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Brexit: EU27 agree guidelines on future UK trade

Out-Law News | 26 Mar 2018 | 9:45 am | 2 min. read

Guidelines that promise to shape the next phase of Brexit negotiations have been agreed by the European Council.

The new guidelines (7-page / 222KB PDF) provide a mandate for the EU27's chief Brexit negotiator Michel Barnier to negotiate with UK government officials on the terms of a new free trade agreement.

According to the guidelines, however, no new EU-UK trade agreement reached would take effect until after the UK formally exits the EU. Brexit date is 29 March 2019.

In the paper, the European Council identified six areas that a new EU-UK trade agreement would cover. It includes trade in goods, which the Council said should apply across all sectors and look to "maintain zero tariffs and no quantitative restrictions".

Terms around trade in services should also be included, the Council said, but market access rights would need to reflect the UK's status as a 'third country' post-Brexit and the fact that the EU27 and UK "will no longer share a common regulatory, supervisory, enforcement and judiciary framework". The Council rejected the idea that different market access terms could be agreed on a sector-by-sector basis.

According to the guidelines, the free trade agreement should also address "appropriate customs cooperation, preserving the regulatory and jurisdictional autonomy of the parties and the integrity of the EU Customs Union", as well as "disciplines on technical barriers to trade" and measures to preserve food safety and animal and plant health.

The trade deal should also contain "a framework for voluntary regulatory cooperation", and further address "access to public procurement markets, investments and protection of intellectual property rights, including geographical indications, and other areas of interest to the Union", the Council said.

Beyond the terms of the future "economic partnership" that would be provided for in the free trade agreement, the Council's guidelines identified the "importance of data flows" in respect of the EU27's future relationship with the UK. The guidelines reiterated the EU27's previous position that the flow of personal data between the EU and UK post-Brexit "should be governed by Union rules on adequacy with a view to ensuring a level of protection essentially equivalent to that of the Union".

The Council said that an agreement on the future relationship between the EU27 and UK would only "deliver in a mutually satisfactory way" if it contained "robust guarantees which ensure a level playing field".

"The aim should be to prevent unfair competitive advantage that the UK could enjoy through undercutting of levels of protection with respect to … competition and state aid, tax, social, environment and regulatory measures and practices," the guidelines said. "This will require a combination of substantive rules aligned with EU and international standards, adequate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement mechanisms in the agreement as well as Union autonomous remedies, that are all commensurate with the depth and breadth of the EU-UK economic connectedness."

According to the guidelines paper, as well as considering matters relating to the EU27's future relationship with the UK at its next meeting in June, the European Council will also look at the "remaining withdrawal issues" that provisional agreement has still to be reached on. Those issues include the question of the UK's border arrangements with Ireland post-Brexit.