UK Withdrawal Agreement Concluded At Negotiators’ Level

What is the Withdrawal Agreement

The Withdrawal Agreement establishes the terms of the UK’s withdrawal from the EU. It aims to ensure the UK’s withdrawal from the will take place ‘in an orderly manner’, and seeks to ‘offer legal certainty once the Treaties and EU law will cease to apply to the UK’. It sets out provisions on how the agreement should be understood and applied, citizens’ rights, separation issues, the transition period, the financial settlement, the overall governance structure for the agreement a legally operational backstop to ensure that there will be no hard border between Ireland and Northern Ireland’, and special protocols on the UK Sovereign Base Areas (SBA) in Cyprus, and the specific situation of Gibraltar.

The Withdrawal Agreement does not deal with the future relationship between the EU and the UK. This will be negotiated after the UK has formally left the EU. The broad outline of the basis for future relations is however set out in a separate accompanying Political Declaration. Currently only a short outline of this Political Declaration has been agreed, with ongoing work aiming to have more fully elaborated this text by the end of November 2018. Whereas the Withdrawal Agreement is legally binding the Political Declaration is not legally binding but rather includes best endeavour commitments.

Extracted form: EC, ‘Brexit Negotiations: What is in the Withdrawal Agreement’, Questions and Answers, Brussels, 14 November 2018
http://europa.eu/rapid/press-release_MEMO-18-6422_en.htm

Scope of the Outline Political Declaration To Date

To date the outline Political Declaration on future EU/UK relations covers the following areas:

·         Part I – Initial Provisions:
covering the basic principles and values on which future cooperation is to be based.

·         Part II – Economic Partnership:
covering trade in goods, services and investment, financial services, digital services, intellectual property and public procurement, transport, energy , fishing opportunities, global cooperation and ensuring a level playing field for open and fair competition.

·         Part III Security Partnership:
covering law enforcement and judicial cooperation in criminal matters, foreign policy, security and defence, thematic cooperation (e.g. on cyber-crime or migration), treatment of classified and sensitive non-classified information.

·         Part IV Institutional Arrangements:
covering  the overarching institutional framework and governance

·         Part V Forward Process:
covering commitments in loving ahead with substantive negotiations covered by the Political Declaration.

The areas of greatest interest to ACP exporters in regard to the current developments around the Withdrawal Agreement are fourfold:

1) The November 2018 version of the Withdrawal Agreement concluded at negotiators’ level reiterates the provisions of Article 124 of the 28^th February draft Withdrawal Agreement text in Article 129. This article states during the transition period in EU27/UK trade relations ‘the United Kingdom shall be bound by the obligations stemming from the international agreements concluded by the Union’.

This means the market access enjoyed to the UK market under EU EPAs with ACP countries will continue to apply throughout the transition period, which is until the currently scheduled end date of 1^st January 2021. This also implies all other EU 3^rd country trade agreements will continue to apply to the UK market. This includes those trade agreements providing access for $ banana exporters under bilaterally negotiated TRQs. This side-steps or rather defers the issue of the apportionment of bilaterally negotiated EU TRQs between the EU27 and UK markets.

As in the February draft the November 2018 version of the Withdrawal Agreement includes a footnote which states ‘The Union will notify the other parties to these agreements that during the transition period the United Kingdom is to be treated as a Member State for the purposes of these agreements’. This provision removes the need for ACP EPA signatories to rapidly refit their existing EU EPAs into ‘UK-Only’ bilateral trade agreements and provides more time for ACP negotiators to consider just how any bilateral ‘UK-Only’ trade agreements will need to be structured to meet the long term needs of ACP economies.

However, the current withdrawal agreement also includes an Irish border ‘backstop’ arrangement which would keep the UK in a customs union until such time as a longer term alternative trade arrangement was in place. This ‘backstop’ which would apply to the whole of the UK, would potentially prolong the period during which the provisions of article 129 would apply in regard to the UK’s obligations under international agreements concluded by the EU.

2) The overall Withdrawal Agreement by providing for a managed transition based, on the UK’s de facto continued membership of a customs union with the EU until an alternative long term trade arrangement is in place means there is likely to be little prospect of disruption of EU/UK supply chains and little prospect of disruption of ACP triangular supply chains serving the UK market via a port of landing in an EU27 member states (normally Holland, Belgium or France) and ACP supply chains which serve markets in the Republic of Ireland via the UK ‘land bridge’.

3) A further question of concern to ACP agro-food producers (not just exporters) is the nature of the future long term EU/UK trade relationship. Currently both parties are focussed on securing an arrangement which would allow the continued free flow of goods to the extent this is possible while respecting each parties’ legal order.

Given the emphasis within EU27 government that a country which is not a member of the EU, the customs union and the single market cannot expect to enjoy the same rights without the same obligations as existing EU members, it remains to be seen just how limiting each parties respective ‘legal orders’ will be when it comes to maintaining the smooth flow of trade between the EU27 and the UK.

Already it should be noted a text is included in the Political Declaration that acknowledges the ‘extent of the United Kingdom’s commitments on customs and regulatory cooperation’, will need to be ‘taken into account in the application of checks and controls at the border’.

4) However a more fundamental concern remains for ACP agro-food producers and exporters, namely whether Prime Minister May can secure Parliamentary ratification of the Withdrawal Agreement. Given the balance of political forces in the UK Parliament and the discontent within the ruling Conservative Party around the Brexit issues (witness the resignation of the Minister responsible for bringing back the new agreement, given his personal objections to the deal) this is far from certain.

If the UK Parliament rejects the negotiators’ draft of the Withdrawal Agreement the UK government would have 21 days to put forward a new plan.  If this were also rejected the BBC’s Political Research Unit  has identified 4 possible outcomes:

a) the UK leaves the EU without a Withdrawal Agreement and with no transition period
being set in place;

b) the UK government seeks to renegotiate the existing agreement;

c) a general election is called;

d) a second referendum on EU membership is held.

This would greatly complicate matters in terms of securing the necessary approval of the Withdrawal Agreement by EU member states governments and Parliaments, who also need to ratify the Withdrawal Agreement before it can legally enter into force. In this context EU member states governments have already begun to express some concerns over the text of the Withdrawal Agreement.  Some EU governments believe the UK is getting the benefits of the EU customs union and single market without respecting the four freedoms of the EU single market which are seen as indivisible.

If the Withdrawal Agreement is rejected and is not ratified then the prospect of a ‘no-deal’ Brexit will be back on the table. This would mean the provisions of the Withdrawal Agreement which roll-over existing UK market access obligations under EU trade agreements (Article 129) throughout the whole of the transition period would not come into force.

In addition a ‘no-deal’ Brexit would be likely to disrupt the functioning of EU/UK supply chains, with this carrying serious consequences for ACP exporters who serve UK market via ports of landing in EU27 member states and markets in the Republic of Ireland via the UK.

Against this background there remains considerable uncertainty as to the final outcome of the Brexit process and the implications this will carry for ACP exporters. In this context ACP exporters should continue to make preparations for a ’no-deal’ Brexit as a matter urgency, until such time as the ratification of the Withdrawal Agreement in all quarters is completed and the transitional period arrangements are on a legally sound footing.