Brexit Briefing November 2020

Dover Beach

Jane Lambert

This is my last Brexit Briefing before the end of the transition period.  I delayed it much longer than I should have done to await the outcome of the negotiation between representatives of the British government and the Commission on the UK's future relationship with the European Union.  I have decided not to wait any longer for two reasons. The first is that we may not get an outcome tomorrow. Both sides are gloomy but that does not mean that talks will not continue.  The second is that an agreement may not make all that much difference to businesses and individuals in practice as there will be checks, delays and inconvenience even under a free trade agreement.

The very first Brexit Briefing grew out of a talk that I gave in chambers on IP planning for brexit on 7 Dec 2016.  There were then many uncertainties as to what would happen to Community designs and plant varieties, EU trade marks, geographical indication, the trade secrets directive, the unitary patent and the Unified Patent Court.  Because those uncertainties were likely to be resolved in the negotiations on the terms of the UK's withdrawal, I advised my audience to "Follow the withdrawal negotiations closely, particularly in so far as they affect [their] clients' industries" on slide 21.  I tried to monitor those developments in NIPC News but their speed and complexity prompted me to launch this blog.

Many of the uncertainties have been revolved.   The Trade Secrets Directive came into force during the 2 year notice period (see Transposing the Trade Secrets Directive into English Law: The Trade Secrets (Enforcement etc) Regulations 6 Jun 2019 NIPC Law).  The withdrawal agreement preserved EU intellectual property rights by converting them into national rights (see Intellectual Property Post Brexit 2 Feb 2020 and The Intellectual Property Provisions of the Draft Withdrawal Agreement 19 Nov 2019). Sadly, as I had anticipated in 2016 the UK has withdrawn from the Unified Patent Court Agreement just before Germany introduced legislation ratifying its accession (see Unified Patent Court Ratification Bill clears Lower House of the German Federal Parliament 30 Nov 2020).

A remaining uncertainty is what is to happen to cross-border litigation after the Brussels Regulation (Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters OJ L 351, 20.12.2012, p. 1–32) ceases to apply to the UK. This country has applied to accede to the Lugano Convention (Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters OJ L 339, 21.12.2007, p. 3–41) but has not yet secured the consent of all members. The UK is party to the Convention of 30 June 2005 on Choice of Court Agreements which will come into effect at 23:00 on 31 Dec 2020 and regulations have been made to implement these changes. The Ministry of Justice has provided guidance on these matters in Cross-border civil and commercial legal cases: guidance for legal professionals from 1 January 2021.

As the process of dissolving the UK's 47-year legal relationship with its immediate neighbours will end at 23:00 on 31 Dec, brexit will in a sense be done.  I had thought about ending this blog at the same time but I believe that there will be many issues arising from brexit for many years to come.  There will be new initiatives like the English speaking commercial court in the Netherlands which are likely to interest businesses in the UK. The unitary patent will provide cost savings and other advantages for British companies even though the UK has withdrawn from the UPC agreement, There will be IP provisions to consider in the free trade agreements that the government hopes to negotiate. Also, it is not out of the question that the brexit experiment will be seen to fail sooner rather than later in which case it will be necessary to monitor the art 49 accession negotiations.

Anyone wishing to discuss this article or any topic mentioned in it may call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Brexit Briefing August 2020

Author  Pedroserafin  Licence CC BY-SA 3.0,

Jane Lambert

Talks on the new relationship continued between British and EU officials throughout August but without outwards signs of progress.  In a speech to the Institute of International and European Affairs published on 2 Sept 2020, Michel Barnier complained of the UK's failure to engage in discussions on:

• credible guarantees for open and fair competition particularly in state aid, labour and environment;
• fisheries; and
• dispute settlement.

Monsieur Barnier acknowledged the UK's avowed ambition for a clean break but noted that its negotiators wanted to keep many of the advantages of  EU membership such as transport, trading conformity assessment for its goods and police and judicial cooperation.  He also expressed concern at the British request to renegotiate indications provisions of the withdrawal agreement and at progress of implementing the Northern Irish protocol.

The British request to renegotiate the geographical indications provisions of the withdrawal agreement is curious because it is not clear what the British government wants to put in their place.  As she had mentioned GIs several times in her talk to the Informa IP Law Summer School, I asked Olivia Wessendorff of the Department of International Trade, one of the negotiators for the free trade agreement with Japan,  whether she could share any insight on the changes that the government desired (see Virtual Cambridge: Informa Connect's IP Law Summer School 2020 22 Aug 2020 NIPC Training).  She replied that her department was not responsible for negotiations with the EU. The last she had heard the government intended to create a GI regime on the lines of the EU one.

In his speech to the Institute Monsieur Barnier warned that from the 1 Jan 2021 British financial services firms will lose their passporting rights,  Britsh manufacturers' type approval will cease to be recognized and there will be customs formalities at all EU ports and airports even with the most favourable trade deal.  The Britsih government appears to be resigned to greater birder formalities for it has recently announced £50 million funding for new customs intermediaries and completed a consultation on a new border strategy for 2025.  Clearly, anybody hoping to do substantial business with EU countries after that date (particularly financial and professional services providers) should have started planning for those realities.

Probably by the end of this month and certainly by the end of October, we should know whether there will be a new partnership agreement.  Neither side sounds particularly hopeful.  How much difference any such agreement will make is debatable.  Anyone wishing to discuss this article or anything mentioned or referred to it it should call me on +44 (0)20 7474 5252 or send me a message through my contact form.

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 May 2020

By ClemRutter, Rochester, Kent. - Own work,
CC BY 2.5, https://commons.wikimedia.org/w/index.php?curid=2163988

Jane Lambert

A lot happened in May.  Mr David Frost presented British proposals for a comprehensive free trade agreement with accompanying agreements on various other matters (see Jane Lambert Better Late than Never - The UK Counter Proposals in the New Relationship Negotiations 19 May 2020). Michel Barnier answered David Frost's shrill and petulant covering letter from David  Frost of 19 May 2020 with a firm but measured and courteous response the very next day. The British government resumed its negotiations with the USA for a free trade agreement on 5 May 2020 and published its proposals for a free trade agreement with Janan.

The British proposals are structured very differently from the draft agreement of 18 March 2020 but they are a substantial set of documents and contain many provisions upon which the Commission ought to be able to agree.  It is said that Mr Frost's letter irritated many on the continent but they will be aware that Mr Frost and his political masters have an audience of Conservative backbenchers and a Eurosceptic press.  Another round of negotiations begins today on an agreed agenda.  For the first time since negotiations began, both sides' proposals have been exchanged.

If there is to be an extension to the 11th-month transition or implementation period it has to be agreed in June. A bill to extend that period has been introduced into the House of Commons by Sir Edward Davey, acting leader of the Liberal Democrats. It is supported by the Scottish National Party, Plaid Cymru, the Green Party, the Alliance Party and the Social Democratic and Labour Party in Northern Ireland but not the Labour Party and it has been welcomed by Monsieur Barnier in a letter dated  25 May 2020 (a copy of which can be downloaded from this blog's EU negotiations page.  Labour's reticence has surprised some but it can probably be explained by the fact that he party under its new leader is doing rather well in the polls and sees no advantage in picking fights that it can't win,

Many commentators are gloomy about the outcome of the new relationship negotiations but I am not so sure.  A lot of work has been done on the British draft agreements which would have been pointless had they been intended to fail. The UK needs continued access to the single market more than its negotiators concede because there is no obvious alternative. With the highest number of coronavirus deaths in the world and record unemployment, the US economy is in an even worse mess than ours.  It now has race riots in its major cities with which to contend.  Relations with the other economic superpower have deteriorated still further with the Chinese government's clampdown on Hong Kong.

Anyone wishing to discuss this article or the new relationship negotiations, in general, should call 020 3819 8725 while lockdown continues or message me through my contact form

Brexit Briefing April 2020

Author NIAID Licence CC BY 2.0

Jane Lambert

The world has changed since 23 June 2016 and indeed much of that change has occurred since 12 Dec 2019. The United States and the United Kingdom have suffered more deaths from CORVID-19 than any other country and a severe contraction of economic activity. The virus has affected other large countries but not to the same extent.  The other significant event that occurred in April was the announcement that China had overtaken the USA in the number of applications for patents through the Patent Cooperation Treaty for the first time ever (see WIPO PR/2020/848 7 April 2020).  In terms of domestic applications, China is considerably further ahead.  That country filed 1.5 million applications compared to the USA's 597,000 {see World Intellectual Property Indicators 2019 -Patents WIPO 2019).

Despite those changes, British officials are quietly pursuing negotiations that are likely to result in trade barriers with the UK's nearest and largest market from 31 Dec 2020 and an American administration in an election year that is struggling to control the pandemic and the resulting economic downturn.  Such policy would, of course, be justified by the 2016 referendum result and the 2019 general election though it is probably the case that the government won with remainder votes who were more afraid of Corbyn than they were of brexit.

The new relationship negotiations resumed in April as I noted on 18 April 2020 in Barnier and Frost talk at last and two rounds have actually taken place. In a press statement by Michel Barnier following the second round of future relationship negotiations with the UK on 24 April 2020, the EU chief negotiator warned of

"two very real deadlines that we are faced with and which have been set by law:

• 30 June 2020: Will we decide or not, before that date, and by joint decision with the British, to extend the transition period, according to the possibility that is foreseen in the Withdrawal Agreement?

• And, 31 December 2020 – the date of the ‘economic Brexit', following the ‘political Brexit' that took place at the beginning of this year: On this date, which will bring important and definite changes in many areas, will the United Kingdom leave the Single Market and Customs Union with or without an agreement with the EU?"

By a circular dated 29 April 2020, the Commission announced that it had reviewed and updated the plans that it had made for a British departure from the EU without a withdrawal agreement and has set them out in a number of sector readiness notices that can be found on its Getting ready for the end of the transition period page.

In his statement, Monsieur Barnier came close to accusing British officials of negotiating in bad faith. In the Political Declaration that accompanied the withdrawal agreement, both sides made commitments for the future framework that British negotiators refused to discuss except in the most general terms.  There is concern that the British government is failing to implement the provisions of the withdrawal agreement that would enable the border between Northern Ireland and the Republic of Ireland to remain open.  In order to monitor such implementation, the Commission has sought permission to open a representative office in Belfast which was refused by the Paymaster General on 27 April 2020 (see the letter from the Rt Hon Penny Mordaunt MP to Helga Schmid and Michel Barnier).  Further, the only British response to the draft treaty that the Commission proposed to the UK on 18 March 2020 has been a number of text proposals which Monsieur Barnier has been asked not to share with the member states or the European Parliament.

Negotiations began with the US Trade Representative on a trade agreement with the USA on 5 May 2020 after a two-month break with platitudinous statements on both sides (see Joint Statement of UK International Trade Secretary Liz Truss and USTR Robert Lighthizer  5 May 2020 Department for International Trade and Statement of USTR Robert Lighthizer on the Launch of U.S.-UK Trade Negotiations 5 May 2020 Office of the US Trade Representative).   It is worth remembering that any deal with the USA will have to be approved by the US Senate which will have concerns if a largely US brokered peace deal in Northern Ireland breaks down as a result of the failure to honour the commitments on Northern Ireland in the withdrawal agreement.

I shall be updating the EU new partnership negotiations page and the US trade agreement negotiations page.  Ideally, there should be a page on British involvement with the one belt one road initiative and the UK's relationship with China which is already providing much of the investment and technology for the UK's next generation of nuclear power stations, high-speed rail and 5G mobile communications but at the moment that relationship seems to be going nowhere.  Anyone wishing to discuss this article or any of the issues raised in it should call 020 3819 8725while lockdown continues or message me through my contact form.

Negotiations on the Future Relationship between the UK and EU

Author Furfur Licence CC BY-SA 4.0 Source Wikimedia Brexit

Jane Lambert

The negotiations between the British government and the Commission on the relationship between the United Kingdom and the European Union began yesterday afternoon in Brussels with a bilateral meeting between the lead negotiators, David Frost and Michel Barnier (see AGENDA EU - UK Future Relationship 1st Round of Negotiations 2 - 5 March 2020).  I have already discussed the parties negotiating positions in Future Relationship Negotiations: The EU sets out its Stall 26 Feb 2020 and The Future Relationship with the EU The UK’s Approach to Negotiations - An Introduction and Overview 27 Feb 2020). I am also monitoring the negotiations on my EU Trade Negotiations page.

The negotiations are continuing today and tomorrow with negotiations between working parties on the following topics:

1. Trade in goods
2. Trade in services and investment and other issues
3. Level playing field for open and fair competition
4. Transport
5. Energy and civil nuclear cooperation
6. Fisheries
7. Mobility and social security coordination
8. Law enforcement and judicial cooperation in criminal matters
9. Thematic cooperation
10. Participation in Union programmes
11. Horizontal arrangements and governance

Particularly useful resources include The Future Partnership, The European Union and the United Kingdom – forging a new partnership, Documents related to the negotiations with the United Kingdom,
Questions & Answers on the draft negotiating directives for a new partnership with the United Kingdom and the Task Force for Relations with the United Kingdom on the Commission website and the link to member states' websites on brexit.  

Yesterday the British government also published the UK's approach to trade negotiations with the US in UK-USFree Trade Agreement which I shall discuss later.

Anyone wishing to discuss this article or the new relationship negotiations generally may call me on +44 (0)20 7404 5252 or send me a message through my contact page.

Future Relationship Negotiations: The EU sets out its Stall

Standard YouTube Licence

Jane Lambert

The United Kingdom left the European Union on 31 Jan 2020 pursuant to the Agreement on the withdrawal of theUnited Kingdom of Great Britain and Nothern Ireland from the EuropeanUnion and the European AtomicEnergy Community ("the Withdrawal Agreement"). The Withdrawal Agreement provides for an implementation period during which EU law will continue to apply to the UK until 31 Dec 2020. One of the reasons for the implementation period is to enable the parties to negotiate a new relationship to take effect from 1 Jan 2021.

The parties have already agreed a framework for such a relationship in the Political Declaration setting out the framework for the future relationship between the European Union and the theUnited Kingdom ("the Political Declaration").  The European Council has now authorized the opening of negotiations with the UK for a new partnership agreement in the terms of the draft decision of 13 Feb 2020 and an addendum to the decision setting out directives for those negotiations.

The decision consists of 8 recitals and 3 articles.  The recitals refer to the Withdrawal Agreement and the Political Declaration as well as Council guidelines of 30 March 2018 restating the Council's determination to have as close as possible a partnership with the UK covering trade and economic cooperation and also other areas including, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy. Art 1 of the decision authorizes the European Commission to open negotiations for a new partnership agreement.  Art 2 nominates the Commission as the EU's negotiator.  Art 3 requires the negotiations to be conducted in consultation with the Working Party on the United Kingdom and in accordance with the directives contained in the addendum, subject to any directives which the Council may subsequently issue to the Commission.

The addendum is a much larger document consisting of 46 pages containing 172 paragraphs divided into an introduction and four Parts.  Paragraph 5 of the introduction reminds readers that:

"The negotiations of the envisaged partnership should be premised on the effective implementation of the Withdrawal Agreement and of its three Protocols. In this context, the envisaged partnership should continue to protect the Good Friday or Belfast Agreement reached on 10 April 1998 by the United Kingdom Government, the Government of Ireland and the other participants in the multiparty negotiations in all its parts, in recognition of the fact that the peace process in Northern Ireland will remain of paramount importance to the peace, stability and reconciliation on the island of Ireland. While preserving the integrity of the Single Market, the envisaged partnership should ensure that issues arising from Ireland's unique geographic situation are addressed."

Paragraph 9 acknowledges the very short duration of the implementation period. The Commission is urged to achieve as much as possible during that time and to be ready to continue negotiations after its expiry.

Part I of the addendum concerns "Initial Provisions".  Paragraph 12 recites the parties' core values and rights including a shared commitment to combat climate change which may or may not be reflected in this country's negotiations for a trade agreement with the USA.  Another shared commitment is maintaining a high level of data protection. The proposed partnership envisages future UK participation in some EU and Euratom programmes in cultural, scientific and other matters.

Part II concerns economics.  It should conform to the Agreement to establish the World Trade Organization and its policies for trade.  There should be free trade in goods, customs cooperation, trade facilitation and a measure of regulatory alignment.  Trade in services and the free flow of investment should be prioritized.  Intellectual property is mentioned specifically.  There are sections on financial services, competition, mobility of labour, transport cooperation and fisheries the last of which is likely to be particularly sensitive politically.

Part III covers security and addresses law enforcement and judicial cooperation, intelligence sharing, foreign policy coordination including sanctions, defence procurement, space, international development, refugees and infection control.

Part IV deals with institutional matters. Paragraph 155 proposes "a governing body responsible for managing and supervising the implementation and operation of the envisaged partnership, facilitating the resolution of disputes" Disputes that cannot be resolved through consultation should be referred to arbitration with provision for the referral of points of EU law to be referred to the Court of Justice of the European Union. That provision has been criticized by some but it is hard to see an objection. It merely provides machinery to access the Court where none exists right now.   The tribunal will have its seat in a national jurisdiction with direct access to national courts on issues of national law.

Anyone wishing to discuss this article or the new relationship negotiations generally should call me on +44 (0)20 7404 5252 during normal office hours or send me a message through my contact page.