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NOTE From: General Secretariat of the Council To: Permanent Representatives Committee (Art. 50) Subject: European Council (Art. 50) Draft guidelines
Today the Commission has stated that, in its assessment, "sufficient progress" has been reached in the first phase of negotiations. It will now be for Member States to appraise the results of the negotiations, and for the European Council on 15 December 2017 to decide whether it agrees that "sufficient progress" has been achieved. Should that be the case, the President of the European Council recommends these draft guidelines for adoption.This makes a basic point. This text is a draft, which EU leaders and their aides will discuss in the run up to the summit of EU leaders on December 14/15. The text is likely to stay broadly the same, but the EU27 debate over some of the fine detail will be important. It offers a glimpse of the points of difference on substance that will grow more significant over time.
Following the notification under Article 50 TEU, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.
1. The European Council welcomes the progress achieved during the first phase of negotiations as reflected in the Joint Report and decides that it is sufficient to move to the second phase related to transition and the framework for the future relationship. It calls on the Union negotiator and the United Kingdom to complete the work on the issues pertaining to the first phase, to consolidate the results obtained so far and to start drafting the relevant parts of the Withdrawal Agreement.Although “sufficient progress” has been made on the broad outlines of a divorce settlement, there is still a lot of work to do. This sentence underlines that the complex work of untangling UK and EU relations will go on right up to Brexit day. A binding treaty must be drafted, and many provisions of that remain contentious. Big outstanding issues include the system to manage disputes over the withdrawal agreement, and the legal drafting that would apply to provisions on Northern Ireland, which are bound to be highly contentious. It underlines that negotiations in the second phase can only progress as long as all commitments undertaken during the first phase are respected in fullThis is an important warning. British ministers often suggest the financial payment is tied in some way to trade terms. This sentence makes clear that the divorce terms are not to be reopened in the second phase of talks, and any attempt to backslide would carry consequences. Germany in particular is extremely wary of the UK using past debts or obligations as leverage in a negotiation about future relations. and translated faithfully in legal terms as quickly as possible.
2. In the negotiations during the second phase the European Council guidelines of 29 April 2017 continue to apply These guidelines are not the first the European Council has adopted on Brexit. Indeed the first version in April are far more substantial and significant in laying out the EU’s approach to Brexit. Official have given the two guidelines nicknames like the Old and New Testament. But this overplays the importance of this latest set. They were originally intended to be longer and more detailed, especially on the EU’s priorities for the future relationship. But those plans were ditched because of the slow progress in divorce negotiations in October and early November. entirety and must be respected.
3. As regards transition, the European Council notes the proposal put forward by the United Kingdom for a transition period of around two yearsThis part of the guidelines covers the transition, the glide path out of the EU that is an urgent priority for London and UK business. The “around two years” time scale is taken directly from Theresa May’s Florence speech. Most EU member states imagine it will end on January 1, 2021. If it goes beyond that, Britain would fall into the EU’s next long term budget, which has yet to be negotiated. Even if it were to be for just a few months, the negotiations around this would be excruciatingly difficult. , and agrees to negotiate a transition period covering the whole of the EU acquisThis defines the nature of the transition. It is basically a continuation of EU membership, without the voting rights and seat at the table. The word ‘whole’ is important. The EU is making clear that the UK cannot opt out some elements of the EU regime, such as fisheries for instance. ,while the United Kingdom, as a third country, will no longer participate in or nominate or elect members of the EU institutions.
4. Such transitional arrangements, which will be part of the Withdrawal Agreement, must be in the interest of the Union, clearly defined and limited in time. In order to ensure a level playing field based on the same rules applying throughout the Single Market, changes to the acquis adopted by EU institutions and bodies will have to apply both in the United Kingdom and the EU.These conditions will not make easy reading for Boris Johnson, foreign secretary. He has called Britain to have no obligation to take on new EU rules or rulings in the transition period. Here the EU is saying that is not possible. In a two year transition, this should not make much difference to the UK. It takes many years to negotiate new directives, meaning most new laws before 2021 would have been shaped with some British input. But the EU does take all sorts of other decisions that will apply without UK having any say on how they were taken. This includes competition decisions, and legal instruments adopted by regulators to enforce laws.
All existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will also apply.This line is a repeat from the April guidelines. Some diplomats call it the “Full Monty” clause. Britain will escape none of the legal or financial obligations that members must honour. That includes free movement of persons, accepting EU court rulings and allowing the European Commission to police your national laws and practices. As the United Kingdom will remain a member of the Customs Union and the Single Market (with all four freedoms) during the transition, it will have to continue to apply and collect EU customs tariffs and ensure all EU checks are being performed on the border vis-à-vis other third countries.This is one of the most intriguing sentences in the entire document. The main point is that Britain will have to remain part of the EU’s customs union, which would require it to enforce the EU’s common external tariff, including by collecting duties. The interesting part is what is missing. There is no reference here to the UK having to completely abide by the EU’s external trade policy. That would prohibit, for instance, any negotiations with the US or Japan after Brexit. The EU here is leaving the issue open and signalling willingness to offer the UK some latitude, as long as London abides by its obligations during the transition. That said, the UK will need some freedom to negotiate. At the point of Brexit, Britain will lose all the benefits of the EU’s agreements with third countries. There are something like 750 agreements with relevance to the UK that it must seek to renew or renegotiate after Brexit. There is no automatic transition, in other words, for these external agreements. Britain has to rebuild them all.
The European Council calls on the Commission to put forward appropriate recommendations to this effect, and on the Council to adopt additional negotiating directivesFor Michel Barnier, the EU’s chief negotiator, to discuss transition issues with the UK, he will need more than these guidelines. In the Brussels jargon, he will also need “negotiating directives”, a legal document outlining his negotiating stance that must be approved by EU member states. Here the leaders are calling on him to propose that mandate and for ministers to approve it as soon as possible. But it can take some time. EU officials think it may take a month. on transitional arrangements as soon as possible.
6. The European Council reconfirms its desire to establish a close partnershipHere the EU finally lays out its view of the “close partnership” it wants with Britain after Brexit. Note it is extremely brief. That is not because they don’t want it to be close, but because in tactical terms the EU has no interest at this point in defining the terms of a future relationship. It wants Britain to make clear what it wants first. between the Union and the United Kingdom. While an agreement on a future relationship can only be finalised and concluded once the United Kingdom has become a third countryThe EU is working to a different timeline from Britain. EU officials stress real trade negotiations only start with the UK once it has left the union and is a “third country”. That makes a difference in practical and not just legal terms. Once Britain is a third country, the EU must appoint a negotiator again, and follow different treaty rules for conducting the negotiations. It involves a whole change of cast, and will give a much bigger role to the European parliament. EU diplomats also look to the end of any post-Brexit transition as the real deadline for a trade deal. Britain, by contrast, wants as much of a trade deal agreed by 2019 as possible. , the Union will be ready to engage in preliminary and preparatory discussions with the aim of identifying an overall understanding of the framework for the future relationshipThis is what the EU sees as the outcome of the negotiations on future relations before Brexit, and it is hardly the big, ambitious trade deal many Brexiters expected. The EU sees this discussion as the start of a long process, rather than its conclusion. Such an understanding, which will require additional European Council guidelinesThis may look innocuous but it sets the date for the start of trade discussions. If this were in the sentence above, it would mean exploratory talks with the UK could not start until another set of guidelines on the future relationship are adopted. As written, EU leaders would instead be saying they will need to prepare in more detail for a full negotiation on the future relationship, but in the meantime they are not ruling out some preliminary discussions with London. Some member states are expected to push to make this section tougher. , should be elaborated in a political declaration accompanying the Withdrawal Agreement.For the EU the only binding treaty Britain will have on exit will cover the withdrawal and transition. Anything on trade and future relations will just be a “political declaration”.
7. The Union takes note that the United Kingdom has stated its intention to leave the Customs Union and the Single Market after the end of the transition period, and the European Council will calibrate its approach as regards trade and economic cooperation in the light of this position so as to ensure a balance of rights and obligations, avoid upsetting existing relations with other third countriesIn plain terms this section says the EU is going to be quite conservative in its approach in structuring trade relations with Britain. It will work on old precedents, and will respect arrangements it has with neighbours and trade partners. So, in other words, no deals that involve Norway-style benefits with Canada-style freedoms. Britain needs to choose between models. , and respect all other principles set out in its guidelines of 29 April 2017, in particular the need to preserve the integrity and proper functioning of the Single Market.
8. The European Council reconfirms its readinessThe UK is an important partner in all these areas. Note the EU here stresses the need for cooperation more than the conditions that may come with it. to establish partnerships in areas unrelated to trade, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy.
9. The European Council will continue to follow the negotiations closely and will adopt additional guidelines at one of its next meetings, in particular as regards the framework for the future relationship. It calls on the United Kingdom to provide further clarity on its position on the framework for the future relationship.One of the most important political messages in the whole document. The EU side is frustrated that the UK cabinet has still to acknowledge the realities of leaving the EU, and what cannot be rebuilt as a non-member with more legal independence. It wants London to get on with the debate. And as these guidelines show, the leaders are not willing at this stage to define what they think the future relationship should look like. They want the UK to make choices with a full understanding of the implications. The European Council invites the Council (Art.50) together with the Union negotiator to continue internal preparatory discussions.