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Beyond Brexit: the institutional framework Contents

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Chapter 5: The future of UK-EU relations

The path ahead

136.The EU-UK Trade and Cooperation Agreement, as well as establishing a broad partnership covering trade, security and judicial cooperation, establishes an extensive institutional framework within which UK-EU relations can evolve. The key question for the Government, for Parliament, and indeed for the British people, is the direction this evolution should take. The partnership will change over time—that is a given. But what form will this change take?

137.The TCA itself offers few pointers. The purpose of the Agreement, as we have noted, is to establish “the basis for a broad relationship between the Parties, within an area of prosperity and good neighbourliness characterised by close and peaceful relations based on cooperation, respectful of the Parties’ autonomy and sovereignty”. This ambivalence, between cooperation and autonomy, extends throughout the TCA. As Professor Usherwood noted, the lack of provision for summit-level dialogue, to give strategic direction to the UK-EU relationship, allied with the comprehensive provisions on dispute resolution and the rebalancing mechanism, appear to hint at long-term divergence (see above, paragraph 66). Such a direction of travel would be wholly consistent with the position adopted by the Government in its 2019 general election manifesto and subsequently. The absence of any provision in the TCA for structured dialogue on foreign and defence policy may also point in the same direction.

138.On the other hand, the TCA also allows the option of gradual extension, both in scope and depth. As we noted in March 2020, the Government’s initial objective was to negotiate “a suite of agreements”, each with their own governance arrangements. The EU, in contrast, sought an “overall institutional framework”, in the form of an Association Agreement.120 The final result, the TCA, is closer to the EU’s preferred model: in EU law it is an Association Agreement, concluded under Article 217 TFEU. Not only does it provide an overarching institutional framework, but Article COMPROV.2 allows the UK and the EU, if they conclude “other bilateral agreements”, to integrate them within the framework of the TCA as “supplementing agreements to this Agreement”, and as “an integral part of the overall bilateral relations as governed by this Agreement”.121 Association Agreements are, as we have previously noted, “by their nature dynamic and evolutionary”.122

139.But while the TCA creates the option of gradual extension, there is no obligation upon the Parties to take it up. As Marie Demetriou QC told us, “Although the agreement provides and envisages supplemental agreements and further cooperation, there is not actually a mechanism in this agreement for that to take place … Had there been something set in the agreement, that would have been helpful. It would have provided some impetus.”123 Lord Frost did not appear to envisage this option being taken up, describing the TCA as “a very comprehensive agreement … We like to think that there is not much more negotiating to do for the time being about new elements to come into this.” But he also noted that the provision on supplementing agreements underlined the presumption “that it all fits together”, adding that “there are two [supplementing agreements] already, i.e. the nuclear cooperation agreement and the agreement on exchange of information. I expect there will be more over time.”124

140.Whatever path the two sides take, it will involve trade-offs. The Government’s position on UK participation in EU programmes illustrates the point. This is covered in Part Five of the TCA, which provides that the UK “shall participate in and contribute to the Union programmes, activities, or in exceptional cases, the part of Union programmes or activities, which are open to its participation, and which are listed in Protocol I”. The Protocol itself “shall be agreed between the Parties”. It will be adopted and “may be amended by the Specialised Committee on Participation in Union Programmes”.125

141.The text of the Protocol has yet to be agreed, but a draft was published in the form of a Declaration accompanying the TCA,126 and the Government’s ‘Summary Explainer’ confirms likely UK participation in the Horizon Europe, Euratom Research and Training, and Copernicus programmes.127 The EU Sub-Committees will weigh up the arguments for and against UK participation in these and other EU programmes: our concern here is with the process by which decisions will be taken, and the factors that will be borne in mind. Asked about ‘red lines’ that might prohibit UK participation, Mr Gove responded:

“There are three points. The first is value for money. The second is whether it involves a surrender of sovereignty, ECJ jurisdiction and the application of the direct effect of EU law within the UK. The third is the broader one, which is just a general public policy judgment: is this a programme that works? We do not have any theological objection. The objections are financial, constitutional, legal and public policy.”

This shows welcome pragmatism, as long as the three factors—cost, constitutional principle and public policy—are held in balance. To achieve this, it will be important that the Government talks to those directly affected. Mr Gove gave an encouraging example when he confirmed that the Government had “engaged with scientists and universities in the approach we took towards participation in Horizon”. Indeed, in explaining the Government’s decision not to participate in the SME funding instrument within the Horizon programme he referred back to “the priorities that were shared with us in the conversations we had with people in universities and the broader science community”.128 We are not, on the other hand, aware of any comparable consultation taking place before the Government’s decision, on value-for-money grounds,129 to withdraw from the Erasmus+ programme of student exchanges.

142.More broadly, none of the three factors identified by Mr Gove is absolute. Even UK sovereignty, which has been a red line throughout the negotiations with the EU, may be partially constrained by the continuing jurisdiction of the Court of Justice of the European Union in respect of key parts of the Withdrawal Agreement, and the potentially decisive influence of CJEU case-law over certain parts of the TCA itself, such as the provisions on data sharing.130

143.It follows that in any area of potential divergence the Government, while giving full weight to policy objectives, will have to balance these against the costs of that divergence. Such costs might be felt in the first instance by businesses, thanks to the creation of new barriers to trade, but could potentially escalate, if the Government’s actions were to lead the EU to invoke the dispute resolution or rebalancing mechanisms in the TCA.

144.Similarly, if the Government were to contemplate extending the scope of the TCA, for instance by negotiating supplementing agreements, it will need to balance potential policy synergies or economic benefits against the impact upon national autonomy. As this Committee concluded as long ago as June 2018:

“The benefits that the UK and the EU could derive from a deep and durable partnership will come at a cost, and may entail trade-offs between economic and political considerations. There is no ‘free lunch’ for either side.”131

What was true of the negotiations that led ultimately to the TCA remains true today, and in the years to come.

Conclusion

145.The governance structure established by the Trade and Cooperation Agreement has been designed to support cooperation between the UK and the EU, as autonomous entities, across many areas of mutual interest. But the TCA is a starting point, not a final destination, for UK-EU relations. Cooperation may expand and deepen over time, or it may narrow in scope as the two Parties diverge. From the UK perspective, this Government—and future Governments, with their own democratic mandate—will have to make difficult choices. It is already clear that these choices will demand trade-offs, between economic, political and constitutional considerations. As we concluded in 2018, there is no ‘free lunch’ in UK-EU relations.

146.What is vital, though, is that both sides 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. The TCA provides a structure within which the UK and the EU can do just that: the opportunity must not be wasted.

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