The Chequers Statement explained

Chequers Court

Author Stephen Simpson
Licence Copyright released by the author
Source Wikipedia

Jane Lambert

The Statement from HM Government issued from Chequers on 6 July 2018 appears to be a direct response to the European Council's Conclusions of 29 June 2018.  In order to understand both documents it is necessary to have regard for the Joint statement from the negotiators of the European Union and the United Kingdom Government on progress of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union.

The Joint Statement refers to a draft treaty for the withdrawal of the UK from the European Union which was first published on 28 Feb 2018.  The draft treaty is intended to be an agreement "setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union" within the meaning of art 50 (2) of the Treaty of European Union. It provides a timetable and road map for the orderly withdrawal of the UK from the EU. The draft agreement provides for the UK to observe the obligations of membership until 31 Dec 2020 after which a new framework agreement is hoped to be in place.

Without a withdrawal agreement, art 50 (3) provides that the treaties and the entire superstructure of legislation that has governed the relationship between the UK and its neighbours and allies since 1973 will simply fall away on 29 March 2019.

There are some who believe that such an outcome would be a good thing because it would enable:

• British businesses and consumers immediately to buy goods from suppliers outside the EU more cheaply than they can now because the UK would no longer have to apply the common external tariff on such goods; and 
• British diplomats to negotiate trade deals with countries outside the EU that would be more favourable to British business than the ones to which HM government is already a party.

That may or may not be the case but it is not a view shared by business leaders in the aerospace and automotive sectors that have warned that they will reconsider investing in the UK if the UK leaves the EU without, at the very least, a withdrawal agreement on the lines of the 28 Feb draft.

The problem for both the British government and the remaining EU member states is that any withdrawal agreement will have to be ratified by the British and European parliaments and there is not much time left for them to do it. That is why the Council expressed concern that no substantial progress had yet been achieved on agreeing a backstop solution for the border between the Irish Republic and the United Kingdom and called upon the UK to make its position clear on any framework agreement for future trade relations between the UK and EU.

Both the British government and the remaining EU member states are committed to an open border between the United Kingdom and the Republic of Ireland.  The EU Commission proposes a backstop agreement which would require Northern Ireland to remain in a customs union with the Irish Republic.  As that would be politically unacceptable to the UK, the Chequers statement makes two proposals. The first is that:-

"The UK and the EU would maintain a common rulebook for all goods including agri-food, with the UK making an upfront choice to commit by treaty to ongoing harmonisation with EU rules on goods, covering only those necessary to provide for frictionless trade at  the border."

Secondly:

"The UK and the EU would work together on the phased introduction of a new Facilitated Customs Arrangement that would remove the need for customs checks and controls between the UK and the EU as if a combined customs territory."

The government listed the benefits of the proposal one of which is that it should

"enable the Government’s commitments to Northern Ireland to be met through the future relationship, avoiding the need for a border between Northern Ireland and Ireland, or within the UK."

There is no guarantee that these proposals will be accepted but they are a start.  The alternatives to a withdrawal treaty are no agreement at all and the last paragraph of the statement makes arrangements for that eventuality, an agreed extension of the two year negotiating period in accordance with art 50 (3) or, if that is legally or politically possible, the revocation of the notice of intention to withdraw from the EU.

Anyone wishing to discuss this article or Brexit in general should call me on 020 7404 5252 during office hours or send me a message through my contact form.

The Best that can be achieved from the Withdrawal Agreement Negotiations and the Likelihood of achieving it

Jane Lambert

In Hope for the best but prepare for the worst 22 June 2018, I advised businesses of all kinds to make risk assessments and draw up contingency plans for the UK's departure from the EU without a withdrawal agreement.  Comparing what needs to be done before 29 March 2019 with what has been achieved to date it has become increasingly unlikely that such an agreement can be concluded and ratified in time. 

The remaining 27 member states appear to be of a similar view.  In a statement following the Council meeting of 28 and 29 June 2018 President Tusk said:

"On Brexit. The EU27 has taken note of what has been achieved so far. However, there is a great deal of work ahead, and the most difficult tasks are still unresolved. If we want to reach a deal in October we need quick progress. This is the last call to lay the cards on the table."

This was amplified in the  Conclusions of the Council of 29 June 2018. 

While the governments of the remaining 27 member states welcomed the progress mentioned in the  joint statement from the negotiators of the European Union and the United Kingdom Government on progress of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union, they noted that "other important aspects still need to be agreed, including the territorial application of the Withdrawal Agreement, notably as regards Gibraltar." They expressed concern that no substantial progress had been achieved on a backstop solution for the Irish border despite British commitments made in December 2017 and March 2018, and that negotiations can only progress as long as all commitments undertaken so far are respected in full.

The remaining member states also concluded that work must be accelerated with a view to preparing a political declaration on the framework for a future relationship between the UK and EU.  Such a political declaration would have to appear in a withdrawal agreement because the EU 27 made plain in paragraph 6 of their Guidelines of 15 Dec 2017 that an agreement on a future partnership can only be concluded after the UK leaves the EU.  In paragraph 8 of their Guidelines of 23 March 2018 the 27 remaining states emphasized that although they were prepared to countenance a  "balanced, ambitious and wide-ranging free trade agreement" such an agreement could not offer the same benefits as EU membership and or allow participation in the single market or parts thereof.  

It could, however, cover such matters as:

"i) trade in goods, with the aim of covering all sectors and seeking to maintain zero tariffs and no quantitative restrictions with appropriate accompanying rules of origin. In the overall context of the FTA, existing reciprocal access to fishing waters and resources should be maintained;
ii) appropriate customs cooperation, preserving the regulatory and jurisdictional autonomy of the parties and the integrity of the EU Customs Union;
iii) disciplines on technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures;
iv) a framework for voluntary regulatory cooperation;
v) trade in services, with the aim of allowing market access to provide services under host state rules, including as regards right of establishment for providers, to an extent consistent with the fact that the UK will become a third country and the Union and the UK will no longer share a common regulatory, supervisory, enforcement and judiciary framework;
vi) access to public procurement markets, investments and protection of intellectual property rights, including geographical indications, and other areas of interest to the Union."

There could also be collaboration on climate change, sustainable development and pollution control. Agreement could be reached on free movement of people, recognition of professional qualifications and judicial cooperation, transport and scientific research and development.

Such an agreement would go a long way towards ensuring the continuation of integrated manufacturing in industries like motor manufacturing and aerospace and the provision of financial and professional services by the city of London. That is the best possible outcome that could be hoped for.  Both sides want it but it is increasingly unlikely that they will be able to deliver it by the end of March.

Anyone wishing to discuss this article or Brexit in general should call me on +44 (0)20 7404 5252 or send me a message through my contact form.