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The UK-EU Future Relationship: the Trade and Cooperation Agreement

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The UK-EU Future Relationship: the Trade and Cooperation Agreement House of Commons Committee on the Future Relationship with the European Union The UK-EU future relationship: the Trade and Cooperation Agreement Fourth Report of Session 2019–21 Report, together with formal minutes relating to the report Ordered by the House of Commons to be printed 29 December 2020 HC 1094 Published on 30 December 2020 by authority of the House of Commons Committee on the Future Relationship with the European Union The Committee on the Future Relationship with the European Union is appointed by the House of Commons to examine matters relating to the negotiations on the future relationship with the European Union. Current membership Hilary Benn MP (Labour, Leeds Central) (Chair) Lee Anderson MP (Conservative, Ashfield) Mr Peter Bone MP (Conservative, Wellingborough) Joanna Cherry QC MP (Scottish National Party, Edinburgh South West) Sir Christopher Chope MP (Conservative, Christchurch) Mark Eastwood MP (Conservative, Dewsbury) Florence Eshalomi MP (Labour, Vauxhall) Sally-Ann Hart MP (Conservative, Hastings and Rye) Antony Higginbotham MP (Conservative, Burnley) Dr Rupa Huq MP (Labour, Ealing Central and Acton) Stephen Kinnock MP (Labour, Aberavon) Seema Malhotra MP (Labour, Feltham and Heston) Nigel Mills MP (Conservative, Amber Valley) Nicola Richards MP (Conservative, West Bromwich East) Gary Sambrook MP (Conservative, Birmingham, Northfield) Mr Barry Sheerman MP (Labour, Huddersfield) Jane Stevenson MP (Conservative, Wolverhampton North East) Wes Streeting MP (Labour, Ilford North) Matt Vickers MP (Conservative, Stockton South) Dr Jamie Wallis MP (Conservative, Bridgend) Dr Philippa Whitford MP (Scottish National Party, Central Ayrshire) The following Members are former members of the Committee: Mark Fletcher MP (Conservative, Bolsover); Matthew Pennycook MP (Greenwich and Woolwich) Powers The powers of the Committee are set out in House of Commons Standing Orders, principally under a Temporary Standing Order of 16 January 2020 (amended on 2 March 2020). These are available on the internet via www.parliament.uk. Publication © Parliamentary Copyright House of Commons 2020. This publication may be reproduced under the terms of the Open Parliament Licence, which is published at www.parliament.uk/site-information/copyright-parliament/. Committee reports are published on the Committee’s website and in print by Order of the House. Evidence relating to this report is published on the inquiry publications page of the Committee’s website. Committee staff The current staff of the Committee are Jonathan Arkless (Committee Specialist), Henry Ayi-Hyde (Committee Operations Officer), Gordon Clarke (Committee Clerk), Mark Earl and Hannah Finer (Committee Operations Managers), Dr Ariella Huff (Senior Committee Specialist), Duma Langton and Julian Mazowiecki (Committee Specialists), Fraser McIntosh (Specialist Assistant), Zac Mead (Second Clerk) and Ben Shave (Media and Communications Officer). Contacts All correspondence should be addressed to the Clerk of the Committee on the Future Relationship with the European Union, House of Commons, London SW1A 0AA. The telephone number for general enquiries is 020 7219 7568; the Committee’s email address is [email protected]. You can follow the Committee on on Twitter using @CommonsFREU The UK-EU future relationship: the Trade and Cooperation Agreement 1 Contents Conclusions and recommendations 3 1 The deal 5 Reaching agreement 5 What is in the deal? 6 Trade, transport and aviation 9 Social security and visas for short-term visits 10 Law enforcement and judicial cooperation in criminal matters 11 Thematic cooperation 11 Participation in Union programmes 12 Communicating change 12 Outstanding issues 12 2 Next steps 14 Ratifying the Agreement 14 Implementing the Agreement 14 Scrutiny of the Agreements 14 Formal minutes 16 Witnesses 17 Published written evidence 20 List of Reports from the Committee during the current Parliament 25 The UK-EU future relationship: the Trade and Cooperation Agreement 3 Conclusions and recommendations The deal 1. We welcome the fact that both sides managed to reach an agreement in principle on Thursday 24 December 2020. We pay tribute to the hard work and dedication of both parties’ negotiating teams who have managed to conclude a deal in a much shorter timeframe than many expected and in the face of all the difficulties created by the global pandemic. (Paragraph 4) 2. Commencing 2021 with this deal in place is significantly better than starting it without one. Securing the Trade and Cooperation Agreement means that as the UK leaves the Single Market and Customs Union, UK businesses and consumers will not have to face the economically damaging consequences of tariffs on 1 January 2021 that would have been the result of no-deal. This Agreement is important in its own right, but its significance as the basis of the UK’s future relationship with the EU should not be underestimated. The UK’s relationship with the EU will always be significant because of the interconnectedness of our markets, our geographic proximity and our longstanding cooperation in many areas. (Paragraph 5) 3. The UK and the EU will embark on a long-term relationship that recognises the parties’ equality of sovereignty as much as it recognises their common interests. Having an agreed deal in place will make it much easier to build the kind of relationship the UK and the EU will need, in the coming years, as both parties explore opportunities for further cooperation on trade and security matters, while at all times continuing to respect the independence of each other’s legal orders. (Paragraph 6) 4. This deal is important, but businesses, traders and communities need to understand that it heralds significant change in the UK’s relationship with the EU; it does not preserve the arrangements in place before or during the transition period. It is imperative that the Government communicates the coming changes clearly so that businesses can take the steps they need to take in order to comply with the new arrangements. We urge all relevant authorities to be as flexible as possible in their enforcement of the new arrangements in the coming weeks to support people through the new procedures rather than punishing them for unintended non- compliance. (Paragraph 25) Next steps 5. The UK Government and the European Commission must move ahead swiftly with implementation, establishing the Agreements’ institutional arrangements and reducing or eliminating any remaining areas of uncertainty, for example: data adequacy and equivalence for financial services. The Government should ensure the terms of the deal and its implications are communicated quickly and clearly, helping them to prepare in the very short amount of time available, given the absence of any phasing in arrangements, so that businesses can reap the benefits of the deal. (Paragraph 29) 4 The UK-EU future relationship: the Trade and Cooperation Agreement 6. The Agreement is necessarily complex. It will take time for people to analyse it fully and understand its implications. It will be important that the Agreement and its implementation and application are subject to ongoing scrutiny. We regret that the timing of the deal means there is not enough time for our Committee to scrutinise the deal more fully; we intend to report again in January with more analysis but this will be without the benefit of having had time to take extensive evidence on the deal. Members of the House are being asked to read the deal (published on 26 December), to read the Bill brought forward by the Government to give the deal effect in UK law (due to be made available on 29 December) and to form a judgement on its contents in time to debate and vote on the Bill on 30 December. There is no alternative given where we are but that both the Government and the EU Commission have put parliaments in this position is a matter of deep concern. (Paragraph 31) The UK-EU future relationship: the Trade and Cooperation Agreement 5 1 The deal Reaching agreement 1. The UK left the European Union (EU) on 31 January 2020. The Withdrawal Agreement that the Government agreed with the EU, settled the questions of the UK’s outstanding financial contributions, citizens’ rights, and established the Ireland/Northern Ireland Protocol to maintain an open border on the island of Ireland.1 It also put in place a transition period ending on 31 December 2020. 2. Having agreed the terms on which the UK’s membership of the EU would cease, attention turned to negotiating the UK-EU future relationship. This negotiation has been completed faster than many thought possible. By the end of February 2020 the Council of the European Union had adopted a negotiating mandate2 and the UK had set out its detailed negotiating position.3 Negotiations started in early March. Early negotiating rounds were affected by the measures put in place to deal with the Covid-19 global pandemic and had to be conducted in part by videoconference. Four rounds of negotiations were held before a high-level meeting on 15 June between Prime Minister Boris Johnson, the President of the European Council Charles Michel, the President of the European Commission, Ursula von der Leyen, and the President of the European Parliament, David Sassoli at which they took stock of progress and agreed actions to move negotiations on the future relationship forward. Negotiations resumed, were intensified at least twice and paused once. The UK’s and EU’s deadline for completing the deal by the end of October passed as did the point in November after which it was generally agreed that ratification before the end of the transition period became difficult. 3. Negotiations continued into the morning of Christmas Eve before agreement was finally reached. At this stage both the UK Government, and European Commission, published summary documents on the Agreement that had been concluded.4 On 26 December, over 1200 pages of the Trade and Cooperation Agreement5 were made available by the UK Government6 and the European Commission.7 The text still needs to be legally scrubbed (i.e.
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