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The UK left the EU on 1 February 2020, 47 years after joining the European Economic Community, the predecessor of the EU. For almost 50 years, the country was part of our unique Union. And at the conclusion of 2020, when the transition period ends, it is leaving the EU single market of almost 450 million consumers as well.
EU member states are closely intertwined in the single market. Businesses benefit, for example, from the absence of tariffs and from uniform standards, and can make their services available everywhere in the EU. EU citizens can travel, work, study and live in all member states; they can rely on the same minimum standards in consumer protection and environmental, social and labour regulations. Meanwhile, close cooperation among security agencies enhances our citizens’ security, and strict data protection regulations are in force.
Now that it is leaving the single market, all of this will cease to apply to the UK. However, new regulations will replace those previously in place with the agreement reached by both sides on 24 December 2020 following comprehensive negotiations. Now that all member states have given their consent, the agreement will be applied provisionally from 1 January 2021. This is the only way to avoid an uncontrolled end to the transition period. Its provisional application also gives the European Parliament the time needed to thoroughly assess the agreement in the new year and give its consent.
What form will our future relations with the UK take?
The EU’s goal has always been a comprehensive agreement that envisages the closest possible partnership in all areas between the EU and the UK as our strategic partner. The agreement now reached establishes such a comprehensive economic and security partnership. This is based, among other things, on a free trade agreement that contains neither tariffs nor quotas and thus prevents any major trade barriers. However, such a partnership also needs fair parameters. For that reason, the two sides have agreed on far-reaching provisions in order to guarantee fair competition. This concerns the sphere of state aid, as well as standards for consumer, employee, environmental and climate protection. The EU and the UK have also reached agreement on the framework for future cooperation in many other areas, including services, professional qualifications, public procurement, environmental and energy issues, air, sea and rail freight transport, as well as regulations on social security and research and development. Under the agreement, the UK will continue to participate in an array of EU programmes.
In light of the close links between the EU and the UK and their geographical proximity, the agreement also establishes a close security partnership. This will facilitate future cooperation in the policy area of justice and home affairs. This means that both sides will continue, for example, within the context of Europol, to work closely together to fight crime, and will cooperate on efforts to combat money laundering, transnational crime and terrorism. The agreement also regulates the mutual exchange of data, such as airline passenger data and criminal records. All of this will be done in compliance with the European Convention on Human Rights and the EU’s data protection standards.
Though desired by the EU, the agreement unfortunately does not contain any provisions for cooperation in the sphere of foreign and security policy; however, the EU and the UK will remain key partners in NATO, the OSCE and the UN.
Despite all of this, the EU’s relationship with the UK will fundamentally change even though an agreement has been reached. Governments, citizens and businesses throughout the EU need to come to grips with that and prepare themselves.
Why were further negotiations necessary after the withdrawal?
To ensure that important political and economic ties were not severed from one day to the next after Brexit on 1 February 2020, an agreement was negotiated before the UK’s withdrawal from the EU that stipulates that nothing would fundamentally change for citizens and the economy during a transition period until 31 December 2020. Aside from this, it was always clear that, after Brexit, it was precisely the changes in economic relations that would be felt by citizens and companies, despite the new agreement.
In addition to the Withdrawal Agreement, the joint Political Declaration was agreed as the framework for the future partnership, which essentially envisages an economic and security partnership. This was the point of departure for negotiations on the future relationship.
How did the negotiations progress?
The European Commission conducted the negotiations on future relations with the UK in accordance with the Political Declaration on the basis of a mandate from the EU member states of 25 February 2020 and a comprehensive draft agreement published on 18 March 2020. The tight timetable did not leave the chief negotiators, Michel Barnier for the EU and David Frost for the UK, much time to reach agreement. That is why, over the past few months, 11 negotiation tracks were running in parallel on different topic areas. In the end, the frequency of negotiations was increased. As such, on 24 December 2020, both sides agreed to the comprehensive agreement now on the table before the end of the transition phase.
For a long time, the negotiating positions were far apart on important issues such as treaty architecture, fair conditions for competition/level playing field, and fisheries. It is therefore all the more gratifying from a German perspective that an agreement was reached following intensive negotiations.
Irrespective of the negotiations on the future relationship, the EU, its member states, citizens and companies have already prepared for the impact of Brexit at the end of the transition phase. These preparations are necessary no matter what happens, because the UK will leave the EU single market at the end of the transition period. To this end, the European Commission has published more than 90 “readiness notices” for numerous economic sectors and areas of life in recent months. During Germany’s Presidency of the Council of the EU, the Federal Government was in close contact in this regard with the Commission and the other member states within the EU, and at national level with all stakeholders (the business community, associations, members of the public), and will remain so following the Presidency.
What did this mean for Germany’s Presidency of the Council of the EU?
Negotiations concerning the agreement on the future relationship between the EU and the UK were conducted by the Commission via Michel Barnier and his team on behalf of the EU. All 27 EU member states stood united behind the chief negotiator during the difficult negotiations. This is also thanks to the German Presidency of the Permanent Representatives Committee and the General Affairs Council from 1 July 2020. Close cooperation in a spirit of trust within this framework formed the basis for an effective, coherent and transparent approach by the EU in the negotiations.