The draft Agreement for the Withdrawal of the UK from the EU, including the Protocol on Ireland and Northern Ireland was published on 14 November 2018.
The Withdrawal Agreement provides for what happens when the UK leaves the EU on 30 March 2019 and the basis for such leaving. The agreement provides, inter alia,
- there will be a transition period until 31 December 2020 and this can be extended once by agreement between the parties
- the rights of EU citizens in the UK and of UK citizens in Europe are protected
- goods placed on the market in the EU or the UK before the end of the transition period may continue to freely circulate, without any need for product modifications or re-labelling
- existing EU intellectual property rights will be automatically protected in the UK, without any re-examination and free of cost
- the UK shall apply the GDPR to personal data received during its EU membership from companies and administrations in other Member States, until the EU makes a formal decision to the effect that the UK data protection regime is "essentially equivalent" to the EU (adequacy decision)
- the UK will continue to participate in the EU Customs Union and the Single Market but will no longer be part of EU decision-making and will not have any representation in the EU institutions
- the methodology for calculating the UK's financial contribution to the EU
The EU and UK also published an outline of the political declaration on the future UK-EU relationship which will provide a framework for the next phase of negotiations and includes the following:
- the Commission will begin to process the UK’s application for a data protection adequacy decision with the aim of adopting a decision by the end of 2020
- a free trade area for goods - the level of checks required at borders will be contingent on the level of customs and regulatory alignment achieved between the UK and EU
- free movement of capital and payments and equivalence assessments for financial services with cooperation on regulatory and supervisory matters
- a framework for ongoing UK participation in EU programmes in areas such as science and innovation, culture, education among others
- enhanced protection of IP rights
- agreements on air, road, rail and maritime transport as well as continued connection between UK and EU energy systems
Northern Ireland protocol
The Protocol forms part of the overall Withdrawal Agreement and will apply unless and until it is superseded by any subsequent agreement. If an agreement on the future EU-UK relationship is not reached by 31 December 2020, the EU and the UK have agreed that a backstop solution will apply until such a time as a subsequent agreement is in place. This would mean that there would be a single EU-UK customs territory, avoiding tariffs, quotas etc. EU customs rules, which set out, inter alia, the provisions for releasing products into free circulation within the EU, will continue to apply to Northern Ireland, and Northern Ireland will remain aligned to a limited set of rules that are related to the EU's Single Market eg rules on agricultural production/marketing, VAT and excise in respect of goods, and state aid rules.
What happens next?
In the UK, the Withdrawal Agreement and the political declaration must be approved by the House of Commons, and if it is so approved, the European Union (Withdrawal Agreement) Bill will be introduced. The European Parliament must agree to the Withdrawal Agreement by simple majority and the Council of the European Union (excluding the UK) must approve it by a qualified majority. If no agreement is reached by 11.00 pm on 29 March 2019, the withdrawal will still happen unless the negotiation period is extended or the notice to withdraw revoked.
In the meantime, both parties continue to prepare for a no-deal Brexit. In the UK, the European Union Withdrawal Act 2018 will preserve UK law as it stands on 30 March 2019 including most directly applicable EU law (and other EU rights and obligations), and the UK has published dozens of technical notices and hundreds of draft statutory instruments to deal with post-Brexit law and policy changes. The EU Commission has recently published a communication on preparing for a withdrawal of the UK without a deal, which identifies key areas and actions to be taken, as well as a structure for discussions and Member State coordination between now and 29 March 2019.