Background Briefing: The European Commission's position paper on "Transitional Arrangements in the Withdrawal Agreement"

Open Britain’s top lines:

  • We should not leave the European Union until we know where we are going.
  • Wednesday’s position paper by the European Commission underlines that the Government’s only plan for transition is to move us from rule maker to rule taker.
  • All transition would do is push the cliff-edge out a little bit further. Transition increasingly looks less like building a bridge and more like walking the plank.
  • If all transition means is abiding by the rules but losing our seat at the table to decide them, the Government should instead seek to extend the Article 50 timetable.

 

Introduction

On Wednesday, the European Commission published a position paper on the transition aspects of the withdrawal agreement of the UK’s exit from the European Union. This document can be found here and translates into legal terms previous guidelines issued by the EU27 and the European Commission on the UK’s withdrawal from the EU. As a next step, the EU 27 Member States will look to reach an agreement on this text before presenting it to the UK Government as part of the Brexit negotiations.

This briefing provides an overview of the main points of today’s document; an overview of what the transition period entails in real terms; an in-depth comparison of today’s document with previous statements by UK Government ministers and a Q&A section at the end on Open Britain’s own position on transition.

 

Overview

The text of Wednesday’s document, which draws heavily on the spirit of the text of EU27’s transition negotiation directives from end January, which can be found here and here, (see Open Britain briefing on this here), crucially spell out the following:

  • A transition period should not last beyond 31 December 2020 – this is less than the 2 years which the Government have been calling for and less and which Theresa May had envisaged in her Florence speech.
  • During transition all existing as well as new EU rules proposed during this period will apply to the UK, without the UK having a say over them.
  • The transition period will see the UK continue to have to abide by rulings of the European Court of Justice and also accept the jurisdiction of the ECJ as a final arbiter.
  • During transition, UK officials may, on invitation only and without voting rights, attend meetings of the EU’s institutions. This is in stark contrast to today, where UK officials, including elected ones, sit around the EU negotiating tables influencing the EU’s rules.  
  • The document highlights that the UK will be bound to uphold all existing international agreements to which it is currently a party through its EU membership and will not be able to enter into any new international agreements, unless authorised to do so by the EU27. This seriously throws into questions the capability of the UK to conclude and implement its own international trade agreements. 

 

The terms of the transition period, if agreed to by the Government, would turn the UK from being a rule maker into a rule taker, effectively taking the country into a worse situation than we currently enjoy. If the Government need more time they should instead request an extension of the Article 50.       

The Brexit secretary, David Davis, has spoken about the transition phase being a “bridge” to the future UK-EU relationship. However, as things currently stand, the Government have failed to agree among themselves what they want from the future relationship, let alone begin negotiating it. As things stand, the transition phase looks like a very rickety bridge to nowhere. 

With just over 13 months to go until the UK leaves the EU, the clock is ticking. The Government’s continuing failure to resolve the contradictions inherent in its own position on Brexit means everybody has the right to change their mind on whether this is the right path for our country. 

 

What transition does:

  • The aim of the transition period is to ensure that there is sufficient time for the UK and the EU to be able to negotiate a future relationship, given the 2-year period under Article 50 is unlikely to be length enough.
  • The European Commission has proposed a transition period of 21 months, until December 2020. The Government has called for a period of 2 years. Neither period is likely to provide enough time for the UK to negotiate a future relationship with the EU.
  • However, today’s position paper, if agreed to by the UK Government would see the UK having to implement all EU rules as they are today, without getting a say over them. If the Government needs more time to negotiate, it could look to extend the 2-year period of the negotiations, which is possible under Article 50.
  • During transition, the UK will not be able to implement any new trade or other international agreements of its own.
  • Throughout transition, the UK will have to abide by rulings from the European Court of Justice, making a mockery of the promise repeatedly made by the Government to end the jurisdiction of the ECJ in March 2019.
  • The transition agreement is intended to bridge the relationship between the UK of an EU member to that of the future relationship. However, to date, the UK Government has not spelled out in any serious detail what it actually wants the future relationship to look like. Therefore, at the moment, the transition is effectively a transition to nowhere.

 

Today’s text compared with previous Government statements:

On the length of the transition period

Theresa May had alleged that a transition period would be around 2 years in length but today’s document shows that it will only be for 21 months, further putting business concerns at the fore-front of these negotiations. To counter these concerns, the Government should look to keep the UK in the Single Market and the Customs Union for the long-term.  

What Ministers said then: “As of today, these considerations point to an implementation period of around two years.”[1] (Theresa May, Florence speech, 22 September 2017)

European Commission position paper: “There shall be a transition period, which shall start on the date of entry into force of this Agreement and end on 31 December 2020.”[2]

 

On the European Court of Justice

Throughout the 2016 referendum one of the key arguments to leave the EU by leading Brexiteers was about “taking back control.” The Government have also stated in the past that the UK would no longer need to abide by the jurisdiction of the ECJ, including during a transition period. However, today’s document makes a complete mockery of this and – if the Government agree to them – turns the UK from a rule maker with a seat around the table to a rule taker.

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.”[3] (Theresa May Lancaster House speech, 17 January 2017)

European Commission position paper: “Unless otherwise provided in this Part, Union law shall be binding upon and applicable in the United Kingdom during the transition period … In particular, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties.”[4]

 

On the Single Market/regulatory alignment

Only in December, the Prime Minister stated that the UK would be outside of the Single Market during a transition period and, 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 clearly underlines not only that the UK will be in the Single Market during transition but that the UK would not be able to deviate from Single Market rules during transition.

What Ministers said then: “As I proposed in Florence, during this strictly time-limited implementation period which we will now begin to negotiate, we would not be in the Single Market or the Customs Union, as we will have left the European Union. But we would propose that our access to one another’s markets would continue as now, while we prepare and implement the new processes and new systems that will underpin our future partnership.”[5] (Theresa May statement to the House of Commons, 19 December 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.”[6] (David Davis, 24 September 2017)

European Commission position paper: “In addition, the Governance and Dispute Settlement Part of the Withdrawal Agreement should provide for a mechanism allowing the Union to suspend certain benefits deriving for the United Kingdom from participation in the internal market where it considers that referring the matter to the Court of Justice of the European Union would not bring in appropriate time the necessary remedies.”[7]

 

On the Customs Union/rolling over international agreements  

Prior to Christmas, Theresa May reiterated the Government’s 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 European Commission clearly spells out that the UK would have to abide by EU trade policy until 31st December 2020 and will effectively be in the Customs Union in this period, but with no say over how it functions. 

What Ministers said then: “As I proposed in Florence, during this strictly time-limited implementation period which we will now begin to negotiate, we would not be in the Single Market or the Customs Union, as we will have left the European Union. But we would propose that our access to one another’s markets would continue as now, while we prepare and implement the new processes and new systems that will underpin our future partnership.”[8] (Theresa May statement to the House of Commons, 19 December 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.”[9] (Liam Fox and Philip Hammond, 13 August 2017)

European Commission position paper: “During the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the areas of exclusive competence of the Union, unless authorised to do so by the Union.”[10]

“Unless otherwise provided in this Part, Union law shall be binding upon and applicable in the United Kingdom during the transition period.”[11]

 

On fisheries

In the past, UK Ministers have suggested that outside of the EU, the UK would be able to set its own fisheries policy and take back control of its own territorial waters. However, with the UK having to abide by all EU laws during transition, this will not be the case. Moreover, where once the UK sat around the table, influencing EU fisheries policy, during transition, the UK will merely be “consulted”.

What Ministers said then: “There is a sea of opportunity for us out there as we leave the European Union… it’s in our interests to be able to dramatically increase the amount of fish that we catch. We can do so because once we take back control of our territorial waters, we can decide who comes here, we can decide on what terms and we can also have a far more sensible, environmentally wise policy which enables us to conserve and grow the stock of an amazing renewable resource.”[12] (Michael Gove, 23 June 2017)

European Commission position paper: “As regards the fixing of fishing opportunities within the meaning of Article 43 TFEU for any period prior to the end of the transition period, the United Kingdom shall be consulted by the Commission during the decision-making process within the Council and during international negotiations in respect of the fishing opportunities related to the United Kingdom.”[13]


Q&A:

If you believe a transition period would mean Britain becoming a ‘rule taker’, why does Open Britain advocate staying in the Single Market and Customs Union for the long term?

  • We have always been clear that Britain should stay in the Single Market and the Customs Union in the long-term.
  • Non-EU countries that are in the Single Market permanently, such as Norway, have a degree of influence over the rules.
  • As one of the largest economies in the world, the UK Government could have fought for a deal that keeps us in the Single Market and Customs Union but with considerably more influence than Norway or any other non-EU country.
  • The transition period could not be more different to this – it would leave us entirely outside the room and with no say whatsoever over the rules.

 

Why does Open Britain no longer support the idea of a transition period, given you previously supported it?

  • The Government has made a complete mess of the negotiations and cannot even agree among themselves what they want.
  • As things stand, there is nothing to transition to, and certainly nothing to “implement” – transition increasingly looks less like building a bridge and more like walking the plank.
  • The EU’s negotiating directives underline that the Government’s only plan for transition is to move us from being a rule maker to a rule taker while they try to figure out what on earth they want.
  • It would be far better to instead seek to extend the Article 50 timetable. 

 

Do you think the EU’s position on transition is justifiable?

  • The Government is determined to blame anyone but itself for the fact that it cannot have its cake and eat it.
  • Ministers claimed they wouldn’t even need a transition period because it would all be negotiated within the Article 50 period – they must now face up to the reality of failing to achieve this.
  • By choosing to leave the Single Market and Customs Union, and triggering Article 50 with no plan, the Government has created this situation.
  • It is the Prime Minister that have chosen this course. It would be surprising if the EU were to suddenly bend over backwards to spare Theresa May’s blushes.

 

Do you agree with Jacob Rees-Mogg that a transition period on the EU’s terms would make Britain a ‘vassal state’? 

  • Clearly the transition period being proposed does not match up to what the Prime Minister has promised - it would turn Britain from being a rule maker today, to being a rule taker for an indefinite period of time.
  • That’s why she has backbenchers like Jacob Rees-Mogg, as well as members of her own Cabinet, growing increasingly undisciplined.
  • This is a direct result of the many hypocrisies and inconsistencies that have plagued the Government's handling of the Brexit negotiations.
  • But Jacob Rees-Mogg and the other Brextremists’ alternative proposal is to walk away from the talks and crash out with no deal whatsoever.
  • The Prime Minister needs to face down these Brexit hardliners, and commit to seeking an extension of Article 50 while she and her Cabinet figure out what on earth they actually want.

 

[1] https://www.gov.uk/government/speeches/pms-florence-speech-a-new-era-of-cooperation-and-partnership-between-the-uk-and-the-eu

[2] https://ec.europa.eu/commission/sites/beta-political/files/transition.pdf

[3] https://www.gov.uk/government/speeches/the-governments-negotiating-objectives-for-exiting-the-eu-pm-speech

[4] Ibid

[5] https://www.gov.uk/government/speeches/pm-commons-statement-on-european-council-18-december-2017

[6] https://www.politico.eu/article/david-davis-uk-will-diverge-from-eu-regulations/  

[7] https://ec.europa.eu/commission/sites/beta-political/files/transition.pdf

[8] https://www.gov.uk/government/speeches/pm-commons-statement-on-european-council-18-december-2017

[9] https://www.theguardian.com/politics/2017/aug/13/hammond-and-fox-brexit-transition-would-not-be-way-to-remain

[10] https://ec.europa.eu/commission/sites/beta-political/files/transition.pdf

[11] Ibid

[12] https://www.scotsman.com/news/politics/general-election/michael-gove-brexit-could-boost-scots-fishing-industry-1-4485032

[13] https://ec.europa.eu/commission/sites/beta-political/files/transition.pdf