Open Britain Background Briefing: The European Commission’s position papers on Article 50 negotiations

Introduction

Today the European Commission published five documents adding further detail about various aspects of its approach to the Article 50 negotiations, namely Northern Ireland; customs rules; data protection regulations; intellectual property rights; and public procurement. The papers have been transmitted to the EU27 for discussion at the European Council working party of 7 September 2017.

Each of the papers address divorce issues and focus on withdrawal day, 29 March 2019. The paper on intellectual property rights also touches on longer-term commercial concerns. Together, the papers hammer home how complex and potentially damaging the implications are of the Government's determination to leave the Single Market and the Customs Union.

  

‘Guiding principles transmitted to EU27 for the Dialogue on Ireland/Northern Ireland’

Overview

The Commission’s paper on Northern Ireland sets out the key principles that the EU believes should underpin negotiations between the UK and the EU on the complex issues Brexit has created relating to Ireland and Northern Ireland. The full document can be read here. Open Britain’s summary of the key points of the document is as follows:

  • The EU believes that the issues relating to Ireland/Northern Ireland created by Brexit are the UK Government’s responsibility to resolve.
  • The key issues that must underpin the Brexit negotiations between the UK and the EU as they relate to Ireland/Northern Ireland are as follows: maintaining the integrity and institutions of the Good Friday Agreement; ensuring the avoidance of a return to a hard border on the island of Ireland; maintaining North/South cooperation on the island of Ireland; and maintaining existing frameworks of funding for the peace process, such as the EU-funded PEACE programme.
  • The Common Travel Area between the UK and Ireland must also be maintained, without compromising Ireland's ability to honour its obligations as a European Union member state. Additionally, Northern Irish citizens should retain their right to claim Irish (and therefore EU) citizenship without prejudice.

 

Open Britain’s Assessment

  • Open Britain agrees that the integrity and the institutions of the Good Friday Agreement must be a fundamental priority for the British Government in the Brexit negotiations.
  • Open Britain believes that all existing funding frameworks for the peace process must be maintained, including the EU-funded PEACE programme, even if that means the Government dropping its self-imposed and unworkable red line on the European Court of Justice.
  • Open Britain’s position is clear: the complex and difficult issues created by Brexit as it relates to Ireland/Northern Ireland would be quickly resolved if the UK stays in both the Single Market and the Customs Union. 

 

‘Customs related matters needed for an orderly withdrawal of the UK from the Union’

Overview 

The Commission’s paper on customs sets out some of the EU’s principles in relation to customs arrangements at the point at which the UK leaves. The full document can be read in full here. Open Britain’s summary of the key points of the document is as follows:

  • The paper says the Withdrawal Agreement should determine the customs status of goods that enter, leave or transit between the UK and the EU, where the movement starts before and ends on or after the withdrawal date, and the legal provisions applicable to them.

  • It makes clear that on exit day the movement of goods between the UK and the EU 27 will immediately constitute third country trade, and discusses how customs and VAT rules should be applied in that context.
  • The paper goes on to set out what the Commission believes would be the appropriate treatment in relation to customs and VAT status of goods loaded before the withdrawal date, goods under temporary storage at the time of withdrawal, and a number of other circumstances. 
  • The paper proposes that any goods in transit on Brexit day should be subject to the jurisdiction of the European Court of Justice. This would mean British companies and the UK government-of-the-day could be fined by Brussels for breaches of EU VAT and customs rules.

 

Open Britain’s Assessment 

  • This position paper re-emphasises how much more difficult and complex Brexit will be as a consequence of the Government’s decision to leave the Customs Union.
  • One of the reasons consistently put forward for leaving the EU was to reduce the amount of red tape businesses face, but this position paper, and the UK Government’s complex and largely unrealistic proposals, suggest that leaving the Customs Union will in fact result in a Brexit bureaucracy bombshell for British businesses.

  • The time for David Davis’ “blue sky thinking” is over. The Government needs to come forward with serious, credible and detailed proposals over how to ensure that leaving the Customs Union does not impact negatively upon businesses’ ability to trade, or upon the situation in Northern Ireland.

  • Open Britain believes the Government should think again about its self-imposed red lines, including its determination to leave the Customs Union. 

 

‘Public Procurement’

Overview
 

The Commission’s paper on public procurement focuses on how administrative procedures in the area of public procurement on-going at the time of the UK’s withdrawal should be dealt with. The full document can be read in full here. Open Britain’s summary of the key points of the document is as follows: 

  • The position paper considers how Brexit risks creating uncertainty in relation to administrative procedures in the area of public procurement on-going on the date of the UK’s departure.
  • It says the Withdrawal Agreement should ensure that administrative procedures relating to public procurement should continue to be carried out in accordance with EU law until their completion, and in accordance with the principle of non-discrimination.

Open Britain’s Assessment

 

  • Open Britain agrees that certainty and continuity is required for public procurement projects post-Brexit. The best way to achieve this certainty and continuity is for the UK to remain in both the Single Market and the Customs Union. That would prevent any cliff-edge or legal divergence that could put public procurement projects at risk. 
  • The Government has not produced any information relating to its plans on this issue. The Government must explain and clarify how it plans to maintain certainty and continuity in public procurement projects post-Brexit.
  • If the Government is not planning to remain in either the Single Market or the Customs Union, and if it continues to take a dogmatic approach to the role of the ECJ, it must explain how it will avoid a cliff-edge for the UK economy, including potentially for public procurement projects.

 

‘Intellectual property rights (including geographical indications)’

Overview

The Commission’s paper on intellectual property rights says the Withdrawal Agreement should ensure the protection currently enjoyed by holders of intellectual property rights should “not [be] undermined by the withdrawal of the UK from the EU”. The full document can be read in full here. Open Britain’s summary of the key points of the document is as follows:

  • The paper sets out that any intellectual property protected under European law should not be undermined by Britain’s withdrawal from the European Union. It says holders of existing rights should be able to enforce them in the UK market for years after Britain’s departure and vice versa.

  • The Commission says Britain’s withdrawal should not result in added financial costs for the holders of intellectual property rights, and that any related administrative burden for such holders should be kept to a minimum.

  • Regarding protected agricultural products, it says the UK must codify protections for European and UK products, comparable to EU law, into domestic law in order to protect these products sufficiently. The paper stresses that the UK must protect geographical indications for food and wine in order to receive the same treatment on the Continent, which include Parma ham, Champagne and Parmesan cheese. 

 

Open Britain’s Assessment

  • It is vital that both British and European holders of intellectual property rights have clarity as soon as possible, and keeping costs and red tape at a minimum for business should be a priority.

  • Many British exports benefit from protected status, such as Kentish ale, Stilton Blue cheese, Pembrokeshire Early potatoes and Cornish pasties. Others, including Scottish Dundee cake and Devon cider, are pending applications for protected status. This must in no way be jeopardised by the Government’s pursuit of a hard Brexit, or its determination to secure trade agreements with the US or any other country.

 

Use of Data and Protection of Information Obtained or Processed before the Withdrawal Date’

Overview

The Commission’s paper on data calls for information flows between the UK and the EU to continue before exit day, but only if Britain agrees to abide by the EU’s existing laws in this area. The full document can be read in full here. Open Britain’s summary of the key points of the document is as follows:

  • The paper says the United Kingdom will lose access to networks, information systems and databases established by EU law on the date of withdrawal. However, the United Kingdom or entities in the UK may continue to use and process data obtained before the withdrawal date only if the conditions of the paper are fulfilled.

  • Classified information received before the withdrawal date should continue to be protected under the same principles of Union law and the same applies for confidential British data.

Open Britain’s Assessment

  • Open Britain believe losing access to data would be detrimental for British business – creating further red tape and unnecessary bureaucracy for British business.
  • Much depends on what regulatory framework the UK Government foresees for data protection in the UK after Brexit. The Government recognised in its position paper in August that it UK data protection law should closely mirror the EU’s. But this essentially amounts to keeping existing EU rules in place, which would not end the role of the European Commission or the ECJ in deciding future UK-EU arrangements and hardly amounts to taking back control.
  • If the ECJ is going to continue to play a role in future UK arrangements whether the UK is in the Single Market or not, there is no rationale at all for leaving the Single Market.