Summary

The first paragraph of the Preamble to the Trade and Cooperation Agreement (TCA), published on 24 December 2020, sets out the shared commitment of the United Kingdom and the European Union to democratic principles, to the rule of law, to human rights, to countering the proliferation of weapons of mass destruction and to the fight against climate change. As liberal democracies, more unites the UK and the EU than divides them, and we welcome this acknowledgement of the shared values that will underpin their ongoing relationship.

But the haste with which the TCA was agreed, as the deadline of 31 December 2020 approached, means that it is incomplete: the text is provisional, and there are many items of ‘unfinished business’, including those outlined in the 15 Declarations accompanying the TCA. There is also the prospect of a further UK-EU treaty, on Gibraltar, which we welcome.

Not only is the TCA incomplete, but at the time of writing it has yet to be ratified by either side—and the response of the European Parliament to the UK Government’s unilateral decision to extend certain ‘grace periods’ under the Protocol on Ireland/Northern Ireland has cast doubt on the timetable for ratification. The European Union Committee warned in December 2017 that it was difficult to envisage a worse outcome for the United Kingdom than a ‘no deal’ Brexit. We are therefore concerned that recent developments have so undermined trust that the possibility of ‘no deal’—in other words, a failure to ratify the TCA—has now resurfaced. It is incumbent on both sides to approach the new relationship constructively, in good faith, with the aim of rebuilding trust.

The aim of this report is to analyse the cross-cutting provisions of the TCA, particularly those relating to governance and dispute settlement.

On governance, the TCA establishes a complex but flat structure, which will sit alongside the structure already put in place by the Withdrawal Agreement. This complexity is likely to prove challenging, and there may be a case for simplifying and rationalising it in due course. We are also concerned by the absence of any provision for regular ministerial and Head of Government-level dialogue with the EU-27 and the Commission, to provide strategic direction to the UK-EU relationship.

A more immediate problem is that the entire governance structure is, in effect, in abeyance: pending ratification the Government has stated that none of the governance bodies can meet. The TCA, despite being only provisionally applied, is fully operational, and we see no justification for allowing such a complex and important relationship, affecting the security and livelihoods of over 500 million citizens in the UK and in the EU, to drift without the formal governance arrangements having been activated.

The complexity of the proposed governance structure underlines the need for accountability and parliamentary oversight. We call on the Government to commit to supporting effective scrutiny by both Houses, and to undertake that the Minister overseeing relations with the EU should appear regularly before designated Select Committees of both Houses.

Both sides need also to commit to transparency. We welcome the TCA’s provision for a Parliamentary Partnership Assembly (PPA), which will have the power to request information from the main governance body, the Partnership Council. The PPA’s initial goal should be to help rebuild relationships between the UK and the EU and strengthen channels of communication between the two Parliaments.

Within the dispute resolution provisions of the TCA, the Government has, with some caveats, broadly achieved its aim of bringing the direct jurisdiction of the Court of Justice of the European Union to an end. But instead the TCA creates a varied series of dispute resolution mechanisms to deal with the many areas of potential disagreement that could arise between the UK and the EU. Some of these mechanisms are novel, untested, and without clear precedents. Only time will tell if they are workable in practice, or if they will have a destabilising effect, given that some of them could lead to a broader renegotiation of the TCA as a whole—or even, in an extreme case, to termination of all or part of the agreement.

We regret the fact that the bulk of the dispute settlement arrangements are State-to-State, and as a result access to justice for individuals and businesses will be restricted: we call on the Government to take steps to mitigate this impact. This is a particular concern so far as Part Three of the TCA, on law enforcement and judicial cooperation in criminal matters, is concerned, and we call on the Government to explain what safeguards and rights will be available to those who may be subject to extradition requests from EU Member States under the terms of the TCA.

This is the final report of the European Union Select Committee. It will be published alongside four reports from our sub-committees, analysing the TCA’s provisions on the environment, trade in goods, trade in services, and law enforcement.

The five reports are unified by the theme of moving ‘Beyond Brexit’: the TCA is a starting point, not a final destination. Both sides need to approach the new relationship constructively, in good faith, with the aim of rebuilding the trust that has been so undermined in recent times. Liberal democracies are precious, and they should work together, not pull apart.