Key developments in May included the European General Affairs Council’s authorisation of the opening of Article 50 negotiations and adoption of the first set of negotiating directives. The European Commission also published draft position papers on citizens’ rights and financial settlement, while the House of Commons Library released a briefing paper on options for the UK’s participation in EU agencies post-Brexit.
European Council authorises European Commission to start negotiations on behalf of EU
As anticipated, at its meeting on 22 May 2017, the General Affairs Council adopted a Coucil Decision authorising the opening of negotiations with the UK for an agreement setting out the arrangements for its withdrawal from the EU. The first set of negotiating directives is annexed to the Decision. The European Commission was nominated as the EU negotiator.
The negotiating directives are almost identical to those proposed by the Commission and are intended to cover the matters necessary to ensuring an orderly withdrawal of the UK from the EU, dealing with:
- Guarantees to protect citizens’ rights.
- A single financial settlement.
- Support of the Good Friday Agreement.
- Goods placed on the market and procedures based on EU law.
- Administrative issues and governance.
On 29 May 2017, the Commission published two draft position papers on Article 50 negotiations, setting out the main principles of the EU’s positions on citizens’ rights and on financial settlement. These two papers relate to the ‘Orderly Withdrawal’ listed as one of the six headings of the Article 50 guidelines, which were formally adopted by the European Council on 29 April 2017.
Formal meetings between the EU and the UK negotiators are expected to start in the week of 19 June 2017.
House of Commons Library publishes briefing paper on EU agencies and post-Brexit options
On 28 April 2017, the House of Commons published a briefing paper on the different types of EU agencies and the options for UK participation in their activities post-Brexit.
The paper notes that many of the agencies permit third-party participation, usually as observers without voting rights; such third parties are usually required to contribute to the agency’s budget and accept the jurisdiction of the Court of Justice of the EU. The power of such agencies to agree other arrangements for third party participation is subject to some debate, but such issues could be discussed during the Brexit negotiations.
The paper also looks at relocation of the UK-based European Medicines Agency and the European Banking Authority, which is likely to be settled before Brexit.
Trade, WTO and Free Trade Agreements
On 10 May 2017, the British Bankers’ Association (BBA) published a Brexit quick brief on issues relating to the UK’s profile at the World Trade Organization (WTO) and Free Trade Agreements (FTAs), including:
- Establishing a WTO profile for the UK.
- Whether existing EU FTAs can be translated to the UK.
- Re-establishing framework arrangements with third countries.
- New trade relationships.
The BBA notes that market access arrangements for financial services in even the most modern FTAs can be limited. The Association will undertake further work on the possible approach to future FTAs that might go further on market access.
The Institute for Government set out the practical steps they believe are required in the new Department for International Trade and other government departments to launch a successful UK trade policy after Brexit on 17 May 2017. The report focuses on trade with non-EU countries and recommends, among other things, that the government should:
- Collaborate with devolved administrations, businesses and consumer and environmental groups when making trade policy.
- Guarantee Parliament a direct vote on future trade deals before they are ratified.
- Prioritise carrying over existing EU FTAs, particularly those with Canada, Singapore, South Korea, Switzerland and Turkey.
Several reports considering the impact of Brexit on specific sectors and policy areas were published in May:
- Energy and climate change policy. The House of Commons BEIS Select Committee published a report on the UK government’s negotiation priorties in this area. Among other key issues identified, the report warns that the decision to leave Euratom as a result of triggering Article 50 has left the UK nuclear industry at risk and recommends that the government seeks to delay exit from Euratom if necessary to avoid an interval between doing so and entering into secure alternative arrangements.
- Agriculture and food. The Lords EU Energy and Environment Sub-Committee published a report investigating the likely implications of Brexit for the UK’s food and agricultural industry. Key findings of the report relate, among other things, to the UK’s withdrawal from the CAP, which may represent an opportunity to introduce policies that better benefit UK farmers.
- Financial services. TheCityUK published a report on the legal impact of the UK’s exit from the EU on the UK-based financial services sector, which considers in particular the effect of potential changes to rights to access EU markets.