EU-UK Evolving Relationship Bulletin

EU-UK Evolving Relationship Bulletin



Although the EU-UK trade agreement has been concluded, it has become clear that there are still many issues to resolve and many areas left for the UK and EU to discuss further. At Instinctif Partners we will continue to track the evolving EU-UK relationship and monitor major changes in regulations the UK or the EU may adopt post-Brexit on a weekly basis.


EU-UK Future Relationship Updates


Northern Ireland Protocol


  • Following the release of the EU’s package of solutions, Brexit Minister Lord Frost and Vice-President of the Commission Maroš Šefčovič have been holding discussions, suggesting progress could be made in the coming weeks.
  • UK Prime Minister Boris Johnson has also promised to find a solution, a further sign that compromise will be reached soon.
  • Lord Frost has said the EU’s proposals are encouraging, and he will engage constructively, but warned that fundamental differences between the EU and the UK remain.
  • The crucial issue is whether EU law in Northern Ireland will continue to be policed by the European Court of Justice (ECJ), and it is expected that the success of the talks – which both sides say they want to be over by Christmas – will hinge on this.
  • Some on the EU side have also expressed concern that the tensions over the ECJ are just a way to torpedo the EU-UK relationship for political reasons, which Lord Frost has denied.
  • The “Washington Group”, a group of EU members states, have met with Šefčovič to be briefed about the proposals, likely pushing for tough measures to be prepared.


UK will seek to “correct” rulings by European Court of Human Rights

  • UK Justice Secretary Dominic Raab has said he will look to overhaul the UK’s Human Rights Act, including correcting rulings of the ECHR.
  • Raab has said that he will not allow British parliamentary prerogatives to be removed by external judicial legislation.
  • In particular, Raab noted the NHS, welfare provision and police forces as areas in which he felt the ECHR had undue say currently.
  • This has drawn criticism from several legal experts, with Mark Elliot, of Cambridge University, writing that Ministers being given the power to ‘correct’ judgements they consider ‘incorrect’, raises “profound constitutional concerns”.


Trade Relations being tested


  • A report published Thursday 21 October by the London School of Economics highlights how the Trade and Cooperation Agreement (TCA) between the EU and UK has not made a level playing field for trade, post-Brexit.
  • According to the report, the TCA “produces a dilemma for the UK: either stick to EU standards to preserve trade with European counterparts, or modify its standards to facilitate new free trade agreements, but with the substantial risk of cutting off its companies from the single European Market.”
  • The trade deal provides for tariff and quota-free trade in goods between the EU and UK but offers little in the way of trade in services.
  • In addition, the imposition on non–tariff barriers has hit UK small businesses disproportionately hard. Latest data from the Office for National Statistics demonstrates a second consecutive monthly fall in trade, from the impacts of Brexit and the global pandemic resulting in total exports of goods falling by 4.6% (£1.3bn) in August 2021.




  • The European Central Bank is pushing banks to add hundreds of extra staff, and billions of extra capital, to their post-Brexit operations in continental Europe.
  • The ECB’s fresh push is partly linked to its recent decision to end temporary pandemic-era reprieves it granted banks on their timetable for moving staff and capital to the EU.
  • Stakeholders have noted that the ECB was taking a tougher approach than expected to the longstanding issue of the location of risk management staff overseeing EU trades, and how much capital the EU entities must have.
  • This week, Mairead McGuinness, the European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, pledged to avoid market instability, or a “cliff edge”, over a decision on European banks’ ability to access UK clearing houses. It is expected that Brussels will not extend the temporary permit.
  • The Irish commissioner urged market participants to take seriously the Commission’s demand that more euro-denominated derivatives business moves to the EU over the longer term, following the UK’s decision to quit the single market.
  • The Commission wants to see business shifted back to the EU because it is unhappy about the financial stability risks of seeing up to €80tn of open contracts being handled in a market that is no longer subject to its direct oversight.




  • The UK Government has finally granted the EU’s ambassador to the UK, João Vale de Almeida, full diplomatic recognition. He presented his diplomatic credentials to the British monarch on Tuesday (19 October) at the Buckingham Palace, as is standard diplomatic practice.
  • The status confirmation formally resolves a dispute between the EU and the UK Government over whether the former should be treated as a state or international organisation.
  • The U.K.’s Foreign Office had initially insisted the EU was not a state in its own right, so Vale de Almeida could receive only international organization status instead of diplomatic mission status.


Other EU-UK News


  • The Chartered Institute of Personnel and Development (CIPD) has said Britain should temporarily allow more young people from the European Union back into its labour markets to fix the shortage of staff facing many companies. The trade body stressed that the UK Government should allow EU citizens to apply for Britain’s youth mobility visa, which offers two-year work permits to 18–30-year-olds from Australia, Canada, New Zealand, Japan, South Korea, Taiwan, and Hong Kong.
  • Meanwhile, the UK music industry is urging British ministers to overcome their “Brexit ideology” in order to tackle new barriers that might lead to a “slow, steady decline” of the industry because of Brexit red tapes.
  • Mark Pemberton, director of the Association of British Orchestras, said the music industry has very good engagement with U.K. officials, but when it comes to ministers “there’s a glass ceiling of ideology we cannot break through”. He added that “ministers aren’t willing to listen to our concerns if what we want to change bumps up against their ideology and their ideology is ‘the nation voted for Brexit, they voted for us to take back control of our laws, our borders and our money”.
  • In the interim, a broad coalition of business groups have warned the UK’s supply chain crisis will continue into 2023 and beyond, driving up inflation and delaying Prime Minister Boris Johnson’s domestic policy agenda to “level up” the UK economy.
  • The leaders of a range of sectors told the House of Commons Business, Energy, and Industrial Strategy Committee that small businesses would bear the brunt of labour shortages and price rises that have hit swaths of the economy this year, including haulage, hospitality, food and drink, construction and autos.
  • Elsewhere, divisions in UK society as a result of Brexit appear to be as entrenched as ever, according to the latest British social attitudes survey, with little sign that the issue is losing its polarising force. The survey found 9 in 10 of leave and remain voters saying they would vote the same way again.


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