The Copa Cogeca Brexit Task Force, chaired by ICOS’s Alo Duffy, “met” yesterday with the European Commission and the UK Mission to the EU to discuss the progress of the ongoing future relationship negotiations. Below are the 5 key take-aways from the meeting, focusing on:

• The Timetable and Organisation of the Negotiations
• Negotiations on Rules of Origin for Goods
• The Debate on a Achieving a “Level Playing Field” for Agri-Food Products
• The UK’s Global Trade Plans
• Implementation of the Irish Protocols and Creation of a Border in the Irish Sea

Timetable & Organisation

20-24 April	Round 2 of Negotiations: Discussions were held via video conference. While it was found that there was a good level of agreement in areas such as trade in goods, transport and energy, on the topics where there are differing positions, including around the governance of the agreement, its structure and discussions on a level playing field, little progress was made on bridging gaps.
11-14 May	Round 3: The plan for this round is to focus on areas where there are significantly diverging points of view and try to develop a common text, with the aim of progressing these topics which so far have not shifted.
1-4 June	Round 4
End of June	High level Stocking Taking Conference: A high level conference is planned for June to discuss the progress made in the negotiations so far. It will be determined whether there are certain parts of the agreement which can be concluded and whether an extension of the transition period beyond December 2020 is necessary.   Extending the Transition Period? A 1st July deadline to decide on an extension of the transition period (possible up until December 2022) is set out in the Withdrawal Agreement. However yesterday the Commission confirmed that, if necessary, a decision on an extension could be taken later. That being said, the current December 2020 transition end date is set in UK national legislation and the ruling Conservative Party are against any further extension, as committed to in their election manifesto. It is therefore the current belief of the negotiation teams that extending the transition period is not an option.
Early Q4 2020	Ratification of the Agreement: The agreement needs to enter into force before the end of the year (according to the current deadline). Ratification will take a number of months and therefore an agreement on the deal will need to be reached in early Q4 2020.
1 January 2021	Deal or No Deal: Either the new EU-UK trade relationship will come into force in 2021 or no deal has been reached, in which case the EU and UK will move to trading under WTO rules, with tariffs and full controls applied.  The UK are currently developing their future tariff schedule which will be applied following their exit from the EU Customs Union. What tariff rates will be applied are as of yet unclear, however the new schedule will not be based on the no-deal plans previously published (which applied no tariffs on 87% of goods, but specific commodities such as cheddar and butter faced a tariff of  €221/tonne & €605/tonne respectively). The expectation is that tariffs will be applied for most products, and applied rates adjusted.

Rules of Origin

The first two negotiations rounds demonstrated that there is a lot of agreement between the EU and UK in the area of rules of origin. Specifically it was highlighted that there was common agreement on the intention that the rules ensure only the right businesses and products can benefit from preferential market access and that trade is facilitated through simple procedures. However while the UK wants to push forward with discussion on specific rules for specific products, and have the rules tailored to the UK’s trade profile, the EU argues that a standard approach is needed, i.e. that rules previously set out in other trade deals be used, given the limited time available for talks.

A Level Playing Field for Agri-Food Standards

Little progress has been made on this issue so far. The EU has asked for the UK to align with certain EU rules (meaning they would follow and adopt the exact same rules as the EU) in order to create a “level playing field” in trade and prevent competition distortions. They stated that this is a necessary condition in exchange for the unprecedented level of market access (tariff free and quota free) the EU was offering. The UK has ruled this out, as they consider having control of their own laws and being free to amend them as they please, a key reason for leaving the EU. While they have committed not to diverge for the sake of it, the UK has said there will be no compromise on this basic principle.  

The UK have asked instead for regulatory equivalency to be recognised within the EU-UK agreement (meaning that both sides would recognise the others rules are achieving equivalent standards of safety and sustainability, even if the rules and the process for achieving the standards are not aligned). The EU has rejected this request as a threat to the integrity of the single market and its standards. The UK say that they are committed to leading the way on food safety and hygiene standards and have been leaders in the development of the EU’s own food safety and hygiene laws and therefore do not believe these concerns are justified.

The UK’s Global Trade Plans

The UK launched its trade negotiations with the US this week. The decision to go ahead with the discussions despite the difficult circumstances can be considered a sign of the importance the UK places in the talks, which are similarly aimed to be carried out at pace, despite the time pressure to conclude the EU negotiations.  The UK Trade Department plan to launched talks with Australia, New Zealand and Japan as well, over the coming year.

Implementation of the Irish Protocols

A specialised Joint committee on the Irish Protocols of the Withdrawal Agreement met for the first time on the 30th April. Under the terms of the Irish Protocols, Northern Ireland will remain inside the EU’s single market for goods and will need to comply with the relevant EU rules. This will mean a new type of border is necessary in the Irish sea with checks and duties required on certain goods. At the meeting the UK acknowledged their obligations under the Withdrawal Agreement and work is now ongoing on the implementation of the protocols. A plan for the management of the new border is expected to be ready for the high level conference taking place in June, where progress made towards the implementation of the Withdrawal Agreement will be evaluated.

For any questions, comments or to be added to the mailing list for future Brexit Briefings, please find my contact details below.

Alison Graham

European Affairs Executive

Irish Co-operative Organisation Society Ltd

Tel: +32 (0)22 31 06 85

Fax: +32 (0)22 31 06 98

Mobile: +32 (0)487 64 86 80

Email: alison.graham@icos.ie