The UK-EU Withdrawal Agreement:

Key Points

The Withdrawal Agreement (WA) is long – 585 pages – and complex, and no summary can be exhaustive, but here we distil its key aspects.

To begin with, recall that the WA is intended to extract the UK from the EU. It does not constitute an agreement on the future UK-EU relationship, which remains to be negotiated. It contains a “political declaration” setting out the ambitions for those talks, but these are non-binding, and negotiations could potentially take many years or even fail.

The WA first establishes a “transition period”, a period of time where the UK has formally left the EU (on 29 March 2019), but is still extricating itself from EU laws and regulations and needs time to put its own substitute arrangements in place. The transition period is currently slated to take 21 months, ending on 31 December 2020. It is intended to be temporary but can be extended by mutual agreement. During this time, the UK must follow virtually all EU laws and submit to European Court of Justice (ECJ) jurisdiction. If there are any breaches of EU law during this period, the UK can be sued in the ECJ for up to four years after the transition period ends. The UK must also honour commitments previously made to the current EU budget cycle, generally estimated at £39bn. On citizens’ rights, the UK and EU will honour the rights of each other’s citizens as they existed prior to the UK’s departure, i.e. EU nationals already resident in Britain will be allowed to stay and be given permanent residency, and vice versa. This requires both sides to maintain existing arrangements around the mutual recognition of qualifications, social security, and so on. The ECJ will retain jurisdiction over EU citizens’ rights in the UK for eight years after the transition period.

During the transition period, the UK and EU are meant to negotiate their future relationship. The transition period could be extended by mutual agreement if these talks drag on. But if either side disagrees, then a “backstop” kicks in as a contingency measure.

The “backstop” is primarily concerned to avoid a “hard border” between Northern Ireland (NI) and the Republic of Ireland, i.e. normal international customs checks, whilst still allowing relatively frictionless trade between the UK and EU. Unlike the time-limited transition period, the backstop will last indefinitely. To terminate the backstop, the EU must agree that alternative arrangements are in place that avoid the hard border. Under the backstop, the UK would not be bound by EU policies on the free movement of people, services or capital, nor must it contribute to the EU budget. However, the UK will be forced to comply with many other EU measures. Initially the EU wanted these rules to apply only to NI, but this would have created a customs border between NI and the rest of the UK. May’s government therefore insisted on a UK-wide backstop, to maintain the free flow of goods within the UK, and between the UK and EU. To achieve this, the UK will have to harmonise its policies with the EU in areas of commercial policy and business taxes; maintain existing environmental standards for goods, emissions, labour and social rules; and comply with EU rules on state aid and competition, with a new “Authority” established to police this. Because NI will essentially remain within the EU customs territory, it must ensure “full alignment” with EU regulations on a host of areas, including customs, technical regulations, agriculture, the environment, and state aid, and maintain a single electricity market with the Republic. The ECJ will have jurisdiction over these issues in NI, while the European Commission will be empowered to enforce state aid rules directly.

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The UK-EU Withdrawal Agreement:

Key Points