Brexit: the revised Withdrawal Agreement and Political Declaration Contents

Chapter 5: The revised Political Declaration on the future relationship

Overview

197.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.” Accordingly, on 22 November 2018, a 26-page draft ‘Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom’ was published.209 This expanded an earlier seven-page outline Declaration, published on 14 November 2018.210

198.Following the renegotiation undertaken after the change of Government in July 2019, a 27-page revised Political Declaration was published on 17 October 2019.211 In quantitative terms, the majority of the text of the Political Declaration is unaltered from the November 2018 version. However, some significant changes have been made to the text, which can be summarised as follows:212

199.The following analysis highlights key issues, with particular reference to the findings of the reports published by the Committee since the referendum.

Introduction to the Political Declaration

200.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”.213 It also acknowledges the “unique context” of the UK’s status as a former Member State.214

201.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”.215

202.The text of the introduction has not changed from the previous iteration of the Political Declaration, save for the insertion of text stating that “a comprehensive and balanced Free Trade Agreement” will be at the core of the future relationship.216 This newly specified destination is emphasised at several subsequent points in the text.

203.The Secretary of State for Exiting the EU, Rt Hon Stephen Barclay MP, sought to explain the specific references to a free trade agreement:

“It really flows from the criticism we used to get previously that the Political Declaration was too wide in scope and the UK had not been specific enough about what sort of future relationship it was seeking. The Prime Minister has been very clear that the relationship the UK is seeking is a best-in-class free trade agreement. That is not simply shorthand for CETA; it is saying that, where the EU has entered into deals with other countries, we take the best elements of that as a package together with other areas such as close security co-operation.”

He added that this clarification had enabled the text of the Political Declaration to be made more specific at certain points.217

204.At the same time, the Political Declaration acknowledges that the UK-EU relationship may evolve over time, and therefore “may encompass areas of cooperation” beyond those described in the document itself.

205.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.

206.The Political Declaration notes the need to strike a balance between the rights and obligations of both sides. It now also includes an explicit reference to the intended destination of a “comprehensive and balanced Free Trade Agreement”. While this provides greater definition of the likely shape of the future relationship, it also constrains the potential depth of that relationship. The scope and ambition of the Declaration must be judged in that light.

Part I: initial provisions

207.No change has been made to the initial provisions set out in Part 1 of the Political Declaration. 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), while the UK commits to “respect the framework” of the ECHR.218

208.Both sides also 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.219 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”.220

209.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”.221 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:

210.The precise means by which the UK will participate in, and have influence over the management of, these programmes remain 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”.222

211.The Committee has consistently called for continued UK participation in those programmes that benefit the UK. For instance, our February 2019 report on Brexit: the Erasmus and Horizon programmes concluded:

“It is in the UK and the EU’s mutual interest to preserve current close levels of cooperation on research and innovation and educational mobility, and that the UK should participate fully in the Erasmus and Horizon Europe programmes as an associated third country.”

We also acknowledged that even if the UK secured continuing participation, it would have less influence over these programmes’ development as a non-EU Member State.223

212.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.224 There is a more detailed commitment to a future PEACE PLUS programme in Northern Ireland (which we advocated in our December 2016 report on Brexit: UK-Irish relations), maintaining current funding proportions.225

213.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.226 The parties will also explore ongoing cooperation between culture and education related groups.227

214.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 (EIB).228 In our January 2019 report on Brexit: the European Investment Bank, we noted that the EIB had lent more than €118 billion to key infrastructure projects in the UK, and expressed concern that losing access to the EIB could have negative consequences for the financing of UK infrastructure.229

215.We welcome the reference in paragraphs 6–7 of the Political Declaration to shared values and the maintenance of human rights and fundamental freedoms.

216.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.

217.We also welcome the prospect of UK participation in EU programmes in areas such as research, 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.

218.We warmly welcome the shared commitment of the UK and the EU to delivering a future PEACE PLUS programme in Northern Ireland.

219.We note the possibility of continuing cooperation in areas such as culture, education, science and innovation. We again 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.

220.We note that most of the commitments in Part I of the Declaration remain undefined. Stakeholders in the various sectors affected still need clarification of how future UK-EU cooperation will work in practice, in particular in terms of UK participation in EU programmes and its relationship with the European Investment Bank.

Part II: economic partnership

221.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 Agreement, as well as wider sectoral cooperation where it is in the mutual interest of both Parties”. The reference to a free trade agreement replaces the words “free trade area” in the November 2018 text. This partnership should facilitate trade and investment to the extent possible while respecting both sides’ principles and obligations.230

Goods

222.While the November 2018 text envisaged “a trading relationship on goods that is as close as possible”,231 the revised text refers to “an ambitious trading relationship on goods on the basis of a Free Trade Agreement”. The aim is 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”.232

223.As with the previous text, the revised Declaration envisages “no tariffs, fees, charges or quantitative restrictions across all sectors”, albeit now in the explicit context of a free trade agreement. The reference to “ambitious customs arrangements” is retained. But rather than referring back to the single customs territory provided for in the November 2018 text of the Protocol on Ireland/Northern Ireland, which would have obviated the need for checks on rules of origin,233 the latest text acknowledges that there will need to be “appropriate and modern accompanying rules of origin”.234

224.The Secretary of State acknowledged that the clarification of rules of origin requirements was an urgent concern for manufacturing industry, in particular, and said that the Government was in discussions with major manufacturers. However, when we asked him to elaborate on what might be involved, he told us only that “we have not defined that at this stage … This is part of the negotiation that is still to come.”235

225.The Declaration emphasises the principle of regulatory autonomy. Consistent with this, there is no reference to a common external tariff, which would inhibit the UK’s ability to develop an independent trade policy. The November 2018 iteration noted that the UK would consider aligning with EU rules in relevant areas.236 This qualification too has been deleted in the revised text (see further in relation to level playing field for open and fair competition, below). Nevertheless, references to the following areas are retained:

226.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.238 The extent and means of such cooperation are not explained.

227.The Secretary of State stressed that the key issue in the negotiations on cooperation with EU agencies would be “not just what appetite there is on the UK side but also what willingness there is on the EU side. The Political Declaration allows these discussions to continue.” He expressed optimism that other Member States wished for UK-EU cooperation to continue.239

228.In an apparent nod to the so-called ‘maximum facilitation’ model previously 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. This has been supplemented by a new reference to administrative cooperation in VAT matters and the exchange of information to combat VAT fraud.240

229.Paragraph 26 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”. However, the previous reference to alignment of rules has been deleted, as has the statement that the extent of UK commitments “can lead to a spectrum of different outcomes” for administrative processes, checks and controls.241 This has been replaced by a reference to the possibility of “facilitation” of processes, 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”.242

230.The Political Declaration’s commitment to tariff-free trade in goods is welcome. The change in objective from a free trade area to a free trade agreement is one of the most consequential in the revised Political Declaration, involving in particular the deletion of references to the single customs territory and alignment of rules.

231.While these changes provide greater clarity, they also imply that there will be some new friction in trade in goods, notwithstanding that the Declaration holds out the possibility, without commitment, of the use of facilitative arrangements and technologies, and refers, without elaboration, to “facilitation” of customs processes, checks and controls. We call on the Government to specify what new facilitative arrangements and technologies are envisaged, when, at what cost, and to what effect.

232.The revised Declaration also concedes, for the first time, that rules of origin, albeit “appropriate and modern”, will be necessary. We call on the Government urgently to confirm to Parliament, manufacturers, traders and all those affected, what rules of origin checks and processes will be required in the future.

233.We welcome the commitment to consider cooperation and exchange of information in customs and, additionally, VAT matters, including to combat customs and VAT fraud and other illegal activity.

234.We also call on the Government urgently to clarify the extent and means of UK cooperation with EU agencies, including the European Medicines Agency, the European Chemicals Agency and the European Aviation Safety Agency, and to confirm whether cooperation with other agencies is envisaged.

Services and investment

235.The text of the Declaration is unchanged in relation to services and investment. It 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.243 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.

236.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”.244 We also note the importance of onward free movement within the EU in this context. Paragraph 30 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.245

237.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”.246

238.We welcome the intention to conclude “ambitious, comprehensive and balanced” arrangements on trade in services across a range of sectors. However, given the significance of the sector to the UK economy, we are concerned by the lack of detail in the section on services and investment, and in particular 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.

239.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 the latter provision envisages preferential arrangements for UK and EU citizens moving between each other’s territories to provide services.

240.More broadly, 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.

Financial services

241.The latest text of the Declaration in relation to financial services is unchanged. It 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”.247 We have previously noted that it is “crucial that [international] standards remain the base of the UK’s domestic regime”.248

242.The Declaration makes clear that the future relationship will be on the basis of “equivalence frameworks”, and, like the November 2018 text, states that both sides will endeavour to conclude these assessments before the end of June 2020 (even though 14 months have passed since this timetable was originally proposed).249 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.”250

243.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.251

244.We acknowledge the intention of both sides to complete the equivalence assessment process in respect of financial services by June 2020, but note that time is now acutely short for such assessments to be completed. 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.

Digital

245.The text of the Declaration on digital is unchanged. It 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.252 It also proposes sectoral agreements to provide for fair and equal access for service providers to public telecommunications networks and services.253 There is, however, no commitment to the maintenance of free data flows, or to the continued abolition of data roaming charges.

246.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.

Capital movements and payments, intellectual property and public procurement

247.Paragraph 41 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.

248.Paragraph 42 states that provision should be made for the “protection and enforcement of intellectual property rights”, going beyond international standards. Paragraph 43 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.

249.Paragraphs 46–47 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.

250.The text of these paragraphs is unchanged from the November 2018 Declaration.

251.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.

Mobility

252.The section on mobility, also unchanged in the latest text,254 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.

253.The emphasis in the Declaration on “full reciprocity” means that any restrictions placed by the UK upon those moving from the EU are likely to apply in reverse. The recent Conservative Party manifesto stated that “we will treat EU and non-EU citizens equally”, and that people coming into the UK from the EU “will only be able to access unemployment, housing, and child benefit after five years, in the way non-EEA migrants currently do”.255 If this is the case, it follows that UK nationals will also 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.

254.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.256

255.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”.257 The lack of detail in the Declaration suggests that little consideration has yet been given to this complex area.

256.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.

257.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.

258.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.

Transport

259.The provisions of the Declaration on transport are unchanged. It 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.258 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.

260.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”—but makes no reference to reciprocal market access.259 The Declaration also 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.260

261.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).261

262.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.262

263.Our May 2019 report on Brexit: road, rail and maritime transport underlined the importance of UK-EU transport links and cooperation across sectors, as well as emphasising the unique demands placed upon Northern Ireland/Ireland transport connections.263 It is disappointing that no further progress appears to have been made in this area.

264.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 the reference to market access in paragraph 58 of the Declaration is intended to include the fully liberalised market access currently enjoyed by UK and EU operators.

265.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.

Energy

266.In our 2017 report on Brexit: energy security we urged the Government to seek continuing participation of the EU’s Internal Energy Market.264 The (unaltered) commitment in 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.265

267.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.266

268.The Secretary of State stressed the importance of security of energy supply, and therefore of the maintenance and development of UK-EU interconnectors. He argued that energy cooperation was of mutual benefit, in meeting climate change targets and in reducing costs.267

269.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.

270.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.

Fishing opportunities

271.The text of the Declaration on fishing is unaltered. It 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 is paragraph 73, 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.268

272.A Declaration by the EU 27, attached to the Minutes of the 25 November 2018 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.”269 It appears therefore that the EU may insist on a fisheries agreement, providing access to the UK’s waters, as a precondition for concluding a free trade agreement.

273.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.”270

That warning has been borne out by subsequent events.

274.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. We note also that the aspiration of both sides to conclude a fisheries agreement before 1 July 2020, in time to determine fishing opportunities for 2021, is now highly ambitious.

Global cooperation

275.The Declaration is unchanged in relation to global cooperation, where it 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.271

276.Paragraph 76 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 76 should thus be read alongside paragraph 70 (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.

277.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.

Level playing field for open and fair competition

278.Paragraph 77 of the Declaration, on the level playing field for open and fair competition, includes some of the most significant changes to the 2018 text of the Declaration.272 Some text is retained:273 the core references to the need to ensure open and fair competition remain; the key areas cited remain state aid, competition, social and employment standards, environment, climate change and relevant tax matters; and the text continues to stress the role of EU and international standards, and appropriate mechanisms for implementation, enforcement and dispute settlement.

279.The remainder of the text, however, has been substantially rewritten, and new text added. The Declaration now refers to the geographic proximity and economic independence of the parties. It states that “the precise nature of commitments should be commensurate with the scope and depth of the future relationship and the economic connectedness of the Parties”, with the aim of preventing distortions of trade and unfair competitive advantages. It calls on common high standards applicable at the end of the transition period to be retained, and continues:

“The Parties should … maintain a robust and comprehensive framework for competition and state aid control that prevents undue distortion of trade and competition; commit to the principles of good governance in the area of taxation and to the curbing of harmful tax practices; and maintain environmental, social and employment standards at the current high levels provided by the existing common standards.”

The revised text also stresses the importance of adherence to and implementation of internationally agreed principles and rules in these areas, including the Paris Agreement.

280.Some of the additional text has been transferred, in modified form, from the November 2018 Withdrawal Agreement. This stated that, in order to ensure the “proper functioning” of the “single customs territory” and “the maintenance of [a] level playing field”274 within it, the UK would also undertake to implement EU standards on taxation (including a number of EU Directives that support the “principles of good governance in the area of taxation”),275 and not to fall below whatever EU standards apply at the end of the transition period in respect of environmental protection,276 labour and social standards.277 These “non-regression”278 provisions (in common with all references to the single customs territory) have been deleted from the Withdrawal Agreement, and the corresponding statement in the November 2018 Declaration that the future relationship should build “on the level playing field measures provided for in the Withdrawal Agreement” has also been deleted.

281.The Secretary of State told us that these changes were “100%” about stressing the UK’s sovereignty, rather than an indication of whether standards would necessarily go up or down: “The whole point is that the UK … will have control over it as a sovereign country.” He said that it was “quite normal to have level playing field commitments within free trade deals”, but stressed that “those standards should be set by a UK sovereign Parliament and should focus on what are the best outcomes rather than simply marching in step with what the EU does in some sort of dynamic alignment … The point is: we can be more bespoke but that is not about a race to the bottom.”279

282.The Secretary of State said that the key change in the new text was the “commitment to high international standards”. He argued that the Government had demonstrated such commitment through its support for strengthened environmental standards and parental rights, which, in the latter case, were already higher than in many other EU countries:

“But those need to be part of a reflection of the level of access that comes in a future trade deal. There is always a trade-off between market access and regulatory commitments. The key issue in paragraph 77 is the word ‘commensurate’. It says that the commitments that are given will be ‘commensurate with the scope and depth of the future relationship’. It makes a commitment to uphold common high standards and includes a specific reference to the Paris agreement. That is reflective … of wider government policy on things such as the environment, but it should be commensurate with the level of access to the EU market … the level of access is linked to the level of commitment.”280

283.Mr Barclay denied that the shift of text on the level playing field from the Withdrawal Agreement to the Political Declaration was a lowering of ambition: “It is a fact that the Political Declaration reflects the future arrangements and that is where the Government feel that these arrangements should be discussed and set out.”281

284.The Conservative Party Manifesto included a commitment to “legislate to ensure high standards of workers’ rights, environmental protection and consumer rights”.282 Furthermore, during the general election campaign, the Prime Minister stated that the UK would introduce a new State aid regime on 1 January 2021, based on the World Trade Organization commitments on restricting harmful subsidies.283 We await further details.

285.The EU (and many of its Member States) have expressed concern that the UK may seek to undercut EU standards and competitiveness. These concerns were reflected in the November 2018 text of the Withdrawal Agreement, but are now reflected in the (non-binding) Political Declaration. The amended text, the Government argues, maintains the UK’s commitment to high international standards while protecting the UK’s sovereign right to pursue a bespoke approach.

286.Early case studies in the practical implications of these level playing field provisions will be found in the UK’s post-Brexit approach to workers’ rights, environmental protection, consumers’ rights, and State aid. We await proposals from the Government, as well as the EU’s response. Statements by EU leaders suggest that clear level playing field commitments will be a pre-condition for the EU to conclude a free trade agreement with the UK.

287.We note also that the elements that make up the ‘level playing field’ are split between reserved and devolved competence. There will, as a result, be an overlap between any future UK-EU level playing field and the internal UK level playing field. The early adoption of UK-wide common frameworks, agreed by central and devolved administrations, will be an important early indicator of the UK’s capacity to come to an agreement with the EU in these areas.

Negotiating the economic partnership during the transition period

288.As we noted in Chapter 3, the two sides will have just 11 months, from exit day on 31 January 2020, to the end of the transition period, in which to negotiate, conclude and ratify the future economic partnership.

289.The Secretary of State was confident that the terms of the economic partnership could be agreed before the end of 2020, because “we start from a position of alignment”. He argued that in a free trade agreement, much preliminary work and time was spent in understanding each other’s economies and positions, which would not be necessary in this case. He also said that the logistics were simpler because of geographical proximity, which meant that negotiations could progress quickly rather than in six-week cycles. He also noted that there was “a shared will; there is a legal commitment in the Withdrawal Agreement to work at pace”.284

290.The former Prime Minister, Rt Hon Theresa May MP, in her Florence speech on 22 September 2017, argued that the length of any transition or implementation period should “be determined simply by how long it will take to prepare and implement the new processes and new systems that will underpin [the] future partnership”. She concluded that the challenges of this task “point to an implementation period of around two years”. The end date for the transition period was accordingly set (in late 2018) as 31 December 2020.

291.Despite the repeated delays in the Brexit process, that deadline has not changed. The time available to negotiate the terms of the future economic relationship has thus been reduced from over two years to under one year—yet the task ahead is no less complex. Other deadlines, including the need to adopt a financial services equivalence framework and conclude a fisheries agreement, fall even earlier, on 1 July 2020.

292.The current Government has made clear that it will not request an extension to the transition period. Yet the Political Declaration contains, for the most part, only an overview of the terms of the economic relationship, and while the two sides start from a position of alignment, the prospect of future divergence could make reaching agreement more difficult, technically and politically, than the Government allows. If agreement is to be reached by the end of 2020, both sides will have to commit from the outset to intense, continuous negotiation. But success cannot be guaranteed, and it would in our view be prudent for the Government to keep open the option of seeking an extension to the transition period, should more time be required to conclude an agreement in the best interests of both sides.

Part III: security partnership

293.Part III of the Declaration, on the security partnership, is for the most part unchanged from the November 2018 iteration, save for the few amendments that are highlighted below. 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.285

Law enforcement and judicial cooperation in criminal matters

294.Without setting out the precise depth and breadth of future arrangements between the UK and the EU in these areas, paragraph 80 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 81 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”, including with regard to alignment of rules and the mechanisms for settling disputes and enforcement. A reference in the previous text to the role of the CJEU in the interpretation of EU law has been replaced with a simple forward reference to the relevant subsequent paragraphs of the Political Declaration.286

Data exchange

295.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 systems are highly valued by UK law enforcement, as witnesses to our 2016 inquiry into Brexit: future UK-EU security and police cooperation testified.287 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”,288 but to which no non-EU (or, in the case of SIS II, no non-EU and/or non-Schengen) country currently has access.289

Operational cooperation between law enforcement authorities and judicial cooperation in criminal matters290

296.Paragraph 86 of the Declaration states that the parties will work together to identify terms for the UK’s operational cooperation via Europol and Eurojust.

297.Paragraph 87, on extradition, makes no mention of the European Arrest Warrant. Instead it suggests that “effective arrangements” on extradition will be established. It 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 will 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 will, 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 after 31 January 2020.

298.Paragraph 88 expresses an intention to continue joint investigation teams (JITs) that “approximate those enabled by relevant Union mechanisms”.

Anti-money laundering and counter-terrorism financing

299.The parties envisage continued cooperation through international bodies, including the Financial Action Task Force, to fight money laundering and terrorist financing.291

Classified and sensitive non-classified information

300.Also relevant to the security sphere is paragraph 116 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.

Conclusions

301.We welcome the ambition by both sides to strike a “broad, comprehensive and balanced security partnership”, but note that the depth of this partnership 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.

302.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.

303.It is unclear whether UK cooperation with Europol and Eurojust will go beyond existing third-country-arrangements. Both agencies are vital tools for UK law enforcement.

304.We note that the UK will cease to be party to the European Arrest Warrant, 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.

Foreign policy, security and defence

305.Paragraph 90 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 92 acknowledges “their respective strategic and security interests”—collaboration will only occur “when and where these interests are shared”.292

Consultation and cooperation

306.Paragraph 95 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.

307.Paragraph 95 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.

Sanctions

308.In 2017 we concluded that it was “particularly important that the UK should remain able to align itself with EU sanctions post-Brexit”.293 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”.294 Paragraph 98 refers to “the possibility of adopting sanctions that are mutually reinforcing”.

Operations and missions

309.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”.295 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.296 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 give the UK 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.

310.The following caveat has been added to the text at paragraph 99:

“Such an agreement would be without prejudice to the decision-making autonomy of the Union or the sovereignty of the United Kingdom, and the United Kingdom will maintain the right to determine how it would respond to any invitation or option to participate in operations or missions.”

The Secretary of State explained that this text had been added to make clear that such defence cooperation was not binding on the UK, and that Parliament would be able to express its view as the future relationship negotiations were taken forward.297

Defence capabilities development

311.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 (EDF), 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.298

Intelligence exchanges

312.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.299

Space

313.Paragraph 105 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 2018 the Government confirmed that the UK would withdraw from military aspects of Galileo, instead seeking to build its own global satellite navigation system.300

Development cooperation

314.Paragraph 106 proposes a dialogue to develop “mutually reinforcing” strategies in the programming and delivery of development. Paragraph 107 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.

Conclusions

315.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.

316.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.

317.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 the EU’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 greater UK engagement with and influence over EU foreign policy than is currently afforded to any third country. We also note that the UK retains full sovereignty in determining how to respond to any invitation or option to participate in operations and missions.

318.The Political Declaration is vague in respect of space. Set alongside the 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.

Thematic cooperation

319.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.301

320.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.302

321.Paragraph 113 envisages cooperation on health security “in line with existing Union arrangements with third countries” and via international fora.

322.Paragraph 114 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.

323.There is no mention in the Political Declaration of future UK-EU cooperation on asylum, or of the Eurodac database, which records fingerprints of those seeking asylum. The previous Government had in July 2018 expressed its wish to join Eurodac,303 in which Norway, Iceland, and Switzerland participate. Our October 2019 report on Brexit: refugee protection and asylum policy expressed concern over this omission from the Political Declaration, and more broadly over the impact of UK withdrawal from the Dublin system and the Eurodac database—in particular on the reunification of separated refugee families in Europe.304

324.Both parties agree to cooperate on “counter-terrorism, countering violent extremism and emerging threats”.305 They also agree to conclude a Security of Information Agreement providing for the handling and protection of classified information.306

325.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. However, we regret the conspicuous lack of reference to future UK-EU asylum cooperation, and we are concerned more broadly at the impact of UK withdrawal from the Dublin system.

Negotiating the security partnership during the transition period

326.The Secretary of State said that he was “mindful” of concerns about the lack of time to negotiate the security partnership by the end of the transition period in 2020. He was, however, confident that it was possible to do so, given the commitment of both sides to use their best endeavours to reach agreement: “If one takes the security co-operation areas, on the European Arrest Warrant the UK surrenders eight times more people than is the case from the EU to the UK. The message I get in European capitals is an extremely strong desire from the EU to have close security relationships.”307

327.The target of negotiating the full terms of a new security partnership dealing with Justice and Home Affairs cooperation by the end of the transition period in December 2020 is extremely challenging, given the legal and technical obstacles to third country participation in many of the relevant EU mechanisms.

Part IV: institutional and other horizontal arrangements

328.Significant textual alterations have been made to Part IV of the Declaration, on institutional and other horizontal arrangements. 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.308

329.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.309 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. Paragraph 120 of the Political Declaration, unchanged from the November 2018 text, notes that the overarching institutional framework could take the form of an Association Agreement.

330.On governance, the previous commitment to dialogue “at summit, ministerial, technical and parliamentary level” has been made less specific, referring only to dialogue “at appropriate levels”, to provide strategic direction and discuss opportunities for cooperation in areas of mutual interest. Similarly, while the commitment to specific thematic dialogues is retained, the revised Declaration states only that this should take place “at appropriate level”, rather than “at ministerial and senior official level”. This should take place as often as is necessary for the effective operation of the future relationship.310

331.The Secretary of State explained that these changes were designed to make clear that the proposed models and structures for dialogue as set out in the original Political Declaration were not binding on the UK, and that there was room for flexibility, taking into account the views of Parliament: “What role Parliament and both Houses have in the future negotiating mandate will also shape that.”311

332.According to paragraph 125, 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”.

333.Paragraphs 126–127 state 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.

334.The section on dispute settlement (paragraphs 129–132) has been significantly altered. The statement that “arrangements for dispute settlement and enforcement will be based on those in the Withdrawal Agreement”312 has been replaced with the following:

“The Agreement should include appropriate arrangements for dispute settlement and enforcement, including provisions for expedient problem-solving such as, in certain areas, a flexible mediation mechanism. Such a mediation mechanism would be without prejudice to the Parties’ rights and obligations or to dispute settlement provided for under the Agreement.”313

335.The syntax has also been altered to make clear that the Joint Committee is a forum for discussion and consultation, as well as for formal resolution. As with the previous iteration, the revised Declaration states that 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.314

336.Should a dispute raise “a question of interpretation of provisions or concepts of Union law, the arbitration panel will refer the question of EU law to the CJEU for a binding ruling, with the added caveat that “there should be no reference to the CJEU where a dispute does not raise such a question”.315

337.The November 2018 text stated that the arbitration panel should decide the dispute in accordance with the CJEU ruling, and that a Party considering that the arbitration panel should have referred a question of interpretation of Union law to the CJEU could ask the panel to review and provide reasons for its assessment.316 This text has been deleted.

338.The wording on remedial measures for non-compliance has been simplified and made less specific in the latest text, and new paragraph 132 states merely that “the future relationship will set out the conditions under which temporary remedies in case of non compliance can be taken”, including the suspension of obligations arising from parts of any agreement between the EU and the UK.317

339.The Secretary of State told us that these changes were a direct result of the UK providing clarity that it was seeking a “best-in-class free trade agreement … That has enabled the text of the Political Declaration to be more precise in areas such as dispute resolution mechanisms, compared to what it was before.”318

340.Paragraphs 133–134 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.

341.We welcome the proposed overarching institutional framework, and, while we note that the precise legal form of the future relationship remains to be determined, we welcome the suggestion that it 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.

342.Much of the detail of how the future UK-EU dialogue will function in practice, including the Joint Committee’s rules of procedure, the frequency of its meetings, its membership, and the appointment of specialist sub-committees, remains to be determined. We addressed these issues in detail in our March 2019 report Beyond Brexit: how to win friends and influence people. We again emphasise that the work of the Joint Committee on the future relationship, and the process by which it is established, will require close parliamentary scrutiny and accountability at both UK and EU level.

343.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. We stand ready to work with House of Commons and European Parliament colleagues in establishing this dialogue as swiftly as possible.

344.As we set out in Chapter 2, the proposed arbitration model for the future relationship means that the CJEU would have a limited, but continuing, role in relation to questions of EU law arising in disputes with the UK, even after its obligations under the Withdrawal Agreement fell away. These provisions, like those on dispute settlement and on the Joint Committee, illustrate how the structure for interinstitutional dialogue in the Political Declaration echoes that established under the Withdrawal Agreement. This underlines the close relationship between the two parts of the Brexit agreement.

Part V: forward process

345.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 by the end of 2020.319

346.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.”320

347.The text of the remainder of Part V has been reworked, reflecting developments since November 2018. It states that after the EU has taken the steps necessary to begin formal negotiations under Article 218 TFEU, the parties will “negotiate in parallel the agreements needed to give the future relationship legal form”. Immediately following UK withdrawal, a programme will be agreed, covering the structure, format and schedule of negotiation rounds: “This programme will be designed to deliver the Parties’ shared intention to conclude agreements giving effect to the future relationship by the end of 2020.” Text has been added, to the effect that the Commission “is ready to propose applying on a provisional basis relevant aspects of the future relationship, in line with the applicable legal frameworks and existing practice”.321

348.New paragraph 140 states that the parties will expeditiously identify those areas that are likely to require the greatest consideration and the associated legal and technical issues that will need to be addressed; draw up a full schedule for the negotiations; and consider the logistical requirements of the formal negotiations.

349.The November 2018 text referred to a high-level conference , to be convened at least every six months to take stock of progress and agree, as far as possible, further action.322 This reference has been made less specific, merely stating that “the Parties will convene to take stock of progress with the aim of agreeing actions to move forward in negotiations on the future relationship. In particular, the Parties will convene at a high level in June 2020 for this purpose.”323

350.Finally, the Political Declaration makes no reference to any arrangements that either side may make for parliamentary oversight of the negotiations. On the EU side, the negotiations are likely to take place under Article 217 or 218 TFEU, and will be subject to detailed scrutiny by the European Parliament, probably led by the International Trade (INTA) Committee. On the UK side, the original text of the European Union (Withdrawal Agreement) Bill, published in October 2019, included a detailed clause (clause 31) on parliamentary oversight of the negotiations on the future relationship. This required a Minister to lay a statement before Parliament setting out the Government’s objectives for the future relationship, and prohibited the Government from commencing negotiations until that statement had been approved by the House of Commons and debated by the House of Lords. It also provided for regular reports to Parliament thereafter, and required a vote by the House of Commons to approve the treaty prior to its ratification. This clause was entirely dropped from the Bill prior to its reintroduction at the start of the present session of Parliament.

351.The Political Declaration confirms that formal negotiations on the future UK-EU relationship will begin only after UK withdrawal on 31 January 2020. 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.

352.While much of the text of Political Declaration is unaltered from the November 2018 iteration, significant changes have been made, reflecting the evolution of the UK Government’s negotiating position.

353.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. Nevertheless, given the range and complexity of the issues to be discussed, which the former Prime Minister judged would require a transition period of around two years, this timetable is extremely challenging.

354.We endorse the recognition in paragraph 136 of the Declaration, 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.

355.The negotiations on the future relationship should be subject to full parliamentary scrutiny. 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, and we urge the Government to engage proactively and constructively with Parliament, rather than repeating the mistakes of the last three years.

356.We are therefore concerned by the omission of what was clause 31 of the October 2019 version of the European Union (Withdrawal Agreement) Bill. The result of this omission is that Parliament will have no formal statutory role in respect of the future relationship treaty, other than the limited role provided for in Part 2 the Constitutional Reform and Governance Act 2010—a role which under section 22 of the Act can itself be disapplied by a Minister of the Crown.

357.Our March 2019 report on Beyond Brexit: how to win friends and influence people, set out our views on the role of committees in scrutinising these negotiations, and our intention is therefore to play a full, active and constructive part in scrutinising negotiations on the future relationship during 2020. We urge the Government to engage with Parliament, and with select committees, in the same spirit.


210 Outline of the Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom (14 November 2018): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/756378/14_November_Outline_Political_Declaration_on_the_Future_Relationship.pdf [accessed 18 December 2019]

211 Political Declaration (19 October 2019)

212 See also Institute for Government, Brexit deal: Political Declaration on future UK-EU relationship (17 October 2019): https://www.instituteforgovernment.org.uk/explainers/brexit-deal-political-declaration [accessed 9 January 2020]

213 Political Declaration (19 October 2019), para 3

214 Political Declaration (19 October 2019), para 5

215 Political Declaration (19 October 2019), paras 4–5

216 Political Declaration (19 October 2019), para 3

217 Oral evidence taken on 21 October 2019 (Session 2019), Q 14 (Rt Hon Stephen Barclay MP)

218 Political Declaration (19 October 2019), para 7

219 Compare European Union Committee, The EU data protection package (3rd Report, Session 2017–19, HL Paper 7), paras 112 and 113.

220 Political Declaration (19 October 2019), paras 8–10

221 Political Declaration (19 October 2019), para 11

222 Political Declaration (19 October 2019), para 11

223 European Union Committee, Brexit: the Erasmus and Horizon programmes (28th Report, Session 2017–19, HL Paper 283)

224 Political Declaration (19 October 2019), para 11

225 Political Declaration (19 October 2019), para 13. See European Union Committee, Brexit: UK-Irish relations (6th Report, Session 2016–17, HL Paper 76), para 194.

226 See European Union Committee, Brexit: movement of people in the cultural sector (18th Report, Session 2017–19, HL Paper 182).

227 Political Declaration (19 October 2019), para 14

228 Political Declaration (19 October 2019), para 15

229 See European Union Committee, Brexit: the European Investment Bank (25th Report, Session 2017–19, HL Paper 269).

230 Political Declaration (19 October 2019), paras 16–18

231 Political Declaration (26 November 2018), para 20

232 Political Declaration (19 October 2019), para 21

233 Political Declaration (26 November 2018), para 23

234 Political Declaration (19 October 2019), para 22

235 Oral evidence taken on 21 October 2019 (Session 2019), QQ 13, 15 (Rt Hon Stephen Barclay MP).

236 Political Declaration (26 November 2018), para 25.

237 Political Declaration (19 October 2019), para 23

238 Political Declaration (19 October 2019), para 23

239 Oral evidence taken on 21 October 2019 (Session 2019), Q 16 (Rt Hon Stephen Barclay MP)

240 Political Declaration (19 October 2019), para 24

241 Political Declaration (26 November 2018), para 28

242 Political Declaration (19 October 2019), para 26

243 Political Declaration (19 October 2019), paras 27–28

244 European Union Committee, Brexit: trade in non-financial services (18th Report, Session 2016–17, HL Paper 135), para 292

245 Political Declaration (19 October 2019), para 30

246 Political Declaration (19 October 2019), paras 31–34

247 Political Declaration (19 October 2019), para 35

248 European Union Committee, Brexit: the future of financial regulation and supervision (11th Report, Session 2017–19, HL Paper 66), para 61

249 Political Declaration (19 October 2019), para 36

250 European Union Committee, Brexit: financial services (9th Report, Session 2016–17 HL Paper 81), para 58

251 Political Declaration (19 October 2019), para 37

252 Political Declaration (19 October 2019), para 38

253 Political Declaration (19 October 2019), para 39

254 Political Declaration (19 October 2019), paras 48–57

255 Conservative Party, Conservative and Unionist Party Manifesto 2019, p. 23: https://assets-global.website-files.com/5da42e2cae7ebd3f8bde353c/5dda924905da587992a064ba_Conservative%202019%20Manifesto.pdf [accessed 19 December 2019]

256 Political Declaration (19 October 2019), para 55

257 European Union Committee, Brexit: justice for families, individuals and businesses? (17th Report, Session 2016–17, HL Paper 134), para 145

258 Political Declaration (19 October 2019), paras 58–59

259 Political Declaration (19 October 2019), para 60

260 Political Declaration (19 October 2019), para 60

261 Political Declaration (19 October 2019), para 61

262 Political Declaration (19 October 2019), paras 62–63

263 European Union Committee, Brexit: road, rail and maritime transport (39th Report, Session 2017–19, HL Paper 355)

264 European Union Committee, Brexit: energy security (10th Report, Session 2017–19, HL Paper 63), para 67

265 Political Declaration (19 October 2019), paras 64–65

266 Political Declaration (19 October 2019), paras 66–68

267 Oral evidence taken on 21 October 2019 (Session 2019), Q 15 (Rt Hon Stephen Barclay MP).

268 Political Declaration (19 October 2019), paras 71–74

269 European Council, Special Meeting of the European Council (25 November 2018): https://www.consilium.europa.eu/media/37102/xt20017-en18.pdf [accessed 28 November 2019]

270 European Union Committee, Brexit: fisheries (8th Report, 2016–17, HL Paper 78), paras 96 and 170

271 Political Declaration (19 October 2019), para 75

272 Political Declaration (19 October 2019), para 77

273 Political Declaration (26 November 2018), para 79

274 Withdrawal Agreement (25 November 2018), Protocol on Ireland/Northern Ireland, Article 6

275 See Withdrawal Agreement (25 November 2018), Protocol on Ireland/Northern Ireland, Article 1 of Annex 4.

276 Withdrawal Agreement (25 November 2018), Protocol on Ireland/Northern Ireland, Article 2 of Annex 4

277 Withdrawal Agreement (25 November 2018), Protocol on Ireland/Northern Ireland, Article 4 of Annex 4

278 For example, Withdrawal Agreement (25 November 2018), Protocol on Ireland/Northern Ireland, Article 2 of Annex 4, states “With the aim of ensuring the proper functioning of the “single customs territory”, the Union and the United Kingdom shall ensure that the level of environmental protection provided by law … is not reduced below the level provided by the common standards applicable within the Union and the United Kingdom at the end of the Transition period”.

279 Oral evidence taken on 21 October 2019 (Session 2019), Q 13–15 (Rt Hon Stephen Barclay MP)

280 Oral evidence taken on 21 October 2019 (Session 2019), Q 13 (Rt Hon Stephen Barclay MP)

281 Oral evidence taken on 21 October 2019 (Session 2019), Q 13–15 (Rt Hon Stephen Barclay MP)

282 Conservative Party, Conservative and Unionist Party Manifesto 2019, p.23: https://assets-global.website-files.com/5da42e2cae7ebd3f8bde353c/5dda924905da587992a064ba_Conservative%202019%20Manifesto.pdf [accessed 19 December 2019]

283 ‘Boris Johnson backs looser state aid rules after Brexit’, Financial Times, (29 November 2019): https://www.ft.com/content/e46f977e-12b5-11ea-a7e6-62bf4f9e548a [accessed 6 January 2020]

284 Oral evidence taken on 21 October 2019 (Session 2019), Q 14 (Rt Hon Stephen Barclay MP)

285 Political Declaration (19 October 2019), para 78

286 See Political Declaration (19 October 2019), para 131.

287 See European Union Committee, Brexit: future UK-EU security and police cooperation (7th Report, Session 2016–17, HL Paper 77), Chapter 3

288 See European Union Committee, Brexit: future UK-EU security and police cooperation (7th Report, Session 2016–17, HL Paper 77), para 122

289 Political Declaration (19 October 2019), paras 83–85

290 Political Declaration (19 October 2019), paras 86–88

291 Political Declaration (19 October 2019), para 89

292 Political Declaration (19 October 2019), paras 92–95

293 European Union Committee, The legality of EU sanctions (11th Report, Session 2016–17, HL Paper 102), para 116

294 Political Declaration (19 October 2019), para 97

295 Political Declaration (19 October 2019), paras 99–101

296 European Union Committee, Brexit: Common Security and Defence Policy missions and operations (16th Report, Session 2017–19, HL Paper 132), paras 173–174

297 Oral evidence taken on 21 October 2019 (Session 2019), Q 14 (Rt Hon Stephen Barclay MP).

298 Political Declaration (19 October 2019), para 102

299 Political Declaration (19 October 2019), paras 103–104

300 ‘Britain quits military side of Galileo satellite system’, Financial Times (30 November 2018): https://www.ft.com/content/da53b36e-f4ad-11e8-ae55-df4bf40f9d0d [accessed 4 December 2019]

301 Political Declaration (19 October 2019), paras 108–111

302 Political Declaration (19 October 2019), para 112

303 HM Government, The future relationship between the United Kingdom and European Union, Cm 9593, July 2018: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/725288/The_future_relationship_between_the_United_Kingdom_and_the_European_Union.pdf [accessed 28 November 2019]

304 European Union Committee, Brexit: refugee protection and asylum policy (48th Report, Session 2017–19, HL Paper 428)

305 Political Declaration (19 October 2019), para 115

306 Political Declaration (19 October 2019), paras 116–117

307 Oral evidence taken on 21 October 2019 (Session 2019), QQ 14–17 (Rt Hon Stephen Barclay MP)

308 Political Declaration (19 October 2019), para 118

309 See European Union Committee, UK-EU relations after Brexit (17th Report, Session 2017–19, HL Paper 149), para 105.

310 Political Declaration (19 October 2019), paras 122–124. Compare Political Declaration (26 November 2018), paras 124–127.

311 Oral evidence taken on 21 October 2019 (Session 2019), QQ 14 (Rt Hon Stephen Barclay MP)

312 Political Declaration (26 November 2018), para 132

313 Political Declaration (19 October 2019), para 129

314 Political Declaration (19 October 2019), paras 129–130

315 Political Declaration (19 October 2019), para 131

316 Political Declaration (26 November 2018), para 134

317 Political Declaration (17 October 2019), para 132. Compare Political Declaration (26 November 2018), para 135.

318 Oral evidence taken on 21 October 2019 (Session 2019), QQ 14 (Rt Hon Stephen Barclay MP)

319 Political Declaration (19 October 2019), para 135

320 Political Declaration (19 October 2019), para 136

321 Political Declaration (19 October 2019), paras 137–139

322 Political Declaration (26 November 2018), para 147

323 Political Declaration (19 October 2019), para 141




© Parliamentary copyright 2020