In terms of the volume and virulence of commentary generated, there is little to be compared with the draft Withdrawal Agreement which Theresa May brought back from Brussels in November 2018. It is a poor deal: very few commentators on any side say any different. However the level of vehemence and anger heard exceeds the reality of what is within the pages of the draft Agreement itself, suggesting that it has not been read. It therefore needs a commentary.
As the Agreement is 585 pages of dense text, this is examined in sections.
The leading Eurocrats reacted to the British decision to withdraw from the European Union with their wonted disgust and resolved not to discuss any free trade agreement between the European Union and the United Kingdom without the fulfilment of certain preconditions. This was unwarranted according to the existing treaties of the Union but imposed nevertheless, and the motion to impose those preconditions was passed overwhelmingly in the European Parliament on 5 April 2017, and on 3 October 2017 MEPs backed the Commission in refusing to begin trade talks: in this vote, all British members would have been expected to vote against damaging their own country’s interests, but of those 73 British MEP, 4 were not there, only 38 voted against, 21 abstained, including the Labour Members, and 10 voted for the motion: the Liberal Democrat and the Nationalists supported the motion, and incomprehensively, two Conservatives did also, against the whip and all sense of patriotism, and were booted out of the party as a result.
Various proposals came from the Government, with an attempt at a settled position, the Chequers proposal, resulting in numerous resignations though in the event it had little traction and the EU’s negotiators ignored it. The negotiation proceeded in diplomatic confidence, with leaks and tweets throughout. In the meantime, a steady stream of MPs and others were seen in Europe apparently briefing against the British position. (There is no suggestion yet that the police will investigate this activity.)
Later, on 13 March 2019, the House of Commons voted to reject the possibility of a no-deal Brexit, which in effect disabled the government’s fall-back position. The resultant draft Agreement when published caused a new set of resignations, but has not changed since.
- See: Draft Withdrawal Agreement – full text
The text is prolix, tedious, legalistic but in the European style of substituting length for meaning, and the devil is in the detail, but a broad analysis is possible.
The key provisions of interest are the Part 3 ‘Separation Provisions’ (pages 69 to 195), Part 4 on ‘Transition’ (pages 196 to 209), the Part 5 ‘Financial Provisions’ (pages 210 – 267) and the Ulster Protocol (pages 301 – 475)
Part 1: Common Provisions (pp 6 – 15)
Largely administrative and setting the scene for what is to follow. It contains several definitions, the key definition being inchoate: “transition period”.
The Transition Period is defined in Article 126 as a transition or implementation period, which shall start on the date of entry into force of this Agreement and end on 31 December 2020. That said, Article 132 then says the Transition period may be extended by “the Joint Committee” up to “[31 December 20XX]”: the year is yet to be agreed but assumed to be 2022.
The Joint Committee is to be established under Article 164 (in Part 6), “comprising representatives of the Union and of the United Kingdom”. Notwithstanding this and detailed rules in Annex VIII, it is unclear how many members the committee will have from each side nor how it will make decisions; whether by majority vote or unanimity.
The terms of the agreement are to form part of “Union law” and to be enforced in the United Kingdom and Gibraltar also. Article 4 is an interpretation clause changing nothing except that Section 5 requires that British judicial and administrative authorities have due regard to relevant case law of the European Court of Justice handed down after the end of the transition period, which is a foretaste of the later provisions to which it applies.
Part 2: Citizens’ Rights (pp 16 – 68)
Mutual rights are to be enjoyed for EU nationals living and working in Britain and British citizens living and working in the EU. This does not grant freedom of movement but says those currently living and/or working across the border may continue to do so: it does not require that new workers be let in, nor retrospectively give rights to those who have since left. However the cut-off is not the date of Exit, nor the date of the treaty, but the end of the Transition Period.
(The provisions are not just for those who live and work in the United Kingdom: plenty of workers for example live in Spain and work in Gibraltar or live in Louth but work in Newry, or vice versa: these are termed “Frontier Workers”.)
Part 2 also deals with family members, adopted children etc. Article 12 prohibits discrimination on grounds of nationality as to those covered by Part 2.
Article 15 goes wider: “Union citizens and United Kingdom nationals, and their respective family members, who have resided legally in the host State in accordance with Union law for a continuous period of 5 years or for the period specified in Article 17 of Directive 2004/38/EC, shall have the right to reside permanently in the host State …”; and this right may be lost only by 5 years’ continual absence.
There follow tedious details of residence certification documents and similar, and the ability to terminate residence in circumstances defined in an existing directive, for those abusing their rights (with a right of appeal).
Chapter 3 contains a continued recognition of professional qualifications. This is still tied to the Transition Period. Title III (from Articles 30 onwards) contains detail of co-ordination of national insurance provisions, essentially continuing current arrangements.
Part 3: Separation Provisions (pp 69 – 195)
Title I: Goods placed on the market (from p 69)
Article 41 sets the stage; that any goods lawfully placed on the market in the EU or the United Kingdom before the end of the transition period may continue to be circulated, but with exceptions for live animals and animal products for which there is detail in an annex. The subsequent provisions on proof, data and shipping are eye-watering in their dull detail but do not alter the essential intent, and likewise the provisions on VAT co-operation.
Title II: Ongoing customs procedures (pp 78-84)
Title III: Ongoing value added tax and excise duty matters (pp 85-87)
Title IV: Intellectual property (pp 88-102)
This title, from Article 54, ensures that EU-level intellectual property continues to been protected as before Exit, but transformed into national versions: for example all Community trademarks will in the United Kingdom become UK trademarks as from Exit and be governed by British law, though during transition the validity of any Community trademark will be governed by EU rules (which does not apply to UK trademarks). This conversion of Community trademarks is provided for in domestic withdrawal legislation in any case. Also, rules on geographical indication / designation of origin or traditional speciality will continue but as domestic law as from the end of the Transition Period.
Title V: Ongoing police and judicial cooperation in criminal matters (pp 103-116)
This Title, from Article 62, concerns ongoing judicial cooperation proceedings in criminal matters. It continues the current co-operation arrangements, including the European Arrest Warrant, to the end of the Transition Period. The European Arrest Warrant will operate on anyone arrested before the end of transition.
While Article 8 (in Part 1) terminated the United Kingdom’s rights to access EU databases as from the end of the Transition Period, Article 63 would entitle the United Kingdom to use, for no longer than one year after the end of the Transition Period, the Secure Information Exchange Network Application to the extent strictly necessary to complete ongoing procedures, reimbursing the EU for costs thereby incurred.
Title VI: Ongoing judicial cooperation in civil and commercial matters (pp 117-126)
This is similar in theme. It essentially has a run-off before the United Kingdom signs up to the international Hague convention. It refers to the European Enforcement Order, a creature very rarely seen, as continuing to the end of the Transition period.
Title VII: Data and information processed or obtained before the end of the transition period, or on the basis of this agreement (pp 127-131)
Data processed before the end of the Transition Period is governed by EU data law. Also any classified information received before the end of the Transition Period shall continue to be legally protected.
Title VIII: Ongoing public procurement and similar procedures (pp 132-137)
Where any public authority is putting a matter out to tender, the EU procurement rules apply where the tender procedures are launched before the end of the transition. This includes a requirement for bodies in the EU to allow British companies to tender on the same terms.
Euratom, the European Atomic Energy Community, has particular sensitivities concerning ‘special fissile materials’: nuclear materials. The United Kingdom will be required to take responsibility for such materials on British territory and to accept international obligation. None of this changes anything as these obligations are complied with and always would have been. The main change then is the clarification that all nuclear material in the United Kingdom and Gibraltar which would otherwise belong to Euratom shall at the end of the transition period belong to the United Kingdom.
Title X: Union judicial and administrative procedures (pp 145-166)
This title is important in the consideration of the reality of Brexit. The jurisdiction of the European Court of Justice will not end at once on Exit Day but will continue until the end of the Transition Period, and shall apply to any case begun in that court before the end of the Transition Period (Article 86). Further, the Commission may bring cases against the United Kingdom in the European Court to enforce Community law in the United Kingdom before the end of the Transition Period (Article 87). This refers on to Article 95(1) (see below)
Article 92 gives EU administrative bodies power in the United Kingdom in ‘administrative procedures’ to the end of Transition and any which began before the end of Transition.
Article 93 give the European Commission authority to take action on state aid for a period of 4 years after the end of the transition period, though only in respect of state aid granted before the end of the Transition Period. (This unlikely to be of relevance: improper state aid to private enterprises is not done.) Likewise, anti-fraud investigations may be held for up to four years after Transition for events happening before the end of Transition.
Article 95 (“Binding force and enforceability of decisions”) is a vital clause to note. Buried though it is deep with in the body of the Agreement, it goes to the heart of the issue:
“Decisions adopted by institutions, bodies, offices and agencies of the Union before the end of the transition period, or adopted in the procedures referred to in Articles 92 and 93 after the end of the transition period, and addressed to the United Kingdom or to natural and legal persons residing or established in the United Kingdom, shall be binding on and in the United Kingdom.”
This passage does not appear to impose on Britain any post-exit changes in EU law: that is found in Part 4, in Article 127 (see below), but does impose EU authority in administering existing rules.
Title XI: Administrative cooperation procedures between member states and the United Kingdom (pp 167-170)
Title XII: Privileges and immunities (pp 171-195)
Where EU law extends to its officials forms of privilege and immunities, essentially equivalent to diplomatic privilege and the confidential nature of communications and data, then the United Kingdom will continue to recognised this as diplomatic privilege after Transition. The Title continues with similar, unexceptional points such as not taxing the EU on its income and assets not forcing its officials to pay into National Insurance. In Article 117 this is extended to officers and employees of the European Central Bank and the representatives of the national central banks in the European System of Central Banks, and in Article 118 to the European Investment Bank.
Title XIII: Other issues relating to the functioning of the institutions, bodies, offices and agencies of the Union (pp 190-195)
Part 4: Transition (pp 196 – 209)
Article 126 defines the Transition Period: “There shall be a transition or implementation period, which shall start on the date of entry into force of this Agreement and end on 31 December 2020.” This is altered by a later provision, Article 132, allowing it to be extended by a decision of the Joint Committee.
Article 127 states:
“Unless otherwise provided in this Agreement, Union law shall be applicable to and in the United Kingdom during the transition period.”
This then is the provision which delays effective Brexit until the end of the Transition Period, and which has therefore been described as making the United Kingdom a “vassal state” during those months. When read with Article 95 above, that is apparently the precise intent. There are exceptions from the continuing application of EU law, named as the provisions on Schengen and the Charter of Fundamental Rights which do not apply in the United Kingdom even now. Also it is stated that any “enhanced co-operation” agreed after Exit Day is not imposed on the United Kingdom.
Article 128 has “winding down” provisions, laying down for example that British representative or experts may be invited to attend, without voting rights, EU committees and bodies where British interests are involved and it is necessary for implementation.
Article 129 delays international trade deals:
“During the transition period, the United Kingdom may negotiate, sign and ratify international agreements entered into in its own capacity in the areas of exclusive competence of the Union, provided those agreements do not enter into force or apply during the transition period, unless so authorised by the Union.”
Therefore as from Exit Day the United Kingdom may sign any trade deals we wish, they must not come into force until the end of 2020. It is doubtful that the EU could effectively stop an early start date for a trade deal but it is more likely that such deals would commence from Midnight on New Year’s Day 2021. Article 131 repeats that EU bodies have authority in the United Kingdom and over Britons until the end of the Transition Period.
Part 5: Financial Provisions (pp 210 – 267)
Article 135 begins the Budget Contribution provision, which has become known as “the Divorce Bill”. It applies only until the end of the Transition period, which is to say in 2019 and 2020, unless Transition were extended, in which case by Article 132 the contribution would be extended. It is then stated that “The applicable Union law concerning the Union’s own resources relating to financial years until 2020 shall continue to apply to the United Kingdom after 31 December 2020” – however the general statement is then derogated from to relate these payments to a budget period ending on 28 February 2021. The complexities of this and following detail must be left to tax and finance experts, and likewise how the Rebate negotiated by Margaret Thatcher is factored in.
In Addition there is Article 141 allocation to the United Kingdom a share in the EU’s liabilities as in 2021 (including staff costs, pension contributions etc).
Article 137 then, in tangled, bureaucratic wording, states that programmes for which the European Union has budgeted for the budget period 2014-2020 shall still operate in United Kingdom, which must read as saying that payments in are not all for nothing as the UK will get some payments out also, if nothing like as much as is paid in.
Article 139 determined the United Kingdom’s share in participation according to a percentage paid in. On a brighter note, Articles 145 and 146 provide for a payment to the United Kingdom for its share of the net assets of the European Coal and Steel Community in liquidation on 31 December 2020 and its investment in the European Investment Bank. In each case EU is to reimburse the United Kingdom in five equal annual instalments on 30 June of each year, starting on 30 June 2021.
Also by Article 149, the European Central Bank is to reimburse the Bank of England for the paid-in capital provided by the Bank of England. There are additional detailed provisions for the EIB capital and liabilities, and other funds such as Trust Funds and the Facility for Refugees in Turkey (Article 155).
Article 156 had additional payments to be made by the UK, to continue to contribute the financing of the European Defence Agency, the European Union Institute for Security Studies, and the European Union Satellite Centre, as well as to the costs of Common Security and Defence Policy until the end of 2020.
Part 6: Institutional and Final Provisions (pp 268 – 300)
The bulk of the Agreement is done by this stage. Part 6 attempts to tie it all together. There have been concerns from this Part though, at least on symbolic issues.
Article 158: For 8 years from the end of the Transition Period, any British court faced with a question on Citizens’ Rights under Part 2, may request a preliminary ruling from the European Court of Justice on interpretation, which interpretation the court must implement.
Article 159 empowers an “independent authority” to report on how those Citizens’ Rights provisions are being implemented.
Article 160 empowers the European Court to rule on the implementation of Part 5; the Financial Provisions.
Article 163 has provision on the consistent interpretation of the Agreement. that:
“in full deference to the independence of courts, the Court of Justice of the European Union and the United Kingdom’s highest courts shall engage in regular dialogue, analogous to the dialogue in which the Court of Justice of the European Union engages with the highest courts of the Member States.”
Provisions following this establish the Joint Committee entrusted with implementing the Agreement (which seems unnecessary as there is nothing for it to do as the United Kingdom and the European Union would be the ones implementing it), and other specialist committees (presumably most also functionally redundant from the start). These include committees for implementing the protocols on Ulster, Gibraltar and the Sovereign Base Areas on Cyprus.
Article 184 contains what all this was about in the first place: it requires that the European Union and the United Kingdom then negotiate in good faith a future relationship, guided by the separate Political Declaration.
Protocols (from p 300)
The Protocols are stated to apply from the end of the Transition Period.
Protocol on Ireland/Northern Ireland (pp 301 – 475)
This is the “Back-stop” and the main objection which has been raised to the Agreement, and given its terms, that is to be expected. The backstop is meant to be temporary and is explicitly said to last only until arrangements have been made which render it unnecessary. However it is technically unlimited in time and if the EU will not agree alterative arrangements, the United Kingdom is stuck within the backstop protocol.
The essential problems expressed with this Protocol then are threefold:
- Whether it could de facto become temporary, if the EU ensures that the conditions for its discharge are not met;
- During its endurance it creates a customs union between the UK and the EU (Article 6, clause 1); and • During its continuance it creates regulatory separation between Northern Ireland and the rest of the United Kingdom (Article 6, clause 2).
It is stated that the Withdrawal Agreement is to be temporary only:
The objective of the Withdrawal Agreement is not to establish a permanent relationship between the Union and the United Kingdom. The provisions of this Protocol are therefore intended to apply only temporarily, taking into account the commitments of the Parties set out in Article 2(1). The provisions of this Protocol shall apply unless and until they are superseded, in whole or in part, by a subsequent agreement.
Article 2 contains a “best endeavours” clause requiring the EU and the UK to find an agreement superseding the Protocol. The unenforceability of that requirement was the reason for “Cox’s Codpiece”; a codicil agreement on an arbitration mechanism if no such agreement is proceeded with.
Article 5 recited that the Common Travel Area between the United Kingdom and Eire (which long precedes membership of what was then the European Communities) shall continue as a matter for the British and Irish governments.
Article 6 is the problem article. Clause 1 states “a single customs territory between the Union and the United Kingdom shall be established”, with details following. Clause 2 states that EU legislation shall apply in of Northern Ireland.
Article 7 tries to soften this regulatory separation, providing that nothing in this Protocol prevents the British government from giving unfettered market access for goods moving from Northern Ireland to the rest of the United Kingdom. It does not provided for unfettered access for goods from Great Britain moving to Northern Ireland though. Article 8 differentiates the marking of goods as to the country of origin; those from Ulster are to be marked “UK(NI)” or “United Kingdom (Northern Ireland)”, to allow free access to the European Union.
Details which follow at great length in the Protocol, follow from the logic of Articles 6 and 7 and provide amongst other things for a joint committee and specialist committees: plenty of work there for those who drink taxpayers’ money for a living.
Article 20 enforces the intent that the Protocol be temporary, stating that:
“If at any time after the end of the transition period the Union or the United Kingdom considers that this Protocol is, in whole or in part, no longer necessary to achieve the objectives set out in Article 1(3) and should cease to apply, in whole or in part, it may notify the other party, setting out its reasons.”
(Article 1(3) is “arrangements necessary to address the unique circumstances on the island of Ireland, maintain the necessary conditions for continued North-South cooperation, avoid a hard border and protect the 1998 Agreement in all its dimensions”.)
Protocol relating to the Sovereign Base Areas of the United Kingdom of Great Britain and Northern Ireland in Cyprus (pp 476 – 495)
The context is that of the two Sovereign Base Areas on the south coast of Cyprus, which constitute a British Overseas Territory, known as Akrotiri and Dhekelia. The territory is essentially a pair of large naval and military bases, with training areas and with civilian settlements inhabited by naval and military personal and contractors and families, but also with some native Cypriots villages. The laws of this territory have been kept consistent with the laws of the Republic of Cyprus, the border is fairly open and the Republic’s government by agreement provides many services within the territory, including customs and taxation. The currency in circulation is the euro.
With this in mind, the Protocol provides that Akrotiri and Dhekelia shall be part of the EU customs area and subject to that extent to EU law and customs and excise duties. The Cypriot authorities may administer all relevant customs functions, and British authorise shall be responsible for doing so in the Akrotiri and Dhekelia. However military goods are exempt from EU jurisdiction and military personnel, contractors and families are exempt from taxes. The army may control the territory’s borders: the Protocol contains rules on travel documents.
Protocol on Gibraltar (pp 496 – 503)
Gibraltar is a free port and while it has hitherto been within the European Union, it is outside the customs area, the common commercial and agricultural policies, it has a hard border with Spain and its membership of the EU is only nominal in most spheres. However, the frontier and freedom to cross and operate across it is considered vital to Gibraltar, resulting in a 97% remain vote at the referendum.
The border is open on the British side which is to say that the British authorities allow free passage in and out. The Spanish authorities however maintain strict customs checks and frequently inhibit passage of vehicles from Spain into Gibraltar and those from Gibraltar into Spain, and have on occasion imposed a complete blockade for days on end with petty excuses, for example an illness on a visiting cruise ship.
That said, the Spanish areas neighbouring Gibraltar are economically dependent on the territory as providing a source of work and of customers. Many nominal residents of Gibraltar live in Spain because of high property prices on the Rock.
The Protocol would establish a joint committee to look at “frontier workers”. It requires co-operation against smuggling into Spain. Article 3 though also contains a declaration against “harmful tax practices” and following the OECD Inclusive Framework on base erosion and profit shifting: it has been a bugbear of Spain’s that Gibraltar has been used as a tax haven.
Article 2 has a framework potentially to apply EU law on air transport to Gibraltar Airport, which depends on future agreements as to the use of the airport.
Annexes (pp 504 – end)
The Annexes to the Agreement contain specifics too tiresome in minutiae even for the detail contained in the Articles themselves, for example identifying particular provisions in a raft of treaties which concern social security payments or plant variety rules, or the particular nuclear equipment belonging to Euratom which becomes British government property at exit. There is nothing apparent in these points to contradict the preceding provisions as described.
Annex VIII contains procedural rules for the Joint Committee, and that its working language shall be English: nothing specifies though whether a decision of the committee has to be a unanimous or a majority decision.
Annex IX, finally, has rules of procedure for dispute settlement, using an arbitration panel.
Analysis by Lawyers for Britain
Lawyers for Britain provided an analysis of the Withdrawal Agreement highlighting various problems with it. These can be summarised as follows:
In the general Agreement:
- The Agreement is stated to have “direct effect” (like current EU law)
- In the Transition Period to the end of 2020 the United Kingdom will effectively be a vassal state, subject to new laws made but with no voice in the making of them. The summary notes obligations to follow treaties with outside states and state aid rules. It notes the “long tail” of 4 years after Transition given to the European Court (see Part 3 Title X above, for state aid investigations).
- Financial obligations to the EU budget, estimated at £39 billion, and that the European Court, not a neutral arbitrator, judges the rules.
- European citizens’ rights of settlement continue indefinitely after Transition and are governed by the Agreement, not purely by British law, to be interpreted consistently with guidance from the European Court for up to 8 years, and thereafter by an arbitration scheme.
- European Court of Justice jurisdiction continues in full force during the Transition Period, then with a tail-off of 4 years for things which happened during Transition: 4 years for state aid breaches and 8 years for citizens’ rights.
In the Northern Ireland backstop protocol:
- The backstop endures indefinitely unless replaced by a new agreement in the gift of the EU.
- It imposes a customs union while it lasts.
- Northern Ireland is made subject to all EU laws, without a say in making them.
- State aid rules persist in Northern Ireland.
- It imposes “level playing field” rules on the environment and workers’ rights.
- For the Record by David Cameron
- All Out War: The Full Story of How Brexit Sank Britain’s Political Class by Tim Shipman
- Brexit: Why Britain Voted to Leave the European Union by Harold D. Clarke, Matthew Goodwin and Paul Whiteley
- Brexit: How the Nobodies Beat the Somebodies by Sebastian J. Handley
- Brexit and Ireland: The Dangers, the Opportunities, and the Inside Story of the Irish Response by Tom Connelly
- Beyond Brexit by Vernon Bogdanor
- From Partition to Brexit: The Irish Government and Northern Ireland by Donnacha O Beachain
- Brexit: Its Necessity and Challenge by Tony Kosuge
- Rising Tides: Facing the Challenges of a New Era by Liam Fox
- By Boris Johnson: