Sherbhert will from time to time make observations on the progress of settling the EU/UK future relationship.
INTRODUCTION
The UK, having left the EU, is now embarking on settlement of the detail of both a trading relationship and cooperation in a number of other fields, such as security. The Political Declaration (PD) adopted with the Withdrawal Agreement sets out a framework for this future relationship.
The PD is long on common values and broad language like the following to describe the envisaged relationship:
“…ambitious, broad, deep and flexible partnership across trade and economic cooperation with a comprehensive and balanced Free Trade Agreement at its core and…. (various other areas described)”.
Ideas of partnership and balance imply a level of equality and goodwill. But the friendly and fluffy language peppering the PD is capable of different interpretations when applied to the detailed subject matter to be addressed in the new agreement.
The PD will no doubt be invoked, selectively, by both the EU and the UK to suit their respective standpoints. When considering commentary and coverage of this process of negotiation throughout 2020 and the parties’ positions, it will be right for the public and commentators to have regard to the PD and its wording, but it will be necessary to be mindful of the risk of abuse of the contents of the PD by any party pushing a certain line of argument.
OPENING STANCES
The EU and the UK have published officially and unofficially positions on a variety of topics. Take timing for example: the PD makes very clear on its face that “it is the clear intent of the parties to develop in good faith agreements giving effect to this relationship…. such that they can come into force by the end of 2020”. So, both sides contemplated a full settlement by the end of this year.
The UK has been clear that the deadline agreed should be adhered to. Why has that often been portrayed as unwise given it is what was agreed? The EU line is that meeting such a deadline is so difficult that it can only be done if the UK submits to the EU’s requirements to meet the “level playing field” principles in the PD by agreeing to follow EU Rules and Regulations from time to time in the relevant areas. That new condition by the EU to its timing commitment might by some be regarded as a change to the PD itself. This is not to criticise the EU but to illustrate how distortions are to be anticipated.
To enlarge on that theme: reports of the EU stance say that Michel Barnier has already alleged that in the PD the UK committed to follow such EU Rules and Regulations. The “level playing field” paragraphs certainly:
“envisage the relationship encompassing robust commitments to ensure a level playing field…should prevent distortions of trade and unfair competition advantages. To that end the parties should uphold the common high standards applicable in the EU and the UK…”. –
High standards does not in any shape or form mean all the Rules and Regulations of the EU on the relevant subjects. This is a case of calling the PD in aid to one’s advantage but deliberately exaggerating its content to suit a line. In the same breath Michel Barnier expresses how this demonstrates “good faith” by the EU! Boris Johnson on the other hand has at least implied that, although the UK operates to the highest standards, no actual commitments to high standards are required- clearly an overstatement given the text of the PD.
THE LEVEL PLAYING FIELD FOR OPEN AND FAIR COMPETITION
The EU expresses a concern that the UK might adopt lax regulation in areas like competition, state aid, employment and social, environment and climate change and some tax matters, to give itself a competitive advantage. This has not been the case in the past. The EU way to resolve this is simple-impose a blanket obligation to obey EU Rules and Regulations in such areas, as described in the previous section. In several of those areas the UK has more stringent rules today than all or most countries in the EU, Boris Johnson observed: for example in its carbon reduction approach, paternity and maternity leave, and the fact that the volume of allegations of subsidies involving state aid abuse against the UK are very few when compared to the large numbers involving France and Germany.
Can the differences of opinion in the opening stances described above be resolved by a compromise embodying the principles of high standards and preventing distortions of trade and unfair competition and some independent dispute settlement procedures? Surely that is not hard if the goodwill and fine words of the PD such as “partnership” and “balanced” mean anything at all.
WHO DECIDES?
Independent dispute resolution mechanisms will be essential for any agreement. Indeed, the PD deals with principles round this important issue. It makes clear that on matters of interpretation of EU law, the European Courts should decide. But not anything else. This would mean that, if the UK agreed to follow any EU rules and regulations, the European Court would be the ultimate interpreter. How can a party’s own courts be independent in a dispute with another party? Is not such an extreme position untenable? The UK rejects any idea that the European Courts should have any jurisdiction over UK laws. The PD seems to require independent arbitration for any dispute that may arise under the new arrangements (except a matter of EU Law interpretation}. Should this difference of approach not be easy to sort out? Arbitration arrangements are regularly adopted in all sorts of international agreements.
STYLE OF NEGOTIATION – INVOKING MEDIA
The EU style of negotiation, as demonstrated over the last 3 years and by the opening stances described above, is to set out an extreme starting position, and then, when giving minor ground to something less extreme, seeking to suggest this demonstrates good faith and reasonableness: it rarely does, given the starting point. This is not an unusual approach to negotiation from powerful parties. It is a bit Trump like in style.
The UK negotiators in the withdrawal stage did not display an established strategic style and their mistake in the past with regard to the withdrawal was to accept so many early extreme demands without getting concessions in return. Such weakness was fully exploited, resulting in “salami slicing” by the EU. The biggest salami slicing by the EU was its insistence from the start to separate withdrawal from the future relationship – the salami was cut in half from day one. Will this prevail again? It should not, as the UK is now not behaving as a supplicant. Indeed, the PD contemplates a balanced partnership as shown by the Introduction above!
In the last round too, the UK position was regularly undermined by people within the UK. Hopefully that will not reoccur as we are now out of the EU. But, if certain media and interest groups talk up the EU position and talk down the UK position, this will certainly encourage the EU representatives to stoke that fire to cause damaging pressure on the Government’s stance, feeding lines to the media and so to weaken the UK. Of course, the PD envisages the opposite behaviour.
The UK position set out by Boris Johnson envisages a Canada style agreement on trade, also encompassing services appropriately. Provided the compromise on level playing field is reached, should not this sort of agreement be possible, given the words of the PD, that it is an agreement the EU has precedent for, and the fact that the UK already follows agreed high standards? It is to be recalled that the EU itself used to say that a Canada style agreement would be fine. A Special circumstance to be navigated is however the separate individual demands of countries within the EU; Ireland aside, there are for example the fishing demands to maintain existing quotas in UK waters which France, Belgium and the Netherlands are clearly promoting, and the Gibraltar debate where Spain sees opportunity. It is for Brussels to handle these, but the UK will have to account for them too.
FINALLY
The Introduction section of the PD ends:
“ABOVE ALL (Sherbhert emphasis) it should be a relationship that will work in the interests of citizens of the Union (EU) and the United Kingdom, now and in the future”.
What those interests are is a very subjective question. Therefore, the invocation of this “above all” principle should just about justify any position either side may take in negotiation, on their way to a deep partnership with a balanced agreement.
