Open Britain Background Briefing: The December 2017 EU Council Conclusions

Introduction

Today, the European Council – representing the EU27’s Heads of Government issued guidelines for discussions on the future relationship between the UK and the EU. These guidelines can be found here.  The text, which was unanimously agreed by the 27, provides a harsh reality check of the Government’s plans for a Brexit transition and the future relationship:    

  • A transition period would see the UK abide by all existing Single Market and Customs Union rules, including any future EU legislation as well as by any judgements by the European Court of justice.
  • During the transition, the UK will have to abide by the EU’s Common Commercial Policy, including existing trade policy. 
  • Guidelines for discussing the future relationship will not be issued by the EU until March, and in the meantime the EU27 are waiting for the Government to explain what kind of future relationship they actually want. With the European Council not meeting again until end March 2018, this means that talks on the future relationship are unlikely to start in earnest until April. 

Today’s text presents a stark reminder of how difficult the Brexit negotiations are and underlines the fact that the future negotiations will not get going until March 2018 at the very earliest, meaning that talks thereon are unlikely to be able to last longer than 6 months until the ratification process will need to start. The summer break in Brussels will provide a further impediment to progress.

The Government’s Brexit rhetoric is already crashing head-first into reality and this serves as a reminder that everybody has the right to change their mind on Brexit, if they so choose.  

The full text of today’s European Council conclusions on the article 50 negotiations can be found here, where all the quotes in each “reality” section are taken from below.

On the legally binding nature of the agreement

Following last week’s agreement between the EU and the UK on the terms of the UK’s withdrawal, comments by David Davis on the Andrew Marr Show led both the European Parliament (here) earlier this week as well as the European Council today to spell out the importance of last week’s agreement being binding.

What Ministers said then: “It [the terms of ‘sufficient progress’] was much more a statement of intent than it was a legally enforceable thing.”[1] (David Davis, Andrew Marr Show, 10 December 2017)

Reality: “It underlines that negotiations in the second phase can only progress as long as all commitments undertaken during the first phase are respected in full and translated faithfully into legal terms as quickly as possible.”

On timings for the negotiations on the future relationship

The Government used to allege that the negotiations on the future relationship could be concluded prior to the UK leaving the EU. This has run into the reality that the UK will not be able to conclude any agreement thereto until after it has left the EU and will also not be able to start negotiating the future relationship until March at the earliest.

What Ministers said then: "What we are intending to do is to get the form of the implementation period agreed quickly -- December or thereafter -- but we want to conclude the overall negotiation by the end of March 2019."[2] (David Davis, 25 October 2017) 

Reality: “The European Council will continue to follow the negotiations closely and will adopt additional guidelines in March 2018, in particular as regards the framework for the future relationship. It calls on the United Kingdom to provide further clarity on its position on the framework for the future relationship … While an agreement on a future relationship can only be finalised and concluded once the United Kingdom has become a third country, the Union will be ready to engage in preliminary and preparatory discussions with the aim of identifying an overall understanding of the framework for the future relationship, once additional guidelines have been adopted to this effect.”

On the European Court of Justice

The Government have stated in the past that the UK would no longer need to abide by the jurisdiction of the ECJ, including during a transition period. Today’s European Council conclusions make a complete mockery of this.

What Ministers said then: “So we will take back control of our laws and bring an end to the jurisdiction of the European Court of Justice in Britain. Leaving the European Union will mean that our laws will be made in Westminster, Edinburgh, Cardiff and Belfast. And those laws will be interpreted by judges not in Luxembourg but in courts across this country.”[3] (Theresa May Lancaster House speech, 17 January 2017)

“The UK must refuse to accept new EU or ECJ rulings during transition…UK must not agree to shadow EU rules to gain access to market.”[4] (Boris Johnson, 29 September 2017)

Reality: “In order to ensure a level playing field based on the same rules applying throughout [the withdrawal agreement] the Single Market, changes to the acquis adopted by EU institutions, bodies, offices and agencies will have to apply both in the United Kingdom and the EU. All existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will also apply, including the competence of the Court of Justice of the European Union.”

On the Single Market

Theresa May had set a red line of leaving the Single Market in order to pursue regulatory divergence for the UK. It is clear that all existing and future single market rules, during any transition period will have to apply to the UK and divergence during this period will not be possible.

What Ministers said then: “I want to be clear. What I am proposing cannot mean membership of the Single Market. European leaders have said many times that membership means accepting the ‘four freedoms’ of goods, capital, services and people. And being out of the EU but a member of the Single Market would mean complying with the EU’s rules and regulations that implement those freedoms, without having a vote on what those rules and regulations are.”[5] (Theresa May, Lancaster House speech, 17 January 2017)

Reality: “In order to ensure a level playing field based on the same rules applying throughout the Single Market, changes to the acquis adopted by EU institutions, bodies, offices and agencies will [during a transition period] have to apply both in the United Kingdom and the EU.”

On the Customs Union

The Government set a red line of leaving the Customs Union in order to try to strike new free trade deals with other countries outside the EU. Today’s language by the EU27 clearly spells out that even post March 2019 if the Government wants a transition, this will not be possible.   

What Ministers said then: “That means I do not want Britain to be part of the Common Commercial Policy and I do not want us to be bound by the Common External Tariff. These are the elements of the Customs Union that prevent us from striking our own comprehensive trade agreements with other countries.”[6] (Theresa May, Lancaster House speech, 17 January 2017)

“We respect the will of the British people – in March 2019 the United Kingdom will leave the European Union. We will leave the Customs Union and be free to negotiate the best trade deals around the world as an independent, open, trading nation...When we’ve left the Customs Union, we will build up on [relationships with other countries] by negotiating as an independent nation with the freedom to sign bilateral free trade agreements.”[7] (Liam Fox and Philip Hammond, 13 August 2017)

Reality: “As the United Kingdom will continue to participate in the Customs Union and the Single Market (with all four freedoms) during the transition, it will have to continue to comply with EU trade policy, to apply EU customs tariff and collect EU customs duties, and to ensure all EU checks are being performed on the border vis-à-vis other third countries.”

On regulatory alignment

The Government has previously spoken about the desire to see regulatory divergence between the UK and the EU, including during the transition period. Today’s document fully spells out that the UK will have to be in full regulatory alignment with the EU during a transition period.  

What Ministers said then: “That is why we believe a time-limited interim period will be important to further our national interest and give business greater certainty - but it cannot be indefinite; it cannot be a back door to staying in the EU. We are both clear that during this period the UK will be outside the single market and outside the customs union and will be a 'third-country' not party to EU treaties.”[8] (Philip Hammond and Liam Fox, 13 August 2017)

“We start at the same position, but we will manage the divergence… Of course we will diverge, we will do things our own way.”[9] (David Davis, 24 September 2017)

Reality: “As the United Kingdom will continue to participate in the Customs Union and the Single Market (with all four freedoms) during the transition, it will have to continue to comply with EU trade policy, to apply EU customs tariff and collect EU customs duties, and to ensure all EU checks are being performed on the border vis-à-vis other third countries.”

The transition period

Theresa May had alleged that a transition period would be about the UK transitioning to a future relationship and would therefore not be a standstill transition, but today’s guidelines show the EU see it differently.

What Ministers said then: "An implementation period is about a period which is adjusting to the future relationship. That's the basis on which I have put it to the European Union and that is the basis on which we will be negotiating an agreement on it."[10] (Theresa May, 23 October 2017)

Reality: “As regards transition, the European Council notes the proposal put forward by the United Kingdom for a transition period of around two years, and agrees to negotiate a transition period covering the whole of the EU acquis, while the United Kingdom, as a third country, will no longer participate in or nominate or elect members of the EU institutions, nor participate in the decision-making of the Union bodies, offices and agencies.”