The European Council has published updated Guidelines on Brexit setting out its positions for phase 2 of the negotiations. The Guidelines confirm previous guidelines of April and December 2017, and reiterate that nothing is agreed until everything is agreed.

The Council seeks as close as possible a partnership with the UK in future, covering trade and economic cooperation as well as anti-terrorism, crime, security, defence and foreign policy.  Although it rejects frictionless trade outside Customs Union and Single market – stating that a free trade agreement is all that is on offer. The FTA proposed by the Guidelines would cover: (i) trade in goods; (ii) customs cooperation; (iii) disciplines on technical barriers to trade, and sanitary/phytosanitary standards and voluntary regulatory cooperation; (iv) trade in services; and (v) other areas. The Guidelines state that the free trade in services should be undertaken under host state rules, including a right of establishment for providers, to an extent consistent with the fact the UK will become a third-country and will no longer share a common regulatory, supervisory, enforcement and judicial framework.

The Council states that, to ensure a level playing field, rules will need to be aligned with EU and international standards, and with adequate domestic implementation, enforcement and dispute resolution mechanisms. Furthermore the Council proposes the availability of unilateral measures for the EU to prevent combat any perceived interference with a level playing field – such as undercutting current levels of protection regarding competition, state aid, tax, social, environment and regulatory measures/practices.  The Guidelines reiterate the EU’s priority of preserving its autonomy and the role of the CJEU. The Council will reconsider the framework at the June meeting as negotiations progress.

If members have any questions or comments, please contact Oliver Robinson.