Brexit Committee sets challenging ‘tests’ for future UK-EU relationship

SUMMARY:

The Committee for Exiting the EU has laid also said that EFTA/EEA membership should remain an option, in case an agreement isn’t reached.

The British government’s Committee for Exiting the EU has laid out a number of challenging ‘tests’ that should be met before a meaningful vote is brought before parliament on the UK’s future trading relationship with the European Union post-Brexit.

The UK is set to leave the EU on 29 March 2019 and negotiations are currently underway for what a new relationship may look like after 46 years of membership with the trading bloc.

We at diginomica/government have been monitoring the situation closely, pouring over government white papers, speaking to civil servants and politicians about the potential impact, as well as seeking advice and insight from business leaders about the UK’s future in a post-Brexit world.

What has become clear is that there is a fundamental role that technology and data will play in ensuring that Brexit is a success. This is a theme that has run throughout the negotiation period, since the result of the referendum almost two years ago.

By way of an update on progress, Prime Minister Theresa May made a breakthrough in recent weeks, after the the terms of the ‘transition period’ were agreed with the EU, which will allow the UK to strike new trade deals, but keep the current arrangements with the trading bloc ongoing for a 21 month period to allow both sides some extra time to prepare.

The much debated ‘EU divorce bill’ has been decided, but the future trading relationship with the EU has yet to be agreed. A final deal will be put before parliament later this year, most likely in October.

The Committee has said that the government should not write off retaining membership of EFTA/EEA (the former includes countries such as Norway and Switzerland, the latter being the single market), as these provide an off-the-shelf alternative to a bespoke deal and would ensure the continued free trade of services for the UK with the EU, which is important for digital businesses. British negotiators have said they are not considering this, as it would mean being subject to EU law and having to make financial contributions, without any say over the direction of the EU.

However, a ‘Canada-plus’ agreement, which has been pushed as the objective of the government, has “serious challenges” according to the Committee, as such an FTA excludes access to those all important services.

The Chair of the Exiting the EU Committee, Hilary Benn MP, said:

Having listened to the evidence, we today offer a series of tests against which any deal reached must be judged. I hope these will assist Parliament when it comes to its meaningful vote at the end of the Article 50 negotiations.

Our tests set a high bar but they are based on the Prime Minister’s vision for our future outside the EU and the statement by the Secretary of State for Exiting the European Union, David Davis MP, that any new deal would be at least as good as what we have now. It is vital that UK businesses are able to continue to trade freely and sell services into our largest market after we leave, without additional costs or burdens or a hard border in Northern Ireland, and that we maintain close co-operation on defence, security, data and information sharing and consumer safety.

And should negotiations on a ‘deep and special partnership’ not prove successful, we consider that EFTA/EEA membership remains an alternative which would have the advantage of continuity of access for UK services and could also be negotiated relatively quickly.

The tests

The tests that the Committee has put forward are challenging, as they essentially require a status-quo for the UK, whilst it also taking back control of its borders and laws (red lines for the UK government). Such a deal has never been struck between the EU and a third country, meaning this is uncharted territory.

The Committee also notes that countries with an existing agreement will be watching negotiations closely, as they will be wanting to ensure that the UK isn’t being given preferential treatment.

However, the following tests (I’ve just selected the most significant ones out of a long list) should be applied to any deal brought before parliament in October for the meaningful vote by MPs, according to the Committee:

  • The border between Northern Ireland and the Republic of Ireland must remain open with no physical infrastructure or any related checks and controls, as agreed in the Phase 1 Withdrawal Agreement.
  • Crime and terrorism: arrangements must replicate current operational and practical cross-border cooperation; particularly continued involvement with Europol and the European Arrest Warrant and participation in the EU’s information-sharing systems including SIS II.
  • In respect of trade in goods, there must be no tariffs on trade between the UK and the EU 27.
  • Trade in goods must continue to be conducted with no additional border or rules of origin checks that would delay the delivery of perishable or time-sensitive deliveries or impede the operation of cross-border supply chains.
  • There must be no additional costs to businesses that trade in goods or services.
  • UK providers of financial and broadcasting services must be able to continue to sell their products into EU markets as at present.
  • UK providers of financial and other services should be able to retain automatically, or with minimal additional administration, their rights of establishment in the EU, and vice versa, where possible on the basis of mutual recognition of regulatory standard.
  • There must be no impediments to the free flow of data between the UK and the EU.
  • Any new immigration arrangements set up between the UK and the EU must not act as an impediment to the movement of workers providing services across borders or to the recognition of their qualifications and their right to practise.
  • The UK must seek to maintain convergence with EU regulations in all relevant areas in order to maximise access to European markets.
  • The UK’s continued participation in the Horizon 2020 programme, the Erasmus+ scheme, the Galileo project and in other space and research programmes in order to support the work of our world-class academic institutions and the importance of cultural and educational exchange between the UK and the EU 27.

My take

Doubts have been cast on whether an agreement can actually be achieved by October, when the Prime Minister hopes to bring the deal before parliament for a vote. If it is, then meeting these tests will be an even more significant challenge, as it’s likely to be seen as the UK cherry picking. That being said, the Committee notes that the UK is an incredibly important market to the EU and that it will likely want to reach an agreement too. If Theresa May and her team of negotiators manage it, it will be one of the greatest trade agreements ever achieved. If they don’t, the future prosperity of the UK is at risk.

Image credit - Via pixabay