The future partnership between the European Union and the United Kingdom : negotiating a framework for relations after Brexit.
Date: 2018-09-26
Institutions: Directorate-General for Parliamentary Research Services
Subjects: European Union, European Union membership, United Kingdom, defence policy, development aid, economic policy, exchange of information, extradition, judicial cooperation in criminal matters in the EU, legislation, mutual assistance, negotiation of an agreement (EU), police cooperation, trade agreement

The future 
partnership 
between the 
European Union 
and the United 
Kingdom 
Negotiating a 
framework for 
relations after 
Brexit 

STUDY 

EPRS | European Parliamentary Research Service 

Authors: Carmen-Cristina Cîrlig and Laura Puccio 
Members' Research Service 
PE 628.220 – September 2018 

 
 
The future partnership 
between the European 
Union and the United 
Kingdom 

Negotiating a framework for relations after Brexit 

Following  the  European  Council's  additional  guidelines  of  March 
2018, the European Union (EU) and the United Kingdom (UK) have 
started discussions on their future relationship after Brexit. The aim 
is to agree on a political framework for their future partnership by 
autumn 2018, to be adopted alongside the withdrawal agreement. 
Conclusion of a treaty or treaties establishing future EU-UK relations 
will  only  take  place  after  the  UK  leaves  the  Union  and  becomes  a 
third country. 

Both  parties  have  expressed  the  desire  to  remain  in  a  close 
partnership,  which  would  cover  several  areas  including  trade  and 
economic matters, internal security, foreign and security policy, and 
cooperation on defence. This study looks at the respective aims for, 
and principles underpinning, the negotiations, as expressed publicly 
to date by each party, and analyses some of the legal constraints and 
existing practices or precedents shaping EU cooperation with third-
country  partners.  This  allows  assessment  of  the  possibilities  and 
limits  of  any  future  EU-UK  partnership,  in  light  of  the  stated 
objectives  and  'red  lines'  officially  announced,  leading  to  the 
conclusion that, notwithstanding several common aims, significant 
divergences still persist with respect to the means of achieving the 
stated objectives. 

EPRS | European Parliamentary Research Service 

 
 
 
 
 
 
AUTHOR(S) 

Carmen-Cristina Cîrlig and Laura Puccio, Members' Research Service 

Data and infographics by Giulio Sabbati and Laura Puccio 

This  paper  has  been  drawn  up  by  the  Members'  Research  Service,  within  the  Directorate-General  for 
Parliamentary Research Services (EPRS) of the Secretariat of the European Parliament. 

To contact the authors, please email: eprs@ep.europa.eu  

LINGUISTIC VERSIONS 

Original: EN 

Manuscript completed in September 2018.  

DISCLAIMER AND COPYRIGHT 

This  document  is  prepared  for,  and  addressed  to,  the  Members  and  staff  of  the  European  Parliament  as 
background  material  to  assist  them  in  their  parliamentary  work.  The  content  of  the  document  is  the  sole 
responsibility of its author(s) and any opinions expressed herein should not be taken to represent an official 
position of the Parliament. 

Reproduction  and  translation  for  non-commercial  purposes  are  authorised,  provided  the  source  is 
acknowledged and the European Parliament is given prior notice and sent a copy. 

Brussels © European Union, 2018. 

PE 628.220 
ISBN: 978-92-846-3338-8 
DOI:10.2861/608213 
CAT: QA-04-18-783-EN-N 

eprs@ep.europa.eu  
http://www.eprs.ep.parl.union.eu (intranet) 
http://www.europarl.europa.eu/thinktank (internet) 
http://epthinktank.eu (blog) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The future partnership between the European Union and the United Kingdom 

Executive summary 

Following the European Council's additional guidelines of March 2018, the European Union (EU) and 
the United Kingdom (UK) have begun discussions on their future relations, after the UK's withdrawal 
from  the  EU  (Brexit).  Negotiations  continue,  in  parallel,  to  agree  the  terms  of  a  Withdrawal 
Agreement, the purpose of which is to sort out the main issues regarding the UK's separation from 
the EU, in accordance with Article 50 TEU on the procedure for the withdrawal of a Member State 
from the EU. The negotiating teams currently aim at identifying a political framework for the future 
partnership, to be annexed to the Withdrawal Agreement and adopted simultaneously. The treaty 
or treaties governing the future relations between the UK and the EU would only be concluded once 
the UK leaves the Union and becomes a third country – after the currently scheduled Brexit date of 
30 March 2019. At EU level, the treaty or treaties would be subject to the ratification procedure for 
international agreements under Article 218 TFEU.  

Both the EU and the UK have stated their desire for a close partnership in the future. However, a 
fundamental difference has surfaced in the talks. Whereas the UK has consistently called for a special 
status,  going  further  and deeper  than  any  existing third-country  relationship,  the  EU  has  instead 
based its approach on existing models underpinning its relations with third countries. In particular, 
the EU assessed the various models used in previous EU agreements against the 'red lines' originally 
set by the UK government: no membership of the customs union or the internal market, no free 
movement of persons; no jurisdiction of the Court of Justice of the EU (CJEU); and the regaining of 
regulatory autonomy. In line with those red lines, the EU has explored what could be offered, in the 
area of trade, within the framework of a free-trade agreement (FTA) comparable to the EU-South 
Korea and the EU-Canada agreements. Similarly, the EU is looking at possible arrangements in the 
fields of justice and home affairs, and foreign policy and defence, based on how the EU cooperates 
with  other  third  countries.  Furthermore,  several  aspects  of  the  special  treatment  that  were 
requested  by  the  UK  either  clash  with  the  above-mentioned  UK  red  lines  or  with  the  guiding 
principles  set  down  in  the  European  Council  guidelines  for  the  negotiations.  These  include: 
protection of the EU's interests; preserving the integrity of the internal market and customs union; 
safeguarding the EU's decision-making autonomy, including the role of the CJEU; ensuring a balance 
of  rights  and  obligations  and  a  level  playing  field;  respecting  the  principle  that  a  third  country 
cannot have the same rights and benefits as a Member State; and safeguarding the EU's financial 
stability, as well as its regulatory and supervisory regime and standards. While the objectives of the 
negotiations might be similar on both sides, the EU and UK perspectives remain divergent, and their 
positions differ in many areas on the means to achieve those objectives in the context of the future 
partnership. 

In  trade  and  economics,  the  parties  seem  to  agree  on  maintaining  duty-  and  quota-free  market 
access in goods, even though for the EU preferential rules of origin would need to be introduced as 
a  result  of  the  UK  leaving  the  customs  union.  Instead,  the  UK  advocates  a  facilitated  customs 
arrangement, whereby the UK would apply UK or EU tariff duties at its external border depending 
on the destination intended for the good (UK or EU internal market) and a common rulebook for 
goods' standards checked at the borders, which would eliminate the need for an internal border for 
goods (including the need for preferential rules of origin) between the EU and the UK. However, the 
Commission  has  repeatedly  indicated  it  considers  these  proposals  to  be  unrealistic.  Different 
approaches  have  also  been  suggested  with  regard  to  access  to  fishing  waters  and  sustainable 
fisheries.  Other  controversial  areas for  negotiation will  include  access  to  the  services  market  and 
regulatory  cooperation.  Greater  market  access  is  permitted  in  some  sectors  only  if  regulatory 
alignment is achieved. Whenever alignment to EU law is required, agreements also entail a role for 
the CJEU. Further market access in an FTA can only be granted within the constraints of other EU 
FTAs  (most  favoured  nation  (MFN)  clauses  in  previously  concluded  EU  agreements,  which  may 
require  extending  the  benefits  to  other  EU  partners),  and  within  the  constraints  of  EU  law 
(preserving the integrity of the internal market and the EU decision-making system, including CJEU 

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EPRS | European Parliamentary Research Service 

jurisdiction).  Finally,  the  EU  is  adamant  that  strong  provisions  are  introduced  to  ensure  the 
maintenance of a level playing field (LPF), such as in the areas of competition and state-aid, taxation 
and environmental and labour standards. Violations of these LPF measures should be subject to a 
dispute settlement mechanism and sanctions. 

In the area of justice and home affairs, the UK has proposed to conclude an internal security treaty 
with  the  EU.  Such  a  treaty  would  be  based  on  the  existing  EU  measures  regarding:  exchange  of 
information, including access to EU databases; operational cooperation through mutual recognition 
tools, such as the European arrest warrant; and multilateral cooperation through the EU agencies, 
Europol and Eurojust. This would avoid any operational gaps post-Brexit and take account of the 
important contribution the UK has made to date in providing intelligence and analysis under current 
EU tools. The EU, however, although agreeing to the main areas of future cooperation with the UK 
–  exchange  of  information;  operational  police  cooperation  and  judicial  cooperation  in  criminal 
matters  –  is  offering  the  UK  a  relationship  based  on  the  model  of  third  countries  that  do  not 
participate in Schengen, rather than a special status. The UK would thereby lose direct access to the 
EU's  databases  and  participation  rights  in  the managing  bodies of  the  EU  agencies,  Europol  and 
Eurojust. Furthermore, the EU mutual recognition instruments recognised as extremely valuable for 
UK law enforcement – such as the European arrest warrant – would cease to apply. Moreover, data 
sharing  and  protection  arrangements  would  need  to  be  agreed  to  allow  the  exchange  of 
information to continue in the future.  

In  addition,  in  foreign  policy  and  defence,  the  UK  is  seeking  a  special  status,  including  some 
influence  in  the  EU  decision-making  process,  proportional  to  its  contribution  to  CFSP  and  CSDP. 
However, here again, the EU takes the third-country model of cooperation as a starting point in the 
talks, although some special arrangements may be possible, inter alia, in light of the UK's status as a 
permanent member of the United Nations Security Council and as a significant European military 
power.  The  negotiations  on  the  framework  for  future  dialogue,  cooperation  and  coordination  in 
CFSP/CSDP aim at agreeing arrangements as soon as possible after Brexit. 

The European Council meeting of 29 June 2018 evaluated the progress made both with respect to 
the legal provisions of the Withdrawal Agreement, in particular the contentious issue of the border 
between Northern Ireland and Ireland, and with regard to the framework for future relations. The 
conclusions adopted on that occasion stated that further efforts were needed on both issues.  

The European Parliament has already provided essential input to the European Council discussions 
and guidelines, through its March 2018 resolution on the EU-UK future framework for relations. In 
particular, it suggested the form of an association agreement for the future treaty with the UK that 
would be based on four pillars: trade and economic relations; foreign policy, security and defence, 
and development cooperation; internal security; and thematic cooperation (fisheries, aviation, etc.). 
A  single  governance  structure  and  dispute  resolution  mechanism  established  by  the  association 
agreement would cover the entire EU-UK relationship. On many of the issues under discussion, the 
European Parliament has to give consent (meaning it has the right of veto) for the conclusion of the 
EU-UK  future  relationship  agreement(s).  However,  should  the  parties  conclude  an  agreement 
relating exclusively to CFSP/CSDP matters, then the Parliament would not have to give consent nor 
would it have formal consultation rights on that specific agreement. 

II 

 
 
 
The future partnership between the European Union and the United Kingdom 

Table of contents 

1. Introduction  ________________________________________________________________ 1 

2. Legal basis and procedure  ____________________________________________________ 3 

3. Initial EU and UK positions regarding future relations _____________________________ 7 

3.1. The EU's negotiating objectives and principles ___________________________________  7 

3.2. The United Kingdom's stated objectives  ________________________________________  9 

4. The future trade and economic partnership: main issues  _________________________ 13 

4.1. Introduction ______________________________________________________________ 13 

4.1.1. EU-UK trade relations ____________________________________________________ 13 

4.1.2. What trade agreement model to apply? _____________________________________ 15 

4.2.  Constraints  in  EU  FTAs  on  tailored  solutions  for  Britain:  Most  favoured  nation  clauses  in 
FTAs  _______________________________________________________________________ 16 

4.3. Exiting the customs union and common commercial policy  _______________________ 19 

4.3.1. Renegotiation of World Trade Organization schedules  _________________________ 23 

4.3.2. The introduction of preferential rules of origin in EU-UK relations  ________________ 28 

4.3.3. Brexit and existing EU trade agreements  ____________________________________ 32 

4.4. Exit from the internal market  ________________________________________________ 35 

4.4.1. Services and investment liberalisation under an FTA ___________________________ 36 

4.4.2. Consequences for regulatory cooperation for goods and services  ________________ 42 

4.4.1. Other issues ____________________________________________________________ 48 

4.5. Trade and economic impact of Brexit __________________________________________ 55 

5. Future EU-UK cooperation in justice and home affairs ____________________________ 58 

5.1. UK's special status in the area of freedom, security and justice ______________________ 58 

5.2. UK and EU views on future JHA cooperation ____________________________________ 60 

5.2.1. The UK position _________________________________________________________ 61 

5.2.2. The EU position _________________________________________________________ 62 

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EPRS | European Parliamentary Research Service 

5.3.  Preserving  police  and  judicial  cooperation  in  criminal  matters:  Negotiating  issues  and 
challenges ___________________________________________________________________ 63 

5.3.1. EU JHA agencies and the issue of post-Brexit UK participation  ___________________ 64 

5.3.2. Mutual recognition instruments  ___________________________________________ 68 

5.3.3. Data and information exchange  ___________________________________________ 71 

5.3.4. Other issues ____________________________________________________________ 74 

6. Foreign policy, defence and development cooperation  __________________________ 76 

6.1. The UK role in CFSP/CSDP ___________________________________________________ 76 

6.2. UK and EU views on the future partnership in CFSP/CSDP  _________________________ 78 

6.2.1. The UK's position  _______________________________________________________ 78 

6.2.2. The EU's position  _______________________________________________________ 80 

6.2.3. Towards new arrangements in CFSP/CSDP: main issues for the negotiations  _______ 81 

6.2.4. Common Foreign and Security Policy coordination ____________________________ 81 

6.2.5. Common Security and Defence Policy  ______________________________________ 85 

6.2.6. Development aid  _______________________________________________________ 92 

7. Annex – Negotiating the framework for future EU-UK relations – Comparative positions94 

IV 

 
 
 
 
 
The future partnership between the European Union and the United Kingdom 

List of figures 

Figure 1 – UK trade with EU-28 and with the rest of the world (2016) _____________________ 13 

Figure 2 – UK trade with other EU Member States (in share of total trade with the EU, 2017) __ 14 

Figure 3 – The 'Stairway' to Brexit  _________________________________________________ 16 

Figure 4 – EU and EU Member States MFN reservations in CETA by sectors ________________ 18 

Figure  5  –  Reintroduction  of  customs  control  when  exiting  the  internal  market  and  the  customs 
union ________________________________________________________________________ 19 

Figure  6  –  UK  imports  from  extra-EU  partners  for  selected  agricultural  sectors  and  share  of  UK 
imports in total EU imports from non-EU countries for those agricultural sectors (2017)  _____ 24 

Figure 7 –Tariff rate quote (TRQ) per EU-27 share of in quota usage ______________________ 26 

Figure 8 – Diagonal versus full cumulation __________________________________________ 32 

Figure 9 – Repartition of UK total trade (2017) _______________________________________ 34 

Figure 10 – Reservations in CETA by annexe and country ______________________________ 39 

Figure 11 – Absolute losses for UK and EU(27) GDP in different scenarios (optimistic and pessimistic) 
as reported in different economic studies (in billion euros) _____________________________ 57 

List of tables 

Table 1 – UK service credit with EU-28 and with the rest of the world in million euros (2014) __ 14 

Table 2 – UK service debit with EU-28 and with the rest of the world in million euros (2014) __ 15 

Table 3– Average, minimum and maximum EU 27 share of in quota usage of TRQ by country  26 

Table 4 – Reservations in CETA Annex 1 and 2 per commitment _________________________ 39 

Table 5 – Overview of some of the trade consequences of Brexit by trade arrangement  _____ 55 

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List of boxes 

Box 1 – The different types of EU competences and implications for international agreements _  3 

Box 2 – Article 218 TFEU and other possible legal bases  ________________________________  5 

Box 3 – What do the European Council Guidelines of 23 March 2018 say? __________________  8 

Box 4 – What does the UK government want? _______________________________________ 10 

Box 5 – The Northern Ireland conundrum ___________________________________________ 21 

Box 6 – Procedures in the WTO for the renegotiation of tariff schedules under GATT Article XXVIII27 

Box 7 – Preferential rules of origin _________________________________________________ 29 

Box 8 – Doctrine of acquired rights ________________________________________________ 32 

Box 9 – EU air transport agreements _______________________________________________ 36 

Box 10 – Selected services sectors relevant to the Brexit debate and example reservations existing 
under CETA and other agreements ________________________________________________ 38 

Box 11 – Financial markets and equivalence procedures _______________________________ 43 

Box 12 – The AFSJ and the Treaty of Lisbon reforms  __________________________________ 58 

Box 13 – The EU Justice and Home Affairs agencies ___________________________________ 59 

Box 14 – Denmark's operational and strategic cooperation agreement with Europol ________ 65 

Box 15 – Agreements with third countries under the new Europol regulation ______________ 66 

Box 16 – The evolution of EU CFSP and CSDP ________________________________________ 76 

Box 17 – Foreign policy arrangements with third countries  ____________________________ 82 

Box 18 – The UK Sanctions and Anti-Money Laundering Act ____________________________ 83 

Box 19 – EU coordination with third countries on sanctions ____________________________ 84 

VI 

 
 
The future partnership between the European Union and the United Kingdom 

1. Introduction 

On 29 March 2017, the UK notified its intention to leave the EU (Brexit), following the result of the 
June 2016 referendum and in accordance with Article 50 of the Treaty on European Union (TEU). 
Article 50(2)  TEU  provides  that  a  withdrawal  agreement  should  set  out  the  terms  of  such  a 
separation, taking the framework of the departing state's future relationship with the Union into 
account. However, no other guidance is provided on the question of what this framework should 
look like.  

On 29 April 2017, the 27 remaining EU Heads of State or Government adopted political guidelines 
for the Brexit negotiations, setting out a phased approach. In the first phase, three priorities were 
set for the negotiation of the withdrawal agreement: the rights of EU-27 citizens in the UK and of UK 
citizens in the EU-27; the settlement of the financial obligations incurred by the UK; and the issue of 
the border between Ireland and Northern Ireland. In a second phase – after 'sufficient progress' had 
been  achieved  –  discussions  would  continue  on  possible  transitional  arrangements  and  other 
unsettled issues related to the withdrawal agreement, as well as on the framework for the future EU-
UK relationship. After talks led to a EU-UK joint report setting out a common understanding on the 
withdrawal  deal,1  in  December 2017,  the  European  Council  decided  that  sufficient  progress  was 
achieved  on  the  first  phase  issues  and  talks  therefore  advanced  to  the  second  phase.2  On 
19 March 2018, the EU and UK negotiators announced that they had agreed a substantial part of the 
draft withdrawal agreement, paving the way for discussions on the future partnership.  

As a result, the European Council adopted specific guidelines regarding the framework for the future 
EU-UK  relationship  at  its  meeting  of  22-23 March 2018.3  Discussions  began  on  this  basis  in 
April 2018, with the purpose of identifying an 'overall understanding of the framework for the future 
relationship' between the EU and UK. The negotiating teams agreed the structure of the discussions 
regarding  the  future  framework  jointly:  the  basis  for  cooperation  (structure,  governance, 
interpretation and application, dispute settlement, non-compliance, participation and cooperation 
with  EU  bodies);  the  economic  partnership  (objectives,  goods,  agricultural,  food  and  fisheries 
products,  services  and  investment,  financial  services,  digital  and  broadcasting,  transport,  energy, 
horizontal measures and mobility framework); the security partnership (aims, law enforcement and 
criminal justice, foreign, security and defence and wider security issues); and cross-cutting or stand-
alone  issues  (data  protection,  cooperative  accords  in  science  and  innovation  and  culture  and 
education, and fishing opportunities).4 

The objective is first to jointly agree on a political declaration setting out the framework for future 
relations, which will be annexed to the withdrawal agreement and thus adopted simultaneously. 
The two negotiating teams are aiming for an agreement on the text in autumn 2018. This would 
then constitute the basis for the future negotiations on a treaty or treaties governing the future EU-
UK  relations.  At  a  press  conference  on  8 June 2018,  the  EU's  chief  negotiator,  Michel Barnier, 
mentioned  three  remaining  issues  to  discuss  with  regard  to  the  withdrawal  agreement:  data 
protection,  geographical  indications,  and  pending  and  ongoing  procedures  before  the  CJEU 
involving UK violations (such as state aid cases). Certain additional provisions agreed on 19 June do 

1  C. Cîrlig, E. Poptcheva, The Brexit process: Moving to the second phase of negotiations, EPRS, European Parliament, 

20 December 2017.  

2  Guidelines,  European  Council  (Article  50),  15  December  2017.  See  also  C.  Cîrlig,  S.  Mazur,  L.  Tilindyte,  The  EU-UK 

withdrawal agreement: Progress to date and remaining difficulties, EPRS, European Parliament, 12 July 2018.  
3  Guidelines on the framework for the future EU-UK relationship, European Council (Article 50), 23 March 2018.  
4 

See Topics for discussions on the future framework at forthcoming meetings, United Kingdom government. 

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not  include  the  three  issues  enumerated  above.5  Discussions  on  the  border  between  Northern 
Ireland and Ireland are also ongoing.6 The European Council of 29 June 2018 was unable to identify 
substantial progress with regard to either the Northern Ireland/Ireland issue or the negotiations on 
the future relationship.7  

5 

Joint  statement  of  the  negotiators  of  the  European  Union  and  the  United  Kingdom  Government  on  progress  of 
negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union, 19 June 
2018. 

6  M. Barnier, European Commission Chief Negotiator for Article 50 negotiations with the UK, Press conference following 

this week's round of negotiations, (extracts) 8 June 2018. 
7  Conclusions, European Council (Article 50), 29 June 2018. 

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The future partnership between the European Union and the United Kingdom 

2. Legal basis and procedure 

Article 50 TEU does not contain any indications as to what the future relationship between the EU 
and the UK post-Brexit should look like, or how the agreement(s) governing these future relations 
should be concluded. In this context, the usual procedures for the negotiation and conclusion of 
international agreements, as provided for by the EU Treaties, will apply, namely Article 218 TFEU.8 
This article applies only to agreements with third countries and international organisations, so the 
agreement(s) governing future EU-UK relations can only be legally concluded after the UK has left 
the  EU.  In  a  statement  before  a  House  of  Commons  committee,  the  EU's  chief  negotiator, 
Michel Barnier,  indicated  that  these  agreements  would  be  'based  on  a  legal  basis  other  than 
Article 50 and, most probably, mixed agreements.'9 Mixed agreements are international agreements 
which go beyond areas where the EU has exclusive external competence and which therefore need 
to be concluded jointly by the EU and its Member States. Mixed agreements, once approved by the 
EU institutions, would then also need to undergo national ratification in the remaining EU Member 
States, involving the national and even, in one case, regional parliaments.10 Furthermore, Barnier 
mentioned that the future relations could be based on one or several treaties. In this latter case, 
different procedures might apply, depending on the EU competence and the chosen legal basis. 

Box  1  –  The  different  types  of  EU  competence  and  implications  for  international 
agreements11 
The European Union operates on the principle of conferral, meaning that the Union acts within the limits of 
the  competences  conferred  upon  it  by  the  Treaties.  The  competence  involved  governs  the  procedure  for 
concluding a given agreement. Three types of competences exist in EU law: exclusive competence, shared 
competence, and concurrent competence. 12 Where there is an express exclusive competence (Article 3(1) 
TFEU),  only  the EU  is  competent  to  conclude  trade  agreements.  Agreements  concluded  in  these  areas  are 
ratified solely at EU level, following the procedure under Article 218 TFEU.13 This is the case for agreements 
falling  exclusively  under  the  common  commercial  policy  (legal  basis  Article 207 TFEU).14  Shared 
competences under Article 4 TFEU (such as the internal market) can fall under both EU and Member State 
competence. Where the EU has acted, Member States are prevented from acting (except for areas mentioned 
in Articles 4(3) and 4(4) TFEU). Following the ERTA case (Case 22/70, Commission v Council)15 and subsequent 
case law, areas where the EU has acted internally may take on implied exclusive external competence – the 
exclusive competence for the conclusion of international agreements – if it is so provided in a legislative act 
or this is necessary for the exercise of the internal competence, or if it can affect EU measures taken (Article 
3(2) TFEU). Where there is implied exclusive competence, the EU can conclude agreements on its own, as in 
areas  of  express  exclusive  competences.  A  recent  example  of  this  kind  of  exclusive  competence  is  the 

8  M.  van  der  Wel  and  R.  A.  Wessel,  The  Brexit  Roadmap:  mapping  the  choices  and  consequences  during  the  EU/UK 
withdrawal and future relationship negotiations, Centre for the Law of EU External Relations, CLEER Papers 2017/5, 
December 2017.  

9  Michel  Barnier:  Oral  evidence:  Brexit  and  Northern  Ireland,  Northern  Ireland  Affairs  Committee,  HC  329,  United 

Kingdom House of Commons, 22 January 2018.  

10  K. Grosek and G. Sabbati, Ratification of international agreements by EU Member States, EPRS, European Parliament, 

November 2016.  

11  L. Puccio, CJEU Opinion on the EU-Singapore Agreement, EPRS, European Parliament, May 2017. 
12  FAQ on the EU competences and the European Commission powers, European Commission. 
13  L. Puccio, A guide to EU procedures for the conclusion of international trade agreements, EPRS, European Parliament, 

26 October 2016.  

14  For  example,  mutual  recognition  agreements,  such  as:  Agreement  between  the  European  Union  and  Australia 
amending  the  Agreement  on  mutual  recognition  in  relation  to  conformity  assessment,  certificates  and  markings 
between the European Community and Australia, OJ L 359, 29 December 2012; Council Decision of 18 July 2011 on 
the conclusion of the Agreement between the European Union and Australia amending the Agreement on mutual 
recognition in relation to conformity assessment, certificates and markings between the European Community and 
Australia, OJ L 359, 29 December 2012 

15  Case 22/70, Commission v Council, CJEU, Judgment of the Court of 31 March 1971.  

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agreement  concluded  between  the  EU  and  the  US  on  prudential  measures  regarding  insurance  and 
reinsurance.16 In shared competences, where the EU has not acted internally, Member States retain their own 
competences. International agreements touching these competences have to be signed and ratified by both 
the  EU  and  each  Member  State,  and  are  referred  to  as  'mixed'  agreements. Concurrent competences  are 
competences where external action can take place both at EU or Member State level. EU competence in those 
areas  is  mainly  to  support,  coordinate  or  supplement  Member  State  actions  and  cannot  lead  to 
harmonisation.17 

The  European  Parliament  has  put  forward  a  specific  proposal for  the  framework of  EU-UK  future 
relations. In its resolution of 14 March 2018, the EP suggests that the future agreement should take 
the  form  of  an  association  agreement  (based  on  Articles 217 TFEU  and  8 TEU),  comprising  four 
pillars: trade and economic relations (a comprehensive EU-UK free trade agreement); foreign policy, 
security and defence, and development cooperation; internal security; and thematic cooperation 
(fisheries, aviation, research and innovation, culture and education, energy etc.).18 One agreement 
would have, in the EP's opinion, the advantage of a single coherent governance mechanism for the 
entire relationship. Such an agreement would be mixed and would require both unanimity in the 
Council  and  European  Parliament  consent,  as  set  out  in  Article 218 TFEU  (see  box 2).  The  EP 
mentioned that obtaining its consent to any agreement on the future relations would depend on 
compliance  with  a  series  of  principles  set  out  in  its  resolution  of  March 2018.  These  principles, 
echoing those established by the European Council, include:  

  the fact that a third country may not have the same rights and benefits as EU, or even as 
an European Free Trade Association (EFTA)/European Economic Area (EEA) Member; 

  protecting the integrity of internal market, not allowing 'cherry-picking'; 
  preserving the autonomy of the EU's decision-making system; 
  safeguarding the EU legal order and the role of the CJEU; 
  respect of democratic principles, human rights and fundamental freedoms; 
  ensuring  a  level  playing  field  with  respect  to  competition  rules,  social  and  workers' 

rights, environment, etc.; 

  safeguarding EU agreements with third countries and international organisations; 
  safeguarding EU financial stability, its regulatory and supervisory regime and standards; 
  ensuring the right balance between rights and obligations. 

16  Bilateral  Agreement  between  the  European  Union  and  the  United  States  of  the  America  on  prudential  measures 
regarding insurance and reinsurance; Council Decision (EU) 2017/1792 of 29 May 2017 on the signing, on behalf of the 
Union, and provisional application of the Bilateral Agreement between the European Union and the United States of 
America on prudential measures regarding insurance and reinsurance, OJ L 258, 6 October 2017; Council Decision (EU) 
2018/539 of 20 March 2018 on the conclusion of the Bilateral Agreement between the European Union and the United 
States of America on prudential measures regarding insurance and reinsurance, OJ L 90, 6 April 2018. 

17  For example, agreements in the area of research and technical cooperation. 
18  Resolution  of  14  March  2018  on  the  framework  of  the  future  EU-UK  relationship  (2018/2573(RSP)),  European 
Parliament. The EU's chief negotiator Michel Barnier has already expressed the view that the content of the EU-UK 
future relations would be organised on the basis of four pillars: 'a trade pillar; a pillar governing specific co-operation 
in certain areas of shared interest, research, university co-operation, fisheries, aviation; co-operation in internal security 
and legal matters—home affairs in other words—of initial and particular interest to the citizens and their daily lives; 
and of course a fourth pillar would involve defence and security.' The UK's then chief negotiator, David Davis, stated 
that he had 'no intrinsic objection' to concluding an association agreement with the EU, depending on what would be 
included in it, in particular as regards the jurisdiction of the EU Court of Justice. Furthermore, the UK government's 
White Paper on the future relationship between the United Kingdom and the European Union, published in July 2018, 
mentioned  that  the  arrangements  underpinning  the  future  relationship  'could  take  the  form  of  an  Association 
Agreement'. 

See also the European Parliament homepage on Brexit negotiations. 

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The future partnership between the European Union and the United Kingdom 

Box 2 – Article 218 TFEU and other possible legal bases 
Article  218  TFEU  applies  to  all  international  agreements  concluded  by  the  EU  with  third  countries  and 
international organisations, setting out the procedures at EU level for their negotiation and conclusion. The 
agreements will also need to be based on one or more additional legal bases in the EU treaties, corresponding 
to the  main field(s) covered by the agreement  that will clarify  which  procedure under Article 218 must be 
applied, as well as whether the agreement is mixed or not.  

Under  Article  218  TFEU,  negotiations  for  an  international  agreement  begin  after  the  Council  adopts  a 
negotiating mandate on a proposal by the Commission or the High Representative/Vice-President for Foreign 
Affairs and Security Policy. The Council also nominates the EU negotiator to whom it may address directives 
throughout the negotiations. Decisions on the signature and conclusion of the final agreement are adopted 
by the Council, by qualified majority (QMV), with the exception of association agreements and agreements 
covering fields for which unanimity is required for a Union act.  

The  Council  must  wait  for  the  European  Parliament's  consent  for  the  conclusion  of  those  types  of 
agreements  set  out  in  Article 218 (6a),  inter  alia  association  agreements,  agreements  falling  under  a  field 
where the ordinary legislative procedure applies for internal acts of the EU, as well as for those fields where 
consent  of  the  Parliament  is  required  under  a  special  legislative  procedure;  agreements  with  important 
budgetary  implications  for  the  EU  etc.  For  all  the  other  agreements,  the  European  Parliament  is  only 
consulted.  As  regards  agreements  relating  exclusively  to  common  foreign  and  security  policy,  decisions 
concerning their conclusion is taken exclusively by the Council. The EP must also be kept immediately and 
fully informed at all stages throughout the procedure, for all international agreements (Article 218(10)).19 

In conjunction with Article 218 TFEU, some possible legal bases could be: 

–  
Article 207 TFEU on the common commercial policy (an exclusive EU competence) would be the only 
possible legal basis if the future agreement would exclusively cover only the trade relations between the EU 
and the UK. Under Article 207 TFEU, agreements require the consent of the Parliament to be adopted, and the 
Council  normally  takes  decisions  under  QMV.  Unanimity  is  necessary  in  the  case  of  agreements  covering 
cultural and audiovisual services, or those having serious consequences on the national organisation of social, 
education and health services. Unanimity is also required in those few areas of services, intellectual property 
rights, and foreign direct investment where the Council adopts internal EU acts by unanimity.20  

– 
Article  212  TFEU  covers  EU  cooperation  measures,  including  the  possibility  of  concluding 
cooperation  agreements  with  third  countries  other  than  developing  countries  (e.g.  macro-economic 
assistance agreements etc.). In this case, EP consent would be required, while the Council's decision-making 
rule would be QMV. 

– 
Moreover,  some  specific  agreements  have  their  own  legal  basis,  which  could  be  used  either  in 
conjunction  with  Article 207 TFEU  if  these  issues  are  tackled  in  a  trade  agreement,  or  they  could  be  used 
independently  if  the  agreements  are  concluded  as  stand-alone  agreements.  For  example,  transport 
agreements should be concluded on the basis of the relevant transport provisions in the TFEU, agreements 
for scientific and technological cooperation are concluded under Article 186 TFEU, partnership agreements 
in the fisheries sector are concluded on the basis of Article 43 TFEU, etc. 

Article  217  TFEU  governs  EU  association  agreements  ('agreements  establishing  an  association 
– 
involving reciprocal rights and obligations, common action and special procedure').21 As mentioned above, 
Article 217 TFEU could be linked to Article 8 TEU (relations with neighbouring countries) which also envisages 
the  possibility  of  concluding  'specific  agreements  with  the  countries  concerned.  These  agreements  may 
contain  reciprocal  rights  and  obligations  as  well  as  the  possibility  of  undertaking  activities  jointly.  Their 
implementation shall be the subject of periodic consultation.' Article 8 TEU has not been used so far as a legal 
basis  on  its  own  or  even  jointly  with  Article 217 TFEU  (for  example  in  the  recent  Association  Agreements 
concluded  with  Georgia,  Ukraine  or  the  Republic  of  Moldova).  The  conclusion  of  association  agreements 
requires, as mentioned, the consent of the EP and unanimity in the Council. They are also mixed agreements 

19  The  Court  of  Justice  of  the  EU  may  be  asked  for  an  opinion  on  the  compatibility  of  the  envisaged  international 

agreement with EU law (Article 218(11) TFEU.  

20  L. Puccio, A guide to EU procedures for the conclusion of international trade agreements, EPRS, October 2016. 
21  For a brief introduction defining association agreements, refer to: Association Agreement, Institute for Government, 

March 2018. 

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which entails that ratification at the national level in the EU Member States is also required for their entry into 
force.  

– 
Article  37  TEU,  where  the  agreement  falls  exclusively  in  the  CFSP/CSDP  area,  for  example  the 
framework  participation  agreements  (see  section  6.2.5). This  article  can  also  be  linked  to  Article  217  TFEU, 
when association agreements contain provisions on cooperation in the field of CFSP/CSDP.  

– 
In the field of justice and home affairs, the legal basis for agreements with third countries will depend 
on the subject covered by the agreements (e.g. regarding passenger name records (PNR), the legal bases are 
Article 82 and 87 TFEU). 

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The future partnership between the European Union and the United Kingdom 

3. Initial EU and UK positions regarding future relations 

For the first time in its history, the EU will negotiate loosening instead of strengthening of ties with 
a  country.  Indeed,  the  EU  and  UK  are  departing  from  a  situation  of  convergence  of  rules  and 
regulations with both sides recognising the difficult task of mitigating or managing probable future 
regulatory divergence through their future partnership agreement.22 However, the historical ties, 
longstanding partnership and interconnectedness between the UK and the EU Member States, their 
geographical  proximity  and  shared  values  are  arguments  in  favour  of  preserving  close  relations 
between the EU and the UK, covering areas beyond trade and economic relations, such as: political 
and  strategic  cooperation,  culture,  education,  research,  global  issues  such  as  climate  change, 
international aid for development etc. As acknowledged by the EU-27, 'strong and constructive ties 
will remain in both sides' interest and should encompass more than just trade.'23 

3.1. The EU's negotiating objectives and principles 

The EU-27 already put forward the broad principles for the 'framework on the future relationship' in 
the European Council Conclusions of April and December 2017, reconfirmed in March 2018.24 While 
affirming its desire for a close future partnership with the UK, the European Council sets out the core 
principles guiding the Union's position on any future relationship:  

  protecting the EU's interests; 
  ensuring a balance of rights and obligations, and a level playing field;  
  preserving the integrity and proper functioning of the single market, which excludes a 

sector-by-sector approach and relies on the indivisibility of the four freedoms; 

  a country that is not a Member State of the EU cannot have the same rights and benefits 

as a member state; 

  preserving  the  EU's  decision-making  autonomy,  including  the  role  of  the  European 
Court  of  Justice  (CJEU),  in  particular  in  the  enforcement  and  dispute  settlement 
mechanisms of the future partnership; 

  safeguarding  the  EU's  financial  stability,  its  regulatory  and  supervisory  regime  and 

standards and their application. 

The EU's chief negotiator, Michel Barnier, has also repeatedly stated that any 'vision of the future 
must  take  into  account  the  fact  that  the  EU  cannot  and  will  not  compromise  on  its  founding 
principles' and that it was the EU's responsibility to preserve the future of the Union, its common 
values and identity, the single market and common policies, all of which are non-negotiable.25  

Internal preparatory discussions within the Council and with the European Commission as the Union 
negotiator have taken place since December 2017 on various aspects related to the future relations 
with the UK.26 The Commission has also participated in meetings with the European Parliament on 
issues such as fisheries, aviation, security, defence and foreign affairs.27 After the European Council 
adopted the specific guidelines on 23 March 2018, discussions with the UK on the future framework 
of relations started in April 2018 with a view to agreeing a political declaration.  

22  Trade after Brexit: Options for the UK's relationship with the EU, Institute for Government, 18 December 2017.  
23  Guidelines, European Council (Article 50), 15 December 2017. 
24  Guidelines following the United Kingdom's notification under Article 50 TEU, European Council (Article 50), 

29 April 2017, and Guidelines on the framework for the future EU-UK relationship, 23 March 2018.  

25  M. Barnier, Speech at BusinessEurope Day 2018, 1 March 2018, and Statement at the plenary session of the European 

Parliament on the Article 50 negotiations with the United Kingdom, 13 March 2018.  

26  See negotiating documents on Article 50 negotiations with the United Kingdom, European Commission.  
27  M. Barnier, Remarques au point presse à l'issue du Conseil affaires générales (Article 50), 27 February 2018. 

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Regarding trade and economic cooperation, the EU-27 took note of the UK's wish to leave the single 
market and the customs union, and seek a free trade agreement with the EU instead. By its rejection 
of the two options which enable closer interdependence with the EU markets, the UK will necessarily 
face trade barriers,28 and make trade for both sides 'more complicated and costly than today', as 
mentioned by the President of the European Council.29 The EU is particularly concerned about the 
regulatory challenge posed by the UK (due to its geographic proximity and market size), taking the 
stance  that  no  ambitious  partnership  would  be  possible  without  'common  ground  in  fair 
competition, state aid, tax dumping, food safety, social and environmental standards'.30 Regulatory 
divergence would also pose a major obstacle to cooperation across the Irish border.31 Therefore, an 
EU-UK  free  trade  agreement  should  be  balanced,  ambitious  and  wide-ranging,  but  must  not 
undermine  the  proper  functioning  and  integrity  of  the  single  market,  by  allowing  sectoral 
participation or by failing to ensure appropriate safeguards against unfair competitive advantages 
(i.e. UK lowering standards on state aid, competition, environment, tax, labour etc.). A future EU-UK 
FTA would also need to 'avoid upsetting existing relations with other third countries', in the EU's 
view.32 The European Council guidelines of 23 March 2018 confirmed this initial position.  

Box 3 – What do the European Council Guidelines of 23 March 2018 say? 

By rejecting the single market and customs union, opposing any role for the CJEU in the future agreement, 
and upholding regulatory sovereignty, the UK would be left with the option of a Canada-style free trade deal 
with the EU.33 The EU-27 propose zero tariffs and quotas for trade in goods with appropriate rules of origin, 
reciprocal access to fishing waters, agreement on technical barriers to trade and sanitary and phytosanitary 
standards, as well as a framework for voluntary regulatory cooperation; market access for services under host 
state  rules,  but  with  'ambitious  provisions  on  movement  of  people  and  a  framework  for  recognition  of 
professional  qualifications'.  The  current  guidelines take  the  perspective  that  'the  Union  and  the  UK  will  no 
longer  a  share  a  common  regulatory,  supervisory,  enforcement  and  judiciary  framework'34  and  this  has 
consequences  for  what  the  EU  can  offer  in  terms  of  trade  in  services  liberalisation  and  checks  that  are 
necessary  at  the  borders.  Indeed  stronger  integration  and  liberalisation  is  permitted  only  at  the  cost  of 
'approximation' or 'alignment', including acceptance of the CJEU's exclusive role in interpreting EU law (see 
section 4). The guidelines however mention that EU could reconsider its offer should the UK's red lines evolve. 
Public procurement, investment and intellectual property rights, including geographical indications should 
also be covered. Importantly, the text makes no mention of financial services, while on data protection it opts 
for the EU rules on adequacy, and not a specific data-protection agreement as requested by the UK. Moreover, 
the  future  partnership  should  address  global  challenges,  in  particular  in  the  areas  of  climate  change  and 
sustainable development, as well as cross-border pollution. Cooperation in the field of transport services is 
another objective of the EU, with the aim of negotiating an 'air transport agreement, combined with aviation 
safety and security agreements, as well as agreements on other modes of transport'. The EU is also willing to 
open its research and innovation programmes or other programmes in the field of education and culture to 
UK  participation  after  Brexit,  subject  to  conditions  available  to  third  countries  and  with  adequate  financial 
participation on the part of the UK. The March European Council guidelines also confirmed the EU-27's already 
stated 'readiness to establish partnerships in areas unrelated to trade and economic cooperation, in particular 
the fight against terrorism and international crime, as well as security, defence and foreign policy'.  

Institute for Government, op. cit.  

28 
29  D. Tusk, Statement by President Donald Tusk on the draft guidelines on the framework for the future relationship with 

the UK, 7 March 2018.  

30  Slides on Level Playing Field, European Commission, 31 January 2018. 
31  K. Hayward, P. McGrade, Regulatory Alignment: What Will It Take to Make It Work, And How Big Are the Risks of Failure?, 

Scottish Centre on European Relations, 14 December 2017. 
32  Guidelines, European Council (Article 50), 15 December 2017. 
33  M. Barnier, slide presented to the Heads of State and Government at the European Council (Article 50) on 15 December 

2017, TF50(2017) 21, 19 December 2017.  

34  Guidelines on the framework for the future EU-UK relationship, European Council (Article 50 TEU), 23 March 2018. 

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The governance of the future relationship agreement would cover 'management and supervision, dispute 
settlement and enforcement, including sanctions and cross-retaliation mechanisms' and would need to take 
account, in the EU's view, of the content and depth of the future relationship; the need to ensure effectiveness 
and  legal  certainty;  as  well  as  the  EU's  legal  autonomy,  including  the  role  of  the  EU  Court  of  Justice. 35  No 
agreement between the EU and the UK may apply to the territory of Gibraltar without agreement between 
Spain and the UK.  

The European Council conclusions of 29 June 2018 did not add elements to the EU's negotiating 
position,  reconfirming  the  March  guidelines.  However,  the  European  Council  called  for  further 
clarity from the UK as well as 'realistic and workable proposals' regarding its position on the future 
relationship.36  

Finally, maintaining EU-27 unity is an EU priority in the Brexit negotiations process. The European 
Council conclusions of April 2017 state that throughout the withdrawal negotiations 'the Union will 
maintain its unity and act as one with the aim of reaching a result that is fair and equitable for all 
Member States and in the interest of its citizens'. At every important stage in the talks, the EU leaders 
have strived to protect the unity of the 27 Member States, avoiding any action or statement that 
would undermine consensus.37 While some believe that EU Member States' unity will be tested in 
the future trade negotiations, due to their different economic interests, experts expect that the EU 
will stand firm on its position, in light of the wider concern of preserving the integrity of the single 
market.38  

3.2. The United Kingdom's stated objectives 

The UK's position on future relations with the EU has been expressed in various places, including the 
Article 50 notification letter (29 March 2017), the white paper on the United Kingdom's exit from, 
and new partnership with, the European Union (2 February 2017) and other thematic papers, and in 
several  of  the  UK  Prime  Minister's  speeches.39  A  new  government  white  paper  on  the  British 
priorities  for  the  future  relationship  with  the  EU  was  published  on  12  July  2018  based  on  the 
6 July 2018 Government statement at Chequers.40 

The UK Prime Minister's speech of 17 January 2017,41 as well as the government's white paper of 
February 2017, clearly states the UK's goal of negotiating a bold and ambitious free trade agreement 
with  the  EU,  allowing  for  the  freest  possible  trade  in  goods  and  services,  and  including  a  new 
customs agreement with the EU. However, the UK 'would not seek to adopt a model already enjoyed 
by  other  countries'. Furthermore  such  an  agreement,  in  the UK's  view,  could  take  in  elements of 
current single market arrangements, 'on a fully reciprocal basis and in our mutual interests'. In the 
Article 50  Notification  of  29 March 2017,  Prime  Minister  Theresa May  also  mentioned  the  UK's 
objective of agreeing a deep and special partnership between the UK and the EU, covering both 
economic and security cooperation. A priority for the negotiations would be to find ways to manage 
the  evolution  of  the  respective  regulatory  frameworks  to  maintain  a  fair  and  open  trading 
environment,  as  well  as  to  identify  a  dispute-settlement  mechanism  (that  would  'respect  UK 

35  See  also  Internal  EU-27  preparatory  discussions  on  the  framework  for  the  future  relationship:  Governance, 

TF50 (2018) 22/2, European Commission, 19 January 2018. 
36  Conclusions, European Council (Article 50), 29 June 2018.  
37  E. Zalan, EU stresses unity as it launches next phase of Brexit talks, EU Observer, 15 December 2017.  
38  J. Springford, S. Lowe, B. Oppenheim, Will the unity of the 27 crack?, Centre for European Reform, 15 March 2018. 
39  Prime Minister's letter to Donald Tusk triggering Article 50, UK Government, 29 March 2017; The United Kingdom's exit 
from and new partnership with the European Union White Paper, UK Government, 2 February 2017; Future partnership 
papers; Brexit: Prime Minister''s speeches, UK Government.  

40  Statement from HM Government, Chequers, UK Government, 6 July 2018 and The future relationship between the 

United Kingdom and the European Union, UK Government, 12 July 2018..  

41  The government's negotiating objectives for exiting the EU: PM speech, UK Government, 17 January 2017.  

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sovereignty, protect the role of our courts and maximise legal certainty, including for businesses, 
consumers, workers and other citizens').  

Other  speeches  by  the  Prime  Minister  (from  September 2017  and  March 2018)42  contain  more 
details on the UK's vision regarding the specific aspects of future EU-UK relations, while the general 
objective of the UK government is reaffirmed: to secure the 'most frictionless possible trade in goods 
and services' outside the single market and the customs union, through a 'new strategic partnership 
with the EU, including an ambitious FTA and a new customs arrangement', but to which no existing 
EU model for relations with third countries could apply.43 Avoiding any physical infrastructure at the 
Irish border, or any related checks and controls, has been another general objective, entirely shared 
by the EU. The most recent government white paper from July 2018 advocates a future relationship 
with  the  EU  structured  around  an  economic  partnership  and  a  security  partnership,  as  well  as 
cooperation  in  some  important  areas,  including  the  protection  of  personal  data,  science  and 
innovation, culture and education, and fisheries, among other things.  

With each occasion, the Prime Minister and other UK representatives have, however, reiterated the 
government's red lines, namely ending the direct jurisdiction of the CJEU; ending the freedom of 
movement of people and UK contributions to the EU budget; and obtaining the freedom to pursue 
an  independent  trade  policy  (which  entails  both  leaving  the  customs  union  and  the  common 
commercial  policy).  Any  deal  negotiated  with  the  EU  would  have  to  comply  with  five  tests: 
implementing the decision of the British people in the referendum; reaching an enduring solution; 
protecting the security and prosperity/jobs of people in the UK; delivering an outcome consistent 
with the UK's values; and strengthening the unity of all UK nations. 

Box 4 – What does the UK government want? 

In  her  speech  dedicated  to  the  future  economic  partnership  (March  2018),  Prime  Minister  Theresa May 
recognised  the  necessary  trade-offs  between  sovereignty  ('taking  back  control  of  our  laws,  money  and 
border') and market access, as well as the concept of a level playing field, and reaffirmed the commitment to 
avoid a hard border on the island of Ireland. She wished for the 'broadest and deepest possible partnership - 
covering more sectors and cooperating more fully than any FTA in the world today', with voluntary alignment 
by  the  UK  parliament  to  EU  standards,  zero  tariffs  and  quotas  for  goods  and  a  'comprehensive  system  of 
mutual  recognition';  a  'customs  partnership'  or  a  'highly  streamlined  customs  arrangement';  regulatory 
dialogue and associate membership for the UK in some EU regulatory agencies (medicines, chemicals, aviation 
safety); an independent arbitration mechanism; reciprocal access to waters and open  markets for  fisheries; 
and  on  services:  mutual  recognition  of  professional  qualifications,  arrangements  on  labour  mobility, 
continuation of mutual recognition of licences for broadcasting services and a collaborative framework for 
financial services that is 'reciprocal, mutually agreed and permanent'. Furthermore, the UK seeks a new data 
protection agreement with the EU, as well as cooperation in various fields – transport, energy, culture, digital 
etc. 

The  statement  agreed  by  the  Cabinet  at  Chequers  on  6 July 201844  and  the  ensuing  white  paper  of 
12 July 2018, clarified that the UK government wants to propose an FTA agreement. While it wants to recover 
'regulatory  flexibility'  in  the  services  field,  the  UK  government  suggests  the  maintenance  of  a  'common 
rulebook  for  all  goods  including  agri-food',  in  order  to  diminish  regulatory  barriers  in  that  framework.  The 
white paper further clarifies that the alignment of UK standards to the EU would only be considered for those 
goods checked at the border, which means that they would not include certain agri-food standards.45 The UK 
would also seek participation in the EU agencies relevant to the free trade area for goods.  

42  PM's  Florence  speech:  a  new  era  of  cooperation  and  partnership  between  the  UK  and  the  EU,  UK  Government, 

22 September 2017; PM speech on our future economic partnership with the European Union, 2 March 2018.  

43  See for example, J. Carmona, C. Cîrlig, G. Sgueo, UK withdrawal from the European Union: Legal and procedural issues, 

EPRS, European Parliament, March 2017.  

44  Statement from the HM Government, UK Government, 6 July 2018. 
45  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 

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The UK also proposed a new 'facilitated customs arrangement' (FCA) in order to avoid EU-UK customs barriers, 
whereby the UK would apply EU duties for goods going to the EU and UK tariffs for goods meant for the UK 
market. The proper mechanisms and procedures underpinning the functioning of the FCA would have to be 
agreed with the EU. Furthermore, recognising that 'only the CJEU can bind the EU on the interpretation of EU 
law', the white paper (as well as the preceding Chequers statement), suggests that the UK would be willing to 
accommodate, through a 'joint reference procedure', the role of the CJEU with respect to the common rule 
book  on  goods, in  the  event  of  a  dispute. Finally,  the  statement and  the  white  paper  indicate  that  the  UK 
would  agree:  to  apply  a  common  rulebook  on  state  aid;  to  establish  cooperative  arrangements  between 
regulators on competition; and to commit to an obligation to maintain environmental, social and employment 
and consumer protection standards at least at their current level of protection; in the area of climate change 
regulation the UK mentioned that it would also maintain high standards and that it would be ready to engage 
with the EU on a broad agreement on climate change cooperation. 

Alongside the economic partnership, a security partnership with the EU would form part of the future relations 
framework. The UK would like to establish a strong and close future relationship with the EU in the fight 
against  crime  and  terrorism,  focusing  on  operational  and  practical  cross-border  cooperation,  while 
continuing  to  work  with  the  EU on foreign policy, security and defence,  on  sanctions,  on  stabilising  the 
Balkans,  or  securing  Europe's  external  border.46  In  this  context,  the  UK  has  proposed  an  EU-UK  security 
partnership 'of unprecedented breadth and depth', based on three pillars – internal security, external security 
and  wider  cooperation  (e.g.  cyber  security,  civil  protection,  asylum  and  illegal  immigration,  intelligence, 
countering  terrorism  and  violent  extremism)  –  and  underpinned  by  cross-cutting  issues  such  as  data 
protection and exchange, governance and secondments of officials between the partners' institutions.47 Such 
a partnership would be 'sufficiently flexible, with a mix of political and legal agreements, dynamic, adaptable 
and responsive to crises'. Regarding the first pillar, a new security treaty with the EU on law enforcement 
and criminal justice cooperation is suggested, that goes beyond the existing precedents for agreements 
with third countries by enshrining the existing cooperation based on EU measures. It would cover three areas 
–  practical  operational  cooperation  (including  measures  such  as  the  European  Arrest  Warrant  and  the 
European Investigation Order); multilateral cooperation through EU agencies (Europol and Eurojust) and data-
driven  law  enforcement  (information  exchange  through  various  law  enforcement  databases)  –  and  be 
underpinned by safeguards as regards human rights, dispute settlement and enforcement mechanisms and 
data protection arrangements. The July 2018 white paper further clarifies that the UK will respect the remit of 
the CJEU where the UK participates in an EU agency. The treaty should have a dynamic dimension allowing 
the UK to cooperate on the future versions of the current tools, as well as allowing for the incorporation of 
new tools and measures, where mutually beneficial. The UK also seeks a strategic dialogue based on expertise 
and experience exchanges between the UK and the EU on justice and home affairs matters (JHA). As regards 
the second pillar, the UK proposes a new partnership on foreign and defence policy cooperation, based on: 
consultation by way of an institutionalised and structured dialogue, coordination of diplomatic, defence and 
development resources, cooperation in the research and development of capabilities, reciprocal exchanges 
of officials, as well as arrangements for sharing sensitive and classified information. The partnership would 
possibly be based on a series of formal agreements and should respect both the autonomy of the EU and its 
Member States, as well as the UK's sovereignty.  

Data exchange and protection are mentioned in the July 2018 paper among the vital cross-cutting issues for 
the  UK.  Due  to  the  existing  alignment  of  standards  on  data  protection,  the  UK  has  repeatedly  asked  for  a 
separate agreement with the EU, instead of an approach based on the adequacy decision framework which 
would  remain  in  the  discretion  of  the  Commission.  The  July  2018  white  paper  however  expresses  the  UK 
government’s readiness to begin preliminary discussions on an adequacy assessment which would constitute 
a 'right starting point' for a future 'extensive' data protection agreement. 

On governance, the white paper of July 2018 proposes that the future relationship should be based on an 
overarching institutional framework that could take the form of an Association Agreement between the EU 
and the UK, managed by a Governing Body and a Joint Committee. The white paper also argues for a future 
partnership which is flexible and adaptable, accommodating additional agreements if needed and the review 
of existing ones. 

46  PM speech at Munich Security Conference, UK Government, 17 February 2018. 
47  Framework for the UK

EU Security Partnership, UK Government, May 2018.  

‐

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EPRS | European Parliamentary Research Service 

As regards the consistent interpretation of the agreement(s), the UK insists on the independence of the UK 
and EU courts, but suggests that they could take into account the relevant case-law of the other party. At the 
same time, Prime Minister May recognised that, where the UK wanted to participate in an EU agency, it would 
have to respect the CJEU role in that remit; also, in view of maintaining the common rulebook with the EU, the 
UK would commit by treaty that its courts would pay due regard to CJEU case-law in this respect.  

State-to-state dispute resolution in the context of the agreement(s) would be based, in the UK’s view, on an 
independent arbitration mechanism, as is the case in EU free trade agreements. As mentioned above, disputes 
relating to the common rule book on goods could be solved through the option of a joint referral to the CJEU 
for interpretation.  

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The future partnership between the European Union and the United Kingdom 

4. The future trade and economic partnership: main issues 

4.1. Introduction 

4.1.1. EU-UK trade relations 
Figure 1 shows the evolution of UK imports and exports with the EU as opposed to extra-EU partners. 
It is interesting to note that, during the post-2009 crisis, UK exports to non-EU partners exceeded 
those with EU partners, however this trend has slowly reverted, and imports from the EU remain 
greater than those from extra-EU trade partners. As such, in 2017, UK trade with the EU amounted 
to 50 % of UK total trade. Map 1 illustrates the percentage of UK trade with the EU by Member State. 
The  top  EU  trade  partners  for  the  UK  are  Germany  (25 %  of  total  UK  trade  with  the  EU),  the 
Netherlands (15 %), France (12 %), Belgium (9 %) and Ireland (8 %). UK trade with the EU is highly 
concentrated among certain EU trade partners. Indeed, the top three EU partners account for 51 %, 
while the top five reach 68 % and top ten account for 90 % of UK's trade with the EU. However, such 
analysis does not account for possible internal EU value chains. For example, the UK might import 
an input from Germany, but that input can be manufactured using parts from other EU partners. So 
this  descriptive  picture  might  actually  underestimate  the  potential  importance  of  UK-EU  trade 
relations for certain EU countries, with which the UK has less direct trade flows. 

Figure 1 – UK trade with EU-28 and with the rest of the world (2016) 

Source: Eurostat 

13 

 
 
 
Figure 2 – UK trade with other EU Member States (in share of total trade with the EU, 2017) 

EPRS | European Parliamentary Research Service 

Source: Eurostat 

Moreover, the EU accounted for 42 % of total UK trade in services in 2014. In 2014, services flows 
from  the  UK  to  the  EU  represented  37 %  of  total  UK  services  credit  (exports).  However,  that 
percentage rises to 41 % for financial services (excluding insurance), 43 % for the travel sector, and 
45 %  for  the  transport  sector. The  top UK  export  sectors  to  the  EU  are:  financial  services  (with or 
without  insurance); other business  services  (which include legal  services,  accountancy  and  audit, 
consultancy, etc.); and the travel and transport sector. EU exports services to the UK of are more 
important in the transport and travel sector as well as the other business sector. EU exports to the 
UK represent 49 % of total UK imports of services. 

Table 1 – UK service credit with EU-28 and with the rest of the world in million euros (2014) 

Balance of payments item 

EU-28 

Extra-EU28 

Total 

% EU-28 

Services 

100 822.5 

171 790.8 

272 613.3 

37.0 

Services:  Manufacturing 
physical inputs owned by others 

services  on 

n.a. 

Services: Maintenance and repair services 

n.a. 

Services: Transport 

Services: Travel 

Services: Construction 

Services: Insurance and pension services 

Services: Financial services 

14 750.9 

14 979.2 

899.4 

3 045.5 

25 068.2 

n.a. 

n.a. 

18 378.2 

20 178.1 

1 538.2 

21 901.2 

35 993.4 

n.a. 

n.a. 

33 129.1 

35 157.3 

2 437.6 

24 946.7 

61 061.6 

n.a. 

n.a. 

44.5 

42.6 

36.9 

12.2 

41.1 

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The future partnership between the European Union and the United Kingdom 

Services:  Charges 
intellectual property 

for 

the  use  of 

5 208.9 

8 363.5 

13 572.4 

Services: Telecommunications, computer, 
and information services 

9 324.9 

10 935.1 

20 260.0 

Services: Other business services 

22 737.3 

48 139.2 

70 876.5 

Services: 
recreational services 

Personal, 

cultural, 

and 

888.2 

1 749.1 

2 637.3 

Services: Government goods and services 

650.0 

2 415.3 

3 065.3 

38.4 

46.0 

32.1 

33.7 

21.2 

Source: Eurostat, 2014. 

Table 2 – UK service debit with EU-28 and with the rest of the world in million euros (2014) 

Balance of Payments Item 

EU-28 

Extra-
EU-28 

total 

% 
EU-28 

Services: 

79 583.7 

82 450.5 

162 034.2 

49.1 

-  Manufacturing  services  on  physical 
owned by others 
- Maintenance and repair services  

inputs 

n.a 

n.a 

- Transport 

- Travel 

- Construction 

- Insurance and pension services 

- Financial services 

- Charges for the use of intellectual property  

Telecommunications, 

- 
information services 
- Other business services 

computer, 

and 

- Personal, cultural, and recreational services 

- Government goods and services  

Source: Eurostat, 2014. 

n.a 

n.a 

11 165.8 

19 923.8 

517.3 

1 039.5 

7 926.9 

4 880.2 

4 955.8 

n.a 

n.a 

24 027.4 

47 670.3 

2 710.5 

1 704.4 

12 410.1 

7 348.8 

11 676.9 

12 861.6 

27 746.5 

2 193.2 

664.9 

4 483.2 

2 468.6 

6 721.1 

18 919.0 

25 129.0 

44 048.0 

352.3 

2 187.0 

3 546.6 

3 026.8 

3 898.9 

5 213.8 

n.a 

n.a 

53.5 

58.2 

80.9 

39.0 

36.1 

33.6 

57.6 

43.0 

9.0 

41.9 

4.1.2. What trade agreement model to apply? 
After some discussion on the different trade models, the UK government has expressly refused to 
retain membership of the customs union or form a customs union with the EU (as in the Turkish 
model), access to the internal market (thus rejecting the EEA model), and free movement rights (thus 
rejecting  both  the  Swiss  model  and  the  EEA).  Considering  all  of  these  UK  government  red  lines 
(including  those  with  respect  to  regulatory  autonomy  and  the  CJEU),  the  European  Commission 
concluded that the only viable trade agreement model for the future relations between the EU and 
the  UK  would  be  of  the  kind  negotiated  with  Canada  or  South  Korea  (see  figure 3).  Deep  and 
comprehensive free trade agreements (DCFTA) of the kind negotiated with Ukraine in its association 
agreement – as further explained in section 4.4.2 – would entail areas of approximation or alignment 
with  the  EU  regulatory  system  and  consequently  the  need  to  account  for  the  CJEU  role  in 
interpreting EU law. The Commission therefore considered DCFTAs to be incompatible with the red 
lines  expressed  by  the  UK  government.  The  European  Council  guidelines  therefore  build  mainly 
upon the FTA model. The FTA model entails exiting the customs union, the common commercial 
policy  and  the  internal  market.  However,  some  of  the  suggestions  made  by  Prime  Minister 
Theresa May  would  indeed  require  to  go  beyond  the  FTA  model  and  imply  acceptance  of  both 
alignment to EU legislation and a CJEU role in some cases. This seems also to be the line adopted in 
the  statement  that  the  UK  government  issued  on  6 July 2018,  where  the  UK  suggested  some 

15 

 
 
EPRS | European Parliamentary Research Service 

harmonisation in the field of goods' regulation (common rulebook) in order to ensure frictionless 
trade and a joint reference procedure to accommodate the role of the CJEU. The European Council 
Guidelines  had  mentioned  that  if  the  UK  revisited  its  red  lines,  a  new offer  could  be  considered. 
However the European Council highlighted the need for rights and commitments to be balanced 
and that the integrity of the internal market and the EU legal and decision-making framework could 
not  be  endangered.  During  the  8 June 2018  press  conference,  the  EU's  chief  negotiator, 
Michel Barnier, stressed that maintaining the current status quo in EU-UK relations after Brexit was 
impossible, and that the UK will have to bear the consequences of its choice, including accepting 
the constraints that exist in EU law regarding what can be offered to a third country.48 

Figure 3 – The 'Stairway' to Brexit 

Source:  M.  Barnier,  European  Commission  chief  negotiator,  slide  presented  to  the  Heads  of  State  or 
Government at the European Council (Article 50) meeting on 15 December 2017. 

4.2. Constraints in EU FTAs on tailored solutions for Britain: Most 
favoured nation clauses in FTAs 

The capacity of the EU to offer a deal that goes beyond the Canadian or other FTA deals that the EU 
has concluded to date depends on several factors. First of all, certain liberalisation and integration 
levels can only be granted on the basis of regulatory alignment and CJEU involvement in order to 
preserve the integrity of the EU internal market and legal framework. Secondly, the EU might also 
be bound by most favoured nation clauses in its trade agreements. Most favoured nation (MFN) 
status  stipulates  that  an  exporter  from  the  partner  country  is  treated  no  less  favourably  than  an 
exporter from a third country in like situations. One of the main technical questions during the Brexit 
debate  has  been  whether  the  EU  introduced  MFN  clauses  in  its  FTAs  and  what  would  be  the 
consequences of such clauses on the current negotiations with the UK.  

In other words, do MFN clauses in EU FTAs imply that any more favourable deal granted to the UK 
has also to be extended to other countries with whom the EU has an FTA?  

48  M. Barnier, European Commission Chief Negotiator for Article 50 Negotiations with the UK, press conference following 

this week's round of negotiations, (extracts), 8 June 2018. 

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The future partnership between the European Union and the United Kingdom 

First, the existence of MFN clauses in the framework of trade in goods, i.e. clauses which prescribe 
that the EU shall grant any more favourable treatment applicable to a third party in another FTA to 
the other partners of the FTA containing the MFN clause, could be significant for the Brexit talks, as 
the  EU  wants  to  grant  duty  free  access  to  UK  goods,  while  in  previously  agreed  EU  FTAs,  some 
sensitive products do not receive duty free treatment. However, this is not a problem in practice 
because  MFN  clauses  for  goods  are  actually  extremely  rare  in  EU  FTAs.  These  clauses  are  mainly 
found  in  FTAs  with  a  development  perspective,  such  as  the  economic  partnership  agreements 
(EPAs), aiming at avoiding preference erosion. So, for example, this can be found in the EPA with the 
East African Community49 and with the South African Development Community (SADC).50 In the EPA 
with SADC, this MFN treatment is applicable to all SADC with the exception of South Africa. With 
South Africa, the EU has only a duty of consultation to decide whether and how to extend to South 
Africa the more favourable treatment permitted by the EU in an FTA with a third country.51 Usually, 
EU FTAs will instead contain a provision that ensures that applied MFN rates52 should apply if they 
become lower than the preferential rate given in the party's schedule to the FTA agreement.53 This 
kind of provision ensures that the preferential agreement maintains its overall preferential nature 
even in the context of multilateral liberalisation. 

Second, MFN clauses are present in the services and investment chapters. However, these types 
of MFN clauses are also subject to a series of limitations. These clauses will only apply within the 
scope of the chapters in which they are found, i.e. any sector carved out from the application of the 
chapter  in  question  is  also  excluded  from  the  application  of  the  MFN  clause  found  therein. 
Furthermore, the scope of application of the MFN clause can be limited, both through exceptions or 
specifications introduced in the provision, as well as through the introduction of reservations. 

If we take the example of the EU-Canada Comprehensive Economic and Trade Agreement (CETA), 
the  MFN  provision  for  cross-border  services  does  not  apply  with  respect  to  'arrangements  or 
agreements with a third country regarding accreditation of testing and analysis services and service 
suppliers, the accreditation of repair and maintenance services and service suppliers, as well as the 
certification of the qualifications of, or the results of, or work done by, those accredited services and 
service  suppliers'.54  This  provision  prevents  the  MFN  clause  applying  to  mutual  recognition 
agreements. In other words, if the EU concludes mutual recognition agreements with the UK, it is 
not obliged to reciprocate these terms with Canada. 

As  regards  the  use  of  reservation  to  limit  application  of  the  MFN  principle  for  services  and 
investment, the EU has used this in particular to avoid extending the treatment granted to countries 
that are part of the internal market or of a stronger integration framework. For example, this main 
reservation is contained in CETA in Annex 2, and 'reserves the right of the EU to adopt differential 
treatment to a country pursuant to any existing or future bilateral or multilateral agreement which: 
a) creates an internal market in services and investment, b) grants the right of establishment; or c) 
requires the approximation of legislation.' A similar reservation is found in EU FTAs using a positive 
approach to services commitments, such as the EU-South Korea agreement.55  

The MFN treatment will also be further limited by other reservations.56 

49  Article 15 of the Economic Partnership Agreement with EAC. 
50  Article 28 of the Economic Partnership Agreement with SADC. 
51  Article 28.7 of the Economic Partnership Agreement with SADC. 
52  Applied MFN tariffs are import tariff rates that apply to goods, which do not benefit from preferential treatment. 
53  See for example Article 29 in the Association Agreement with Ukraine; Article 25 of the EU-South Korea FTA.  
54  CETA, Article 9.5.  
55  Annex 7-B of the EU-South Korea FTA. 
56  See Annex 7-C of the EU-South Korea FTA and Annex I and II of CETA. 

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Figure 4 – EU and EU Member States MFN reservations in CETA by sectors 

EPRS | European Parliamentary Research Service 

Source: EPRS data on reservations in annex 1 and 2 of CETA. 

These reservations can be introduced at the EU level as well as at EU Member State level (in which 
case the reservation applies only to the Member State introducing it). For example, in CETA, several 
EU Member States have reservations with respect to legal services and allow a more preferential 
treatment  to  be  granted  to  EU  or  EEA  lawyers  as  opposed  to  third-country  lawyers,  including 
Canadian lawyers and law firms. The EU reserves the right to conclude agreements, which lead to 
differential treatment in a variety of sectors, especially transport, fisheries, and recreation (cultural 
and gambling services). Several Member States further restrict MFN application in certain sectors. 
These often hint at rights for which the Member State wants to obtain reciprocity and will therefore 
liberalise  only  for  those  third  countries  granting  similar  concessions.  Other  Member  State 
reservations will protect certain rights given to some countries only because of closer cooperation 
or  neighbourhood  ties  (for  example,  Nordic  cooperation,  road  transport  between  Bulgaria,  the 
Czech Republic and Slovakia, etc.).  

Finally, the MFN clause introduced in CETA for the financial service sector incorporates the clauses 
found  in  the  chapter  on  investment  and  cross-border  issues,  and  therefore  includes  similar 
limitations as per these two clauses. Application of MFN has been further limited in the context of 
chapters on the entry and stay of natural persons for business purposes. For example in CETA, it is 
granted only to some categories and within the terms of the chapter.57  

Therefore, in the context of services and establishment, the MFN clauses in previous EU FTAs may 
impact the Brexit negotiations to some extent. Besides the sectors where the EU or Member States 
have  put  reservations  on  MFN  commitments  in  other  FTAs,  or  commitments  to  liberalise  under 

57  See, article 10.6 paragraph 2 of CETA. 

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The future partnership between the European Union and the United Kingdom 

condition of approximation of laws (as in the association agreement with Ukraine), there are some 
sectors  where  further  commitments  to  the  UK  could  mean  that  the  EU  or  the  Member  State  in 
question would also have to extend such favourable treatment to other FTA partners that enjoy the 
benefit of an MFN clause. 

4.3. Exiting the customs union and common commercial policy 

As a member of the EU customs union and of the internal market, goods circulate freely from the UK 
to the EU and vice versa. Currently, UK firms can source inputs from the rest of the world, pay import 
duties on these inputs at the UK border, use them in further processing and then export the final 
processed good to the EU without internal border controls. The customs union implies that the EU 
has a single external border with respect to the rest of the world, thus the EU and their Member 
States apply the same tariffs to multilateral trade. To protect the integrity of that external border, 
competences  concerning  commercial  policy,  including  both  unilateral  trade  measures  (such  as 
trade defence) and international trade agreements (such as preferential trade agreements), are an 
exclusive competence of the EU.  

The choice of an FTA as the future framework of EU-UK trade relations implies that the UK will exit 
the EU customs union and the EU common commercial policy. In practice, that means that the UK 
will no longer apply EU external tariffs. Because external tariffs in the EU and the UK will diverge, an 
FTA will necessitate the introduction of preferential rules of origin. All these changes will require the 
re-establishment of the customs border between the UK and the EU (see figure 5).  

Figure  5  –  Reintroduction  of  customs  control  when  exiting  the  internal  market  and  the 
customs union 

Source: European Commission. 

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EPRS | European Parliamentary Research Service 

The UK government would like to minimise such customs borders, and in its statement issued on 
6 July 2018,58 which was further detailed in the white paper of 12 July 2018, suggested that the UK 
and the EU should institute a 'facilitated customs arrangement'. Under such an arrangement, where 
the trader can robustly demonstrate the destination of the good, the UK customs authorities would 
apply the UK's tariff for goods intended for the UK market and the EU common external tariff for 
goods  intended  for  the  EU  market.  In  cases  where  traders  could  not  positively  demonstrate  the 
destination of the good, UK customs would apply the higher of the UK or EU tariffs. A repayment 
mechanism would be applicable in cases where the good's destination is later identified as a lower 
tariff  jurisdiction.  The  framework  would  be  completed  by  a  mechanism  for  the  remittance  of 
relevant  tariff  revenues,  an  institutional  oversight mechanism,  a  new  trusted  trader  scheme,  and 
would  specify  the  circumstances  where  repayment  would  be  applicable.59  Notwithstanding  this 
repayment mechanism, a deeper analysis would be needed to verify whether such a system would 
not be in violation of the Article XXIV GATT requirement not to increase barriers to trade with non-
FTA members (external trade requirement).60 In any case, such an arrangement would de facto be 
very similar to a UK proposal suggested as a backstop option for Northern Ireland, which the EU had 
already  refused  to  consider  for  the  entire  UK  territory.  Such  a  customs  arrangement  would 
necessitate a high level of trust in the management of the border as the EU would relinquish that 
management to the UK authorities for goods transiting via the UK. By way of illustration, several 
newspapers quoted the customs fraud case that the European Anti-Fraud Office (OLAF) investigated 
in 2016 and concluded in 2017, which showed that customs declarations of certain Chinese textile 
and  footwear  goods were  undervalued  by UK  customs.  These  goods  were  destined  for other  EU 
Member State markets, such as France, Spain, Germany and Italy, who suffered the revenue losses 
from the undervaluation of the goods at the UK border. As a consequence, OLAF had recommended 
that  the  Commission  seek  recovery  of  the  €1.987 billion  lost  in  customs  duties  from  the  UK.61  In 
general, the European Commission has met UK proposals for a 'facilitated custom arrangement' with 
scepticism. In a press conference,62 Barnier highlighted the following practical questions:  

  How can customs authorities verify the final destination of goods, and therefore assure 

that the correct customs tariff is applied? Is there not a major risk of fraud? 

  What  would  the  additional  financial  and  administrative  costs  be  for  businesses  and 
customs  authorities in order  to  conform  to  this  new  system?  In  Barnier's  view,  Brexit 
cannot, and will not, be a justification for creating additional bureaucracy. 

  What would the impact be of a UK tariff that is lower than the EU tariff, with regards to 
revenues for both the Union budget and Member States? How can the Union delegate 
the  application  of  its  customs  rules  to  a  non-member  of  the  EU,  who  would  not  be 
subject to governance structures? Would that be acceptable or, simply, legally possible? 

In a recent interview, Barnier clarified the reasons why the proposals were not considered realistic 
by  the  European  Commission.  In  particular,  he  highlighted  that  it  would  be  illegal  for  the  EU  to 
entrust a third country with the supervision of its borders; also, that it would be extremely difficult 
to check the final destination of a good and that the proposed system would be prone to fraud.63 
Following the informal European Council meeting in Salzburg on 20 September 2018, the President 
of  the  European  Council,  Donald  Tusk,  confirmed  that  the  framework  for  economic  cooperation 

58  Statement from the HM Government, UK Government, 6 July 2018. 
59  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
60  For a brief explanation of article XXIV GATT requirements, refer to: G. Fassina, P. Perchoc, L. Puccio, Customs unions 

and FTAs: Debate with respect to EU neighbours, EPRS, November 2017. 

61  OLAF report 2016, European Commission, 2017. 
62  Press statement by Michel Barnier following the July 2018 General Affairs Council (Article 50), 20 July 2018. 
63  Der Termin für den Brexit steht, Frankfurter Allgemeine Sonntagszeitung, 2 September 2018. 

20 

 
                                                             
The future partnership between the European Union and the United Kingdom 

suggested by the UK could not work for the EU, in particular since it would undermine the single 
market.64  

Box 5 – The Northern Ireland conundrum 
After Brexit, Northern Ireland will be the only part of the UK sharing a land border with the EU. Therefore 
the  border  between  Northern  Ireland  and  the  Republic  of  Ireland  –  largely  invisible  and  'frictionless'  at 
present – will become an external EU border. At the same time, keeping an open border between Northern 
Ireland  and  Ireland  holds  strong  political  importance  for  the  peace  process,  which  has  established 
consultation  and  cooperation  between  the  island's  North  and  South  on  matters  of  common  interest, 
including  the  development  of  joint  policies.  Both  the  UK  and  the  EU  have  recognised  the  unique 
circumstances  of  Northern  Ireland and  committed  to  avoiding the  introduction  of  a  hard  border  on  the 
island of Ireland after Brexit; they also committed to fully respecting the 1998 Good Friday/Belfast Peace 
Agreement,  which  enshrines  extensive  North-South  cooperation  between  Northern  Ireland  and  the 
Republic of Ireland, facilitated by the EU membership of both the UK and Ireland. In this context, EU and UK 
negotiators have jointly identified more than 140 areas of North-South cooperation. 65 

However, the UK government has rejected the possibility of remaining in the EU's internal market and/or 
in  the  EU  customs  union.  This  raises  the  question  of  how  to  maintain  the  open  border  on  the  island  of 
Ireland if, in the future, standards and regulations diverge between the UK and the rest of the EU, while at 
the  same  time  avoiding  divergence  between  Northern  Ireland  and  the  rest  of  the  UK.  Moreover,  the 
absence of a customs union between the EU and the UK will require the introduction and enforcement of 
a  customs  border  to  manage  the  future  differences  in  the  customs  regimes  and customs  procedures  to 
control the compliance of goods in transit.66 A survey conducted in Northern Ireland in May 2018 concluded 
that there was substantial opposition to physical border checks between Northern Ireland and Ireland and 
substantial support for an UK exit that would eliminate the need for such checks; that is, for the UK to remain 
as a whole in the customs union and the single market.67 

Finding solutions to the Northern Ireland question has been a priority for the Brexit negotiators, and one of 
the key issues to be tackled by the withdrawal agreement (containing a draft protocol on Ireland/Northern 
Ireland). Paragraph 49 contains the three scenarios agreed in the joint report of December 2017: 1) first, a 
solution to avoid a hard border to trade in goods on the island of Ireland and any physical infrastructure or 
related checks would be achieved in the context of the future EU-UK relationship; 2) should this scenario 
prove impossible, the UK would propose specific solutions for Northern Ireland; 3) failing agreement on this 
as well, the UK committed to 'full alignment of those rules of the internal market and the customs union 
which now or in the future support North-South cooperation, the all-island economy and the protection of 
the 1998 Agreement.' 68 

The  draft  protocol  agreed  in  principle  in  the  withdrawal  agreement  contains  the  third  scenario  as  a 
backstop option, should other solutions not be found. Nevertheless, the actual European proposal for this 
backstop option within the withdrawal agreement would entail the creation of a 'common regulatory area 
comprising  the  Union  and  the  United  Kingdom  in  respect  of  Northern  Ireland',69  which  has  not  been 
accepted by the UK.  

Negotiations are continuing on Northern Ireland/Ireland, with the European Council meeting at the end of 
June 2018  concluding  with  no  substantial  progress;  due  to  the  fact  that  the  parties'  positions  remain 
divergent with respect to the backstop option, negotiations on this issue continue. The EU negotiators have 

64  Remarks by President Donald Tusk after the Salzburg informal European Council meeting, 22 September 2018. 
65  M.  Barnier,  Oral  evidence:  Brexit  and  Northern  Ireland,  HC  329,  Northern  Ireland  Affairs  Committee,  House  of 
Commons,  22 January 2018;  The  land  border  between  Northern  Ireland  and  Ireland,  House  of  Commons  Northern 
Ireland Affairs Committee, Second Report of Session 2017-19, HC 329, 13 March 2018.  

66  Written evidence submitted by K. Howard and D. Phinnemore for the Northern Ireland Affairs Committee' inquiry into 

the land border between Northern Ireland and Ireland (ILB0020), 28 February 2018. 

67  J.  Garry,  K.  McNicholl,  B.  O'Leary,  J.  Pow,  Northern  Ireland  and  the  UK's  Exit  from  the  EU:  What  do  people  think?, 

Economic and Social Research Council (ESRC)/UK in a Changing Europe, May 2018.  

68  Joint report from the negotiators of the European Union and the United Kingdom Government on progress during 
phase 1 of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union, 
8 December 2017.  

69 

Infographic on the EU's backstop proposal, European Commission, 11 June 2018. 

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EPRS | European Parliamentary Research Service 

consistently  argued  that  it  is  the  UK  government's  responsibility  to  propose  'specific  solutions'  for  the 
island. Two identified options were initially debated within the UK government without a clear outcome: 
1) a customs partnership and 2) a 'maximum facilitation' arrangement. 70 The first option, supported by the 
UK Prime Minister, would see the UK adopting the EU's customs rules at its ports and acting as the external 
frontier of the EU, collecting tariffs and carrying out checks on imports on behalf of the EU. At the same 
time the UK would establish its own duties and trade policy. The second option would see customs checks 
reduced to the minimum, through new technological solutions, but would not completely eliminate them. 
Both  options  would,  however,  require  years  to  implement/develop  the  necessary  technology,  and  they 
would need to convince the EU and Ireland that the Irish border would remain invisible. One report from 
the UK House of Commons on the Irish land border has found that there was 'no evidence to suggest that 
right now an invisible border is possible'.71 Reports also suggest that the EU has rejected these options.72 
The EU's chief negotiator, Michel Barnier73 clarified that the backstop option must respect the integrity of 
the internal market and of the customs union.  

Another  proposal  advanced  by  the  UK  government  on  7 June 2018  concerns  a  temporary  customs 
arrangement,74 which would apply from the end of  the transition period until replaced by a permanent 
settlement. The text mentions the end of December 2021, as the date at which the government expects 
that a future end state agreement would be in force, however this is an expectation rather than a precise 
time limit. 

This  proposal  would  see  the  entire  UK  (not  just  Northern  Ireland)  remain  in  the  EU  customs  union  (or 
creating a new customs  territory combining the customs territories of the UK and  the EU), meaning  the 
elimination of tariffs, quotas, rules of origin and customs processes in EU-UK trade, the application of the 
Union Customs Code by the UK, as well as other relevant parts of the common commercial policy, although 
the  UK  would  fall  outside  of  the  scope  of  the  CCP.  During  the  application  of  the  temporary  customs 
arrangement, as the CCP would not cover the UK, the UK would be able to sign, conclude and ratify FTAs 
with other countries, and apply those elements that do not impede on the functioning of the temporary 
customs arrangement. Furthermore, in the UK's view, the EU and the UK would need to find a solution to 
ensure that the UK continues to apply the Common External Tariff in full and to benefit from existing and 
future EU FTAs. 

Provisions  on  VAT  and  excise,  on  information  exchanges  and  access  to  the  relevant  IT  systems,  on 
enforcement, as well as on the allocation and distribution of revenue from customs duties, would have to 
be agreed. The EU and UK would also need to identify mechanisms for ensuring UK participation in  the 
relevant  EU  committees  on  trade  and  customs  policy,  as  well  as  governance  arrangements  for  dispute 
settlement.  Finally,  the  UK  recognised  that  an  approach  to  regulatory  standards  would  also  need  to  be 
addressed, as the UK committed to maintain Northern Ireland's full alignment with the relevant rules of 
both the customs union and the single market, but the paper does not cover the issue.  

This  proposal  was  received  with  scepticism  by  observers  and  EU  officials.  While  the  EP's  Brexit 
representative  Guy Verhofstadt  characterised  the  plan  as  unworkable,  Michel Barnier  welcomed  the 
proposal,  but  expressed  some  reservations  as  to  the  content,  which  would  have  to  be  assessed  against 
three criteria: providing a workable solution to avoid a hard border; respecting the integrity of the single 
market/customs  union  and  constituting  an  'all-weather'  backstop.75  Indeed,  according  to  the  EU's  chief 
negotiator, Michel Barnier, a time limited backstop option could not secure the absence of a hard border in 

70  Please see L. Hughes, Conservative party factions attack Theresa May''s Brexit options, Financial Times, 13 May 2018; 
D. Roberts, Customs row punctures 'have-cake-and-eat-it' Brexit fantasy, The Guardian, 2 May 2018. See also T. Durrant, 
A. Stojanovic, The Irish border after Brexit, Institute for Government, June 2018. 

71  The  land  border  between  Northern  Ireland  and  Ireland,  House  of  Commons  Northern  Ireland  Affairs  Committee, 

Second Report of Session 2017-19, HC 329, 13 March 2018. 

72  L. O''Caroll, J. Rankin, H. Stewart, EU rejects Irish border proposals and says Brexit talks could still fail, The Guardian, 
20 April 2018; D. M. Herszenhorn and C. Cooper, EU rejects UK''s post-Brexit customs fixes for Northern Ireland, Politico 
Europe, 19 April 2018; Trade barriers 'unavoidable' outside customs union, says EU's Barnier, BBC, 5 February 2018. 

73  Speech by Michel Barnier at the All-Island Civic Dialogue, 30 April 2018. 
74  Technical note: temporary customs arrangement, UK Government, 7 June 2018. See also J. Henley, Brexit: What is the 
UK's backstop proposal?, The Guardian, 7 June 2018 and A. Barker, Brexit's strange harmony, Financial Times, 8 June 
2018.  

75  P. Smyth, Lack of 'significant progress' in UK Brexit report, The Irish Times, 7 June 2018.  

22 

 
                                                             
The future partnership between the European Union and the United Kingdom 

all  circumstances.  He  also  stressed  the  importance  of  and  the  need  for  an  agreement  on  regulatory 
alignment  for  the  Irish  border  to  be  seamless,  and  excluded  the  possibility  to  extend  this  option  to  the 
entire United Kingdom. Any backstop solution will have to be limited to the territory of Northern Ireland.76 
Furthermore, slides published by the Commission on 11 June 2018 mention the need for full EU supervision 
and enforcement mechanisms, including OLAF.77  

On the other hand, the UK government considers that its subsequent proposals of 6 and 12 July 2018 would 
solve the Northern Ireland problem through the future relationship, and any legal text agreed regarding 
the  backstop  solution  'would  not  need  to  be  brought  into  effect'.  As  explained  above,  the  proposed 
facilitated  customs  arrangement  together  with  the  common  rulebook  as  part  of  the  future  relationship 
agreement would ensure, in the UK’s view, frictionless trade between the whole of the UK and the EU and 
in particular no hard borders between Ireland and Northern Ireland. A House of Commons inquiry on the 
future customs arrangements is ongoing.78 On the EU side, officials have on several occasions expressed 
serious doubts over the feasibility of the proposals.79 However, the EU has been working on elements of its 
proposal  for  the  backstop  on  Ireland  and  Northern  Ireland  (e.g.  by  clarifying  which  goods  arriving  into 
Northern Ireland from the rest of the UK would need to be checked, where and by whom).80 

4.3.1. Renegotiation of World Trade Organization schedules 
The common external tariff applied by the EU must respect the commitments the EU has undertaken 
in  the  World  Trade  Organization  (WTO).  Indeed,+  WTO  members  committed  not  to  raise  their 
applied tariffs beyond a certain 'bound' tariff rate, known as bindings. In agriculture, those bindings 
also  cover  tariff  rate  quotas,  limits  on  export  subsidies  and  some  domestic  support  measures. 
Bindings are listed in schedules of commitments, which also exist in non-goods agreements in the 
WTO, such as the General Agreement on Trade in Services (GATS). 

While the UK, as all EU Member States, is a member of the WTO in its own right,81 its schedule of 
commitments  within  the  WTO  is  currently  tied  to  the  EU  schedule  as  a  result  of  the  EU  customs 
union.82 Although for ad valorem tariffs, this does not seem to be a problematic issue,83 in the sense 
that the EU tariff bindings can simply be 'copied and pasted' by the UK into its new separate tariff 
schedule,  this  is  not  so  easy  for  tariff  rate  quotas  limiting  market  access  in  agricultural  goods.84 
Quotas are set to satisfy the demand of 28 EU Member States and would thus be disproportionate 
for a single country. Therefore, as a consequence of Brexit, the UK will have to modify its bindings in 
the WTO. Considering that the UK is one of the major EU importers of agricultural goods and that 
UK import demand was taken into account when the EU first negotiated its own bindings, the EU 
also wishes to adapt its quotas for a reduced post-Brexit EU-27. Figure 6 shows the percentage of 
UK imports in total EU imports from non EU countries for selected agricultural sectors. 

76  M. Barnier, European Commission Chief Negotiator for Article 50 Negotiations with the UK, press conference following 

this week's round of negotiations, (extracts), 8 June 2018. 

77  Slides on UK technical note on temporary customs arrangements, European Commission, 11 June 2018.  
78  Brexit: customs arrangements inquiry, EU External Affairs Sub-Committee, House of Commons.  
79  D. Boffey, P. Crerar, Angela Merkel admits collapse of Brexit talks cannot be ruled out, The Guardian, 4 September 2018.  
80  Press statement by Michel Barnier following the General Affairs Council (Article 50), 18 September 2018.  
81  Member information: United Kingdom and the WTO, World Trade Organization. 
82  Current Situation of Schedules of WTO Members, World Trade Organization; Schedules of commitments and lists of 

Article II exemptions, World Trade Organization. 

83  The  Brexit  changes  also  seem  unproblematic  in  the  case  of  services  commitments.  On  this,  see:  G. Sacerdoti,  'The 
prospects: the UK trade regime with the EU and the World: options and constraints post-Brexit', in F. Fabbrini (ed.), The 
law and politics of Brexit, Oxford University Press, 2017. 

84  See: G. Fassina, P. Perchoc, L. Puccio, Customs unions and FTAs: debate with respect to EU neighbours, EPRS, European 
Parliament, 2017; P. Ungphakorn, Six things I've learnt since the Brexit referendum: seeing both the wood and trees, 
Trade β blog, 9 January 2017; L. Bartels, The UK's status in the WTO after Brexit, 23 September 2016. 

23 

 
 
                                                             
EPRS | European Parliamentary Research Service 

Figure 6 – UK imports from extra-EU partners for selected agricultural sectors and share of 
UK imports in total EU imports from non-EU countries for those agricultural sectors (2017) 

Source: Eurostat.85 

The schedule of commitments in the WTO will be the background to the fall-back situation in EU-
UK relations, as well as the basis for UK trade with third countries as soon as the transition currently 
planned  in  the  draft  withdrawal  agreement  is  over.  For  that  reason,  the  question  of  quotas  was 
already  raised  during  the  first  phase  of  Brexit  negotiations.  Considering  that  adjustments  to  the 
schedule were needed because of the special circumstances of Brexit, the EU and the UK viewed 
these  as  an  adaptation  of  the  schedule  to  the  new  post-Brexit  situation  and  not  as  proper 
renegotiations  of  such  schedules.  In  this  context,  the  EU  and  the  UK  started  initial  bilateral 
discussions  in  order  to  adjust  their  schedules  to  the  post-Brexit  situation  without  triggering 
renegotiations  at  the  WTO  following  GATT  Article XXVIII.  The  WTO  rules  include  particular  time 
schedules for requesting renegotiation of bindings, and renegotiations in the WTO are lengthy and 
entail concessions to be offered to WTO members that originally negotiated the schedules or that 
have  substantial  trading  interests.86  An  EU-UK  agreement  on  splitting  the  quotas  was  then 
submitted to the WTO partners in October 2017.87 However, some WTO contracting parties –major 
exporters of agricultural products, have reacted negatively to the announced agreement. Argentina, 
Brazil, Canada, New Zealand, Thailand, the USA and Uruguay issued a joint letter to the EU and UK 
Permanent Representatives at the WTO, raising concerns about the reported agreement.88 These 

85  These  categories  were  computed  on  the  basis  of  the  following  HS  headings:  wine  and  spirits  (HS22.04-22.08), 
Vegetables (HS07), Sugar and sugar confectionery, beet sugar and sugar cane (HS17, HS121291, HS121293), Cocoa (HS 
18), Other Food preparations (HS 16, HS 19-21), Meat (HS 03), Fish (HS 02), Dairy and Dairy products (HS 0101-0406), 
Eggs (HS 0407-0408), Tobacco (HS24).  

86  See: Article XXVIII modification of schedules, WTO e-book. 
87  Letter from the EU and UK Permanent Representatives to the World Trade Organization, 11 October 2017. 
88  Joint letter of the Permanent Representatives to the WTO of Argentina, Brazil, Canada, New Zealand, Thailand, United 
States of America and Uruguay to the Permanent Representatives to the WTO of United Kingdom and of the European 
Union, 26 September 2017. 

24 

 
 
                                                             
The future partnership between the European Union and the United Kingdom 

countries highlighted that the changes proposed by the EU and the UK were more than a simple 
rectification and entailed a diminished flexibility and market access for their exporters. Indeed, as 
Peter Ungphakorn explains,89 if a given third country was assigned an EU quota of 200 000 tonnes, 
that country was free to sell its 200 000 tonnes of agricultural goods in any EU country. If this quota 
is divided on the basis of historical import levels, the country will no longer have an EU quota of 
200 000 tonnes, but only a percentage of that quota. The example given assumes the country in 
question (New Zealand) exports 48 % of the good to the UK and 52 % of the same good to the rest 
of  the  EU;  that  would  signify  that  the  200 000 tonnes  quota  would  be  subdivided into  quotas  of 
96 000 tonnes to the UK and 104 000 tonnes to the EU. For this reason, the WTO contracting parties 
who wrote the joint letter stressed that if market access were changed as a result of the proposed 
subdivision, concessions would have to be made to compensate for the loss of market access, and 
pointed  out  that  modification  of  the  current  WTO  binding  commitments  required  their 
agreement.90 To obtain an agreement on the split, the EU and the UK began preliminary talks with 
the countries considered to have a stake in renegotiation of tariff schedules under WTO law (those 
with  initial  negotiating  rights,  principal  or  substantial  supplying  interest).  On  26 June 2018,  the 
Council formally authorised the start of negotiations with the relevant WTO members pursuant to 
GATT rules (Article XXVIII GATT).91  

While negotiations in the WTO continue, the European Commission submitted a proposal to modify 
Council Regulation (EC) No 32/2000, which internally implements the tariff quotas bound in GATT 
by the EU.92 The proposal was submitted to the Council and the European Parliament for adoption 
because the Commission considers that negotiations in the WTO may not be complete before the 
UK exit from the EU. The Commission's proposal does not currently reflect an agreement reached, 
but not yet ratified, with New Zealand with regard to the scheduled tariff rate quota (TRQ) for 'meat 
of sheep or goats, fresh, chilled or frozen'.93 The proposal gives the Commission delegated powers 
to change the annexes to the Regulation, as well as to Regulation (EC) No 32/2000, to account for 
any agreement reached in the WTO. The Commission proposal needs to be adopted by Council and 
Parliament following the ordinary legislative procedure under Article 207 TFEU. 

The Commission's proposal follows the methodology agreed jointly with the UK. The EU share of 
the apportioned quota was computed by subtracting the UK share of a given quota from the entire 
scheduled  tariff  rate  quota  in  question.  The  UK  share  of  that  given  quota  was  computed  by 
determining the UK's usage share (expressed in percentage) and applying it to the scheduled TRQ 
volume. The UK usage share was obtained by calculating the UK share of imports under a certain 

89  P. Ungphakorn, UK, EU, WTO, Brexit primer – 2. Tariff quotas, 7 October 2017, updated 25 November 2017. 
90  Joint letter of the Permanent Representatives to the WTO of Argentina, Brazil, Canada, New Zealand, Thailand, United 
States of America and Uruguay to the Permanent Representatives to the WTO of United Kingdom and of the European 
Union, 26 September 2017. 

91  Recommendation  for  a  Council  Decision  authorising  the  opening  of  negotiations  with  a  view to  apportioning  the 
Union's WTO concessions on Tariff Rate Quotas annexed to the General Agreement on Tariffs and Trade 1994 in view 
of the withdrawal of the United Kingdom from the Union, COM/2018/311 final; COUNCIL DECISION authorising the 
opening of negotiations with a view to apportioning the Union's WTO concessions on Tariff Rate Quotas annexed to 
the General Agreement on Tariffs and Trade 1994 in view of the withdrawal of the United Kingdom from the Union 
and  Directives  for  negotiations  with  a  view  to  apportioning  the  Union's  WTO  concessions  on  Tariff  Rate  Quotas 
annexed to the General Agreement on Tariffs and Trade 1994 in view of the withdrawal of the United Kingdom from 
the Union; see also the press release: Council authorises opening of negotiations with WTO members on Brexit-related 
adjustments, 26/06/2018 

92  Proposal for a regulation of the European Parliament and of the Council on the apportionment of tariff rate quotas 
included  in  the  WTO  schedule of  the  Union  following  the  withdrawal  of  the United  Kingdom  from  the  Union  and 
amending Council Regulation (EC) No 32/2000, COM/2018/312 final – 2018/0158 (COD). 

93  An agreement has been concluded with New Zealand in the form of an Exchange of Letters between the European 
Union and New Zealand relating to the modification of concessions in the WTO schedule of the Republic of Croatia in 
the course of its accession to the European Union. The latter agreement currently awaits European Parliament consent. 
Once the agreement with New Zealand is adopted, the EU-27 quota allocated to New Zealand for 'meat of sheep or 
goats, fresh, chilled or frozen' will have to be modified (from 114 116 to 114 184 tonnes).  

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EPRS | European Parliamentary Research Service 

quota over a recent representative period of three years (in this case 2013-2015). The Commission 
proposal contains an annex giving the detailed list of TRQs and the respective EU apportionment. 
Figure 7 shows the TRQ count, depending on the EU-27 share of in quota usage. Only 56 over 19494 
have an EU-27 share of in quota usage of 100 %; 69.07 % of the TRQ reported in the annex have an 
EU-27 share of in quota usage over 71 %. In figure 8, the average, minimum and maximum EU-27 
share per country are given. 

As pointed out by academics, discussions could also take place with respect to the cap imposed 
under WTO law on trade-distorting agricultural subsidies (known as the amber box),95 and whether 
these should also be subject to apportioning between the EU and the UK.96 

Figure 7 –Tariff rate quote (TRQ) per EU-27 share of in quota usage 

90

80

70

60

50

40

30

20

10

0

13

16

27

78

56

0-20

21-50

51-70

71-99

100

Source: EPRS, from data in European Commission, proposal for a regulation of the European Parliament and 
of the Council on the apportionment of tariff rate quotas included in the WTO schedule of the Union following 
the withdrawal of the United Kingdom from the Union and amending Council Regulation (EC) No 32/2000, 
COM/2018/312 final – 2018/0158 (COD). 

in 

in 

Min  of  EU27  share 
quota usage[2] 

Max  of  EU27  share 
quota usage[2] 

Average  of  EU27  share  in 
quota usage[2] 

Table 3– Average, minimum and maximum EU 27 share of in quota usage of TRQ by country 
Row 
Labels 
ACP 
ARG 
AUS 
BIH 
BRA 
CAN 
CHL 
CHN 
CUB 
EO 
GRL 
IDN 
ISL 
MKD 
NW 
NZL 

0.712 
0.955166667 
0.611833333 
0.483 
0.8145 
0.346 
0.876 
0.7625 
1 
0.851753028 
0.483 
0.292 
0.582 
1 
0.923 
0.575833333 

0.712 
1 
1 
0.483 
0.975 
1 
0.876 
1 
1 
1 
0.483 
0.584 
0.582 
1 
1 
0.651 

0.712 
0.739 
0.2 
0.483 
0.553 
0 
0.876 
0.421 
1 
0 
0.483 
0 
0.582 
1 
0.846 
0.417 

94  Four TRQ lines are left blank with respect to the EU-27 share. 
95  L. Bartels, The UK's status in the WTO after Brexit, 23 September 2016.  
96  G. Sacerdoti, The prospects: the UK trade regime with the EU and the World: options and constraints post-Brexit, in 

F. Fabbrini (ed.), The law and politics of Brexit, Oxford University Press, 2017. 

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OT 
OTH 
PAR 
THA 
URY 
US 
USA 
USA / CAN 

0.88 
0.7448125 
0.711 
0.574615385 
0.859666667 
0.36 
0.883975 
0.998 

0.88 
1 
0.711 
1 
0.879 
0.36 
1 
0.998 

0.88 
0 
0.711 
0 
0.821 
0.36 
0.536 
0.998 

Source: EPRS, from European Commission, proposal for a regulation of the European Parliament and of the 
Council on the apportionment of tariff rate quotas included in the WTO schedule of the Union following the 
withdrawal  of  the  United  Kingdom  from  the  Union  and  amending  Council  Regulation  (EC)  No 32/2000, 
COM/2018/312 final – 2018/0158 (COD). 

Box  6  –  Procedures  in  the  WTO  for  the  renegotiation  of  tariff  schedules  under  GATT 
Article XXVIII 
Three different procedures for renegotiation exist under GATT Article XXVIII.97  

A. 
The first procedure contained in GATT Article XXVIII(1) can only be triggered at the beginning of each 
three year period, the first period starting from 1 January 1958. The current three-year period has begun in 
2018. The interpretative note to Article XXVIII from Annex I specifies that the desire to modify the schedules 
must be notified between July and October. The requesting member notifies the Council for Trade in Goods 
(CTG),  which  will  determine  the  identity  of  the  parties  concerned.  Indeed  renegotiation  only  involves 
negotiation  with  the  parties  with  whom  the  concessions  were  initially  negotiated  (parties  holding  initial 
negotiating  rights  (INR),  and  the  parties  considered  to  be  principal  suppliers  (principal  supplying  interests 
(PSI). Other WTO members that are neither INR nor PSI but are recognised to have a substantial interest (SI) in 
the renegotiations must be consulted but do not directly participate in the renegotiation. If the requesting 
contracting party agrees with the INR and PSI, then it can notify the WTO of its new schedule, which will be 
applied on a most favoured nation (MFN) basis. If no agreement is reached, the requesting member can still 
change  its  schedule  unilaterally.  However,  INR,  PSI  and  SI  are  then  entitled  to  request  the  withdrawal  of 
equivalent  concessions  negotiated  with  the  requesting  member.  Similarly,  under  Article XXVIII(3)(b),  if 
agreement is reached between the requesting member and INR and PSI members, but not with SI members, 
then those members can notify the withdrawal of equivalent concessions. While the wording of the text of 
Articles XXVIII(3)(a) and XXVIII(3)(b) limits this right to concessions initially negotiated by INR, PSI and SI with 
the requesting member, in practice, retaliatory measures can be applied to any good, whether or not initially 
negotiated with the requesting member.98  

B. 
The second procedure is envisaged under Article XXVIII(5). Under this provision, a WTO contracting 
party reserves the right at the end of each three-year period (end of 2017), to modify the schedules following 
the  procedure  described  above,  pursuant  to  Articles XXVIII(1)  to  (3)  during  the  next  three  year  period 
(negotiations would therefore take place from 2018 onwards). 

C. 
The third procedure is found under Article XXVIII(4). Unlike the previous two, this procedure can be 
triggered at any time. It requires contracting parties' authorisation for the requesting member to be able to 
launch  negotiations  on  modifications  or  withdrawal  of  concessions.  The  procedures  under  Article XXVIII(1) 
and  XXVIII(2)  are  also  applicable  here,  and  Article XXVIII(3)(b)  is  also  applicable.  However,  should  the 
requesting member fail to find agreement with INR and PSI holders, the procedure is different. In that case, 
the issue is referred to the contracting parties, which should negotiate a solution to the dispute. Nevertheless, 
while the procedure is different, the end result is the same, indeed if settlement is not reached, the requesting 
party is still entitled to modify its concession unilaterally. If the contracting parties (i.e. the CTG) consider such 
a  modification  offers  adequate  compensation,  then  the  modification  will  be  allowed  to  stand.  If  the  CTG 
considers that an unreasonably introduced modification fails to offer adequate compensation, PSI, INR and SI 
are entitled to withdraw equivalent concessions. 

97  A.  Hoda,  Tariff  Negotiations  and  Renegotiations  under  the  GATT and  the  WTO  –  procedures  and  practices,  Cambridge 

University Press, 2002. 

98  P. Mavroidis, Trade in Goods - second edition, Oxford University Press, 2012. 

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The  current  rules  of  procedure  for  renegotiation  under  Article XXVIII  were  adopted  in  1980.99  Under  these 
procedures, a Member seeking renegotiation under Article XXVIII GATT must, at the end of the negotiations, 
submit to the WTO Secretariat: a) a report and a joint letter upon completion of each bilateral negotiation (the 
report must be initialled and the joint letter must be signed by both parties to the bilateral negotiation); and 
b) a final report on the completion of all bilateral negotiations. The changes agreed take effect as from the first 
day of the period referred to in Article XXVIII(1) (and for Article XXVIII(4) and (5), from the date of notification 
of  conclusion  of  all  negotiations).  This  means  that  legal  effect  is  given  from  the  negotiations  and  is  not 
dependent  on  certification  of  these  schedules  (see  paragraph 7  of  the  guidelines  reported  below). 
Certification is mentioned instead in paragraph 8 of the guidelines as giving 'formal effect' to the changes in 
the schedules. Through the certification procedure, the contracting party certifies that the new schedule is 
accurate (i.e. it properly translate the terms agreed by the parties). 

The certification procedure 

The WTO Decision of March 1980100 provides that any changes to the authentic schedules must be certified. 
The certification procedure entails that the draft schedules is presented by the WTO Director-General to all 
contracting parties. The modified schedules are then certified if no objections are raised by a contracting party 
within three months. Objections can be raised on two grounds: 1) for modifications of the schedule, if the new 
schedule does properly reflect the modification agreed upon, 2) in the case of rectification, objections can be 
raised whenever the change does not comply with the requirement of not altering the scope of concessions 
in respect of bound items.  

4.3.2. The introduction of preferential rules of origin in EU-UK relations 
The aim of the EU negotiating guidelines for EU-UK trade in goods is to maintain zero tariffs, avoid 
quantitative  restrictions,  and  retain  reciprocal  access  to  fishing  waters  and  resources.  However, 
trade in goods will be subject to 'appropriate accompanying rules of origin'.101 An FTA will institute 
preferential rules of origin (PRoO), which could become one of the most contentious issues in the 
Brexit negotiations on trade in goods. In an EU-UK FTA, in order to obtain preferential treatment, 
goods produced in the EU for export to the UK, and goods produced in the UK for export to the EU, 
will have to comply with the PRoO requirements (see box on the basic functioning of PRoO). Those 
exports that do not comply with the PRoO requirements will have to pay the applied MFN tariff for 
the good at the EU-UK border.  

Currently, as a member of the internal market and customs union, UK-based producers can source 
any inputs from third countries, pay the common external tariffs on those imported goods (the EU 
MFN tariff or preferential rate applicable to that good), use them for further processing, and export 
the  final  good  produced  in  the  rest of  the  EU  without  paying  duties  and without  proving  origin. 
Several foreign investors in the UK export primarily to the EU market, while sourcing inputs from 
outside the UK. The definition of local content contained in PRoO will determine whether or not 
such  manufacturing  investments  will  lose  their  privileged  access  to  the  EU  consumer  market. 
Concerns  have  been  raised  in  particular  in  the  context  of  Japanese  investments  in  the  UK  car 
industry. A European Parliament Policy Department study correctly pointed out that withdrawing 
from the EU customs union could put Japanese car manufacturers in the UK that wish to import 
inputs from Japan for further manufacturing in the UK and export the final product to the EU, at a 
competitive disadvantage with respect to other producers within the EU. This disadvantage is seen 
both from the perspective of having to comply with rules of origin in order to export duty-free to 
the EU, but also from the perspective of importing intermediate goods from Japan if the UK does 
not conclude an FTA similar to the FTA the EU is about to conclude with Japan, which will allow 
duty-free import of the required inputs.102 However, preferential rules of origin could also have an 

99  WTO, Procedures for negotiations under Article XXVIII, C/113, 5 November 1980. 
100  WTO, Procedures for modification and rectification of schedules of tariff concession, L/4962, 28 March 1980. 
101  Guidelines on the framework for the future EU-UK relationship, European Council (Article 50), 23 March 2018. 
102  Future  trade  relations  between  the  EU  and  the  UK:  options  after  Brexit,  Policy  Department  for  External  Policies, 

European Parliament, 2018. 

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impact  on  EU  intermediate  products  used  for  further  production  in  the  UK,  depending  on  the 
cumulation rule used. This rule will have an important impact on how local content is computed and 
thus whether intermediates produced in the EU need themselves to comply with rules of origin to 
be counted as originating in the EU in UK final goods production (and vice-versa; refer to box 7 for 
a specific example).  

Contrary  to  the  European  Council  guidelines,  the  UK  proposal  would  institute  an  FTA  without 
preferential  rules  of  origin.103  The  assumption  is  that  the  facilitated  customs  arrangement  would 
make the FTA work de facto as a customs union, in the sense that there would be no hard border 
within the preferential area and duties perceived only at the external border of the preferential area. 
The feasibility of the UK proposal of an FTA without PRoO depends entirely on the feasibility of the 
facilitated  customs  arrangement,  which  has  already  been  questioned  by  EU  leaders  and  the 
Commission.104 

Box 7 – Preferential rules of origin 

Preferential rules of origin define which exported goods can be deemed as originating in a country in order to 
obtain preferential duty access.105 Preferential rules of origin can either define that a good must be wholly 
obtained,  or  that  it  must  have  achieved  substantial  transformation,  in  the  country.  The  former  criteria  are 
normally  used  for  agricultural  goods,  while  the  latter  criteria  are  applied  to  manufactured  products. 
Substantial transformation can be drafted in three different ways.  

- The first method requires the final good to achieve a specified change of classification on the basis of the 
harmonised commodity description and coding system (HS) with respect to its inputs, i.e. the final product 
produced must not fall under the same product classification (HS code) as its inputs. The type of change to be 
performed will be specified in the treaty. For example, if the rule of origin specifies a change of chapter, the 
final good produced must be classified in a different chapter to the chapter in which the non-FTA originating 
inputs used for production  were classified.  Change of classification can also require particular  inputs to be 
sourced  locally.  The  best  known  example  is  that  of  ketchup  in  the  North  American  Free  Trade  Agreement 
(NAFTA), where the rule of origin requires, in addition to the change of chapter, the local sourcing of tomato 
paste, even though tomato paste falls under a different HS chapter to ketchup. 

- The second way of defining substantial transformation is to establish a value added requirement, which 
will  either  establish  a  threshold  to  the  value  of  non-originating  material  used  or  establish  a  required 
percentage of local value added. EU agreements will usually use the first valuation method mentioned. 

- Finally, rules of origin can require that production follows a certain technical process. Known as technical 
requirements rules, these are rare. 

The definition of originating goods will depend largely on the applicable 'cumulation' rule. 

Diagonal  cumulation  is  a  cumulation  between  more  than  two  countries,  whereby  inputs  produced  in  a 
partner  country  within  the  cumulation  area  can  be  used  by  local  producers  as  originating  material  if  they 
comply with the rules of origin under the agreement. If an input fails to comply with the rule, even if it contains 
some  value  added  from  the  partner  country,  it  will  account  as  non-originating  input  for  further  local 
production. Bilateral cumulation is similar to diagonal cumulation but applies to two parties only. 

103  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
104   Remarks by President Donald Tusk after the Salzburg informal European Council meeting, 22 September 2018. See 

also 'Der Termin für den Brexit steht', Frankfurter Allgemeine Sonntagszeitung, 2 September 2018. 

105  For an overview of preferential rules of origin and how they work, refer to: S. Inama, Rules of origin in international trade, 
Cambridge University Press, 2009; L. Puccio, Building bridges between regionalism and multilateralism: enquiries on 
the ways and means to internationally regulate preferential rules of origin and their impact on systemic problems of 
FTA,  2013;  L. Puccio,  20  Years  After  Marrakesh:  Reconsidering  the  Effects  of  Preferential  Rules  of  Origin  and  Anti-
Circumvention  Rules  on  Trade  in  Inputs  and  Global  Production  Networks,  2013,  C. Herrmann,  M. Krajewski, 
J. Terhechte (eds), European Yearbook of International Economic Law 2014. European Yearbook of International Economic 
Law, volume 5, Springer. 

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Full cumulation instead allows local final goods producers to account for any value added achieved in the 
production of inputs within the accumulation area, in order to achieve value added requirements applicable 
to the final good.  

The  specific  example  below  illustrates  the  difference  between  these  two  cumulation  systems  and  their 
implication  for  firms  requesting  preferential  status.  For  the  moment,  the  more  liberal  'full  cumulation'  has 
rarely been granted by the EU; it is found for example, for the European Economic Area (EEA) countries, and 
African, Caribbean, and Pacific Group of States (ACP). 

Several other aspects of rules of origin can hamper or facilitate the granting of preferential status, however for 
reasons of space, these cannot be developed extensively in this analysis. 106 

An example of compliance of rules of origin (see also figure 9)107 

Assuming  countries  A  and  B  are  linked  by  an  FTA,  while  third  country  C  supplies  A  and  B  with  parts.  The 
producer of hydraulic turbines in A wants to export its good to B under the preferential treatment of their FTA. 
Following  the  FTA  rule  of  origin  requirement  for  hydraulic  turbines  (falling  under  HS  Heading 8410),  the 
hydraulic turbines must undergo:  

Rule  (a)  either  a  change  of  classification  equivalent  to  a  change  of  heading,  and  respect  a  value  added 
requirement whereby non-originating materials used in the production of the turbine do not exceed 40 %;  

Rule (b) or, if the product does not comply with the change of classification required in the first rule (i.e. does 
not comply with the change of heading), then the product could still obtain origin under the FTA if it complies 
with  a  stricter  value  added  requirement  whereby  non-originating  materials  used  in  the  production  of  the 
turbine do not exceed 30 %. 

Assuming that the breakdown of the price for the production of the turbine by the producer of country A is: 
parts  from  third-country  C  correspond  to  15 %  of  the  price  of  the  turbine;  parts  coming  from  country  B 
correspond to 30 % of the price of the turbine; parts and labour from country A correspond to 55 % of the 
price of the turbine. 

Moreover, assuming the cost of parts from B (under HS 8410) is broken down as follows, to assess whether the 
parts from B are eligible for FTA origin under the agreement: parts from country C that also fall within HS 8410 
and  account  for  40 %  of  the  price  of  the  intermediate  product  produced  by  B  and  parts  and  labour  from 
country B correspond to 60 % of the price of the intermediate product produced by B. 

Do parts coming from country B qualify for origin under the FTA? Does that affect the possibility for production 
from country A to qualify for origin under the FTA, depending on the accumulation rule used? 

Diagonal cumulation 

Parts from B also fall under HS 8410, therefore are subject to the same rule of origin as the turbines from A and 
must comply either with rule (a) or rule (b) above. Under rule (a), the parts from B do not qualify for origin. 
Indeed, the producer in B uses non-originating products (parts from C) falling under the same heading as the 
product produced in B (HS 8410). That means that the producer in B fails to comply with the change of heading 
which requires that all non-FTA parts used in the FTA production of the good fall under a heading other than 
HS 8410. The parts in B also do not qualify with rule (b). Indeed, rule (b) allows sourcing of non-originating 
parts  falling  under  the  heading  HS 8410,  however  it  also  requires  compliance  with  a  stricter  value  added 
requirement, whereby non-originating parts cannot exceed 30 % of the price. As the producer in B uses parts 
from third-country C accounting for 40 % of the price of the good produced in B, production in B does not 
comply with the stricter value added requirement. Parts from B therefore do not comply with the rules of 
origin requirement of the FTA. The producer in A will have to pay the MFN duty when importing the 
parts from B.  

106  For more on this refer to: S. Inama, Rules of origin in International trade, Cambridge University Press 2009; L. Puccio, 
Building  bridges  between  regionalism  and  multilateralism  :  enquiries  on  the  ways  and  means  to  internationally 
regulate preferential rules of origin and their impact on systemic problems of FTA, EUI, 2013. 

107  Example taken from B. Driessen, F. Graafsma, The EC Wonderland – An overview of the Pan-European Harmonised 
Origin Protocols, in E. A. Vermulst, Customs and Trade Laws as Tools of Protection: Selected Essays, Cameron May, 2005. 

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The future partnership between the European Union and the United Kingdom 

As  parts  produced  in  B  do  not  comply  with  rules  of  origin  under  the  FTA,  they  will  account  as  non-
originating products in the production of the turbine in country A. This means that non-originating parts 
used in A are both the parts from country C (accounting for 15 % of the price of the turbine produced in A), 
but also parts from country B (accounting for 30 % of the price of the turbine produced in A). This means that 
non-originating  parts  account  for  45 %  of  the  price  of  the  turbine  produced  in  A.  The  turbines  from  A 
therefore do not qualify, as they do not comply with the value added requirements contained in either 
rule (a) or (b) of the rule of origin in the FTA. The turbines produced in A will be subject to MFN duty 
when exported to B. 

Full cumulation 

However,  the  situation  is  different  when  the  FTA  allows  'full  cumulation'.  Indeed,  in  'diagonal  cumulation', 
because the parts in B did not comply with the rules, they automatically counted as 100 % non-originating, 
even if 60 % of the price of these parts originated in country B. Full cumulation instead allows to trace back 
the origin of parts from B used in A. 

Accordingly, the new breakdown of costs for the production in A with 'full cumulation' is the following:  

- the parts from country C used by A counted for 15 %. Added to these are the parts from C incorporated in 
the parts from B used by producer A. These account for 12 % of the price of A.108 The total value added from C 
in A's production is equal to 27 % of the price.  

- the new value of parts from B used by the turbine producer in A account for 18 % of the price.109  

- value added by A remains 55 %  

Production in A still does not comply with rule (a) because it does not fulfil the change of heading requirement, 
which remains unchanged under 'full cumulation'. However, now production in A complies with the stricter 
value  added  requirement  in  rule  (b),  as  the  non-originating  parts  now  account  only  for  27 %  due  to  'full 
cumulation'.  With  'full  cumulation',  the  turbine  produced  by  A  qualifies  for  origin  and  preferential 
treatment under the FTA. 

108  This is obtained by multiplying the value of the parts from C in the production of B times the value of the parts of B in 

the production of A, i.e. in the example: 40 % times 30 %. 

109  This is obtained by multiplying the value originating in B of B's production of parts times the value of parts from B used 

in the production of country A, in is the example: 60 % times 30 %. 

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Figure 8 – Diagonal versus full cumulation 

EPRS | European Parliamentary Research Service 

Source: EPRS. 

4.3.3. Brexit and existing EU trade agreements 
Leaving the EU common commercial policy will also have implications with respect to international 
agreements  concluded  with  third  countries  by  the  EU  on  its  own  (EU-only  agreements),  or 
concluded jointly with its Member States (known as mixed agreements).  

In  the  case  of  EU-only  agreements,  Brexit  signifies  that  these  will  no  longer  apply  to  the UK. For 
example, mutual recognition agreements (MRA), whereby parties recognise each other's conformity 
assessments and certifications, will cease to apply to the UK post-Brexit, with related consequences 
for firms operating under these agreements. An MRA can also include provisions on acquired rights 
(see box 8).  

Box 8 – Doctrine of acquired rights 
The doctrine of acquired rights110 considers that certain rights obtained by individuals, because of the execution 
and application of a certain law (including a treaty provision), remain intact after a change of sovereignty occurs 
(secession and annexation cases for international public law), or the law is changed. The principle ensures that 
changes do not have retroactive effect and ensures a certain continuity and stability. Recent commentaries111 
on the Vienna Convention on the Law of Treaties consider that individual rights acquired in the execution and 
application of a treaty may also be covered as a consequence of the doctrine of acquired rights. However, the 
protection of acquired rights in international public law is not considered absolute. The doctrine of acquired 

110  P. A. Lalive, The doctrine of acquired rights, in: Bender (Ed.), Rights and duties of private investors abroad - International 
and Comparative Law Center, New York, 1965, pp. 145-200; see also: F. J. Nicholson, 'The protection of foreign property 
under customary international law', Boston College Law Review, vol. 6(3), 1965; J. Crawford, Brownlie's Principles of Public 
International  Law  (eighth  edition),  Oxford  University  Press,  2012;  M.  Sorajah,  The  international  law  on  foreign  direct 
investment, Cambridge University Press, 2010. 

111   O. Dörr and K. Schmalenbach, Vienna Convention on the Law of Treaties - A commentary, Springer, 2012; O. Corten and 
P. Klein, The Vienna Convention on the Law of treaties: a commentary, Vol. II, Oxford University Press, 2011; see also: C. 
Binder, 'The Pacta Sunt Servanda Rule in the Vienna Convention on the Law of Treaties: A pillar and its safeguard', in 
I. Buffard,  J. Crawford,  A. Pellet,  S. Wittich  (eds),  International  Law  and  fragmentation  between  universalism  and 
fragmentation - Festschrift in honour of Gerhard Hafner, Martinus Nijhoff, 2008. 

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rights is normally confined to those rights that have been implemented into national law, i.e. a right simply 
enshrined in a treaty that has not given rise to a specific right in domestic law does not entail a vested right. 
According  to  practice,  acquired  rights  appear  to  be  connected  with  rights  that  have  a  contractual  form 
enforceable by individuals in municipal law, such as property, employment rights stipulated in an employment 
contract, concessions of resource exploitation, licence issued before notification of withdrawal from a treaty, 
etc. 

Some EU MRA agreements may contain explicit provisions with respect to acquired rights. These provisions can 
be drafted in such a way that they can be triggered only by suspension, termination or non-renewal. In other 
words, provisions safeguard the recognition of certificates for declarations of conformity submitted prior to the 
expiry  of  the  agreement,  as  long  as  the  conformity  evaluation  request  was  issued  prior  to  the  notice  of 
denunciation or non-renewal of mutual recognition. An example is Article 20 of the Agreement between the 
European  Community  and  the  Swiss  Confederation  on  mutual  recognition  in  relation  to  conformity 
assessment. 112  As  Brexit  does  not  entail  a  denunciation  or  suspension  of  these  agreements,  as  they  were 
concluded by the EU using its exclusive competence and the EU remains a party to these agreements, this casts 
doubt as to whether or not the acquired rights clause applies in the framework of Brexit. 

Brexit also implies that EU FTAs will no longer apply to the UK even if the latter were formally signed 
and  ratified  jointly  by  the  EU  and  the  UK  (i.e.  even  if  the  latter  are  mixed  agreements).  Two 
explanations given for this Brexit consequence. Firstly, this type of mixed agreement is concluded 
'between the European Union and its Member States, of the one part, and the [country x], of the 
other part'. For example, the title of the EU-Korea Agreement refers to an agreement 'between the 
European Union and its Member States, of the one part, and the Republic of Korea, of the other 
part'. This suggests that Member States' participation is strictly associated with their status as EU 
Member  States,  and  the  EU  and  its  Member  States  comprise  a  single  united  party  within  the 
agreement.  In  other  words,  EU  FTAs,  though  they  are  mixed  agreements,  do  not  behave  as 
multilateral  agreements  (unless  they  involve  more  than  one  non-EU  party),  but  are  considered 
bilateral agreements with, on the one hand, the EU and its Member States, and, on the other hand, 
the  third  party.113  This  interpretation  is  further  confirmed  by  the  territorial  application  provision 
found  in  several  EU  trade agreements,114  which  clarifies  that  the  treaty  is  binding  and  applicable 
only to the territories in which the EU treaties apply and the territory of the third country, partner 
to the FTA.115 Therefore, as soon as the EU treaties are no longer applicable to one of the Member 
States by virtue of the withdrawal of that Member State from the EU, application of the FTA should 
also cease for that exiting EU Member State. It has been argued that the UK exit from these EU FTA 
agreements does not require a denunciation by the UK, because the members to the agreement 
(the EU and the third party/parties) actually remain part of the agreement, so no real withdrawal 
would take place for the agreement. The UK would exit automatically because of the territoriality 
provision, so it is possible that the EU will simply have to notify the UK exit from the agreement to 
the other party/parties to the FTA.  

112  Agreement  between  the  European  Community  and  the  Swiss  Confederation  on  mutual  recognition  in  relation  to 

conformity assessment, OJ L 114, 30 April 2002. 

113  See  also:  Future  trade  relations  between  the  EU  and  the  UK:  options  after  Brexit,  Policy  Department  for  External 

Policies, European Parliament, 2018. 

114  Taking again here the example of the treaty with South Korea, this provision (Article 15.15 of the Agreement) stipulates 

that: 
'1.  This Agreement shall apply, on the one hand, to the territories in which the Treaty on European Union and the Treaty on 
the Functioning of the European Union are applied and under the conditions laid down in those Treaties, and, on the 
other hand, to the territory of Korea. References to 'territory' in this Agreement shall be understood in this sense, unless 
explicitly stated otherwise. 

2.  As regards those provisions concerning the tariff treatment of goods, this Agreement shall also apply to those areas of 

the EU customs territory not covered by paragraph 1.' 

115  G. Fassina, P. Perchoc, L. Puccio, Customs unions and FTAs: debate with respect to EU neighbours, EPRS, European 
Parliament, 2017; See also: Future trade relations between the EU and the UK: options after Brexit, Policy Department 
for External Policies, European Parliament, 2018. 

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The figure below shows the percentage of total UK trade with EU FTA partners.116 Those countries 
with  whom  the  EU  has  implemented  trade  agreements  or  concluded  trade  negotiations 
represented, in 2017, 17 % of total UK trade and 35 % of the UK's trade with extra-EU countries. So 
Brexit will not only affect the 50 % of UK trade with EU partners but also the additional 17 % of UK 
trade with EU FTA partners.  

Figure 9 – Repartition of UK total trade (2017) 

Source: Eurostat. 

The  UK  exit  from  these  agreements  may  have  important  implications  for  some  EU  FTA  partners, 
depending  on  the  importance  of  the  UK  as  a  trade  partner.  The  non-application  of  EU-FTA 
agreements to the UK may have also consequences for firms operating under these frameworks. 
These  consequences  are  not  only  limited  to  the  UK  and  partner  countries'  firms,  who  will  lose 
preferential market access respectively to the third country and to the UK. Further consequences 
derive for example from rules of origin (explained above). As a member of the EU, the UK is currently 
part of the 'cumulation area' applicable under these FTAs; once the UK withdraws from the EU and 
application of EU FTAs to the UK territory ceases, this will no longer be the case. This means that any 
UK input used by exporters in other EU Member States, or in the EU trade partner under the FTA, will 
account as a non-originating material for the EU's FTAs preferential rules of origin.  

Another relevant example is EU aviation agreements. In this field, the UK will have to renegotiate 
and  replace  around  65 international  treaties117  between  the  EU  and  third  countries.  Discussions 
have  already  started with the  United States  on  agreeing  a  replacement  to  the  EU-US  Open  Skies 
agreement that regulates air operating rights.118 However, the US proposal for a bilateral treaty has 
been  deemed  unsatisfactory  by  the  UK  to  date,  as  it  removes  important  elements  of  the  EU-US 
deal.119 Furthermore, the ownership and control clause included in US bilateral aviation agreements, 
which in a US-UK deal would require that airlines are majority owned and controlled by US or UK 

116  This includes those future FTA partners with which the EU is in the final signing and ratification stages, such as Japan, 
Singapore and Vietnam. Indeed, if those agreements enter into force, the EU Member States will be able to benefit 
from preferential market access with these partners, while the UK will have to renegotiate agreements with them. 

117  Brexit and transport, United Kingdom House of Commons, April 2018. 
118  Air Transport Agreement between the European Community and its Member States, on the one hand, and the United 
States  of  America,  on  the  other  hand,  signed  on  30  April  2007.  See  also:  International  aviation:  United  States  and 
External Aviation Policy - Horizontal Agreements, European Commission. 

119  K. Manson, A. Barker, T. Powley, US offers UK inferior open skies deal after Brexit, Financial Times, 5 March 2018. 

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The future partnership between the European Union and the United Kingdom 

nationals in order to fly to the USA, complicates the situation for UK airlines where significant shares 
are held by other EU nationals.  

Finally, the UK will instead be able to remain party to other agreements, such as the WTO or UN 
Convention on the Law of the Sea, where the EU and its Member States have individual standing, 
although  the  UK  might  have  to  make  further  commitments,  originally  undertaken  by  the  EU  on 
behalf of the UK.120  

The UK has already started establishing trade policy dialogues with third countries,121 although it 
will  be  able  to  formally  start  negotiations  for  FTA  agreements  only  after  it  leaves  the  European 
Union. As trade negotiations are lengthy, the UK has considered a 'roll-over' of EU trade agreements 
as a transitional trade arrangement with third countries.122 That would imply that the UK and the 
third  country  would  conclude,  as  a  transitional  trade  arrangement,  an  agreement  that  would 
essentially be the same as that concluded between the trade partner and the EU. As highlighted by 
experts, this 'bilateral roll-over' would most probably not be a perfect 'cut and paste' approach and 
would still entail some negotiations and possibly technical and political adjustments to adapt to the 
new bilateral situation.123 Suggestions for trilateralisation, i.e. the UK acceding as a third country to 
the  existing  EU  trade  agreements,  also  require  EU  agreement,  and  would  need  to  be  approved 
following the EU ratification procedures.124 In its white paper of 12 July 2018, the UK government 
mentioned  its  intention  to  seek  continuity  with  its  existing  trade  and  investment  relationships 
(including those covered by EU FTAs and other preferential arrangements) as well as the desire to 
pursue  ambitious  bilateral  negotiations  with  the  US,  Australia  and  New  Zealand.  The  UK  also 
mentioned  that  it  would  potentially  seek  accession  to  the  Comprehensive  and  Progressive 
Agreement  for  Transpacific  Partnership  (CPTPP),125  which  replaced  the  Transpacific  Partnership 
(TPP) after the USA withdrew.126  

4.4. Exit from the internal market 

As a member of the internal market, the UK benefits from free movement of goods, services, capital, 
and workers, and freedom of establishment. This entails a prohibition on introducing restrictions 
unless justified.127 It also provides for mutual recognition of production standards whenever those 
are not harmonised; i.e. products complying with the rules of a Member State can be sold in other 
internal market countries without the need to meet the requirements of the country of importation. 
Derogations  to  the  mutual  recognition  principle  are  only  permitted  if  the  Member  State  of 
importation can prove that stricter regulations are needed to achieve a legitimate objective and the 

120  Refer to Future trade relations between the EU and the UK: options after Brexit, Policy Department for External Policies, 

European Parliament, 2018. 

121  See, for example, the trade policy dialogue established with New Zealand, UK Government, 17 October 2016. 
122  Continuing  application  of  EU  trade  agreements  after  Brexit  - First report  of session  2017-2019,  International  Trade 

Committee, House of Commons, 7 March 2018. 

123  Oral evidence: continuing application of EU trade agreements, International Trade Committee, House of Commons, 
HC 520-ii, 15 November 2017; for a deeper analysis of some issues (such as tariff rate quotas and rules of origin) see: 
Continuing  application  of  EU  trade  agreements  after  Brexit  - First report  of session  2017-2019,  International  Trade 
Committee, House of Commons, 7 March 2018. 

124  ibid. 
125  The CPTPP includes the following countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, 
Peru, Singapore and Vietnam. Refer also to: K. Binder, Edging closer to a TPP-11 agreement, EPRS at a glance, 2017. 

126  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
127  Restrictions to establishment and cross-border services must be justified within the internal market and therefore a 
restriction must be found to be necessary to meet some legitimate concern, non-discriminatory, and proportional. The 
concept of proportionality entails that there must be a clear link between the objective and the measure and that such 
measure must be the least restrictive possible. Member States must also be able to demonstrate they comply with the 
requirements of Directive 2006/123/EC. 

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measure  taken  is  proportionate.128  Participation  in  the  internal  market  comes  with  rights  and 
obligations, as highlighted by the EU's chief negotiator, Michel Barnier, which means that obtaining 
internal market rights is dependent on the fulfilment of these obligations; inter alia participation in 
the EU legal system and the related role of the CJEU.129 

4.4.1. Services and investment liberalisation under an FTA  

The  scope  of  market  access  commitment  within  the  internal  market  and  within  an  FTA  is  not 
equivalent; liberalisation of services and investment under EU FTAs is more limited.  

First, the FTA can exclude some sectors from the application of the chapters. Often sectors such as 
audiovisual and air transport are carved-out from EU FTAs. In some cases, air transport agreements 
are concluded as separate agreements (such as with Canada).130 In the case of Brexit, the guidelines 
adopted by the Council aim at 'continued connectivity between the UK and the EU after the UK' 
withdrawal,  to  be  achieved  via  the  conclusion  of  an  'air  transport  agreement,  combined  with 
aviation safety and security agreements, as well as agreements on other modes of transport, while 
ensuring a strong level playing field in highly competitive sectors'.131 As pointed out in the UK white 
paper of 12 July 2018, the UK has the largest aviation industry in Europe and in 2017, 164 million 
passengers travelled between the UK and other EU Member States.132 

Box 9 – EU air transport agreements 

Air  transport  agreements  were  first  concluded  by  Member  States  with  third  countries,  the  ECJ  Open  skies 
judgements 133  paved  the  way  to  the  conclusion  of  an  EU  external  aviation  policy  and  the  EU  enjoys  some 
exclusive competences in external aviation relations. The EU has negotiated horizontal agreements to amend 
and  bring  Member  States'  pre-existing  bilateral  agreements  into  line  with  EU  law.  It  has  also  started 
negotiating comprehensive agreements (also called global agreements) with third countries and is building a 
common aviation area with its neighbours. 

In  agreements  with  countries  part  of  the  common  aviation  area,  alignment  with  the  EU  acquis  has  been 
required.134 Other type of air transport agreements (global agreements), have regulatory cooperation clauses 
instead.135 Unless an air transport agreement is concluded with the EU, some UK airlines will lose their EU flying 
rights  post-Brexit,  as  UK  shareholders  will  no  longer  be  considered  EU  nationals.  Indeed,  according  to  the 
existing rules, for an airline to operate in the EU, it must prove that at least 50 % of its shares are owned and 
effectively  controlled  by  EU  nationals  and  that  its  principal  place  of  business  is  located  in  one  of  the  EU 
Member  States. 136  The  UK  white  paper  of  12  July  2018  mentions  that  the  UK  will  explore  options  for 
maintaining  reciprocal  liberalised  access  through  an  Air  Transport  Agreement.  The  paper  specifically 
mentions the EU-Canada Air Service Agreement as an example.137 

128  S.  Weatherill,  What  'mutual  recognition'  really  entails:  analysis of  the  Prime  Minister's  Mansion  House  Brexit policy 

speech, EU Law Analysis blog, 4 March 2018. 

129  For a deeper discussion of what internal market participation entails, refer to Future trade relations between the EU 

and the UK: options after Brexit, Policy Department for External Policies, European Parliament, 2018. 
130  Agreement on air transport between Canada and the European Community and its Member States.  
131  Guidelines on the framework for the future EU-UK relationship, European Council (Article 50), 23 March 2018. 
132  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
133  C-466/98, C-467/98, C-468/98, C-469/98, C-471/98, C-472/98, C-475/98 and C-476/98, Commission v United Kingdom, 

Denmark, Sweden, Finland, Belgium, Luxembourg, Austria, Germany. 

134  See, for example, Article 137 of the EU-Ukraine DCFTA which requires fulfilment of the conditions contained in the EU-
Ukraine Common Aviation Area Agreement, which requires the adoption of part of the acquis containing the European 
aviation rules, starting with safety requirements. On the European common aviation area, see the Commission website. 

135  This kind of agreement has been concluded for example with the United States and Canada.  
136  P. McClean, IAG calls for EU to relax ownership laws as Brexit concerns mount, Financial Times, 12 July 2017; Regulation 
(EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the 
operation of air services in the Community, OJ L 293, 31 October 2008. 

137  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 

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The future partnership between the European Union and the United Kingdom 

With respect to audiovisual services, the guidelines for future EU-UK relations are silent, whereas for 
other trade negotiations, audiovisual was explicitly excluded from the mandate for the negotiations 
(e.g. TTIP).138 The UK government has indicated its interest in negotiating specific rights with respect 
in particular to broadcasting.139 

Second,  commitments  in  trade  agreements  are  often  subject  to  reservations.  Reservations  are 
used  to  limit  the  application  of  the  commitments  undertaken  in  the  agreement  to  and  within 
specific sectors. Two different approaches exist to reservations in trade in services: 

- The first, known as the positive approach, where commitments are made only for those sectors 
listed in the schedule of commitments, such as in GATS or the EU-South Korea FTA;140  

- The second, or negative approach, entails a broader liberalisation, as commitments apply a priori 
to all sectors unless explicitly mentioned in reservations. This approach was used in CETA, where 
reservations were introduced in two different types of annexes.141 Annex 1 of CETA contains those 
rules that violate the commitments under the agreement that parties want to maintain, subject to a 
ratchet clause (i.e. if those restrictions are lifted in the future they cannot be reintroduced). Annex 2 
of CETA instead allows restrictions not subject to a ratchet clause, i.e. restrictions that can also be 
introduced in the future. The European Council guidelines on the framework for future relations do 
not specify which approach will be used for services; CETA may be taken as a basic model and the 
more  liberal  negative  approach  may  be  used  at  least  with  respect  to  cross-border  services  and 
investment. Even if CETA is used as basic model that does not mean that reservations will be similar. 
The  number  and  scope  of  reservations  may  vary  from  FTA  to  FTA.  Moreover,  within  an  FTA,  the 
number of reservations may vary greatly from Member State to Member State (see figure 10), as in 
some  Member  States,  services  are  more  liberalised  than  in  others.  Reservations  may  also  vary 
according to the sectors in terms of number, type (Annex 1 or 2), and scope.  

Third,  even  for  sectors  covered  by  the  agreement,  some  measures,  that  would  be  construed  as 
restrictive and would therefore require justification under the internal market rules, would not be 
constrained by the market access commitments under FTA rules. Indeed, the commitment to grant 
market access in an FTA will mainly forbid the introduction of some specific measures as opposed 
to  the  internal  market  formulation  which  prohibits  restrictions  to  trade  in  services  and 
establishment  in  general.  The  market  access  rule  for  cross-border  services  trade  in  FTAs  only 
imposes  a  prohibition  on  introducing  quantitative  measures  limiting  the  number  of  foreign 
enterprises, imposing other market access bans (such as monopolies, exclusive services suppliers or 
economic needs test), or limiting the quantity of output.142 For investments, the market access rule 
further prohibits measures imposing limitations on an investment's value, on the extent of foreign 
capital participation, or on the number of employees.143 It also forbids prescription of a certain legal 
form  for  a  foreign  enterprise.  Reservations  can  be  introduced  if  a  country  desires  to  maintain  or 
introduce a measure which violates the above-mentioned market access commitments.  

With respect to investments, an FTA – such as CETA – can consider certain measures as compatible 
with  the  market  access  commitment,  such  as  inter  alia,  measures  limiting  the  number  of 
authorisations because of technical or physical constraints (for example in the telecommunication 

138  See, as an example, the mandate for the negotiations issued for the Transatlantic Trade and Investment Partnership 

(TTIP) negotiation, or the mandate issued for negotiations of Free Trade Agreement with Japan.  

139  PM speech on our future economic partnership with the European Union, UK Government, 2 March 2018. See also: The 

future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 

140  See, for example, Articles 7.5 and 7.6 of the EU-South Korea Free Trade Agreement with respect to market access and 

national treatment commitments. 

141  See: CETA Article 9.7 for cross-border trade, CETA Article 8.15 for investments, CETA Article 13.10 for financial services, 

CETA Article 14.4 for International Maritime Transport services. 
142  See for example CETA Article 9.6 for cross-border market access. 
143  See for example in CETA Article 8.4. 

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sector),  or  measures  imposing  a  certain  percentage  of  directors  or  shareholders  be  qualified  or 
practice certain professions such as lawyers or accountants. Some of these measures may also exist 
in  intra-EU  relations,  but  have  to  be  justified.  Moreover,  in  CETA,  a  chapter  was  introduced  to 
specifically  allow,  in  the  context  of  both  cross-border  and  establishment,  the  introduction  of 
authorisation  requirements  and  authorisation  fees,  licensing  requirements  and  professional 
qualifications  requirements.144  This  chapter  imposes  some  requirements  on  how  such  measures 
should  be  undertaken,  however  parties  can  still  derogate  from  these  requirements  (for  example 
non-discriminatory requirement of licensing), if they have introduced specific reservations to that 
effect (for example a reservation on national treatment).  

Parties usually also agree not to impose performance requirements on investments,145 such as a 
mandatory level of exports or domestic content, however reservations can also be introduced in this 
context.  

Regarding  non-discriminatory  treatment,  the  rules  in  the  internal  market  are  also  stricter  than 
rules  under  an  FTA.  In  the  internal  market,  restrictions  to  movement  must  normally  be  non-
discriminatory.  The  prohibition  on  instituting  discriminatory  measures  covers  measures  both 
directly  discriminating  on  the  basis  of  nationality,146  and  indirectly  (for  example  on  the  basis  of 
residency requirements).147 For indirect discrimination, states can successfully justify a measure, for 
example when it comes to the need to master a certain language in order to provide the service. 
Justification  must  include  that  the  measure  is  necessary  to  provide  the  service  and  that  it  is 
proportional.148  In  FTAs,  national  treatment  with  respect  to  cross-border  trade  in  services  and 
investments ensures that foreign enterprises are treated by governments no less favourably than 
domestic  businesses.  The concept  is  however  not  without limitations.  For  example,  Article 9.4 of 
CETA specifies a number of measures which can be adopted in the context of cross-border trade in 
services  by  the  contracting  parties,  as  long  as  they  do  not  constitute  'arbitrary  or  unjustified' 
discrimination.  These  may  include  the  requirement  to  speak  a  language  needed  to  supply  the 
service, or measures requiring a licence, registration, certification or authorisation. Moreover, parties 
can introduce a series of reservations on national treatment for both cross-border trade in services 
and investments.  

Finally,  trade  agreements  usually  prohibit  requirements  that  senior  management  or  board  of 
director positions are occupied by people of any particular nationality.149 Again, parties can waive 
this requirement by introducing specific reservations. 

Box 10 – Selected services sectors relevant to the Brexit debate and example reservations 
existing under CETA and other agreements 
Services commitments and reservations can vary from agreement to agreement, so reservations in a future EU-
UK agreement can be very different from those of past agreements, depending on the constraints imposed by 
MFN clauses introduced in EU agreements for services (see section 4.2).  

As CETA was mentioned as a model, and is one of the most ambitious EU FTAs, table 3 shows the number of EU 
reservations existing per commitment. Unfortunately, the count does not give the idea of the restrictiveness of 
the measure. Indeed, while cross-border market access (MA) (MA-Mode 1) is not the commitment with most 
reservations, it is prohibited in many sectors where the EU or the Member States require establishment either 
in the EU or sometimes even in the Member State introducing the reservation (with a minimum requirement to 
establish a branch). Nevertheless, the data shows that several restrictive measures are maintained even in the 

144  See Chapter 12 of CETA. 
145  See for example in CETA Article 8.5. 
146  Cases: C-546/07; C-186/87; C-96/85. 
147  Cases: C-350/96; C-224/97; C-145/99; C-221/89. 
148  Case C-424/97. 
149  For example in CETA Article 8.8. 

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The future partnership between the European Union and the United Kingdom 

more  open  context  of  investment/establishment  (MA-mode 3).  The  number  and  scope  of  reservations  in 
services  will  also  largely  depend  on  the  Member  State  (see  figure 10).  When  it  comes  to  reservations  under 
Annex 2, these reservations do not necessarily mean that currently the service is restricted but that the EU or 
the Member State reserves the right to protect it in the future although in some cases restrictions are already in 
place. 

Table 4 – Reservations in CETA Annex 1 and 2 per commitment 

Market access (MA): MA-mode 1 are reservations on cross-border market access while MA-mode 3 are reservations on investment 
market access. 
National treatment (NT): NT_ Mode 1 are reservations on national treatment for cross-border trade in services and NT- Mode 3 are 
reservations for national treatment accorded to investments.  
Performance requirement (Perf. Req.) refers to reservation on the performance requirement prohibition. 
Senior management and Board of Directors (SMBD) refers to reservation on the commitment with respect to senior management and 
board of directors. 
Source: EPRS 

Figure 10 – Reservations in CETA by annexe and country 

Source:  EPRS;  L.  Puccio,  W.  Schöllmann  and  G.  Sabbati,  CETA  and  public  services,  EPRS  in-depth  analysis, 
February 2017. 

Financial services and insurance: 

Considering the role of the City of London and the importance of financial services in UK services exports, this 
will be a key area of interest in EU-UK negotiations. Currently, the UK has full access to the internal market 
thanks to what is known as passporting. The licence to operate, issued by the EU Member State where the 
financial institution is established, includes a 'European passport', allowing the financial institution to operate 
in  other  Member  States.  The  'European  Passport'  can  only  be  granted  to  firms  that  meet  EU  legislative 
requirements and is a benefit limited to the EU and the EEA. Brexit implies that EU legislation will cease to 
apply  to  the  UK  and  UK  based  firms  will  become  third-country  firms  under  EU  legislation,  thereby  losing 

39 

 
 
 
 
 
EPRS | European Parliamentary Research Service 

passporting rights. This means that UK groups wishing to operate in other EU Member States will have to go 
through  an  authorisation  process  in  the  host  Member  State  and  can  be  required  to  establish  branches  or 
subsidiaries there. FTAs do not grant passporting rights; this is valid even in the Swiss model, notwithstanding 
the fact that Switzerland does incorporate part of the EU acquis. The authorisation requirement remains for 
FTA partners' banks and in some cases reservations are introduced. There are limited commitments in FTAs 
with  respect  to  cross-border  trade  and  several  reservations  were  introduced  on  both  cross  border  and 
investments  commitments.  For  example,  in  CETA  an  EU  reservation  in  Annex 2  states  that  only  firms  with 
registered offices in the EU can act as depositaries for investment assets. Several Member States also have 
reservations  related  to  financial  services.  Those  can  cover  requirements  to  establish  at  least  a  branch, 
requirements  of  residency  of  the  executive  director  or  of  the  board  of  directors,  specific  legal  forms 
requirements, etc. Reservations also exist with respect to insurance services. In several EU countries, there are 
limitations to both cross-border and investment market access for insurance services. Some Member States' 
reservations require that the insurance company be established in the EU in order to underwrite certain types 
of  insurance  risks.  Another  major  issue  is  that  financial  services  (including  insurance)  do  not  seem  to  be 
covered in CETA by sector-specific MFN reservations. This means that a more favourable treatment can only 
be granted to the UK without also extending it to Canada if it falls under one of the broader all-encompassing 
MFN  reservations  (such  as  that  for  the  internal  market  and  approximation  of  laws).  In  its  white  paper  of 
12 July 2018,150 the UK government recognises that it cannot obtain passporting rights, but asks for a strong 
regulatory cooperation framework (see section 4.4.2).  

Transport – rail, road and maritime – and fisheries 

As shown in tables 1 and 2, transport services are an important sector for EU-UK trade in services.151 Transport 
services are also subject to several reservations in existing EU FTAs. In CETA for example, the EU has reserved 
railway transport licences only to undertakings established in the EU. Besides the reservation introduced by 
certain Member States to maintain some exclusive rights, some EU MS further restrict rail transport licences 
to  EU  nationals  (for  example  Bulgaria)  or  require  incorporation  (such  as  the  Czech  Republic).  The  UK  has 
requested the continuation of cross-border rail services in its white paper of 12 July 2018, and in particular 
bilateral rail agreements with the relevant EU Member States in order to ensure the continued operation of 
services through the Channel Tunnel and the Belfast-Dublin Enterprise Line.152 Maintenance and repair of 
rail transport equipment is also reserved: the EU prohibits cross-border supply, with the exception of some 
Member States, and can introduce any measure with respect to establishment and physical presence. A similar 
reservation covers maintenance and repair of waterway and maritime transport vessels. The EU also has 
a reservation allowing it to require establishment and limit cross-border supply of road transport services. 
Establishment is also required for services supporting road transport. Some Member States reservations are 
introduced for example with respect to taxis, or for the introduction of authorisation systems, or exclusive 
rights reserved to nationals of the EU, or limiting foreign investments in bus services, etc. On road transport, 
cross-border agreements between third countries and one or more Member States may be concluded; these 
agreements are normally protected by reservations on MFN clauses in EU trade agreements such as CETA. The 
EU also reserved the right to adopt or maintain measures limiting the supply of cabotage within a Member 
State of the EU by foreign investors established in another Member State of the EU. The UK wants to explore 
the possibilities for reciprocal access for road hauliers and passenger transport operators and arrangements 
for private motoring. 153 Combined transport is also subject to reservation in EU FTAs. In Annex 1 to CETA, the 
EU (with the exception of Finland) reserved access to the market for transport of goods between Member 
States of the EU, in the context of a combined transport operation, to hauliers established in the EU. On water 
transport, the  EU  is  generally  open  to  maritime  transport  but  restricts  inland  waterways.  In  CETA,  the  EU 
reserved the right to introduce any measures with respect to national cabotage (including feeder services) as 
well as with respect to pilotage and berthing services. Pushing and towing services are reserved for vessels 
carrying an EU Member State flag (with the exception of Lithuania and Latvia where further restrictions apply 
to pilotage, berthing, pushing and towing). Moreover the EU reserved the right to adopt any measures with 
respect to the nationality of crew on a seagoing or non-seagoing vessel. Several reservations exist with respect 
to the requirements in order to fly the flag of an EU Member State. Further reservations exist at the Member 
State level. The reservation on the conditions in order to fly the flag of an EU Member State can further restrict 

150  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
151  For some numbers see the publication recently published on transport, UK Government, June 2018. 
152  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018.  
153  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 

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access to restricted inland waterways, cabotage, and fisheries. Indeed, FTAs normally reserve fisheries. For 
example, a reservation in CETA allows the imposition of a requirement to fly the flag of an EU Member State 
in order to fish in the exclusive economic zone (EEZ). This latter point is of less interest in the context of the 
EU-UK relationship as both parties have expressed the desire to maintain open access for fisheries. The EU has 
granted  fishing  rights  for  example  to  some  southern  partners  via  the  sustainable  fisheries  partnership 
agreements (SFPAs).154 The SFPAs concluded with non-EU countries give the vessels of that third country 
access  rights  to  the  EEZ.  Normally  these  agreements  also  include  clauses  with  regard  to  resource 
conservation,  environmental  sustainability  and  cooperation  in  the  fight  against  illegal,  unreported  and 
unregistered  (IUU)  fishing.155  The  EU  also  has  fisheries agreements with Norway and the Faeroe Islands 
that cover the joint management of shared stocks. In the Brexit context, the Commission proposed an EU-UK 
fisheries partnership agreement in line with UNCLOS provisions and including mutual access to waters and 
resources  as  well  as  provisions  concerning  fisheries  management  based  on  shared  principles.156  In  its 
statement of 6 July 2018, the UK government simply mentions that the UK would be 'taking back control of 
UK  waters  as  an  independent  coastal  state'.  The  12  July  2018  white  paper  suggests  that  the  UK  would  be 
willing to agree only on annual negotiations on access to waters and fishing opportunities (including multi-
annual agreements for appropriate stocks) and proposes provision to promote sustainable fisheries.157 

Transport services are subject to some MFN reservations in trade agreements including CETA, which could 
allow for further concessions in the context of EU-UK negotiations, as opposed to the approach undertaken 
in previous EU agreements, however the Commission needs to review the flexibility granted by these MFN 
reservations.158  

Research and development (R&D) programmes 

Another  important  EU  reservation,  found  in  FTAs  such  as  CETA,  regards  the  EU  research  and  innovation 
funding programme for 2007-2013, or framework programme 7 (FP7), and the EU, national, regional and 
local research programmes. This reservation states that, at EU level, publicly funded R&D exclusive rights or 
authorisations  may  only  be  granted  to  natural  or  juridical  EU  nationals,  with  a  registered  office,  central 
administration  or  principal  place  of  business  in  the  EU.  For  Member  State-level  funds,  exclusive  rights  or 
authorisations may only be granted to EU nationals or juridical persons with headquarters in that Member 
State. Some limited third country participation in Union research programmes is currently allowed, but will 
need to be reconfirmed following the next Multiannual Financial Framework. 159 According to the European 
Council  guidelines,  this  limited  participation  by  third  countries,160  if  extended,  could  cover  also  the  UK.161 
Currently,  the  UK  is  extremely  active  in  research  and  development.  It  ranked  first  in  2016  for  number  of 
participants with signed Horizon 2020 contracts, 162 and second in 2017. The UK also hosted 2 349 Marie Curie 
Fellows and 773 European Research Council Principal Investigators. The total financial contribution achieved 
was  €4229 38 million  and  8 749  participants.163  The  UK  proposed  that  the  future  relationship  include  an 
accord on science and innovation allowing the UK to participate in EU research funding programmes such as 
Horizon Europe, the Euratom Research and Training Programme, the Joint European Torus project and ITER. 
The accord would allow discussion of UK participation in other programmes in the future, and should also 

154  Bilateral agreements with countries outside the EU, European Commission website. 
155  Illegal, unreported and unregulated fishing, Food and Agriculture Organization, 2016. 
156  See slides on internal EU 27 preparatory discussions on the framework for the future relationship: fisheries, European 

Commission, 17 January 2018. 

157  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018.  
158  See slides on internal EU-27 preparatory discussions on the framework for future relationship: Transport, European 

Commission, 21 February 2018; see also section 4.2. 

159  Slide on the EU/UK Possible Framework for the Future Partnership Discussions, European Commission, 15 May 2018. 
160  In  the  context  of  Horizon  2020,  a  distinction  is  made  between  associated  countries  and  non-associated  countries. 
Associated countries can participate under the same conditions applicable to Member States (sometimes even though 
the association agreement only covers some sectors). A number of non-associated third countries have put co-funding 
mechanisms in place for their participants in Horizon 2020 projects. See Guide note - Funding of applicants from non-
EU countries and international organisations, European Commission, 22 August 2017. 

161  Guidelines on the framework for the future EU-UK relationship, European Council (Article 50) 23 March 2018. 
162  Collaboration on Science and Innovation-a future partnership paper, UK Government, 6 September 2017. 
163  Horizon 2020 country profile United Kingdom, European Commission, 8 February 2018. 

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enable continued cooperation through joint participation in networks, infrastructure, policies and agencies, 
and to establish channels for regular dialogue between regulators, researchers and experts. 164 

Legal services 

Another area of interest for the UK-EU trade in services relations are business services. One example of these 
are  legal  services.  In  FTAs,  legal  services  are  usually  reserved  in  all  the  EU  Member  States  to  a  varying 
degree.165 In CETA, some Member States reserve full admission to the bar only for EU nationals or EEA and 
Swiss lawyers. Others reserve commercial presence for EEA and Swiss lawyers, while allowing other foreign 
lawyers only minority shares. In other Member States, some aspects of law cannot be practiced by non-EU or 
non-national lawyers (for example, there are exceptions for national law or EU law). The UK white paper of 
12 July 2018 mentions business services where the UK requests supplementary provisions to be inserted in 
the future agreement, which would permit joint practice between UK and EU lawyers, and continued joint 
UK-EU ownership of accounting firms. 166 

4.4.2. Consequences for regulatory cooperation for goods and services 
Even if standards of production are identical in the post-Brexit UK and the EU, compliance with EU 
standards will have to be verified at the customs border as soon as the UK leaves the internal market. 
Without the mutual recognition principle enshrined in internal market law, certification issued by 
the UK authority will not be recognised by EU authorities and vice-versa. The fact that the UK will no 
longer  be  bound  by  the  acquis  can  also  lead  to  increasing  regulatory  divergence  in  the  future. 
Regulatory  barriers  exist  in  the  trade  of  goods,  mainly  sanitary  and  phytosanitary  measures  to 
ensure food safety, and technical barriers to trade exist to ensure consumer safety and appropriate 
labelling. Regulatory barriers are also in present trade in services, to ensure consumer protection, as 
well as in financial markets for prudential reasons. 

There  are  several  ways  in  which  regulatory  trade  barriers  can  be  tackled.  The  European  Council 
guidelines mention the basic features found in EU FTAs with regard to regulatory matters. These 
include: disciplines on technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, 
and a framework for voluntary regulatory cooperation. Regulatory cooperation normally envisages 
WTO+  features,  such  as  provisions  on  the  adoption  of  international  standards,  alignment  of 
standards, equivalence, harmonisation, etc.  

FTAs may have provisions on the granting of equivalence,167 while both provisions and annexes 
setting  good  governance  standards  for  equivalence  procedures  can  be  found  in  association 
agreements.168  The  possibility  for  equivalence  decisions  is  included  in  certain  EU  regulations.169 
These decisions are adopted unilaterally by the Commission via implementing or delegated acts. 
Through equivalence decisions, the EU recognises that the regulatory or supervisory regime of a 
non-EU  country  is  equivalent  to  the  corresponding EU  regime.  Equivalence  normally  requires  an 
assessment  by  the  Commission  of  the  comparability  of  rules  applied  in  the  third  country  and 
whether they comply with the following characteristics: 

  requirements are legally binding; 

164  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
165  See CETA as an example. 
166  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
167  For  example  CETA  Article  13.5  of  the  chapter  on financial  services envisages  unilateral recognition  of  a  prudential 
measure. It further requires that the party according recognition shall provide adequate opportunity to the other party 
to demonstrate the equivalence of its regulation, oversight and implementation of the regulation. A similar provision 
is found under Article 7.46 of the section on financial services of the EU-South Korea FTA. 

168  See for example Article 66 (for SPS provisions) and Annex IX to chapter 4 (SPS chapter) included in the Association 

Agreement with Ukraine. 

169  See the table of equivalence decisions provided by the Commission. 

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The future partnership between the European Union and the United Kingdom 

  they are subject to effective supervision for compliance and enforcement by domestic 

authorities; 

  their effects are similar to those of the EU legal provisions and supervision.170 

Therefore, trade agreements cannot introduce automatic equivalence, as the Commission needs to 
comply with the procedure laid down in the EU regulations. Non-compliance with such a procedure 
can lead to annulment of the equivalence decision by the CJEU. While these EU regulations may give 
third countries the right to ask, there is no obligation on the Commission to grant equivalence. The 
power  is  discretionary  under  EU  law,  and  can  be  withdrawn  unilaterally,  which  may  lead  to  the 
conclusion that a procedure claiming failure to act cannot be initiated against the Commission for 
not adopting an equivalence decision.171 Nevertheless, provisions in trade agreements might oblige 
the  importing  party  (therefore  also  the  EU),  to  provide  the  exporting  party  with  a  detailed  and 
reasoned  explanation  for  the  refusal  of  an  equivalence.172  Equivalence  decisions  may  also  be 
granted partially and sometimes subject to conditions.173 

Box 11 – Financial markets and equivalence procedures 
Equivalence decisions are particularly important for financial markets. 174 According to the Commission's 2017 
assessment  on  equivalence  decisions  in  financial  services  policy,175  such  equivalence  decisions  are 
contemplated in 15 EU acts, although those equivalence decisions might differ in terms of: 

final outcome (some might need follow-up actions),  

• 
•  processes (involvement or not of Member States),  
• 
• 
• 

criteria for the assessment,  
the extent to which assessment implies an analysis of regulatory and procedural rules, and 
the possibilities to withdraw equivalence.  

In financial markets, the Commission usually carries out these assessments on the basis of technical advice 
from the European supervisory authorities.176 The Commission has adopted some 212 equivalence decisions 
with 32 different jurisdictions. Japan has most equivalence (with 17 determinations), the USA and Canada (16), 
Australia (13), Brazil (12) and Singapore (11). It is interesting to note that these countries do not currently have 
trade agreements in force with the EU. In other words, the existence of a trade agreement with formalised 
regulatory dialogues does not necessarily mean adoption of more equivalence decisions. 

The UK considers the EU's third-country equivalence regimes in financial regulation insufficient to cope with 
the interdependence of EU-UK financial markets. The UK proposed a system for what some newspapers have 
referred to as a 'super-charged' equivalence system.177 The proposed system, while still relying on the principle 
of the regulatory autonomy of each party, would provide for: 

170  EU equivalence decisions in financial services policy: an assessment, Commission staff working document, European 

Commission, SWD(2017) 102 final, 27 February 2017. 

171  Article 265 and 266 TFEU on actions for failure to act can only be activated after two months of inaction if the EU 

institution had an obligation to act. 

172  See for example Article 66 (for SPS) and the Annex IX to chapter 4 (SPS chapter) included in the Association Agreement 

with Ukraine. 

173  An example of this kind of arrangement can be the EU-US organic equivalence arrangement.  
174  For a more detailed analysis of equivalence measures in financial services, refer to Implications of Brexit on EU financial 

services, Policy Department for economic and scientific policy, European Parliament, June 2017. 

175  EU equivalence decisions in financial services policy: an assessment, staff working document, European Commission, 

SWD(2017) 102 final, 27 February 2017. 

176  The  European  Banking  Authority,  the  European  Securities  and  Markets  Authority,  the  European  Insurance  and 

Occupational Pensions Authority. 

177  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 

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• 

• 

• 

• 

• 

• 

the  expansion  of  existing  autonomous  frameworks  for  equivalence,  covering  a  larger  range  of  cross-
border activities; 
a  framework  of  reciprocal  recognition  of  equivalence  under  all  existing  third  country  regimes,  taking 
effect at the end of the implementation period; 
a  transparent  assessment  methodology  for  assessing  equivalence  based  on  common  objectives  with 
industry and other stakeholder consultations, and the possibility of using expert panels; 
a  structured  withdrawal  process,  whereby  before  withdrawal  of  equivalence,  parties  must  engage  in 
consultations in order to find solutions as to how to maintain equivalence. The process would set clear 
timeline and notification periods and there would be a clause protecting acquired rights; 
a presumption against unilateral changes that narrow the terms of existing market access other than in 
exceptional  circumstances,  including  the  idea  that  equivalence  decisions  can  only  elapse  after  a  new 
decision is taken; 
a regulatory dialogue and supervisory cooperation system. 

The  UK  proposal  appears  at  odds  with  current  EU  independence  and  discretion  in  equivalence  decision-
making. The scope of equivalence is currently decided unilaterally by the EU in its legislative process, as well 
as  the  objectives  upon  which  the  Commission's  assessment  must  be  made.  Withdrawal  and  decision  on 
whether  to  issue  a  new  equivalence  decision  after  a  decision  elapses  are  mostly  left  to  the  Commission's 
discretion.  Similarly,  the  framework  for  reciprocal  recognition  of  equivalence  could  also  be  interpreted  as 
limiting  the  Commission's  capacity  to  withdraw  these  equivalence  decisions  with  third  countries.  The 
Commission  has  apparently  already  rejected  the  UK  proposal,  as  it  would  entail  a  'system  of  generalised 
equivalence decisions that would in reality be jointly run by the EU and the UK'.178 

In the absence of equivalence provisions in EU regulations, regulatory issues will have to be solved 
by the conclusion of agreements which will have to be based on an external EU competence (that 
competence  can  be  explicit  either  in  the  treaties  or  in  secondary  legislation,  or  implied  from 
secondary  legislation).  Agreements  can  also  tackle  regulatory  issues  which  are  not  covered  by 
equivalence  decisions.  A  recent  example  of  this  is  the  conclusion  in  2017  of  the  EU-US  bilateral 
agreement  on  prudential  measures  regarding  insurance  and  reinsurance.179  An  equivalence 
provision for reinsurance exists under the solvency regime, and the USA obtained that equivalence 
for a period of 10 years in 2015.180 The agreement signed in 2017 with the USA allowed inter alia to 
reach  further  regulatory  cooperation  with  respect  to  group  supervision  (avoiding  duplication  of 
procedures) and exchange of information. 

Similarly, in the framework of trade in goods, regulatory requirements will become an additional 
non-tariff barrier in EU-UK trade, unless agreements are concluded. This is usually done via mutual 
recognition agreements (MRAs) in the framework of conformity assessments. MRAs are bilateral 
agreements under which the importing party will accept conformity assessment results (e.g. testing 
or  certification)  performed  by  the  exporting  party's  designated  conformity  assessment  bodies 
(CABs) to show compliance with the importing party's requirements and vice versa. MRAs include 
relevant  lists  of  designated  laboratories,  inspection  bodies  and  conformity  assessment  bodies. 
Sectors  covered  by  MRAs  may  vary  depending  the  country.181  MRAs  may  require  equivalence  of 

178  M. Sheen, 'EU rejects May’s financial services Brexit plan', Investment Week, 23 July 2018; J. Brunsden, 'Brussels rejects 

UK’s financial services Brexit Plan', Financial Times, 22 July 2018. 

179  Bilateral Agreement between the European Union and the United States of America on prudential measures regarding 

insurance and reinsurance, OJ L 258, 6 October 2017. 

180  Delegated decision (EU) 2015/2290 of 12 June 2015 on the provisional equivalence of the solvency regimes in force in 
Australia,  Bermuda,  Brazil,  Canada,  Mexico  and  the  United  States  and  applicable  to  insurance  and  reinsurance 
undertakings with head offices in those countries, OJ L 323, 9 December 2015. 

181  On mutual  recognition  and for the list  of  countries  with  which the EU has concluded  agreements,  refer  to  mutual 

recognition agreements, European Commission website. 

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regulatory standards ('enhanced MRAs'),182 however, traditionally these did not require alignment 
of  standards  or  equivalence.  Traditional  MRAs183  would  require  at  least  compatibility  of 
infrastructures and regulatory objectives, as well as a recognition of technical competence and trust 
in assessment and certification; thus even traditional MRAs are difficult to conclude where there are 
major regulatory divergences.184 Where no equivalence of standards is required, the agreement will 
require that conformity assessment bodies of the exporting party assess the compatibility of the 
good with the importing parties' requirements. The MRA contains rules concerning the designation 
of suitable conformity assessment bodies that should be able to operate according to the criteria 
and  the  procedures  set  out  in  the  other  party's  regulations.  MRAs  will  not  therefore  require 
alignment of regulatory standards, but do entail an assessment of the other party's regulatory praxis. 

As  mentioned,  in  its  March  2018  resolution,  the  European  Parliament  suggested  using  an 
association agreement (AA) as a model for the future EU-UK model.185 On trade aspects, AAs are very 
different from the FTA model in particular with respect to regulatory cooperation. AAs used by the 
EU  with  its  neighbours  entail  some  alignment  on  technical  standards,186  and  are  often 
accompanied by the negotiation of agreements on conformity assessment and acceptance of 
industrial products (ACAA).187 The ACAA is a type of enhanced MRA based on the alignment of the 
legislative system and infrastructure of the country concerned with those of the European Union. 
The ACAA would only initially cover some sectors where alignment is specified in the agreement 
(obviously only if alignment of technical legislation, standards and infrastructure is completed). The 
ACAA  is,  in  the  long  term,  intended  to  cover  all  the  sectors  for  which  regulatory  alignment  was 
Israel,189  for  example,  covers  medicinal  and 
envisaged 
pharmaceutical products (see annex to the agreement), and in its Article 7 sets out the possibility to 
extend it to other areas if Israel adopts and implements further national law aligning with relevant 
EU law.190 The legislative alignment in association agreements entails a role for the CJEU because of 
the exclusive competence of the CJEU to interpret EU law and the autonomy of the EU legal system. 
For  example,  Article 322 of  the  AA with  Ukraine  specifies  that,  when  there  is a  dispute on  an  AA 
provision relating to regulatory approximation or which imposes an obligation referring to EU law, 

in  the  treaty.188  The  ACAA  with 

182  This is the case of the 'enhanced MRA' concluded by the EU. For example, equivalence is required in the MRA with 
Switzerland:  Article 1(2)  Agreement  between  the  European  Community  and  the  Swiss  Confederation  on  mutual 
recognition in relation to conformity assessment, OJ L 114, 30 April 2002. 

183  Examples of these are for the EU: Agreement on mutual recognition between the European Community and Japan, 
OJ L 284,  29 October 2001;  Agreement  on  mutual  recognition  between  the  European  Community  and  the  United 
States of America, OJ L 31, 4 February 1999. 

184  A. Correia de Brito, C. Kauffmann, J. Pelkmans, The contribution of mutual recognition to international regulatory co-

operation, OECD Regulatory Working Papers, No 2, 2016. 

185  Resolution  of  14  March  2018  on  the  framework  of  the  future  EU-UK  relationship  (2018/2573(RSP)),  European 

Parliament. 

186  See  for  example  Article  52  and  Annex  III  to  Chapter  3  of  the  Association  Agreement  with  Ukraine.  Besides  some 
horizontal measures such as those related to product safety, accreditation and market surveillance to the marketing 
of  products,  alignment requirement  covers  27  sectors including:  machinery,  electromagnetic  compatibility,  simple 
pressure  vessels,  pressure  equipment,  transportable  pressure  equipment,  lifts,  toy  safety,  electrical  equipment 
designed  for  use  within  certain  voltage  limits,  medical  devices,  measuring  equipment,  radio  equipment  and 
telecommunication terminal equipment, construction products, high-speed railways, etc.  

187  For example,  the  possibility  to negotiate  an  ACAA is included under  Article  57  of  the  Association  Agreement  with 

Ukraine. 

188  See for example Article 57 of the Association Agreement with Ukraine. 
189  Protocol to the Euro-Mediterranean Agreement establishing an association between the European Communities and 
their  Member  States,  of  the  one  part,  and  the  State  of  Israel,  of  the  other  part,  on  Conformity  Assessment  and 
Acceptance of Industrial Products (CAA), OJ L 1, 4 January 2013. 

190  idem 

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the arbitration panel must ask the CJEU to give a ruling on the question and that such a ruling is 
binding on the arbitration panel.191  

The  UK  in  its  statement  of  6  July  suggested  the  creation  of  a  common  rulebook  for  all  goods, 
including  agriculture.192  The  statement  suggested  that  harmonisation  with  EU  rules  would  cover 
'only those necessary to provide for frictionless trade at the border', suggesting that harmonisation 
would not be complete. In the July 2018 white paper, the proposal was further clarified: the common 
rulebook for goods would only apply to those rules that can be checked at the border (this would 
include  certain  agri-food standards  checked  at  the  border  like  SPS measures).  The UK  confirmed 
during the negotiations that the common rulebook would not include agri-food standards which 
are not checked at the border (such as pesticides, GMO, for example).193 The UK proposal covers all 
compliance activities necessary for products to be sold in the UK and EU markets. These include:194  

  testing products, including conformity assessments and type approval for vehicles as 

well as other declarations, labels and marks to show they meet the requirements. 

  accreditation of conformity assessment bodies, whereby the testers would be assessed 

within a jointly agreed certification framework. 

  manufacturing and quality assurance processes, such as Good Laboratory Practice and 

Good Manufacturing Practice. 

  the  role  of  nominated  individuals,  such  as  'responsible  persons'  for  certain  high-risk 

products. 

  specific provisions for human and animal medicines and the role for the qualified person 
in  pharmacovigilance,  who  is  responsible  for  safety  monitoring  and  potential  side 
effects.  

  licensing regimes and arrangements for the movement of restricted products. 

For  certain  agri-food  standards  not  checked  at  the  border  and  therefore  not  covered  by  the 
common rulebook, the UK proposed an equivalence arrangement on wider food policy rules that 
set  marketing  and  labelling  requirements.195  For  the  moment,  the  EU  has  concluded  several 
reciprocal equivalence arrangements or agreements on organic food.196 The UK has also asked to 
establish cooperation arrangements with EU regulators and would like to seek participation in the 
EU's communication systems, such as the Rapid Alert System for Food and Feed (RASFF), Rapid Alert 
System  for  Serious  Risk  (RAPEX)  and  the  Information  and  Communication  System  for  market 
Surveillance (ICSMS).197 

As alignment to EU rules can lead to the need to interpret EU law in disputes, for which the CJEU has 
exclusive competence, the CJEU's involvement is required. The UK suggested the introduction of a 
joint  institutional  framework,  carried  out  by  UK  and  EU  courts,  which  would  however  have  'due 
regard' for EU law and would entail a 'joint reference procedure' to account for the CJEU's role as the 
interpreter  of  EU  law.  As  opposed  to  goods,  the  UK  government  stresses  the  maintenance  of 
'regulatory flexibility' for services and, where appropriate, 'arrangements on financial services' for 
maintaining integrated markets and protecting financial stability.  

Prime Minister May mentioned her desire to also explore the terms on which the UK could remain 
part  of  certain  EU  agencies,  including  the  European  Medicines  Agency  (EMA),  the  European 

191  Article 322 of the Association Agreement with Ukraine. 
192  Statement from the HM Government, UK Government, 6 July 2018. 
193  European Commission, Press statement by Michel Barnier following the July 2018 General Affairs Council (Article 50), 

20 July 2018. 

194  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
195  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
196  European Commission, Organic Farming - relations with non EU countries, last accessed 3 September 2018. 
197  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 

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Chemicals  Agency  (ECHA)  and  the  European  Aviation  Safety  Agency  (EASA).198  This  desire  was 
reconfirmed in the 12. July 2018 white paper.199 In some cases, it is indeed possible for a third country 
to be member of an European agency, however full membership implies acceptance of EU law and 
the role of the CJEU, as these agencies are subjects and actors of EU law.200  

For  example,  the  EASA  is  responsible  for  devising  and  enforcing  EU  aviation  rules  (e.g.  aircraft, 
components or manufacturers cannot operate in the EU internal market without EASA approval). 
After Brexit, UK aviation operators aiming to perform commercial air transport operations in the EU 
will  have  to  deal  with  EASA.  The  EASA  has  instituted  different  types  of  relationships  with  third 
countries. It is open to the participation of European third countries, which are not necessarily part 
of  the  EEA  (for  example  Switzerland  is  an  Associated  Member).  The  UK's  July 2018  white  paper 
suggests that the UK would like to join EASA as an Associated Member, similarly to Switzerland.201 
However,  associated members  are  required  to  enter  into  agreements with  the  EU, whereby  they 
apply  Community  law  in  the  field  covered  by  the  Regulation  establishing  EASA  and  its 
implementing rules;202 this also entails that interpretation of these laws is the exclusive competence 
of the CJEU.  

The EMA is responsible for granting marketing authorisations for pharmaceuticals and supervising 
the side effects of medicine in circulation. Its membership consists of only the EU Member States; 
the  other  EEA members  are observers.  EEA  countries  participate  fully in  the  European  medicines 
regulatory  network. Bilateral  cooperation  with  non-EEA  members203  is usually  carried out  via  the 
conclusion of MRAs (as per the agreement with Switzerland mentioned above), and other regulatory 
cooperation  initiatives  (see  for  example  the  Transatlantic  Taskforce  on  Antimicrobial  Resistance). 
The EMA also cooperates with third countries in multilateral organisations.204 The UK would like to 
ensure  that  it  can  still  conduct  technical  work  within  the  agency,  including  acting  as  'leading 
authority' for the assessment of medicines and participating in ongoing safety monitoring and the 
EU clinical trials framework.205 

The Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation which 
established the ECHA – the EU regulatory agency that registers and authorises chemical products 
for circulation within the internal market – sets out the possibility of third country participation.206 
For the moment, EU and EEA countries plus Switzerland are members. Some cooperation is planned 
with  beneficiaries  from  the  European  neighbourhood  and  enlargement  countries.  The  ECHA  has 
reached  Memoranda  of  Understanding  with  Canada,  the  USA,  Australia  and  Japan,  and  also 
cooperates  with  other  third  countries.  With  respect  to  ECHA,  the  UK  government  would  like  to 
ensure that UK businesses can continue to register substances directly with ECHA and not via an EU-

198  PM Theresa May's speech on future UK-EU relations, UK Government, 2 March 2018. 
199  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
200  For an overview of EU regulatory agencies and possibilities of UK participation after its withdrawal from the EU, please 
see N. von Ondarza, C. Borrett, Brexit and EU agencies, Staff Working Paper, European Commission, 1 April 2018.  

201  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
202  Article  66  of  Regulation  (EC)  No  216/2008  of  the  European  Parliament  and  of  the  Council  of  20 February 2008  on 
common rules in the field of civil aviation and establishing a European Aviation Safety Agency, and repealing Council 
Directive 91/670/EEC, Regulation (EC) No 1592/2002 and Directive 2004/36/EC. 

203  For the complete list of agreements refer to the EMA website. 
204  For the complete list see the EMA website. 
205  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
206  Article  106  of  Regulation  (EC)  No  1907/2006  of  the  European Parliament  and  of  the  Council  of  18  December  2006 
concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European 
Chemicals  Agency,  amending  Directive  1999/45/EC  and  repealing  Council  Regulation  (EEC)  No  793/93  and 
Commission  Regulation  (EC)  No  1488/94  as  well  as  Council  Directive  76/769/EEC  and  Commission  Directives 
91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/EC. 

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based representative.207 However, this eventuality does not seem to have been considered in the 
current REACH regulation, where only EEA natural or legal persons can register. Substances from 
non-EEA manufacturers would have to be registered either by the importer established in the EEA 
or a nominated representative established in the EEA or, in the case international companies, by a 
legally separate subsidiary that qualifies as a registrant under REACH.208 

In  trade  in  services,  one  of  the  main  issues  to  discuss  will  also  be  recognition  of  qualifications. 
Indeed,  without  such  recognition,  a  service  can  only  be  provided  on  the  basis  of  the  host  state 
qualifications. FTAs usually include frameworks for the recognition of qualifications that allow the 
conclusion of mutual recognition agreements (MRA) at any time after the FTA has come into force.209 
The system relies on voluntary decisions to negotiate MRA (no obligation exists to negotiate) and 
the conclusion of the MRA necessitates the parties' endorsement.210 For example, CETA does not 
provide  for  mutual  recognition  of  professional  qualifications,  but  establishes  a  framework  for 
negotiating agreements on the mutual recognition of professional qualifications.211 In this respect, 
the UK has requested an alternative arrangement that would include:212 

  mutual  recognition  of  qualifications  covering  the  same  range  of  professions  as  the 

Mutual Recognition of Qualifications Directive;  

  professionals working on a temporary and permanent basis across borders;  
  a  predictable  system,  enabling  professionals  to  demonstrate  they  meet  the 

requirements; 

  a  proportional  system,  allowing  legitimate  compensatory  measures  where  there  are 

significant differences between qualifications or training in a timely way; and 
  provisions on transparency and cooperation between regulatory authorities. 

4.4.1. Other issues 
The  EU  has  expanded  its  new  FTAs  to  cover  WTO+  provisions  relating  to  public  procurement, 
competition law, intellectual property, and trade and sustainable development. These aspects take 
on a new importance in Brexit negotiations. Indeed, the UK rules on these subjects are currently in 
line with EU law and Brexit would mean that the UK will be able to deviate from those rules.  

Level playing field 
As  mentioned  in  the  latest  European  Council  guidelines,  one  of  the  objectives  of  the  EU  in  the 
negotiations with the UK is to prevent any future undercutting of levels of protection 'with respect 
to,  inter  alia,  competition  and  state  aid,  tax,  social,  environment  and  regulatory  measures  and 
practices.' This is part of the aim to maintain 'a level playing field' (LPF).  

In  this  context,  the  Commission  is  also  discussing  when  and  how  to  introduce  sanctions  for 
violations  of  the  commitments  undertaken  in  the  future  partnership.  Indeed,  some  of  these  LPF 
areas (such as competition, environment or labour provisions) are not usually covered by traditional 
state-to-state  dispute  settlement  mechanisms  under  EU  FTAs  and  are  not  subject  to  sanctions. 
However,  in  the  negotiations  with  the  UK,  the  Commission  suggested  that,  in  principle,  dispute 
settlement must be available for any violation of LPF provisions. These dispute settlement provisions 
would  have  a  traditional  two-stage  format  including  consultation  and  a  dispute  settlement 
mechanism. The Commission further stresses that, whenever the agreement makes reference to EU 

207  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
208  See also the Questions and Answers website on REACH registration on the ECHA website, accessed 3 September 2018. 
209  See Chapter 11 in CETA as an example of a framework for mutual recognition of professional qualifications. 
210  See, slides prepared on Internal EU-27 preparatory discussions on the framework for the future relationship 'Services', 

European Commission 6 February 2018. 

211  See Chapter 11 of CETA. 
212  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 

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law provisions, these can only be interpreted by the CJEU. Sanctions (including interim sanctions for 
certain areas such as State aid) should also be available, according to the Commission, for all these 
LPF provisions.213  

Competition and State aid 
Brexit  means  that  the  UK  will  no  longer  be  bound  to  the  rules  enshrined  in  the  EU  treaties  with 
respect to competition and State aid. The EU wants to maintain strong commitments in both areas. 
In her speech of 2 March 2018, Prime Minister Theresa May seemed to also favour reciprocal binding 
commitments with respect to competition.  

Currently concluded or negotiated EU agreements have limited substantive rules on State aid (they 
mainly  reaffirm  the  rights  under  WTO  law,  introduce  transparency  provisions,  consultations  and 
provisions  to  ensure  that  trade  liberalisation  achieved  is  not  replaced  by  export  subsidies).214 
Moreover,  these  provisions  can  exclude  some  sectors.  Therefore,  with  regard  to  the  UK,  the 
Commission submitted a proposal for internal EU-27 discussions that would instead provide rules 
equivalent to those enshrined in the EU State aid rules, including with respect to transparency. Ex-
ante control would be entrusted to an independent State aid authority having similar powers to 
those of the Commission.215 In its statement of 6 July 2018, the UK government proposes to commit 
to the application of a common rulebook on State aid and also suggested establishing cooperative 
arrangements  between  regulators  on  competition.216  This  was  confirmed  in  the  July  2018  white 
paper,  where  the  UK  government  mentioned  the  common  rulebook  on  state  aid.  Enforcement 
would  be  entrusted  to  the  Competition  and  Market  Authority  (CMA).  The  UK  stressed  that  its 
proposal would 'not fetter its sovereign discretion on tax, including to set direct and indirect tax 
rates,  and  to  set  minimum  tax  rates'  and  mentioned  its  intention  'to  develop  new  tailored 
arrangements  in  relation  to  payments  to  farmers  and  other  land  managers  for  environmental 
benefits, and the UK's future public procurement policy', suggesting those areas would not be part 
of/or affected by the UK's commitments under the common rulebook on state aid.217 

It  is  not  yet  clear  what  the  Commission  and  the  UK  will  introduce  in  the  framework  of  other 
provisions relating to competition. In its white paper of 12 July 2018, the UK proposed to establish 
cooperative arrangements, such as those existing in current FTAs, to manage parallel mergers and 
antitrust investigations. These provisions would include the sharing of confidential information and 
joint work on live cases.218 

Until now, the EU has concluded agreements on competition with like-minded third parties even 
before signing an FTA with those partners (such as the USA and Canada).219 The agreement with 
Canada only includes provisions concerning notifications requirements, cooperation provisions and 
a provision to avoid conflicts with other parties' major interests.220 With the USA, the EU had already 
established advanced cooperation via stand-alone agreements covering some competition issues. 
General  transatlantic  cooperation  in  the  field  of  competition  is  based  on  the  1991  EU/USA 

213  Internal  EU-27  preparatory  discussions  on  the  framework  for the  future  relationship:  'level playing  field', European 

Commission, 31 January 2018. 

214  See Chapter 7 of CETA. On the last point see for example Article 7.5 of CETA which prohibits the introduction of an 
export  subsidy  on  an  agricultural  good  after  a  tariff  rate  quota  has  been  eliminated  in  accordance  with  the  tariff 
schedules. 

215  Internal  EU-27  preparatory  discussions  on  the  framework  for the  future  relationship:  'level playing  field', European 

Commission, 31 January 2018. 

216  Statement from the HM Government, UK Government, 6 July 2018. 
217  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
218  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
219  The agreement with Canada was later incorporated into CETA, see Article 17.2 of CETA. 
220  Agreement between the European Communities and the Government of Canada regarding the application of their 

competition laws, signed in Bonn, 1999. 

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Competition Cooperation Agreement, which provides for the exchange of information on cases and 
proceedings that are important to the interests of the other party, as well as the general exchange 
of information and discussion on reforms and implementation of competition rules.221 The Positive 
Comity Agreement, concluded by the EU and the USA in 1998, instead allows one party to ask the 
other party to take measures against anti-competitive behaviour occurring in the territory of the 
other  party,  and  affecting  the  requesting  party's  interests.222  Finally,  the  EU-US  Best  Practices  on 
Cooperation in Merger Investigations, first agreed in 2002 and then updated in 2011, contain non-
legally-binding rules that provide a framework for interagency cooperation in the field of merger 
cases.223 Moreover, the EU has introduced provisions on competition rules in several agreements 
with third countries.224 In the DCFTA concluded with the Ukraine, provisions on competition rules 
are much stronger. Ukraine shall approximate its legislation to EU law within three years with respect 
to: the implementation of the rules on competition laid down in Articles 81 and 82 TFEU, control of 
concentrations  between  undertakings,  the  categories  of  vertical  agreements  and  concerted 
practices and the categories of technology transfer agreements.225 This provision of the EU-Ukraine 
Association  Agreement  on  approximation  of  competition  rules  is  subject  to  dispute  settlement 
procedure and the CJEU role of interpretation is safeguarded.  

Taxation 
As  the  UK  would  no  longer  be  bound  by  the  acquis  communautaire,  EU-derived  rights  and 
obligations  would  cease.  The  Commission  stresses  in  particular  the  risks  with  respect  to  tax 
avoidance, the potential losses in terms of exchange of information and the risk of fiscal dumping 
in order  to  attract  competitiveness.  The  EU  has  concluded  a  certain  number of  agreements  with 
enclave European countries (such as Liechtenstein, Switzerland, Andorra, San Marino, Monaco) and 
the  French  Overseas  Territory  of  Saint Barthélemy.  In  EU  FTAs,  provisions  on  taxation  are  scarce 
(national treatment with reference to Article III of GATT, provisions to secure the right to regulate 
and  a  good  governance  clause  were  introduced  for  example  in  CETA),226  while  Organisation  for 
Economic  Co-operation  and  Development  base  erosion  and  profit  sharing  (OECD-BEPS)227 
standards  are  non-binding.  Therefore,  with  a  view  to  future  partnership  talks  with  the  UK,  the 
Commission  submitted  a  proposal  for  discussion  among  the  EU-27,  which  suggested  the 
introduction  of:  a  good  governance  clause,  binding  requirements  with  respect  to  exchange  of 
information,  anti-tax  avoidance  measures,  and  public  country-by-country  reporting  (CbCR)228  for 
credit institutions and investment firms.229  

221  Agreement  between  the  Government  of  the  United  States  of  America  and  the  Commission  of  the  European 
Communities  regarding  the  application  of  their  competition  laws  –  Exchange  of  interpretative  letters  with  the 
Government of the United States of America, OJ L 95, 27 April 1995; on EU-US cooperation in competition laws, see 
also: I. Van Bael, Due process in EU Competition Proceedings, Kluwer Law International, 2011. 

222  Agreement  between  the  European  Communities  and  the  Government  of  the  United  States  of  America  on  the 

application of positive comity principles in the enforcement of their competition laws, OJ L 173, 18 June 1998. 

223  US-EU Merger Working Group Best Practices on cooperation in merger investigations. 
224  See the complete list on the European Commission website. 
225  Article 256 of the EU-Ukraine Association Agreement. 
226  See Article 2.3 and article 28.7 CETA. 
227  Base  Erosion  and  Profit  Shifting  (BEPS)  is  an  action  plan  adopted  by  OECD  and  G20  countries  in  2013  to  enhance 

transparency for tax administrations. 

228  The CbCTR is a report which is part of Action 13 of the BEPS, which multinationals would submit annually for each tax 

jurisdiction in which they do business.  

229  Internal  EU-27  preparatory  discussions  on  the  framework  for the  future  relationship:  'level playing  field',  European 

Commission, 31 January 2018. 

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impact  on  UK  environmental 

Trade and sustainable development 
The EU has developed a rich legislation in the framework of environmental policy, which has had an 
legislation.230  Even  though  the  European  Union 
important 
(Withdrawal)  Act  incorporates  EU  derived  law  into  UK  legislation,  the  UK  will  not  be  obliged  to 
remain  aligned  to  EU  law  after  Brexit.  Because  of  its  proximity,  there  is  a  high  risk  of  negative 
externality costs if UK regulatory standards are lowered; this is valid not only for border relations 
with Ireland but also for preservation of maritime resources and air pollution. This is the main reason 
for which the EU wants to ensure stronger commitments in the agreement on future relations. While 
exported  products  must  respect  the  importing  country's  product  standards  (including  those 
derived from environmental policy, such as the REACH regulation concerning chemical substances), 
this is not the case for other aspects of environmental policy (such as industrial waste, biodiversity 
preservation etc.), for which the rules of the country of production apply. The EU is bound to ensure 
coherence of its trade policy with other EU policies, including those concerning the environment.231 
This is why the EU has introduced a chapter on trade and sustainable development in all its recent 
FTA  agreements,  which  includes  commitments with  respect  to  labour  and  environmental  policy, 
while  product  standards  are  normally  covered  by  regulatory  cooperation  chapters,  technical 
barriers to trade chapters and sanitary and phytosanitary measures (see section 4.4.2). Usually trade 
and sustainable development chapters232 reaffirm the international commitments taken by parties 
in  the  framework  of  the  International  Labour  Organization,  as  well  as  in  the  main  Multilateral 
Environmental  Agreements  (MEA).  They  therefore  include  provisions  for  cooperation  in  various 
fields of interest to both FTA partners. Finally, the chapters also include two main obligations: the 
first  binds  the  parties  to  effectively  enforce  their  respective  environmental  laws  and  prohibit  the 
parties  from  failure  to  enforce  labour  law  via  'sustained  or  recurring  course of  action  or inaction' 
(repeated action or failure to act which can be framed as a pattern).233 The second prohibits a party 
to  waive  or  derogate  from  its  environmental  or  labour  laws  in  order  to  encourage  trade  and 
investment.234  

The European Commission published some slides for internal discussion on all LPF areas, including 
the environment and labour.235 It proposes to maintain the principles of non-lowering of standards 
of protection and non-regression clauses, as well as the principle of upholding standards across its 
territory.  According  to  a  speech  delivered  by  the  EU's  chief  negotiator,  Michel Barnier,  these 
principles could be inspired by the CETA or the EU-Japan FTA, but will need to go further in order to 
prevent  a  reduction  in  pre-Brexit  standards.236  The  proposal  also  includes  the  maintenance  of 
international commitments, however it also suggests some principles and substantive provisions 
anchored in EU law without specifying these further.237 The key areas mentioned for environmental 
protection  include:  industrial  emissions,  air  quality,  water  quality  (including  issues  concerning 
nitrates), waste management, nature conservation, impact assessments and transparency and good 
governance principles. With regard to labour, the proposal mentions fundamental rights at work, 
occupational  health  and  safety,  fair  working  conditions  and  employment  standards,  labour 

230  Brexit: environment and climate change, 12th report of session 2016-2017, House of Lords, February 2017. 
231  This  duty  of  coherence  was  reaffirmed  by  the  CJEU  in  its  opinion  on  the  agreement  with  Singapore.  See:  Opinion 

C-2/15 of the Court (Full Court) of 16 May 2017.  

232  Trade and sustainable development chapters may differ in the various agreements, but in general some features are 

similar.  

233  See for example Articles 23.5 and 24.6, 23.4(3) and 24.5(3) of CETA. 
234  See for example Article 23.4(2) and article 24.5(2) of CETA. 
235  Internal  EU-27  preparatory  discussions  on  the  framework  for the  future  relationship:  'level playing  field', European 

Commission, 31 January 2018. 

236  Remarks  by  Michel  Barnier  at  Green  10:  'Is  Brexit  a  threat  to  the  future  of  the  EU's  environment?'  European 

Commission/European Parliament, 10 April 2018. 

237  Internal  EU-27  preparatory  discussions  on  the  framework  for the  future  relationship:  'level playing  field', European 

Commission, 31 January 2018. 

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inspection and access to remedy, information and consultation rights at company level, fair wages 
and rights to social security.238  

In  its  reply  to  the  House  of  Lords  in  April 2017  with  respect  to  environmental  policy,  the  UK 
government had reaffirmed its intention of respecting the UK's international commitments. The UK 
is a member of several MEA and of the Paris agreement. The reply specifies a desire to cooperate 
with the EU on matters such as air pollution and that it would consider the possibility of continued 
UK  participation  in  the  EU  Emissions  Trading  System.  The  reply  also  made  allusion  to  a  possible 
simplification after Brexit of the legislation concerning waste management, while trying to maintain 
a similar level of protection.239 The UK government statement of 6 July 2018 suggests that the UK 
would comply with an obligation to at least maintain current levels of protection with respect to 
environment, climate change, social and employment and consumer protection.240 In its July 2018 
white paper, the UK government confirmed its intention to agree with the EU to commit to a non-
regression clause on environmental and labour standards. However, such an obligation does not 
seem to be envisaged for climate change, as the UK government only mentions that 'the UK will 
maintain  [its]  high  standards  after  withdrawal'.241  The  UK  also  seeks  reciprocal  commitments  to 
cooperation  in  environmental  matters  including  in  international  fora  and  to  uphold  obligations 
derived from their International Labour Organization commitments.  

Public procurement 
The  UK  has  integrated  EU  regulations  and  directives  with  respect  to  public  procurement242  and 
according to the single market scoreboard of 2016 is one of the countries with good performance.243 
Brexit means that the UK would no longer have access to the EU market as it does today. The UK is 
currently part of the Government Procurement Agreement (GPA), a plurilateral agreement in force 
among 47 WTO members. The UK is, however, part of the GPA only as a Member of the EU and not 
in its own capacity. The UK will need therefore to accede the GPA.244 GPA market access and rules 
are  however  of  lower  standards  than  those  of  the  internal  market.  In  order  to  maintain  higher 
commitments and liberalisation, GPA+ provisions need to be negotiated within the framework of 
the EU-UK future agreement. The association agreement with Ukraine does envisage 'mutual access 
to public procurement markets on the basis of national treatment at national, regional and local 
level for public contracts and concessions in the traditional as well as in the utilities sector' when 
such  contracts  are  above  a  certain  threshold  and  within  the  EU  acquis  definition  of  public 
procurement.245 However, the chapter requires approximation of Ukrainian law to the EU rules with 
the  corresponding  role  of  the  CJEU.246  Alternatively,  the  GPA+  model  used  in  EU  FTAs  does  not 
require approximation, but market access is more limited. In CETA, the public procurement rules are 
largely inspired by the GPA, with some additions on electronic procurement. Public procurement is 
not subject to some commitments found in the services chapter, such as performance requirements 
prohibition  under  the  investment  chapter.  Moreover  public  procurement  is  carved  out  from  the 
cross-border services chapter.247 Finally, commitments are limited to the sectors listed and are only 

238  Internal  EU-27  preparatory  discussions  on  the  framework  for the  future  relationship:  'level playing  field', European 

Commission, 31 January 2018. 

239  Government  response  to  the  House  of  Lords  EU  Energy  and  Environment  Sub-Committee  report  into  Brexit, 

Environment and Climate Change Policy, 16 April 2017. 

240  Statement from the HM Government, UK Government, 6 July 2018. 
241  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
242  Public procurement rules in the EU, European Commission website. 
243  The EU single market scoreboard website. 
244  The Brexit papers: Public procurement, Bar Council Brexit Working Group, paper 19, June 2017. 
245  Article 148 and Article 149 of the Association Agreement with Ukraine. 
246  Article 148, 153 and 322 of the Association Agreement with Ukraine. 
247  In other words, it does not liberalise public procurement contracts to firms not established in the country where the 

procurement contract is offered. 

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applicable to those public entities listed by the parties and to those procurements with value above 
the threshold stipulated in the agreement.248 

Intellectual property rights (IPR), in particular geographical indications (GIs) 
The UK is also currently bound by EU law with respect to intellectual property and has to protect 
those  geographical  indications  that  are  harmonised  at  EU  level  (GIs  for  agricultural  food  and 
alcoholic beverages). Nevertheless, Brexit means that the UK will no longer be bound by this EU law. 
For the moment, the European Union (Withdrawal) Act,249 intended to provide a smooth exit for the 
UK, incorporates existing EU legislation, converting it into UK law. Thus, the UK would preserve the 
protection of EU GIs currently protected in EU law but could decide in the future to deviate from 
that position, and deregister GIs. In the meantime, in its 12 July 2018 white paper, the UK declared 
that it will establish its own GI scheme with its own set of rules.250 At the same time, the UK itself has 
some GIs,251 and according to a European Commission-commissioned study, the UK is one of the 
Member States with significant GI sales, even though they have a limited number of GIs.252 Important 
UK GIs include whisky and cheese. After Brexit, the UK will need to re-register the GIs that it wants 
to protect in the EU. The EU and the UK will have then to negotiate a chapter on IP rights, including 
the protection of GIs. In FTAs, GIs protection is given to those GIs that are listed in the agreement. 
The list of GIs protected in agreements with third countries has until now been smaller than the list 
of GIs protected internally in the EU. 

Apart from GIs, other issues may appear in the context of intellectual property. For example, with 
respect  to  patents,  the  UK  wants  to  remain  in  the  unitary  patent  system  and  the  Unified  Patent 
Court, which are restricted to Member States.253 The Unified Patent Court explicitly restrict accession 
to the Treaty to European Union Member States,254 while the unitary patent system was introduced 
on the basis of enhanced cooperation between EU Member States under article 329 TFEU.255 

Data flows 
Another  issue  in  Brexit  will  be  data  flows,  as  the  UK  will  become  a  third  country  for  EU  data 
protection legislation. Data flows from third countries are allowed if certain conditions are met, as 
specified  in  the  new  General  Data  Protection  Regulation  (GDPR).256  Transfers  of  data  to  a  third 
country may also take place if the third country is found to have adequate data protection legislation 
that  achieves  similar  standards  of  protection  and  safeguards  as  in  the  EU.257  The  third  country 
considering that it has similar data protection safeguards must request an adequacy decision from 
the Commission. The procedure is similar to the equivalence decisions described in section 4.4.2. 

248  See Chapter 19 of CETA. 
249  European Union (Withdrawal) Bill 2017-2019. 
250  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
251  C.  Horseman,  Geographical  indications:  the  Brexit  dimension,  IEG  Policy,  7  February  2018;  for  the  complete  list  of 

designation see the AGRI DOOR website. 

252  T.  Chever,  C.  Renault,  S.  Renault,  V.  Romieu,  Value  of  production  of  agricultural  products  and  foodstuffs,  wines, 

aromatised wines and spirits protected by a geographical indication (GI), AND-International, October 2012. 
253  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
254  See Article 2 and 84 of the Agreement on a Unified Patent Court, OJ C 175, 20 June 2013. 
255  See Council Decision of 10 March 2011 authorising enhanced cooperation in the area of the creation of unitary patent 
protection, OJ L 76, 22 March 2011; Regulation (EU) No 1257/2012 of the European Parliament and of the Council of 
17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection, OJ L 
361, 31 December 2012. 

256  Article 44 to 50 of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the 
protection of natural persons with regard to the processing of personal data and on the free movement of such data, 
and repealing Directive 95/46/EC (General Data Protection Regulation), OJ L 119, 4 May 2016. 

257  Article 45 of Regulation (EU) 2016/679. 

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Adequacy decision requires first an assessment by the Commission. The GDPR258 specifies some of 
the elements that need to be taken into account when assessing the adequate level of protection 
in  detail.  The  list  is  non-exhaustive  and  other  elements  may  be  taken  into  account,  but  those 
elements contained in the GDPR must be taken into account. Within those elements, we find that 
attention  must  be  paid  to  safeguards  for  data  protection  in  the framework of  transfer of data  to 
authorities of third countries for law enforcement. After the assessment is issued, the Commission 
may decide by means of an implementing act to issue an adequacy decision, which will recognise 
that  the  third  country or  international  organisation ensures  an  adequate  level  of  protection. The 
implementing  act  can  also  specify  territorial  and  sectoral  application.  The  implementing  act  is 
adopted  following  the  examination  procedure  set  out  in  Article 93(2)  of  the GDPR,  which makes 
reference to Article 5 of Regulation (EU) No 182/2011. The GDPR specifies that a periodic review of 
the assessment must be carried out at least every four years to verify that safeguards are still in place. 
As explained in an EPRS in-depth analysis on the Privacy Shield,259 because of triangular flows, a third 
country that has obtained an adequacy decision for data flows with the EU may feel compelled to 
conclude a similar data protection agreement with the USA to ensure a similar level of protection of 
data as in the EU (see the example of Switzerland).260  

The  UK  had  instead  proposed  a  'bespoke  arrangement  to  reflect  the  UK's  exceptionally  high 
standards of data protection', which would apply both to data exchanged for commercial purposes 
and to data exchanged for law enforcement purposes. The UK considered that a new agreement 
would  give more legal  certainty  than  an  adequacy decision,  in  so far  as  the Commission  has  the 
discretion to withdraw the adequacy decision (as for equivalence decisions).261 Nevertheless, in its 
white  paper  of  12  July  2018,  the  UK  government  mentions  that  'it  would  be  ready  to  begin 
preliminary discussions on an adequacy assessment so that a data protection agreement is in place 
by the end of the implementation period at the latest', in order to provide continuity and stability 
of data flows. The UK further requested a framework that would include 'a transparent framework 
to  facilitate  dialogue,  minimise  risk  of  disruption  to  data  flows  and  support  stable  relationship 
between the UK and the EU to protect data (...)'. The arrangement should continue to provide for EU 
data protection authorities cooperation with the Information Commissioners’ Office (ICO), the UK 
data protection authority.262 In May 2018, the EU's chief negotiator, Michel Barnier, explicitly stated 
that after Brexit the UK data protection authority would no longer be a member of the European 
Data Protection Board and of the one-stop-shop created by the GDPR, as these are restricted to EU 
Member  States’  authorities.263  The  UK  underlined264  that  its  proposal  on  regulatory  cooperation 
between  data  protection  authorities  is  still  in  line  with  the  Commission's  intention  to  'develop 
international  cooperation  mechanisms  with  key  international  partners  to  facilitate  effective 
enforcement', as stated in a Commission communication.265 

258  Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural 
persons  with  regard  to  the  processing  of  personal  data  and  on  the  free  movement  of  such  data,  and  repealing 
Directive 95/46/EC (General Data Protection Regulation), OJ L 119, 4 May 2016. 

259  S. Monteleone and L. Puccio, From Safe Harbour to Privacy Shield: State of play of the new EU-US data transfer rule, 

EPRS, July 2018. 

260  Swiss-US Privacy Shield: new framework for the transfer of data to the USA, press release, Federal Data Protection and 

Information Commissioner. 

261  Technical note: benefits of a new data protection agreement, UK Government, 7 June 2018.  
262  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
263  Speech by  Michel  Barnier  at  the  28th  Congress  of the  International  Federation  for  European  Law  (FIDE),  European 

Commission, 26 May 2018. 

264  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
265  European  Commission,  Exchanging  and  Protecting  Personal  Data  in  a  Globalised  World,  COM(2017) 7 final, 

10 January 2017. 

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4.5. Trade and economic impact of Brexit 

Brexit will bring readjustments to the economic relations between the EU and the UK (less economic 
integration). The table below summarises the readjustment that will take place when moving from 
EU membership to an FTA. 

Table 5 – Overview of some of the trade consequences of Brexit by trade arrangement 

Current 
situation:  EU 
Membership 
Free 
movement 

no 

CU  with  Common 
Commercial  Policy 
(CCP): 'perfect' CU 
Duty  free  (could  be 
to 
subject 
exceptions) 
No 

Mutual 
recognition 
principle; 
harmonisation 

internal 
free 

No 
border, 
circulation 

of 

Could be subject to 
alignment 
or 
sectoral 
negotiations 
MRAs 
Border to verify TBT 
and SPS compliance 
if 
standards  not 
aligned 

Goods 
internal 
circulation 
Preferential 
rules of origin 

Standards 

Customs 
arrangement 
internal 
border 

Services  and 
investments 

Free 
movement  of 
services 
and 
investments 

Subject 
to 
on 
reservations 
both  market  access 
and 
national 
treatment 

CU  without  CCP: 
'imperfect' CU 

Free Trade Area 

of 

Duty  free  (could  be 
to 
subject 
exceptions 
Could  be  an  option 
trade 
avoid 
to 
deflection 
Could  be  subject  to 
alignment 
or 
sectoral 
negotiations 
MRAs 
Border to verify TBT 
and SPS compliance 
if 
standards  not 
aligned;  border  to 
trade 
verify 
deflection  (via  rules 
of origin) 
Subject 
to 
on 
reservations 
both  market  access 
and 
national 
treatment 

free; 

Duty 
sectoral 
exceptions  
Yes 

Sectoral 
negotiations  of 
MRAs 

Border  needed 
for 
control  of 
preferential  rules 
of origin; TBT and 
SPS  verification 
compliance 

Subject 
to 
reservations  on 
market 
both 
access 
and 
national 
treatment 

Source:  G.  Fassina,  P.  Perchoc,  L.  Puccio,  Customs  unions  and  FTAs:  debate  with  respect  to EU  neighbours, 
EPRS, European Parliament, November 2017. 

Those  readjustments  will  imply  economic  costs.  Most  econometric  analyses  find  Brexit  results  in 
losses, since some non-tariff barriers are introduced in all of the alternatives considered so far, and 
therefore even optimum scenarios still represent less integration than the status quo.  

A  UK  HM  Treasury  analysis266  looks  at  three  alternative  scenarios.  The  first  corresponds  to 
membership  of  the  EEA  (an  FTA  plus  access  to  the  internal  market)  and  is  expected  to  bring  a 
decrease  in  trade  volumes  of  -9 %  after  15 years.  The  second  refers  to  a  negotiated  bilateral 
agreement  (using  the  models  of  Switzerland,  Turkey  and  Canada)  and  is  expected  to  result  in 
changes, according to the study, of between -14 and -19 % in total trade volumes. Finally, the third 
relates to WTO membership with no preferential treatment, and bringing changes of -17 and -24 % 
in total trade volumes. The HM Treasury study also quotes a variety of external studies conducted 

266  The long-term economic impact of EU membership and the alternatives, HM Treasury, UK Government, April 2016. 

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mainly by private banks and all with varying negative results ranging from a decrease in GDP of -1 % 
over 1 year to -8 % over 5 years.  

An LSE study, conducted in 2014, considers an optimistic version with internal market access and a 
pessimistic  scenario  with  only  WTO  membership.  They  find  results  between  -1.13 %  for  the 
optimistic scenario and -3.09 % for the pessimistic scenario.267  

A World Bank study268 assessed the effect of EU Membership on the United Kingdom as well as the 
impact  of  different  post-Brexit  scenarios.  The  study,  using  data  from  1995-2011,  found  that  EU 
membership  (and  participation  in  the  EU  common  commercial  policy)  had  a  particularly  strong 
effect on UK trade, almost doubling UK service trade and increasing both the country's backward 
and forward participation in global value chains by 30 %. Evaluating the exit scenarios, the study 
shows that trade between the UK and the EU would decline under all scenarios ranging from -6 % 
to -28 % for trade in value added; the less deep the agreement on the future relations, the more the 
trade in value added is expected to decrease. According to the study, exiting EU FTAs with third 
partners would decrease UK exports to these countries by 17 %. Obviously, renegotiation with these 
countries and with other important trade partners, such as the USA, Canada and China, could bring 
some readjustments.  

Another study269 analyses the effects of Brexit on the EU and its Member States (with a particular 
focus on Germany). The study finds that in a 'hard' Brexit scenario (WTO rules only) the UK would 
lose 1.4 % of GDP per capita, while the EU-27 on average would lose 0.25 %. The Netherlands would 
experience a loss of about a third of that of the UK, while Germany, France and Spain would lose 
respectively  0.23 %,  0.17 %  and  0.14 %.  Losses  would  be  particularly  pronounced  for  Ireland, 
Luxembourg and Malta, who experience greater losses than the UK. Under a DCFTA, the UK's real 
GDP per capita is expected to decrease by 0.6 % while the EU-27 average would decrease by 0.11 %. 
Luxembourg is found to significantly reduce its losses due to smaller frictions in services,270 while 
Ireland  and  Malta  decrease  their  losses  but  maintain  higher  losses  than  the  UK.  The  study  also 
analyses the Brexit effect on EU-27 and UK real gross income when accounting for Brexit budgetary 
losses. The EU-27 would lose €29.6 billion of real gross income per year in the WTO scenario, while 
the cost for the UK would be €30.2 billion; these results decrease to €13.49 billion for the EU-27 and 
€12.66 billion for the UK under the FTA scenario. The study also assessed the impact of Brexit on 
exports from different sectors in the UK and Germany.  

Finally, an economic analysis for the EP271 looks at the impact of Brexit on the UK and EU Member 
States.  The  literature  reviewed  by  the  study  suggests  that  there  will  be  losses  on  both  sides, 
although  they  could  be  insignificant  when  considering  the  annual  impact  on  the  overall  EU-27 
economy, while the loss would be more substantial for the UK and for certain EU Member States. An 
EP  Policy  Department  study  provides  a  graph  showing  the  absolute  losses  observed  in  different 
econometric  analysis  for  the  UK  and  the  EU27  under  optimistic  (Opt.)  and  pessimistic  (Pes.) 
scenarios. When reading the graph, one should be aware that those different econometric studies 

267  G. Ottaviano, J. Paulo Pessoa, T. Sampson, The costs and benefits of leaving the EU, May 2014. 
268  A. Mulabdic, A. Osnago, M. Ruta, Deep integration and EU-UK Trade Relations, Policy Research Working Paper, World 

Bank, January 2017. 

269  G. Felbermayr, C. Fuest, J. Grschla and D. Sthölker, Economic effects of Brexit on the European Economy, EconPol, Policy 

Report, November 2017. 

270  This  finding  could  be  linked  to  the  fact  that  Luxembourg  introduces  very  few  and  restricted  reservations  to 

commitments liberalising trade in services in EU FTAs.  

271  An Assessment of the Economic Impact of Brexit on the EU-27, Policy Department for Economic and Scientific Policy, 

European Parliament, 2017. 

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may have different definitions of what the optimistic/pessimistic scenarios272 are, as well as rely on 
different models (different assumptions and or econometric models).  

Figure 11 – Absolute losses for UK and EU(27) GDP in different scenarios (optimistic and 
pessimistic) as reported in different economic studies (in billion euros) 

Legend:  Ott.  Ottaviano/LSE;  CPB:  Roja-Romagosa/Central  Planning  Bureau,  NL;  Booth:  Booth/Open  Europe; 
OECD. Source: An Assessment of the Economic Impact of Brexit on the EU-27, Policy Department for Economic 
and Scientific Policy, European Parliament, 2017. 

272  The study reports the different definitions of scenarios in table 8, p. 30. See: An Assessment of the Economic Impact of 

Brexit on the EU-27, Policy Department for Economic and Scientific Policy, European Parliament, 2017. 

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5. Future EU-UK cooperation in justice and home affairs 

5.1. UK's special status in the area of freedom, security and justice 

Over the past decades, the EU has built up significant cooperation in the area of criminal justice and 
law  enforcement  cooperation,  going  further  than  any  other  international  body.  In  particular, 
following the Treaty of Amsterdam, which introduced the idea of an 'area of freedom, security and 
justice' (AFSJ), the EU stepped up the adoption of common instruments based on the principle of 
mutual recognition in criminal matters (e.g. one of the most notable achievements was the 2002 
Framework Decision on the European Arrest Warrant, allowing for the mutual recognition between 
Member States of judicial extradition decisions). Furthermore, with the Lisbon Treaty, the area of 
police  and  judicial  cooperation  in  criminal  matters  relinquished  its  intergovernmental  character 
and, since 1 December 2014, following a transition period of five years, has become subject to the 
community method (including the full competence of the CJEU) and underpinned by the EU Charter 
of Fundamental Rights.273  

Box 12 – The AFSJ and the Treaty of Lisbon reforms 
The Treaty of Lisbon divides the themes related to the area of freedom, security and justice into four fields, 
reunited under Title V of the Treaty on the Functioning of the European Union (TFEU): policies related to 
border control, asylum and immigration; judicial cooperation in civil matters; judicial cooperation in 
criminal matters; police cooperation.274  

Matters relating to criminal judicial cooperation  and police cooperation  were previously covered by the 
third pillar of the EU, governed by intergovernmental cooperation. Under the framework of the third pillar, 
EU institutions could not adopt regulations or directives, as opposed to the community method under the 
first pillar. The Treaty of Lisbon ends this distinction, enabling the EU to intervene in all matters related to 
the AFSJ. Qualified majority vote (QMV) in the Council and the ordinary legislative procedure apply now to 
most issues in the criminal law and police cooperation area. However the Treaty of Lisbon preserves the 
unanimity requirement in the Council – and the special legislative procedure – for: the establishment of the 
European Public Prosecutor (Article 86(1) TFEU); police cooperation (Article 87(3) TFEU); and cross-border 
operations  of  the  competent  law  enforcement  and  judicial  authorities  (Article 89 TFEU).  Unanimity  also 
applies to possible extensions of competence or changes to decision-making rules.275 

The UK has enjoyed special status in the EU AFSJ.276 While the UK has significant expertise in this 
area, the country, wary of further integration in a field considered a mark of national sovereignty, 
has negotiated several opt-outs from AFSJ measures. For example, the UK decided not to participate 
in  the  Schengen  border-free  area  set  up  intergovernmentally  in  1985;  however,  since  the  1999 
Treaty of Amsterdam brought the Schengen acquis within the EU legal order, it has negotiated an 
'opt-in'  system,  whereby,  subject  to  unanimous  approval  of  the  other  Schengen  states,  it  can 
participate in parts of that acquis (e.g. the Schengen rules concerning irregular immigration, policing 
and criminal law), and in the policing and criminal law part of the Schengen Information System (SIS, 
and the second generation, SIS II) database. 277  

The UK has reinforced its special status with the adoption of the Lisbon Treaty, by negotiating two 
types of opt-outs. 

273  A. Weyembergh, Consequences of Brexit for European Union criminal law, New Journal of European Criminal Law, 

2017, Vol. 8(3), pp. 284-299. 

274  Summaries of EU legislation: Area of freedom, security and justice, Eur-Lex, September 2015. 
275  S. Peers, EU justice and home affairs law, Vol. I and II, Oxford University Press, 2016. 
276  The EU-UK relationship beyond Brexit: options for Police Cooperation and Judicial Cooperation in Criminal Matters, 

Policy Department for Citizens' Rights and Constitutional Affairs, European Parliament, July 2018.  

277  S. Peers, UK and Irish opt-outs from EU Justice and Home Affairs (JHA) law, Statewatch Analysis no 4, 26 June 2009.  

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Firstly, with regard to EU measures adopted before the entry into force of the Lisbon Treaty, the 
UK secured a block opt-out in Protocol 36. Accordingly, up until six months before 1 December 2014 
at the latest, the UK could notify the Council of its decision to opt-out of all instruments adopted in 
this area under the intergovernmental third pillar; at the same time, the Protocol however allowed 
the UK to opt back in to the instruments of its choice. The UK used this possibility and decided to 
opt back into 35 measures (out of more than 130), among which were the European Arrest Warrant 
(EAW), the law enforcement part of the SIS and SIS II, the measures establishing Europol (the EU's 
law  enforcement  cooperation  body),  Eurojust  (the EU's  judicial  cooperation body),  the  European 
Judicial Network (EJN, a network composed of contact points designated by each Member States' 
central judicial authorities), and the joint investigation teams (JITs).  

Secondly, Protocol 21 on the position of the UK and Ireland with regard to the AFSJ278 allows these 
two countries to exercise an opt-out on any new instruments adopted since 1 December 2009 (after 
the entry into force of the Lisbon Treaty), with the possibility of opting in either before or after 
the  adoption  of  the  specific  act.  In  this  context,  the  UK  has  opted  in  to  mutual  recognition 
instruments  such  as  the  directives  on  the  European  Protection  Order  and  the  European 
Investigation  Order;  certain  directives  approximating  substantive  criminal  law  (on  the  sexual 
exploitation of children, on trafficking of human beings, on cybercrime); directives approximating 
procedural law (victims' rights, suspects' right to interpretation and translation, as well as their right 
to information), but refused to participate in other procedural law directives (such as the directive 
on access to a lawyer).279 The UK government also decided to opt in to the new Europol Regulation 
(in  force  since  1  May  2017)  and  to  participate  in  the  adoption  of  the  Regulation  on  the  mutual 
recognition of freezing and confiscation orders. In 2016, its request to re-join measures related to 
the Prüm system of storage and exchange of personal data (DNA, vehicle registration, fingerprints) 
was also approved by the EU.280 The box below presents an overview of the role of the EU agencies 
and databases to which the UK participates in the area of justice and home affairs.  

Box 13 – The EU Justice and Home Affairs agencies281 
Europol is  the EU agency  that supports law enforcement authorities from  the EU Member States  in  the 
fight against terrorism, cybercrime, drug trafficking or other forms of serious crimes. It acts as a support 
centre for law enforcement operations; a hub for information and data exchange on criminal activities; and 
as centre for law enforcement expertise. 

Eurojust  is  the  body  that  supports  the  coordination  of  investigations  and  prosecutions  between  the 
judicial authorities in the EU Member States. With around 2 700 cases referred to Eurojust in 2017, the body 
provides a platform for cooperation across borders, including through support in the implementation of 
the EAW, the European Investigation Order, and asset freezing orders, as well as through the creation of 
Joint Investigation Teams (JITs). The JITs' multinational teams facilitate the coordination of investigations 
and prosecutions across multiple jurisdictions.282 

EU databases and systems for the exchange of information 283 

The Europol Information System (containing data on serious international crime and crime organisations, 
suspected/convicted persons and their offences etc.) can be accessed by Europol members.  

278  It also covers judicial cooperation in civil matters.  
279  A. Weyembergh, op. cit.  
280  House  of  Lords,  European  Union  Committee,  Brexit:  future  UK-EU  security  and  police  cooperation,  HL  Paper77, 

16 December 2016.  

281  N. von Ordanza, C. Borrett, Brexit and EU agencies, SWP Working Paper, No. 2, April 2018. 
282  Please see Eurojust, Legal framework and Successful results from intensified judicial cooperation in 2017, press release, 

26 April 2018.  

283  C.  Dumbrava,  European  information  systems  in  the  area  of  justice  and  home  affairs:  An  overview,  EPRS,  European 

Parliament, May 2017. 

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SIENA (Secure information exchange network application) is Europol's system for exchanging sensitive and 
restricted information.  

Schengen Information System (SIS) II is a database for sharing real-time alerts between law enforcement 
authorities  related  to  individuals  subject  to  a  EAW,  missing  persons,  witnesses  or  other  persons  due  to 
appear before judicial authorities, people or vehicles requiring checks or surveillance, objects that require 
seizure or are needed as evidence. 

European Criminal Records Information System (ECRIS)  allows  the  exchange  of  data  on  the  criminal 
records of EU citizens, either on request or every time an EU Member State's court convicts a national of 
another  Member  State.  Around  288 000  requests  per  year  are  sent  through  ECRIS  and  the  system  is 
currently  being  expanded  to  include  information  on  non-EU  citizens.  New  legislative  proposals  on 
extending ECRIS to information on third country nationals and stateless persons are in the final stages of 
adoption, to which the UK decided to opt in in November 2017.284  

The Prüm decisions 285 allow searches of national databases on vehicle registration, DNA and fingerprints. 
As mentioned the UK asked to participate in Prüm in 2016, and this became operational in 2017.  

The EU-wide Passenger Name Records (PNR) system agreed in 2016 allows Passenger Information Units 
set up by each EU Member State to share airline passenger data with law enforcement authorities across 
the EU. 

Eurodac is an EU asylum fingerprint database, which allows EU Member States to determine which Member 
State is responsible for examining an asylum application made in the EU. Its primary objective is to help 
implement the Dublin Regulation.286 Law enforcement officials in the Member States (as well as Europol) 
may  also  have  access.  In  the  context  of  the  reform  of  the  Common  European  Asylum  System,  the 
Commission proposed to review the Eurodac Regulation. The proposed changes provide for the possibility 
for Member States to store and search data belonging to third-country nationals or stateless persons who 
are not applicants for international protection and found irregularly staying in the EU, so that they can be 
identified for return and readmission purposes. It will also allow Member States to store more personal data 
in Eurodac, including facial images. 287 On 17 November 2016, the UK expressed its desire to take part in the 
adoption and application of the recast Eurodac Regulation, regarding which the European Parliament and 
the Council reached a provisional agreement in June 2018.288 

5.2. UK and EU views on future JHA cooperation  

While  both  the  EU  and  the  UK  have  expressed  their  willingness  to  enter  a  future  partnership  to 
combat organised crime and terrorism,289 the tension between the special status the UK seeks and 
the  limits  imposed  by  EU  legislation  and  existing  third-country  models  frames  the  current 
discussions.  

284  Improvement of European Criminal Records Information System (ECRIS), Legislative Train, European Parliament.  
285  The Convention  on  the  stepping-up  of  cross-border  cooperation, particularly  in combating  terrorism, cross-border 
crime  and  illegal  migration,  also  called  the  'Prüm  Convention',  was  agreed  by  seven  European  countries  on 
27 May 2005.  On  23 June 2008,  important  parts  of  the  Convention  were  transformed  into  EU  law  when  Council 
Decision  2008/615/JHA  was  adopted.  At  the  same  time,  the  Council  adopted  Decision  2008/616/JHA  on  the 
implementation of Decision 2008/615/JHA6 (together, both Decisions are referred to as 'the two Prüm Decisions'). 
286  Regulation (EU) No 604/2013 of the European Parliament and of the Council of 26 June 2013 establishing the criteria 
and  mechanisms  for  determining  the  Member  State  responsible  for  examining  an  application  for  international 
protection  lodged  in  one  of  the  Member  States  by  a  third-country  national  or  a  stateless  person,  OJ L 180, 
29 June 2013. 

287  Recast Eurodac regulation, Legislative Train, European Parliament, 20 May 2018. See also 2016/0132(COD), European 

Parliament. 

288  Recast Eurodac regulation, Legislative Train, European Parliament, as of 20 July 2018.  
289  H. Deane, A. Menon, Post-Brexit law enforcement cooperation: negotiations and future options, The UK in a Changing 

Europe, November 2017.  

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5.2.1. The UK position 
At the Munich Security Conference in February 2018, the UK Prime Minister reiterated the security 
interests shared between the UK and the other EU Member States and her desire that, 'through a 
deep  and  special  partnership',  the  EU  and  the  UK  would  be  able  to  retain  the  same  level  of 
cooperation and go even further in addressing evolving threats. The Prime Minister recalled the UK's 
significant contribution in this area and argued that no existing EU partnership with third countries 
could  capture  'the  full  depth  and  breadth'  of  the  current  cooperation  between  the  UK  and  EU. 
Therefore, based on the precedent of the EU's comprehensive agreements with third countries in 
other areas such as trade, the EU and the UK could consider a comprehensive, strategic agreement 
in the area of internal security. The proposed UK-EU security treaty would preserve both the EU and 
UK's operational capabilities, but at the same time be respectful of the sovereignty of the UK and EU 
legal orders. However, the Prime Minister declared that 'when participating in EU agencies, the UK 
will respect the remit of the European Court of Justice'. The Prime Minister also mentioned, among 
the important operational capabilities to be maintained: the EAW, mutual legal assistance including 
the  exchange  of  evidence  in  criminal  investigations,  and  the  exchange  and  processing  of  data 
through  the  SIS II  and  EU PNR.  An  independent  mechanism  for  dispute  resolution  would  be 
necessary (which would actually apply to all areas of the UK-EU future partnership). Finally, the UK 
and the EU would need to agree to comprehensive data protection arrangements (to cover both 
data exchanged for law enforcement purposes and commercial data flows), which should rely on a 
'bespoke arrangement to reflect the UK's exceptionally high standards of data protection' and which 
would ensure a role for the UK Information Commissioner's Office.290  

In  September  2017,  a  UK  government  position  paper  on  the  future  partnership  on  security,  law 
enforcement and criminal justice291 set out the UK's objectives for future cooperation in more detail. 
Another  UK  government  paper  published  in  May 2018  on  the  framework  for  the  EU-UK  security 
partnership,292  further  defines  the  model  and  scope  of  the  proposed  internal  security  treaty. 
Cooperation with the EU would continue on the basis of existing EU measures (over 40 measures in 
which the UK currently participates) and would cover three areas: 

  practical  operational  cooperation:  preserving  the  measures  that  are  essential  for 
effective  cross-border  investigations,  such  as  the  EAW,  the  European  Investigation 
Order or the Prisoner Transfer Framework Decision – most of which are also important 
for police cooperation between Ireland and the UK, including Northern Ireland. Another 
instrument mentioned are the Joint Investigation Teams. 

  multilateral  cooperation  through  EU  agencies:  protecting  the  capabilities  and  the 

cooperation underpinning the UK's participation in Europol and Eurojust. 

  data-driven law enforcement:  preserving  the  tools  that  allow  for  secure  and  timely 

exchange of information, that is, the existing databases, such as SIS II or ECRIS. 

The UK document recognises that EU cooperation under some of the instruments mentioned above 
is not open to third countries. However, it insists that the future EU-UK partnership should ensure 
that these capabilities are maintained, in order to prevent a 'patchwork of cooperation' that would 
result in operational gaps for both the UK and EU. Importantly, the UK makes the case for a dynamic 
relationship  that  would  allow,  'when  mutually  beneficial':  1) the  UK  to  continue  to  cooperate  on 
future versions of the current tools; and 2) for the incorporation in the EU-UK security treaty of new 
measures and tools. Furthermore, the UK proposes a strategic dialogue with the EU, permitting the 
exchange  of  expertise  and  experience  in  this  field.  Finally,  institutionalised  arrangements  are 
proposed,  including  regular  EU-UK  discussions  on  priorities  in  JHA;  a  reciprocal  secondment 

290  PM speech at Munich Security Conference, UK Government, 17 February 2018. See also, Framework for the UK-EU 

partnership on Data Protection, UK Government, May 2018. 

291  Security, law enforcement and criminal justice: a future partnership paper, UK Government, 18 September 2017.  
292  Framework for the UK-EU Security Partnership, UK Government, May 2018.  

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programme to EU and UK institutions and agencies; and a framework for sharing and protecting 
classified and sensitive information with the EU. The entire internal security partnership would be 
underpinned by strong governance provisions (based on a dispute resolution mechanism applying 
to all areas of the future partnership), as well as by a parallel (bespoke) EU-UK agreement on the 
exchange and protection of personal data. 

Another  UK  government  technical  note  from  May  2018,293  points  to  various  precedents  for  the 
participation of third countries to the EU activities in this field that could provide a departure point 
for discussions, even if the UK considers that most of these cooperation models fall short of what 
the  EU-UK  agreement  should  achieve.  In  particular,  the  UK  underlined  the  close  and  dynamic 
cooperation arrangements the EU has with two non-EU Schengen countries, Norway and Iceland, 
which  do  not  involve  direct  jurisdiction  of  the  CJEU  –  currently  one  of  the  UK's  red  lines. 
Nevertheless, it should be noted that these two countries need to follow the interpretation of CJEU 
case-law. 

The white paper published on 12 July 2018 confirms the previous positions of the UK government, 
while proposing that a number of wider security issues (asylum and illegal migration; cyber security; 
counter-terrorism  and  countering  violent  extremism;  civil  protection;  and  health  security)  be 
addressed  as  part  of  the  future  security  partnership.  It  reiterates  the  UK  objective  of  a  dynamic 
relationship with the EU that allows for new areas for cooperation to be added as necessary. 294 

5.2.2. The EU position 
The  EU-27  have  repeatedly  expressed  readiness  to  cooperate  with  the  UK  in  combating 
international crime and terrorism. The European Council guidelines of March 2018 mention police 
and judicial cooperation in criminal matters as an important element of the future relationship, in 
light of geographical proximity and shared threats. The future partnership should cover 'effective 
exchanges  of  information,  support  for  operational  cooperation  between  law  enforcement 
authorities and judicial cooperation in criminal matters', while taking the future status of the UK as 
a  non-Schengen  third  country  into  account.  Safeguards  for  effective  enforcement  and  dispute 
settlement mechanisms and full respect of fundamental rights should be included. 

Declarations by the European Commission President and the chief Brexit negotiator also point in 
this  direction:  the  future  EU-UK  partnership is  essential,  and  working  together  is  the only  way  to 
tackle crime and terrorism. However, the EU is keen to avoid being seen as favouring the UK and 
discriminating against other third countries.295 

For internal  preparatory  discussions,  the  European Commission  presented  an  initial  vision of  the 
future  partnership  in  this  area  in  January  2018.296  Firstly,  the  core  principles  established  by  the 
European  Council  should  be  respected  (the  autonomy  of  the  EU's  decision-making  process;  a 
balance  of  rights  and  obligations  and  non-members  cannot  have  the  same  rights  as  a  Member 
State). Moreover, a series of factors determining the degree of cooperation are mentioned, including 
the existence of a common framework of obligations with third countries (e.g. Schengen), the risk 
of  upsetting  relations  with  other  countries,  respect  for  fundamental  rights  and  equivalent  data 
protection standards, and the strength of enforcement and dispute settlement mechanisms. As the 
UK  does  not  participate  in  Schengen,  the  Commission  takes  the  view  that  the  model  for 
cooperating with non-Schengen third countries should apply, based on three pillars: exchange 
of security relevant data; support for operational cooperation and judicial cooperation in criminal 

293  Technical note on security, law enforcement and criminal justice, UK Government, 24 May 2018. 
294  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
295  H. F. Carrapico, The Future UK-EU Internal Security Agreement: political dilemmas, legal challenges and unanswered 

questions, Europe Matters Blog. 

296  European Commission, Slides on Police & judicial cooperation in criminal matters, 24 January 2018. 

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matters. On this basis, the Commission sets out the possibilities and limits of future cooperation with 
the UK in the framework of Europol, Eurojust, the mutual recognition instruments (such as the EAW), 
or passenger name records. 

In a subsequent document published in June 2018, the Commission completed its initial position 
with several elements, also in response to the UK's proposals. Firstly, the Commission dampens the 
UK's expectations for a security treaty, taking the view that the form of the future agreement on 
internal security will have to be defined at the end of the negotiations, in function of the content 
agreed.  Furthermore,  the  dynamic  relationship  advocated  by  the  UK  is  not  taken  up  by  the 
Commission: EU-27 cooperation with the UK on new JHA measures may be possible, but only under 
the  conditions  set  out  for  third  countries.  The  Commission  thus  rejects  any  incorporation 
mechanism, as no third country has the possibility to join (or opt-in to) EU JHA measures. Secondly, 
the Commission sets out the EU approach regarding the safeguards that should be included in the 
future EU-UK agreement (on fundamental rights, data protection and dispute settlement). Thirdly, 
as regards the building blocks of the agreement, measures against money laundering and terrorism 
financing  are  added  to  the  areas  of  cooperation  to  be  covered  by  the  agreement.  Finally,  the 
Commission clarifies that future operational cooperation along the lines of the UK's proposals – that 
is, cooperating on the basis of existing EU measures (similarly to an EU Member State), but without 
the relevant institutional framework relying on CJEU jurisdiction and rules on fundamental rights 
and data protection – would lead to a situation where the UK would have the same rights as EU 
Member States, but different constraints. This would pose a risk to the integrity of the EU's AFSJ, 
including the proper functioning of the Schengen area, and would undermine the mutual trust that 
underpins  law  enforcement  and  judicial  cooperation  among  EU  Member  States  and  that  cannot 
exist outside the EU institutional framework.297  

5.3. Preserving  police  and 
matters: Negotiating issues and challenges 

judicial  cooperation 

in  criminal 

Experts consider that the special, 'pick and choose', status of the UK in the area of EU criminal justice 
cooperation has already become a challenge to the coherence and legal certainty of the EU's single 
area of freedom, security and justice, as well as for the protection of fundamental rights in the EU.298 
In this context, Brexit might offer opportunities for the EU to develop closer cooperation between 
the  remaining  Member  States  and  push  forward  new  policy  objectives  in  the  AFSJ,  once  the  UK 
leaves the EU.299 On the other hand, Brexit will come with risks and losses to the EU, as the UK has 
provided  considerable  expertise  and  experience  in  this  field.  The  British  introduced  the  idea  of 
mutual recognition in criminal matters in the EU; the UK has been one of the biggest contributors 
to  Europol  of  data,  information  and  expertise;  and  for  almost  ten  years  Europol,  led  by  a  British 
national,  has  helped  shape  the  current  role  of  the  agency.300  Furthermore,  Brexit  will  lead  to  a 
reduction in the geographical area covered by EU cooperation in criminal matters and a loss for the 
EU in terms of benefitting from the UK's privileged partnerships with third countries,301 such as the 
United  States  or  its  other  partners  within  the  'Five  Eyes'  intelligence  alliance.  The  UK  has  also 
considerably benefitted from the EU JHA instruments, as one of their largest users, e.g. the ECRIS or 
the JITs. 

297  Police and judicial cooperation in criminal matters (slides), European Commission, 18 June 2018.  
298  V. Mitsilegas, The uneasy relationship between the UK and European criminal law: from opt-outs to Brexit, Criminal 

Law Review, 8, 2016, 519-538.  

299  The  implications  of  the  UK's  withdrawal  from  the  EU  for  the  AFSJ,  Policy  Department  for  Citizens'  Rights  and 

Constitutional Affairs, European Parliament, December 2017.  

300  A. Weyembergh, op cit. 
301  A. Weyembergh, op cit. 

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A European Parliament study has identified the areas within the AFSJ field on which Brexit would 
have the biggest impact.302 The area of immigration and asylum is assessed as not significantly 
impacted by the UK's departure: the UK participates in a limited number of related measures – e.g. 
it opted out of the second phase of the Common European Asylum System, with the exception of 
Eurodac and the Dublin III regulation. When it leaves the EU, the UK will lose access to Eurodac, as 
the UK will be outside the Dublin system. 

In the field of judicial cooperation, whereas a minimal impact of Brexit is forecast as regards the 
common  rules  of  substantive  criminal  law  (the  UK  intends  to  transpose  into  domestic  law  all 
measures  it  has  already  implemented  through  the  European  Union  (Withdrawal)  Act),303  the 
operation of mutual recognition instruments in cases involving the UK would be largely impacted 
(most importantly, the EAW, but also those instruments allowing for the exchange of evidence or 
the freezing and confiscation of assets across borders).304 Cooperation under the Joint Investigation 
Teams will also be impacted once the UK becomes a third country. 

In law enforcement, the exchange of data would suffer enormously from Brexit. As a third country, 
the UK would lose full access rights to a series of instruments set up in this area, such as the various 
Europol databases, the SIS II, the exchange of criminal records for third-country nationals (ECRIS), of 
passenger  name  records  (PNR)  across  the  EU,  and  the  Prüm  decisions  (there  will  be  no 
interconnection of databases).305  

5.3.1. EU JHA agencies and the issue of post-Brexit UK participation 

Europol 
Europol cooperates with third countries and international organisations (e.g. Interpol) or other EU 
agencies. Europol has concluded two types of cooperation agreements with these external partners: 
strategic  and  operational.  While  strategic  agreements  are  limited  to  the  exchange  of  general 
intelligence, as well as strategic and technical information (concluded with China, Russia, Turkey and 
with  a  series  of  agencies),  operational  agreements  allow  for  closer  cooperation  through  the 
exchange of information, including personal data (with 17 third countries, including the USA, as well 
as with Eurojust, Frontex and Interpol). Furthermore, liaison officers from 13 partner countries are 
hosted  at  Europol.  With  the  entry  into  force  of  the  current  Europol  regulation  in  May 2017,306 
cooperation  agreements  will  no  longer  be  concluded  by  Europol,  but  by  the  EU,  following  the 
international  agreements  procedure  set  out  in  Article 218 TFEU,  thereby  thus  involving  the 
Commission, the European Parliament and the CJEU.307 

The UK expressed a preference for a bespoke relationship with the agency as part of EU-UK future 
cooperation, going further than the existing operational agreements, and followed with interest the 
agreement concluded by Denmark in 2017 with respect to participation in Europol (see box 14). In 
this context, the EU nevertheless made clear that the agreement with Denmark fell short of the level 
of cooperation it enjoyed previously as a full Europol member, and was conditional on its continued 

302  The  implications  of  the  UK's  withdrawal  from  the  EU  for  the  AFSJ,  Policy  Department  for  Citizens'  Rights  and 

Constitutional Affairs, European Parliament, December 2017. 

303  The European Union (Withdrawal) Bill became an Act after receiving Royal Assent on 26 June 2018. 
304  Other such instruments are: European Investigation Order, the European Protection Order, the mutual recognition of 

financial penalties, of custodial sentences, of supervision measures etc.  

305  For an overview of existing EU databases in this field please see: C. Dumbrava, European information systems in the 

area of justice and home affairs: An overview, EPRS, European Parliament, May 2017.  

306  Regulation  (EU)  2016/794  of  the  European  Parliament  and  of  the  Council  of  11  May  2016  on  the  European  Union 
Agency  for  Law  Enforcement Cooperation  (Europol)  and replacing  and repealing  Council  Decisions  2009/371/JHA, 
2009/934/JHA, 2009/935/JHA, 2009/936/JHA and 2009/968/JHA. 

307  Please see the Europol website, including the list of Strategic agreements and Operational agreements. 

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EU  and  Schengen  membership;  it  cannot  therefore  be  considered  a  precedent  for  the  future  UK 
relations with Europol. 

Box 14 – Denmark's operational and strategic cooperation agreement with Europol 
Due to its opt-out from all EU justice and home affairs legislation, without any possibility to opt-in, Denmark 
could  not  maintain  its  cooperation  with  Europol  under  the  new  Europol  Regulation.  For  Denmark  to 
continue cooperation within the Europol framework, the EU designated Denmark as a third country for this 
purpose, thereby allowing the conclusion of a cooperation agreement. On 29 April 2017, the Agreement 
between Denmark and Europol was officially signed, and entered into force on 30 April 2017, just before the 
new Europol Regulation's entry into force on 1 May 2017.308  

Under  the  terms  of  the  agreement,  Denmark  benefits  from  closer  cooperation  with  Europol  as  regards 
access  to  the  databases  than  other  third  countries  cooperating  with  Europol,  however  this  access  is 
conditional on Denmark's continued participation in the Schengen area and its EU membership; moreover 
Denmark  must  implement  Directive  (EU)  2016/680  on  the  processing  of  personal  data  by  competent 
authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences 
or the execution of criminal penalties, 309 in its national law, and agree to the application of the jurisdiction 
of the Court of Justice of the EU (CJEU) and the competence of the European Data Protection Supervisor 
(EDPS).  Furthermore,  while  Denmark  obtained  observer  status  (with  no  voting  rights)  on  Europol's 
Management  Board  and  Management  Board  working  groups,  it  nevertheless  lost  direct  access  to  the 
Europol  databases,  although  Europol  is  obliged  to  notify  Denmark  'without  delay  of  any  information 
concerning it'. Moreover, Denmark will not be able to take part in the Europol Joint Parliamentary Scrutiny 
Group  (comprised  of  representatives  of  the  European  Parliament  and  national  parliaments  of  Member 
States) set up under the new Europol regulation, and loses participation rights to the cooperation council 
of national data protection authorities and the EDPS. 

Finally, the agreement contains a provision whereby the Commission must undertake an evaluation of the 
agreement  by  31 October 2020,  based  on  which,  it  may  recommend  to  the  Council  by  30 April 2021,  to 
replace the agreement with an international agreement negotiated under Article 218 TFEU. 

According  to  the  Commission,  the  UK,  as  a  third  country,310  will  have  no  participation  rights  (as 
member or observer) to Europol's Management Board and Management Board working groups, and 
therefore have no influence on Europol's strategic and policy objectives. However, its representative 
could be invited to Heads of Europol National Units meetings and may participate in the EU Policy 
Cycle.311 Moreover, the UK will lose direct access to Europol databases, but exchanges of data can 
continue  if  an  international  agreement  is  concluded  (or  an  adequacy  decision  is  adopted  with 
respect  to  the  UK  on  the  basis  of  Article 36  of  Directive  (EU) 2016/680).  For  example,  some  third 
countries with which Europol has concluded operational agreements can store data in the Europol 
Information System and make queries, but only through the Europol Operational Centre, as they do 
not  have  direct  access  to  the  system.312  As  regards  the  secure  information  exchange  network 
application  (SIENA),  Europol's  secure  messaging  platform,  some  third  countries,  which  have  an 
operational  agreement,  currently  exchange  information  using  SIENA  (Australia,  Canada,  Norway, 
Switzerland, the USA, Liechtenstein and Moldova). In 2016, according to Europol, 32 third parties 

308  Agreement  on  Operational  and  Strategic  Cooperation  between  the  Kingdom  of  Denmark  and  Europol.  See  also 
European Commission, Commission welcomes Europol's new mandate and cooperation agreement with Denmark, 
Statement, 29 April 2017. 

309  Directive (EU) 2016/680 of 27 April 2016 on the processing of personal data by competent authorities for the purposes 
of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, 
and on the free movement of such data. 

310  There is no differentiation between Schengen and non-Schengen third states with regard to Europol cooperation. 
311  EU Policy Cycle - EMPACT, Europol. 
312  Europol Information System, Europol. 

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(law  enforcement  authorities)  were  connected  to  SIENA  (19 third  parties  connected  directly  and 
13 third parties connected indirectly).313 

Moreover, the UK could send liaison officers to Europol. The UK would also be able to participate in 
analysis  projects  if  Member  States  agree  and  if  the  project  is  relevant  to  the  UK  or  data  that  is 
processed within the project concerns the UK. Finally, the UK would be able to take part in real time 
investigations.  

In  the  UK's  view,  however,  cooperation  on  this  basis  alone  would  not  allow  maintenance  of  the 
current level of UK contribution to Europol's activities. Indeed, Europol cooperation agreements fall 
short of the level of participation and access to information and intelligence the UK enjoys as an EU 
Member State. In this context, the UK has even expressed willingness to accept, in certain cases, the 
jurisdiction  of  the  CJEU  in  exchange  for  more  access  to  Europol  activities.  Furthermore,  such 
agreements have taken years to conclude (five years normally, but also up to twelve years when the 
exchange of personal data was concerned); nevertheless, in the case of the UK, as a former Member 
State, that negotiation process may take less time.314 In addition, the UK would be one of the first 
states to conclude an agreement covering the exchange of personal data with the EU under the new 
Europol Regulation (Article 25) – see the procedure in Article 218 TFEU.315 

Box 15 – Agreements with third countries under the new Europol regulation 
Under the Commission recommendations for the mandates for negotiation of such new agreements with 
eight Middle East and North African countries, the agreements will contain 'an effective dispute settlement 
mechanism  with  respect  to  (...)  interpretation  and  application',  and  the  respective  partners  will  set  up  a 
'system of oversight by one or more independent public authorities responsible for data protection' over 
their public authorities handling personal data, which will also have the competence of engaging in legal 
proceedings.  Moreover,  the  EU  will  support  these  countries'  accession  to  the  Council  of  Europe's 
Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data.316 In this 
context,  it  must  be  noted  that  the  EU  Court  of  Justice  will  still  have  jurisdiction  over  the  agreement's 
compliance with EU law (Article 218 (11)). 

Eurojust 
Brexit is also expected to greatly impact cooperation within Eurojust, where the UK has participated 
actively. It also made active use of the Joint Investigation Teams.317 

Like Europol, Eurojust has concluded cooperation agreements with third countries. At the end of 
2017, Eurojust had cooperation agreements in place with nine countries (Norway, USA, Switzerland, 
Montenegro,  Moldova,  former  Yugoslav  Republic  of  Macedonia,  Iceland,  Liechtenstein,  Ukraine), 
while  another  with  Albania  is  about  to  be  concluded.318  These  countries  may,  inter  alia,  second 
liaison  prosecutors  to  Eurojust.  Currently,  the  USA,  Norway  and  Switzerland  second  liaison 

313  Annual Review 2016, Europol, April 2017.  
314  R. Hanratty, The effect of Brexit on the fight against crime, Archbold Review, 4, 2018, pp. 4-9. 
315  For the time being, no international agreement has been concluded between the EU and third states on the basis of 
the  new  Europol  Regulation.  In  December  2017,  the  Commission  recommended  opening  negotiations  with  eight 
Middle East and North African countries: Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Tunisia and Turkey. The EP 
approved the Commission recommendations on 4 July 2018. See also: European Data Protection Supervisor, Opinion 
2/2018 on eight negotiating mandates to conclude international agreements allowing the exchange of data between 
Europol and third countries, 14 March 2018. See also R. Davidson, Brexit and criminal justice: the future of the UK's 
cooperation relationship with the EU, Criminal Law Review, 5, 2017, pp. 395-397. 

316  Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data, Council of Europe, 

Treaty 108.  

317  Joint Investigation Teams Practical Guide, Council of the EU, 6128/1/17, 14 February 2017.  
318  Eurojust,  Third  States  and  organisations.  See  also  Albanian  Minister  of  Justice  visits  Eurojust  President:  enhanced 
cooperation on agenda, 29 May 2018; Eurojust Annual Report 2017, 2018; and the Agreement on cooperation between 
Eurojust and Albania 2018/0807(CNS), Legislative Observatory, European Parliament.  

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prosecutors  to  Eurojust.  Since  2017,  Eurojust  has  acquired  the  legal  framework  to  post  liaison 
magistrates  to  third  states,  besides  the  'contact  points'  that  it  maintains  in  non-EU  European 
states. 319 

A Eurojust cooperation agreement with the UK would seem desirable for both the UK and the EU-
27  in  light  of  the  high  level  of  cooperation  so  far,  even  though  the  UK  argues  that  future  UK 
participation in Eurojust on the terms of existing third country cooperation agreements would lead 
to fewer opportunities to contribute to the work of Eurojust, as well as reduced capability for both 
the  EU  and  UK  in  tackling  organised  crime.320  Conversely,  while  other  agreements  with  third 
countries  have  taken  five  to  seven  years,  arguably  reaching  agreement  with  the  UK  as  a  former 
member of Eurojust might take less, if there is political will to do so.321 A precedent in this sense is 
the agreement with the USA, which was concluded within a year.  

Under this framework, the UK could appoint contact points and liaison magistrates to Eurojust to 
facilitate  data  exchange.  Nevertheless,  the  UK  would  lose  direct  access  to  the  Eurojust  Case 
Management  System  or  case-files.  If  Member  States  agree,  however,  the  UK  could  take  part  in 
Eurojust cases and may use the Eurojust On-Call Coordination, a system enabling judicial authorities 
and law enforcement officials to request Eurojust's assistance on a 24 hour/7 day basis. Moreover, 
the UK would not be allowed to initiate and take the lead on Joint Investigation Teams. The legal 
basis for Joint Investigation Teams is Article 13 of the EU Convention on Mutual Legal Assistance 
(2000),322 which means that third states such as Norway and Iceland, who have reached agreement 
with the EU to participate in the 2000 Convention,323 can also take part in JITs.324 Experts point to 
this  precedent  for  future  UK  involvement  in  such  teams  post-Brexit,  assuming  that  a  similar 
arrangement  can  be  reached  in  relation  to  the  2000  Convention.'325  According  to  the  Eurojust 
Annual Report 2017, in recent years, experience with cooperating with third states in the context of 
JITs  has  increased:  'The  possibility  of  involving  representatives  of  third  States  in  coordination 
meetings greatly facilitates the setting up of JITs between EU and non-EU States. In addition, the 
presence  of  the  Swiss  and  Norwegian  Liaison  Prosecutors  at  Eurojust  has  led  to  the  successful 
establishment  and  development  of  JITs  with  Switzerland  and  Norway.'326  Indeed,  the  UK 
government has pointed to the Norwegian, Swiss and American models as possible precedents for 
a third state cooperation agreement.327 However, the UK government white paper of 12 July 2018, 
clarifies that it seeks 'full participation rights in JITs including the ability to initiate them'.328 

319  Please see Legal framework and Successful results from intensified judicial cooperation in 2017, press release, Eurojust, 

26 April 2018.  

320  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
321  The  implications  of  the  UK's  withdrawal  from  the  EU  for  the  AFSJ,  Policy  Department  for  Citizens'  Rights  and 

Constitutional Affairs, European Parliament, December 2017. 

322  Council Act of 29 May 2000 establishing in accordance with Article 34 of the Treaty on European Union the Convention 

on Mutual Assistance in Criminal Matters between the Member States of the European Union. 

323  Agreement between the European Union and the Republic of Iceland and the Kingdom of Norway on the application 
of certain provisions of the Convention of 29 may 2000 on Mutual Assistance in Criminal Matters between the Member 
States of the European Union and the 2001 Protocol thereto, OJ L 26. The agreement was signed in 2003 and entered 
into force in 2013.  

324  Council Framework Decision 2002/465/JHA of 13 June 2002 on joint investigation teams (JIT), OJ L 162.  
325  R.  Davidson,  Brexit  and  criminal  justice:  the  future  of  the  UK's  cooperation  relationship  with  the  EU,  Criminal  Law 

Review, 5, 2017. 

326  Annual Report 2017, Eurojust, 2018. See also the Conclusions of the Thirteenth Annual Meeting of National Experts on 

Joint Investigation Teams (JITs), 17-18 May 2017.  

327  R.  Davidson,  Brexit  and  criminal  justice:  the  future  of  the  UK's  cooperation  relationship  with  the  EU,  Criminal  Law 

Review, 5, 2017. 

328  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 

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Finally, as a third state, the UK would no longer be represented on the Eurojust College, the agency's 
leading management body – made up exclusively of representatives of the EU Member States, and 
would thereby have no say on the agency's future evolution. 

5.3.2. Mutual recognition instruments 
On the basis of the mutual recognition principle, EU Member States recognise each other's judicial 
decisions in order to facilitate cooperation on exchanging evidence in criminal cases, on extraditing 
persons or on freezing and confiscating assets. This speeds up the processes between the issuing 
and  the  executing  Member  State  and  avoids  the  need  for  litigation  in  both  states'  courts.329  The 
European Arrest Warrant is the most famous example of an EU JHA instrument based on mutual 
recognition and has been widely used since its creation in 2002, both by the EU-27 in relations with 
the  UK  and  vice-versa.330  The  more  recent  European  Investigation  Order  (EIO)331  –  the  directive 
establishing the EIO had to be transposed by Member States by 22 May 2017 – replaces many of the 
mutual  legal  assistance  arrangements  in  the  EU,  including  the  2000  EU  Mutual  Legal  Assistance 
Convention and Framework Decision 2008/978/JHA on the European Evidence Warrant. Under the 
EIO, a Member State must recognise and execute the request of another Member State for specific 
criminal investigative measures to be carried out, in the same way as that decision would have been 
adopted by its own authorities. After Brexit, both of these instruments will no longer apply to the 
UK,  therefore  new  arrangements  for  future  cooperation  between  the  EU  and  UK  will  need  to  be 
identified.  Moreover,  the  legal  assistance  arrangements  in  other  police  and  judicial  cooperation 
areas will need to be defined, including to potentially cover the more recent EU instruments that are 
now at the proposal stage, for example as regards cross-border access to electronic evidence.332  

The European Arrest Warrant 
The EAW has no provisions on cooperation with third countries and most experts consider that it 
would  be  impossible  to  replicate  the  EAW  in  a future  treaty with  the UK.  The  extradition of own 
nationals  would  be  the  main  political  obstacle  post-Brexit,333  also  due  to  the  fact  that  some  EU 
Member States (e.g. Germany) would need to amend their constitution to allow extradition of an 
own national to a non-EU country.334  

The agreement on the surrender procedure with Iceland and Norway could offer a model, but that 
treaty, although very close to the EAW model, is not as comprehensive. For example, unlike the EAW, 
the agreement allows the parties to refuse to surrender their nationals and restricts the obligation 
to surrender suspects considered to have committed political offences (except for terrorism-related 
offences).  Furthermore,  the  agreement  took  thirteen  years  to  conclude  and it  is  still  not in  force, 
almost four years after its conclusion,335 although, as UK extradition law is already aligned with the 

329  R. Hanratty, The effect of Brexit on the fight against crime, Archbold Review, 4, 2018. 
330  Council  Framework  Decision  2002/584/JHA  of  13  June  2002  on  the  European  arrest  warrant  and  the  surrender 

procedures between Member States, OJ L 190.  

331  Directive  2014/41/EU  of  the  European  Parliament  and  of  the  Council  of  3  April  2014  regarding  the  European 

Investigation Order in criminal matters, OJ L 130. 

332  E-evidence - cross-border access to electronic evidence, European Commission. 
333  Uncorrected oral evidence: Brexit: the proposed UK-EU security treaty, House of Lords, Home Affairs Sub-Committee, 

28 March 2018.  

334  In this sense, the draft withdrawal agreement includes a reservation (Article 168) allowing Member States to refuse – 
upon a justified decision – extradition of own nationals to the UK during the transition period of 21 months, as the UK 
is set to become a third state on 30 March 2019. In return the UK may also refuse extradition of UK nationals to those 
particular Member States.  

335  Agreement between the European Union and the Republic of Iceland and the Kingdom of Norway on the surrender 
procedure between the Member States of the European Union and Iceland and Norway, OJ L 292. Council Decision 
2014/835/EU  of  27  November  2014  on  the  conclusion  of  the  Agreement  between  the  European  Union  and  the 
Republic  of  Iceland  and  the  Kingdom  of  Norway  on  the  surrender  procedure  between  the  Member  States  of  the 
European Union and Iceland and Norway, OJ L 343.  

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EU, a similar EU-UK agreement might be concluded more swiftly. In any case, the EU-Norway/Iceland 
surrender agreement offers an important model to the UK, also in terms of provisions on dispute 
settlement and the role of the CJEU therein. Accordingly, any disputes regarding the interpretation 
or  the  application  of  the  agreement  would  be  submitted  to  a  meeting  of  government 
representatives  of  the  State  Parties  to  the  treaty,  to  be  settled within  six months.336  Additionally, 
with the objective of obtaining uniform application and interpretation, the agreement provides for 
the  creation  of  a  mechanism  to  ensure  regular  mutual  transmission  of  the  related  case  law,  as 
Norway and Iceland commit to keep the development of the case law of the CJEU under 'constant 
review', and vice versa: the EU Member States will keep the case law developments in Iceland and 
Norway under constant review.337  

Unlike  the  EU-Iceland/Norway  surrender  agreement,  the  EU-US  extradition  agreement,  in  force 
since 2010, envisages the use of diplomatic channels for the surrender procedure, and relies mostly 
on the bilateral agreements the USA has concluded with Member States.338  

An option, other than negotiating an agreement with the EU, would be to rely on the 1957 Council 
of Europe Convention on Extradition and its protocols, ratified by all EU Member States, including 
the UK.339 However, the procedures under the Convention would be significantly different to those 
under the EAW. Firstly, the Convention is not an entirely judicial process, as extradition requests are 
made through diplomatic channels and political decisions may be made on extradition requests at 
certain  stages  in  the  procedure.  Secondly,  the  Convention  maintains  the  dual  criminality 
requirement  for  all  offences  (i.e.  the  conduct  for  which  extradition  is  sought  must  be  a  criminal 
offence in both the issuing and the executing state), unlike the EAW which abolished dual criminality 
in respect to 32 serious offences. Thirdly, under the Convention, states may refuse to extradite their 
nationals or for political offences. Finally, unlike the EAW Framework Decision, which imposes strict 
time limits, the Convention does not, leading to lengthy procedures.340 The CJEU would have no 
jurisdiction in this scenario. On the other hand, relying on the 1957 Council of Europe Convention 
may not be that straightforward, also from the point of view of the EU-27. For example, since the 
EAW  was  established,  some  Member  States  have  repealed  domestic  legislation  needed  to 
implement the 1957 Convention on extradition, so amendments to their national systems might be 
needed. In this context, an agreement on extradition between the EU and the UK post-Brexit would 
also be in the EU-27's interest.341  

The  UK  could  also  choose  to  negotiate  bilateral  surrender  agreements  with  individual  EU  states, 
although  the  prospect  of  27  separate  negotiations  may  not  be  so  appealing.342  Another  option 
would  be  for the  UK  to  fall  back on  the  Council of Europe  Convention,  and  then  conclude more 
comprehensive  bilateral  extradition  agreements  with  those  EU  Member  States  where  there  is 
already intense cooperation in this area or much interest, e.g. with Poland, Spain and Ireland.343 In 
its July 2018 white paper, the UK government suggests that the arrangements for the EAW decided 

336  Article 36 of Agreement between the European Union and the Republic of Iceland and the Kingdom of Norway on the 

surrender procedure between the Member States of the European Union and Iceland and Norway, OJ L 292. 

337  Article 37 of Agreement between the European Union and the Republic of Iceland and the Kingdom of Norway on the 

surrender procedure between the Member States of the European Union and Iceland and Norway, OJ L 292. 

338  Agreement on extradition between the European Union and the United States of America, signed 25 June 2003, in 

force since 1 February 2010.  

339  Council of Europe, European Convention on Extradition, Treaty No 024. Switzerland for example relies on the Council 

of Europe Convention and its protocols for extradition. 

340  R. Davidson, B. Lloyd, A. Payter, Extradition law - recent developments and the potential impact of Brexit, Criminal Law 

Review, 10, 2016, pp. 743-764. 

341  House of Lords, 28 March 2018, fn. 191. See also J. Dawson, S. Lipscombe, S. Godec, The European Arrest Warrant, 

House of Commons Library Briefing Paper, No. 07016, 18 April 2017.  

342  R. Davidson, B. Lloyd, A. Payter, op. cit.  
343  House Of Lords, 28 March 2018. 

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in the draft withdrawal agreement that would be applied during a possible transition period should 
be the basis for the future EU-UK relationship on extradition.344 

legal  assistance 

Investigation  Order  and  other  mutual 

The  European 
arrangements 
The  EIO  is  a  rather  new  instrument,  but  as  an  important  tool  for  investigations  in  the  EU,  it  may 
become another issue for negotiations in this area for the UK government. For the time being, other 
third  countries  do  not  participate  in  the  EIO;  for  this  purpose,  Norway  and  Iceland  rely  on  the 
provisions of the 2000 EU Mutual Legal Assistance (MLA) Convention to which they acceded in 2013 
(the  2008  Framework  Decision  on  the  European  Evidence  Warrant  was  not  extended  to  these 
countries). As these two countries have also signed an agreement concerning the Prüm decision 
(see  below),  some  observers  regard  this  as  a  possible  option  for  the  UK  to  negotiate  similar 
arrangements and maybe also get access to the EIO.345 Yet again, Norway and Iceland have a special 
status as countries associated to the Schengen acquis: before entering into agreement with the EU 
on the EU MLA Convention, these two states were already applying those relevant provisions of the 
Convention that represented a development of the Schengen acquis. Furthermore, with respect to 
the EIO, which is a mutual recognition instrument, a MLA regime is more discretionary.  

Should the extension of the EU MLA regime to the UK, similarly to the Iceland/Norway agreement 
to participate in the 2000 EU MLA Convention, not be possible, the UK may either have to rely on 
the 1959 Council of Europe Convention and Protocols on mutual legal assistance,346 or on an MLA 
agreement similar to those concluded by the EU with third countries such as the USA or Japan. The 
1959 Convention however offers fewer options in terms of flexibility and speed than the EU MLA 
convention, while the EU MLA agreements with third countries do not allow for the same level of 
cooperation as between EU Member States.347The EU-US MLA agreement (signed in 2003, in force 
in 2010), just like the deal on extradition, makes use of diplomatic channels for this cooperation and 
mostly relies on bilateral MLA agreements with individual EU Member States.348 The EU-Japan MLA 
(signed in 2009 and entered into force in 2011) is the first 'self-standing' EU MLA with a third country 
(there  are  no  bilateral  MLAs  between  Japan  and  EU  Member  States).349  However,  this  is  rather  a 
conventional  MLA  agreement,  where  parties  have  a  wide  discretion  in  complying  with  MLA 
requests. Furthermore, experts point to the rather low number of cases between the EU and Japan 
that  would  require  legal  assistance,  therefore  the  practical  implications  of  the  agreement  are 
difficult to evaluate.350 In any case, the EU-Japan MLA option would fall short of the comprehensive 
and close relationship the UK is seeking.351 

344  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. For the 
provisions of the draft withdrawal agreement see C. Cîrlig, S. Mazur, L. Tilindyte, The EU-UK withdrawal agreement: 
Progress to date and remaining difficulties, EPRS, European Parliament, 12 July 2018. 

345  R.  Davidson,  Brexit  and  criminal  justice:  the  future  of  the  UK's  cooperation  relationship  with  the  EU,  Criminal  Law 

Review, 5, 2017. 

346  European Convention on Mutual Assistance in Criminal Matters, Council of Europe, Treaty No 30.  
347  R.  Davidson,  Brexit  and  criminal  justice:  the  future  of  the  UK's  cooperation  relationship  with  the  EU,  Criminal  Law 

Review, 5, 2017. 

348  Agreement on mutual legal assistance between the European Union and the United States of America, OJ L 181, 2003. 
349  Agreement between the European Union and Japan on mutual legal assistance in criminal matters, OJ L 39, 2010. 
350  Basic principles of mutual legal assistance and extradition agreements with third countries, Asser Institute, 2010.  
351  R.  Davidson,  Brexit  and  criminal  justice:  the  future  of  the  UK's  cooperation  relationship  with  the  EU,  Criminal  Law 

Review, 5, 2017. 

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5.3.3. Data and information exchange 
The UK has looked at the EU agreements in this area with third countries such as Norway and Iceland. 
However,  both  states  have  full  access  to  SIS  II, due to  their  status  as  Schengen members,  and  to 
Eurodac, as Dublin members. 

  SIS II and Eurodac 

The EU granted access to SIS II352 and Eurodac to third countries such as Norway, Iceland, Switzerland 
and  Lichtenstein  on  condition  of  their  accession  to  the  Schengen  Agreement  and  therefore 
adoption of the acquis. After Brexit, British law enforcement will most likely lose access to both SIS II 
and Eurodac, as the UK will no longer be part of the Dublin system.  

SIS II is an essential tool in Schengen cooperation. It contains information on individuals who do not 
have the right to enter or stay in the Schengen area, or on those who are sought in relation to an 
EAW; it also contains information on missing persons, or on certain objects that may have been lost, 
stolen,  or  used  to  carry  out  a  crime.353  Data  processed  in  SIS  II  cannot  be  transferred  or  made 
available to third countries or to international organisations.354 

Concerning  Eurodac,  the  EU  has  concluded  agreements  with  Iceland,  Norway,  Switzerland  and 
Liechtenstein  associating  them  to  the  Dublin/Eurodac  acquis,  in  light  of  their  association  to  the 
Schengen  acquis.355  Denmark  has  also  been  associated  to  the  Dublin/Eurodac  acquis  via  an 
international  agreement.356  There  is  an  explicit  requirement  that  'the  Dublin/Eurodac  acquis  be 
applied simultaneously with the Schengen acquis'.357 When the recast Dublin regulation enters in 
force, complementary agreements will have to be concluded to cover the access of law enforcement 
to Eurodac. Under the agreements in force, the associated countries accept the development of the 
Dublin/Eurodac  acquis  without  exception,  without  taking  however  part  in  the  adoption  or 
amendment of related acts. Should one of these countries inform the EU of their decision not to 
accept an act related to the Dublin/Eurodac acquis, or not to apply such an act under the terms of 
the agreement, then the agreement is suspended in its entirety (guillotine clause). If, within 90 days, 
the  situation  is  not  remedied  or  the  joint/mixed  committee  governing  the  application  of  the 
agreement does not decide otherwise, the agreement is terminated. Denmark, however, benefits 
from  an  extra  3 months  after  the  90 days  deadline.  Furthermore,  there  is  a  precondition  for  the 
associated states to implement or participate in the Prüm agreements in order to perform checks in 

352  Council Decision 2007/533/JHA of 12 June 2007 on the establishment, operation and use of the second generation 

Schengen Information System (SIS II), OJ L 205, 2007.  

353  According to the EU-LISA Report on the technical functioning of Central SIS II, July 2017: 'On 31 December 2016, there 
were over 70 million alerts stored in the system, showing a net increase of 51% in alerts stored since the entry into 
operation of the system in April 2013. In 2016, SIS II was searched almost 4 billion times, a billion more than in 2015.' 

354  Questions and Answers: Schengen Information System (SIS II), European Commission, 9 April 2013.  
355  Agreement between the European Community and the Republic of Iceland and the Kingdom of Norway concerning 
the criteria and mechanisms for establishing the State responsible for examining a request for asylum lodged in a 
Member State or in Iceland or Norway, OJ L 93, 2001; Agreement between the European Community and the Swiss 
Confederation concerning the criteria and mechanisms for establishing the State responsible for examining a request 
for asylum lodged in a Member State or in Switzerland, OJ L 53, 2008; Protocol between the European Community, the 
Swiss Confederation and the Principality of Liechtenstein on the accession of the Principality of Liechtenstein to the 
Agreement between the European Community and the Swiss Confederation concerning the criteria and mechanisms 
for establishing the State responsible for examining a request for asylum lodged in a Member State or in Switzerland, 
OJ 160, 2011.  

356  Agreement  between  the  European  Community  and  the  Kingdom  of  Denmark  on  the  criteria  and  mechanisms  for 
establishing the State responsible for examining a request for asylum lodged in Denmark or any other Member State 
of  the  European  Union  and  Eurodac  for  the  comparison  of  fingerprints  for  the  effective  application  of  the  Dublin 
Convention, OJ L 66, 2006. Other two legal instruments were adopted to create obligations between the associated 
states and Denmark.  

357  See for example the Agreement with Switzerland.  

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Eurodac.358 In this context again, alignment with the Schengen acquis implies a strong role for the 
CJEU. Associated countries are obliged to keep CJEU case law under constant review. In the situation 
of substantial divergence between the CJEU case law and the third states' interpretation, the matter 
is  brought  before  the  joint/mixed  committee;  failing  agreement,  the  treaty  may  be  terminated 
under the guillotine clause mentioned above. In the case of Denmark, the CJEU has jurisdiction for 
the interpretation and application of the agreement. Danish courts must submit questions on the 
validity  or  interpretation  of  the  agreement  for  preliminary  rulings  to  the  CJEU  under  the  same 
conditions as the other EU Member States. Denmark must take due account of the rulings of the 
CJEU. The CJEU is also responsible for ensuring compliance with the agreement: the Commission 
may bring a complaint before the CJEU against Denmark for non-compliance, while Denmark may 
bring a complaint to the Commission against another EU Member State. 

  Prüm 

The EU has an agreement with Norway and Iceland giving these two countries access to Prüm (not 
yet in force, although some parts are applied provisionally).359 The same provisions with respect to 
dispute settlement and keeping the developments of the CJEU under constant review apply as in 
the case of the EAW agreement. Negotiations are ongoing with Switzerland and Liechtenstein. 

  ECRIS 

While the UK has proposed its continued participation in ECRIS as part of the new treaty, no access 
to the ECRIS database is granted to non-EU countries. However, some authors advocate that, in light 
of the large number of EU citizens that will continue to live in the UK post-Brexit and of UK citizens 
in  the  EU,  the  sharing  of  criminal  records  information  would  constitute  a  necessity  for  effective 
cooperation and ECRIS would be the most appropriate and mutually beneficial instrument to this 
end.360 

  Passenger name records 

After Brexit, the EU Passenger Name Records (PNR) Directive 2016/681 adopted by the Council in 
April 2016 and applied since May 2016361 will no longer apply to the UK, therefore the UK will no 
longer  have  access  to  PNR  on intra-EU  flights. The EU  has  concluded  PNR  agreements with  third 

358  See  the European  Commission, Explanatory  memorandum to  the  Proposal for  a regulation  of the Council  and the 
European Parliament on the establishment of 'Eurodac' for the comparison of fingerprints for the effective application 
of  [Regulation  (EU)  No 604/2013  establishing  the  criteria  and  mechanisms  for  determining  the  Member  State 
responsible for examining an application for international protection lodged in one of the Member States by a third-
country national or a stateless person], for identifying an illegally staying third-country national or stateless person 
and on requests for the comparison with Eurodac data by Member States' law enforcement authorities and Europol 
for law enforcement purposes (recast), COM/2016/0272 final, 4 May 2016. 

359  Council Decision 2010/482/EU of 26 July 2010 on the conclusion of the Agreement between the European Union and 
Iceland and Norway on the application of certain provisions of Council Decision 2008/615/JHA on the stepping up of 
cross-border  cooperation,  particularly  in  combating  terrorism  and  cross-border  crime  and  Council  Decision 
2008/616/JHA  on  the  implementation  of  Decision  2008/615/JHA  on  the  stepping  up  of  cross-border  cooperation, 
particularly in combating terrorism and cross-border crime, and the Annex thereto. See also Stepping-up cross-border 
cooperation (Prüm Decision), Eur-lex summaries of EU legislation and the Council of the EU, International Agreements 
database.  

360  A. M. Jackson, G. L. Davies, Making the case for ECRIS: post-“Brexit” sharing of criminal records information between 
the European Union and United Kingdom, International Journal of Evidence and Proof, 2017, 21(4), pp. 330-350.  
361  Directive 2016/681 of the European Parliament and of the Council of 27 April 2016 on the use of passenger name 
record (PNR) data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime, 
OJ L 119. EU Member States had to incorporate the directive into national law by 25 May 2018. 

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countries such as the USA,362 Australia363 and Canada364. However, the EU-Canada PNR Agreement 
cannot  yet  enter  into  force,  as  CJEU  Opinion 1/15,  delivered  in  July 2017,  found  the  agreement 
lacked appropriate safeguards and appropriate limits on the storage of data, which prompted the 
Commission to return to negotiations with Canada. Negotiations with Mexico began in July 2015.365 
Argentina, Japan, Saudi Arabia, Qatar, the Republic of Korea and New Zealand have requested or are 
expected to request PNR agreements with the EU. On PNR there is no specific cooperation so far 
with Iceland and Norway. The UK could continue to exchange PNR and the results of processing PNR 
with  the  remaining  Member  States  through  an  EU-UK PNR  agreement.  However,  any  agreement 
concluded with the UK on PNR would also have to comply with CJEU Opinion 1/15. The UK could 
also opt for bilateral agreements with the EU Member States, but these would not cover the entire 
EU  and  would  probably  differ  in  terms  of  the  obligation  to  provide  information.366  The  UK  has 
explicitly stated it would seek to maintain cooperation with the EU based on the EU PNR Directive 
(thereby including capabilities on analysis of PNR and access to PNR on intra-EU flights).367 

On  the  substance,  future  access  by  the  UK  to  these  databases  might  be  complicated  by  various 
issues. The current reform in the EU to improve interoperability of the systems in this area might 
become an obstacle for the UK, as some of the databases concern migration; it is unlikely the EU 
would  subsequently  grant  the  UK  access  to  SIS II,  as  it  will  be  no  longer  bound  by  freedom  of 
movement rules. Furthermore, both Iceland and Norway would react should a more interesting deal 
be concluded with the UK (including on extradition): on the one hand these countries would likely 
wish to also take advantage of more favourable provisions; on the other hand, they would point out 
that,  as  Schengen  states,  they  comply  with  more  obligations  than  the  UK,  an  argument  the 
Commission  also  seems  to  support.  Conversely,  the  remaining  EU  Member  States  also  have  an 
interest in preserving UK data, which would possibly prompt some flexibility on the side of the EU-
27.368 Future access to the databases would above all be dependent on UK compliance with EU data 
protection  standards.369  A  Directive  on  protecting  personal  data  processed  for  the  purpose  of 
criminal law enforcement cooperation was adopted by the EU in 2016, replacing a 2008 Framework 
Decision.  The  2016  Directive,  unlike  the  previous  Framework  Decision,  covers  both  cross-border 
data transfer between law enforcement authorities, and data processing activities by national law 
enforcement.  The  UK  government  announced  that  it  would  transpose  the  Directive  into  UK  law 
through its Data Protection Bill, now the Data Protection Act, after royal assent on 23 May 2018.370 
The UK proposal for a comprehensive bespoke agreement on data protection would most likely not 

362  Agreement between the United States of America and the European Union on the use and transfer of passenger name 
records to the United States Department of Homeland Security, signed 14 December 2011, in force since 1 July 2012. 
363  Agreement between the European Union and Australia on the processing and transfer of Passenger Name Record 
(PNR) data by air carriers to the Australian Customs and Border Protection Service, signed on 29 September 2011, in 
force since 1 June 2012. 

364  In June 2014, the EU and Canada signed a new PNR agreement to replace the existing one from 2006. The EP voted in 
November 2014 to refer the agreement to the CJEU for an opinion on the compliance of the agreement with the EU 
treaties  and  the  Charter  of  Fundamental  Rights.  The  CJEU  adopted  its  Opinion  1/15  on  26  July  2017.  See  also  S. 
Monteleone, CJEU Opinion on EU-Canada PNR agreement, EPRS, European Parliament, 5 September 2017. 

365  Joint  statement:  Beginning  of  negotiations  between  Mexico  and  the  European  Union  on  PNR  data  transmission, 

European Commission, 14 July 2015.  

366  R.  Davidson,  Brexit  and  criminal  justice:  the  future  of  the  UK's  cooperation  relationship  with  the  EU,  Criminal  Law 
Review, 5, 2017. In the case of an EU Member States bilateral agreement, the latter would need to comply with EU law 
following  the  Declaration  on  Article  218  of  the  Treaty  on  the  Functioning  of  the  European  Union  concerning  the 
negotiation and conclusion of international agreements by Member States relating to the area of freedom, security 
and justice, OJ C 2010 83. 

367  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
368  S. Peers, UK/EU Security Cooperation After Brexit: the UK Government's Future Partnership Papers, EU Law Analysis 

Blog, 25 September 2017. 

369  The implications of the United Kingdom's withdrawal from the European Union for the Area of Freedom, Security and 

Justice, Policy Department on Citizens' Rights and Home Affairs, study, December 2017.  

370  Data Protection Act 2018, UK Parliament. 

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be accepted by the EU, as it insists the EU adequacy rules must apply in the future to data exchanges 
with the UK. However, an EU adequacy decision (now possible for law enforcement), finding that UK 
standards  for  data  protection  offer  an  adequate  level  of  protection  is  characterised  by  several 
constraints.  Among  them,  the  length  of  reaching  such  decisions,  as  well  as  their  temporary 
character:  adequacy  decisions  are  granted  for  a  specific  period  of  time  and  reviewed  by  the 
Commission after at least four years, meaning that the UK would have to keep up with the changes 
in EU legislation in this field, in order to maintain its adequacy status, and be indirectly bound by EU 
decisions and institutions in this area.371 The Commission has proposed to include a guillotine clause 
on data protection in the EU-UK security agreement that would terminate the agreement if the EU's 
adequacy decision is withdrawn or is declared invalid by the CJEU.372 

5.3.4. Other issues 
Respect for fundamental rights and freedoms as enshrined in the EU Charter on Fundamental Rights 
and the European Charter on Fundamental Rights (ECHR) would also be a factor in shaping future 
EU-UK cooperation. The fact that the UK government managed to have the EU Charter removed 
from the scope of the EU Withdrawal Act,373 and a possible future UK withdrawal from the ECHR, 
would render police and judicial cooperation with the EU extremely difficult, in particular as regards 
extradition. The Commission therefore insists that all future cooperation arrangements will have to 
be set against appropriate safeguards regarding fundamental rights as set out in the ECHR, so that 
the risk of the UK lowering standards of protection for individuals is minimised. In this context, a key 
safeguard for the EU with regard to fundamental rights would be that the UK remains party to the 
European  Convention  on  Human  Rights  (ECHR).  The  Commission  proposes  the  insertion  of  a 
guillotine clause in the future EU-UK agreement which would see the agreement terminated should 
the UK leave the Convention, or be condemned by the European Court of Human Rights for non-
execution of a judgment in the area concerned. The 12 July 2018 white paper clarified that the UK is 
committed to continued membership of the ECHR.374  

Finally, the issue of dispute resolution will be essential for the future partnership.375 The Commission 
has proposed that effective enforcement and dispute settlement provisions, and a mechanism for 
ensuring the reciprocal application of the agreement, are included in the future agreement, while 
pointing  out  that  there  was  a  lack  of  clarity  as  to  the  UK's  preferred  dispute  settlement 
mechanism.376  Currently,  the  CJEU  has  jurisdiction over  all  measures into  which  the UK opted-in, 
over  Europol  and  the  EAW,  and  the  Commission  can  refer  Member  States  to  the  CJEU  over 
implementation failures. Ending CJEU jurisdiction was one of the main elements at the origin of the 
UK's request for derogations and it continues to be a red line for the UK government in its position 
on a future agreement. The UK pointed to EU agreements with third countries that are not subject 
to  CJEU  jurisdiction,  but  rather  resort  to  independent  arbitration  (for  instance  the  Europol 
agreements with Norway and with Switzerland). Another example is the EU-US umbrella agreement, 
which  contains  an  alternative  dispute  settlement  mechanism,  or  the  Europol-US  operational 
agreement.377 Indeed, the EU has not insisted on maintaining CJEU jurisdiction beyond a transitional 
period, consistent with EU agreements in this field with third countries. Some of those agreements 

371  E. Haves, Proposed UK-EU Security Treaty, House of Lords Library Briefing, 1 February 2018. 
372  European Commission, Police and judicial cooperation in criminal matters (slides), 18 June 2018. 
373  European  Union  (Withdrawal)  Act  2018,  26  June  2018.  See  also:  J.  Blitz,  May  seeks  united  Conservatives  as  Brexit 

strategy tested by Commons, Financial Times, 11 June 2018. 

374  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
375  H. F. Carrapico, op. cit. 
376  Police and judicial cooperation in criminal matters (slides), European Commission, 18 June 2018. 
377  H. Deane, A. Menon, op. cit. 

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however do include provisions on taking account of each other's case law and dispute settlement.378 
Experts consider that, given that the EU will need to continue to comply with CJEU case law, 'even if 
the future EU-UK security agreement has a separate arbiter, it will still indirectly need to follow the 
ECJ'.379 

378  S. Peers, UK/EU Security Cooperation After Brexit: the UK Government's Future Partnership Papers, EU Law Analysis 

Blog, 25 September 2017. 

379  H. F. Carrapico, op. cit. 

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6. Foreign policy, defence and development cooperation 

On foreign policy and defence, both sides in the negotiation are pursuing the option of reaching a 
deal as soon as possible after the exit day, prompted by the fact that during transition the UK would 
not be represented in the EU institutions, so it would not have a say in the EU's common foreign 
(CFSP) and defence (CSDP) policies which largely rely on unanimity.380 The possibility of reaching an 
earlier agreement regarding CFSP/CSDP, during the transition period, is also envisaged in the draft 
withdrawal  agreement.381  While  observers  consider  that  defining  a  future  EU-UK  partnership  in 
these areas would be easier compared to trade and economic cooperation, some disagreement has 
already arisen with respect to UK participation in the EU space programme, which may negatively 
impact the talks.  

6.1. The UK role in CFSP/CSDP 

Irrespective of the government in place, the UK has long been a promoter of intergovernmentalism 
in the EU's common foreign policy and defence policy, opposing any proposals for reform of these 
policies in the direction of diminishing the role and powers of the Member States in favour of the 
EU institutions.382 

Box 16 – The evolution of EU CFSP and CSDP 
Established by the 1992 Maastricht Treaty as the EU's second pillar, the CFSP provides for intergovernmental 
cooperation between EU Member States on foreign policy and security issues. It covers EU Member States' joint 
actions  and  common  decisions  in  all  matters  of  foreign  policy  and  external  security  (e.g.  diplomatic 
cooperation, imposition of sanctions on third countries or on persons suspected of terrorism), including the 
development  of  a  common  defence  policy  (which  would  later  become  the  CSDP).  Through  a  series  of 
institutional  and  procedural  changes,  the  Lisbon  Treaty  attempted  to  increase  the  coherence  and  the 
effectiveness of the EU's external action, among others by abolishing the EU's pillared structure, strengthening 
the  role  of  the  'double-hatted'  High-Representative  for  CFSP  who  became  also  Vice-President  of  the 
Commission, and by creating the EU's diplomatic service, the European External Action Service (EEAS), which 
coordinates a network of more than 130 EU delegations in third countries.  

The EU's CSDP developed more slowly: the UK and France agreed to create the European Security and Defence 
Policy  only  in  1998,  with  the  goal  of  autonomous  action  for  the  EU  in  response  to  international  crises  (but 
without prejudice to NATO). The CSDP covers today the EU's military operations and civilian missions in the 
performance of what is known as the 'Petersberg tasks' (e.g. conflict prevention and peace-keeping tasks, post-
conflict stabilisation in third countries etc.), as well as Member States' actions for improving and coordinating 
their defence capabilities. The Lisbon Treaty aimed to increase the potential of CSDP through more political 
and  operational  flexibility  and  introduced  some  new  possibilities  for  cooperation  in  this  field.  Inter  alia,  the 
concepts of permanent structured cooperation in defence (PESCO) and of a European armaments policy are 
included in the Treaty; a mutual assistance clause is also introduced, as well as the possibility for a group of 
Member States to take the lead in implementing certain defence tasks when not all Member States want to get 
involved.383  

Even  after  these  reforms,  both  the  CFSP  and  CSDP  have  maintained  their  specific  intergovernmental 
characteristics,  with  unanimous  decision-making  in  most  cases  and  limited  roles  for  the  Commission,  the 
European Parliament and the CJEU. Member States maintain control over the formulation and conduct of their 
national  foreign  policies.  Furthermore,  the  possibilities  offered  by  the  Lisbon  Treaty,  in  particular  regarding 
CSDP, have not been fully used, although significant steps have been made in recent years.384 

380  A. Barker, EU and UK seek speedy Brexit deal on defence and security, Financial Times, 4 February 2018. 
381  See Article 122(2) of the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern 

Ireland from the European Union and the European Atomic Energy Community, 19 March 2018. 

382  R. G. Whitman, The UK and EU foreign and security policy: an optional extra, The Political Quarterly, Vol. 87, No 2, 2016.  
383  C. Cîrlig, A. Dobreva, Common Foreign and Security Policy, EPRS, European Parliament, 2 March 2016.  
384  E. Lazarou, European defence – A year on from the global strategy, EPRS, European Parliament, July 2017.  

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In  CFSP  and  CSDP,  the  UK  has  been  considered  an  'awkward  partner',385  participating,  but  also 
preventing a more integrated policy, always careful not to undermine its special relationship with 
the United States and the role of NATO. It has, however, used foreign policy cooperation within the 
EU as an influence multiplier and as a means to advance its national security interests and priorities 
in the global arena. The review of the balance of competences carried out under the 2010-2015 UK 
government  evaluated  the  UK's  participation  in  the  CFSP  positively,  identifying  as  benefits  the 
increased impact of acting in coordination with the other EU-27 countries; the EU's comprehensive 
approach, combining trade, development and other tools; as well as the international weight of the 
EU's single market, among others.386 Reaching an agreement with Iran over its nuclear programme 
and the Serbia-Kosovo dialogue are illustrations of EU foreign policy successes that also advance 
some of the UK's priorities. Furthermore, the UK has benefited from the EU's weight in imposing 
restrictive  measures  against  third  states  or  individuals  under  the  CFSP.  For  example,  the  UK  has 
actively  supported  the  imposition  and  renewal  of  EU  sanctions  against  Russia  following  the 
annexation of Crimea in 2014. At the same time, in strategic and policy documents, the EU was not 
mentioned  as  a  central  tenet  of  the  UK's  foreign  policy,  but  considered  as  only  one  network  of 
influence for the UK as a foreign policy actor.  

As regards the CSDP, the situation is similar. Although the UK must be credited with the impetus for 
the early development of the CSDP, the policy has not turned into a central component of British 
defence planning, unlike NATO. Despite its significant capabilities and military power, the UK has 
provided a rather modest contribution to CSDP missions and operations. While it has participated 
in  most  CSDP  civilian  missions,  the  UK  has  however  provided  less  personnel  to  EU  military 
operations, preferring action through NATO.387 Moreover, it has also hindered further enhancement 
of  the  role  and  budget  of  the  European  Defence  Agency  (EDA),388  as  well  as  the  creation  of  a 
permanent EU operational headquarters for conducting CSDP missions and operations389 (national 
headquarters were put at the EU's disposal by certain Member States – including the UK – or the EU 
conducted these missions using NATO facilities).390 The UK has also recently begun to place more 
emphasis on developing bilateral security and defence relations, notably with France (e.g. the 2010 
Lancaster House treaties focused on nuclear cooperation and interoperability of their armed forces).  

Since  the  referendum  in  June  2016,  UK  government  representatives  have  repeatedly  made 
reference to 'Global Britain' as the vision for the UK's foreign policy post-Brexit. In adapting to the 
changes, the UK intends not to isolate itself from world affairs but to become 'a Britain with global 
presence, active in every region'. While the relationship with the EU will be a major priority, with the 
UK aiming 'to establish a new, deep and special partnership with the EU and European states', the 
UK's alliance with the United States will remain the 'top priority' and the 'cornerstone' of the UK's 
foreign  policy  objectives.  The  UK  will  also  look  towards  the  Indo-Pacific  region,  while  trying  to 
remain a key player in the Middle East, and collaborate with the EU with regard to the European 
neighbourhood. Also mentioned as UK interests are Africa, and a commitment to multialteralism 
through  the  UN,  as  well  as  the  Commonwealth.391  Many,  including  in  the  UK  Parliament,  have 
denounced 'Global Britain' as a slogan devoid of clarity and concrete policy proposals. While taking 

385  P.J.  Cardwell,  The  United  Kingdom  and  the  Common  Foreign  and  Security  Policy  of  the  EU,  Croatian  Yearbook  of 

European Law and Policy, 13 (2017), pp. 1-26. 

386  P.J. Cardwell, op. cit.  
387  The UK is the seventh largest contributor to CSDP civilian missions and the fifth to CSDP military operations.  
388  Quick Guide, European Defence Agency, 2016.  
389  A military planning and conduct capability was recently established within the EU military staff to command the EU 

non-executive military missions. 

390  R. G. Whitman, The UK and EU foreign, security and defence policy after Brexit: integrated, associated or detached?, 

National Institute Economic Review No. 238, November 2016. 

391  Global  Britain,  House  of  Commons,  Foreign  Affairs  Committee,  12 March 2018.  See  in  particular  the  Appendix: 

Memorandum from the Foreign and Commonwealth Office. 

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note of the array of resources at the UK's disposal, UK parliamentarians have underlined the lack of 
clarity over 'what the Government believes the UK should do with these resources and assets in the 
post-Brexit  environment,  and  how  the  UK  should  exercise  leadership  on  the  most  urgent  and 
complex issues facing the international system'.392  

6.2. UK and EU views on the future partnership in CFSP/CSDP 

Most experts believe that Brexit will lead to a lose-lose situation for both the EU and the UK, in terms 
of foreign policy influence, as well as in security and defence matters.  

The UK is one of the two EU Member States with a permanent seat on the United Nations Security 
Council, and one of the two EU nuclear powers. It is also an influential member of other groupings, 
such as the G7 and G20, and has a wide network of embassies and consulates around the world. 
Moreover, the UK is a significant contributor to aid for development, and one of the few EU Member 
States reaching the official development aid (ODA) target of 0.7 percent of Gross National Income 
(GNI).393 In terms of defence, the UK is one of the strongest European military powers, the biggest 
EU  military  spender,394  having  some  military  capabilities  and  (strategic)  assets  that  are  in  short 
supply among the other EU Member States. It also has one of the most developed defence industries 
in Europe and globally.395 Not to be forgotten is its intelligence network, in particular the Five-Eyes 
Alliance  with  the  US,  Canada,  Australia  and  New  Zealand.  All  these  characteristics  have  been 
repeatedly emphasised by UK representatives throughout the Brexit talks.  

With  the UK's  withdrawal,  the  EU will  therefore  lose  in  terms of  diplomatic weight  and  access  to 
important  UK  capabilities,  although  some  observers  consider  that  Brexit  would  also  provide  an 
impetus for the EU to advance its cooperation on defence (with several important developments 
already underway),396 and allow the EU to acquire a larger role in international fora.  

On the other hand, the UK will lose the multiplier force of action through the EU and access to the 
EU's comprehensive approach and wide range of policy tools, as mentioned above, as well as its 
influence in the EU decision-making process. It will also be less able to influence the destination of 
EU aid toward projects or countries of interest to the UK. Against this background, the EU and the 
UK have indicated they aim to preserve cooperation in foreign policy and defence after Brexit. 

6.2.1. The UK's position 
UK Prime Minister Theresa May has expressed her desire to conclude a future security partnership 
with the EU, which would be based on:397 

  regular  consultation  and  coordination  in  diplomatic  fora,  including  cooperation  on 

sanctions;  

  on  operational  cooperation  through  possible  UK  contribution  to  EU  missions  and 

operations and to EU development programmes and instruments;  

  on capability development, including a future relationship with the European Defence 

Fund and the European Defence Agency (see below).  

392  Ibid. 
393  Statistics on International Development 2017, UK Government, 16 November 2017. See also Net official development 

assistance from DAC and other countries in 2017, OECD, April 2018.  

394  How much is spent on defence in the EU?, Eurostat, 7 June 2017. 
395  N. Koenig, EU external action and Brexit: relaunch and reconnect, Policy Paper 178, Delors Institute, 22 November 2016.  
396  'EU remains committed to strengthen security and defence': Council adopts Conclusions, press release, 18 May 2017 

and Implementation Plan on Security and Defence, EEAS, updated 1 March 2018.  

397  PM speech at Munich Security Conference, UK Government, 17 February 2018. 

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While  working  with  the  EU  on  foreign  policy,  security  and  defence,  the  UK  will  focus  on 
strengthening bilateral cooperation with EU nations, and strive to preserve the centrality of NATO, 
as expressed in the government's white paper of February 2017.398 Among the EU Member States, 
France, Germany and Ireland were mentioned as priorities for the UK.399  

In its paper on foreign policy, defence and development of September 2017, the UK government 
sets out its view on a future partnership with the EU which would be 'deeper than any current third 
country partnerships' and 'unprecedented in its breadth' and 'degree of engagement'.400 Regular 
consultation on foreign and security policy, including the option of agreeing joint positions and of 
cooperating  on  sanctions  through  information  sharing  as  well  as  alignment  in  certain  cases,  is 
mentioned. The UK proposes to use 'existing foreign policy mechanisms' to cooperate in areas of 
common interest and on shared threats, including on counterterrorism. As regards defence issues, 
the UK expresses readiness to cooperate in the context of CSDP missions and operations, but with 
appropriate UK implication (proportionate to the level of its contribution) in the process of planning 
those EU missions. Future UK cooperation in European Defence Agency projects and initiatives, as 
well  as  participation  in  the  Commission's  European  Defence  Fund  (including  both  the  European 
Defence Research Programme and the European Defence Industrial Development Programme),401 
is also sought. Other aspects of the future partnership could consist, in the UK's view, of cooperation 
and alignment on development policy and programming, as well as 'continued cooperation on early 
warning, conflict prevention and stabilisation'. Finally, the UK wishes to offer: reciprocal exchange 
of  foreign  and  security  policy  experts  and  military  personnel;  classified  information  exchange  to 
support external action; and mutual provision of consular services in third countries where either 
EU Member States or the UK lack a diplomatic presence, and continued co-location of diplomatic 
premises. 

The presentation given on the framework for the UK-EU security partnership from May 2018402 to 
the Commission's Article 50 Task Force sets out three main areas of future cooperation on external 
security with some concrete proposals: consultation; coordination in the diplomatic, development 
and defence areas; and research and development cooperation on capabilities. The technical note 
of 24 May 2018 on consultation and cooperation on external security403 provides further details on 
what form the future EU-UK external security partnership might take. The white paper issued on 
12 July 2018 confirms the previously stated objectives, adding that the future EU-UK cooperation in 
this area is likely to require 'a combination of formal agreements enabling coordination on a case-
by-case basis'.404 

In  essence,  the  UK  position  aims  at  keeping  the  UK  involved  as  much  as  possible  in  CFSP/CSDP 
decision-making structures and processes, despite the lack of precedent for such an involvement 
for  non-EU  Member  States.405  Finally,  the  UK  welcomes  the  possibility  to  already  agree  and 
implement the future arrangements on CFSP and CSDP during the transition period.  

398  The  United  Kingdom's  exit  from  and  new  partnership  with  the  European  Union  White  Paper,  UK  Government, 

2 February 2017. 

399  Global  Britain,  Appendix:  Memorandum  from  the Foreign  and Commonwealth  Office,  House  of  Commons  Foreign 

Affairs Select Committee, 12 March 2018. 

400  Future partnership paper on foreign policy, defence and development, UK Government, September 2017. 
401  See  for  example,  the  Summary  on  the  Legislative  proposal  regarding  the  establishment  of  a  European  defence 

industrial development programme, European Parliament, 2017/0125(COD).  

402  Framework for the UK-EU Security Partnership, UK Government, May 2018. 
403  Technical note: Consultation and cooperation on external security, UK Government, 24 May 2018. 
404  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
405  CSDP after Brexit: the way forward, Policy Department for External Relations, European Parliament, 22 May 2018. 

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6.2.2. The EU's position 
The EU-27 have also stated their willingness to build a strong future partnership between the EU 
and the UK in the fields of foreign, security and defence policy. According to the European Council 
guidelines  from  March  2018,  'a  future  partnership  should  respect  the  autonomy  of  the  Union's 
decision-making, taking into account that the UK will be a third country, and foresee appropriate 
dialogue, consultation, coordination, exchange of information, and cooperation mechanisms. As a 
pre-requisite for the exchange of information in the framework of such cooperation, a Security of 
Information Agreement would have to be put in place'. The guidelines do not offer more detail on 
these  mechanisms.  Some  observers  argue  that  the  EU-27  are  still  discussing  which  model  of 
association in foreign policy and defence could be offered to the UK.406 Certain EU members are said 
to be reluctant to accept a special partnership with the UK that would give a degree of influence 
over EU policy to a non-EU country or are concerned about establishing precedents for other third 
countries (e.g. Turkey).407 

The EU's HR/VP Federica Mogherini has pointed to the fact that the EU and the UK share the same 
strategic  interests  and  the  need  for  both  to  remain  as  close  as  possible  in  this  area,  expressing 
confidence that the future was 'one of close partnership and cooperation'.408 

The EU's chief negotiator, Michel Barnier, has also stated that close cooperation and an ambitious 
partnership  between  the  EU  and  the  UK  are  possible  even  as  the  UK  becomes  a  third  state.409 
However, this cooperation would have to be organised differently to that which was possible during 
the UK's EU membership, therefore the UK will not have the same rights as an EU Member State. In 
particular, the UK will no longer participate in EU decision-making; no longer shape and lead the 
EU's  collective  actions;  and  British  entities  will  no  longer  have  the  same  rights  as  EU  entities.  In 
Barnier's view, the future partnership could include five dimensions: 

  close and regular consultations with the UK on foreign policy, including on restrictive 

measures and shared assessment of geopolitical challenges; 

  possibility for the UK to contribute to EU development aid programmes/projects, as well 

as to CSDP missions and operations; 

  possibility  for  the  UK  to  participate  in  EDA  projects,  keeping  in  mind  that  industrial 
defence cooperation is based on EU internal market rules (in particular as regards the 
European Defence Fund); 

  information exchange on cyber-incidents; 
  exchange and protection of classified information, including intelligence-sharing, with 

the conclusion of a security of information agreement as a precondition. 

As early as January 2018, the European Commission put forward ideas on future cooperation with 
the  UK  in  the  fields  of  security,  defence  and  foreign  policy,  followed  in  June 2018  by  another 
presentation taking into account the UK's proposals from the previous month. The autonomy of the 
EU's decision-making process; ensuring a balance of rights and obligations and avoiding that a non- 
EU country has the same benefits as a Member State, also remain the core principles guiding the 
negotiations with the UK in these areas. Existing frameworks of cooperation with third countries will 

406  N. Koenig, Towards Norway Plus? EU-UK defence cooperation post-Brexit, Blog Post, Jacques Delors Institut Berlin, 7 

February 2018.  

407  Th. Henökl, How Brexit affects EU external action: The UK's legacy in European international cooperation, Futures, Vol. 

97, March 2018, pp. 63-72. 

408  Remarks by HR/VP Mogherini at the EU Institute for Security Studies event on 'The future of EU foreign, security, and 

defence policy post Brexit', 14 May 2018.  

409  Speech by Michel Barnier at the EU Institute for Security Studies conference, 14 May 2018. See also Barnier pledges 

'close' security partnership with UK after Brexit, J. Brunsden, T. Buck, Financial Times, 14 May 2018. 

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also be taken into account, as well as the EU's own security interests.410 Finally, while recognising a 
certain convergence between the EU and UK on the strategic objectives and the components of the 
future partnership, the Commission points to differences as to the modalities proposed to achieve 
the  aims  of  the  future  partnership.  In  particular,  some  of  the  British  requests,  if  accepted,  would 
imply  a  change  in  the  EU  applicable  rules.  In  the  Commission's  view  therefore,  the  future 
relationship should: 'reflect the third country status of the UK; include scalable and proportionate 
mechanisms depending on the level of commitment of the UK alongside the Union on a case-by-
case basis; include reciprocity where relevant; and be formalised'. 

6.2.3. Towards  new  arrangements  in  CFSP/CSDP:  main  issues  for  the 
negotiations 

The CFSP and CSDP, as mentioned, are less integrated policy areas than, for example, trade and even 
justice and home affairs and, as such, a certain flexibility may be possible from the point of view of 
EU law. Nevertheless, agreeing to a privileged status for the UK in particular by meeting its demands 
for closer involvement in the EU's decision-making process after Brexit would be difficult for the EU-
27,  against  the  background  of  maintaining  EU  autonomy  in  decision-making  and  its  current 
relationships with third countries in these two areas. Whereas EU decision-making autonomy is non-
negotiable,  a  special  relationship  with  the  UK  has  not  been  entirely  dismissed  by  the  EU.  For 
example, Michel Barnier has mentioned rather ambiguously that UK's involvement in EU defence 
will 'confer rights and obligations in proportion to the level of this participation'.411 However, the EU 
would need to tread carefully, so as not to be seen as discriminating against other third country 
partners.  On  the  other  hand,  as  some  EU  partners  (Norway,  Turkey)  have  long  demanded  to  be 
involved to a higher degree in some aspects of the CFSP and, in particular, CSDP, and the EU has 
already  started  a  reflection  process  on  this  issue  (see  below),  the  negotiations  with  the  UK  may 
provide additional impetus for devising mechanisms for closer participation in the future, not only 
for the UK but also for some other EU third country partners. 

6.2.4. Common Foreign and Security Policy coordination 
When the UK leaves the EU, it will be excluded from EU decision-making in the CFSP area and will 
thereby lose its ability to influence policy from the inside or veto the development of policy.412 The 
EU does not allow any third country to participate in its decision-making structures – the European 
Council, Foreign Affairs Council, Political and Security Committee (PSC) and related working groups. 
Moreover, third countries do not take part in Member States' coordination meetings organised by 
EU delegations in third countries, or at international organisations. 

The main challenge for the negotiations in this area will be to identify those mechanisms that allow 
for a large degree of coordination between the EU and the UK, without compromising the autonomy 
of the EU's decision-making and upsetting other third country partners. The Commission envisages 
two options: using the existing cooperation mechanism with third countries, or setting up a specific 
dialogue and consultation mechanism with the UK, considering its status as one of the permanent 
five members of the UN Security Council. 

The  UK  set  out  its  proposals  in  May  2018  as  regards  the  future  cooperation  arrangements. 
Accordingly, the EU and UK should establish a framework of consultation and cooperation on shared 
global challenges, up to leader level, to be flexible and thematic, as well as including a day-to-day 
exchange of views with Member States and EEAS. In crises situations, the UK proposes intensified 

410  Slides on Security, Defence and Foreign Policy, European Commission, 24 January 2018; Foreign, security and defence 

policy (slides), European Commission, 15 June 2018. 

411  Policy Department for External Affairs, European Parliament, op. cit. 
412  R. G. Whitman, The UK and EU foreign, security and defence policy after Brexit: integrated, associated or detached?, 

National Institute Economic Review, No 238, November 2016. 

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cooperation,  including  on  consular  protection.  The  EU-UK  partnership  should  also  include 
coordination  of  foreign  policy  levers;  joint  positions,  statements  and  actions;  UK  support  for  EU 
programmes  and  election  observation  missions;  as  well  as  coordination 
international 
organisations. The UK therefore proposes regular cooperation and consultation: 

in 

  with  the  EEAS  :  regular,  day-to-day  exchanges  of  views  with  the  EEAS,  including  at 
Secretary  General  and  Political  Director  levels,  as  well  as  thematic  and  geographic 
consultations  at  Director  level,  including  with  the  Commission,  where  appropriate; 
weekly  dialogues  between  the  PSC  Chair  (a  representative  of  the  EEAS)  and  the  UK 
Mission in Brussels; 

  with the EU-27: the UK could attend ad hoc meetings of the Foreign Affairs Council in 
informal sessions or attend sessions of informal Council meetings; and ad hoc meetings 
with the PSC in informal sessions; 

  in third countries or at international organisations: through regular contact between the 
EU  Head  of  Delegation  and  the  UK  embassy  or  other  diplomatic  mission;  ad  hoc 
attendance  at  informal  session  of  EU  Heads  of  Mission  meetings;  and  working  level 
consultation with the EU in multilateral fora, such as the UN, G20, etc. 

  on  intelligence  and  analysis  sharing:  through  the  European  Union  Intelligence  and 

Situation Centre (INTCEN), where the UK could establish a permanent liaison. 

These consultations would lead to the possibility of joint outcomes, including joint statements, joint 
positions or démarches, as well as mutually supportive interventions or positions.  

In its June 2018 paper to the EU-27, the Commission mentions that a future consultation mechanism 
on foreign policy should be: reciprocal (in scope, depth and timing of consultation); scalable or 
proportionate (political dialogue on geographic and thematic issues at various levels – Ministers, 
senior officials etc., but also intensified dialogue in crisis situations, or on the basis of a political UK 
commitment  to  engage  with  the  EU  in  a  specific  policy  field);  formalised,  for  reasons  of 
finally,  centralised 
predictability, 
(headquarters) or local – in third countries and international organisations – where the consultation 
organised by the EU delegations should facilitate a coordinated EU-27 and UK approach.413  

transparency,  manageability  and  accountability;  and 

Regarding intelligence cooperation in particular, the Commission has proposed a mechanism that 
would allow timely and in-depth exchange of intelligence and sensitive information between the 
EU and the UK through: close interaction with UK points of contact and experts in specific fields; 
possible  use  of  electronic  networks  to  facilitate  sensitive  information  exchange;  and  an 
administrative arrangement with the EU Satellite Centre to have access to products, services against 
cost-recovery, as well as the possibility to second imagery analysts. The Commission pointed out 
that the UK proposal to assign a permanent liaison presence to the EU's INTCEN but also to the EU 
Military Staff would amount to a status quo situation that would give the UK a similar treatment to 
EU Member States.  

Box 17 – Foreign policy arrangements with third countries 
Current arrangements with third countries vary in terms of institutionalisation and frequency of dialogue. 
For  example,  Norway  does  not  have  any  formal  agreements  with  the  EU  on  foreign  policy,  however 
consultation takes place regularly, in particular with the EEAS, the EU Member States, and through ad hoc 
consultation  with  the  EU's  HR/VP.  Moreover,  in  the  context  of  the  EEA  Agreement,  there  is  a  biannual 
political  dialogue  on  foreign  policy  issues.  The  EU  also  invites  Norway  and  the  other  EFTA  partners  to 
consultations with the Council Working Groups. Norway is invited to align itself to EU common positions 
and declarations, which it generally does.414  

413  Foreign, security and defence policy (slides), European Commission, 15 June 2018. 
414  Norway and the EU: Foreign and security policy, Mission of Norway to the EU. 

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Another example is Ukraine, which has concluded an Association Agreement with the EU. The EU-Ukraine 
Agreement includes a political chapter setting out the objectives of foreign and security policy cooperation 
between the two, as well as the institutional fora for dialogue.415 It contains commitments of the Parties to 
'intensify  their  dialogue  and  cooperation  and  promote  gradual  convergence  in  the  area  of  foreign  and 
security policy, including the Common Security and Defence Policy (CSDP), and shall address in particular 
issues  of  conflict  prevention  and  crisis  management,  regional  stability,  disarmament,  non-proliferation, 
arms control and arms export control as well as enhanced mutually-beneficial dialogue in the field of space.' 
The  institutional  framework  includes:  regular  political  dialogue  meetings  at  summit  level;  ministers' 
meetings within the Association Council (body set up by the Agreement), as well as meetings at foreign 
minister  level;  regular  meetings  at  Political  Director,  Political  and  Security  Committee  and  expert  level, 
including on specific regions and issues; appropriate contacts in third countries and in international fora; 
regular meetings both at the level of high officials and of experts of the military institutions of the Parties; 
and finally any other mechanisms for political dialogue, including extraordinary consultations, are to be set 
up  my  mutual  agreement.  As  in  the  case  of  Norway,  there  is  a  high  degree  of  alignment  on  the  part  of 
Ukraine with the EU's statements and declarations on international and regional issues.416 

Restrictive measures (CFSP sanctions) 
Restrictive measures are one of the areas where diplomatic cooperation between the EU and the UK 
would be necessary. The EU makes use of restrictive measures or sanctions as an essential foreign 
policy tool. CFSP sanctions may be imposed on governments of third countries, but also on entities, 
groups and organisations, as well as on individuals which are suspected of terrorist activities. These 
can take the form of arms embargos, trade restrictions, asset freezes and travel bans. The EU can 
impose sanctions autonomously, but applies also all sanctions decided by the UN Security Council 
(which are converted into EU law). The EU Member States are responsible for implementation.417 
Currently, the EU imposes restrictive measures in relation to over 30 countries, and terrorism-related 
sanctions against entities, organisations/groups and individuals. Whereas arms embargos and travel 
bans based on a Council CFSP decision (based on Article 29 TEU) are implemented directly by the 
Member States, economic sanctions such as asset freezes falling under trade and internal market 
competences require additional legislation, through an EU regulation (with direct effect) adopted 
by the Council on the basis of a joint proposal from the HR/VP and the Commission (according to 
Article 215 TFEU).418 

Box 18 – The UK Sanctions and Anti-Money Laundering Act 
In  light  of  Brexit,  the  UK  has  developed  its  own  national  powers  to  impose  sanctions.419  The  UK 
government's Sanctions and Anti-Money Laundering Act provides the UK with a national sanctions legal 
framework and policy (it also updates the national anti-money laundering regime). The European Union 
Withdrawal Act copies existing EU-derived sanctions measures into UK law. The sanctions legislation will 
allow names to be added and removed to this retained EU law and provides a legal basis for imposing new 
sanction regimes. The Act replicates existing EU powers to impose sanctions, but with some changes, in 

415  See Title II on Political dialogue and reform, political association, cooperation and convergence in the field of foreign 

and security policy, EU-Ukraine Association Agreement, OJ L 161, 2014. 

416  See for example: EU-Ukraine Association Council - Joint communiqué, 8 December 2017.  
417  Please see The EU Sanctions Map, Council of the EU, last update 16 May 2018; the Consolidated list of persons, groups 
and entities subject to EU financial sanctions, EEAS, last update 16 May 2018; Sanctions, Service for Foreign Policy 
Instruments, European Commission. 

418  C. Cîrlig, Counter-terrorist sanctions regimes: Legal framework and challenges at UN and EU levels, EPRS, European 

Parliament, October 2016. 

419  See  the  Sanctions  and  Anti-Money  Laundering  Act.  For  a  complete  overview  of  its  provisions,  see  B. Smith,  The 
Sanctions  and  Anti-Money  Laundering  Bill  2017-19,  House  of  Commons  Library  Briefing  Paper  CBP-  8232, 
15 February 2018. 

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particular in order to give greater flexibility to impose sanctions, to create a more effective licensing system 
and to establish own guidance on compliance.420  

In  the  UK's  view,  in  the  future,  the  EU  and  UK  could  share  information,  expertise  and  technical 
support for the substantiation of EU and UK sanctions designations, as well as closely cooperate and 
consult each other on the development and adoption of measures, to ensure the effectiveness of 
sanctions. In particular, consultation and cooperation on sanctions could include:  

  exchange of information on listings and their justification; 
  UK-EU sanctions dialogue; and 
  intensive  interaction  when  one  of  the  parties  is  trying  to  adopt  mutually  supportive 

sanctions, including in crisis situations.  

Maintaining cooperation with the UK on restrictive measures is also in the EU's interest, as the EU-
27  will  lose  the  UK's  significant  expertise  in  designing  and  substantiating  the  sanctions  listings. 
While the EU's sanctions policy will be formulated on the basis of EU-27 interests, the EU will seek a 
coordinated  approach  with  the  UK  to  avoid  diverging  sanctions  regimes,  as  the UK  also  benefits 
from the weight of the EU in the imposition and implementation of sanctions.421 In the Commission's 
view,  consultation  with  the  UK  on  sanctions  should  aim  at  facilitating  early  information-sharing, 
minimising  the  risk of divergence  and  also  eventually  enable UK  convergence  with  EU  sanctions 
policy. The mechanism for consultation on foreign policy should comprise a formalised regular EU-
UK  sanctions  dialogue  (on  EU  and UK  sanctions  policy  and  practice;  on  the  sanctions  regimes  in 
place and regarding the exchange of good practices), but also intensified dialogue and in-depth 
interaction  at  all  appropriate  policy  stages,  in  situations  when  sanctions  are  reviewed,  or  new 
sanctions are imposed, or when existing sanctions regimes are lifted, provided that 'the UK commits 
to align with the EU foreign policy objectives that underpin the restrictive measures in question'.422 

Experts consider, however, that sanctions are a 'highly complex issue to be resolved' in the EU-UK 
negotiations, due to the fact that restrictive measures are not a purely CFSP related matter, but are 
connected  also  to  the  internal  market,  as  explained  above.423  Some  took  the  view  that  an 
institutional arrangement would be necessary to allow the UK to remain aligned to EU sanctions 
policy, but also to be involved in the design of new measures, having regard to its important role so 
far in designing sanctions and identifying their targets, and avoid the risk of 'sanctions dumping'. In 
this context, a 'new institutional formula of EU-27+1 in shaping and co-implementing sanctions' was 
suggested by some academics. In any case, clear mechanisms for cooperation will be critical for the 
credibility and effectiveness of the common EU-UK efforts in this area.424 

Box 19 – EU coordination with third countries on sanctions 
At present, the EU and third countries coordinate on sanctions in the following ways:425 

  with the USA, there is formal EU-US coordination based on regular meetings and information 
sharing, exchange of best practices, and updates on new and existing sanctions regimes. The 
EU usually aligns to US sanctions; 
in the case of non-EU European partners, the EU invites partners to align to a new sanctions 
regime, after the decision has been taken at EU level. They are not involved in the EU decision-
making process and there is no legal obligation for them to align to an EU restrictive measure. 

420  B. Smith, The Sanctions and Anti-Money Laundering Bill 2017-19, House of Commons Library Briefing Paper CBP-8232, 

15 February 2018. 

421  Slides on Security, Defence and Foreign Policy, European Commission, 24 January 2018. 
422  Foreign, security and defence policy (slides), European Commission, 15 June 2018. 
423  P.J.  Cardwell,  The  United  Kingdom  and  the  Common  Foreign  and  Security  Policy  of  the  EU,  Croatian  Yearbook  of 

European Law and Policy, 13 (2017), pp. 1-26. 

424  E. Moret, F. Pothier, Sanctions after Brexit, Survival (00396338), Vol. 60 Issue 2, April 2018, pp.179-200. 
425  Ibidem. 

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Switzerland  coordinates  through  diplomatic  channels  with  the  EU  regarding  the 
implementation  and  enforcement  of  sanctions  with  which  it  chooses  to  align.  Norway 
engages with the EU through dialogue on sanctions, but coordination and consultation are 
not  regular  or  formalised.  When  it  decides  to  align  with  an  EU  sanctions  regime,  Norway 
translates the Council's act enacting the sanctions, with modifications, into domestic law.  

One important aspect when it comes to sanctions is the role of the CJEU. While in CFSP and CSDP 
matters the Court has a very limited role, it does have jurisdiction over sanctions issues. According 
to Article 275 TFEU, the CJEU has the power to review the legality of CFSP decisions providing for 
restrictive measures against natural or legal persons, but also of the EU regulations providing for the 
freezing of assets in implementation of CFSP decisions. The risk of divergence after Brexit will be 
real, as many challenges to EU sanctions before the CJEU are successful, leading to the removal of 
those sanctions, and probable consequences on capital movement between the EU and the UK.426 

The exchange of classified information: a cross-cutting issue 
According to both the EU and the UK, the future exchange of classified information in the framework 
of  this  partnership  (including on  sanctions or  intelligence,  but  also regarding  CSDP  cooperation) 
should  be  based  on  a  security  of  information  agreement  (SoIA).  The  EU  has  concluded  SoIA 
agreements with around 20 countries and international organisations on the security of classified 
information, including the EU's neighbouring countries, the USA, Australia, and organisations such 
as NATO or the European Space Agency. In general, these agreements provide for the protection of 
classified  information  exchanged  between  the  parties,  they  indicate  the  corresponding  security 
classifications  in  the  EU  and  in  the  third  country  or  international  organisation  and  establish  the 
procedures for the exchange of such information.427 

The  UK  published  a  technical  note  on  the  exchange  and  protection  of  classified  information  in 
May 2018.428  In  its  view,  a  SoIA  with  the  EU  should  not  prejudice  existing  or  future  bilateral 
agreements  between  the  UK  and  EU  Member  States,  and  should  cover  a  wide  range  of  areas, 
essential  among  which  are  CSDP  missions  and  operations,  the  EU's  INTCEN,429  and  cyber-threat 
reporting. The UK has indicated that the agreement with Canada is a useful model. In the UK's view, 
the SoIA sets out the general legal framework for the exchange of information, while further details 
may be set out in other supporting implementing arrangements – which may also serve to address 
specific programmes or topics. In this context, the UK is seeking specific arrangements at least as 
regards Galileo (see below). The UK will also seek appropriate arrangements for the exchange and 
protection of sensitive non-classified information. 

6.2.5. Common Security and Defence Policy 
A framework for consultation and coordination would also be needed with respect to UK possible 
participation in CSDP missions and operations, as well as in EU capability development programmes. 
However, no comprehensive EU framework applies to cooperation with third countries in CSDP, but 
instead  different  instruments  and  various  degrees  of  involvement  of  third  countries  exist.430 
Moreover, whereas the UK is seeking a certain degree of participation in the EU decision-making 

426  S. Peers, UK/EU Security Cooperation after Brexit: the UK Government's Future Partnership Papers, EU Law Analysis 

blog, 25 September 2017.  

427  Database of International Treaties and Agreements, Council of the EU. 
428  Technical note on the exchange and protection of classified information, UK Government, 24 May 2018. 
429  EU Analysis Intelligence Centre, formerly named EU Joint Situation Centre (SitCen) and based in the Council Secretariat 
since 1999, is now part of the EEAS. Its role is to provide 'intelligence analyses, early warning and situational awareness' 
to EU institutions and Member States in the fields of security, defence and counter-terrorism. 

430  Policy Department for External Affairs, European Parliament, op. cit. 

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process,  the  Commission  has  already  stated  some  red  lines,  in  the  field  of  CSDP,  that  apply  in 
general to cooperation with third countries:431  

  no UK  participation  in  Council  (EU ministers)  or  Political  and Security  Committee  (EU 

ambassadors) meetings;  

  no lead as Battlegroup framework nation or in CSDP missions and operations;  
  no provision of EU operation headquarters by the UK;  
  participation  in  permanent  structured  cooperation  (PESCO)  by  invitation  only,  under 
the criteria for third countries and subject to Council (in PESCO format) approval;432 

  no participation in the management of the European Defence Agency; and 
  no  benefits  from  the  European  Defence  Fund  (EDF)  equivalent  to  those  of  Member 

States.  

As regards the UK, in the latest papers on cooperation with the EU on foreign policy and defence, 
the government has conditioned the potential scope of UK contributions to CSDP on the depth of 
the  future  arrangements.  Accordingly,  the  UK  proposes,  based  on  the  model  of  the  suggested 
cooperation  in  CFSP,  inter  alia,  regular  political-military  dialogue  and  consultation  through 
participation in ad hoc meetings in informal sessions of the PSC and of the EU Military Committee; 
ad hoc participation in Council (meetings of the defence ministers) informal sessions or attending 
sessions of informal Councils; joint awareness and analysis through a permanent UK liaison to the 
EU military staff and INTCEN. The UK also seeks, as described below, a certain influence over CSDP 
missions and operations, to a greater extent than current EU cooperation with third countries allows, 
as well as a reinforced role through specific EU-UK consultation and dialogue as regards capability 
development.  

CSDP missions and operations 
Currently, third countries are invited to contribute to CSDP missions and operations433 – and around 
45  non-EU  countries  have  taken  part  in  such  missions  and  operations  since  their  launch  –  but 
without  decision-making  powers  over  the  operational  plans  of  those  missions;  they  are  also 
involved  rather  late  in  the  process  of  establishing  the  mission,  and  after  the  approval  of  their 
participation  by  the  PSC.  A  committee  of  contributors  is  set  up  after  a  mission  or  operation  is 
launched,  which  includes  the  contributing  third  countries,  but  even  then,  their  involvement  is 
reduced in comparison to the role of EU Member States.434 On the other hand, it is clear that third 
country contributions to CSDP missions and operations have been rather limited, although essential 
to filling some EU capability gaps. As mentioned, the UK has made a rather modest contribution to 
such missions and operations compared to its capabilities, and it remains to be seen to what extent 
it would want to participate as a third country in CSDP missions and operations.  

According to the UK position, the UK could continue to cooperate with the EU on CSDP missions 
and operations, when in the mutual interest and ensuring independent decision-making for the EU 
and  the  UK.  As  mentioned,  the  scope  of  UK  contributions  would  depend  on  the  arrangements 
defined. The UK would therefore be willing to contribute, on a case-by-case basis, personnel, assets 
and  expertise  to  such  missions  and  would  be  willing  to  host  the  operational  headquarters.  In 
support  of  EU  deployments,  the  UK  could  make  important  niche  capabilities  available,  such  as 
strategic airlift, and could cover the common costs and specific mission costs of its participation in 
a particular CSDP mission or operation on the same basis as other third states. However, it would 
seek ad hoc consultations in informal sessions at all political and military levels (Council, PSC, EU 

431  Slides on Security, Defence and Foreign Policy, European Commission, 24 January 2018. 
432  Council Decision (CFSP) 2017/2315 of 11 December 2017 establishing permanent structured cooperation (PESCO) and 

determining the list of participating Member States, OJ L 331, 2017. 

433  CSDP handbook, European Security and Defence College, Vol. I, Third Edition, 2017.  
434  T. Tardy, CSDP: getting third states on board, EU ISS, March 2014. 

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Military Committee) in exchange, as well as UK participation in the Committee of Contributors set 
up for missions and operations. This latter request is in line with the current practice of involving 
third countries in CSDP missions and operations. Moreover, the UK seeks full involvement in force 
generation and calls for contributions, including a possible ongoing contribution to the EU force 
catalogue. The UK also makes the case for sharing classified and sensitive information to support EU 
planning and situational awareness. In particular, the UK proposes embedding experts and liaison 
staff  in  the  EU  military  staff  and  EEAS,  sharing  of  early  planning  documents  for  missions  and 
operations and allowing the UK to provide input prior to the EU's decision to launch a mission. It will 
have to be seen to what extent the UK could be allowed to provide such input as a third country.435 
Finally,  the  UK  offers  to  provide  diplomatic  support  to  the  EU  as  regards  crisis  management 
operations in other third countries. 

In the EU's view, the future UK contribution to CSDP missions and operations would be based on 
one of three options: a framework participation agreement (FPA), an ad hoc agreement or a new 
model for cooperation.436  

  Framework  participation  agreements:  offer  a  longer  term  solution  for  operational 
cooperation in crisis management between the EU and other third states, rather than 
concluding agreements on a case-by-case basis. FPAs have been concluded by the EU 
with some 18 countries437 and represent the legal basis for these countries' participation 
in CSDP missions and operations, including provisions on the status of personnel and 
forces, the modalities of information exchange, the involvement of third states in the 
decision-making  process  and  conduct  of  the  operations,  as  well  as  financial  aspects, 
both  for  civilian  and  military  operations.438  The  contribution  of  third  states  to  CSDP 
operations is 'without prejudice to the decision-making autonomy of the Union'.  

  Ad-hoc  agreements:  are  concluded  on  a  case-by-case  basis,  establishing  the 
conditions  for  the  participation  of  a  third  country  in  a  specific  CSDP  mission  or 
operation.439  

  A new and more ambitious framework applicable to third countries: developing any 
more advanced model for cooperation with the UK should, in the EU's view, mean it is 
also made available to other third countries. Indeed, it is a longstanding demand from 
some third countries, such as Norway which already has a close cooperation with the 
EU in the field of foreign policy and defence, that the EU allow for 'closer involvement 
in discussions, 'decision-shaping' and information sharing as regards CSDP operations 
and  missions.  A  more  tailored  approach  based  on  differentiation  between  various 
partner  countries,  taking  into  consideration  their  individual  characteristics  has  been 
called for.440 In this context, the closer involvement offered by NATO to some partner 
countries  has  been  underlined  (e.g.  Finland  and  Sweden  which  have  the  status  of 
'enhanced opportunities partners' in NATO, and are extensively involved in relation to 
operations and policy deliberations).441 A reflection process has also begun among EU 

435  It appears that the EU is unwilling to renew seconded UK military personnel to EU bodies after Brexit. See D. Bond, 

A. Barker, UK military secondments to EU to cease after Brexit, Financial Times, 6 June 2018. 

436  Slides on Security, Defence and Foreign Policy, European Commission, 24 January 2018. 
437  T. Tardy, CSDP: getting third states on board, EU ISS, March 2014. See also List of FPAs with third countries, Council of 

the EU.  

438  E.g. Framework Agreement between the United States of America and the European Union on the participation of the 

United States of America in European Union crisis management operations. 

439  E.g. Agreement between the European Union and Montenegro on the participation of Montenegro in the European 
Union  military  operation  to  contribute  to  the  deterrence,  prevention  and  repression  of  acts  of  piracy  and  armed 
robbery off the Somali coast (Operation Atalanta). 

440  Please see Speech of State Secretary Tone Skongen, Norwegian Security Policy – including participation in the CSDP, 

28 February 2018 and Foreign and security policy, Mission of Norway to the EU. 

441  See: Partnership tools, NATO, last update 24 June 2016.  

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Member  States,  with  a  view  to  developing  a  more  strategic  approach  to  CSDP  third 
country partners. In its May 2017 conclusions, the Council underlined the importance of 
'associating contributing partners as closely and as early as possible to the conduct of 
these missions and operations', but nevertheless 'in full respect of the EU's institutional 
framework and its decision-making autonomy'.442 In particular, the EU would maintain 
regular dialogue with those countries with an FPA and regularly contributing to CSDP 
missions and operations, and inform them with regard to CSDP developments, while 
continuing work on facilitating their participation in CSDP missions and operations.  

The FPA option has subsequently been highlighted by the Commission as the preferred mechanism 
for  the  UK's  participation  in  CSDP  missions  and  operations.  What  seems  to  be  new  is  the 
Commission's vision of a scalable arrangement: conditional on a confirmed UK political commitment 
to significantly (in qualitative or quantitative terms) contribute to a CSDP mission or operation, the 
EU's interaction with the UK should intensify 'at relevant stages of the planning process, to allow the 
UK to best tailor its contribution and provide timely expertise to the EU'. The UK would participate 
in  the  Committee  of  Contributors  of  the  CSDP  mission  or  operation  and  in  the  force  generation 
conference.  The  UK  could  also  second  staff  to  the  operational  headquarters  of  the  mission  or 
operation, in proportion to the UK contribution.443  

The UK should also be able to participate in the EU's Battlegroups (the EU's rapid reaction force), 
according to the Commission. Some third countries – such as Norway, Ukraine, Serbia – have indeed 
contributed to the EU Battlegroups.444 In March 2018, the UK officially withdrew its battlegroup offer 
for the second semester of 2019 – for which it was a lead nation – in view of Brexit uncertainties.445 
In  this  context,  some  UK  officials  are  quoted  as  saying  that  future  UK  involvement  in  the  EU 
Battlegroup  programme  will  depend  on  whether  the  UK  can  negotiate  greater  involvement  in 
decision-making  and  control  than other  third  states  over  EU  missions  and  operations in  general. 
Officially, the UK has also indicated openness to future contributions to EU Battlegroups.  

The UK has, however, joined a new initiative spearheaded by France – the European Intervention 
Initiative (EII) – alongside other EU Member States: Germany, Belgium, Denmark, the Netherlands, 
Estonia,  Spain  and  Portugal.  Established  on  25  June  2018,  the  EII  aims  at  ensuring  coordination 
among national armed forces, as well as rapid reaction in critical situations, and is outside both the 
EU and NATO structures. As such, Brexit will have no consequences on full UK involvement in the 
EII.446  

Capability development 
Interest has been expressed from both the EU and the UK to continue cooperation in the field of 
capability development. In particular, both parties have indicated that an agreement between the 
UK and the European Defence Agency to work on specific capability projects would be appropriate. 
Furthermore, the UK expressed interest in participating in some recently established EU initiatives, 
such  as  the  European  Defence  Fund,  comprised  of  a  research  strand  and  a  European  Defence 
Industrial Development Programme, as well as in PESCO projects. Moreover, due to the UK's existing 
integration into the European Defence Technological and Industrial Base (EDTIB), the UK believes 

442  Conclusions on Security and Defence in the context of the EU Global Strategy, Council of the EU, 9178/17, 18 May 2017. 
443  Foreign, security and defence policy (slides), European Commission, 15 June 2018. 
444  EU Battlegroups, EEAS, Fact Sheet, 5 October 2017.  
445  T. McTague, D. M. Herszenhorn, Britain pulls out of EU defense force, Politico Europe, 20 March 2018. 
446  D. Boffey, Nine EU states sign off on joint military intervention force, The Guardian, 25 June 2018. See also: A. Gorka, 
The European Intervention Initiative: a New Military Force Established in Europe, Strategic Culture Foundation, 27 June 
2018; A. Pannier, France's Defence Partnerships and the Dilemmas of Brexit, Policy Brief, German Marshall Fund, 30 
May 2018.  

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that the future partnership should not disrupt supply chains, should support the operation of EU 
and UK defence companies and not disadvantage companies with EU-UK ownership.  

  European Defence Agency (EDA)447 

The  possibility  of  concluding  an  administrative  arrangement  between  the  UK  and  the  European 
Defence Agency (all Member States participating, except Denmark who has an opt-out) setting out 
specific areas of cooperation has been highlighted by both the EU and the UK. EDA cooperates with 
third countries and organisations by way of administrative arrangements (negotiated by the Head 
of  the  EDA  and  approved  by  the  European  Council),  allowing  the  participation  of  these  third 
partners in EDA projects and programmes. The EDA has arrangements in place with Norway (2006), 
Switzerland (2012), the Republic of Serbia (2013) and Ukraine (2015), as well as with organisations 
such  as  the  Organisation  for  Joint  Armament  Cooperation  (OCCAR),  the  European  Space  Agency 
and a cooperation arrangement with the European Aviation Safety Agency.  

Should such an administrative arrangement with EDA be concluded after Brexit, the UK would have 
the possibility of participating in EDA projects and programmes as a third country without having 
to contribute to the agency's common costs.448 In 2016, the UK was the second largest contributor 
among the 27 participating Member States – of around €5 million – to the common costs of the 
Agency,  after  Germany.449  In  the  UK's  view,  an  administrative  arrangement  with  the  EDA  would 
enable:  UK  participation  in  EDA  projects;  a  coordinated  approach  to  European  capability 
development  and  planning,  including  through  prior  consultation  on  capability  development 
priorities  and  UK  input  into  EU  capability  planning  processes.  In  this  context,  the  UK  proposes  a 
regular strategic dialogue on capability collaboration and industrial development; consultation on 
capability planning processes; ad hoc invitations to the EDA Ministerial Steering Boards, as well as 
ad  hoc  UK  attendance  at  EDA  Directors'  meetings.  In  a  wider  perspective,  a  dialogue  with  the 
Commission would be established, with the objective of managing UK engagement in EDF projects 
(see below); as well as an exchange of expertise, including through a permanent UK liaison presence 
at EDA, as well as at the Commission. Access to sensitive information and commercial opportunities 
would be prerequisites for UK contributions to capability programmes. 

In the Commission's view, while an administrative arrangement would allow for British participation 
in  EDA  ad  hoc  projects  and  working  groups,  the  UK  would  be  excluded  from  EDA  management 
structures: EDA is governed by a Steering Board made up of the Head of the Agency, all EU Member 
States'  defence ministers  except  Denmark  and  a  Commission  representative. However,  based on 
EDA rules and procedures, the Commission envisages that the UK could possibly be invited to EDA 
steering  boards/directors  meetings  (National  Armaments  Directors/Capability  Directors/Research 
and Technology Directors), 'on a case-by-case basis and for items of common interest, without a 
decision-making role'.450 In addition, the UK would have the possibility to second personnel to the 
EDA.451 

It should be noted that the UK is also a member of the Organisation for Joint Armament Cooperation 
(OCCAR) together with France, Belgium, Germany, Italy and Spain, and of the Letter of Intent (LoI) 

447  Please  see  Member  States,  and  Long  term  review  of  the  agency  –  conclusions  and  recommendations,  EDA, 

18 May 2017.  

448  Third  countries  contribute  to  the  costs  of  the  programmes  or  projects  in  which  they  take  part,  on  the  basis  of 
contractual  arrangements  (see  for  example  the  EDA-Switzerland  administrative  agreement).  Third  country 
participation in EDA ad hoc activities related to wider EU policies needs to be consistent with the relevant rules defined 
in the relevant EU regulations.  

449  2016 Annual Accounts, European Defence Agency, 30 June 2017.  
450  Foreign, security and defence policy (slides), European Commission, 15 June 2018. 
451  Ibidem.  

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Framework  Agreement  with  France,  Italy,  Germany,  Spain  and  Sweden.452  Both  organisations, 
founded  by  intergovernmental  agreements  outside  of  the  EU  framework,  have  the  objective  of 
reinforcing  European  industrial  defence  cooperation  through  the  management  of  common 
armaments programmes (OCCAR) and devising common regulatory and legislative procedures in 
this field (LOI/FA). However both have developed a close cooperation with EDA, and their continued 
functioning  with  the  UK  as  a  member  may  require  some  changes  in  the  light  of  Brexit.  Should 
OCCAR, for example, transform into an EU agency for military acquisitions in the future, then UK 
membership as a third country would raise some problems.453  

  PESCO 

The recently launched PESCO – one of the most important steps taken by 25 EU Member States in 
the field of defence cooperation – will focus on 17 projects agreed in March 2018 (e.g. European 
Medical Command), with others to be agreed later in 2018.454 Capabilities developed under PESCO 
remain in the ownership and control of the participating Member States. The UK has decided not to 
take part in PESCO for the time being. The UK government has however expressed a view that PESCO 
should  keep  open  options  for  cooperation  with  third  countries,  and  as  mentioned  above,  has 
declared its readiness to participate in PESCO projects in the future.455 The governance structures 
for third-party participation are to be determined by the Council in PESCO format, and thus without 
the  UK,  by  December  2018.  According  to  the  Council  decision  establishing  PESCO,  the  general 
conditions for third-country participation – which may include an administrative template – will set 
out the requirements with which third states invited to take part in a specific project must comply.456 
If  the  Council  decides  that  the  third  country  complies  with  the  requirements,  the  administrative 
arrangements may be concluded between the participating states that will however 'respect the 
procedures  and  the  decision-making  autonomy  of  the  Union'.  Third  countries  will  have  thus  no 
decision-making rights within the PESCO framework. The Commission further took the view that UK 
participation in PESCO projects should be decided 'on a case-by-case and exceptional basis by the 
Council in PESCO format, where it significantly participates in the fulfilment of the Union's level of 
ambition'; should the UK participation go beyond exceptional invitation, then the UK would receive 
better treatment than EU Member States themselves.457  

It should be also noted that some of the PESCO projects could potentially be part-funded through 
the newly established European Defence Fund (EDF) and at a higher rate of EU financing (30 %) 
than that available to other collaborative projects set up with EDF funding (20 %).458  

  The European Defence Fund (EDF) 

452  Framework  Agreement between  The  French  Republic,  The  Federal  Republic  of  Germany,  The  Italian  Republic,  The 
Kingdom of Spain, The Kingdom of Sweden and The United Kingdom of Great Britain and Northern Ireland Concerning 
Measures to Facilitate the Restructuring and Operation of the European Defence Industry, 27 July 2000. 

453  A. R. Ungaro, D. Fattibene, L'impatto della Brexit per la difesa europea e transatlantica: tanti dubbi e poche certezze, 

Istituto Affari Internazionali, No 123, November 2016.  

454  E.  Lazarou,  Permanent  structured  cooperation  (PESCO):  Beyond  establishment,  EPRS,  European  Parliament, 

9 March 2018.  

455  One project of interest for the UK is the facilitation of military mobility across the EU, which combines cooperation in 
the PESCO framework with Commission action, for example in the area of transportation and customs. Therefore even 
if the UK participated in the relevant PESCO project, the application of other measures, such as customs relief, would 
probably  apply  only  to  the  members  of  the  internal  market  and  the  customs  union.  See:  Action  Plan  on  military 
mobility: EU takes steps towards a Defence Union, European Commission, 28 March 2018; Military Mobility in the EU, 
House of Commons European Scrutiny Committee, documents considered by the Committee on 2 May 2018.  

456  Council Decision (CFSP) 2017/2315 of 11 December 2017 establishing permanent structured cooperation (PESCO) and 

determining the list of participating Member States, OJ L 331, 2017. 

457  Foreign, security and defence policy (slides), European Commission, 15 June 2018. 
458  C. Mills, EU Defence: the realisation of Permanent Structured Cooperation (PESCO), Commons Briefing papers CBP-

8149, 2 May 2018.  

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Another  important  development  in  strengthening  EU  defence  policy,  the  EDF  was  set  up  in 
June 2017 to support investment in joint research and the joint development of defence equipment 
and technologies.459 In its proposal for the next multiannual financial framework the Commission 
endows  the  EDF  with  €13 billion  in  support  of  a  European  defence  research  programme  and 
collaborative  capability  development  (a  European  Defence  Industrial  Development  Programme 
(EDIDP)  for  new  defensive  technologies  and  Member  State  financing  of 
joint  defence 
acquisitions).460  Until  2020,  the  research  pillar  of  the  EDF  was  allocated  €90 million  from  the  EU 
budget, while, through the capability development pillar, up to €500 million are available for co-
financing from the EU budget. The only non-EU country currently participating in the EDF, in the 
research  part  only,  is  Norway  (as  an  EEA  member  state  applying  EU  legislation  on  research  and 
technological development). Norway has also expressed a desire to be included in the EDIDP for the 
development  of  capabilities  (Norway  would  cover  its  own  participation  costs).461  The  UK,  as 
mentioned above, has stated its aim to participate in both pillars of the EDF in the future. According 
to  the  Commission  such  participation  would  be  possible  under  the  conditions  available  to  third 
countries  (still  to  be  decided  at  EU  level);462  furthermore,  the  'industrial  security  and  security  of 
supply of the cooperative projects supported by the Fund should be preserved'.463 

  Galileo 

One  contentious  issue  has  arisen  in  negotiations  with  respect  to  Galileo/EGNOS,  the  European 
satellite navigation system managed jointly by the Commission and the European Space Agency (an 
intergovernmental body made up of 22 Member States, of which 20 are also Members of the EU).464 
The  Commission  takes  the  view  that,  after  Brexit,  UK  companies'  access  to  sensitive  security 
information related to the Galileo programme should be restricted, an idea contested by the UK, in 
light  of  its  consistent  contribution  to  the  programme  so  far.  For  the  future,  the  Commission  has 
proposed a cooperation agreement with the UK on Galileo, as well as an agreement on access to 
Galileo's Public Regulated Service or PRS (encrypted signals with controlled access for specific users 
such as governmental bodies). As Michel Barnier recently explained, after Brexit, EU-UK cooperation 
on Galileo would have to be put on a new basis, as the EU's rules on Galileo – adopted with the UK 
as a Member State and meant to protect the EU's autonomy and security interests – prevent third 
countries (and their companies) from participating in the development of security-sensitive matters, 
such  as  the  manufacturing  of  PRS  security  modules.465  If  a  new  agreement  is  concluded,  the  UK 
would, however, be able to use/have access to Galileo's encrypted signal.466 The UK government, on 
the  other hand,  seeks  continued  use  and  participation in  the  development  and operation of  the 
open signal,  as well as of the PRS – which would entail continued access to the relevant security 
information, but also a right for UK entities to compete for the related contracts. The UK's technical 
note  on  the  exchange  and  protection  of  classified  information  mentions  the  UK's  intention  to 

459  A  European  Defence  Fund:  €5.5  billion  per  year  to  boost  Europe's  defence  capabilities,  Press  release  IP/17/1508, 

European Commission, 7 June 2017.  

460  A modern budget for a Union that protects, empowers and defends: Questions and Answers, Fact Sheet, European 
Commission,  2  May  2018.  See  also:  EU  budget  for  the  future:  Defence,  European  Commission,  May 2018;  and  C. 
Scheinert, European defence industrial development programme (EDIDP), EPRS, European Parliament, 7 June 2018.  
461  C. Mills, European defence: where is it heading?, Commons Briefing paper 8216, 1 May 2018. See also Speech of State 

Secretary Tone Skongen, Norwegian Security Policy – including participation in the CSDP, 28 February 2018. 

462  European defence industrial development programme, EP Legislative Observatory, 2017/0125(COD). 
463  Foreign, security and defence policy (slides), European Commission, 15 June 2018. 
464  The European Space Agency (ESA) is an intergovernmental body made up of 22 Member States, of which 20 are also 

Members of the EU. See Galileo/EGNOS webpage, ESA. 

465  See Article 3(5) of the Decision No 1104/2011/EU of the European Parliament and of the Council of 25 October 2011 
on the rules for access to the public regulated service provided by the global navigation satellite system established 
under the Galileo programme, OJ L 287, 2011. 

466  Michel Barnier, Speech at the EU Institute for Security Studies conference, 14 May 2018. See also Policy Department on 

External Affairs, op. cit. 

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conclude with the EU 'all relevant agreements necessary to ensure that UK security requirements 
are met and that there is no gap in legal capability for UK industry and nationals to participate in the 
programme'. If proper arrangements are not found for EU-UK cooperation on Galileo, then the UK 
declared it would withdraw from the programme.467 Already, plans have been announced to start 
work  on  a  British  Global  Navigation  Satellite  System,  as  an  alternative  option  to  Galileo.468  The 
Commission  has  in  the  meantime  proposed  a  new  regulation  on  the  EU's  space  programme,469 
which would bring some changes to its governance arrangements, including the role of the ESA. A 
presentation to the EU-27 in June 2018 further explains the Commission's approach to the UK future 
involvement in the EU's space programmes.470 

6.2.6. Development aid 
Brexit will have long-term implications for both EU and UK development aid, although their extent 
is unclear at present, as they largely depend on the future relationship. The UK is responsible for 
much  of  European  development  cooperation  funding,471  including  through  the  EU  budgeted 
instruments and through a large contribution to the (11th) European Development Fund which is 
outside  the  EU  budget  (around  15 %).472  Therefore,  Brexit  will  represent  a  big  loss  for  EU 
development policy. An EP study has hypothesised three scenarios for future UK involvement in EU 
aid policy: nationalist, realist, and cosmopolitan, each with different consequences for the EU's share 
of  world  aid.  In  the  first  two  scenarios,  there  is  no  future  EU-UK  cooperation,  with  UK  aid  being 
channelled bilaterally, arguably to countries with which the UK would like to strengthen political 
and  economic  ties  beyond  Europe.  In  the  cosmopolitan  scenario,  the  UK  would  maintain 
cooperation with the EU and choose to channel part of its aid budget through EU instruments (while 
opting  also  for  other  multilateral  fora  outside  the  EU,  e.g.  the  OECD  Development  Assistance 
Committee), but possibly in exchange for some influence in EU decision-making.473  

Post-Brexit cooperation in this field will also depend, beyond future UK budgetary pressures, on the 
EU's renegotiation with ACP countries of a successor treaty to the Cotonou agreement,474 on the 
future place of the European Development Fund in the EU's framework (the current Commission 
proposal for the future MFF (2021-2027) incorporates the Fund into the EU budget),475 as well as on 
the form that the other EU development instruments will take post-2021;476 the UK contribution will 

467  Framework for the UK-EU Security Partnership, UK Government, May 2018. 
468  UK Space Agency leads work on options for independent satellite system, UK Government, 2 May 2018. See also P. 
Hollinger, A. Barker, UK could withhold security clearance for companies working on Galileo, Financial Times, 15 May 
2018.  

469  Questions  and  Answers  on  the  new  EU  Space  Programme,  Fact  Sheet,  European  Commission,  6  June  2018,  and 
Proposal for a Regulation (...) establishing the space programme of the Union and the European Union Agency for the 
Space Programme (...), COM(2018) 447, 6 June 2018. See also: P. Hollinger, EU outmanoeuvres UK in latest battle over 
Galileo, Financial Times, 5 June 2018; B. Bowen, Leaving Spaceship Europe: British space policy after Brexit, LSE Blog, 
30 April 2018.  

470  Involvement in the EU's space-related activities, European Commission, 13 June 2018. 
471  EU Member States allocate aid bilaterally and/or through the EU development instruments. Collectively, in 2017 the 

EU and its Member States were the world's largest provider of official development assistance.  

472  A.  D'Alfonso,  European  Development Fund  -  Joint  development  cooperation  and  the  EU  budget:  out  or  in?,  EPRS, 
European Parliament, November 2014. To note that UK contribution to the EDF, as percentage of its GNI, has been 
larger than its overall contribution to the EU budget – see p. 11. 

473  Possible impacts of Brexit on EU development and humanitarian policies, Policy Department for External Affairs, April 

2018.  

474  New  EU  partnership  with  Africa,  the  Caribbean  and  the  Pacific,  Commons  Select  European  Scrutiny  Committee, 

31 January 2018. See also Timeline: steps towards a new EU-ACP partnership after 2020, Council of the EU. 

475  Proposal  for  a  Council  Regulation  laying  down  the  multiannual  financial  framework  for  the  years  2021  to  2027, 

COM(2018) 322 final, European Commission, 2 May 2018.  

476  New EU partnership with Africa, the Caribbean and the Pacific, European Scrutiny Committee, House of Commons, 

31 January 2018. 

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also be determined by the extent these instruments will be open to third countries.477 Some non-EU 
states choose on a case-by-case basis whether to opt into various EU funds.478 For example, in the 
development area, both Norway and Switzerland contribute to the EU Emergency Trust Fund for 
Africa.479 Some observers point to the EEA and Norway grants that could provide a model for an 
instrument to continue UK engagement in EU development cooperation.480 

Future EU-UK cooperation in the field of international development aid is not dealt with extensively 
in Commission documents; nevertheless, Michel Barnier has suggested the UK could make future 
contributions to the EU development programmes. The UK also indicated willingness to continue 
close  cooperation  with  the  EU  in  this  area,481  and  to  coordinate  with  the  EU  in  the  field  of 
development and other external programmes. In the UK's view, the EU and the UK could agree to 
coordinate  measures  on  geographic  areas  or  across  thematic  issues  to  ensure  complementarity, 
including  through  the  creation  of  a  cooperation  mechanism.  This  would  also  allow  for  UK 
contributions to EU programmes or instruments, provided the UK was appropriately involved in the 
decision-making. In the white paper of 12 July 2018, the UK government includes a proposal for an 
overseas development assistance and international action accord with the EU that would allow UK 
participation  in  EU  development  programmes  and  instruments  and  in  EU  external  spending 
programmes,  subject  to  'an  appropriate  level  of  influence  and  oversight  over  UK  funds'.482 
Coordination could be enhanced through a reciprocal exchange of seconded humanitarian policy 
and development officials and through structured and flexible UK-EU dialogue and consultation. As 
in  the  case  of  the  CFSP  and  CSDP  proposals,  the  UK  suggests  UK  attendance  at  the  Council 
(development  ministers)  informal  sessions  or  meetings;  at  informal  sessions  of  EU  Heads  of 
Cooperation  or  Heads  of  mission  meetings,  as  well  as  at  meetings  of  Directors  General  on 
humanitarian  aid  and  development.  In  response,  the  Commission  has  indicated  that  the  UK 
participation in the EU's external assistance programmes, including development cooperation, will 
have  to  be  based  on  the  modalities  for  third  country  participation  defined  in  the  respective  EU 
regulations and decisions. Cooperation along the proposed UK lines (joint EU-UK programming at 
strategic level, as well as no differentiation between UK and EU entities in the field of development 
assistance)  would  amount,  in  the  Commission's  view,  to  treatment  exceeding  existing  third 
countries' arrangements.483  

477  H. Evennett, op. cit.  
478  M. Anders, First clues for post-Brexit aid cooperation between EU and UK, 9 December 2016.  
479  EU Emergency Trust Fund for Africa, European Commission. 
480  T. Henökl, How Brexit affects EU external action: The UK's legacy in European international cooperation, Futures 97, 

March 2018, pp. 63-72. See also https://eeagrants.org/ . 

481  H. Evennett, Brexit: Overseas Development Assistance, House of Lords Library notes LLN-2018-0020, 6 February 2018. 
482  The future relationship between the United Kingdom and the European Union, UK Government, 12 July 2018. 
483  Foreign, security and defence policy (slides), European Commission, 15 June 2018. 

93 

 
 
 
                                                             
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7. Annex – Negotiating the framework for future EU-UK relations – Comparative positions 

Issues 

UK position 

European Council 

European Parliament 

Trade and Economic 

Future  economic 
relationship 

Economic  partnership, 
covering 
more sectors and co-operating more 
fully  than  any  other  EU  free  trade 
agreement (FTA). 

•  Balanced, ambitious 

and wide-ranging FTA. 
It should ensure a 
level playing field. 
•  Not the same benefits 
as EU Membership, no 
cherry picking of the 
rights derived from 
Single Market.  

in  goods 
quotas, 

Trade 
(tariffs, 
including 
preferential  rules 
of origin) 

•  Zero tariffs or quotas 
•  A common rulebook for rules to 
be checked at the border  
Participation in some regulatory 
EU agencies 

• 

•  No preferential rules of origin 

• 

Trade in goods for all 
sectors  

•  Zero tariffs and no 
quantitative 
restrictions  
•  With appropriate 

(PRoO). 

•  Customs agreement through 
either a UK-EU customs 
partnership, or a highly 
streamlined customs 
arrangement.  

•  New UK proposal for a 
facilitated customs 
arrangement. 

PRoO. 

•  Appropriate customs 

• 

cooperation 
Preserving the 
regulatory and 
jurisdictional 
autonomy of the 
parties and the 
integrity of the EU 
Customs Union. 

Customs  

94 

•  Respect of 9 principles (including 
not giving the same rights and 
benefits as a Member State of the 
EU, of the EFTA or of the EEA; 
protection of the integrity of the 
internal market, of the customs 
union and the four freedoms; etc.).  
•  An association agreement (Article 8 
TEU and Article 217 TFEU) with a 
consistent governance framework, 
including a robust dispute 
resolution mechanism. 
PRoO based on EU standard EU 
producers' interests 

• 

•  Avoid any free-riding by ensuring 

consistency in keeping a tuned tariff 
and quota system and rules of 
origin for products vis-à-vis third 
countries. 

Protection  of  the  integrity  and  correct 
functioning  of  the  internal  market,  the 
customs  union  and  the  four  freedoms, 
without  allowing  for  a  sector-by-sector 
approach. 

Commission's current 
considerations for discussion 

Current main basis for discussion 
is  the  FTA  model  (CETA  or  EU-
South Korea model). 

further  details 

No 
regarding 
market access in trade in goods. 

•  Customs cooperation (trade 
facilitation chapters in FTA).  
•  Customs checks as for third 
countries outside customs 
union. 

•  No loss of control over EU 

• 

customs. 
Ensure practicality of the 
arrangement 

 
Issues 

UK position 

European Council 

European Parliament 

Fisheries 

•  UK will leave the common 
fisheries policy (CFP) 

•  Annual negotiations on access 

Maintaining 
existing 
reciprocal access to fishing 
waters and resources. 

to waters and fishing 
opportunities (including multi-
annual agreements for 
appropriate stocks) 
Provision to promote 
sustainable fisheries 

• 

•  Cooperation to manage shared 

stocks. 

Trade  in  services 
and investments 

New  barriers 
introduced 
absolutely necessary. 

should  only  be 
where 

Air Transport 

•  Membership of the 

European Aviation Safety 
Agency.  

•  Market access for 

services under host 
state rules, including 
as regards for right of 
establishment 
•  Market access 

consistent with the UK 
becoming a third 
country and no shared 
common regulatory, 
supervisory, 
enforcement and 
judiciary framework. 

•  An air transport 
agreement. 

The future partnership between the European Union and the United Kingdom 

• 

•  A novel form of third-country-type 
of bilateral partnership agreement  
Ensuring stable and continued 
mutual access to waters and 
resources in accordance with CFP 
principles and governance 
provisions,  
Sustainable and common 
management of shared stocks 

• 

•  Continuation of the UK's 

contribution to the scientific 
assessment of those stocks 
•  Access to the EU domestic market 

• 

conditional on access for EU vessels 
to the UK fishing grounds and their 
resources, as well as on the level of 
cooperation in the management of 
shared stocks. 
The level of access to the EU market 
proportional to the continued 
convergence or alignment to EU 
technical standards and rules 
•  No sector-by-sector approach and 
preserving the integrity of the 
internal market 
FTA market access for services 
subject to exclusions, reservations 
and exceptions. 

• 

• 

Commission's current 
considerations for discussion 
EU-UK fisheries partnership 
agreement in line with 
UNCLOS provisions  

•  Mutual access to waters and 

• 

resources. 
Provisions concerning 
fisheries management 
based on shared principles. 

•  Based on FTA model, 

• 

subject to restrictions in 
sensitive sectors.  
The EU can top-up 
commitments undertaken in 
existing FTAs depending on 
MFN clauses in those FTAs.  
•  Regulatory autonomy of the 

parties. 

• 

Ensure connectivity via an air 
transport agreement and aviation 
safety agreement. 

• 

EU-UK Air Transport 
Agreement and an Aviation 
Safety Agreement  

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EPRS | European Parliamentary Research Service 

Issues 

UK position 

European Council 

European Parliament 

•  Maintaining reciprocal 

liberalised access through an 
Air Transport Agreement (such 
as EU-Canada Air Service 
Agreement). 

•  Combined with 

aviation safety and 
security agreements. 
•  A strong level playing 

field in highly 
competitive sectors. 

Other  Transport 
services 

Continuity  of  maritime  and  rail 
services, 
and 
mutual access for road hauliers. 

Financial Services  •  Ability to access each other's' 

markets, based on similar 
regulatory outcomes.  
•  A collaborative, objective 

• 

framework that is reciprocal, 
mutually agreed, and 
permanent.  
Proposal for a new enhanced 
equivalence arrangement, 
going beyond existing 
unilateral equivalence system.  

•  Agreements on other 
modes of transport 
Ensure a strong level 
playing field in highly 
competitive sectors. 

• 

•  Any future framework 
should safeguard 
financial stability in 
the Union  
•  Respect the EU 
regulatory and 
supervisory regime 
and standards and 
their application. 

• 

• 

The degree of market access 
conditional on regulatory 
convergence and alignment with 
the EU acquis, and on a solid 
dispute settlement and arbitration 
mechanism. 
Future cooperation on projects of 
common interest. 

•  Degree of market access conditional 
on regulatory convergence and 
alignment with the EU acquis, and 
on solid dispute settlement and 
arbitration mechanism 
Future cooperation on projects of 
common interest. 

• 

•  UK loss of passporting rights for 
financial services and of the 
possibility of opening branches in 
the EU subject to UK supervision 
Equivalence of third country rules 
based on a proportional and risk-
based approach 
Limitations of cross-border financial 
services customary in FTAs 

• 

• 

Research 
Development 

and 

Participation in EU programmes and 
networks  with  ongoing 
financial 
contribution.  

UK participation subject to 
the  relevant  conditions  for 
third countries as provided 
in 
corresponding 
the 
programmes. 

UK participation as a third country in the 
EU  Framework  Programme  for  Research 
and  Innovation  and  in  the  EU  space 
programmes, without permitting any net 
transfers from  the EU budget to the UK, 
or any decision-making role for the UK. 

96 

Commission's current 
considerations for discussion 

•  Market access will be 
depend on regulatory 
convergence and 
alignment.  

•  Membership of the 

Common Aviation Area 
requires compliance with 
the EU acquis. 

•  New framework outside of 

the single market.  
•  Commission is reviewing 

implications of MFN clauses 
in previously concluded 
FTAs. 

• 

• 

•  Horizontal provisions plus a 
financial service chapter as 
in other EU FTAs.  
Prudential carve-out and 
regulatory autonomy. 
Equivalence only on the 
basis of specific EU 
regulations (unilateral). 
Strong objections to the 
enhanced equivalence 
arrangement proposed by 
the UK.  
legal  approach 
EU 
countries in EU programmes. 

for  3rd 

 
The future partnership between the European Union and the United Kingdom 

Issues 

UK position 

European Council 

European Parliament 

Audiovisual  and 
Education 
and 
Culture 

• 

Exploring options including 
mutual recognition to allow for 
continued transfrontier 
broadcasting  

Regulatory 
cooperation 

•  New EU-UK culture and 
education accord. 

• 

Framework for regulatory 
cooperation.  

•  UK associate membership in 

some EU agencies,  
respecting the remit of the 
CJEU 
and with appropriate financial 
contribution.  

• 

•  A common rulebook for goods' 
standards checked at the 
border.  
Equivalence arrangements for 
agri-food standards not 
checked at the border 
Enhanced equivalence 
arrangement for financial 
services 

• 

•  Mutual recognition of 

professional qualifications 
covering the same professions 
as the EU Directive. 

UK participation subject to 
the  relevant  conditions  for 
third countries as provided 
corresponding 
in 
education 
cultural 
and 
programmes. 

the 

•  A framework for 

voluntary regulatory 
cooperation;  
•  Disciplines on 

technical barriers to 
trade (TBT) and 
sanitary and 
phytosanitary (SPS) 
measures;  
•  Recognition of 
professional 
qualifications via 
negotiations of mutual 
recognition 
agreements (MRAs);  
•  Respect the Union's 
regulatory and 
supervisory regime 
and standards and 
their application. 

Continued  cooperation  between  the  EU 
and  the  UK  in  those  areas,  including 
through  relevant  programmes  such  as 
Erasmus or Creative Europe. 

•  Guarantee the EU's autonomy in 

setting EU law and standards as well 
as the role of the CJEU  
Focus on SMEs  

• 
•  Voluntary regulatory cooperation  
• 
Ensure the right to regulate in the 
public interest.  

•  Unilateral nature of equivalence 

decisions;  

•  prudential carve-out  
•  With respect to food and 

agricultural products, access to the 
EU market is conditional on strict 
compliance with all EU law and 
standards 

•  UK cooperation with EU agencies in 
specific cases in a strictly regulated 
manner requiring compliance with 
all relevant rules and financial 
contributions. 

•  UK continued adherence to 

Commission's current 
considerations for discussion 

•  Audiovisual services are 

usually excluded from FTA 
commitments  

•  Only limited benefits from 
the Council of Europe 
Convention on Trans-
frontier Television. 
•  No general mutual 

• 

recognition of standards 
possible in FTAs.  
Principles: ensure level 
playing-field, safeguard 
financial stability and 
respect regulatory and 
supervisory regime and 
standards, preserve the 
Union decision-making 
autonomy and the role of 
the CJEU.  

•  Good regulatory practices; 

regulatory cooperation on a 
voluntary basis; TBT and SPS 
chapters and sectoral 
annexes.  
Possibility to conclude MRAs  

• 
•  Unilateral nature of 

equivalence decisions 
•  Mutual recognition of 

international obligations and the 
Union's legislation and policies in 
the fields of consumer protection, 
public health, SPS measures, animal 
health and welfare. 

• 

qualifications based on 
negotiation of MRAs on a 
voluntary basis. 
Explores limitations within 
current FTA models for 
regulatory cooperation in 

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Issues 

UK position 

European Council 

European Parliament 

Public 
procurement 

No  discrimination  between  UK  and 
EU service providers. 

Intellectual 
property rights 

Level-playing 
issues: 
field 
competition  and 
state aid 

The  UK  will  introduce  its  own  GI 
framework. The UK wants to remain 
in  the  unitary  patent  system  after 
Brexit. 
•  Common rulebook on state-aid.  
• 
sovereign discretion on tax  
• 
Safeguard UK autonomy in 
relation to rules for payments to 
farmers and its future public 
procurement policy 

•  Arrangements on cooperation 
in the area of competition 
policy. 

• 

Proposes UK full alignment to EU 
rules for public health and food 
safety. 

Access to public procurement. 

Access 
procurement markets. 

to 

public 

Protection  of 
intellectual 
property  rights,  including 
geographical indications. 

No mention. 

Robust  guarantees  which 
ensure a level playing field 
to  prevent  UK  unfair 
competitive 
advantage 
through  undercutting  of 
levels of protection. 

A  level  playing  field,  in  particular  in 
relation to the UK's continued adherence 
to 
laid  down  by 
international  obligations  and  the  EU's 
legislation and policies in this field. 

standards 

the 

Level-playing 
field 
Taxation 

issues: 

Sovereign  discretion  with  regard  to 
direct and indirect tax rates.  

Robust  guarantees  which 
ensure a level playing field 
to  prevent  UK  unfair 
competitive  advantage  in 
this field. 

98 

•  Recalls the high level of alignment 
between the Single EU VAT Area 
and the UK. 

• 

•  Within the future agreement ensure 
maximum cooperation between the 
EU and the UK in the field of 
corporate taxation.  
The UK adherence to the EU acquis 
standards on taxation and anti-
money laundering legislation. 
The UK should address the non-
compliance of its dependent 
territories with EU good governance 

• 

Commission's current 
considerations for discussion 
the field of vehicles, REACH 
and agri-food standards. 

Discussions currently ongoing in 
the framework of the withdrawal 
agreement. 
Discussions currently ongoing in 
the framework of the withdrawal 
agreement. 

•  An ad hoc model including 
substantive rules equivalent 
to EU state-aid, including 
transparency 
Enforcement through ex 
ante control by an 
independent State aid 
authority  

• 

•  Dispute resolution and 
remedies (possibility of 
interim measures). 

Proposal include: 
• 

tax good governance clause; 
binding requirements on 
exchange of information, 
anti-tax avoidance measures  

•  public CbCR for credit 

institutions and investment 
firms 
code of conduct on business 
taxation mirroring EU code 

• 

•  Horizontal dispute 

settlement applicable for 

 
Issues 

UK position 

European Council 

European Parliament 

Level-playing 
field 
issues: 
Environment and 
Labour 

•  A non-regression clause in 

• 

relation with environmental 
and labour standards  
For climate change the UK 
mentions only its intention to 
maintain high standards  
•  Cooperation with the EU in 

international fora and uphold 
international obligations. 

•  Close cooperation to 
address global 
challenges, in 
particular in the areas 
of climate change and 
sustainable 
development, as well 
as cross-border 
pollution,  

•  Robust guarantees 
ensuring a level 
playing field to 
prevent UK unfair 
competitive 
advantage through 
undercutting of levels 
of protection.  

Level-playing 
field 
enforcement 

issues: 

No particular mention. 

•  Adequate 

mechanisms to ensure 
effective 
implementation 
domestically 
Enforcement and 
dispute settlement 
mechanisms in the 
agreement  

• 

•  Union autonomous 

remedies. 

The future partnership between the European Union and the United Kingdom 

Commission's current 
considerations for discussion 
any breach with sanction 
regime.  
Proposal include principles 
and substantive provisions 
anchored in EU and 
international law  
Principles of non-lowering 
of standards and non-
regression clause  
Provision requiring the 
upholding of standards 
across whole territory  

• 

• 

• 

•  Dispute settlement 

procedures and sanctions 
applicable horizontally to all 
LPF provisions.  

•  Dispute settlement 

mechanism applicable 
horizontally to all LPF 
provisions.  
Two stage dispute 
settlement: consultation 
and dispute settlement 
phase.  

criteria and transparency 
requirements. 

Ensure a level playing field via: 
•  UK's continued adherence to the 

• 

standards laid down by 
international obligations and the 
Union's legislation and policies in 
these fields  
Proposes for the UK to remain fully 
aligned with current and future EU 
legislation for action against climate 
change, and for public health and 
food safety 

•  Alternatively, arrangements 

between the EU and the UK to 
ensure close cooperation and high 
standards on those issues and to 
deal with trans-boundary 
environmental issues;  

•  Access to justice and a proper 

complaints mechanism must be 
guaranteed for citizens and NGOs 
with respect to enforcement.  
•  Robust governance structures to 

include appropriate management, 
supervision, dispute settlement and 
enforcement mechanisms with 
sanctions and interim measures 
where necessary.  

• 

•  With a requirement for both parties 

to establish, where relevant, 
independent institutions capable of 
effectively overseeing and enforcing 
implementation. 

•  CJEU to interpret EU law 

concepts. 

99 

 
 
Issues 

UK position 

European Council 

European Parliament 

Commission's current 
considerations for discussion 

EPRS | European Parliamentary Research Service 

• 

Sanctions such as 
suspension of obligations, 
temporary compensations, 
financial sanctions, cross 
retaliation, 'guillotine 
clause', interim measures (in 
the context of state aid). 
Discussions  regarding  Euratom 
are taking place for the moment 
the 
in 
the 
withdrawal 
No 
document  published  specifically 
on 
future 
in 
energy 
partnership. 

framework  of 
agreement. 

the 

No mention. 

• 

Third-country arrangements should 
be made in the areas of energy.  
•  Respect the integrity of the internal 

energy market. 

•  Contribute to energy security, 

• 

sustainability and competitiveness 
and take account of interconnectors 
between the EU and the UK. 
Expects the UK to comply with the 
highest nuclear safety, security and 
radiation protection standards, 
including for waste shipments and 
decommissioning. 

An  adequacy  decision  is  the  preferred 
and most secure option.  

•  Adequacy decision for data 

flows needed.  

Include rules on data.  

• 
•  As regards personal 
data, protection, 
Union rules on 
adequacy remain 
applicable. 

•  Management and 

•  Robust dispute settlement 

supervision, dispute 
settlement and 
enforcement, 

mechanism and governance 
structures. 

Looking  at  the  three  levels  of 
governance  in  an  international 
agreement: 
ongoing 
management  and  supervision; 

• 

• 

Protect the single electricity 
market in Ireland/ 
Northern Ireland. 
Explore UK participation in EU 
internal energy market;  

•  Close association 
with Euratom.  

•  Broad energy cooperation with 
the EU including arrangements 
on trade in electricity and gas, 
cooperation in EU agencies, 
data sharing and on technical 
and regulatory energy 
arrangements. 

•  Data protection arrangement 
with more depth than an 
adequacy arrangement  
•  A transparent framework to 

• 

• 

• 

facilitate dialogue  
EU data protection authorities' 
cooperation with UK 
Information Commissioner's 
Office (ICO). 
The jurisdiction of the CJEU in 
the UK must end.  
The UK will 'respect the remit' of 
the CJEU for example where the 

Energy 

Data  protection 
and data flows 

Dispute 
resolution 
enforcement 

and 

100 

 
The future partnership between the European Union and the United Kingdom 

Commission's current 
considerations for discussion 
two-phase dispute settlement (a 
political  phase  and  a 
judicial 
phase); enforcement mechanism 
after  dispute  settlement  via 
sanctions. 

Issues 

UK position 

European Council 

European Parliament 

• 

UK participates in EU agencies. 
In the framework of the 
proposed common rulebook for 
goods, the UK recognised the 
CJEU's exclusive competence to 
interpret EU law. 
Set up an independent 
arbitration mechanism. 
In case of non-compliance, 
sanctions may take the form of 
financial penalties or 
suspension of parts of the 
agreement.  

• 

• 

• 

• 

• 

including sanctions 
and cross-retaliation 
mechanisms.  
The overall 
governance shall 
depend on: 
i) the content and 
depth of the future 
relationship; 
ii) the necessity to 
ensure effectiveness 
and legal certainty; 
iii) the requirements of 
the autonomy of the 
EU legal order, 
including the role of 
the CJEU. 

Joint committee responsible for 
overseeing the implementation of 
the agreement, addressing 
divergences of interpretation and 
implementing agreed corrective 
measures, and fully ensuring the 
EU's regulatory autonomy. 
EU representatives on the joint 
committee subject to appropriate 
accountability mechanisms 
involving the European Parliament.  
For provisions based on EU law 
concepts, obligation to provide for 
referral to the CJEU; For the 
provisions other than those relating 
to EU law, an alternative dispute 
settlement mechanism to be 
envisaged only if it offers 
guarantees of independence and 
impartiality equivalent to the CJEU. 

Internal  security: 
general 
cooperation 

•  A new security treaty preserving 

• 

operational 
capabilities, respecting the 
parties' sovereignty 
•  Dispute resolution 
mechanism  

•  Data protection arrangements.  
•  Cooperation on the basis of 
existing EU measures.  
Treaty mechanisms enabling 
the UK to cooperate on future 
versions of current tools; and on 
new tools 

• 

Justice and Home Affairs 

The future partnership 
should cover effective 
exchanges of 
information, support 
for operational 
cooperation between 
law enforcement 
authorities and judicial 
cooperation in 
criminal matters, 
taking into account 
that the UK will be a 
third country outside 
Schengen.  

• 

•  Continued security cooperation to 
face shared threats, especially 
terrorism and organised crime, and 
avoids the disruption of information 
flows in this field. 
For third countries (outside the 
Schengen area): no privileged 
access to EU instruments, including 
databases, and no UK participation 
in setting priorities and the 
development of the multiannual 
strategic goals or lead operational 
action plans in the context of the EU 
policy cycle. 

• 

• 

Third country outside 
Schengen model.  
Exchange of information, 
operational police 
cooperation, judicial 
cooperation in criminal 
matters. 

101 

 
 
Issues 

UK position 

European Council 

European Parliament 

Commission's current 
considerations for discussion 

EPRS | European Parliamentary Research Service 

•  Cooperation on wider security 
issues: asylum and illegal 
migration; cyber security; 
counter-terrorism and 
countering violent extremism; 
civil protection and health 
security.  

• 

Strong safeguards 
regarding 
fundamental rights 
and effective 
enforcement and 
dispute settlement 
mechanisms. 

Information 
exchange, 
including  access 
to EU databases 

Mutual 
recognition 
instruments 

Maintaining  the  capabilities  based 
on EU tools that allow for the secure 
and timely exchange of information 
(Schengen 
II, 
European  Criminal  Records  System 
and 
Record 
Directive). 
• 

Information  System 

Passenger  Name 

Practical cooperation on the 
basis of EU measures such as 
the European Arrest Warrant, 
the European Investigation 
Order and the Prisoner Transfer 
Framework Decision. 
Full UK participation rights in 
the Joint Investigation Teams. 

• 

future  partnership 
The 
should 
effective 
cover 
exchanges of information. 

third-country 
Non-Schengen 
arrangements enabling the exchange of 
security-relevant  data  and  operational 
cooperation  with  EU  bodies  and 
(such  as  Europol  and 
mechanisms 
Eurojust). 

Support 
for  operational 
cooperation  between  law 
enforcement 
authorities 
and judicial cooperation in 
criminal matters. 

Arrangements based on the UK as a third 
country as regards judicial cooperation in 
criminal  matters, 
on 
extradition  and  mutual  legal  assistance 
(MLA),  instead  of  current  arrangements 
such as the European Arrest Warrant. 

including 

Third  country  outside  Schengen 
model. 

Exploring options: 
• 

Extradition: Fall-back the 
1957 CoE Convention, or 
negotiating an agreement 
on extradition.  

•  Mutual legal assistance: Fall-
back: 1959 CoE Convention 
and Protocols, or 
negotiating an agreement 
on MLA on the model of 
other third countries.  

EU agencies 

•  Multilateral cooperation 

through Europol and Eurojust.  
•  Deeper arrangement than the 

existing third country 
agreements. 

•  Respecting the remit of the 

CJEU where the UK participates 
in an EU agency.  

Support 
for  operational 
cooperation  between  law 
authorities 
enforcement 
and judicial cooperation in 
criminal matters. 

Non-Schengen 
third-country 
arrangements enabling the exchange of 
security-relevant  data  and  operational 
cooperation  with  EU  bodies  and 
mechanisms 
(such  as  Europol  and 
Eurojust). 

102 

Third country  model for Europol 
and  Eurojust:  exchange  of  data 
liaison  officers 
with  partners; 
(Europol)  and  possibility 
to 
appoint  contact  points  and 
liaison magistrates (Eurojust); no 
Europol 
(direct) 
databases  and  Eurojust  Case 
Management  System  or  case-
in  Europol 
files;  participation 

access 

to 

 
The future partnership between the European Union and the United Kingdom 

Issues 

UK position 

European Council 

European Parliament 

Data  protection 
for 
law 
enforcement 
purposes 

law 

Explore  a  separate  bespoke  UK-EU 
agreement  (covering  both  business 
and 
for 
exchanging and protecting personal 
data,  building  on  an  EU  adequacy 
decision. 

enforcement) 

• 
•  As 

Include rules on data. 

regards  personal 
data, protection, Union 
rules  on 
adequacy 
remain applicable. 

• 

•  Cooperation to fully respect EU data 
protection standards and rely on 
effective enforcement and dispute 
settlement. 
Preferred option to regulate future 
EU-UK data exchange in the field of 
law enforcement, intelligence and 
counter-terrorism is a Commission 
adequacy decision; in any case UK 
level of data protection that is as 
robust as EU data protection rules. 

Commission's current 
considerations for discussion 
analysis  projects  and  Eurojust 
cases if Member States agree. 
Future  cooperation  depends  on 
essentially 
data 
protection standards.  

equivalent 

Common Foreign and Security Policy (CFSP) and Common Security and Defence Policy (CSDP) matters 

• 

External security -
general 
cooperation  and 
coordination 

Tailored partnership on foreign 
and defence policy, including 
consultation and coordination, 
inter alia on sanctions 

•  UK to play an appropriate role 
in shaping collective actions 

•  Cooperative accord on 

development and external 
programming. 

• 

• 

Strong EU-UK 
cooperation in foreign, 
security and defence 
policy.  
Future partnership 
should respect the EU 
decision-making 
autonomy. 
•  Appropriate 

mechanisms for 
dialogue, consultation, 
coordination, 
exchange of 
information, and 
cooperation.  

countries  or 
and 

Options 
considered:  Existing 
cooperation  mechanisms  with 
third 
specific 
dialogue 
consultation 
mechanism with the UK: 
•  Dialogue and consultation, 
alignment (sanctions), 
exchange of intelligence,  
Participation in EU-led 
operations.  

• 

•  No UK participation in the EU's 
decision-making process. 
Envisage a Framework Participation 
Agreement (FPA) to cover all 
aspects of CSDP. 

• 

• 

•  Consultation mechanisms allowing 
the UK to align with EU foreign 
policy positions, joint actions, 
notably on human rights, or 
multilateral cooperation. 
Intelligence-sharing, training and 
exchange of military personnel. 
•  Cooperation conditional on full 
compliance with international 
human rights law and international 
humanitarian law and EU 
fundamental rights. 

Exchange 
classified 
information 

of 

• 

Security of Information 
Agreement (SoIA) on classified 
information. 

for 

the 
Pre-requisite 
exchange  of  information: 
an SoIA. 

Any sharing of EU classified information, 
including  on  intelligence,  is  conditional 
on a security of information agreement. 

• 

Information-sharing with 
the UK via an SoIA. 

103 

 
 
 
EPRS | European Parliamentary Research Service 

Issues 

UK position 

European Council 

European Parliament 

•  Necessity to exchange sensitive 
but not classified information 
outside of an SoIA. 

•  UK-EU sanctions dialogue  
• 

Exchange of information on 
listings and their justification 
Possibility of adopting 
mutually-supportive sanctions, 
including during crises.  
•  Continued coordination and 

• 

operational delivery on the 
ground; UK participation on 
case-by-case basis.  

•  Offer to host an Operational 
Headquarters and consider 
future contributions to EU 
Battlegroups.  

•  UK contributions to depend on 

defined arrangements, 
including sufficient insight into 
the planning of missions.  

• 

•  Administrative arrangement 
with the European Defence 
Agency (EDA). 
Participation in PESCO projects 
as third party, in the European 
Defence Fund (EDF) and the 
European Defence Industrial 
Development Programme. 

No details on this. 

Coordination  on  sanctions  policy  and 
implementation, 
arms 
embargos and the Common Position on 
arms exports. 

including 

No details on this. 

Possibility for UK participation in civilian 
and  military  EU  missions  (with  no  lead 
role for the UK).  

No details on this. 

•  Based on similar third-country 
arrangements, the UK could 
participate in EU programmes in 
support of defence and external 
security (e.g. European Defence 
Fund, cyber-security). 

•  Collaboration on armaments policy, 

including PESCO projects, without 
prejudice to and consistent with 

Sanctions 

CSDP  missions 
and operations 

Capability 
development 

104 

• 

Commission's current 
considerations for discussion 
Practical procedures to 
allow timely exchanges of 
intelligence with UK 
services. 

Coordinated  approach  with  UK 
on  sanctions  to  minimise  risk  of 
diverging sanctions regimes. 

• 

Options:  
• 
FPA 
•  Ad-hoc agreements, or 
• 
 Developing a new and 
more ambitious framework 
applicable for third 
countries.  
Third countries do not host 
Operation headquarters for 
CSDP operations; they 
cannot be lead-nation or 
provide the operation 
commander or other high-
level positions. 
Possible administrative 
arrangement with EDA, 
excluding UK participation 
in EDA's management or ad-
hoc activities.  

• 

•  UK participation in PESCO 

projects and the EDF under 
the same conditions for 
third countries. 

 
The future partnership between the European Union and the United Kingdom 

Issues 

UK position 

European Council 

European Parliament 

Galileo 

•  UK to participate in European 
capability development in 
cyber and in space. 

Continued  collaboration  on 
the 
Galileo  programme.  UK  use  of  the 
secure,  encrypted  signal  (PRS)  and 
participation in its development and 
operation. 

No details on this. 

relevant EU positions, decisions and 
legislation. 

on 

Based 
third-country 
similar 
arrangements,  the  UK  could  participate 
in EU programmes in support of defence 
and external security including Galileo. 

Development 
cooperation  and 
external 
programming 

Cooperative  accord  with  the  EU  on 
external 
development 
programming. 

and 

No mention. 

• 

EU-UK cooperation with possible UK 
contributions to the EU's external 
financing instruments in pursuit of 
common objectives, especially in 
the common neighbourhood. 

Commission's current 
considerations for discussion 

Satellite  Navigation  Cooperation 
Agreement  on  Galileo/EGNOS 
and  an  Agreement  on  Access  to 
PRS.  No  UK  participation 
in 
sensitive 
developing 
matters  (manufacturing  of  PRS-
security modules). 
The  EU  is  open  to  contributions 
from third countries and to local 
joint programming.  

security 

105 

 
 
 
 
 
 
 
 
 
 
 
 
 
Q
A
-
0
4
-
1
8
-
7
8
3
-
E
N
N

-

Following the European Council's additional guidelines 
of March 2018, the European Union (EU) and the United 
Kingdom (UK) have started discussions on their future 
relationship after Brexit. The aim is to agree on a political 
framework for their future partnership by autumn 2018, 
to  be  adopted  alongside  the  withdrawal  agreement. 
Conclusion of a treaty or treaties establishing future EU-
UK relations will only take place after the UK leaves the 
Union and becomes a third country. 

Both  parties  have  expressed  the  desire  to  remain  in  a 
close  partnership,  which  would  cover  several  areas 
including trade and economic matters, internal security, 
foreign  and  security  policy,  and  cooperation  on 
defence. This study looks at the respective aims for, and 
principles underpinning, the negotiations, as expressed 
publicly to date by each party, and analyses some of the 
legal  constraints  and  existing  practices  or  precedents 
shaping  EU  cooperation  with  third-country  partners. 
This allows assessment of the possibilities and limits of 
any  future  EU-UK  partnership,  in  light  of  the  stated 
objectives  and  'red  lines' officially  announced,  leading 
that,  notwithstanding  several 
to 
common aims, significant divergences still persist with 
respect to the means of achieving the stated objectives. 

the  conclusion 

This is a publication of the Members' Research Service 
EPRS | European Parliamentary Research Service 

This document is prepared for, and addressed to, the Members and staff of the European 
Parliament as background material to assist them in their parliamentary work. The content of 
the document is the sole responsibility of its author(s) and any opinions expressed herein should 
not be taken to represent an official position of the Parliament. 

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ISBN 978-92-846-3338-8  |  doi:10.2861/608213  |  QA-04-18-783-EN-N