180.Article 50(2) TEU states: “In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.” The European Council has consistently stated that the provisions of Article 50 do not permit formal negotiations on the future relationship to commence until the Member State’s withdrawal has taken effect.
181.A seven-page ‘Outline of the Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom’ was published alongside the draft Withdrawal Agreement on 14 November 2018.
182.Following further intense negotiation, on 22 November a full 26-page draft ‘Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom’ was published. This expanded the outline Declaration, as well as adding new material. The Political Declaration was approved by the meeting of the European Council (Art. 50) on 25 November, and the Government presented the final text to Parliament on 26 November.
183.This chapter analyses in turn each section of the Political Declaration, highlighting key issues, with particular reference to the findings of the reports published by the Committee since the referendum.
184.The introduction to the Political Declaration sets out overarching principles and shared “values and interests”, deriving from the EU and the United Kingdom’s “common European heritage”, which should underpin the future relationship. It expresses a shared belief in “free and fair trade, defending individual rights and the rule of law, protecting workers, consumers and the environment, and standing together against threats to rights and values from without or within”. It also acknowledges the “unique context” of the UK’s status as a former Member State.
185.The Declaration “establishes the parameters of an ambitious, broad, deep and flexible partnership “, working in the interests of EU and UK citizens, and based on “a balance of rights and obligations, taking into account the principles of each party”. On the EU side, these include “the integrity of the Single Market and the Customs Union and the indivisibility of the four freedoms”, and that the future relationship “cannot amount to the rights and obligations of membership”. On the UK side, these include the sovereignty of the UK, the protection of its internal market, and respecting the result of the referendum, with particular reference to “the development of its independent trade policy and the ending of free movement of people”.
186.In effect, therefore, paragraph 4 of the Declaration is a restatement of the key ‘red lines’ of the two sides to the negotiation, which we summarised in our report on UK-EU relations after Brexit. In that report we commented that the two sides’ emphasis on ‘red lines’ had risked closing off rather than opening up the options for establishing a fruitful and lasting relationship. We noted that the benefits that the EU and the UK sought from their future relationship would “come at a cost, and may entail trade-offs between economic and political considerations”. In particular, we argued that from the UK’s perspective, “the greater the benefits sought, for instance in respect of trade in services, the greater the compromises that will be needed”.
187.The Political Declaration also acknowledges that the UK-EU relationship may evolve over time, and therefore “may encompass areas of cooperation” beyond those described in the document itself.
188.We welcome the Political Declaration’s acknowledgement of the shared heritage, values and interests of the UK and EU, and its recognition of the unique context of their future relationship given the UK’s post-withdrawal status as a former Member State. It is therefore important to acknowledge that the future relationship may evolve over time.
189.The Political Declaration notes the need to strike a balance between the rights and obligations of both sides. In practice, however, it restates their respective red lines at the outset. This demonstrates just how difficult it has been for both sides to compromise: the scope and ambition of the Declaration must be judged in that light.
190.Paragraphs 6 and 7 develop the theme of shared values, focusing on the commitment of both sides to “human rights and fundamental freedoms, democratic principles, the rule of law and support for non-proliferation”. The EU will remain bound by the Charter of Fundamental Rights of the European Union (which reaffirms rights arising out of the European Convention on Human Rights), but while the outline Political Declaration referred to the UK’s commitment to the ECHR, the final text replaces this with a commitment to “respect the framework” of the ECHR.
191.Both sides commit to maintaining personal data protection. The Commission will start the process of assessing the UK’s data protection regime as soon as possible after the withdrawal date, with a view to adopting an ‘adequacy decision’ by the end of the transition period on 31 December 2020, allowing data flows to proceed without interruption. In return the UK commits within the same timeframe to take steps to ensure uninterrupted transfers of personal data to the EU. There is also a general, but undefined, commitment to “appropriate cooperation between regulators”.
192.The Declaration then gives a generic undertaking to establish “principles, terms and conditions” for UK participation in EU programmes, including those in “areas such as science and innovation, youth, culture and education, overseas development and external action, defence capabilities, civil protection and space”. Though the programmes themselves are not specified, this commitment could be the basis for negotiating continued UK participation in several EU programmes, including but not limited to:
193.The precise means by which the UK will participate in, and have influence over the management of, these programmes remains to be clarified. But among the key principles for UK participation will be a fair and appropriate financial contribution, sound financial management, fair treatment of participants, and “management and consultation appropriate to the nature and cooperation between the Parties”.
194.The parties will also “explore” UK participation in the European Research Infrastructure Consortiums (ERICs), subject to relevant conditions and the level of UK participation in science and innovation programmes. There is a more detailed commitment to a future PEACE PLUS programme in Northern Ireland, maintaining current funding proportions.
195.As well as contemplating UK participation in specific programmes, the Declaration, under the heading of ‘Dialogues’, states that the parties should look for opportunities to cooperate in areas such as culture, education, science and innovation. It acknowledges the importance of mobility and temporary movements of objects and equipment in these areas—though it is unclear whether the reference to ‘mobility’ in this context is intended to allow for measures to facilitate short-term movement of workers in specific sectors, such as the cultural sector, which are acutely reliant on such movement. The parties will also explore ongoing cooperation between culture and education related groups.
196.While no specific commitment is made, the Declaration notes the UK’s intention to explore options for a future relationship with the European Investment Bank.
197.We welcome the reference in paragraphs 6–7 of the Political Declaration to shared values and the maintenance of human rights and fundamental freedoms. We call on the Government to explain the significance, if any, of the reference to the UK’s commitment to the ‘framework’ of the ECHR, rather than to the ECHR itself.
198.We have reported on the critical importance of maintaining uninterrupted data flows during and after Brexit. We therefore welcome the provisions on data protection, which offer a pragmatic way forward.
199.We also welcome the prospect of UK participation in EU programmes in areas such as science and innovation, youth, culture and education, overseas development and external action, defence capabilities, civil protection and space, and the possibility of UK participation in European Research Infrastructure Consortiums. We note, however, that such participation will come at a cost, which is yet to be determined, and that the Declaration sheds little light on how UK participation will be achieved, and what influence it will have over these programmes.
201.We note the possibility of continuing cooperation in areas such as culture, education, science and innovation. We call on the Government to explain the significance of the reference in paragraph 14 of the Declaration to “the importance of mobility” in enabling such cooperation.
202.We note that most of the commitments in Part I of the Declaration remain undefined. Stakeholders in the various sectors affected urgently need clarification of how future UK-EU cooperation will work in practice, in particular in terms of UK participation in EU programmes.
203.In view of the importance of the trading relationship between the UK and EU, the parties agree to develop “an ambitious, wide-ranging and balanced economic partnership”, encompassing a free trade area “as well as wider sectoral cooperation where it is in the mutual interest of both Parties”. It should facilitate trade and investment to the extent possible while respecting both sides’ principles and obligations. The Declaration also reiterates the determination of both parties to replace the backstop (discussed in Chapter 4) with a “subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing”.
204.The Declaration envisages “a trading relationship on goods that is as close as possible”, while also acknowledging that “moving goods across borders can pose risks to the integrity and proper functioning of these markets, which are managed through customs procedures and checks”. This appears to rule out “frictionless trade”, based on a common rulebook and a facilitated customs arrangement, as envisaged in the Government’s July 2018 White Paper on The future relationship between the United Kingdom and the European Union.
205.Instead, the aim appears to be to facilitate the movement of goods by reaching “comprehensive arrangements that will create a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition”.
206.The Declaration envisages “no tariffs, fees, charges or quantitative restrictions across all sectors”; these will sit alongside “ambitious customs arrangements” that “build and improve on the “single customs territory” provided for in the Withdrawal Agreement which obviates the need for checks on rules of origin”. The syntax means that it is unclear whether the reference to rules of origin merely describes the Withdrawal Agreement provisions, or whether the parties will in fact seek to negotiate permanent arrangements with similar effects (notwithstanding the fact that there is no precedent for waiving rules of origin outside a customs union). Nor is there any reference to a common external tariff, which would inhibit the UK’s ability to develop an independent trade policy.
207.The Declaration emphasises the principle of regulatory autonomy, but notes that the UK will consider aligning with EU rules in relevant areas, with particular reference to:
208.The parties undertake to explore the possibility of UK “cooperation” with EU Agencies, including (but not explicitly limited to) the European Medicines Agency, European Chemicals Agency and European Aviation Safety Agency. The extent and means of such cooperation are not explained.
209.In an apparent nod to the so-called ‘maximum facilitation’ model advocated by some UK ministers, the Declaration refers to “making use of all available facilitative arrangements and technologies”, including mutual recognition of trusted traders’ programmes, administrative cooperation and mutual assistance in the recovery of claims for taxes and duties, and exchange of information to combat customs fraud. It also recalls the December 2017 Joint Report in stating that these arrangements will be considered in developing a permanent solution to avoiding a hard border on the island of Ireland (see paragraph 10).
210.Paragraph 28 of the Declaration adds the general caveat that all future customs arrangements are dependent upon “the extent of the United Kingdom’s commitments on customs and regulatory cooperation”. It follows that there is “a spectrum of different outcomes for administrative purposes as well as checks and controls”. While the parties wish to be “as ambitious as possible”, any agreements will have to respect the “integrity of their respective markets and legal orders”.
211.The commitment to tariff-free trade in goods is welcome. Beyond this, the text is careful not to commit to or rule out particular models for cooperation on trade in goods. It consistently reiterates the EU’s principles, with the implication being that some new friction in trade in goods is inevitable. Nevertheless, the extent and nature of such friction is not defined, and the document specifically envisages a “spectrum of outcomes” depending on how closely the UK aligns to the EU on customs and regulation. At the same time, it seeks to reflect the UK’s concerns by omitting reference to a common external tariff, and by holding out the possibility, without commitment, of the use of facilitative arrangements and technologies.
213.The Declaration envisages “ambitious, comprehensive and balanced arrangements on trade in services and investment in services and non-services sectors, respecting each party’s right to regulate”. It aims for substantial sectoral coverage of professional and business services, telecommunications services, courier and postal services, distribution services, environmental services, financial services, transport services and other services of mutual interest. There are no explicit references to other services sectors that are important to the UK economy and citizens, including the health, creative and tourism sectors.
214.The Declaration calls for provisions on market access and national treatment under host state rules to ensure services providers and investors are treated in a non-discriminatory manner. In our 2017 report on Brexit: trade in non-financial services we expressed concern that the Government had “under-estimated the reliance of the services sector on the free movement of persons”. Paragraph 32 of the Declaration states that “the temporary entry and stay of natural persons for business purposes” should be permitted in defined areas, suggesting that there may be scope for relaxing rules on the movement of people to facilitate the delivery of services.
215.While regulatory autonomy is to be retained, the Declaration states that regulatory approaches should be “compatible to the extent possible”. In particular, there should be horizontal provisions on licensing procedures, and specific regulatory provisions in sectors of mutual interest such as telecommunications, financial services, delivery services and international maritime transport. A framework for voluntary regulatory cooperation, including exchange of information and sharing of best practice, should be established. Appropriate arrangements should be developed on professional qualifications which are necessary to the pursuit of regulated professions, “where in the Parties’ mutual interest”.
216.We welcome the intention to conclude “ambitious, comprehensive and balanced” arrangements on trade in services across a range of sectors. We note, however, the lack of detail in the section on services and investment, and also that some key service sectors are not mentioned in the Declaration. We call on the Government to explain what agreement, if any, it expects to reach in respect of the health, creative and tourism sectors.
217.We welcome the commitment to ensure services providers and investors are treated in a non-discriminatory manner, and to allow for the temporary entry and stay of natural persons for business purposes. We invite the Government to confirm whether or not the latter provision envisages preferential arrangements for UK and EU citizens moving between each other’s territories to provide services.
219.The statement that “regulatory approaches should be compatible to the extent possible”, and the mechanics of the proposed voluntary framework on regulatory cooperation, also require further clarification.
220.In summary, while the provisions on services and investment are helpful as far as they go, they will not provide the current level of access to the EU Single Market enjoyed by the UK’s services sectors. Further details are urgently required to provide service providers and customers with assurance and certainty.
221.The Declaration offers a generalised commitment to preserving “financial stability, investor and consumer protection and fair competition”, but qualifies this by acknowledging the UK’s and the EU’s regulatory and decision-making autonomy. It also records an agreement “to engage in close cooperation on regulatory and supervisory matters in international bodies”. We have previously noted that it is “crucial that [international] standards remain the base of the UK’s domestic regime”.
222.The Declaration makes clear that the future relationship will be on the basis of “equivalence frameworks”, and states that both sides will endeavour to conclude these assessments before the end of June 2020. Respective equivalence frameworks will be kept under review, and there is no commitment to a model of economic and regulatory alignment with the EU in financial services as proposed by the Government in its future relationship White Paper. This bears out a warning we issued as long ago as December 2016: “While the UK might be deemed equivalent at the point of withdrawal, there is no guarantee that it will remain so.”
223.Offsetting the prospect of regulatory divergence, the Declaration stresses the mutual importance of “close and structured” political and technical regulatory and supervisory cooperation, including transparency and appropriate consultation on equivalence decisions, information exchange and consultation on regulatory initiatives.
224.We acknowledge the intention of both sides to complete the equivalence assessment process in respect of financial services by June 2020. We also welcome the commitment to “close and structured” regulatory and supervisory cooperation, and to close cooperation in international bodies. But the agreement to keep respective equivalence frameworks under review falls short of the new economic and regulatory arrangement in financial services proposed by the UK. Nor does the granting of equivalence in June 2020 provide any long-term guarantee—equivalence can be reviewed and withdrawn at any point. As we concluded in December 2016, any agreement on financial services based on equivalence will be an “inadequate substitute” for the passporting regime that the UK participates in as an EU Member State.
225.The Declaration calls for the establishment of “provisions to facilitate electronic commerce, address unjustified barriers to trade by electronic means, and ensure an open, secure and trustworthy online environment for businesses and consumers”. These provisions should also facilitate cross-border data flows, though in this respect they should be read alongside the provisions on personal data protection. Paragraph 41 proposes sectoral agreements to provide for fair and equal access for service providers to public telecommunications networks and services. There is, however, no commitment to the maintenance of free data flows, or to the continued abolition of data roaming charges.
226.Given its growing importance to the UK’s economy, the specific emphasis on digital services in the Political Declaration is welcome. Nevertheless, the Declaration’s emphasis on the facilitation of data flows, rather than on the retention of free data flows, appears to mark a lowering of ambition when compared with the ongoing development of the EU’s Digital Single Market.
228.Paragraph 43 of the Declaration calls for provisions to enable free movement of capital and payments related to transactions that fall within the scope of the economic partnership.
229.Paragraph 44 states that provision should be made for the “protection and enforcement of intellectual property rights”, going beyond international standards. Paragraph 45 builds on the Withdrawal Agreement in requiring that any such provisions should include appropriate protection for geographical indicators. The parties will retain their own regimes for the exhaustion of intellectual property rights, and the Declaration calls for a mechanism for cooperation and exchange of information on intellectual property issues.
230.Paragraphs 48–49 of the Declaration call for mutual access to public procurement markets, going beyond WTO provisions, alongside a commitment to upholding mutual standards based on those of the WTO Government Procurement Agreement.
231.We welcome the provisions to enable free movement of capital and payments, on intellectual property (including geographical indicators) and on public procurement, as far as they go. Our Justice Sub-Committee is currently examining EU intellectual property law and the implications of Brexit on UK participation in the Unified Patent Court, and we will offer more detailed comment on this complex area in due course.
232.The section on mobility begins by recalling the UK’s red line, that the principle of free movement of persons between the EU and UK should no longer apply. That red line defines the parameters of what can be agreed, and the Declaration accordingly calls for:
There is no reference in this section of the Declaration to reciprocal healthcare, including the European Health Insurance Card (EHIC), as a means of facilitating mobility.
233.What do these provisions mean in practice? We have previously concluded that there might be “benefits to the UK in offering preferential treatment to EU nationals compared to non-EU nationals in the UK’s future immigration regime”. The Government has instead maintained its red line, and on 15 November the Prime Minister said: “The Declaration will end free movement once and for all. Instead we will have our own new, skills-based, immigration system—based not on the country people come from, but on what they can contribute to the UK.” The emphasis in the Declaration on “full reciprocity” means that the same applies in reverse: UK nationals will not receive any preferential treatment in the EU 27, as compared with other third country nationals. Set against this fundamental fact, the proposals outlined in the Declaration, such as visa-free travel for short visits, or measures to facilitate border crossings, are necessarily limited in scope and impact.
234.The Declaration also highlights the options for judicial cooperation in matrimonial, parental responsibility and other family law matters. It affirms both parties’ commitment to the effective application of existing international family law instruments to which they are parties.
235.In our 2017 report on Brexit: justice for families, individuals and businesses? we expressed concern that the Government had not taken account of the full implications of the impact of Brexit on family law, and warned that leaving the EU without an alternative system in place would have a “profound and damaging impact on the UK’s family justice system and those individuals seeking redress within it”. The lack of detail in the Declaration suggests that little consideration has yet been given to this complex area.
236.The provisions on mobility respect and reflect the UK’s decision that the principle of free movement of persons from the EU will no longer apply. The principle of full reciprocity means that UK nationals will therefore also cease to receive preferential treatment by the EU in the future. While the Political Declaration proposes some mitigations, they will not change this significant restriction upon the freedoms currently enjoyed by UK citizens.
237.We are concerned at the omission of any reference to reciprocal healthcare, including the European Health Insurance Card, as a means of facilitating mobility. We call on the Government to set out, as a matter of urgency, its plans for maintaining reciprocal healthcare arrangements in the context of the future relationship.
238.We are concerned that the Declaration contains so little detail on the impact of UK withdrawal on family law. We remind the Government of our earlier conclusion, that if the UK leaves the EU without alternative arrangements being in place, the UK’s family justice system, and the individuals seeking redress within it, could suffer profound damage.
239.The Declaration calls for a Comprehensive Air Transport Agreement covering “market access and investment, aviation safety and security, air traffic management, and provisions to ensure open and fair competition, including consumer protection requirements and social standards”. It also calls for further arrangements to ensure high standards of aviation safety. As set out above, UK membership of the European Aviation Safety Agency will also be considered. The Declaration does not, however, clarify if the proposed Agreement will aim for reciprocal liberalised market access, as proposed in the Government’s future relationship White Paper.
240.The Declaration also calls for “comparable market access for freight and passenger road transport operators, underpinned by consumer protection requirements and social standards for international road transport”. There is no reference to reciprocal market access, as advocated by the Government in its future relationship White Paper, nor to reciprocal cabotage rights.
241.The Declaration states that the parties should consider “complementary arrangements to address travel by private motorists”, though it is not clear if this will negate the need for UK drivers to carry International Driving Permits or insurance Green Cards when travelling in the EU.
242.The Declaration states that bilateral arrangements should be established to cover cross-border rail services between Belfast and Dublin (with Ireland) and through the Channel Tunnel (with France, Belgium and The Netherlands).
243.It also states that maritime transport passenger and cargo connectivity should be underpinned by the international legal framework, with appropriate arrangements on market access. Maritime safety and security cooperation should be facilitated, including exchange of information between the European Maritime Safety Agency and the UK Maritime and Coastguard Agency.
244.We welcome the commitment to cooperation in the aviation sector, and in particular the proposed Comprehensive Air Transport Agreement. We call on the Government to confirm whether or not the reference to market access in paragraph 60 of the Declaration is intended to include the fully liberalised market access currently enjoyed by UK and EU operators.
245.We also note the high-level commitments to cooperation in the road, rail and maritime sectors. More detail is needed, particularly with respect to road transport, where the Government needs to explain whether the reference to “comparable market access” achieves its aim of “reciprocal access”; whether, in the absence of any reference to reciprocal cabotage rights, new permitting and licencing requirements will be required for transport operators and professional drivers; and whether any “complementary arrangements” in relation to travel by private motorists will negate the need for UK motorists to carry International Driving Permits and insurance Green Cards when travelling in the EU.
246.In our 2017 report on Brexit: energy security we urged the Government to seek continuing participation of the EU’s Internal Energy Market. The Declaration falls short of this, but does call for cooperation to support the delivery of “cost efficient, clean and secure supplies of electricity and gas, based on competitive markets and non-discriminatory access to networks”. It also calls for a technical cooperation framework between electricity and gas networks operators and organisations in the planning and use of energy infrastructure connecting their systems. This should include mechanisms to ensure as far as possible security of supply and efficient trade over interconnectors.
247.The Declaration advocates a wide-ranging Nuclear Cooperation Agreement between EURATOM and the UK, to enable cooperation between them, including exchange of information, trade in nuclear materials and equipment, and the participation of the UK as a third country in EU systems for monitoring and exchanging information on levels of radioactivity in the environment. The UK’s intention to be associated with EURATOM research and training programmes (which include the ITER nuclear fusion research programme) is noted. The Declaration indicates that the EURATOM Supply Agency intends to reassess the authorisations and approvals for contracts for the supply of nuclear material between the EU and UK, and that there will be cooperation through the exchange of information on the supply of medical radioisotopes.
248.We regret that the Declaration does not hold out the possibility of continued UK participation in the Internal Energy Market, but at the same time we welcome the high-level commitment to cooperation in the supply of electricity and gas to ensure as far as possible security of supply and trade over interconnectors.
249.We welcome the commitment to a wide-ranging Nuclear Cooperation Agreement, including exchange of information, trade in nuclear materials and equipment, monitoring of levels of radioactivity, and exchange of information on medical radioisotopes. While the reference to the UK’s intention to be associated with the EURATOM research and training programmes is a positive step, we call on the Government to provide further clarification of its plans in this regard.
250.The Declaration notes that the UK will be an independent coastal state, while stating that the parties should cooperate bilaterally and internationally to ensure sustainable fishing and a healthy marine environment. While preserving regulatory autonomy, the parties should cooperate on conservation, management and regulation of fisheries in a non-discriminatory manner. The key provision, in light of current controversy, is paragraph 75, which, in the context of the overall economic partnership, calls for a new fisheries agreement, covering access to waters and quota shares. The parties will endeavour to conclude and ratify this agreement by 1 July 2020, in time for it to be used for determining fishing opportunities for the first year after the transition period.
251.An accompanying Declaration by the EU 27, attached to the Minutes of the 25 November European Council (Art. 50) meeting, states that the European Council will be particularly vigilant to protect fisheries enterprises and coastal communities when considering the future relationship: “A fisheries agreement is a matter of priority, and should build on, inter alia, existing reciprocal access and quota shares.” It appears therefore that the EU will insist on a fisheries agreement, providing access to the UK’s waters, as a precondition for agreement of a free trade agreement.
252.In our 2016 report on Brexit: fisheries we concluded that geographical proximity, the mobility of fish stocks, international law and the risk of over-exploitation, all necessitated cooperation with the EU and other neighbouring states in fisheries management. We also warned:
“There is a likelihood that the Government may come under pressure to balance the negotiations over a future fisheries relationship, including quota shares and access arrangements, against the negotiations over trade in fish products with the EU.”
That warning has been borne out by recent events.
253.The Political Declaration confirms that the UK will leave the Common Fisheries Policy and become an independent coastal state. Yet, as we warned in December 2016, the EU has also made clear that finalising a future fisheries agreement is a precondition for agreement of the overall economic partnership. While we reiterate our view that cooperation with the EU and other neighbouring states in fisheries management will be critical in the years to come, difficult negotiations lie ahead.
254.The Declaration stresses the importance of cooperation between the parties in international fora, “where it is in their mutual interest”. The specific areas identified are: climate change; sustainable development; cross-border pollution; public health and consumer protection; financial stability; and the fight against trade protectionism.
255.Paragraph 78 of the Declaration gives more specific detail on climate change, restating both parties’ commitment to international agreements, including those implementing the UN Framework Conventions on Climate Change, such as the Paris Agreement. A key tool in reducing carbon emissions is emissions trading, and paragraph 78 should thus be read alongside paragraph 72 (in the section on energy). This indicates that the parties will consider cooperation on carbon pricing by linking a UK national greenhouse gas emissions trading system with the EU Emissions Trading System.
256.We welcome the commitment to future UK-EU cooperation to address issues of shared economic, environmental and social interest. We particularly welcome the continued shared commitment to international agreements on climate change, where the UK has been a global leader, and where continuing cooperation with the EU will help to offset any potential loss of influence as a result of Brexit.
257.The Declaration states that the future relationship must ensure “open and fair competition”, including in relation to “State aid, competition, social and employment standards, environmental standards, climate change and relevant tax matters”. These provisions should “build on the level playing field measures in the Withdrawal Agreement”. They should be “commensurate with the overall economic relationship”, subject to “the scope and depth of the future relationship”. Standards should combine relevant EU and international standards, while providing mechanisms to ensure effective implementation, enforcement and dispute settlement.
258.We note that in its July 2018 future relationship White Paper, the Government itself committed to maintaining alignment, or made a commitment to non-regression in a number of these fields, save in relation to taxation matters.
259.The section on a level playing field for open and fair competition reflects the acute concern of the EU (and many of its Member States) that the UK may seek to undercut EU standards and competitiveness. This may help to explain the opaque language in paragraph 79, notably the reference to provisions that build on the Withdrawal Agreement, while being “commensurate with the overall economic relationship”. It will be difficult to translate such vague commitments into a binding agreement.
260.The Declaration envisages a “broad, comprehensive and balanced security partnership” that comprises law enforcement and judicial cooperation in criminal matters, foreign policy, security and defence, as well as thematic cooperation in areas of common interest.
261.Without setting out the precise depth and breadth of future arrangements between the UK and the EU in these areas, paragraph 82 states that the aim is for a comprehensive, close and reciprocal relationship, while acknowledging “the fact that the United Kingdom will be a non-Schengen third country that does not provide for the free movement of persons”. Paragraph 83 adds that “the closer and deeper the partnership the stronger the accompanying obligations”. Any partnership should therefore reflect “the commitments the United Kingdom is willing to make that respect the integrity of the Union’s legal order”, in particular with regard to the role of the CJEU in the interpretation of Union law.
262.The parties commit to establishing reciprocal arrangements for the exchange of Passenger Name Record (PNR) data, and of DNA, fingerprints and vehicle registration data through the Prüm system. Both are extremely valuable to UK law enforcement, as witnesses to our 2016 inquiry into Brexit: future UK-EU security and police cooperation testified. There are also less specific commitments to consider other arrangements for data exchange which could “approximate” EU mechanisms, but there is no mention of either the SIS (Schengen Information System) II, or the European Criminal Records Information System (ECRIS), which witnesses identified as “top priorities for the UK”, but to which no non-EU (or, in the case of SIS II, no non-EU and/or non-Schengen) country currently has access.
263.Paragraph 88 of the Declaration states that the parties will work together to identify terms for the UK’s operational cooperation via Europol and Eurojust. Given that no non-EU Member State is a participant, we previously called on the Government to seek a bilateral extradition arrangement that would mirror the European Arrest Warrant’s provisions as closely as possible, following the precedent set by Norway and Iceland. It is not surprising, therefore, that the Declaration makes no mention of the European Arrest Warrant. It does, however, suggest that “effective arrangements” on extradition will be established. It also expresses an intention to continue joint investigation teams (JITs) that “approximate those enabled by relevant Union mechanisms”.
264.Paragraph 88 would also allow the parties “to determine the applicability of these [extradition] arrangements to own nationals and for political offences”. The reference to “own nationals” builds on Article 185 of the Withdrawal Agreement, which would allow any Member State that has “raised reasons related to fundamental principles of national law” to refuse during the transition period to surrender its own nationals to the UK in response to a European Arrest Warrant. This provision would, for instance, allow Germany, which has a constitutional bar on extraditing its own nationals to non-EU countries, to decline to surrender them to the UK following exit day.
265.The parties envisage continued cooperation through international bodies, including the Financial Action Task Force, to fight money laundering and terrorist financing.
266.Also relevant to the security sphere is paragraph 118 of the Declaration, in which the parties agree to conclude a Security of Information Agreement, along with Implementing Arrangements, for the handling and protection of classified information.
267.We welcome the ambition by both sides to strike a “broad, comprehensive and balanced security partnership”, but note that this may fall short of the Government’s ambition for a single comprehensive treaty covering all areas of security cooperation.
268.The depth of the future relationship in law enforcement and judicial cooperation, though yet to be defined, will depend on “an appropriate balance between rights and obligations”, and on the UK’s willingness to continue to follow EU rules and to accept that the CJEU, as the sole interpreter of EU law, will have continuing influence over the application of those rules.
269.In some areas the UK will necessarily cease to be part of the EU’s law enforcement and security ecosystem. This is most evident in the case of databases and data exchange. While we welcome the commitment to establishing arrangements for the exchange of Passenger Name Record and Prüm data, we regret the lack of any reference to UK access to the Schengen Information System II (SIS II) and the European Criminal Records Information System (ECRIS) database.
271.We note that the UK will also withdraw from the European Arrest Warrant (EAW), but welcome the commitment to establishing “effective arrangements based on streamlined procedures” on extradition. We urge the Government to bring forward detailed proposals as soon as possible, ahead of formal negotiations.
272.Paragraph 92 of the Declaration commits both parties to “support ambitious, close and lasting cooperation on external action”. This open-ended commitment reflects the close alignment between the UK’s and the EU’s strategic interests, and their determination to “champion a rules-based international order and [to] project their common values worldwide”. At the same time, paragraph 94 acknowledges “their respective strategic and security interests”—collaboration will only occur “when and where these interests are shared”.
273.Paragraph 97 states that a Political Dialogue on Common Foreign Security Policy (CFSP) and Common Security and Defence Policy (CSDP) will enable “flexible consultation between the Parties at different levels”. It is not clear whether this goes beyond existing third-country arrangements.
274.Paragraph 97 also states that the “High Representative may, where appropriate, invite the United Kingdom to informal Ministerial meetings of the Member States of the Union”. This provides a channel through which the UK may informally discuss matters of foreign policy, security, and defence with the Member States, when the EU judges that this is appropriate.
275.In 2017 we concluded that it was “particularly important that the UK should remain able to align itself with EU sanctions post-Brexit”. The Declaration falls some way short of this, stating that, while the parties will pursue “independent sanctions policies driven by their respective foreign policies”, they recognise that sanctions are a “multilateral foreign policy tool”, and that there are benefits in “close consultation and cooperation”. Paragraph 100 refers to “the possibility of adopting sanctions that are mutually reinforcing”.
276.The Declaration proposes a Framework Participation Agreement that would enable the UK to participate “on a case by case basis in CSDP missions and operations”. Similar arrangements already exist for third-countries, and we warned in our report on Brexit: Common Security and Defence Policy missions and operations that such a model would allow limited influence. A key difference is that the Declaration envisages the UK participating in the Force Generation conference that plans the mission, a status otherwise reserved for EU Member States. This could enable the UK to have more influence over the planning and design of the mission, and also suggests that the greater the UK contribution to a future EU operation, the closer the consultations would be.
277.The Declaration foresees a future Administrative Agreement to enable the UK to collaborate in projects of the European Defence Agency (as is already the case for third countries such as Norway and Ukraine), the European Defence Fund, as well as projects in the framework of Permanent Structured Cooperation (PESCO), upon invitation from the Council of the European Union. This would permit UK defence companies to participate in future projects supported by the EDF.
278.The parties agree to exchange intelligence on a “voluntary basis as appropriate”, especially in the areas of counter-terrorism, hybrid threats, cyber-threats and space-based imagery, and to support those CSDP missions to which the UK is contributing. No formal mechanism for such exchanges is described.
279.Paragraph 107 of the Declaration is a one-line reference to consideration of “appropriate arrangements for cooperation on space”. There is no mention of the Galileo programme, let alone support for continuing UK participation. On 30 November the Government confirmed that the UK would withdraw from military aspects of Galileo, instead seeking to build its own global satellite navigation system.
280.Paragraph 108 proposes a dialogue to develop “mutually reinforcing” strategies in the programming and delivery of development. Paragraph 109 suggests that the UK could contribute to EU development instruments and mechanisms, including coordination with EU delegations in third countries. No further clarity is provided.
281.We welcome the commitment to continued cooperation in the areas of foreign policy and defence. While we note that this includes the possibility of UK contributions to EU development programmes, we regret the lack of specific detail about how such cooperation will work in practice. While the commitments in respect of sanctions fall short of the alignment this Committee has proposed, they are nevertheless a balanced reflection of both the common external threats faced by the UK and the EU, and their mutual interest in supporting peace and tackling terrorism.
282.We also endorse the commitment to UK-EU political and industrial collaboration in the area of defence, through UK collaboration with the European Defence Agency and projects in the PESCO framework, and the possibility of UK defence companies participating in projects by the European Defence Fund.
283.The EU’s readiness to engage in sectoral dialogue with the UK, and to invite the UK to informal EU Ministerial meetings on an ad-hoc basis, reflects the crucial contribution by the UK to Europe’s foreign policy. Taken together with the possibility of the UK participating in the planning of CSDP missions to which it contributes, the Declaration allows a greater UK engagement with and influence over EU foreign policy than is currently afforded to any third country.
284.The Political Declaration is extremely vague in respect of space, and fails to address the extent of UK involvement in programmes with a security element such as Galileo. Set alongside the recent confirmation that the UK will no longer have access to Galileo, this underlines that there will be serious consequences for UK companies operating in the sector and for their ability to tender for contracts.
285.On cyber-security, the parties foresee close UK cooperation with the EU’s Computer Emergency Response Team (CERT-EU), as well as participation in the European Union Agency for Network and Information Security (ENISA) and in “certain activities” of the NIS Cooperation Group. There is a broad commitment to “promote security and stability in cyberspace” through increased cooperation in international bodies, and an agreement to exchange data on a voluntary basis that can protect both parties from common threats.
286.The Declaration provides for UK participation as a “participating state” in the EU’s Civil Protection Mechanism. The CPM already provides for third-country participation, and includes Norway, Iceland, and Turkey as well as other EU candidate countries.
287.Paragraph 115 envisages cooperation on health security “in line with existing Union arrangements with third countries” and via international fora.
288.Paragraph 116 sets out both parties’ commitment to cooperate in tackling illegal migration, through operational cooperation with Europol, working with the European Border and Coastguard Agency, and “dialogue on shared objectives and cooperation”, with a particular view to tackling illegal migration upstream. There is no mention of the Eurodac database, which records fingerprints of those seeking asylum. The Government had sought to join Eurodac, in which Norway, Iceland, and Switzerland participate.
289.Both parties agree to cooperate on “counter-terrorism, countering violent extremism and emerging threats”.
290.The UK and the EU’s wish to continue cooperation and dialogue on cyber-security, civil protection, illegal migration, and counter-terrorism, reflects shared concerns, priorities, and threats. While commitments are vague, and the mechanisms for future collaboration are not always described, the Political Declaration shows willingness to continue to exchange information and cooperate in international fora. This is to be welcomed.
291.Part IV of the Declaration states that the future relationship should be based on an “overarching institutional framework covering chapters and linked agreements relating to specific areas of cooperation”. At the same time, it recognises that the precise legal form of the future relationship will be determined as part of the formal negotiations, and that there may be “specific governance arrangements”, particularly in respect of agreements that sit outside the overarching institutional framework. In our report on UK-EU relations after Brexit we noted the European Parliament’s support for an Association Agreement, observing that such agreements are “by their nature dynamic and evolutionary”, and suggesting that a UK commitment to such a partnership could bring about a positive change in the tone of the negotiations. One of the benefits of an Association Agreement would be that it would be subject to a single ratification process on the EU side; it could also be applied provisionally pending ratification. This potential model is now explicitly referenced in paragraph 122, which states that the overarching institutional framework could take the form of an Association Agreement.
292.On governance, there is a commitment to dialogue at summit, ministerial, technical and parliamentary level, as well as to civil society dialogue. The summit and ministerial level should oversee the future relationship, provide strategic direction and discuss opportunities for cooperation. There should also be specific thematic dialogues at ministerial and senior official level, which should take place as often as is necessary for the effective operation of the future relationship.
293.According to paragraph 128, the UK and the EU “support the establishment of a dialogue between the European Parliament and the UK Parliament, where they see fit … to share views and expertise on issues related to the future relationship”.
294.Paragraph 129 states that a Joint Committee will be established, with responsibility for managing and supervising the implementation and operation of the future relationship, and to facilitate the resolution of disputes. It should comprise the parties’ representatives at an appropriate level, establish its own rules of procedure, reach decisions by mutual consent, and meet as often as required. It could also establish sub-committees.
295.The section on dispute settlement (paragraphs 132–135) provides further detail on the role of the Joint Committee. Paragraph 132 states that “arrangements for dispute settlement and enforcement will be based on those in the Withdrawal Agreement”. Every effort will be made to resolve matters through discussion and consultation, but if either side deems it necessary, it will be able to refer the matter to the Joint Committee for formal resolution. The Joint Committee may refer a dispute to an independent arbitration panel, and either party may do so where the Joint Committee has not arrived at a mutually satisfactory solution within a defined period of time. The decisions of the arbitration panel will be binding. Should a dispute raise an issue of the interpretation of EU law, the arbitration panel will refer the question of EU law to the CJEU for a binding ruling. The arbitration panel should then decide the dispute in accordance with the CJEU ruling.
296.Where a party fails to take necessary measures to comply with the binding resolution of a dispute, the other party will be entitled to request financial compensation or take proportionate and temporary measures, including suspension of its obligations within the scope of the future relationship. The future relationship will set out the conditions under which obligations may be suspended. Either party may refer the proportionality of such measures to the independent arbitration panel.
297.Paragraphs 136–137 outline certain exceptions and safeguards, confirming that national security (which is not an EU competence) remains the sole responsibility of the Member States and the UK. Either party may activate temporary safeguard measures if faced with significant economic, societal or environmental difficulties. The other party should have the right to take rebalancing measures, and the proportionality of measures taken would be subject to independent arbitration.
298.We welcome the proposed overarching institutional framework, which should help provide consistency and coherence. While we note that the precise legal form of the future relationship remains to be determined, we welcome the suggestion that the overarching framework could take the form of an Association Agreement. Association Agreements are by their nature dynamic and evolutionary, and such a model fits well with the commitment by both sides to keep the future relationship under review.
299.We welcome the commitment to dialogue at summit, ministerial and technical level. We also note the key role that the proposed Joint Committee will play in managing and supervising the implementation and operation of the future relationship. Much of the detail of how this dialogue will function in practice, including the Joint Committee’s rules of procedure, the frequency of its meetings, and the appointment of specialist sub-committees, remains to be determined. We emphasise that the work of the Joint Committee, and the process by which it is established, will require close parliamentary scrutiny and accountability at both UK and EU level.
300.In that context, we particularly welcome the recognition of the importance of interparliamentary cooperation, and the proposed establishment of a specific dialogue between the European Parliament and the UK Parliament. While noting the interest of devolved legislatures in the UK, and EU Member State parliaments, we stand ready to work with House of Commons and European Parliament colleagues in establishing this dialogue as swiftly as possible.
302.As we set out in Chapter 2, the proposed arbitration model for the future relationship would mean that the CJEU would have a limited, but continuing, role in relation to questions of EU law that arose in disputes with the UK, even after its obligations under the Withdrawal Agreement fell away. This potentially represents a ‘one size fits all’ solution, respecting the role of the CJEU as sole arbiter of EU law, potentially across the full spectrum of UK-EU relations, rather than in specific, identified areas.
303.The provisions on dispute settlement, and on the Joint Committee, illustrate how the structure for interinstitutional dialogue in the future relationship echoes the provisions set out in the text of the Withdrawal Agreement. This underlines the close relationship between the two parts of the Brexit agreement.
304.Part V of the Declaration sets out the “clear intent of both Parties to develop in good faith agreements giving effect to this relationship and to begin the formal process of negotiations as soon as possible” after UK withdrawal, so that they can come into force before the scheduled end of the transition period at the end of 2020.
305.Both parties also affirm their commitment to the peace process in Northern Ireland, and the protection of the Belfast/Good Friday Agreement in all its parts, including “the practical application of the 1998 Agreement on the island of Ireland and to the totality of the relationships set out in the 1998 Agreement.” Priority will be given to addressing this issue in the future relationship negotiations.
306.Before UK withdrawal in March 2019, the two sides will engage in “preparatory organisational work, with the aim of enabling rapid commencement of and progress in formal negotiations”. After withdrawal, it is envisaged that the parties will “negotiate in parallel the agreements needed to give the future relationship legal form”. A programme will be agreed, covering the structure, format and schedule of negotiation rounds. A high-level conference will be convened at least every six months to take stock of progress and agree, as far as possible, further action.
307.The Political Declaration confirms that formal negotiations on the future UK-EU relationship will begin only after UK withdrawal on 29 March 2019. The Political Declaration is thus in many places little more than an agenda for a discussion that has barely begun. But despite its lack of detail and precision, the Declaration is an important signpost to the shape of the future relationship, and to the structure and scope of the forthcoming negotiations.
308.We welcome the commitment of both sides to engage in preparatory organisational work ahead of the commencement of formal negotiations. We also note their commitment to develop agreements in good faith, so that the future relationship can come into force by the end of 2020. While this is welcome, we note that in fact agreements will have to be reached by June 2020, the point at which the UK will have to decide whether to request an extension to the transition period. Given the range and complexity of the issues to be discussed, this timetable is extremely challenging.
309.We endorse the Declaration’s recognition, in the context of the future relationship, of the need to safeguard the peace process in Northern Ireland, and to protect the Belfast/Good Friday Agreement in all its parts. Paragraph 139 of the Declaration is thus important in balancing the backstop provisions in the Withdrawal Agreement.
310.The negotiations on the future relationship should be subject to full parliamentary scrutiny. We note that at EU level the negotiations are likely to take place under Article 217 or 218 TFEU, and will be subject to detailed and transparent scrutiny by the European Parliament. The UK Parliament and the British people deserve the same transparency and accountability: the Government must engage proactively and constructively with Parliament, rather than repeating the mistakes of the last two years. We look forward, in this regard, to making further submissions to the Liaison Committee review of committee activity.
311.We welcome the commitment to a high-level conference at least every six months, which is in keeping with the recognition of both sides that the future relationship will continue to evolve. UK withdrawal from the EU is an important milestone in the evolution of the UK-EU relationship, but the story will not end on 29 March 2019. It is imperative that the structures underpinning the future relationship are flexible to adapt to whatever changes take place in the future.
189 Outline of the Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom (14 November 2018): [accessed 28 November 2018]
190 European Commission, European Council (Art. 50) Conclusion, 25 November 2018 (25 November 2018): [accessed 28 November 2018]
192 (26 November 2018), para 3
193 (26 November 2018), para 5
194 (26 November 2018), para 4
195 European Union Committee, (17th Report, Session 2017–19, HL Paper 149), paras 22, 60 and 103
196 Compare European Union Committee, (3rd Report, Session 2017–19, HL Paper 7), paras 112 and 113
197 (26 November 2018), para 11
198 (26 November 2018), paras 12–13
199 See European Union Committee, (18th Report, Session 2017–19, HL Paper 182)
200 (26 November 2018), para 14
201 (26 November 2018), para 15
202 (26 November 2018), paras 16–19
203 (26 November 2018), paras 20–21
204 HM Government, The future relationship between the United Kingdom and European Union, Cm 9593, July 2018: [accessed 28 November 2018]
205 (26 November 2018), para 22
206 (26 November 2018), para 23
207 (26 November 2018), para 24
208 (26 November 2018), para 28
209 (26 November 2018), paras 29–30
210 European Union Committee, (18th Report, Session 2016–17, HL Paper 135), para 292
211 (26 November 2018), paras 33–36
212 (26 November 2018), para 37
213 European Union Committee, (11th Report, Session 2017–19, HL Paper 66), para 61
214 European Union Committee, (9th Report, Session 2016–17, HL Paper 81), para 58
215 (26 November 2018), para 39
216 (26 November 2018), para 40
218 HC Deb, 15 November 2018,
219 European Union Committee, (17th Report, Session 2016–17, HL Paper 134), para 145
220 (26 November 2018), para 60
221 (26 November 2018), para 62
222 European Union Committee, (10th Report, Session 2017–19, HL Paper 63), para 67
223 (26 November 2018), paras 68–70
224 (26 November 2018), paras 73–76
225 European Council, Special Meeting of the European Council (25 November 2018): [accessed 28 November 2018]
226 European Union Committee, , (8th Report, Session 2016–17, HL Paper 78), paras 96 and 170
227 (26 November 2018), para 77
228 (26 November 2018), para 79
229 HM Government, The future relationship between the United Kingdom and European Union, Cm 9593, July 2018: [accessed 28 November 2018]
230 (26 November 2018), para 80
231 See European Union Committee, (7th Report, Session 2016–17, HL Paper 77), Chapter 3
232 See European Union Committee, (7th Report, Session 2016–17, HL Paper 77), para 122
233 See European Union Committee, (7th Report, Session 2016–17, HL Paper 77), para 141
234 (26 November 2018), paras 88–90
235 (26 November 2018), para 91
236 (26 November 2018), paras 92–95
237 European Union Committee, (11th Report, Session 2016–17, HL Paper 102), para 116
238 (26 November 2018), para 99
239 European Union Committee, (16th Report, Session 2017–19, HL Paper 132), paras 173–174
240 (26 November 2018), para 104
241 ‘Britain quits military side of Galileo satellite system’, Financial Times (30 November 2018): available at [accessed 4 December 2018]
242 (26 November 2018), paras 110–113
243 (26 November 2018), para 114
244 HM Government, The future relationship between the United Kingdom and European Union, Cm 9593, July 2018: [accessed 28 November 2018]
245 (26 November 2018), para 117
246 See European Union Committee, (17th Report, Session 2017–19, HL Paper 149), para 105
247 (26 November 2018), para 138
248 (26 November 2018), para 141
249 (26 November 2018), para 144