After four rounds of future relationship negotiations, the UK and the EU met on 15 June 2020 for a high-level meeting to take stock of progress made so far and to establish forward process.
A short summary of the state of play of negotiations, published shortly after the meeting by the House of Commons' Committee on the Future Relationship with the EU, can be found here.
What are the key sticking points?
In March and May respectively, the EU and the UK published their draft legal texts for the future relationship. We previously blogged on the differences between the two negotiating positions.
After four rounds of negotiations, the key sticking points remain:
- Governance: while the EU wants to agree an overarching comprehensive deal that covers all aspects of the future relationship and is "managed" by a single governing body, the UK is proposing a "Comprehensive Free Trade Agreement", supplemented by a range of "sub-treaties" on specific issues to be negotiated and governed individually, notably with no role for the CJEU. A list of documents can be found here;
- Fisheries: while the UK seeks a stand-alone agreement on access to (in particular, UK) fishing waters, the EU's position is that access to fishing waters and access to the wider market for processing and sales must be addressed together, and if no agreement on fisheries can be reached, there can be no wider free trade agreement. The fisheries problem therefore follows directly on from the governance point);
- ‘Level playing field’: the Political Declaration contains the commitment of the parties, in order to ensure open and fair competition, to uphold common high standards in the areas of state aid, competition, social and employment standards, environment, climate change and relevant tax matters. The parties' differing positions on state aid in particular are proving difficult to reconcile. While the EU suggests that the UK should follow EU state aid rules, albeit under a UK authority, the UK wants to have its own rules on state aid.
- Law enforcement and judicial cooperation: both parties want to continue cooperation on, for example, data exchange on DNA and fingerprints, as well as operational cooperation between the UK and EU bodies such as Europol and Eurojust. However, while for the EU this is seen as part of a comprehensive agreement (again, see Governance above), the UK wants a stand-alone agreement with its own governing rules and no role for the CJEU.
What happens next?
At the Joint Committee meeting held on 12 June 2020 the UK confirmed it would not seek an extension to the transition period and accordingly the transition period will now end on 31 December 2020.
This decision, if not unexpected, put even more pressure on the parties to get ahead with negotiations. Further negotiation rounds are now expected take place in July, August and September. The parties so far have agreed to continue negotiations in the weeks of 29 June, 6 July, 13 July, 27 July and 17 August.
These meetings are to be conducted in person, alternately in Brussels and London; however, locations and formats of the different meetings will be subject to further COVID-19 developments and a combination of physical and videoconference meetings seems likely.
This schedule leaves little room for a break over the summer, as the parties are working towards the end of October at the latest to allow for ratification on both sides.
And more "no-deal" preparations
In order to prepare for the "undesired scenario of no agreement on the future relationship” the European Commission continues to review – and where necessary update – the more than 100 sector-specific “stakeholder preparedness notices” it published during the Brexit negotiations.
Since our last update on the parties’ preparations for a “no-deal” at the end of transition, a further 7 so called "readiness notices" have become available:
- Biocidal products
- Good laboratory practice (GLP)
- Invasive alien species
- Supplementary protection certificates for medical products and plant protection products
- Trade marks and designs
- Value added tax (VAT) - services