Roderick Crawford edited Parliamentary Brief 1992-2012 and currently works in conflict resolution. He is director of If You Are Safe I Am Safe.
According to Ursula von der Leyen, addressing MEPs this week, the two key issues remaining are the level playing field and fisheries. Though progress has been made in agreeing a robust mechanism for non-regression on common standards for a level playing field, she said that ‘difficulties still remain on how to really future-proof fair competition’.
This is the issue that has been described as bringing back ‘dynamic alignment’ of the level playing field through the back door, and was one of the main causes of the reversal of progress that occurred in the first week of December, with UK claims that the EU had brought new issues to the table at the eleventh hour – a claim denied by the European Commission.
In October last year, the UK and EU agreed a Political Declaration on the future relationship. As the UK understands it, this declaration set out the parameters for the negotiations for a future relationship; as the EU understands it, the declaration is a legal text that needs to be developed into the final agreement.
Whilst a lot of water has gone under the bridge since the declaration was agreed, it is still a key reference document for both sides, despite differences in their view of its standing and interpretation.
Section XIV of the declaration says that ‘the Parties should uphold the common high standards applicable in the Union and the United Kingdom at the end of the transition period in the areas of state aid, competition, social and employment standards, environment, climate change and relevant tax matters.’ The envisaged level playing field is one based on non-regression of existing standards in specified fields; it provides no basis for any form of ‘dynamic alignment’.
However, the European Council mandate to the Commission that sets out their negotiating guidelines does hint at ‘future-proofing’ the level playing field. After re-stating the Political Declaration’s language on maintaining current high standards, it adds a call for continued improvement of levels of protection and ensuring high levels of protection over time. This is likely to be the source for authorising the Commission to put dynamic alignment back on the table.
There have been inconsistencies between the declaration and the European Council’s mandate before; the paragraph that immediately follows the aforementioned goes on to say that the UK-EU partnership should apply EU state aid rules in and to the UK. The attempts to have EU state aid rules and a role for the European Court of Justice were withdrawn in the early summer, not least because they were clearly contradicted by the text of the Political Declaration itself, as well as implicitly by previous Council mandates.
Dynamic alignment is ruled out explicitly, unless both parties want it by going further in their ambitions for an even closer relationship than the declaration itself envisages; but that is not the course that the negotiations have taken. What is clear is that the UK has signed-up for non-regression in key areas, but there is no requirement for any form of dynamic alignment. That makes it hard for the Commission, and Michel Barnier in particular, to press this issue.
After all, if it was not required in October 2019, when we agreed the Withdrawal Agreement, why is it needed now? And what is the source of the authority to argue for it?
That a deal on the future relationship will require level playing field commitments is clear, as I have pointed out in articles on this site previously. However, the nature of them is ‘commensurate with the scope and depth of the future relationship’; the deal that is being negotiated is not as ambitious as that envisaged by the political declaration: far from it. Part of the reason that the UK has chosen a thin deal is to ensure that level playing field guarantees are limited and UK sovereignty is maximised.
There is little point in paying the same price for a thin trade deal as for a deep one, not least when that deal is protecting the EU’s substantial surplus in trade in goods without commensurate protection for the UK’s more modest but significant trade surplus in services. The Commission consistently focuses on the size of the Single Market to which we are negotiating conditions of access rather than the profitability to the EU of access to the UK’s market.
The proposals for lightning unilateral tariffs, that appear to have been dropped by Brussels this week, were also outside the Political Declaration’s parameters for dispute resolution. The declaration states that ‘The Parties should first make every attempt to resolve any matter concerning the operation of the future relationship through discussion and consultation, including through the Joint Committee’ which may refer matter of dispute to an independent arbitration committee.
They were set out in the European Council mandate, however, which proposed ‘autonomous measures to react quickly to disruptions in equal conditions of competition in relevant areas, with Union standards as a reference point’. There is no mention in the political declaration of ‘autonomous measures’ being used in this way. Nor of Union standards as the reference point; rather it is the ‘common standards’ drawn from union and international standards, and then only as agreed, with the principle of these should be commensurate with the depth of the agreement.
Dynamic alignment, far from promoting a solution, is putting a settlement further from our reach by making level playing field guarantees unpredictable and represents a far greater threat to UK sovereignty than non-regression guarantees. There was no trade off to remove the demand for EU state-aid rules to be applied nor for a role for the court of justice, after all. The UK and EU excluded dynamic alignment from the level playing field negotiations before the Withdrawal Agreement was signed. There was good reason for that. The EU cannot be allowed to go back on the political declaration it committed to as a basis for negotiations over the future relationship. After all, the Commission set the rules for the negotiation.