20 April 2020
The substance of the future relationship is now the principal focus of the discussions between the United Kingdom (UK) and the European Union (EU). The UK Government has made clear that, following conclusion of the Withdrawal Agreement, it considers its right to diverge from EU law and policies in future as part of its vital national interest. For its part the EU has emphasised the need for a level playing field and so called ‘dynamic alignment’ in areas that include labour law, environmental regulation and state aid.
Second round of FTA negotiations from Monday 20 April to Friday 24 April 2020
Michel Barnier, the European Commission’s Chief Negotiator, and David Frost, the UK’s Chief Negotiator, agreed to hold the second round of negotiations (postponed by almost a month from 18 March) this week. A repercussion of current travel and meeting restrictions to control the spread of the Covid-19 virus is that the negotiations will be held via video conference.
Timetable of this week’s negotiations
After the 20 April plenary session, from Tuesday 21 through Thursday 23 April there will be parallel sessions on trade in goods, trade in services and investment and on a level playing field for open and fair competition – with a relatively short political meeting, between the chief negotiators, scheduled for Friday morning. Other, shorter, parallel sessions will also take place including on fisheries, transport (aviation), transport (roads), law enforcement and judicial cooperation in criminal matters, energy (including civil nuclear cooperation), mobility and social security coordination and participation in EU programmes.
Future negotiation rounds
Two future negotiation rounds are scheduled for the weeks beginning 11 May and 1 June 2020. That leaves very little formal negotiating time before the high-level meeting to review progress scheduled for June. Under Article 132 Withdrawal Agreement (WA), the Joint Committee, established by Article 164 to oversee implementation, application and interpretation of the WA, can adopt ‘a single decision extending the transition period for up to 1 or 2 years’ before 1 July 2020. The transition period is due to end on 31 December 2020.
A possible extension of the transition period?
It will be politically difficult for the UK Government to extend what it refers to as the implementation period [for withdrawal] beyond the end of this year. Following the December 2019 general election the Conservative Party’s pledged that: “We will negotiate a trade agreement next year – one that will strengthen our [UK] Union – and we will not extend the implementation period beyond December 2020”. That pledge is enshrined in law in section 33 of the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A). Although, section 41 EU(WA)A does provide a UK Government Minister with the authority to modify section 33.
Possible impact of Covid-19 on the transition period?
The Covid-19 crisis, unforeseen in both the UK and the EU in December 2019, has negatively affected economies worldwide and any joint decision on whether to extend the transition/implementation period will now be taken against that background. No negotiated deal remains a possible outcome. However, the risk is that persisting with the political deadline for ending transition/implementation will only add to the dislocation already caused by Covid-19.
Disclaimer: This general memorandum may not deal with every important topic or cover all important aspects of the subject matter. It is not intended, and should not be used, as a substitute for seeking appropriate legal advice on specific questions.