After the warm words of Theresa May's letter to Donald Tusk on Wednesday, with its references to shared values and a deep and special relationship, the European Union's response is brisk and businesslike. The draft negotiating guidelines Tusk issued on Friday morning waste no time on platitudes before stating flatly that the EU's objective in the Brexit talks will be "to preserve its interests, those of its Member States, its citizens and its businesses".
The guidelines explicitly recognise Ireland’s concerns over Brexit’s impact on the peace process, the Border and the Common Travel Area.
"In view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order. In this context, the Union should also recognise existing bilateral agreements and arrangements between the United Kingdom and Ireland which are compatible with EU law," the document says.
Britain’s decision to leave key parts of the EU customs union has made some kind of customs controls on the Border inevitable but a “flexible and imaginative” approach on the part of the EU could help to make such measures less intrusive. The suggestion that the EU should recognise the “existing bilateral agreements and arrangements” between Britain and Ireland offers support for maintaining the special status the two countries offer one another’s citizens as well as free movement between them.
“The Union has consistently supported the goal of peace and reconciliation enshrined in the Good Friday Agreement, and continuing to support and protect the achievements, benefits and commitments of the Peace Process will remain of paramount importance,” the guidelines say.
The explicit reference to the Good Friday agreement is important, because it suggests that rights conferred by that agreement should be protected. The passage also implies that the EU may be willing to find a way to continue financial support for the peace process.
As expected, Tusk proposes a phased approach to negotiations, starting with the details of the divorce before moving on to a framework for future relations between the EU and Britain. The first phase would aim to settle the issue of Britain’s rights and obligations as it leaves the EU – in other words, how much it has to pay – as well as the rights of EU citizens in Britain and British citizens in the EU.
Red lines
Although a free trade agreement cannot be concluded until after Britain has left the EU and become a “third country”, the guidelines suggest that “an overall understanding on the framework for the future relationship” could be agreed during the second phase of talks under article 50.
Tusk draws a few red lines on that agreement, making clear that it cannot be as advantageous to Britain as membership of the EU and the single market.
“A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member,” the guidelines say.
The document rules out sectoral deals for access to the single market, such as British ministers have suggested for the car industry, and the guidelines go on to say that Britain will have to drop its threat to become an offshore, deregulated tax haven after Brexit.
“It must ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through, inter alia, fiscal, social and environmental dumping,” the document says.
The guidelines foresee the need for transitional arrangements after Brexit but insist they “must be clearly defined, limited in time, and subject to effective enforcement mechanisms”. The guidelines also make clear that the EU will not accept any trade dispute resolution arrangement with Britain which affect the EU’s own decision-making procedures. This sets up a battle with Britain over the future role of the European Court of Justice, which May has promised will no longer have any role in Britain.
The document says that the EU wants the negotiations to succeed but will prepare for the possibility of failure. The draft guidelines can be amended over the next few weeks before EU leaders sign off on them on April 29th. But the document makes clear that, from now on, the EU must speak with one voice on Brexit, with no bilateral negotiations between London and European capitals.
“So as not to undercut the position of the Union, there will be no separate negotiations between individual Member States and the United Kingdom on matters pertaining to the withdrawal of the United Kingdom from the Union,” it says.