With the third round of exit negotiations under way, this post looks at where the negotiations currently stand, examines the impact of DExEU’s latest position papers and a looks ahead to the key dates for the Bill this autumn.
The first round of negotiations in June aimed to address what David Davis billed as the ‘row of the summer’ and set the timetable for the negotiations. The UK’s preference was for negotiations on the terms of the UK’s withdrawal to run in parallel with discussions about a future trade relationship. In contrast, the EU wanted the talks to be held in two phases: a first phase to agree separation issues before a second phase to agree the future relationship.
In what was widely reported as an early climb-down for Davis, the UK appeared to agree to the EU’s proposed two-phased approach after the first day talks. The Terms of Reference published after Round 1 made no mention of the future UK-EU relationship but noted that three initial negotiating groups had been established to discuss citizens’ rights, the UK’s liability to pay a financial settlement and ‘other separation issues’ while an additional dialogue relating to Ireland and Northern Ireland had also been launched.
The second round of discussions in July were the first real chance for the parties to get to grips with the substance of these issues. However, after four days of talks, the two sides did not appear to be any closer on the key areas of disagreement. A technical note published after the talks summarised the areas of divergence on the issue of citizens’ rights, but little was said about the UK’s financial settlement or how the Irish border would be managed.
At the press conference at the end of the talks, Michel Barnier, the EU’s chief negotiator, appeared to lay the blame for this at the UK’s door, calling for ‘clarification’ on the UK position. In a joint statement with the EU’s Brexit Steering Group published on the 25 July, he also reiterated the EU’s position that sufficient progress would need to be made on three main separation issues: citizens’ rights; the financial settlement; and the Irish border, before any new trade relationship could be discussed. When ‘sufficient progress’ could be said to have been made was, the statement explained, an issue for the European Parliament to decide.
If the two sides are to conclude the first phase of negotiations by October 2017 and all negotiations by October 2018 (to allow time for any deal to be ratified before March 2019) there is increasing pressure on both sides to move to the next phase of negotiations as soon as possible. With this in mind, the Department for Exiting the European Union (DExEU) appears to have made a concerted effort to clarify the UK position and widen the scope of the issues being discussed ahead of this week’s talks.
In the last two weeks, DExEU has published three position papers, three ’future partnership papers’ and three technical notes covering a range of topics including the Irish border, future customs arrangements, and nuclear materials in an attempt to provide much-needed detail on how DExEU envisage the UK-EU relationship in the future.
While a range of topics are addressed, it is DExEU’s customs proposals which have attracted the most attention, in particular the proposal, contained in the ‘Future customs arrangements’ paper, for a transitional period to ease businesses into any new customs arrangements. The paper gives few details of the proposal, but describes DExEU’s preferred arrangement as a, ‘model of close association with the EU Customs Union for a time-limited interim period’ thought to be around two years.
Although criticised by some, who fear it as a way of implementing a ‘soft’ Brexit through the backdoor, the idea has been welcomed by the CBI as a way of avoiding a ‘cliff-edge’ for businesses. Labour too, in a perceived shift from its previous policy, has announced that they would also support a transition period of two to four years during which the UK would remain part of the EU Customs Union and single market with an option to remain in both for good.
However, DExEU’s proposals have not been universally well-received. The Irish PM said the EU was ‘confused and puzzled’ by UK’s trade agreement proposals and Michel Barnier was quick to remind the UK negotiating team via twitter that agreement would need to be reached on citizens’ rights, the Irish border and the UK’s financial settlement before the EU would discuss any future customs relationship.
While both sides no doubt hope that some progress can be made on the first two of these issues this week, the payment of the UK’s financial settlement appears to be a sticking point. Although the UK Government now appear to accept that it will need to meet its financial obligations, at the time of writing, the parties do not seem to be any closer to agreeing how these obligations should be calculated.
Two further rounds of negotiations are planned for the weeks of the 18 September and 9 October. With much left to resolve, progress on the three key separation issues during these talks will be crucial if the Government is to succeed in convincing the EU that sufficient progress has been made to move the second phase of the negotiations.
While it is clear these negotiations will make for an interesting party conference season (all but one of the main party conferences are due to take place before the end of the next two rounds of negotiations), it is less clear what effect these machinations will have on the draft Bill.
Parliament returns from its summer recess on the 5 September and the Bill is due to have its second reading in the House of Commons on the 7 and 11 of September. With Labour’s approach beginning to diverge from the ‘hard’ Brexit proposed by the Government and the Scottish and Welsh administrations already opposed to the Bill as drafted, the one thing we can say is that the Bill’s passage through parliament this autumn looks set to be anything but smooth.