To ensure the future relationship is administered effectively, the UK and the EU will need to agree arrangements for regulatory cooperation. This includes:
- an upfront choice to maintain a common rulebook with the EU, in particular, in relation to the free trade area for goods; and
- a recognition that some rules are equivalent.
By making firm commitments, the UK and the EU would agree to establish a new free trade area for goods; the access that should be provided to firms and individuals to provide services in each others’ markets; provisions related to socio-economic cooperation; and the arrangements for how the UK and the EU will jointly combat security threats.
Where the UK has made these commitments, the governance and institutional arrangements would need to ensure that:
- there is technical dialogue in the Joint Committee to oversee the application of legislative and regulatory commitments;
- where there is a common rulebook, these rules can be relied on by individuals and businesses and enforced by UK and EU courts in the same way, because they have been interpreted consistently; and
- there are arrangements in place for UK participation in EU bodies and agencies, where this is required for the agreed cooperation to take place.
Resource and administrative commitments would be necessary to ensure that the governance arrangements in the future relationship are robust enough to support the breadth of cooperation that would be in the interests of the UK and the EU. This will ensure that the rights of both parties are properly protected over time.
Application of legislative and regulatory commitments
There should be a clear process to manage the regulatory and legislative changes that result from the commitments in the future relationship between the UK and the EU. This would differ between rule changes that relate to different elements of cooperation but would follow the same sequence of steps.
First, the UK and the EU would notify each other through the Joint Committee of any proposed and adopted legislative proposals, where these were related to specific commitments in the future relationship. Either the UK or the EU could request an initial discussion in the Joint Committee if this were necessary.
Second, the Joint Committee would agree on whether the rule changes were in scope of the future relationship and whether the relevant agreement may need to be updated to reflect this change.
Third, where changes were in scope, there would be a period of consultation and adaptation in the Joint Committee. This would include a decision between the UK and the EU about whether the relevant rule change should be added to the agreement. There would therefore always be an option for the rule not to be added.
Where the UK had committed to retain a common rulebook with the EU, the Joint Committee would need to agree on whether the proposed EU rule change should be incorporated into the agreement.
If the UK and the EU agreed that the change should be adopted, this would be reflected in the relevant agreement, taking into account any necessary adaptations for its functioning in the UK context.
If the UK and the EU could not agree, the Joint Committee should consider all other possibilities and endeavour to maintain the functioning of the relevant agreement, including the possibility to recognise the equivalence of legislation. If this was not possible after a defined period and an imbalance was created, proportionate and where possible localised rebalancing measures could be proposed, for instance, requesting financial compensation. Where there was no agreement over these measures, or they were not possible, the relevant part of the future relationship could be suspended.
Where the UK and the EU had recognised within the future relationship that their rules were equivalent, the Joint Committee would consider whether a proposed new or amended UK rule remained equivalent with the EU’s existing rule, or an existing UK rule remained equivalent to a proposed new or amended EU rule.
This would not apply to the parties’ autonomous equivalence regimes, which would continue to operate outside of any legal agreements between the UK and the EU.
If the Joint Committee determined that equivalence was maintained, this would be reflected in the agreements. If the Joint Committee determined that the rules were no longer equivalent, the UK could propose an alternative rule to maintain equivalence or the Joint Committee could seek to agree a different solution for maintaining equivalence.
If the Joint Committee could not agree on equivalence, there should be the option of recourse to independent arbitration for a binding ruling.
If the UK decided to accept that rules were no longer equivalent, this could create an imbalance, and the EU could propose proportionate and where possible localised rebalancing measures, for instance, requesting financial compensation. Where there was no agreement over these measures, or they were not possible, the relevant part of the future relationship could be suspended.
Finally, if an agreement had been updated to reflect a rule change, this would become a binding obligation on both parties in international law. The agreed rule changes would also need to be given effect in UK law through domestic legislation.
The UK Parliament would scrutinise this legislation in accordance with normal legislative procedure, respecting the principle that a sovereign Parliament has complete control over domestic law. This means that the UK Parliament could decide not to give effect to the change in domestic law, but this would be in the knowledge that it would breach the UK’s international obligations, and the EU could raise a dispute and ultimately impose non-compliance measures.
In deciding whether and how to deal with differences as they arise, the UK would, of course, be conscious of a number of factors, including its commitments to Northern Ireland.
Ensuring consistent interpretation
The rights stemming from the future relationship would be enforced in the UK by UK courts and in the EU by EU courts. However, to ensure that businesses and citizens have confidence in the rules and regulations that affect them, there should be a consistent interpretation of the agreements in the UK and the EU. So when courts in the UK or the EU interpret provisions of national legislation intended to give effect to the agreements, they could take into account the relevant case law of the courts of the other party. This would continue to respect the independence of the different courts.
To support this, it will be important for both parties to encourage and facilitate dialogue between the judiciaries of the UK and the EU. The Joint Committee should also keep under review the case law of both the senior courts of the UK and the CJEU, where this was relevant to the interpretation of the agreements. If significant divergences were found between respective courts’ interpretation of the agreements, the Joint Committee could be empowered to act to preserve the consistent interpretation of the agreements.
Where the UK had agreed to retain a common rulebook with the EU, the UK would commit by a treaty that its courts would pay due regard to CJEU case law, insofar as this was relevant to the matter before them. UK courts would not, however, be able to make preliminary references to the CJEU. Once the UK has left the EU, such references would no longer be appropriate or necessary. This would not affect the consistent interpretation of a common rulebook, which would be delivered through the commitment to pay due regard to case law. The proposal for a common rulebook relates to areas of EU law where there is already a body of case law stretching back for decades.
Participation in bodies and agencies
To fulfil the aims set out in the White Paper across the economic and security partnerships, the UK should continue to participate in certain EU bodies and agencies. UK participation would be important for different reasons but could relate to enabling mutual recognition of standards, sharing essential expertise and personnel, and exchanging data and information.
The nature and structure of the UK’s participation will vary depending on the EU body or agency in question. In some cases, there may be an appropriate precedent for third-country involvement, as in the case of Switzerland’s participation in the European Aviation Safety Agency (EASA). In other cases, such as the European Medicines Agency (EMA) and Europol, the future relationship should go beyond existing third country provisions, in line with the depth and breadth of the proposed relationship.
Where the UK participated in EU bodies or agencies, this would involve a number of commitments. First, it may be appropriate for the UK to make a financial contribution, the form, and structure of which would depend on the type of working relationship agreed. Second, the UK would respect the rules under which those bodies or agencies operated. Third, the UK would respect the remit of the CJEU such that if there was a challenge to a decision made by an agency that affected the UK, this could be resolved by the CJEU, noting that this would not involve giving the CJEU jurisdiction over the UK.
This Article draws on the White Paper The Future Relationship between the United Kingdom and the European Union Presented to Parliament by the Prime Minister July 2018 Cm 9593. UK public sector information is reproduced pursuant to the Open Government Licence The Legal Materials contain UK public sector information licensed under the Open Government Licence v3.0. The Licence is available at http://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/ (the UK Licence).