During the transition phase we will be negotiating a trade deal with the EU based on the political declaration.
So what does this declaration say?
The official title:
Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom
Dated: 19 October 2019
Strangely enough there is no index and the structure is a bit messy, but all in all it contains 141 chapters spread over 5 parts subdivided into a number of sections with roman numerals.
- INTRODUCTION: 1-5
PART I: INITIAL PROVISIONS
- I: BASIS FOR COOPERATION: 6-10
- II: AREAS OF SHARED INTEREST: 11-15
PART II: ECONOMIC PARTNERSHIP
- I: OBJECTIVES AND PRINCIPLES: 16-18
- II: GOODS: 19-26
- III: SERVICES AND INVESTMENT: 27-34
- IV: FINANCIAL SERVICES: 35-37
- V: DIGITAL: 38-40
- VI: CAPITAL MOVEMENTS AND PAYMENTS: 41
- VII: INTELLECTUAL PROPERTY: 42-45
- VIII: PUBLIC PROCUREMENT: 46-47
- IX: MOBILITY: 48-57
- X: TRANSPORT: 58-63
- XI: ENERGY: 64-70
- XII: FISHING OPPORTUNITIES: 71-74
- XIII: GLOBAL COOPERATION: 75-76
- XIV: LEVEL PLAYING FIELD FOR OPEN AND FAIR COMPETITION: 77
PART III: SECURITY PARTNERSHIP
- I: OBJECTIVES AND PRINCIPLES: 78-79
- II: LAW ENFORCEMENT AND JUDICIAL COOPERATION IN CRIMINAL MATTERS: 80-89
- III: FOREIGN POLICY, SECURITY AND DEFENCE: 90-107
- IV: THEMATIC COOPERATION: 108-115
- V: CLASSIFIED AND SENSITIVE NON-CLASSIFIED INFORMATION: 116-117
PART IV: INSTITUTIONAL AND OTHER HORIZONTAL ARRANGEMENTS
- I: STRUCTURE: 118-121
- II: GOVERNANCE: 122-132
- III: EXCEPTIONS AND SAFEGUARDS: 133-134
PART V: FORWARD PROCESS: 135-141
Here we go, only looking at the most relevant sections.
INTRODUCTION
Paragraph 4 is BAD
4. The future relationship will be based on a balance of rights and obligations, taking into account the principles of each Party. This balance must ensure the autonomy of the Union’s decision making and be consistent with the Union’s principles, in particular with respect to the integrity of the Single Market and the Customs Union and the indivisibility of the four freedoms. It must also ensure the sovereignty of the United Kingdom and the protection of its internal market, while respecting the result of the 2016 referendum including with regard to the development of its independent trade policy and the ending of free movement of people between the Union and the United Kingdom.
- The EU insists on keeping the single market and the 4 movements intact.
- The UK insists on sovereignty and independent trade policy and the ending of free movement of people
This quite clear states the red lines of the EU and the UK that the UK will not be part of the single market and customs union.
PART I: INITIAL PROVISIONS
I. BASIS FOR COOPERATION
Paragraph 7 is VERY BAD
7. The future relationship should incorporate the United Kingdom’s continued commitment to respect the framework of the European Convention on Human Rights (ECHR), while the Union and its Member States will remain bound by the Charter of Fundamental Rights of the European Union, which reaffirms the rights as they result in particular from the ECHR.
- The UK should continue to respect the ECHR
This is a massive problem as the ECHR in many areas has overruled the UK high court and made it impossible to extradite illegal of criminal immigrants.
The word “should” however is not mandatory statement, however is a strong intension.
Currently commitment and respect of the ECHR is part of the EU treaties.
II. AREAS OF SHARED INTEREST
None so far
PART II: ECONOMIC PARTNERSHIP
I. OBJECTIVES AND PRINCIPLES
Paragraph 17 is BAD
17. Against this backdrop, the Parties agree to develop an ambitious, wide-ranging and balanced economic partnership.
This partnership will be comprehensive, encompassing a Free Trade Agreement, as well as wider sectoral cooperation where it is in the mutual interest of both Parties.
It will be underpinned by provisions ensuring a level playing field for open and fair competition, as set out in Section XIV of this Part.
It should facilitate trade and investment between the Parties to the extent possible, while respecting the integrity of the Union’s Single Market and the Customs Union as well as the United Kingdom’s internal market, and recognising the development of an independent trade policy by the United Kingdom.
- Mostly a repeat of section 4
- Mentions “level playing field for open and fair competition”, which is a dangerous statement however not defined here. We will look in detail in section XIV what this is. However is can be agued that most trade agreements are like this
II. GOODS
Paragraph 19 is GOOD
19. The Parties envisage having an ambitious trading relationship on goods on the basis of a Free Trade Agreement, with a view to facilitating the ease of legitimate trade.
- Emphasises a free trade agreement hence no intention of anything else
Paragraph 21 is BAD
21. However, with a view to facilitating the movement of goods across borders, the Parties envisage comprehensive arrangements that will create a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition, as set out in Section XIV of this Part.
- Here we go again with the “level playing field”
- Additionally “deep regulatory and customs cooperation”
These are two dangerous statements as this is not what is in a normal free trade agreement.
However we still need a proper definition of what this is.
Paragraph 24 is BAD
24. The Parties will put in place ambitious customs arrangements, in pursuit of their overall objectives.
In doing so, the Parties envisage making use of all available facilitative arrangements and technologies, in full respect of their legal orders and ensuring that customs authorities are able to protect the Parties’ respective financial interests and enforce public policies.
To this end, they intend to consider mutual recognition of trusted traders’ programmes, administrative cooperation in customs and value added tax (VAT) matters and mutual assistance, including for the recovery of claims related to taxes and duties, and through the exchange of information to combat customs and VAT fraud and other illegal activity.
- This is unclear if we hereby bound the UK to retain a VAT regime. VAT is mandated by the EU
It is unlikely we will be able to replace VAT with a simple sales tax as this would break the EU mandated VAT regime and facilitative arrangements.
Especially as long as Northern Ireland have one foot in the EU.
III. SERVICES AND INVESTMENT
None so far
IV. FINANCIAL SERVICES
None so far
V. DIGITAL
None so far
VI. CAPITAL MOVEMENTS AND PAYMENTS
None so far
VII. INTELLECTUAL PROPERTY
None so far
VIII. PUBLIC PROCUREMENT
None so far
IX. MOBILITY
Paragraph 55 is BAD
55. To support mobility, the Parties confirm their commitment to the effective application of the existing international family law instruments to which they are parties.
The Union notes the United Kingdom’s intention to accede to the 2007 Hague Maintenance Convention to which it is currently bound through its Union membership.
This “international family law” is an EU only law mainly making other EU countries law in the UK by enforcing all kinds of EU family law in the UK.
To good word is “intention”, which means it can be changed.
X. TRANSPORT
Paragraph 61 is BAD
61. The Parties agree that bilateral arrangements should be established, as appropriate, for cross-border rail services, including to facilitate the continued smooth functioning and operation
of rail services, such as the Belfast-Dublin Enterprise Line and services through the Channel
Tunnel.
This is an attempt to enforce the HS2, which is essentially an EU project to tie-up mainland Europe with Ireland via the English channel and the HS2 into Ireland.
The wording is quite firm and there is no get-out wording hence HS2 seems to be set in stone in spite of the current review of the project.
XI. ENERGY
Paragraph 70 is BAD
70. The Parties should consider cooperation on carbon pricing by linking a United Kingdom
national greenhouse gas emissions trading system with the Union’s Emissions Trading
System.
No, no and no. Carbon pricing is an EU invention and no other non-EU countries have signed up to this, hence we should not either.
Carbon pricing is partly the reason we are exporting pollution to other countries like China and India.
The result is overpriced energy and the killing of heavy industries within the UK.
XII. FISHING OPPORTUNITIES
Hmm, a whole special section on this smells a bit.
Paragraph 73 is BAD
73. 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.
This is essentially opening the UK fishing territory to the EU.
The good word is “should”, which is a firm intention but not really binding.
Paragraph 74 is VERY BAD
74. 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.
This essentially makes 73 binding as part of a new trade agreement.
XIII. GLOBAL COOPERATION
Paragraph 76 is BAD
76. The future relationship should reaffirm the Parties’ commitments to international agreements
to tackle climate change, including those which implement the United Nations Framework
Conventions on Climate Change, such as the Paris Agreement.
This is none of the EU business to force the UK to the Paris agreement especially not when the UK is a sovereign country.
The good word is “should”, which is a firm intention but not really binding.
XIV. LEVEL PLAYING FIELD FOR OPEN AND FAIR COMPETITION
Here we go again with “level playing field”. The EU is very keen or afraid?
Paragraph 77 is VERY BAD
This is a big one almost containing all the previous chapters again. Splitting it up in paragraphs for easy reading.
77. Given the Union and the United Kingdom’s geographic proximity and economic
interdependence, the future relationship must ensure open and fair competition,
encompassing robust commitments to ensure a level playing field. The precise nature of
commitments should be commensurate with the scope and depth of the future relationship
and the economic connectedness of the Parties.These commitments should prevent
distortions of trade and unfair competitive advantages.To that end, the Parties should
uphold the common high standards applicable in the Union and the United Kingdom at the
end of the transition period in the areas of state aid, competition, social and employment standards, environment, climate change, and relevant tax matters.The Parties should in
particular maintain a robust and comprehensive framework for competition and state aid
control that prevents undue distortion of trade and competition; commit to the principles of
good governance in the area of taxation and to the curbing of harmful tax practices; and
maintain environmental, social and employment standards at the current high levels
provided by the existing common standards.In so doing, they should rely on appropriate and
relevant Union and international standards, and include appropriate mechanisms to ensure
effective implementation domestically, enforcement and dispute settlement.The future
relationship should also promote adherence to and effective implementation of relevant
internationally agreed principles and rules in these domains, including the Paris Agreement.
Holy moly this is a big and bad one.
- future relationship must ensure open and fair competition: this is bad as it included the word “must”; so without this we will not get a trade agreement. This continues into the next part of the sentence:
- robust commitments to ensure a level playing field: this is even worse as “level playing field” can be anything around regulation, taxation and access to resources like fishing
- Parties should uphold the common high standards: this is about regulation, Word should indicates an intension
- robust and comprehensive framework for competition and state aid control: so we would have to abide by the state control rules (beyond the one stated by WTO) and maybe even abide by EU tender rules?
- commit to the principles of good governance in the area of taxation and to the curbing of harmful tax practices: so we should not be allowed to lower our taxes or remove VAT?
- they should rely on appropriate and relevant Union and international standards: again not only should we abode by WTO rules but also EU rules. REALLY BAD
- relevant internationally agreed principles and rules in these domains, including the Paris Agreement: so the EU decides for the UK we have to abide by the Paris agreement and other “relevant” treaties
This chapter is really bad and is unlikely to result in an agreement by 2020 unless the UK government beds over backwards and adheres to several EU rules and other treaties.
This chapter alone would be enough for me to say: “walk away”.
PART III: SECURITY PARTNERSHIP
I. OBJECTIVES AND PRINCIPLES
Non so far
II. LAW ENFORCEMENT AND JUDICIAL COOPERATION IN CRIMINAL MATTERS
Paragraph 81 is BAD
Again a big one with lots of bad points reiterating earlier paragraphs.
81. The Parties agree that the scale and scope of future arrangements should achieve an
appropriate balance between rights and obligations – the closer and deeper the partnership
the stronger the accompanying obligations.It should reflect the commitments the United
Kingdom is willing to make that respect the integrity of the Union’s legal order, such as with
regard to alignment of rules and the mechanisms for disputes and enforcement provided for
in paragraphs 129 to 132.It should also be underpinned by long-standing commitments to
the fundamental rights of individuals, including continued adherence and giving effect to the
ECHR, and adequate protection of personal data, which are both essential prerequisites for
enabling the cooperation envisaged by the Parties, and to the transnational ne bis in idem
principle and procedural rights.It should also reflect the Union’s and its Member States’
commitment to the Charter of Fundamental Rights of the European Union.
- commitments the United Kingdom is willing to make that respect the integrity of the Union’s legal order: so the UK would have to abide by an EU extradition order, which is much more intrusive that normal extradition agreements
- fundamental rights of individuals, including continued adherence and giving effect to the ECHR: here the UK is tied to the ECHR again. The same ECHR preventing the UK to return criminal terrorists to their own countries
- Ne bis in idem principle: is “not twice in the same [thing]”, is a legal doctrine to the effect that no legal action can be instituted twice. This is ok
- commitment to the Charter of Fundamental Rights of the European Union: This ties the UK to a number of other international treaties and is interpreted by the ECJ, so quite bad.
So all in all is quite bad for the UK and nothing to lose for the EU here.
III. FOREIGN POLICY, SECURITY AND DEFENCE
Paragraph 91 is VERY BAD
91. The Parties will promote sustainable development and the eradication of poverty.
In this
regard, they will continue to support the implementation of the United Nations Sustainable
Development Goals and the European Consensus on Development.
The European Consensus on Development is a EU directive encompassing the 2030 agenda in areas as stated:
“The Consensus highlights important cross-cutting elements such as: youth; gender equality; mobility and migration; sustainable energy and climate change; investment and trade; good governance, democracy, the rule of law and human rights; innovative engagement with more advanced developing countries; and mobilising and using domestic resources”
So almost everything; so once we sign-up to this we get into all kinds of other treaties we can’t get out of. It is like a double lock.
The word “will” is dangerous as it designates a commitment in order to agree on a free trade agreement.
The UK should NOT sign-up to this.
IV. THEMATIC COOPERATION
Paragraph 109 is BAD
109. In particular, the United Kingdom should cooperate closely with the Computer Emergency
Response Team – European Union (CERT-EU) and, subject to the conclusion of an
agreement as provided for in Union law, participate in certain activities of the Cooperation
Group established under the Union’s Directive on Security of Network and Information
Systems and of the European Union Agency for Network and Information Security
(ENISA).
The UK should not sign-up to any EU treaties or directives based on Union law as such as these may be amended without the agreement of the UK and it also implies the involvement of the ECJ then.
PART IV: INSTITUTIONAL AND OTHER HORIZONTAL ARRANGEMENTS
I. STRUCTURE
None so far
II. GOVERNANCE
Paragraph 131 is BAD
131. The Parties indicate that should a dispute raise a question of interpretation of provisions or
concepts of Union law, which may also be indicated by either Party, the arbitration panel
should refer the question to the Court of Justice of the European Union (CJEU) as the sole
arbiter of Union law, for a binding ruling as regards the interpretation of Union law.
Conversely, there should be no reference to the CJEU where a dispute does not raise such a
question.
This chapter just confirms if we sign-up to any EU law related areas we will be subject to EU law and the ECJ, hence why I warned against the in earlier chapters.
Paragraph 132 is BAD
132. The future relationship will also set out the conditions under which temporary remedies in
case of non compliance can be taken, in particular obligations arising from parts of any
agreement between the Union and the United Kingdom may be suspended in response to a
breach by the other Party, including as foreseen in article 178 and 179 of the Withdrawal
Agreement.
This chapter ties the political agreement with the withdrawal agreement, making these dependent of each other.
First thig when looking at the WA is to look in these two articles 178 and 179.
III. EXCEPTIONS AND SAFEGUARDS
None so far
PART V: FORWARD PROCESS
Just a lot of administrative details in here. Nothing really of interest except for the fact that there will be a high-level meeting in June 2020, which might be the crunch-time.