Alignment with EU rules and a role for Europe's courts will continue to dominate post-Brexit trade talks. But concerns over citizens’ rights and Northern Ireland have not gone away.
European Commission president Ursula von der Leyen has promised “day and night” talks to reach a post-Brexit trade deal with the UK. And she’ll need it. It took almost three years to agree a divorce deal (see 12351/2), and the same issues have started to crop up again, even before formal trade talks begin.
The EU set out its tough stance in a series of slide presentations to Brexit diplomats this week, on issues including data transfers, financial services, fisheries, transport and energy. There were no surprises in the slides, but they paint a picture of an EU that is determined to protect its internal market and prevent the UK morphing into a low-regulation tax haven on the EU’s border.
The main message from the series of slides, drawn up by the Commission’s UK task force, is that there will be a “big difference” between the pre- and post-Brexit trading relationship. The Commission is insistent on iron-clad fair competition provisions – the so-called “level playing field” (LPF) – a theme that runs through all the slide presentations. That would include, for instance, continued carbon pricing in the UK, maintaining EU-style labour and safety standards for truck drivers and ownership and control rules for airlines.
The Commission is also insistent on "effective enforcement”, which means a role for the European Court of Justice – a point the UK has flatly ruled out. And it’s a demand that Eurasia group’s Mujtaba Rahman says will prove more controversial than the alignment debate. He quotes a senior UK official, who said, “The process and governance will matter more than the substance. We will be able to agree to EU standards on climate and workers’ rights, the question is whether this will have to be codified in their legal system.”
Boris Johnson is also "preparing to play hardball”, Mr Rahman said, by threatening to walk out of negotiations unless the EU makes concessions. The government also feels it will be able to exploit divisions within the EU on trade, the BBC’s Nicholas Watt has heard, citing fisheries, freight and tourism as sensitive areas for different countries. One government official told him: “We understand the EU is nervous about having a big economy on its doorstep that could undercut it by reducing standards. But we're not bothered. We want to do our own thing. Lots of our standards will be better.”
Guy Verhofstadt, the head of the European Parliament’s Brexit steering group, rubbished the prospect of EU divisions on BBC radio Friday morning. “There is really, since Brexit, a feeling that this European project is important, that the single market is crucial to survive… nobody of the 27 will undo the single market.”
In a sneak preview of the direction a post-Brexit UK government might take, transport minister Grant Shapps on Wednesday announced a tax break for struggling airline Flybe, which provides regional flights within the UK. The measure essentially gives the company more time to pay its Air Passenger Duty, allowing it to stay afloat. Rival airlines, including outgoing CEO of the rival International Airlines Group (IAG), have hit out at the move, calling it unfair competition and questioning its legality under EU competition rules.
But competition is not the only thing that concerns the EU. This week MEPs voted through a resolution in Strasbourg insisting EU citizens get a physical document to prove their settled status in the UK, and questioned the independence of the “independent authority” the UK is setting up to monitor citizens’ rights (see EUROPE 12404/4). Guy Verhofstadt said he received assurances this week from Brexit secretary Stephen Barclay on both issues, and that there would be no automatic deportation of people who fail to obtain settled status in time.
Meanwhile, a permanent solution for the Northern Irish border has still to be found, with the withdrawal agreement merely parking the issue until a trade deal has been agreed. The good news is that power sharing has been restored in Belfast, including the creation of a new executive sub-committee on Brexit and a pledge by the British government to consult the Stormont assembly during the EU-UK trade talks.
As one assembly reopens, another (partially) closes, with UK MEPs this week celebrating and mourning their final Strasbourg plenary session. Brexit supporters were ecstatic at the prospect, with Brexit Party leader Nigel Farage tweeting that he was having a “fantastic time”. But S&D MEP Seb Dance said British parliamentarians were merely taking a “sabbatical” and would one day return to the EU, an opinion that Mr Verhofstadt believes “will happen” – but perhaps not in his lifetime. Elsewhere in Parliament, Brexit business continues apace. The Constitutional Affairs committee will vote on Thursday on the Withdrawal Agreement, while the Committee on International Trade (INTA) will hold a Brexit debate on Tuesday. And the Parliament will once again raise the idea of ‘associate citizenship’ for UK as part of the debate on a future Conference on the Future of Europe. (Sarah Collins)