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[...]4. At the same time, the European Council has to take into account the repeatedly stated positions of the UK, which limit the depth of such a future partnership. Being outside the Customs Union and the Single Market will inevitably lead to frictions in trade. Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU Single Market as well as of the UK market. This unfortunately will have negative economic consequences, in particular in the United Kingdom.
[...]7. In this context, the European Council reiterates in particular that any agreement with the United Kingdom will have to be based on a balance of rights and obligations, and ensure a level playing field. 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 European Council recalls that the four freedoms are indivisible and that there can be no “cherry picking” through participation in the Single Market based on a sector-by-sector approach, which would undermine the integrity and proper functioning of the Single Market. The European Council further reiterates that the Union will preserve its autonomy as regards its decision-making, which excludes participation of the United Kingdom as a third-country in the Union Institutions and participation in the decision-making of the Union bodies, offices and agencies. The role of the Court of Justice of the European Union will also be fully respected. [...]
8. As regards the core of the economic relationship, the European Council confirms its readiness to initiate work towards a balanced, ambitious and wide-ranging free trade agreement (FTA) insofar as there are sufficient guarantees for a level playing field. This agreement will be finalised and concluded once the UK is no longer a Member State. Such an agreement cannot however offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof. This agreement would address:
i) trade in goods, with the aim of covering all sectors and seeking to maintain zero tariffs and no quantitative restrictions with appropriate accompanying rules of origin. In the overall context of the FTA, existing reciprocal access to fishing waters and resources should be maintained;
ii) appropriate customs cooperation, preserving the regulatory and jurisdictional autonomy of the parties and the integrity of the EU Customs Union;
iii) disciplines on technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures;
iv) a framework for voluntary regulatory cooperation;
v) trade in services, with the aim of allowing market access to provide services under host state rules, including as regards right of establishment for providers, to an extent consistent with the fact that the UK will become a third country and the Union and the UK will no longer share a common regulatory, supervisory, enforcement and judiciary framework;
vi) access to public procurement markets, investments and protection of intellectual property rights, including geographical indications, and other areas of interest to the Union. [...]
12. Given the UK's geographic proximity and economic interdependence with the EU27, the future relationship will only deliver in a mutually satisfactory way if it includes robust guarantees which ensure a level playing field. The aim should be to prevent unfair competitive advantage that the UK could enjoy through undercutting of levels of protection with respect to, inter alia, competition and state aid, tax, social, environment and regulatory measures and practices. This will require a combination of substantive rules aligned with EU and international standards, adequate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement mechanisms in the agreement as well as Union autonomous remedies, that are all commensurate with the depth and breadth of the EUUK economic connectedness. [...]
15. The governance of our future relationship with the UK will have to address management and supervision, dispute settlement and enforcement, including sanctions and cross-retaliation mechanisms. Designing the overall governance of the future relationship will require to take into account: i) the content and depth of the future relationship; ii) the necessity to ensure effectiveness and legal certainty; iii) the requirements of the autonomy of the EU legal order, including the role of the Court of Justice of the European Union, notably as developed in the jurisprudence. [...]
Remarks by President Donald Tusk after the European Council meetings on 22 and 23 March 2018
[...]During our discussion on EMU, President Draghi recalled that the EU economy is back to pre-crisis growth levels and remains extremely strong. In fact, we are experiencing the most favourable situation since the introduction of the euro, which makes this a very good time to reflect strategically on our long-term ambitions. This is what today’s Euro summit was all about. Many of the themes we discussed – like a fiscal capacity for the euro area – are controversial, but I see avenues to be explored. In June we will come back to take concrete decisions, and provide guidance on the way forward. The most urgent political priority remains strengthening the Banking Union and further developing the ESM. This is my goal.
On Brexit. We want to use the positive momentum in the negotiations to finally settle outstanding issues such as the solution to avoid a hard border between Ireland and Northern Ireland. In parallel, we will start our first talks about the future EU-UK relationship. Leaders will assess in June if the Irish question has been resolved, and how to go about a common declaration on our future. [...]
FCA statement on EU withdrawal following the March European Council
Open Europe: The outline of a future UK-EU economic relationship is emerging
Financial Times: Transition deal offers no relief to City of London
Commercial Risk Europe: Transition deal will help solve Brexit insurance issues