Brexit: Is the outcome better than no agreement?
2021 dawned, and, four and a half years after the EU Referendum vote, the UK has finally left the EU in practice, as opposed to in theory in January 2020. The transition phase has ended and EU law no longer applies in principle to the UK or UK citizens. Only it was not really a transition, or implementation phase, because there was no time for businesses and citizens in the UK and the EU to prepare for the changes under the agreement on the future relationship. The terms of the EU-UK Partnership Agreement for Trade and Cooperation were not concluded until 24 December 2020, leaving 7 days before the end of 2020 for businesses and citizens to get ready in earnest for the concrete consequences of the UK’s exit.
So is the outcome better than no agreement? Clearly, any agreement is better than no agreement at all and it is an agreement that can be built on, if the will exists on both sides. Overall, it is certainly to be hoped that this is merely the beginning. But, as the EU notes in its explainer just published, this agreement is unique among EU-negotiated trade agreements because it deals with the management of divergence, rather than convergence, going forward. This fact, the potential early steps in divergence, and the review periods built into the agreement, imply more instability than is usual in international trade agreements.
Despite the short timeframe in which the agreement was negotiated, the agreement, including Annexes, nevertheless runs to nearly 1300 pages. The main body of the text is however just over 400 pages, similar to the Withdrawal Agreement, and is limited in its coverage.
Trade in goods is dealt with in more detail than services, and zero tariffs and quotas were agreed, which, while not comparable to single market access, are clearly much better than trading on WTO terms. However, no frictionless trade or obligation to reduce checks concerning sanitary and phytosanitary requirements at borders is guaranteed, as Scottish fish and shellfish suppliers to the EU unfortunately found out to their cost in the first two weeks of the New Year.
The trade in services provisions, where the EU only has a slight positive balance vis-à-vis the UK, are significantly inferior to EU membership: a consequence of the UK government’s decision to prioritise regaining sovereignty, exiting the single market and ending free movement over attempting to retain previous levels of access to the EU market. Notably, the agreement fails to ensure the EU-wide recognition of UK qualifications, or passporting rights for financial services. The former applies whether or not the holder is British or an EU citizen. For example, a doctor (whether British or an EU national) with a UK title who currently obtains automatic recognition of her/his qualifications across the EU, will need to obtain recognition under national rules in each EU country in which she/he wishes to work. Similarly, lawyers with UK titles may be able to register to practise as third country national lawyers in home country and international law in an EU country but registering to do so will be subject to the national law of each country. This is a far cry from the current extensive rights to practise and of establishment under UK qualifications, and to have these recognised under EU law across the EU. The parties have agreed to keep talking on this subject.
As the UK decided to end free movement of EU citizens to the UK (and thus, due to reciprocity, of UK citizens to the EU), EU-UK business travel will also be subject to restrictions – and paperwork. Temporary movement of key categories of professionals will be covered subject to conditions. But, for example, young British musicians will no longer be able to tour EU countries without filling out a considerable amount of paperwork.
For those mobile citizens – the 5 million UK citizens in the EU and EU citizens in the UK – whose rights were already agreed in the Withdrawal Agreement, this came as no surprise, given the UK government’s red lines. Our rights have to a large extent been guaranteed but only in our current country of residence. Where our qualifications have been recognised in our country of residence, those recognition decisions will be grandfathered, but we will also lose EU-wide recognition of our qualifications. For UK citizens in the EU, this means that, outside of their country of residence, they will not have substantially better rights than UK citizens who never left the UK. On the other hand, it means that UK nationals already in Germany before end 2020, generally well-educated and skilled members of the workforce, will still have full rights to work here for German employers or as self-employed workers. The rights of those who arrive from 2021 will not be equivalent.
Many of these mobile citizens, not content with limits to the rights they had under the Withdrawal Agreement, decided to be pro-active and remedy some of the impact through taking citizenship in the country where they lived. This is not a panacea but is positive, and does offer hope for future EU-UK relations, as they have taken the integration they achieved through free movement to a new level.
This is particularly true of the British population in Germany – between 2016 and 2019, 31,600 UK nationals became German citizens and we expect that 2020 will see further record numbers. It includes high profile British citizens like Simon Rattle. Along with other traditional means of building bridges between countries such as school and cultural exchanges, youth movements and twinning, this group of British-Germans and their German counterparts in the UK represent a huge opportunity for German-UK relations, which should be harnessed pro-actively across the board – in business, politics and cultural life.
Lawyer specialised in EU law and
Co-Chair, British in Europe/Chair, British in Germany e.V.