UK-EU 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

  • Negotiations on the future of the Northern Ireland Protocol are still taking place, as Brexit Minister Lord Frost continues to meet with Vice President of the European Commission, Sefcovic.
  • This comes after Lord Frost met with France’s EU minister Clement Beaune this Thursday, to discuss issues surrounding Jersey fishing licences.
  • Officials in Brussels are anticipating that post COP 26, the UK Government will trigger Article 16. During COP, it’s expected that both the EU and the UK will continue to try and find a solution, however, once complete and UK Ministers have returned to Westminster, if no solution is found, the UK Government will argue that there is no alternative than to trigger Article 16.
  • The role of the European Court of Justice in Northern Ireland remains a critical issue, as the EU have been clear they will not back down from their positioning that the ECJ must be present in Northern Ireland, as the country remains in the Single Market.
  • The current sentiment of the UK Government towards the EU is that the Commission is not going far enough with their proposal, even with the 80% reduction of checks on goods they have offered the UK. There is growing concern from UK businesses that trading with the Single Market remains complicated and costly, therefore a need for further compromises, especially from the EU, remains high.
  • The difficulty underpinning the UK Government’s next move is that Article 16 remains undefined – it can be very broad or very limited, depending on what the UK Government will seek to apply it to.
  • This week UK Ministers have been meeting with lawyers, most likely to help decipher how they could trigger Article 16, what issue they would apply it to, and potential timelines required for future discussions, all in a bid to try and mitigate potential reputational damage for the UK; if Article 16 was triggered.

 

Article 16: What we know

  • Triggering Article 16 allows either side to take steps, officially known as “safeguards”, if the protocol leads to “serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade”.
  • The difficulty lies with these safeguards not having been defined, however they must be “appropriate” to the damage caused. Currently, officials anticipate that they are likely to include the semi-permanent suspension of checks on goods flowing from Great Britain to Northern Ireland.
  • Whilst on the ground, this could have less of an impact than imagined, there is a growing concern that the UK would try to find a way to utilise Article 16 to go further and with the breakdown of negotiations, drive domestic legislation to remove the role of the ECJ in the arbitration process, of which in theory could not be achieved through Article 16, as it stands.

 

Fishing

  • The EU and France have hinted at resolution in the post-Brexit fishing tensions, following a temporary truce between Britain and France on Monday, when French President Emmanuel Macron announced that he would postpone retaliatory action.
  • This postponement will allow negotiation of new proposals to defuse the fishing dispute. It follows an ultimatum from Britain, for France to back down from the threat of sanctions or face legal action under the Brexit trade deal.
  • As of Wednesday morning, the UK had issued 1,793 licenses to EU vessels wanting to fish in British waters, with 38 remaining pending.
  • British Prime Minister Boris Johnson has insisted that the UK Government’s position has not changed. Meanwhile, France said that “all options are on the table” ahead of critical talks in Paris with Brexit Minister Lord Frost and, with the EU Commission, in Brussels.
  • No resolution was found during the meeting between Frost and France’s EU minister, Clement Beaune, with talks scheduled to continue next week.
  • The British scallop dredger which had been held in French waters since last week, has been freed.

 

Other EU-UK News

  • Worsening EU-UK relations have cast doubt over pending market access decisions for the UK’s financial sector. The City of London Corporation policy and resources committee head, Catherine McGuinness, says the deterioration in relations “gives us cause for concern that the political temperature is rising, because we ought to be forging a new, positive relationship with our closest neighbours and trading partners”.
  • Meat producers in the UK have begun sending carcasses to the EU for butchering and then shipping the meat back to the UK, after post-Brexit staff shortages led to the culling of more than 10,000 healthy pigs. The CEO of the British Meat Processors Association, Nick Allen said millions of pigs were expected to be processed this way.
  • In a letter to Commission President Ursula von der Leyen, more than 1,000 EU universities have urged the Commission to finalize the U.K.’s association to the EU’s research and innovation program – as Britain remains frozen out over Brexit disputes. The group stressed that European researchers have been working on funding bids with British colleagues over the past 10 months in preparation for the U.K.’s involvement, yet noted that the absence of a timeline for U.K. involvement is “causing increasing concern,” adding that “uncertainty risks endangering current and future plans for collaboration.”
  • The UK National Audit Office reported on the state of UK borders after the Brexit transition period noting that the UK Government would need to work hard to make ready port infrastructure and educate EU traders on the new controls. It warned that delayed UK border checks increase risk of smuggling and trade disputes, adding the UK government will face “significant challenges” in preparing the country’s borders for the introduction of full customs controls on EU imports next year.

 

If you have any questions or requests, reach out to daniel.costa@instinctif.com