Michel Barnier's Statement at the End of the Fourth Round of Negotiations

Michel Barnier
By Foto-AG Gymnasium Melle,
CC BY-SA 3.0,

Jane Lambert

As I said in my May Brexit Briefing, a fourth round of talks between British and Commission negotiators was scheduled for the 2 to 5 June 2020.  They have now taken place and a statement has been made on their progress by Michel Barnier (see Statement by Michel Barnier following Round 4 of negotiations for a new partnership between the European Union and the United Kingdom 5 June 2020).

On its face, it does not make very encouraging reading.  Monsieur Barnier said that there were four big sticking points, namely:

• "Fisheries, and free and fair competition, the so-called ‘level playing field' – two essential elements of the new economic partnership we want to build;

• Guarantees protecting people's fundamental rights and freedoms needed to underpin a close police and judicial cooperation in criminal matters;

• And finally, the governance of our future relationship."

On none of those issues, according to Monsieur Barnier, has there been any significant progress.  He complains that the British wish to renegotiate the Political Declaration setting out the framework for the future relationship between the European Union and the theUnited Kingdom which the Prime Minister signed and expressed concerns as to the implementation of the Northern Ireland Protocol to the Withdrawal Agreement.

There has been no parallel statement from the British side.  As I said in my comments on the British counterproposals and Brexit Briefing a lot more work has been done on the British side than might be expected for mere window dressing. Nevertheless, Andrew Bailey, the Governor of the Bank of England has warned business leaders to prepare for the present transition or implementation period to expire without an agreement (see Ryan Weeks Bank of England governor tells banks to brace for no-deal Brexit – report 3 June 2020 Financial News).

I have added Monsieur Barnier's speech and my comments to my EU negotiations page. I am also monitoring the UK's negotiations for free trade agreements with the USA and Japan.  Despite the deteriorating relationship with China over Huawei, Hong Kong and responsibility for the pandemic I am minded to monitor China's Belt, Road Initiative ("BRI").  The BRI is a massive infrastructure project over the next 30 years for which British businesses and their professional advisors are well placed to win contracts.  I am under no illusions as to the nature of the present Chinese leadership but while countries' interests remain constant governments and policies can and do change.

Anyone wishing to discuss this article or any of its topics should call my clerk Stephen Somerville on 07986 948267 or send me a message through my contact page.

Brexit Briefing - August 2018

Rt Hon Dominic Raab MP

Author Chris McAndrew
Licence  Creative Commons Attribution Share Alike 2.0 unported
Source Parliament

Jane Lambert

Unless the British government withdraws its notice of intention to leave the European Union or the 27 remaining member states of the EU unanimously extend the notice period under art 50 (3) of the Treaty of European Union, the UK will leave the EU on 29 March 2019.  There are two possible scenarios as to what will happen after that.  If both sides sign a withdrawal agreement as contemplated by art 50 (2) arrangements between the UK and the remaining member states will continue more or less as they are now until 31 Dec 2020.  That would give negotiators a breathing space to negotiate an agreement for a future partnership with the EU that will come into effect on 1 Jan 2021.  If a withdrawal agreement is not signed by 29 March 2019 then the legal framework that has governed the UK's relations with its 27 closest neighbours, trading partners and allies will cease to exist with all sorts of unknown consequences.

A draft of the withdrawal agreement was published in February and 80% of it has been agreed according to Michel Barnier  in his op-ed An ambitious partnership with the UK after Brexit 2 Aug 2018 and the Rt Hon Dominic Raab MP, the new Brexit secretary, in his statement to the House of Commons on 4 Sept 2018.   However, as in all commercial negotiations, nothing is agreed until everything is agreed and the sticking point up to now has been how to ensure that there are no customs formalities at the border between Northern Ireland and the Irish Republic after the UK leaves the single market and customs union.  Two possible solutions have been offered so far neither of which is likely to be agreed.  The Commission has proposed a backstop arrangement by which Northern Ireland remains in the customs union and customs and immigration checks take place at British and Irish sea and airports.  The British government has suggested free movement for goods with a common rule book in its white paper on The Future Relationship between the United Kingdom and the European Union.

In his Commons statement Mr Raab described the Commission's proposals as "unacceptable, because they would create a customs border down the Irish Sea."  The white paper proposals have already prompted the resignation of two cabinet ministers and have been described by a former minister as less popular than the poll tax.  They are unlikely to survive a vote in the Commons let alone scrutiny by the Commission's art 50 task force.   Mr Raab told the Commons that "we are determined to reach a solution that protects the Belfast Agreement and avoids a hard border on the island of Ireland" but gave no details as to what that solution could be.

Interestingly, there now seems to be another snag which concerns geographical indications, a form of intellectual property.   In a statement following his meeting with Mr Raab on 31 Aug 2018, Monsieur Barnier said:

"On geographical indications - 3000 geographical indications in the 28 countries of the Union - I expressed again my worry. 

The EU's position is clear: Brexit should not lead to a loss of existing intellectual property rights.

We must protect the entire stock of geographical indications.

This protection is an international obligation, and seeing as it is one of the separation subjects, it must be clarified in the Withdrawal Agreement. We will come back to this subject, whose solution must be in the Withdrawal Agreement."

It is not clear why this is a problem as the UK is bound to protect geographical indications by section 3 of the TRIPs agreement and has always done so through the registration of collective and certification marks and the law of passing off.

Although Mr Raab stressed that he expected to reach a deal with the EU, that it remained the most likely outcome and the government's top and indeed its overriding priority, HMG had a duty as a responsible government to prepare for any eventuality.  Accordingly it has started to publish guidance to businesses and individuals on how to prepare for withdrawal without an agreement which I discussed in And if there is no deal ................. on 24 Aug 2018.

Concern over the consequences of leaving without a withdrawal agreement appears to have begun a shift in attitude over Brexit.  A number of opinion polls were published apparently showing growing disenchantment with Brexit and support for a second referendum (see Benjamin Kentish
2.6 million Leave voters have abandoned support for Brexit since referendum, major new study finds 4 Sept Independent and Patrick Grafton-Green Brexit news latest: Brits would vote 59-41 to remain in EU if second referendum was held, new poll shows 5 Sept 2016 Evening Standard).  A number of politicians in the Labour and Conservative parties as well as the Liberal Democrats have called for a peoples' vote or second referendum on the terms of the UK's withdrawal from the EU and they have been joined by a growing number of business and trade union leaders. The prime minister has rejected those calls and they have not been endorsed by the leader of the opposition but these are uncertain times in which anything is possible.

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

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.