Devolution and Constitution, Economy and Trade

The future relationship between the UK and the EU

Two years after the UK referendum to leave the EU the British Government has finally released its strategy on the future relationship between the UK and the EU in a White Paper from 12 July 2018.

The White Paper proposes a ‘soft’ Brexit in order to limit the negative repercussions for the British economy when exiting the EU.

Still, this is just a proposal which only forms the basis of the UK’s position for the Brexit negotiations in Brussels with the other 27 Member States of the EU (EU-27). It is expected that there will be concerns on the side of the EU, if not opposition, as regards some of the points suggested by the UK Government.

In a nutshell, what are the main points of the White Paper?

First, the Government’s vision for an economic partnership suggests a free trade area for goods. This would ensure continued access to the EU’s Single Market and, at the same time, avoid a hard border between Northern Ireland and the Republic of Ireland. This economic partnership not only includes a commitment to current arrangements on goods and agriculture, but also envisages new arrangements on services, in particular financial services, and digital.

The EU has previously criticised such an approach as ‘cherry-picking’, with the UK seeking to maintain all the benefits in areas of British interest whilst trying to avoid having to comply with any of its previous obligations under EU membership. Most likely, further concessions will be expected from the UK in this area.

Second, the proposed security partnership suggests a continued participation in certain European agencies, such as Europol and Eurojust, as well as cooperation in areas of international crime and security. While it is possible for a non-Member State to participate and cooperate in these areas, the sharing of information will obviously be restricted after Brexit with the UK having to accept the role of a side liner.

A third main point is the UK’s position in the world. With the withdrawal from the EU it will be possible to negotiate independent trade deals with other partners worldwide. However, the UK will continue to be limited by EU rules the softer this Brexit will be. This will then make it more difficult for the UK to freely trade with other countries, such as the U.S., with President Trump already questioning his interest in such a deal with the UK.

Does the proposal present a unified UK-internal approach to Brexit?

No. Indeed, there is deep disagreement within the UK at multiple levels about what Brexit actually means. Fuelled by a slim majority in Parliament in addition to very tight time constraints for the whole withdrawal process to conclude in March 2019, the Government’s proposal has provoked new tensions.

The series of recent resignations – Brexit Secretary David Davis, Foreign Secretary Boris Johnson, as well as two Vice-Chairs of the Tory party – has made the divisions within the Government over the proposed Brexit plan ever more visible. Any additional concessions necessary with the EU-27 in Brussels for a final agreement to be concluded could further increase the internal pressure on the Prime Minister.

The different regions in the UK also have very different interests and views on Brexit which is adding to the inner-British conflicts. With Northern Ireland being largely occupied with the border issue to the Republic of Ireland, Scotland may opt for another attempt to gain independence as last resort. As for Wales, First Minister Carwyn Jones also has his very own idea of Brexit, criticising the UK Government’s approach as “confused and confusing”.

What does it mean for Wales and Welsh businesses/citizens?

First, the Government’s White Paper itself is not the final document regulating the future relationship between the UK and the EU. Rather, it marks the beginning of substantial negotiations with the EU-27 and is therefore likely to see changes before anything legally binding will be agreed.

While the White Paper anticipates upholding high standards on the environment or consumer protection to meet EU requirements, there is still no legal certainty for businesses and citizens alike on what Brexit will actually mean for them. This uncertainty may deter potential investors from further investing in Wales and other regions in the UK.

Second, the White Paper provides only few vague statements as to a continued respect for devolved competences as established under the devolution settlements. It acknowledges the need for ‘close cooperation’ in certain areas of devolved interest, such as agriculture and the environment.

However, it is also clear from the proposal that the devolved regions have to be in line with ‘the whole of the UK’ which could result in a loss of power in the devolved administrations. In particular in agriculture, a more harmonised UK internal market would potentially mean less support/funding for farmers situated in more deprived areas of Wales and the other devolved regions.

Dr Annegret Engel, Visiting Research Fellow at the Wales Governance Centre (EngelA@cardiff.ac.uk). Annegret specialises in the area of EU law and international agreements, with a particular focus on the delimitation of competences.

This post represents the views of the author and neither those of the Welsh Brexit blog nor Cardiff University.

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