PART II: ECONOMIC PART 1. OBJECTIVES AND PRINCIPLES

16. The envisaged partnership should include an ambitious, wide-ranging and balanced economic partnership. This partnership should be comprehensive, encompassing a free trade agreement as well as wider sectoral cooperation where it is in the Union interest. It should be consistent with the applicable World Trade Organization (WTO) rules, notably Articles XXIV of the General Agreement on Tariffs and Trade (GATT) and Article V of the General Agreement on Trade in Services (GATS), and ensure that all levels of government effectively comply with its provisions. It should include provisions on fisheries, as set out in Section 12 of this Part, in particular paragraph 85, and be underpinned by robust commitments ensuring a level playing field for open and fair competition, as set out in Section 15 of this Part, as well as by effective management and supervision, dispute settlement and enforcement arrangements, including appropriate remedies. It should facilitate, to the extent possible, trade and investment between the Parties, while respecting the integrity of the Union’s Single Market and of its Customs Union.

17. The envisaged partnership should recognise that ensuring sustainable development is an overarching objective of the Parties. The economic partnership should ensure that the Parties retain their autonomy and the ability to regulate economic activity according to the levels of protection each deems appropriate in order to achieve legitimate public policy objectives such as public health, animal and plant health and welfare, social services, public education, safety, the environment including fight against climate change, public morals, social or consumer protection, privacy and data protection, and promotion and protection of cultural diversity and the fight against money laundering.

2. GOODS A. Objectives and principles

18. The envisaged partnership should contain comprehensive arrangements including a free trade area, with customs and regulatory cooperation in line with Points B, C and D of this Section, underpinned by robust commitments ensuring a level playing field for open and fair competition, as well as by effective management and supervision, dispute settlement and enforcement arrangements, including appropriate remedies.

B. Free trade area

19. The envisaged partnership should aim at establishing a free trade area ensuring no tariffs, fees, charges having equivalent effect or quantitative restrictions across all sectors provided that a level playing field is ensured through robust commitments, as set out in Section 15 of this Part. All customs duties or taxes on exports or any measures of equivalent effect should be prohibited and no new ones should be introduced. The envisaged partnership should also prohibit any ban or restriction on trade between the Parties, including quantitative restrictions or authorisation requirements, which are not justified by the specific rules and exceptions provided for in the economic partnership, and should contain enhanced disciplines on import and export licensing, import and export monopolies, repaired goods, transhipment, remanufactured goods and origin marking.

20. The envisaged partnership should include appropriate rules of origin based on the standard preferential rules of origin of the Union and taking into account the Union’s interest.

21. The envisaged partnership should also include provisions to examine jointly appropriate measures in case of errors committed by the competent authorities, in particular in the application of the preferential rules of origin. It should also set out the procedures and appropriate measures that the Parties may take where lack of administrative cooperation in customs matters, irregularities or fraud are established, and with regards to the recovery of unpaid duties in case of customs fraud.

22. The envisaged partnership should include provisions on antidumping, countervailing and safeguard measures providing that either Party may take appropriate measures in accordance with the WTO Agreements on Implementation of Article VI of GATT 1994, the WTO Agreement on Subsidies and Countervailing Measures, the obligations under Article XIX of GATT 1994, the WTO Agreement on Safeguards, and with Article 5 of the Agreement on Agriculture, as appropriate. C. Customs cooperation and trade facilitation

23. Within the framework of the Union Customs Code, the envisaged partnership should aim at optimising customs procedures, supervision and controls and facilitating legitimate trade by making use of available facilitative arrangements and technologies, while ensuring that customs authorities can take effective measures at the border to enforce legitimate public policies and protect financial interests, including the effective and efficient enforcement of intellectual property rights by customs authorities on all goods under customs control.

24. To this end, the envisaged partnership should build on and go beyond the WTO Trade Facilitation Agreement. It should include a comprehensive set of customsrelated provisions covering transparency, efficiency and non-discriminatory nature of customs procedures and practices.

25. The envisaged partnership should also provide for administrative cooperation and mutual assistance in customs and value added tax (VAT) matters including for the exchange of information to fight customs and VAT fraud and other illegal activities, and for mutual assistance for the recovery of claims related to taxes and duties.

26. Additionally, the envisaged partnership should include arrangements on facilitation of inspections and formalities in respect of the carriage of goods and on customs security measures, including through the mutual recognition of Authorised Economic Operators (AEO) programmes, here it is in the Union’s interest and the necessary conditions regarding the security of trade in goods are met.

D. Regulatory aspects

27. While preserving regulatory autonomy, the envisaged partnership should put in place provisions to promote regulatory approaches that are transparent, efficient, promote avoidance of unnecessary barriers to trade in goods and are compatible to the extent possible. Disciplines on technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS) should build on and go beyond the respective WTO agreements.

28. Specifically, the TBT disciplines should set out principles in the fields of standardisation, technical regulations, conformity assessment, accreditation, market surveillance, metrology and labelling. The TBT provisions should include a definition of international standards, based on the shared current practice of the two Parties, and should aim at promoting the use of relevant international standards as a basis for technical regulations, as well as streamlined testing and certification requirements through, for example, the application of a risk-based approach to conformity assessment (including the use of self-certification in sectors where this is possible and appropriate). The envisaged partnership should also establish a mechanism to address expeditiously any specific trade concern related to TBT measures and include provisions aiming to ensure the timely dissemination of information about applicable TBT measures to importers and exporters in both Parties.

29. In the area of SPS, the envisaged partnership should build on and go beyond the WTO Agreement on SPS measures, with the objective of facilitating access to each Party’s market while protecting human and animal health, as well as plant health. The SPS provisions should pursue the application of a Union-wide export authorisation process (single entity), and should recognise regionalisation in case of disease or pest outbreaks on the basis of appropriate epidemiological information provided by the exporting Party. The SPS provisions should take into account the respective international standards, guidelines and recommendations of the International Plant Protection Convention (IPPC), the World Organisation for Animal Health (OIE) and Codex Alimentarius. The SPS provisions should cover transparency and non-discrimination, avoidance of undue delays, harmonisation, the recognition of the Parties’ health and pest status, control, inspections and approval procedures, audits, certification, import checks, emergency measures, approval of establishments without prior inspections, regulatory cooperation, cooperation on antimicrobial resistance, cooperation in multilateral fora relevant for SPS issues, cooperation on sustainable food systems, and the creation of a mechanism to address expeditiously specific trade concerns related to SPS measures or any relevant issues. The envisaged partnership should promote continued cooperation and exchanges on animal welfare. The envisaged partnership should uphold the application of the precautionary principle in the Union as set out in the Treaty on the Functioning of the European Union.

30. The envisaged partnership should establish a framework for voluntary regulatory cooperation in areas of Union interest, including exchange of information and sharing of best practice.

31. The envisaged partnership should include cross-cutting disciplines on good regulatory practices and transparency for the development and implementation of efficient, cost-effective regulations for goods, including early public consultations on significant new regulations or significant reviews of existing measures.

 

4. EXCEPTIONS AND SAFEGUARDS

159. The envisaged partnership should provide for appropriate exceptions. These should include the disclosure of information related to the Parties’ security interests.

160. The envisaged partnership should address the possibility for a Party to activate temporary safeguard measures that would otherwise be in breach of its commitments in case of circumstances of significant economic, societal or environmental difficulties. This should be subject to strict conditions and include the right for the other Party to rebalancing measures. The measures taken should be subject to independent arbitration.

IV. TERRITORIAL SCOPE

161. Any agreement between the Union and the United Kingdom negotiated on the basis of these negotiating directives should be without prejudice to the Protocol on Ireland/Northern Ireland and to the Protocol relating to the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland in Cyprus.

162. Any agreement between the Union and the United Kingdom negotiated on the basis of these negotiating directives will not include Gibraltar.

 

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