Trade and Cooperation Agreement: governance and scrutiny

The UK-EU Trade and Cooperation Agreement (TCA) entered into force on 1 May 2021. The UK and the EU provisionally applied the agreement between 1 January 2021 and 30 April 2021 to allow the EU time to complete its internal ratification procedures. The European Parliament voted by a majority of 655 in favour of the TCA on 27 April 2021. On 29 April 2021, the Council adopted a decision on the conclusion of the agreement, the final step in the EU’s ratification process.

The terms of the TCA establish a complex governance and dispute resolution system. A joint UK-EU Partnership Council will supervise the operation of the agreement at a political level, supported by numerous specialised committees and working groups. The Government has taken the view that these bodies should not begin their work until the TCA was ratified unless there were essential decisions that could not be deferred. Establishing the working of these bodies can now begin. This system will sit alongside the structure established to oversee the Withdrawal Agreement and the Northern Ireland Protocol, under the UK-EU Joint Committee.

Ahead of the recent European Parliament vote, the European Commission set out arrangements for future parliamentary scrutiny of the TCA on the EU side. The European Commission has committed to keeping the European Parliament immediately and fully informed of the activities of the Partnership Council and the other committees, as well as involving the European Parliament “as appropriate and necessary” whenever important decisions are taken under the agreement.

On the UK side, in its final report before it disbanded, the House of Lords European Union Committee called on the Government to “draw up a comprehensive mechanism to support document-based scrutiny by designated select committees, and more generally to promote the transparent operation of the governance bodies established by the TCA”. Lord Frost, Minister of State at the Cabinet Office, said on 29 April 2021 his department was in discussion with the newly established House of Lords European Affairs Committee. The Government is proposing that scrutiny arrangements for the TCA Partnership Council will mirror those for the Withdrawal Agreement Joint Committee as far as possible. This would include routine oral and written updates to committees, written ministerial statements before and after meetings and the sharing of provisional agendas.

The TCA also creates the possibility for the European Parliament and the UK Parliament to establish a parliamentary partnership assembly. The Government has said the exact membership of this assembly would be for the two parliaments to decide.

Implementing the Northern Ireland Protocol

There are outstanding issues between the UK and the EU over the implementation of the Northern Ireland Protocol. Under the terms of the protocol, Northern Ireland is part of the UK’s customs territory but is subject to the EU’s customs code, VAT rules and single market rules for goods, including sanitary and phytosanitary (SPS) rules to protect animal, plant and public health. The EU and the UK have disagreed over how to implement some of these rules, particularly for goods moving from Great Britain to Northern Ireland.

On 3 March 2021, Brandon Lewis, the Secretary of State for Northern Ireland, announced that as part of the “pragmatic and proportionate implementation” of the protocol, the UK was taking several “temporary operational steps to avoid disruptive cliff edges”, allowing businesses time to adapt to new requirements. The steps included:

In response, the EU announced on 15 March 2021 it was launching legal action against the UK for “breaching the substantive provisions of the Protocol on Ireland and Northern Ireland, as well as the good faith obligation under the withdrawal agreement”. The EU sent the UK a letter of formal notice, the first step in infringement proceedings, requesting the UK to “carry out swift remedial actions to restore compliance with the terms of the protocol” and giving one month to respond.

European Commission Vice-President Maroš Šefčovič also sent a political letter to Lord Frost, Minister of State at the Cabinet Office. Mr Šefčovič and Lord Frost are co-chairs of the UK-EU Joint Committee. This letter called on the UK to enter bilateral consultations in the Joint Committee in good faith, with the aim of reaching a mutually agreed solution by the end of March 2021. Mr Šefčovič argued that “unilateral decisions and international law violations by the UK defeat [the protocol’s] very purpose and undermine trust between us”. However, Lord Frost argued the arrangements “largely continued measures already in place”. He described them as the “minimum necessary steps to allow time for constructive discussions in the Joint Committee to continue without the prospect of disruption to the everyday life of people in Northern Ireland in the coming weeks”. He said they were entirely consistent with the UK’s intention to discharge its obligations under the protocol in good faith.

Lord Frost and Mr Šefčovič held an informal meeting on 15 April 2021. Mr Šefčovič emphasised that “solutions can only be found through joint actions and through joint bodies”. He said the EU was looking for “mutually agreed paths towards full compliance with the protocol, which includes clear end-points, deadlines, milestones and the means to measure progress”. The EU’s ongoing legal action against the UK would continue “as long as necessary”. Lord Frost said discussions in the Specialised Committee on the Protocol on Ireland/Northern Ireland (a joint UK-EU body) in recent weeks had begun to clarify the outstanding issues and “some positive momentum had been established”. He said both sides would continue to work on the remaining “difficult issues” through intensified contacts at all levels.

Prime Minister Boris Johnson said recently the Government was working on “sandpapering [the protocol] into shape” to get rid of the “ludicrous” checks on goods moving from Great Britain to Northern Ireland. He did not rule out invoking article 16, a provision in the protocol that allows either side to impose safeguard measures if applying the protocol leads to “serious economic, societal or environmental difficulties that are liable to persist”. The EU was criticised for suggesting in February 2021 it would trigger article 16 to safeguard coronavirus vaccine supplies within the EU.

There are some other grace periods under the protocol that are due to expire in 2021. These were agreed by the UK and the EU in December 2020. They are:

The European Commission has suggested that many of the issues over implementing food safety and animal health measures could be resolved by a bilateral veterinary agreement. The UK Government has ruled out any arrangement that would require the UK to dynamically align with the EU’s rules. The Government says it is still open to an agreement where both sides would agree to recognise each other’s standards as equivalent—a possibility rejected by the EU during the TCA negotiations.

A cross-party group of politicians is bringing legal action against the Government to challenge the lawfulness of the protocol. The group consists of Jim Allister (leader of the Traditional Unionist Voice party), Ben Habib (former Brexit Party MEP for London), Baroness Hoey (non-affiliated), Steve Aiken (leader of the Ulster Unionist Party), Arlene Foster (current leader of the Democratic Unionist Party) and Lord Trimble (Conservative). Their claim for judicial review is currently due to be heard in the high court from 14 May 2021.

Recent discussions between the UK and the EU about implementing the protocol have taken place against a backdrop of violence and unrest in Northern Ireland in the first half of April. Brandon Lewis recognised there were concerns about the implications of the protocol but said the causes of the disorder were “complex and multi-faceted”. Other factors for the unrest are thought to include criminal organisations encouraging young people to commit violence, and unionist frustration at an official decision not to prosecute individuals, including senior members of Sinn Féin, for alleged breaches of Covid-19 regulations at a funeral. Northern Ireland’s main political parties all condemned the violence.

Citizens’ rights: settlement scheme deadline

The deadline for EU citizens who were living in the UK before the end of the Brexit transition period (31 December 2020) to apply to the EU Settlement Scheme is 30 June 2021. Successful applicants are granted settled or pre-settled status to allow them to remain in the UK. As of 31 March 2021, 5.3 million applications had been made and 4.98 million had been concluded. Of the concluded applications, 53% were granted settled status and 44% pre-settled status.

The3million, a campaign group for EU citizens in the UK, has warned that the “consequences for those without status after 1 July 2021 will be serious”. It says they will be “faced with the full force of the Government’s hostile environment policy, including potential loss of employment, loss of their homes, loss of entitlement to NHS treatment and far more”. There would even be “a risk [of] detention and removal from the UK if they do not have the required immigration status to remain in the UK beyond 1 July 2021”. It has also voiced concerns about how people who apply before the deadline, but whose application is not decided by then, will prove their rights to work, rent or access benefits in the UK after 1 July 2021.

The Government has said anyone who has “reasonable grounds” for missing the deadline will be given a further opportunity to apply.

Data adequacy decision

The EU is expected to make a formal decision soon on whether personal data can continue to be transferred from the EU to the UK. TCA provisions allow the continued flow of personal data from the EU to the UK until 30 June 2021 at the latest. For personal data transfers to continue beyond then without added legal safeguards, the European Commission would need to grant a data adequacy decision, confirming that the UK offers an adequate level of data protection.

The European Commission approved draft data adequacy decisions on the UK in February 2021, which assessed that the UK ensured an essentially equivalent level of protection to that guaranteed under the EU’s General Data Protection Regulation and Law Enforcement Directive. The European Data Protection Board adopted non-binding opinions on these draft decisions in mid-April 2021. It found many areas of convergence between the UK and the EU data protection frameworks, but also identified some challenges, which it called on the European Commission to address. It said the European Commission should watch closely all relevant developments in the UK that might have an impact on personal data protection and swiftly take appropriate action where necessary. The next step is for the European Commission to seek approval from EU member states. Once adopted, a data adequacy decision would last for an initial period of four years.

The House of Lords European Union Committee highlighted the “vital importance” of an EU data adequacy decision for a wide range of service providers. It cautioned that a positive adequacy decision is not guaranteed to be permanent, given the requirement for renewal after four years and the precedent set by recent legal challenges. It therefore called on the Government to maintain close dialogue with the EU to support the long-term stability of EU-UK data flows.

Phasing in of full border controls on UK imports from the EU

The UK will continue to phase in border controls on EU imports throughout 2021. The EU introduced full third country controls on imports and exports from 1 January 2021, when the Brexit transition period ended, but the UK decided to bring in its controls in stages. The original plan was for full border controls to be in place by 1 July 2021. However, the Government announced in March 2021 that the changes would be phased in over a longer period to give businesses more time to prepare while they were also dealing with the impacts of the Covid-19 pandemic. The full controls are now expected to come into force by 2022. From 1 October 2021, imports of products of animal origin (eg meat, pet food, honey, milk, egg products), certain animal by-products, and regulated plants and plant products will require pre-notification and, where relevant, export health certificates.

Although the requirements for UK importers to complete customs declarations, make VAT payments and declare compliance with rules of origin are being phased in throughout 2021, businesses will need to be able to prove compliance retrospectively back to 1 January 2021. The House of Lords European Union Committee warned that many businesses may not be aware of this and may not be keeping adequate records. It called on the Government to renew awareness-raising efforts and to adopt a “pragmatic approach” to border inspections as the new requirements are phased in.

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The House of Lords European Union Committee and its sub-committees published a series of ‘Beyond Brexit’ reports at the end of March 2021, looking at the UK’s future relationship with the EU under the TCA:

Cover image by Starline on Freepik.