GOVERNANCE

 

The Agreement does not just include a free trade agreement underpinned by commitments to ensure a level playing field, but also provisions on transport, energy, fisheries, law enforcement and judicial cooperation, health security, cyber-security and social security. A horizontal institutional framework is therefore necessary to govern and enforce all aspects of the Agreement.

 

Why did you insist on a single governance framework?

The scope and complexity of the Agreement call for a single and clear governance framework, setting out how implementation is operated and controlled, and how the parties’ commitments are enforced.

This way, multiple parallel structures and additional bureaucracy are avoided, and businesses, consumers and citizens in the EU and in the UK have legal certainty about the applicable rules, as well as robust guarantees of compliance by the Parties.

 

Doesn’t this make the Trade and Cooperation Agreement heavy and more difficult to govern?

On the contrary, the Agreement is conceived to be flexible and adaptable to the specific needs that may arise in different areas of cooperation. Its overarching structure will help sustain the EU-UK relationship over the long term as it evolves, lead to coherence and transparency, and avoid overlapping procedures, which in turn will ensure thorough implementation across all sectors.

 

You did decide not to include two agreements in the main agreement: on nuclear safety and security of information. Why did you exclude them from the main agreement?

Indeed, one fully separate agreement governs EU-UK cooperation on nuclear safety, and another agreement on information security is linked up to the main agreement to ensure the same dates for the entry into application and termination of the agreements. Nuclear safety agreements are usually separate from other arrangements. They are concluded on a separate Euratom legal basis and do not need to come under the same governance and enforcement structures as other areas as they have their own robust structure.

For more information on these agreements please refer to the sections on Energy and on Information Security of this document respectively.

 

What body will supervise the implementation of the draft Trade and Cooperation Agreement?

The EU and the UK agreed to create a joint body, called the Partnership Council, to efficiently manage the Agreement.

The Partnership Council is co-chaired by a Member of the European Commission and a representative of the UK at ministerial level. It meets at least once a year, but can meet more often at the request of either the EU or the UK. Any decision is taken by mutual consent between the EU and the UK.

The Partnership Council oversees the attainment of the objectives of the Agreement. The EU or the UK can refer to the Partnership Council any issue relating to the implementation, application and interpretation of the Agreement.

The Partnership Council is assisted in its work by Specialised Committees and in some areas by technical working groups.

 

Clear commitment to common values

Modern international agreements do not only strengthen the economy and create jobs. They are also a vehicle to promote common values and ensure their protection.

In line with this approach, the EU and the UK agreed to base their cooperation explicitly on shared values such as the protection of human rights and fundamental freedoms, the rule of law, the fight against climate change and respect of the Paris Agreement.

 

You call the fight against climate change an essential element. What does this mean concretely?

This is the first time the EU has included the fight against climate change as an “essential element” in a bilateral agreement with a third country. This means for example that if the EU or the UK were to withdraw from the Paris Agreement, or take measures defeating its purpose, the other party would have the right to suspend or even terminate part or all of the EU-UK Agreement.

This new clause reflects one of the European Commission’s fundamental commitments as part of the European Green Deal.

By agreeing to include the fight against climate change as an essential element of the Agreement, the EU and the UK confirm their global leadership on this important issue and hope to set an example for future agreements.

 

Will the UK be able to continue to participate in EU regulatory agencies as a third country?

No. The UK loses all influence on the governance of the EU. In addition to the EU institutions, this also applies to the agencies which have been set up to support the EU and its Member States to develop and implement EU rules. A third country leaving these rules, and their supervision, can no longer participate in these agencies. This applies for instance to the European Chemicals Agency, the European Aviation Safety Agency, the European Medicines Agency or still the European Food Safety Authority, to name but a few.

 

What role for the European Parliament?

The Agreement enables the European Parliament and the Parliament of the United Kingdom to create a joint parliamentary assembly to exchange views on the Agreement and make recommendations to the Partnership Council.

 

Will civil society get a say in the implementation of the Agreement?

The EU and the UK commit to regularly consult civil society organisations on the implementation of the Agreement. This is a key commitment in all modern international agreements negotiated by the EU.

 

Horizontal Dispute Settlement Mechanism

The Agreement includes a robust mechanism to resolve disputes that may arise between the EU and the UK on the interpretation or implementation of their commitments.

This mechanism covers disputes arising in any economic area, including trade and level playing field commitments, as well as social security coordination, energy, transport or fisheries.

Law enforcement and judicial cooperation has its own mechanism to resolve disputes swiftly (please find more information in the dedicated chapter).

 

What exactly happens in case of a dispute?

The EU and the UK first consult in good faith to try to resolve any issue.

If disagreements persist, the complaining party may request the establishment of an independent arbitration tribunal. The parties choose three arbitrators jointly, if necessary drawing from pre-agreed lists of potential arbitrators and the tribunal is to deliver a binding ruling within a set timeframe.

 

Is the Court of Justice competent to rule on the disputes under the agreement?

No, disputes between the parties on the application of the agreement are settled under the dispute settlement mechanism set up in the agreement, and not by the courts of either party. The EU is of course subject to the oversight of the Court, also for concluding and implementing international agreements.

 

Enforcement of the Agreement

The Agreement contains mechanisms to ensure timely compliance with the arbitration tribunal’s ruling, in order to maximise legal certainty for businesses, consumers and citizens.

 

What measures can be taken if a Party doesn’t comply with the arbitration ruling?

If compliance is not achieved immediately or within a reasonable period of time, the complaining Party may suspend its own obligations in a proportionate way until the other Party complies with the ruling of the tribunal.

This includes the suspension of obligations across all economic areas, for instance by imposing tariffs on goods if the other Party persists in breaching its obligations on social security, transport or fisheries. Such “cross-suspension” mechanisms are an essential tool to ensure that both Parties ultimately comply with all their commitments under the Trade and Cooperation Agreement.

The use of cross-suspension mechanisms must be proportionate and appropriate; it can be challenged before an arbitration tribunal.

 

Are the measures always the same, no matter what kind of dispute or in what sector it occurs?

To take into account their specificities, some areas of cooperation also have their own arrangements for effective enforcement, allowing for example for remedial measures, including the swift suspension of obligations by the other Party in case of breaches of level playing field or fisheries commitments.

 

How does this Agreement relate to the Withdrawal Agreement concluded in January 2020?

This Agreement does not replace nor supersede any part of the Withdrawal Agreement.

For instance, citizens’ rights protected by the Withdrawal Agreement after 1 January 2021 as well as commitments taken by the EU and the UK in the Protocol on Ireland and Northern Ireland are fully safeguarded.

 

Territorial Scope

The new Agreement applies, on one hand, to the territories of the Member States as defined in the EU treaties, and, on the other, to the metropolitan territory of the United Kingdom. This means that the overseas countries and territories of both Parties are in principle not covered.

By derogation, the Agreement applies to the Crown dependencies, i.e. Bailiwick of Guernsey, Bailiwick of Jersey and Isle of Man but only for the purposes of trade in goods and fishing.

Finally, in accordance with the negotiating mandate given to the EU negotiator, the Agreement does not apply to Gibraltar nor has any effects on its territory. This does not exclude the possibility to have in the future a separate agreement between the EU and the UK in relation to Gibraltar.