Full draft Political Declaration on future relationship: comments on trade in goods

The long awaited draft Political Declaration on the future relationship between the EU and the UK which will "accompany" the draft Withdrawal Agreement has now been published.

We need to point out that it needs to be read together with the Withdrawal Agreement – which forms the baseline which a future agreement must build on.

Goods

The PD envisages the negotiation of an ambitious agreement on goods describing it as "comprehensive arrangements that will create a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition."

Tariffs

The arrangements are to ensure an absence of tariffs, fees, charges and quantitative restrictions across all sectors. Significantly, it is to "build and improve on the single customs territory which obviates the need for checks on rules of origin".  This signifies that the arrangement will be more in the nature of a customs union (as understood in the WTO) rather than a free trade agreement.

Regulations

Ambitious and far-reaching provisions to avoid technical barriers to trade (including those of a sanitary and phytosanitary nature) are intended to "build on and go beyond" those in the WTO Agreement.   The parties also announce that they will also explore the possibility of cooperation of United Kingdom authorities with Union agencies such as the European Medicines Agency (EMA), the European Chemicals Agency (ECHA), and the European Aviation Safety Agency (EASA).

Customs controls

There is cautious acknowledgement of the possibility "making use of all available facilitative arrangements and technologies" to reduce friction at the border (subject to ensuring proper enforcement). The concrete measures that are envisaged are mutual recognition of trusted traders’ programmes, administrative cooperation in customs matters and mutual assistance, including for the recovery of claims related to taxes and duties, and through the exchange of information to combat customs fraud and other illegal activity.

Spectrum of outcomes

In a final comment in the section on trade in goods the PD underlines the necessary trade-off between close cooperation and regulatory alignment on the one hand and the application of checks and controls on the other hand. That is, between the ambition of maximum trade facilitation and the preservation of the integrity of the parties respective markets and legal orders.

In other words the precise outcome will depend on the forthcoming negotiations.