Brexit Services Agreement

Both sides issued their negotiating mandates at the end of February. According to the British document, London wants an agreement “on the model of free trade agreements already concluded… canada and other friendly countries,” with an Australian relationship as a fallback. Given that the EU is in a state of trade with Australia under WTO terms, this last point is an understatement for a hard Brexit without a trade deal. In many areas, the UK mandate is based on existing EU bilateral trade agreements. The agricultural tariff quota instrument used in many EU agreements creates problems for the UK with WTO partners and future bilateral trade agreements. Tariff quotas limit tariff reductions and/or tariff exemptions to the defined quantities of the product concerned. Brexit will remove the EU`s large market for agricultural products from the EU, which until now has accounted for a significant share of imports under these quotas. We must now decide how to divide them. The EU and the UK have presented their WTO partners with a joint proposal to adapt a total of 142 quotas for 400 customs lines with a trade value of 28 billion euros (2018): the UK`s historical share would be defined as a separate British quota and deducted from the EU quota.

However, many states, including Australia, New Zealand and the United States, object to the separation of the United Kingdom from the European Union market reducing total sales and increasing the cost of parallel import licences for their producers. They insist on increasing British quotas, which British farmers reject on the grounds that they would be exposed to increased competition. EU bilateral quotas will remain unchanged in existing agreements, making them relatively more important to the smaller EU market and increasing pressure on farmers. The UK should renegotiate on a case-by-case basis. The 2019 revisions also adapted elements of the political declaration and replaced the word “appropriate” with “appropriate” with respect to labour standards. According to Sam Lowe, a trade fellow at the Centre for European Reform, the amendment excludes labour standards from dispute resolution mechanisms. [27] In addition, the Equal Competition Mechanism has been postponed from the legally binding withdrawal agreement to the political declaration,[24] and the line of the political statement that “the United Kingdom will consider taking into account alignment with trade union rules in the relevant areas” has been removed. [26] The October 2019 Joint Political Declaration outlines the future relationship between the European Union and the United Kingdom: the two sides envisage a comprehensive free trade agreement (FTA) and broad cooperation in various areas.

In principle, this should include regulatory issues, insurance services and property. But now that the negotiating mandates (and the EU`s initial offer) are on the table, it is clear that much remains to be filled. 2) After 31 December 2020, an agreement is expected to enter into force before this agreement enters into force. Ambitious free trade agreements (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Tunisia) can cover all aspects of trade mentioned in the answer to question 1 above.