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 bi-weekly basis.

 

EU-UK Future Relationship Updates

 

Lord Frost: “The EU is a natural ally of the United Kingdom”

  • One week ago, Lord Frost, the previous Brexit Minister, surprisingly set out a potential new basis for UK-EU relations at The Churchill Europe Lecture in the University of Zurich.
  • He argued that there is the need to recognise that the EU is a natural ally of the United Kingdom and that both sides should seek equals ways to cooperate and work together more.
  • Lord Frost further suggested that the UK takes the threat of invoking Article 16 off the table in exchange for the EU accepting that there needs to be a fundamental renegotiation of the protocol.
  • Lord Frost finally embraced the idea of a European Security Council, as originally proposed by Macron, as a way for the UK and the EU to work together better.

Why the Ukraine crisis should push the UK and EU into a tighter embrace on security policy

  • According to a policy brief published by the Centre for European Policy Studies (CEPS) recently, one of the costs of Brexit is the weakened ability of both the UK and the EU to shape a strong joint response to Russia’s threats to pan-European security.
  • Post-Brexit relations between the UK and the EU are currently governed by the Trade and Cooperation Agreement (TCA) which does not include any provisions on cooperation on foreign and security matters.
  • Among the key think tank recommendations, the EU should invite the UK to conclude a standard ‘Administrative Arrangement’ with the European Defence Agency and allow for Britain’s involvement in Permanent Structured Cooperation (PESCO). Moreover, the UK and the EU should more systematically align their sanctions policies.
  • The authors further emphasised that good cross-Channel cooperation on sanctions policy could provide a model for a closer relationship in foreign affairs and security policy.

An emergence of divergence in the UK and EU’s competition law

  • A date to remember in this year’s competition law calendar is the 31st of May 2022. Then, the current legislation regulating the competition treatment of vertical agreements will expire: the EU’s Vertical Agreements Block Exemption (VABER) and accompanying Vertical Guidelines (VGs); and VABER’s UK twin, the Retained VABER.
  • The European Commission has published the draft text of its proposed replacement to VABER and the VGs, both of which remain under consultation. Similarly, the UK Competition Market Authority (CMA) published its draft text of a new Vertical Agreements Block Exemption Order (VABEO) on 21 February, asking for comments on the technical drafting by 16 March.
  • It is clear from these two sets of proposals that the law in both the UK and EU will soon change. So expect post-Brexit divergence in the way the EU and the UK treats most-favoured-nation clauses (MFNs)- also known as parity clauses.

UK urges EU to show the spirit of Ukraine for Northern Ireland

  • British Prime Minister Boris Johnson at a meeting with the Irish Taoiseach Micheal Martin on 12 March said that significant changes are still needed with the Northern Ireland protocol.
  • Premier Johnson told his Irish counterpart Martin that he hopes the same spirit of cooperation the UK and the EU have shared during the Ukraine crisis can be applied to Brexit discussions.
  • The Irish premier noted that the long-running EU-UK negotiations about reforming the pact would proceed “step by step”, but stressed it offered the best of both worlds for Northern Ireland. He added that the Protocol is working in terms of access to the EU single market.

Other EU-UK Relationship News

  • The cancelled Taoiseach’s meeting with US president Joe Biden at the White House on 17 March served to highlight the importance of the US link for Ireland in the ongoing row over the Northern Ireland protocol. Biden and the US Congress remain adamant that a free trade deal with the United States and the UK will not happen if the British government reneges on the Northern Ireland protocol.
  • On the 14th of March, the European Commission approved the disbursement of more than €2 billion under the Brexit Adjustment Reserve to 12 Member States. This decision will make available a total of €819.2 million by the end of March 2022 and the rest by April 2023.
  • On 14 March a court of appeal in Belfast ruled that the Northern Ireland Protocol for post-Brexit customs controls is legal. Northern Irish judge Siobhan Keegan ruled that the UK government had acted lawfully, and the protocol was consistent with UK and EU laws.
  • Boris Johnson is open to accepting an invitation to attend the European Council on Thursday 24 and Friday 25 March 2022, when EU leaders meet to discuss the war in Ukraine. EU sources have stressed that no such invitation has been sent to Downing Street, and that this was not expected to change. Nevertheless, the British Prime Minister and the President of the European Council, Charles Michel, spoke on 21 March on the importance of continued close cooperation and a united UK-EU response to the Russian invasion of Ukraine.

 

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