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UK replacement of the EU's external agreements after Brexit

Published Thursday, May 23, 2019

The EU has over a thousand international agreements with non-EU countries, covering trade, aviation, nuclear co-operation and other issues. These will cease to apply to the UK when it leaves the EU. The Government has identified 158 agreements with non-EU countries that it is seeking in order to replace these arrangements in the event a no deal Brexit. Some agreements have already been concluded, but engagement is ongoing for most of these and some will not be in place by the scheduled Brexit day of 31 October.

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How many international agreements does the EU have?

The UK is currently party to numerous international agreements with third countries as a member of the EU.  The EU’s Europa online Treaties database lists 1,261 international agreements that the EU is party to. 

A report in the Financial Times in May 2017 suggested that there were 759 separate EU international agreements with potential relevance to Britain. These cover trade, regulatory co-operation, fisheries, agriculture, nuclear co-operation and transport co-operation (including aviation). The agreements involve 168 other countries.

The International Trade Secretary Liam Fox has indicated that such high figures are misleading, and that not all of the treaties would require action to maintain continuity following Brexit. Some of these treaties have been superseded, are redundant or no longer relevant to the UK, and there are also multiple agreements that could be understood as one agreement.

In January 2019, Brexit Secretary Stephen Barclay also said that some of these agreements are not relevant to the UK and that in some cases the UK has signed agreements in its own right and therefore does not need new agreements. He also said that in the event of the UK leaving the EU with no deal, the Government’s assessment was that about 1,000 EU treaties were relevant, but this slipped down to under 400 with a direct impact, and a much lower number “in the tens” of more material issue from exit day.

In March 2019, the Government released a list of 158 international agreements, across different policy areas, that it is seeking in order to replace current arrangements should the UK leave the EU without a deal. It also referred to an unspecified number of additional agreements in certain policy areas.

Mixed agreements

Around a quarter of the EU’s international agreements have been classified as mixed agreements because they cover competences shared by the EU and Member States. This means that they have been ratified separately by EU Member States as well as approved at EU level. While EU-only agreements will cease to apply to the UK once it leaves the EU, some legal experts have suggested that aspects of mixed agreements could continue to apply. However, the EU has stated that all agreements will cease to apply.

In February 2019, the Government clarified that the UK would remain a party to most “mixed” multilateral agreements after exit day “where it is already a party in its own right”. This includes the agreement establishing the World Trade Organization, and climate change agreements. The UK would not remain party to “mixed” bilateral agreements, such as some EU aviation and free trade agreements.

Replacement of the EU’s international trade agreements

The Government has indicated that it is seeking the transitional adoption or “rollover” of all the EU’s trade agreements and other preferential trade arrangements with third countries. This will enable arrangements with third countries that the UK is currently party to as an EU Member state to be replicated in UK-third country agreements when the UK leaves. This would not preclude a fuller revision of these agreements in the longer term to create a more bespoke arrangement.

The Government introduced the Trade Bill in November 2017 to enable the domestic implementation of these replacement agreements, and also implement other measures necessary for an independent UK trade policy after Brexit.  The Government’s Impact Assessment for the Trade Bill published in November 2017 referred to 88 third countries covered by EU trade agreements, accounting for 13% of UK trade. This figure did not take into account newly signed agreements such as the EU-Japan partnership.  

The Government said in January 2018 that it had engaged with 70 countries covered by over 40 EU international trade agreements and had received a positive reaction in relation to its objective of ensuring continuity in these trading relationships.

A report from the International Trade Select Committee published in February 2018 however warned of trade with 70 nations “falling off a cliff edge” if the Government did not act quickly to roll over the EU’s trade deals. It also said there was an urgent need for clarity “over the number, type, scope, extent and importance of the EU's trade-related agreements.” It also warned that substantive amendments to the rolled-over agreements were almost certain to be required.

International agreements during the transition phase

After previous indications from the EU that its agreements with third countries would not apply to the UK during the envisaged post-Brexit transition period the UK Government published a Technical Note in February 2018 proposing continuing application of EU international agreements to the UK during the transition phase by agreement of all the parties concerned.  At the March 2018 European Council, the EU agreed to notify other parties to international agreements that the UK is to be treated as a Member State during the transition period for the purposes of these agreements. However, this would be a request and it is possible that the third countries concerned may not agree.

In July 2018, Liam Fox said that agreements in principle had been reached with third countries in terms of continuing trading arrangements but that countries were waiting to see if there would be a transition period first, with a view to using the extra time to negotiate a more bespoke agreement rather than simply rolling over the existing arrangements.

UK-EU Withdrawal Agreement

The UK-EU Withdrawal Agreement (WA) agreed in November 2018, provides for a transition period during which the UK will continue to apply the EU’s customs and trade arrangements with third countries and the EU would notify the other parties to its international agreements that the UK should be treated as a Member State for the purposes of these agreements. 

The WA also includes a Protocol on Ireland/Northern Ireland providing for a ‘backstop’ keeping the UK in a ‘Single Customs Territory’ with the EU at the end of the transition period unless or until a new agreement on a future UK-EU relationship has entered into force which guarantees the absence of checks on the Northern Ireland-Ireland border. This is based in part on the temporary UK-EU customs arrangement the Government proposed in a Technical Note in June 2018.  The June proposal suggested that further technical discussions would be required with the EU to explore a shared solution to ensure the UK is able to apply the EU’s common external tariffs in full, and so that the UK continues to benefit from existing EU free trade agreements or any new ones signed during the period.

Replacement Agreements if the UK leaves EU with no deal

In November 2018, Trade Minister George Hollingbery said the Government was still optimistic that most EU trade agreements would be replaced in time for Brexit day. He indicated that discussions had become more complex given that they had previously been predicated on there being a transition period but that the emphasis had now changed “to emphasising to key partners . . . that no deal was a real possibility”.  He said it would be difficult to transition deals with some countries closely aligned with the EU if there was no agreement with the EU. He also said that a previously announced agreement with the Southern African Development Community (SADC) had yet to be finalised.

The Government released a technical notice on existing trade agreements if there is no deal in October 2018. It explained that should replacement agreements not be in place by exit date then World Trade Organization (WTO) Most Favoured Nation (MFN) terms would apply, whereby the same tariff rates would need to be charged to all WTO members in the absence of a free trade agreement.

In December 2018, the Government announced that agreement had been reached with Switzerland to transition UK-Swiss trade arrangements during the planned WA transition period, replicating existing arrangements “as far as possible”. This would also enable the replication of the majority of arrangements if the UK leaves the EU without a deal.

Replacement Trade Agreements delivered and off track

On 20 January 2019, Liam Fox said he was confident that the UK could replicate the five most important trade deals by 29 March. He said there were 34 free trade deals requiring replication. He said however that a number of countries were “unwilling to put in preparations for a no deal”.

On 25 January, the Brexit Secretary released a list of bilateral agreements signed, nearly ready to sign or close to being finalised.  Trade-related agreements already signed related to mutual recognition of conformity assessment with Australia and New Zealand, trade in wine with Australia, and trade in live animals and animal products with New Zealand.   Replacement free trade agreements (FTAs) were close to being signed with Eastern and Southern African States, Chile, the Faroe Islands, Switzerland, Caribbean States, and the Palestinian Authority. Texts on FTAs were being finalised with Israel, Canada, Pacific States, the SADC, and Norway and Iceland. Mutual recognition agreements with the USA were also being finalised.

Signature of FTAs with Chile, the Eastern and South African States, the Faroe Islands, Switzerland, Israel and the Palestinian Authority were announced in late January and February. An agreement extending provisions of the UK-Switzerland agreement to Liechtenstein was also announced.

A leaked Government document published in The Sun on 12 February indicated that eight agreements (including with Canada, South Korea and the EEA countries) were “off track” to be delivered by 29 March. Other agreements, including with the Andean Community, Mexico, Ukraine, North African and Western Balkan states were “significantly off track”, while it said that agreement would not be possible by 29 March with Algeria, Turkey, Japan and Moldova.  

The Department for International Trade published a list on 21 February showing the status of negotiations on replacement agreements. It confirmed that the Japan and Turkey agreements would not be transitioned for exit day, but said that engagement was ongoing for other agreements.

The Government no deal impact assessment published on 26 February said it was “looking urgently” at contingency options where discussions are off track, including provisional application and bridging mechanisms (e.g. Memoranda of Understanding) to bring agreements into force on exit day.

Further agreements were signed in March with the UK and Pacific Islands (Papua New Guinea and Fiji), and the Cariforum (Caribbean) countries. In April a trade continuity agreement with Iceland and Norway was signed, and this was followed by the signature of the agreement with Andean countries (Ecuador, Colombia and Peru) in May.

Replacement of non-trade international agreements

There was initially less information available on the Government’s preparations to replace or address arrangements covered by the numerous EU international agreements on non-trade issues.

In November 2018, the Government announced aviation agreements with the USA, Canada and eight other countries, safeguarding flights post-Brexit. Also in November, agreements with Australia, Canada and the USA on co-operation on peaceful uses of nuclear energy, and an agreement with the International Atomic Energy Agency on safeguards in connection with the Treaty on the Non-Proliferation of Nuclear Weapons were presented to Parliament.

In addition to these agreements, the list of signed agreements issued by the Brexit Secretary on 25 January 2019 referred to agreements relating to insurance with the USA and Switzerland, and a road transport agreement with Switzerland.  Various multilateral agreements for which the UK is taking action to become an independent party were also listed. These include international conventions relating to civil justice, various fisheries conventions and agreements, the Common Transit Convention, the Interbus agreement and the WTO Government Procurement Agreement (GPA).

Confirmation that the UK would become an independent party to the GPA in the event of a no deal Brexit was announced on 27 February. Various fisheries agreements were also laid before Parliament in February.

The Government announced agreements with the three EFTA EEA countries in December 2018 to address separation issues similar to those covered by the WA. It also announced an agreement with Switzerland covering citizens’ rights. An agreement with the three EFTA EEA countries covering citizens’ rights in a no deal scenario was announced in February 2019.

The Government update on 7 March, which detailed the 158 international agreements across different policy areas it is seeking, indicated that engagement is ongoing for agreements in a wide range of areas. This includes customs co-operation, fisheries, organic equivalence, justice and home affairs and wider political co-operation. Most air services agreements have been concluded, as have nuclear co-operation and safeguards agreements. Some agreements will not be in place for exit day, including some political agreements, judicial co-operation agreements with the EFTA states, a veterinary equivalence agreement with USA, and several forestry and other environmental agreements.

 

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