Brexit: Last call. EPC Discussion Paper, 4 July 2018

Following the June European Council, Andrew Duff reviews the state of play in the Article 50 negotiations and looks at prospects for the long-term future relationship between the UK and the EU. The outcome of the referendum was a bad shock, but the manner in which the UK government has conducted itself in the Article 50 negotiations has worsened Britain’s reputation as a negotiation partner. Duff argues that the postponed White Paper and, more importantly, a British contribution to the drafting of the Political Declaration that will accompany the Withdrawal Agreement gives the UK its last chance to rescue Brexit. The Political Declaration is not an optional extra, and will not be ‘non-binding’. The UK must also request that the transition period can be extended beyond 2020 until the long-term partnership treaty enters into force. Duff says that the basic challenge confronting the Tory cabinet at its meeting at Chequers on 6 July is to come to terms with Britain’s decline as a European power. The EU has promised a more positive approach if the UK softens its red lines. The choice is between a narrow agreement on trade in goods and a comprehensive association agreement based on continued alignment with the acquis. Ministers must shed their delusions about the future customs agreement. They must create a new home-grown system of regulation, independent of ministerial direction, to substitute for that previously delivered at the EU level. They must have a greater care for the viability of Britain’s services sector. Duff recalls that an association agreement requires a strong system of joint EU-UK governance, including a joint tribunal, involving the European Court of Justice. If this is not spelt out in the UK’s contribution to the Political Declaration, the country is headed for hard Brexit