the LPF should provide that ‘the common level of environmental protection provided by laws, regulations and practices is not reduced below the level provided by the common standards applicable within the Union and the United Kingdom at the end of the transition period’. The text refers to ‘at least the following areas: access to environmental information; public participation and access to justice in environmental matters; environmental impact assessment and strategic environmental assessment; industrial emissions; air emissions and air quality targets and ceilings; nature and biodiversity conservation; waste management; the protection and preservation of the aquatic environment; the protection and preservation of the marine environment; the prevention, reduction and elimination of risks to human health or the environment arising from the production, use, release and disposal of chemical substances; and climate change.’

Also, the LPF ‘should lay down minimum commitments reflecting standards, including targets, in place at the end of the transition period in those areas, where relevant’; ‘should ensure the Parties respect the precautionary principle and the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay’. For enforcement, again, the LPF ‘should ensure that the United Kingdom implements a transparent system for the effective domestic monitoring, reporting, oversight and enforcement of its obligations by an independent and adequately resourced body or bodies’. (Note that the proposed Environment Bill would include some provisions to this effect).

There are also some specific provisions on climate change: the UK should maintain ‘a system of carbon pricing of at least the same effectiveness and scope as provided by the common standards, including targets, agreed within the Union before the end of the transition period and applicable for the period thereafter’, and the two sides ‘should consider linking a United Kingdom national greenhouse gas emissions trading system with the Union’s Emissions Trading System (ETS)’ which should be ‘based on the conditions agreed within the Union, ensure the integrity of the Union’s ETS and a level playing field, and provide for the possibility to increase the level of ambition over time’. Besides carbon pricing systems, the LPF should ensure that the UK ‘does not reduce the level of protection below the level provided by the common standards, including targets, agreed within the Union by the end of the transition period and applicable for the period thereafter’.

The proposal also refers to ‘adherence to and effective implementation of relevant’ international rules, which ‘should include’ International Labour Organisation conventions, the Council of Europe European Social Charter and multilateral environmental agreements including those related to climate change, including the Paris Agreement. On top of that, where the parties have higher standards above the minimum commitments, ‘the envisaged partnership should prevent them from lowering those additional levels in order to encourage trade and investment.’

Has the EU ‘moved the goalposts’ here? The agreed text in the political declaration refers explicitly to both EU and UK standards, vaguely to dispute settlement, and indirectly to future measures. It’s not surprising that the EU puts forward a maximalist interpretation of this, or that the UK puts forward a minimalist interpretation – although it cannot seriously be argued that the political declaration made no commitment to a standstill as regards EU standards.

There’s nothing here on exactly how dispute settlement would work, besides a reference to EU retaliation. This is significant because in the first withdrawal agreement, which contained much of the detail which the Commission proposes here, dispute settlement was limited: only some issues could be subject to the dispute settlement regime in that text (in particular, disputes about the substance of labour and environmental commitments could not be subject to dispute settlement; only disputes about enforcement systems for those obligations could be). So even the references to EU law in the LPF part of that agreement did not mean that the CJEU would have jurisdiction via dispute settlement arbitrators to interpret them, since the dispute settlement arbitrators would never get hold of such disputes in the first place.

This also meant that EU retaliation for the breach of such obligations was impossible, since retaliation was only possible via the dispute settlement system. While the draft negotiation mandate refers to possible EU retaliation for breach of LPF rules, it’s not clear if the limits on such retaliation (both in terms of which issues are subject to dispute settlement and the constraints on retaliation within the dispute settlement system) would be different from the limits in the first withdrawal agreement. It should be noted that in the first withdrawal agreement, UK retaliation against EU breaches was also possible within the dispute settlement system; one might expect that the UK would argue that it should similarly have reciprocal powers to retaliate in the future relationship treaties.

Security cooperation

In the proposal, the security cooperation is not linked to the LPF or fisheries. But instead it would be made dependent not only on UK adherence to the ECHR, but also the Human Rights Act (HRA), along with the unilateral adequacy decision on data protection - expressly referring to possible CJEU challenges (see the challenges to adequacy decisions relating to the US, discussed here). The ECHR and data protection points reflect para 81 of the political declaration, which referred to the ECHR ‘underpinning’ the relationship; the HRA point goes beyond it. Also, there would be fair trial and double jeopardy standards.

The Commission position here reflects the issues that would be litigated anyway about data protection and human rights standards in the UK. They are already litigated as regards non-EU countries and other Member States.

For police cooperation, the proposal refers to passenger name records, DNA/fingerprint/vehicle info, and exchange of information in individual cases. There is no mention of the Schengen Information System (which the UK currently applies as regards criminal law data) and the exchange of information in individual cases can't simply copy it. As regards PNR, the Commission refers to a CJEU case discussed here, which sets out limits on what the EU can exchange with non-EU countries to comply with data protection standards. On PNR and DNA data et al, the proposal reflects the political declaration. On individual exchanges of information instead of the Schengen Information System, the proposal is explicit on the issue whereas the political declaration fudged it (because the two sides did not agree).

On criminal justice cooperation, there is a reference to fast track extradition. Note that the EU, Norway and Iceland have agreed an extradition treaty which is very similar to the European Arrest Warrant applied between EU countries, but with certain exceptions.  Also it refers to exchanging evidence and criminal records in a similar way to existing EU laws, which would limit the impact of the UK leaving the EU on these issues. Note that this would probably go further than the EU has gone with other non-EU countries.

Foreign policy

In this area, the Commission proposes "alignment" on sanctions (the only explicit use of the word in its proposal). There would be case by case involvement in defence missions or defence industry projects (reflecting the wording of the political declaration, which makes clear that the UK would not be tied to EU defence cooperation against its will), and limited access to Galileo.

Governance and dispute settlement

Finally, the future relationship treaties would have a joint committee to oversee and implement them (which is standard in international treaties). To settle disputes, there would be consultation then binding arbitration. The CJEU would be involved if an issue concerns the interpretation of EU law (as explicitly agreed in the political declaration). There is NO reference to CJEU involvement otherwise (note that the political declaration explicitly ruled that out). The mechanics of dispute settlement are not spelled out in detail; it is possible that they might be based on the provisions in the withdrawal agreement (see my annotation and analysis of them here).

As discussed in the LPF section above, it is possible that some parts of the agreement might not be subject to dispute settlement at all, in which case there is no issue of CJEU involvement or any other remedies issue (unless the agreement allows for remedies to be applied without such remedies being subject to dispute settlement). So the CJEU would only have jurisdiction over the UK in the future relationship treaty where the agreement a) refers to EU law AND b) provides for dispute settlement. Again: key parts of the level playing field in the first withdrawal agreement met condition a) but NOT b). The details of the future treaty therefore will be crucial.

Barnard & Peers: chapter 26

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