© 2017 SCER
What is in the UK government’s White Paper generates many questions which I am sure will be asked by the EU and will have to be responded to if we still aim at an orderly withdrawal with a transition period and a joint political declaration on the future attached to it. And if we want to respect the time challenge.
Let me say, first, that EU red lines have not been taken into account in the proposal. It is, however, clear that awareness of the consequences of leaving the EU single market and customs union is there. It looks like a free trade agreement (FTA) in the proposal does not mean the same for the British side as it means for the EU. There is some good news about accepting the Court of Justice of the EU role in interpreting EU law. There is an understanding that a level-playing field includes state aid and competition, environmental and labour standards.
One can say there are elements that might allow talks to move forwards in a way that would lead to a common political declaration on the future relations.
But, of course, we have to remember that the white Paper as such is not going to be negotiated now. The declaration is seen as providing a basis for the future negotiations of the partnership with UK as a third country. In this context it is rather unfortunate that the White Paper content continues to be contested here and there on the British side.
However, the priority now is to finalise negotiating separation i.e. the Withdrawal agreement. Michel Barnier said recently that 80% of the text is done. But the Irish backstop issue remains key and without a solution.
When it comes to what is proposed in the White Paper regarding the future, I have serious doubts about the facilitated customs arrangement. It is designed in a way to bring all the benefits to the British side without accepting the obligations related to the common trade policy – as they want to have their own trade policy on goods. This goes against the logic of the common external tariff. Then they propose a two-tariff solution which has already been rejected last summer by the EU. It brings too many risks to the EU concerning fiscal, supervisory, financial, and level-playing field issues. It would be also a bureaucratic nightmare hard to imagine, also for businesses. I cannot imagine a change in the EU position here.
When it comes to the common rule book for goods, we have to remember that in the Union it actually does not matter where goods come from that enter its market, they always have to respect EU standards. And the UK knows only too well that some of those standards are not controlled on the border. For those, my understanding is that the UK would expect some sort of mutual recognition which would go even beyond member states rights.
I have had, over the last two years, many meetings with stakeholders on financial services. We discussed the impossibility for the EU side of a mutual recognition approach and the possibility of an equivalence based approach. In the White Paper, it is rather clear that the intention is to keep the right to diverge with a view to maintaining or even boosting competitiveness of the British market. I cannot imagine a positive attitude by the EU to a situation where there is a divergence on rules, loss of passporting and a sort of mutual recognition or generalized equivalence system. This would go against the major EU red line which is its decision-making autonomy.
Prof Danuta Hübner MEP is Chair of the European Parliament’s Committee on Constitutional Affairs and former European Commissioner for Regional Policy. She is Advisory Board member of the Scottish Centre on European Relations.