Early this morning, the UK and European Commission announced that they had reached an agreement that should allow them to move Brexit talks on to the next stage, and published a Joint report on progress during phase 1 of negotiations under Article 50 TEU on the United Kingdom’s orderly withdrawal from the European Union.
Under the caveat (standard for EU agreements) that ‘nothing is agreed until everything is agreed’ (para. 5), the Joint Report sets out that the UK and EU have reached agreement in principle across the three areas under consideration in the first phase of negotiations, ie:
and that these commitments will be reflected in the Withdrawal Agreement.
Progress in the negotiations is welcome but, unsurprisingly, there is plenty in the detail of the Joint Report to chew over. Here’s just a few thoughts and highlights on an initial read through.
On citizens’ rights:
On the Irish border, there is plenty of text to remind us that the border represents ‘a significant and unique challenge’, that the Good Friday Agreement is important, that Northern Ireland is unique, etc.
In terms of substance:
The terms of financial settlement go beyond my area of expertise, but my understanding from the Joint Report is that the parties have agreed a methodology for assessing the UK’s obligations, consisting of:
The media has been obsessed with putting a figure on the UK’s obligations but, of course, the exact UK share will depend on exchange rates, on interest rates, on the number of financial commitments that never turn into payments, and more. When payments are to be made also still needs to resolved, but it will clearly last for many years.
So, with agreement reached, Phase 2 (the future trade agreement and any transition period) can start next week. But it will not be straightforward. The UK seeks a deep and special relationship which goes beyond a mere free trade agreement, but Michel Barnier, the EU’s chief negotiator, has said that the UK’s red lines about leaving the single market, the customs union and the jurisdiction of the CJEU mean that it could only expect a trade deal along the lines of that recently agreed with Canada, which does not cover financial services.
On the transition period (to be discussed at a summit next week), it has been reported that the EU may insist that, during any such period, the UK will have to accept current and new EU laws, as well as the jurisdiction of the European Court of Justice, without having any seats in decision-making institutions.
Donald Tusk, President of the European Council, said this morning ‘… The most difficult challenge is still ahead. We all know that breaking up is hard. But breaking up and building a new relation is much harder.’