Brexit: the revised Withdrawal Agreement and Political Declaration Contents

Chapter 3: The transition or implementation period

The general principles of transition

92.Arrangements for the transition or implementation period are dealt with in Articles 126–132 of the Agreement.84 The transition period will run from when the Agreement comes into force until 31 December 2020.85 Article 132 of the Agreement provides for a single decision by the Joint Committee to extend the length of the transition period “for up to one or two years” (see paragraph 108).86

93.The key objectives of transition, which we outlined in our December 2017 report Brexit: deal or no deal, are to create a time-limited ‘standstill period’, thereby giving reassurance to citizens and businesses that there will be no abrupt ‘cliff-edge’ at the point of Brexit, and to allow time for the two sides to negotiate, agree and implement the terms of their future relationship. To achieve these objectives, the Withdrawal Agreement provides that during the transition period, as a general principle, all EU law will apply to the UK87 and produce “the same legal effects as those which it produces within the Union and its Member States”.88 The EU’s institutions and agencies, including the Court of Justice of the European Union (CJEU), will continue to enjoy all their current powers to enforce, police, and review the application of EU law within the UK, including the application of the Withdrawal Agreement.89

94.While EU law will continue to apply, several provisions deprive the UK Government, and its citizens, of the institutional and constitutional privileges of membership. For UK citizens, this includes the rights to vote and stand in European and/or municipal elections and to engage in European Citizens’ Initiatives.90 UK citizens will also cease to be eligible for recruitment as officials and/or servants of the EU’s institutions, offices or agencies.91

95.Article 128, on institutional arrangements, works in conjunction with Article 7 to remove the UK’s right as an EU Member State to participate in the EU’s institutions and agencies during the transition period. The UK will also lose its limited right to initiate EU legislation;92 will no longer be able to participate in new legislation pursued via enhanced cooperation;93 and will lose its current right to opt into new Justice and Home Affairs (JHA) measures, but will be able to opt into measures that “amend, build upon or replace existing [JHA] measures”.94

96.The Agreement also states that during transition the UK Parliament will “not be considered a national Parliament of a Member State”, and will lose its privileges, for example to issue subsidiarity Reasoned Opinions.95 The UK Parliament will continue, however, to receive consultation documents (Green and White Papers and Communications) directly from the Commission,96 along with draft legislative acts placed in the public domain.97

Exceptions to the general principles

97.There are few exceptions to the general principle that the UK should be excluded from the EU’s institutions and agencies during transition. The Agreement says that “upon invitation” the UK will be able to send national experts to “meetings or parts of meetings” of “Commission expert groups” and/or EU “bodies, offices or agencies”.98 But this will only happen in exceptional circumstances and when the discussion involves legislation “to be addressed to the United Kingdom,99 or where the presence of a UK expert “is necessary and in the interest of the Union”. UK experts will not be allowed to vote in these meetings.100

98.With regard to fisheries and the negotiation and agreement of Total Allowable Catches (TACs) under the Common Fisheries Policy, the UK will be “consulted in respect of the fishing opportunities related to the United Kingdom”,101 and will be allowed to “provide comments” to the Commission ahead of the preparation of its annual Communication on fishing opportunities.102

99.The transition period embodied in the Agreement is intended to ensure stability, avoiding an abrupt change in the terms of UK-EU trade at the point of exit, while allowing the two sides time to negotiate, agree and implement the terms of their future relationship. The price the UK will pay for transition is that, save for a few minor exceptions, it will during the transition period carry all the responsibilities of EU membership without the institutional rights and privileges enjoyed by EU Member States. It will also remain subject to EU law and the EU institutions and agencies that oversee its application and operation, without any institutional say over the development, application and content of that law.

100.Despite the possibility of invitations being extended to UK officials to attend relevant meetings in exceptional circumstances, we remain concerned about the sudden removal of the UK’s institutional privileges, particularly those relating to the EU’s many executive agencies.

Free trade agreements

101.Specific provisions address the ramifications of the UK’s withdrawal from the EU for the suite of international agreements to which the EU is party and in which the UK currently participates by virtue of its EU membership.

102.The Agreement confirms that the UK “shall be bound”103 by all such agreements and must refrain, in this context, from any action “which is likely to be prejudicial to the Union’s interests”.104 During transition, UK representatives will not be permitted to participate in the “work of any bodies set up by international agreements concluded by the Union”, unless the UK participates in its own right or is invited to do so by the EU.105

103.A footnote106 confirms that the EU “will notify” all the other parties to these agreements (that is, third countries) “that during the transition period [the UK] is to be treated as a Member State for the purposes of these agreements”.107

104.The UK will be free to “negotiate, sign and ratify” its own international agreements in areas falling within the “exclusive competence of the Union” (such as free trade agreements) during the transition period. But such agreements cannot enter into force or apply to the UK during transition without prior authorisation from the EU.108

105.We broadly welcome Article 129, which leaves the UK free to pursue its own free trade agreements during the transition period, provided they do not enter into force before it expires.

106.Questions remain about the detailed operation of this provision. For example, it is silent about the extent of the UK’s freedom to renegotiate during transition the myriad EU agreements dealing with matters where responsibilities are shared between the EU and the individual Member States.

107.Furthermore, Article 129, which attempts to carry over the application to the UK of the suite of existing EU international agreements, is one-sided and unclear. While it expressly binds the UK to its obligations under these international agreements, and calls on the Government to refrain from any action in this context deemed “prejudicial” to the Union’s interests, the UK’s status as a party to these agreements after exit day is dealt with by a footnote. We are concerned that the solution to such a significant question remains even in the latest text subject to a footnote of questionable legal status. The attitude of third countries to continuing UK participation in agreements with the EU remains unclear. We call on the Government to clarify these points urgently.

Extending the transition period

108.Article 132 of the Withdrawal Agreement provides that the Joint Committee (for which see paragraphs 21–28) will be entitled, before 1 July 2020, to adopt a single decision extending the transition period for “up to one or two years”.109

109.As we note in Chapter 5, the breadth and complexity of negotiations on the future UK-EU relationship are such that it will be difficult to complete them by the end of 2020, let alone within the five months now left between exit day and the decision point at the end of June 2020. In circumstances where these negotiations are still continuing the provision to extend the transition period is, in the words of the then Prime Minister, in a debate on 15 November 2018, an “insurance policy”.110 Her successor as Prime Minister has, however, ruled out any extension, and clause 33 of the EU (Withdrawal Agreement) Bill states: “A Minister of the Crown may not agree in the Joint Committee to an extension of the implementation period.”

110.The key benefit of extending the transition period, if negotiations on the future relationship were to be incomplete at the end of 2020, would be to maintain continuity and stability: the UK could remain part of the EU Single Market, subject to the continuing application of EU rules, until such time as the new relationship was ready to be implemented. The downside is that the UK would remain subject to all the obligations described above (including those under new Regulations and Directives) and subject to the jurisdiction of the CJEU beyond 2020.

111.Moreover, under Article 132(2)(d), if the UK wished to extend the transition period, it would be required to make an additional contribution to the EU budget. The mechanism for calculating the actual payment for the extension is set out at Article 132(3), but the amount that would be payable is far from clear. The “status of the United Kingdom during that period” would be taken into account, as well as the “modalities of payment of the amount”.

112.The decision on extending transition will be made by the Joint Committee. This means that it will not be subject to veto by individual Member States in Council, but it will still need agreement with the EU and will be subject to “negotiation”.111 The latest text of the EU (Withdrawal Agreement) Bill, in light of the prohibition in clause 33 on Ministers agreeing to an extension, includes no provision for parliamentary oversight of any extension decision.

113.The previous Government described the option to extend the transition period as an “insurance policy” in case the negotiations on the future relationship are not completed by the end of 2020. The present Government, notwithstanding the fact that the transition period will now last only 11 months, has ruled out any extension. The timetable for achieving a satisfactory outcome is, as a result, extremely challenging.

114.Any decision by the Joint Committee to extend the transition period will have to be taken before 1 July 2020. Should that deadline pass without an extension being granted, we can see no other legal mechanism, under the terms of the Withdrawal Agreement, whereby an extension could be achieved, even if the two sides so desired.

115.We note that, were the Government to seek and be granted an extension ahead of the deadline, the cost to the United Kingdom is unclear and would be subject to negotiation.

116.An extension of the transition period would also mean that the UK would remain subject to EU law (including new Regulations and Directives and the jurisdiction of the CJEU) for an extended period, without any representation in the European Parliament, the Council, or the CJEU. The risk that is inherent in the UK becoming a ‘rule taker’ (subject to new EU laws, without having had any say in their preparation or adoption) would become more acute, the longer the transition period lasted.

84 The Government has consistently described the period immediately following the UK’s exit from the EU on 29 March 2019 as an ‘implementation period’. Successive drafts of the Withdrawal Agreement, on the other hand, have referred to a ‘transition period’, and although Article 126 of the current text refers to “a transition or implementation period”, the term ‘transition’ is still used throughout the text. We therefore use the term ‘transition period’ in this report. See also para 129 of European Union Committee, Brexit: deal or no deal (7th Report, Session 2017–19, HL Paper 46).

85 Withdrawal Agreement (19 October 2019), Article 126

86 The original text said that the single extension could be until “31 December 20XX”.

88 Withdrawal Agreement (19 October 2019), Article 127(3)

89 Withdrawal Agreement (19 October 2019), Article 131

91 Withdrawal Agreement (19 October 2019), Article 127(7)(c)

92 Withdrawal Agreement (19 October 2019), Article 128(3)

94 Withdrawal Agreement (19 October 2019), Article 127(5). The UK can also be compelled to participate by the Council in such measures where the UK’s non-participation “in the amended version of an existing measure makes the application of that measure inoperable” for the other EU Member States (Article 4a of Protocol (No 21) of the Treaty on the Functioning of the European Union).

95 Under Protocol (No 2) to the Treaty on the Functioning of the European Union on the Application of the Principles of Subsidiarity and Proportionality

96 Article 1 of Protocol (No 1) to the Treaty on the Functioning of the European Union on the Role of National Parliaments in the European Union

97 Withdrawal Agreement (19 October 2019), Article 128(2)

98 Withdrawal Agreement (19 October 2019), Article 128(5)

99 Withdrawal Agreement (19 October 2019), Article 128(5)(a)

101 Withdrawal Agreement (19 October 2019), Article 130(1)

102 Withdrawal Agreement (19 October 2019), Article 130(2)

103 Withdrawal Agreement (19 October 2019), Article 129(1)

104 Withdrawal Agreement (19 October 2019), Article 129(3)

105 Withdrawal Agreement (19 October 2019), Article 129(2)

106 Withdrawal Agreement (19 October 2019), Article 129(1)

107 A footnote to Withdrawal Agreement (19 October 2019), Article 132 providing for the extension of the Transition Period states: “In case of extension, the Union will notify other parties to international agreements thereof.”

108 Withdrawal Agreement (19 October 2019), Article 129(4)

109 The original text said that the single extension could be until “31 December 20XX”.

110 HC Deb, 15 November 2018, col 432

111 HC Deb, 15 November 2018, col 456

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