Rules of Play for Brexit: The Negotiation Guidelines

Rules of Play for Brexit: The Negotiation Guidelines

Between now and the General Election, Headland's Public Affairs team will be preparing a series of briefings covering the key issues. We hope you find them informative, here is the first:

Article 50 has been triggered and Brexit is underway - with the issue set to dominate the UK General Election in June.This Saturday marks a major milestone. EU Members are about to endorse their “negotiation guidelines”.

Bureaucratic drivel? N’est pas! These guidelines set the bar for any final Brexit deal and the framework for much of what we’ll hear from UK political parties campaigning ahead of the June 8 General Election.

So “negotiation guidelines” means?

In the battle of the UK vs. 27 EU countries, it’s clearly important that the latter agree a common line. The guidelines are a set of Directives (legislated goals) which the EU’s Chief Negotiator will have to fulfil. They tell him the red lines for EU members, ready for when he sits at the negotiating table.

And the EU Chief Negotiator is?

Michel Barnier – Frenchman and arch-federalist. He works on behalf of the European Commission and has his own dedicated Brexit Taskforce, uniting the best of the best from the Commission’s armoury. Two other names to watch out for are Sabine Weyand – the Deputy Negotiator, and Martin Selmayr – Jean-Claude Juncker's Chief of Staff.

Whilst the EU’s key negotiators were appointed all the way back in the autumn of 2016, the UK has yet to pick its team. The Prime Minister reportedly favours a backroom approach with minimal political commentary. Barnier therefore has yet to find out who his opponent will be: Brexit Secretary, David Davis; or civil servant, Olly Robbins.

Why are the negotiating guidelines so important?

The endorsement of these negotiating guidelines is an important pre-match display ahead of formal discussions. Divide and conquer may be the traditional British motto, but the EU has already issued bolshie statements of easy unity between the 27 Member States.

At home, and with the general election upon us, party manifestos are likely to be adapted to account for these guidelines. Political chatter about Brexit ambitions may be sky high at the moment, but expect some tactical differences in the promises made after the guidelines are released. Positions on EU budget payments and free movement may conveniently be forgotten...

What do we expect the guidelines to say?

The guidelines have been discussed at length and have already been signed off by the 27 countries. The endorsement on Saturday is in many ways a formality. It’s therefore no surprise that we already know a number of the key points to expect:

1. Financial obligations: EU members are determined that Britain must honour its financial obligations. The UK has dismissed a previous estimate floated by the EU of €60bn, so the bloc will need to come up with a more palatable sum. There will also be demands to fulfil annual payments on loans and guarantees made by the EU to the UK whilst still a member, but which extend beyond 2019. In the future the UK will also have to pay to participate in any EU programmes, and potentially provide payments in return for a Free Trade Agreement.

2. Financial services: The French have won out in their demand that any negotiations should push for financial services to be excluded from any future free trade agreement. Instead, any deal will focus on safeguarding the financial stability of the Union, in line with EU rules – and aiding Paris and Frankfurt as they attempt to poach FS companies from London. This will disappoint Theresa May, who had set her eyes on an all-inclusive free trade deal.

3. Citizenship rights: The EU will insist on reciprocal citizenship guarantees before any talks begin on a future trade deal. Whilst Theresa May has expressed the same ambition, she will not be so keen on the EU’s demands for key European social and employment rules to continue to apply. For example, they are asking for any EU citizens working in the UK to be able to still receive UK child benefit for their children living elsewhere in Europe. The EU will also insist that citizens have the right to acquire permanent residence after a continuous period of five years.

4. Rule of law: During any transition period, the European Court of Justice will hold legal authority over the UK. Further, the ECJ would continue to oversee UK compliance with EU citizenship rights. This means that in the future the UK would have to abide by new EU laws which it has had no say over.

5. EU agency rights: The European Medicines Agency and European Banking Authority are both currently based in the UK. The guidelines will insist that their fate is settled rapidly, after host applications by almost all of other member states. The aim is for the UK to settle the bill for relocation and outstanding rent.

So what happens now?

As the EU gathers to endorse these guidelines, the question now is, how will the UK react? The first round of negotiations is expected to begin shortly after the General Election on 8 June.

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