Sunday - June 25th, 2017

Our Brexit Checklist Is the Running Commentary Theresa May Won’t Give You


Our Brexit Checklist Is the Running Commentary Theresa May Won’t Give You

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Britain and the European Union are finally ready to talk about Brexit. 

The two sides will open formal negotiations in Brussels on June 19. What they will discuss has been thrown into doubt by Prime Minister Theresa May's loss of a parliamentary majority in June’s election. 

That’s left her under pressure to soften her approach and she’s already pledged to take more account of the broad range of views in her Conservative Party.

For now she has yet to change tack officially, leaving her plan centered on leaving the European single market so as to regain power over immigration, lawmaking and money. 

We’ve compiled a list of where the British and U.K. currently stand on a dozen key topics.

The sources for the British positions are mainly Prime Minister Theresa May’s March 29 letter invoking Brexit and her Conservative Party’s election manifesto. For the EU, the main paperwork is the EU’s negotiating guidelines agreed on April 29  and directives rubber-stamped on May 22.

U.K. Opening Stance: Brexit Secretary David Davis said on April 26 that “the government has made it very clear it wants to secure the rights of EU nationals living in Britain at the earliest chance in the negotiations. I am confident we can achieve very early agreement on these issues.”  He said in May he wants a swift agreement about citizens that “effectively freezes” their existing rights.

EU Opening Stance: The topic should be the “first priority” for the negotiations and there should be “reciprocal guarantees” settled on the date of Brexit. They should be for citizens and their families — including future members and those who move to the U.K. after Brexit — and be non-discriminatory. The rights should be exercised through “smooth and simple administrative procedures” and offer the “right to acquire permanent residency” after five years. They should also last a “lifetime” and be overseen by European courts, with any future changes of EU rules on benefits. Among the rights to be protected are equal treatment in pensions, tax, healthcare, the recognition of qualifications secured elsewhere and access to educational courses. Citizens should also be entitled to rights “which are in the process of being obtained, including the possibility to acquire them under current conditions after the withdrawal date.” 

U.K. Opening Stance: May said in January that “we will ensure we can control immigration to Britain from Europe.” Still, she’s acknowledged the U.K. “will always want immigration from Europe,” especially of high-skilled workers. The prime minister pulled back a little further in April by saying “it will be necessary for there to be a period of time” for adjustment.

EU Opening Stance: The guidelines said the U.K. must accept free movement of labor if it wants to maintain access and is something it would need to accept in any transitional period.

U.K. Opening Stance: The U.K. “does not seek membership of the single market” and wants to be able to negotiate deals with non-EU countries so will leave the customs union. But it also wants a “bold and ambitious” free trade deal covering sectors including financial services and for commerce to be frictionless. May has said such a pact can be completed in two years and priority should be given to the “evolution of regulatory frameworks.” She does not want to “adopt a model already enjoyed by other countries” and has said that failure to seal a deal would leave Britain free to rethink its economic model. May indicated in April that she understands a trade deal may not be signed until after March 2019.

EU Opening Stance: The guidelines were revised having originally indicated backing for an ambitious pact. They changed to say officials stand “ready to initiate work towards an agreement on trade.” Any deal cannot “amount to membership of the single market” or allow for “sector by sector” participation. Any agreement can only be “finalized and concluded” once the U.K. has left and there should be safeguards against “unfair competitive advantages” through tax, social, environmental and regulatory measures.

U.K. Opening Stance: May has said the U.K. will not send “vast” sums to Brussels although “there may be some specific European programs in which we might want to participate. If so, and this will be for us to decide, it is reasonable that we should make an appropriate contribution.”

EU Opening Stance: The U.K. must keep paying into the EU budget through a transitional period and can’t “cherry pick” what it wants from Europe, said the guidelines.

U.K. Opening Stance: The U.K. is willing to agree to “a fair settlement of the U.K.’s rights and obligations,” according to May. Government officials have challenged the sum and legality of a large bill with some suggesting the U.K. has a claim on EU assets too. A House of Lords report suggested it could be as low as 15 billion euros. The manifesto introduced some wiggle room by saying a Conservative government would act “in the spirit of the U.K.’s continuing partnership with the EU.”

EU Opening Stance: The EU is demanding a “single financial settlement” to cover “all commitments as well as liabilities, including contingent liabilities.” The payment should relate to the EU budget, the termination of the U.K.'s membership of bodies such as the European Investment Bank and its participation in programs such as aiding refugees in Turkey. The U.K. must “respect the obligations resulting from the whole period of the UK membership,” signaling Britain would have to pay its EU membership fee until the agreed seven-year budget period concludes at the end of 2020 even if the U.K. leaves almost two years before that.

Luxembourg Prime Minister Xavier Bettel said on April 29 that the sum would be between 40 billion euros ($43 billion) and 60 billion euros although EU negotiator Michel Barnier hasn’t publicly endorsed a number. EU officials have ruled out the U.K. having any claim on the region’s assets, but have indicated they may allow the talks to turn to trade if agreement can be found on a methodology for calculating the bill.

U.K. Opening Stance: The U.K. has a “unique relationship” with the Republic of Ireland and wants to “avoid a return to a hard border” and “be able to maintain the Common Travel Area.” In May, Davis questioned how to resolve the border issue without knowing what the general borders policy will be.

EU Opening Stance: “Flexible and imaginative solutions will be required” with the aim “of avoiding a hard border, while respecting the integrity of the Union legal order.”

U.K. Opening Stance: May vowed in January to “bring an end to the jurisdiction of the European Court of Justice in Britain.” Those who campaigned for Brexit view it as a red line.

QuickTake The Great Repeal Bill

However, on March 29 May appeared to soften her stance by acknowledging companies will “have to align with rules agreed by institutions of which we are no longer part.” The government’s Great Repeal Bill said the court’s case law would “be given the same binding, or precedent, status in our courts as decisions of our own Supreme Court.” The manifesto also lacked mention of the court. 

EU Opening Stance: The EU urged “legal certainty” and wanted to avoid a “legal vacuum.” It also said the U.K. will be subject to the court’s oversight during any transition. The bloc has also proposed the European Court of Justice police how citizens are treated beyond Brexit, has a responsibility for ensuring the U.K. pays its bill and guarantees the implementation of the deal.

U.K. Opening Stance: May said any dispute over the British territory will be resolved through dialogue and that “we are very clear that we continue to support Gibraltar.”

EU Opening Stance: No deal between the EU and U.K. will apply to Gibraltar without an agreement between Spain and the U.K., according to the EU.

U.K. Opening Stance: “It is necessary to agree the terms of our future partnership alongside those of our withdrawal,” according to May in a comment echoed in her party’s manifesto. Davis has said the structure will be the first “row of the summer” and he and May have warned that “no deal is better than a bad deal.”

EU Opening Stance: The EU blueprint said the two sides must “settle the disentanglement” in a “phased approach” and only move to discussing trade once every member agrees “sufficient progress” has been made on the bill, Ireland and citizens. The withdrawal agreement should address issues arising from reduced cooperation on judicial, law enforcement and security issues.

The bloc says the talks can’t be cloaked in secrecy and is committed to making its negotiating documents public. Negotiations will be organized in cycles of four weeks; one of the four will be the actual negotiation with the U.K. team; the first two will be preparatory work and the last one will be about conclusions, according to Barnier.

U.K. Opening Stance: Seeking to avoid a “cliff edge,” May said the U.K. and the EU would benefit from “implementation periods to adjust in a smooth and orderly way to new arrangements.” She argued it would help both sides “to minimize unnecessary disruption if we agree this principle early in the process.”

EU Opening Stance: The EU saw a benefit to potentially agreeing “transitional arrangements” so long as they are “clearly defined, limited in time and subject to effective enforcement mechanisms.” But that will require “regulatory, budgetary, supervisory judiciary and enforcement instruments and structures” applying for the duration. Barnier has said a transition shouldn’t be discussed until more insight is available on what the future relationship looks like with the directives saying it's a matter for the next negotiating mandate.

U.K. Opening Stance: The British want the eventual trade deal to include financial services, although some officials have suggested the complexity of doing that means the sector may need to be put to one side. Chancellor of the Exchequer Philip Hammond has suggested London could maintain oversight of euro clearing.

EU Opening Stance: The financial sector was ring-fenced in the guidelines and told it would have to respect EU regulations and laws in return for access. “Any future framework should safeguard financial stability in the union.” EU officials said it’s unlikely banks with U.K. operations will be allowed to maintain so-called passporting, which grants easy access to the bloc. Germany and France have said authority over euro clearing should move to their countries.

U.K. Opening Stance: The Brexit Department said no decisions about the location of the European Banking Authority or European Medicines Agency have been made and it “will be subject to the exit negotiations.” The government “will discuss with the EU and member states how best to continue co-operation in the fields of banking and medicines regulation in the best interests of both the U.K. and the EU,” it said.

EU Opening Stance:  The U.K. will have “no say” in the locations of the agencies and the topic is not for the Brexit talks, Margaritis Schinas, spokesman for the European Commission, said on April 19. The 27 EU members have told cities that would like to host the agencies to apply by July 31 with a series of votes resulting in the naming of winners by the end of the year. Britain should “cover the specific costs” of relocation.

U.K. Opening Stance: “In security terms a failure to reach agreement would mean our cooperation in the fight against crime and terrorism would be weakened,” said May. Home Secretary Amber Rudd said the U.K. is the largest contributor to Europol, “so if we left Europol then we would take our information.”

EU Opening Stance: The EU “stands ready to consider establishing partnerships” on security and fighting crime or terrorism. The withdrawal agreement would need to address “potential issues arising from the withdrawal in other areas of cooperation, including security.”

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