Withdrawal and Transition
The UK formally ceased to be a member of the European Union at 11 PM on 31 January 2020.The possibility of a second vote to remain no longer applies. It may not re-join without a political decision to do so followed by the completion of the long accession procedure provided for in the EU Treaties.
The withdrawal applies to the whole of the United Kingdom including Northern Ireland. Under the Northern Ireland Protocol Northern Ireland is intended to continue as if it was a member of the EU customs union and subject to EU laws that are relevant to trade in goods. However, it is not a member of the European Union for any other purpose.
The withdrawal also applies to various associated territories of the United Kingdom which were not members as such but had a very close relationship with the European Union by reason of their association with the United Kingdom. This includes Gibraltar which had been in the single market was not the customs union the Channel Islands and the Isle of Man which had been in a customs union with the EU, not the single market. It also includes certain sovereign bases in Cyprus and a list of overseas countries and territories having special relationships with the United Kingdom
A transition period immediately commenced which is scheduled to last until 31 December 2020. The transition period may be extended until the end of 2021 or the end of 2022 by a joint decision made by the EU and UK prior to 1 July 2020.
During this transition period, EU laws continued to be applicable in and to the United Kingdom. Although the basis on which EU law is implemented in the United Kingdom has changed, it continues with the same effect as before, during the transitional period. EU laws may be enforced by and against UK and EU citizens and by and against the UK and other EU governments during this period as before. EU institutions and bodies continue to have much the same powers as before. Decisions of the European courts and other agencies are binding during the transition period.
The UK continues to make contributions to the EU budget in accordance with the agreed existing financial framework for the period to the end of 2020.
No Participation & Some Consultation
During the transitional period, UK representatives including MEPs ministers and civil servants no longer participate in the EU’s institutions. UK MEPs permanently have ceased to participate sit in the European Parliament. UK ministers no longer participate in the various EU Councils of ministers and the EU Council made up of prime ministers and heads of government. UK representatives cease to participate in the EU Commission.
For almost all purposes under European Union law, the United Kingdom is no longer considered to be a member of the European Union. Across the areas where member states may participate and engage in the workings of the European, Union whether by way of proposals initiatives or requests, the United Kingdom is no longer involved. Representatives of the United Kingdom no longer participate in EU decision-making or administration.
Representatives and experts may upon invitation exceptionally attend meetings or parts of meetings of committees and other bodies and agencies in relation to a limited number of matters which specifically relate to the United Kingdom or affect particular persons or entities established in United Kingdom where their presence is necessary for the effective implementation of EU law during the transition period. Representatives and experts of the United Kingdom are not to have voting rights and their presence is limited to these specific agenda items.
The UK is to be entitled for reasons of vital national policy in exceptional circumstances not to apply decisions of the EU Council in relation to foreign affairs and security matters.
The United Kingdom is to be consulted in relation to fishing opportunities for the periods during the transition agreement in the context of participation in international consultations and negotiations in relation to fishing.
UK New Trade Agreements in Transition Period
The United Kingdom may negotiate sign and enter international agreements in areas that would otherwise be within the exclusive powers of the European Union. This will include trade agreements with third countries.
As regards third countries is not clear to what extent they can or must treat the United Kingdom as a member of the European Union during the transition period. During that period the UK is to be bound by international agreements entered by the EU. The EU is to notify the other states to these agreements that the UK is to be treated as such for the transitional period.
Representatives of the United Kingdom are not to participate in bodies established under international agreements by the EU with third countries other than to the extent that this is necessary in the interests of the European Union. The United Kingdom is to refrain from any action or initiative which is prejudicial to the EU’s interest in the context of any international organisation or forum of which the United Kingdom is a member in its own right.
Extension of the Transition period
The EU and UK may decide jointly by a single decision to extend the transition period to a further date up to the end of 2021 by the end of 2022 instead of the end of 2020. If this applies the UK is to continue to contribute to the financing of the European Union. The decision of the joint committee of the EU and UK is to establish the appropriate contributions for those periods in accordance with criteria.
The Withdrawal Agreement act giving effect to the Withdrawal Agreement in UK law prohibits the UK government from agreeing on an extension of the transitional period. Therefore, this legislation would have to be amended to enable a request for an extension to be made.
If a request for extension is not made by July 2020 then under the terms of the Withdrawal Agreement the transitional period cannot be extended beyond 31 December 2020. The UK government is likely to want the threat of a no-deal as a possibility in concluding some type of trade agreement or initial trade agreement by 31 December 2020. If no agreement even a skinny or minimal agreement can be put in place by the state, there is the prospect that the EU and UK might decide on a postponement of the transitional period after July 2020 perhaps in late December 2020.
The question would then arise as to whether the Withdrawal Agreement could be amended using the Article 50 power in the EU treaties. This requires a qualified majority of the members of the European council and the consent of the European Parliament only.
It is arguable that Article 50 does not permit amendment of the Withdrawal Agreement so as to extend the transition period as the article refers to the conclusion of an agreement and contemplates that it is made by the exiting member while still a member.
Article 50 allows extension of the transition period with the unanimous consent of all member states in agreement with the member state concerned. The specific power of extension would not appear to be available in the case of a former member state. If challenged the court may find ways of reconciling the apparent incompatibilities in the text so as to uphold a more expansive interpretation.
The Withdrawal Agreement continues the UK status as if it was an EU member for most practical purposes during the transition period. However, there are some debatable legal uncertainties about the status of the transitional arrangement itself. The Withdrawal Agreement cannot make provision for future trade relations. The treaties cease to apply to a country once the Withdrawal Agreement comes into effect.
New Relationship Agreement
Immediately following withdrawal, the EU and UK are to draw up a programme including a structure format and schedule of negotiating rounds. This is to be designed to deliver the shared intention to conclude the agreement by the target and date of the end of 2020. The EU is prepared to propose applying on a provisional basis, aspects of the future relationship in accordance with applicable legal frameworks and the existing practice.
The United Kingdom and European Union declare that they in good faith they shall proceed to negotiate agreements relating to their future relationship in accordance with the political declaration. They are to seek to the extent possible to ensure that these are concluded so as to be able to take effect from the end of the transitional period.
This political declaration on the future relationship is a statement of intent. It is incapable of having any effect even in international law in the absence of demonstrable bad faith. Even in those circumstances, a future relationship agreement can only come into being when the parties to it agree.
There may be a single comprehensive agreement between the UK and the EU. The future relationship declaration contemplates that there would be an ambitious broad partnership across trade and economic cooperation including a comprehensive and balanced free-trade agreement. It will also include cooperation in relation to law enforcement, criminal justice foreign-policy security, and defence as well as wider areas of cooperation.
It is distinctly possible given the factors mentioned below that there will be a series of agreements initially in areas of high importance, where the interests of the parties so dictate followed by later agreements in more controversial areas. In particular, there may be an initial narrow agreement in areas within the EU’s exclusive competence in particular in relation to trade in goods.
EU Only or EU + States (Mixed) Agreement
A critical issue is the extent to which the agreement relates only to matters which are within the exclusive competence or jurisdiction of the European Union or to a broader range of matters which are either partly or exclusively within the competence or jurisdiction of the member states. In the case of an agreement covering the latter areas, there is much greater political and timescale challenge as the consent of each member state is required.
The terms of each state’s consent are determined by their own constitutional arrangements. Ratification by most states will require the consent of their parliament and in some cases such as in Belgium, the consent of certain devolved regional assemblies. As the Brexit process has shown, international agreements entered by governments are not automatically ratified by their parliaments. Sometimes groups in Parliament cannot be persuaded to agree with government commitments. This is particularly pronounced in the case of regional governments which may be of a different political complexion to the principal government.
Trade Policy
Trade policy involves numerous issues affecting the interests of most sectors of the economy across Europe UK. The EU customs code and the terms of its existing treaties with third countries contain detailed provisions for thousands of product types. There are over 5000 commodity codes within the tariff and many further subdivisions of them in many cases.
The arrangements and terms on which the EU trades with third countries with which it has no agreement and under particular free-trade agreements for each product are defined respectively in the WTO GATT agreement and in the particular trade agreements concerned. In effect, they represent the EU’s commercial policy for both imports and exports with the world generally and with particular countries respectively with which it has a free-trade agreement.
Although there may not be controversy in the vast majority of cases, and it is likely that almost all non-agri-food products will have a zero or near-zero duty. There is the potential that particular issues may affect the interests of one group or another anywhere in the EU or UK such as to cause controversy and disagreement.
There are many instances where particular trading terms within the EU tariff reflect the interests of particular groups within the EU which was settled after negotiation at some point in the past. Although the UK has traded tariff-free as an EU member, it is setting a new course in the world under which it will have different trading terms with third countries to that with remaining EU members. This may, in turn, impact the terms on which the EU is prepared to trade with it in that sector.
