The UK-EU future relationship: the March 2020 EU draft treaty and negotiations update

This paper provides an update on the first three rounds of negotiations on the future UK-EU relationship and analysis of the draft new partnership treaty tabled by the EU in March 2020

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Following the UK’s withdrawal from the EU on 31 January 2020, negotiations on the future UK-EU relationship began on 2 March 2020. The UK and EU negotiating positions were outlined in published documents at the end of February. These are analysed in the Commons Library briefing papers 8834, The UK-EU future relationship negotiations: process and issues and 8920 The UK-EU future relationship negotiations: summary of positions).

The negotiations

The initial terms of reference for the negotiations published at the end of February envisaged five rounds of negotiations up to the middle of May 2020, with further rounds to be mutually agreed. The high-level UK-EU meeting envisaged for June 2020 would be an opportunity to take stock of progress “with the aim of agreeing actions to move forward in negotiations”.

Draft texts tabled

The European Commission published a draft treaty text on 18 March covering all aspects of the EU’s envisaged future relationship with the UK (see below). The UK also tabled texts covering some of its proposed suite of agreements, including a free trade agreement. These were not made public and the Government asked the European Commission not to share these texts with the Member States.

Talks put on hold

Lockdowns across Europe in the wake of the coronavirus outbreak meant that the originally planned second and third round of negotiations did not take place. On 15 April, the two lead negotiators, David Frost (UK) and Michel Barnier (EU) met by videoconference and announced a new schedule of negotiations. This would involve three new rounds to take place by videoconference in the weeks commencing 20 April, 11 May and 1 June.

Second round of negotiations

• Following the second round of negotiations, Mr Barnier said that the UK had refused to engage seriously on a number of fundamental issues.
• He referred to a lack of progress on four issues where the positions of the two sides continued to differ: i) level playing field; ii) governance; iii) police and judicial co-operation; and iv) fisheries.
• A UK Government statement referred to promising convergence in some trade and related issues.

Third round of negotiations

• Ahead of the third round of negotiations in early May, David Frost said that the UK had now tabled a full set of agreements, including a complete draft free trade agreement and a fisheries framework agreement.
• In his statement following the third round, Mr Frost said that the main obstacle was the EUs novel and unbalanced proposals on the level playing field.
• In his statement following the third round, Mr Barnier rejected the UK suggestion that there could be some tariffs, similarly to those found in the EU-Canada agreement, without there being level playing field provisions.
• He said that the negotiations on different topics were linked with agreement in one area requiring agreement in others.

Publication of UK texts and letter to Michel Barnier

• The UK Government published the ten draft treaty texts it has tabled in the negotiations on 19 May.
• The Government also published a letter from David Frost to Michel Barnier sent on the same day.
• Mr Frost said that the UK treaty texts were based on precedent from existing EU agreements with third countries.

Timeline and transition period

• The Scottish and Welsh Governments, the Scottish National Party and Liberal Democrats and several other organisations have called for an extension to the post-Brexit transition period in order to give more time to negotiate an agreement.
• The transition period ends on 31 December 2020, but the Withdrawal Agreement (WA) provides for an extension of the transition period for up to two years if agreed by the end of June 2020.
• The Government has legislated to prohibit itself from seeking an extension and continues to reiterate that it will not do so.

EU draft treaty text

• The EU draft treaty text, published on 18 March, operationalises the positions set out in the EUs negotiating directives in several areas and provides more details.
• Some parts of the text, such as Title VI of Part two on services and investment, closely follow the text of the EU-Japan and other EU free trade agreements (FTAs).
• Part one (common provisions) of the draft treaty states that all areas of the partnership should be within a unified governance structure.

Economy and Trade

• Part two of the draft treaty covers economy and trade.
• In the remaining areas, the parties would agree not to regress below the standards applicable at the end of the transition period (non-regression).
• In addition, the governing body would be able to modify the commitments to reflect evolving standards in most areas of LPF.
• Title IV covers rules establishing a free trade area for trade in goods.
• The text proposes to exempt mutual trade from customs duties (zero tariffs) and product import quotas.
• With regard to trade in services (Title VI) the EU is proposing terms of market access generally on a par with its recent FTAs.
• EU priorities include digital trade, temporary business travel for natural persons and steps towards mutual recognition of professional qualifications where this is in the EUs interest.

Security Partnership

• It also sets out the data protection and human rights requirements that would underpin the agreement and provides for the suspension of it in the event that these are not met.
• This involves a requirement for UK continued adherence to the European Convention on Human Rights and for it to continue to give effect to the Convention in domestic law.
• The EU has also proposed a text on foreign policy, security and defence (Part three, Title II) whilst acknowledging that the UK does not wish to engage in negotiations on these matters.

Participation in EU programmes and financial provisions

• Part four of the draft text covers UK participation in EU programmes and sound financial management.
• It covers financial conditions for UK participation in EU programmes, which would involve a combined sum of a participation fee and an operational contribution.
• EU bodies would have the right to carry out reviews and audits of persons and entities in the UK receiving EU funds.

Governance and Final Provisions

• Part five of the draft treaty sets out the proposed governance structure for the relationship and general dispute settlement.
• The final provisions in Part six provide that if the Withdrawal Agreement (WA) is breached by either party, retaliation to such a breach can take place by suspending aspects of this new treaty.
• The final provisions also cover territorial scope: the treaty will not apply to Gibraltar, the Channel Islands, the Isle of Man, or the Sovereign Base Areas in Cyprus.