The Brexit Declaration on Future Ties: The Breakdown

(Bloomberg) -- In a draft document of just 26 pages, the U.K. and European Union set out what they want their future relationship to look like. Here are the highlights.

  • There will be an “ambitious, wide-ranging and balanced economic partnership” underpinned by level playing field conditions “for fair and open competition.”
  • The relationship should "build and improve on the single customs territory provided for in the Withdrawal Agreement which obviates the need for checks on rules of origin." That is good for business but implies ties that are too close for pro-Brexit hardliners.
  • There’s no mention of frictionless trade, as the U.K. once wanted, but “comprehensive arrangements that will create a free trade area” and there will be “no tariffs, fees, charges or quantitative restrictions across all sectors.”
  • There could be U.K. cooperation with the European Medicines Agency, the European Chemicals Agency and the European Aviation Safety Agency and the U.K. “will consider aligning” with EU rules in those areas. This is a win for May and for business.
  • On services, the two sides “should conclude ambitious, comprehensive and balanced arrangements” on trade in services in areas including: professional and business services, telecoms, courier and postal services, distribution, environmental, financial services and transport services.
  • On financial services specifically, both sides said they are committed to preserving financial stability. Trade will be based on equivalence, and both sides will try to conclude equivalence assessments by June 2020 to avoid disruption.
  • The U.K.’s transition period -- currently agreed to last until the end of 2020 -- can be extended by up to one or two years.
  • In a political move aimed at helping May at home, both sides note their “determination to replace the backstop solution on Northern Ireland by a subsequent agreement.”
  • The two sides aim to ensure a “high level of personal data protection” with cooperation between regulators, and the EU aiming to recognize the U.K.’s standards as adequate.
  • The U.K. will make a “fair and appropriate financial contribution” to participate in future EU projects in areas such as science and education.
  • The two sides want to enable “free movement of capital and payments.”
  • They want high protection for each other’s intellectual property, including geographic indicators related to food and drink origins.
  • Planes will be kept flying thanks to a comprehensive aviation agreement.
  • The two sides will consult each other on sanctions policy.
  • A joint committee will settle disputes between the two sides. Matters of EU law will be interpreted by the European Court of Justice.
  • The EU and U.K. will hold a summit every six months after Brexit to discuss progress.

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