30 August 2017

The UK and EU’s third Brexit negotiation session is scheduled for the end of August 2017. To date the EU has asserted that the UK’s negotiating position has been unclear and its objectives either unrealistic or not clearly expressed. In light of this the EU has said that it will only instruct its negotiators to participate in discussions about a future deal once ‘sufficient progress’ has been made on the terms of exit.

UK government policy papers

While there is some strength to the EU’s concerns, the release during August of a series of government position papers (and the high profile alignment of senior government ministers behind a transition approach) could be seen as a step by the UK towards redressing the balance, avoiding further criticism and pushing the Brexit negotiations forwards. 

That said, the policy documents are presented at a high level. This may be intentional – no negotiator would wish to show all their cards in advance. However, the question remains whether the high-level aspirations expressed in the policy papers are a synopsis of a more fully reasoned approach to be explored during the Brexit negotiation sessions, or have little detail behind them.

Exit, transition and the future deal

Despite the EU’s focus on the exit deal, the UK policy papers are aimed at both exit and the future deal.

Those papers aimed at the current discussions in respect of the exit agreement, such as the proposals for dealing with ongoing EU proceedings at the exit date, share a common feature in seeking to ‘blunt’ the ‘cliff edge’ which might otherwise occur. Whether they are looking at defining the terms for ongoing matters which will survive the exit or proposing a more substantive (and consequently contentious) transition period for existing arrangements, the aim is to limit disruption and confusion and allow a smoother period for citizens and businesses.

Other papers e.g. proposals on customs arrangements, are relevant to both the transition period (i.e. the exit agreement) and the (aspirational) future deal on the UK/EU relationship. In this respect, a number of the policy papers appear to be demonstrating a UK preference for a transition period which develops naturally into an ongoing sensible future working relationship. Such proposals would presumably take the heat out of future trade agreement negotiations: “This works – let’s keep it”. Some of the papers, e.g. the paper on continuity in the availability of goods, while aimed at the exit deal, expressly say they are seeking to lay down an arrangement that could then be adopted into the future.

It may therefore be interesting that a number of the papers envisage arrangements that would involve the UK applying EU arrangements with the rest of the world at the UK’s borders, at least in the transition period. For example one of the proposals for a future UK-EU customs relationship involves removing the need for a EU/UK customs border by mirroring EU’s requirements for imports from the rest of the world at UK points of entry. The intention would ultimately then be to allow cross border trade with the EU where a ‘wash up’ would take place of differential tariffs in the UK/EU. The other option also envisages continuing existing cross-border trade arrangements subject to monitoring using technology and putting in place “final destination” rules.

What next for Brexit?

Seen as a whole, the current policy may therefore be to achieve a workable solution and delay resolving difficulties and restructuring laws until there is time to do so. The UK may be setting out to preserve the current arrangements for such time as it takes to gradually adjust those parts of its border controls and international relationships that it wishes.

In part, that reflects the thinking behind the Withdrawal Bill – the government legislation intended to disapply EU legislation in the UK. Even though EU will no longer apply as at exit date, government is not attempting to draft replacement law. Instead it is deeming the bulk of EU law (presumably as a snapshot of its scope as at exit date) to be instantly converted into UK law. Only from there will it amend and replace that law over the coming years or decades.

If this is true then the government is hoping that Brexit will not be an event so much as the start of an extended adjustment period, domestically and internationally. That adjustment would likely be most acute in the first few years but overall change would be incremental, with ongoing legislative changes and negotiation occupying government, and impacting the economy, for a generation.

All the government’s ambitions in this respect will of course be dependent upon progress being made with the EU. That remains to be seen. The first real opportunity for the EU to determine whether sufficient progress has been made so as to open the door to discussions about the future deal will be October 2017, although some commentators think it likely that any decision on this issue will slip to early 2018. EU negotiator Michel Barnier said, in March 2017, “the clock is ticking”. It still is.

Key contact

Ian Tucker

Ian Tucker Partner

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