Trade

UK, EU agree draft plan for post-Brexit ties

A draft text on the post-Brexit relationship between Britain and the European Union was agreed Thursday, paving the way for a summit on Sunday at which EU leaders could endorse the plan.

Confirming the agreement between her government and the European Commission, Prime Minister Theresa May hailed the text as “the right deal for the U.K.” which delivers on the 2016 Brexit referendum.

She said EU27 governments would now “examine” the text. “[A] deal is within our grasp and I am determined to deliver it,” she added.

The 26-page political declaration sits alongside the much longer draft Withdrawal Agreement governing Britains divorce from Brussels that was agreed last week. The new text calls for an “ambitious, wide-ranging and balanced economic partnership” between Britain and the EU after Brexit.

One of the key questions raised by the document is whether it will improve Mays apparently slim prospects of getting the Brexit deal through the House of Commons. If the package fails to clear the U.K. parliament, Mays position would be in jeopardy and the chances of Britain leaving the EU without a deal would rise dramatically.

The prime minister faced renewed criticism when she updated MPs on the political declaration later on Thursday with Brexiteer Conservative MPs, including former Foreign Secretary Boris Johnson, former Brexit Secretary Dominic Raab and chair of the European Research Group of Euroskeptic Tories Jacob Rees-Mogg, all voicing concern. Northern Irelands Democratic Unionist Party, which props up Mays government in Westminster, also reiterated their hostility to the text, as did the opposition Labour Party, with Leader Jeremy Corbyn describing the statement as “26 pages of waffle.”

Mays official spokesman said she held a conference call with Cabinet ministers Thursday morning on the Brexit negotiations. The spokesman declined to comment on the document seen by POLITICO and other media outlets.

“As the PM said last night, she had a good meeting with [European Commission President] Jean-Claude Juncker where further progress was made in the negotiations. This allowed them to give further instruction to negotiators who began work immediately on resolving the remaining issues,” the spokesman said.

After their meeting, May said she would return Saturday for further talks with Juncker — on the eve of a summit scheduled for Sunday to endorse the deal.

European Council President Donald Tusk tweeted that the text has been “agreed at negotiators level and agreed in principle at political level, subject to the endorsement of the [EU] Leaders.”

However, that does not mean the text is set in stone. Officials in national capitals will now scrutinize the text to see if it is acceptable to them so some alterations are still possible. Advisers to EU leaders who prepare summits, known as sherpas, will hold a meeting in Brussels on Friday at which there could be further changes to the wording.

The text has grown from a seven-page summary published last week alongside the 585-page draft Withdrawal Agreement. Provisions in the political declaration include:

— A commitment on goods trade for the EU and U.K. to negotiate “a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition.” That is a nod to the “near-frictionless” trade promised by May, but appears to fall short of her proposal for a common rule book that would mean the U.K. effectively remaining within the EU single market for goods.

— On the Northern Ireland backstop, the document says “The Parties recall their determination to replace the backstop solution on Northern Ireland by a subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.” That is likely designed to help Theresa May sell the deal to her MPs, many of whom are deeply unhappy about the backstop.

— A plan to “build and improve on the single customs territory provided for in the Withdrawal Agreement.” That will be controversial with U.K. Brexiteers because it suggests that customs arrangements included in the Northern Ireland backstop will form the basis for the future relationship — providing severe restrictions on any future trade deals. But, the draft agreement states that the future customs union will “build and improve on the single customs territory provided for in the Withdrawal Agreement which obviates the need for checks on rules of origin.”

— A commitment to “explore the possibility of cooperation of United Kingdom authorities with Union agencies such as the European Medicines Agency (EMA), the European Chemicals Agency (ECHA), and the European Aviation Safety Agency (EASA).” The EU has been resistant to the idea of associate membership for the U.K. of EU agencies. This looks like a softening of that line.

— On customs, the document says that “facilitative arrangements and technologies will also be considered in developing any alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.” This leaves open the possibility of using new technology to prevent a hard border in Northern Ireland in future.

— On financial services, both parties pledge to begin proceedings to assess “equivalence” of each others rules immediately after Brexit day.

— On services, the EU and U.K. want to “conclude ambitious, comprehensive and balanced arrangements on trade in services and investment in services and non-services sectors, respecting each Partys right to regulate.”

— On movement of people, there is a commitment to “establish mobility arrangements … based on non-discrimination between the Unions Member States and full reciprocity.” These would allow visa-free travel or short-term visits and both sides “agree to consider conditions for entry and stay for purposes such as research, study, training and youth exchanges.”

— On fisheries, there is a no clear mention of an EU demand that access to EU markets for U.K. fishermen in a future trade deal should be contingent on access to U.K. waters. The text is pretty vague and says that “within the context of the overall economic partnership the Parties should establish a new fisheries agreement on, inter alia, access to waters and quota shares” adding that “the Parties will use their best endeavours to conclude and ratify their new fisheries agreement by 1 July 2020 in order for it to be in place in time to be used for determining fishing opportunities for the first year after the transition period.”

— On security, the document envisages a “broad, comprehensive and balanced security partnership” including data sharing of Passenger Name Record data and DNA, fingerprints and vehicle registration data for combatting crime.

— On data, the document envisages a deal by 2020: “In view of the importance of data flows and exchanges across the future relationship, the Parties are committed to ensuring a high level of personal data protection to facilitate such flows between them. The Unions data protection rules provide for a framework allowing the European Commission to recognise a third countrys data protection standards as providing an adequate level of protection, thereby facilitating transfers of personal data to that third country.”

— On the European Investment Bank the two sides say they will “explore options for a future relationship with the European Investment Bank (EIB) Group.”

— The document does not mention Gibraltar.

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