Approach to Brexit

The United Kingdom Government published its White Paper on Brexit and New Partnership with the European Union in February 2017.

The White Paper points out that it is in no one’s interest for there to be a cliff edge for business or a threat of instability. It believes that phased process of implementation in which the UK-EU institutions and member states prepare for the new arrangements would be in their mutual interest. This would give businesses enough time to plan and prepare the new arrangements.

The UK is seeking legal certainty in relation to its EU exit and has introduced the so-called Repeal Bill to restate and adopt European Union law Post-Brexit. At the moment of Brexit, it is contemplated that all European Union Law would become part of domestic UK law with appropriate modifications or deemed modifications. The Repeal Bill allows substantial amendment and modification of legislation by ministerial order.

The House of Commons Select Committee on exiting the UK and other Selected Committees will scrutinise and inform decisions.

The White Paper affirms that there should be no new barriers to living and doing business within the UK.

Funding

The UK confirmed that all funding commitments made by the Government will be met. Structural European structure and investment fund projects signed with funding agreements in place before Autumn Statement 2016 will d be fully funded, even where they run beyond the date of Brexit.

The Treasury has guaranteed that the agricultural sector will receive the same level of funding under the multiannual financial framework which runs until 2020. A similar commitment has been made in relation to EU programs administered by the devolved administrations.

The restoration of parliamentary sovereignty is stated to be a central feature of Brexit, with law-making in London and or by the devolved administrations, in which the UK’s interests and values are central. The jurisdiction of the European Union Court of Justice is to terminate.

Dispute Resolution

It is recognised that a future agreement with the EU will require provision for dispute resolution, both on the interpretation and application of EU – UK trade and other agreements. The White Paper refers to the CETA Joint Committee in the Canadian Agreement as an example of a Joint Committee which can make binding interpretations. The EU agreement with South Korea provides for an arbitration mechanism.

The above agreements provide for interstate procedures. Such arrangements would not have direct effect in UK Law. The UK is seeking a new approach to interpretation and dispute resolution in its arrangements with the EU.

Devolved Governments

The White Paper indicates that the devolved administrations should continue to be engaged in the Brixit process through the Joint Ministerial Committee chaired by the Prime Minister and attended by the First Ministers and the JMC sub-committees on EU negotiations chaired by the Secretary of State with members from the devolved governments.

The UK declares its resolve to strengthen the United Kingdom union. The devolution arrangements in Wales, Scotland and Northern Ireland were created in the context of EU membership. The competence of the devolved legislatures is subjected, in each case to compliance with Human Rights and EU law. The courts may declare measures and acts of the devolved legislatures to be inconsistent with or the Human Rights Act or EU law and to be thereby void.

The UK has indicated when different powers are repatriated to the UK, a decision will be made on where best to place those competences, with the purpose of ensuring that the powers are as close to people of UK as possible. It indicates that the government will champion devolution to local government and that it is committed to devolving greater powers to local government, where there is economic rationale force to do so.

Relations with Ireland

The White Paper commits to maintaining the strong and historic ties with Ireland as an important priority in the Brexit negotiations. This includes protecting the Common Travel Area. The paper highlights the deep integration of the Irish and UK economies. Annual trade between the UK and Ireland is valued at £43 million. Sixty percent of Northern Ireland’s goods export to the EU is to Ireland.

 

14,000 people regularly commute across the Irish / Northern Ireland border for work or study, The free movement of trade and persons across the border is acknowledged as an essential part of daily life. On leaving the EU, the UK aims to have as seamless and frictionless a border as possible between Northern Ireland and Ireland.

Immigration

The White Paper recognises the valuable contribution which migrants make to  society. It welcomes those with skills and expertise. It commits to ensure,  however, that it will control the number of people coming into the UK from EU. It notes that the volume of immigration in the previous decade had put significant pressure on public services, schools, and infrastructure, especially housing, and was perceived to have placed downward pressure on wages for persons on lowest incomes.

The UK commits to design an immigration system which ensures that it is able to control a number of persons arriving. Free movement will no longer apply. The UK commits itself to creating an emigration system that allows the control of the numbers of immigrants while encouraging the brightest and best to come from Europe as part of a stable and prosperous future with the EU and European partners.

The UK will welcome genuine students and those with skills and expertise. It confirms that existing EU students and those starting courses up to 2017-2018 will be continuing to be eligible for student loans and home fee status during their course.

Citizens’ Rights

Securing the rights of EU nationals in the UK and the UK nationals in the EU is stated to be a priority. There are about 300,000 UK nationals in Spain, over 200,000 in the Republic of Ireland, 150,000 in France 90,000 in Germany and much smaller numbers in other states.

There are almost 920,000 Polish nationals in the UK. The next highest number is Republic of Ireland nationals at approximately 300,000, Romania 240,000, Portugal 220,000, Italy 190,000, Lithuania 180,000, France 180,000, Germany 140,000, Spain 130,000.

The UK government commits to engaging with stakeholders including,ex-patriot groups, to understand the priorities. They recognise the priority placed on health care by UK nationals living in the EU. The government wished to resolve this issue at an early date.

Workers Rights

The UK commits in its White Paper on Brexit to protect workers’ rights in domestic legislation post-Brexit. A significant body of employment and health, safety and welfare rights derive from EU.

The paper points out that the UK already grants more than the minimum EU level in respect of statutory annual leave, maternity leave and maternity pay.

Trade

The UK government prioritises seeking the freest and most frictionless trade agreement with the EU. It does not seek membership of the single market. It seeks to pursue a new strategic partnership including an ambitious and comprehensive free trade agreement and a new customs agreement.

The UK’s White Paper points to the highly intertwined trade links between the UK and the EU. The EU is the UK’s largest export market and UK is the largest export market for the EU 27 as a whole. In 2015, there was €230 billion worth of goods and services exported to the EU while the UK imported €291 billion of goods and services from the EU. There was a €89 million deficit of goods and a €28 million surplus in services.

The UK is a major importer of manufactured and other goods including automotive, energy, food, drink chemicals pharmaceuticals and agriculture. The UK exports a wide range of products and services, including motor vehicles, chemicals, financial and other business services.

Producers in the EU states and producers in the UK rely on each other for their supply chains. The supply chains for goods and services are often tightly integrated including, for example, including the integration of design, production, manufacture, and assembly throughout the EU.

Standards

The White Paper points out that many standards are not specifically EU in nature but are evolved globally or through international standards bodies. The international organisation for  standardisation (ISO) and the International Electrotechnical Commission are significant standard setters. The international standards are then adopted at regional and national level worldwide, including by the EU and others.

The British Standards Institution will retain membership of the standards organisations after Brexit and expects to play a continuing role. The standard European standard organisations are not EU bodies but are recognised. Many standards have been originated by the European Standards Organisations at the request of the EU Commission. The government is working with the British Standards Institution to ensure that its future relationship with the European Standards Organisations continues to support a productive open and competitive business environment.

Agriculture and Fisheries

The White Paper points out that the UK as a net importer of agri-food goods from the EU. Agriculture, fishery and food products exports are €11 billion while imports are €28 billion. It points out the EU’ and UK’s mutual interest in continuing high levels of market access.

The White Paper points out the high level of reliance on UK waters by the EU fishing industry and the fact that EU vessels caught over four times as much value in weight terms in UK waters as UK vessels did in EU waters.

Financial Services

The financial services sector is highlighted as an important sector. Two-thirds of financial and related professional services are situated outside London including 156,000 in Scotland, 54,000 in Wales and 32,000 in Northern Ireland.

The European financial services industry is reliant on key EU financial services provisions including, in particular, the right to passport financial services throughout the EU. It points out that many more European firms numerically use passport rights to provide services in the UK. In its strategic partnership with the EU, the UK aims to share the freest possible trade in financial services between the UK and the EU members states.

Energy

The White Paper points out that EU legislation underpins coordinated trading in gas and electricity through existing interconnectors with member states including Ireland, France, Belgium, and the Netherlands. In particular, the UK confirms its wish to avoid disruption of the all-island single electricity market in Ireland.

The Euratom Treaty which was one of the treaties signed in Rome in 1957, provides a legal framework for civil nuclear power generation and radioactive waste management. It is technically a different Treaty and body of institutions to the EU, established by a contemporaneous  EEC Treaty. However,  it uses the EU institutions.

The UK confirms that it will leave Euratom. It wishes to continue to collaborate with EU partners and matters relating to science and research including nuclear energy. The nuclear industry remains of strategic importance. The UK wishes to negotiate a new agreement in relation to these matters.

Transport

The UK wishes to continue the substance of the EU freedoms in transport including aviation, roads, rail and maritime. It is seeking new agreements guaranteeing equivalent standards and mutual access for air, road and maritime services transport.

The UK White Paper confirms that it wishes to ensure that UK telecom companies continue to trade as competitively as possible.

Other Services

The Audiovisual Media Services Directive underpins the operation of the internal market in broadcasting and broadcasting services. The White Paper points out that the UK is the EU’s biggest broadcasting hub.

A range of EU legislation underpins the supply of services and goods. This includes

  • the common competition and consumer protection framework
  • the  framework in respect of anticompetitive unfair trading,
  • the protection of intellectual property.

The UK government is committed to fostering a high quality stable and predictable regulatory environment while taking opportunities to reduce the cost of unnecessary regulation and secure innovative business models.

The UK seeks to maintain the stability of data transfer.

Customs

The UK seeks a mutually beneficial new customs arrangement with the EU. It wishes to negotiate its own preferential trade agreements around the world, without being bound by the EU common external tariff or the common commercial policy. It wishes to make trade with the EU as frictionless and seamless as possible.

The UK White Paper points out the efficiency of its current custom system. Most customs declarations are made electronically. Only a small proportion cannot go through rapidly. Where a risk assessment indicates compliance and enforcement checks are required at the border, the World Bank’s logistics performance index shows that HMRC operates one of the world’s most efficient customs regimes.

The White Paper points out that it is in the interests of the UK and the EU to have a mutually beneficial customs arrangement. This is the key part of the UK’s ambition for a new strategic partnership with the EU. Alongside a new arrangement, it seeks to ensure that the UK own custom systems and processes continue to be as effective as possible.

The UK White Paper indicates that itis aware of the specific circumstances faced by businesses in Northern Ireland and confirms its commitment to working with the Irish government and the Northern Ireland Executive to minimise administrative burdens and to find a practical solution that keeps the border as seamless and frictionless as possible.

The UK White Paper points out that after leaving the EU, the UK will no longer be obliged to make contributions to its budget. There may, however, be European programs in which it might wish to participate and may seek to negotiate agreements for this purpose.

International Trade

The UK sees leaving the UK as an option to strike new free trade agreements around the world. It commits to being champions of free trade driving forth liberalisation bilaterally and in wider groupings.

The UK has established the Department of International Trade with a mission to drive up UK trade and investment. It seeks a deliver the following objectives.

  • promoting and exporting UK exports of goods and services;
  • maximising wealth creation through supporting foreign direct investment and outward investment.
  • delivering the best international trading framework for the UK.

Home Affairs Justice and Security

The UK confirms that it will continue to work with the EU and the UK in the fight against crime and terrorism and in civil justice matters. At present, the UK is one of the biggest contributors to the Europol System. It participates in all its priority projects.

The White Paper confirms that the UK has been a leading proponent of the EU passenger names record rules and has participated in the Schengen information system. It confirms its commitment to continued cooperation. It seeks to negotiate a deal with the EU to cooperate in the fight against crime and terrorism involving strong and close cooperation with the EU.

The UK government’s national security strategy established clear national security objectives. The 2015 strategic defence and security reviews set out a funded plan to achieve the objectives. The UK participates in common security and defence policy missions around the world. Its objective is to ensure the EU’s role on defence and securities complementary to the role of NATO. The UK reaffirms its commitment and deep involvement in NATO.

 

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