The European Council (Art. 50) on 15 December 2017 adopted guidelines for the second phase of the Brexit negotiations. The European Council welcomes the progress achieved during the first phase of negotiations as reflected in the Communication from the Commission1 and the Joint Report2 and decides that it is sufficient to move to the second phase related to transition and the framework for the future relationship.
It called on the Union negotiator and the United Kingdom to complete the work on all withdrawal issues, including those not yet addressed in the first phase, in conformity with the European Council guidelines of 29 April 2017, to consolidate the results obtained, and to start drafting the relevant parts of the Withdrawal Agreement.
In the negotiations during the second phase addressing transitional arrangements as well as the overall understanding on the framework for the future relationship the European Council guidelines of 29 April 2017 continue to apply in their entirety and must be respected. 3. As regards transition, the European Council notes the proposal put forward by the United Kingdom for a transition period of around two years and agrees to negotiate a transition period covering the whole of the EU acquis, while the United Kingdom, as a third country, will no longer participate in or nominate or elect members of the EU institutions, nor participate in the decision-making of the Union bodies, offices and agencies.
A supplementary directive was made by the European Council on 29th of January 2019 which confirmed during the transition period, EU law covered by the transition arrangements should have the same effects in the United Kingdom as in other member states. The UK should have the same obligations and rights under EU law.
It was to remain a member of the customs union and single market through the transition period subject to all of the rights and obligations and be subject to the full jurisdiction of the European Union courts in this period. Therefore, it would appear for all practical purposes to be a member of the EU say that it would not participate in the decision-making process and EU institutions. In March 2018, it was agreed that the transition period runs to the end of 2020.
Combined with the Joint Report, the transition period under the Withdrawal Agreement seemed to Brexit is to represent a perpetual vassal state. Brexit secretary David Davis had stated publicly that the joint declaration was a statement of intent only, not legally binding. Similar soundings came from other governmental sources.
On 28 February 2018, the European Commission published a 119-page draft Withdrawal Agreement (WA) which put into legal language the conclusions of the negotiations in phase one, which were agreed in a Joint Report on 8 December 2017. It included other draft Articles on matters not covered by the Joint Report, as well as detailed provisions on broad areas of agreement. Amended versions were published on 15 and 19 March.
The agreement text was colour coded. The bulk of the text was green representing the parts agreed, in particular, those in relation to citizens’ rights and financial obligations. Parts in yellow were those where the objective was agreed, but the text was not finalised. Parts not coloured presented the EU’s proposals which had not yet been agreed. They related principally to the Northern Ireland Protocol.
Further Draft Negotiations Guidelines in relation to the future relationship were adopted by the European Council on 23rd March 2018. The draft Withdrawal Agreement should “take account of” the framework for the UK’s future relationship with the EU but would not regulate the long-term future EU – UK economic and trade relationship. This would be negotiated, only once the UK had left the EU and become a third country and would be determined by a separate treaty (or treaties).
The EU emphasised once again that it would not negotiate a trade agreement with an existing member. The UK and the EU would negotiate a ‘political declaration’ on the framework for the future relationship, which would “accompany” the Withdrawal Agreement. This was intended to provide an agreed set of objectives as to the content of a treaty on the future relationship, the detail of which would be negotiated and agreed during the implementation or transition period.
The Guidelines contemplated a free-trade agreement which would imply customs controls and possibly some customs duties. In turn, this seemed incompatible with the backstop. They referred to fishing rights in the context of a free-trade agreement. Existing reciprocal access to fishing waters and resources should be maintained. Exports of fishing products would require mutual access to existing waters, including UK waters.
On Northern Ireland and Ireland, scoping work continued on the full range of provisions in the Protocol, in the context of the parties’ commitment to the Belfast or Good Friday Agreement in all its parts. Both the EU and the UK s recognised that the backstop on Ireland/Northern Ireland required provisions in relation to customs and regulatory alignment in line with paragraph 49 of the Joint Report of December 2017.
Remain supporters saw the possibility that the backstop requirements and the commitment given to Northern Ireland would effectively require the abandonment of Mrs May’s January 2017 red lines. Achievement of the Article 49 and Article 50 pledges would require that the whole of the UK would remain in a customs union and in very close regulatory alignment with European Union.
Ardent levers again emphasised that the backstop would leave the whole of the United Kingdom in a vassal state unable to extract itself, without EU consent and then only on terms agreed by the EU. Leavers insisted that the issue of the Northern Ireland border could be solved by technology and alternative arrangements.
It was becoming increasingly apparent that between the objections of leavers and remainers, that a Withdrawal Agreement might not be possible with the result that the UK might crash out of the EU of 29th of March 2019 without any withdrawal or future trading agreement at all.
Various proposals were floated by leave and remain supporting commentators, academics and politicians. Proposals that the UK might remain in the single market and customs union but without accepting free movement of people were rejected by the EU. The EU reasserted the indivisibility of the four freedoms of workers, services, capital and goods.
At the very moment when negotiations on the framework for the future relationship were to begin, the original red lines of a free-trade agreement outside the EU customs market and the single market seemed incompatible with the Northern Ireland backstop. The emerging proposal for a UK wide customs union or relationship with the EU implied a much closer relationship than the original red lines allowed.
In June 2018, the UK government proposed that in addition to Northern Ireland only backstop, the backstop would include a temporary UK wide backstop. Northern Ireland would be in the EU customs union and a single market for goods while Great Britain would be in a customs union with the EU. While the proposal referred to the need to address regulatory issues, it did not commit to regulatory alignment.
The EU rejected the proposal as it was not a backstop unless it was permanent. The backstop was intended to be specific to the unique circumstances of Northern Ireland. The proposal would allow the UK favourable access to the EU single market without the full obligations EU membership, and it seemed to amount to a repudiation of the principles in the December 2017 Joint Report.