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The EU’s proposal for a treaty with the UK keeps the reference to level playing field commitments and a soft form of dynamic alignment. Compared to the negotiating directives adopted by the Council on 25 February, the wording on level playing field requirements is not that straightforward and it remains unclear how this will be implemented. Despite this, it remains the most ambitious treaty the EU has ever proposed on the level playing field and environmental protection.

The level playing field section on environment and health includes a non-regression clause on environmental protection with a time-reference – the end of the transition period. The term “environmental protection” is defined through a list of environmental areas. There is also a ratchet clause and four environmental principles the Parties shall respect in their national legislation and practice (among them the precautionary principle). A soft form of dynamic alignment is foreseen as well, but this has to be mutually agreed by both Parties in the Partnership Council. This body can adopt binding decisions and set higher levels of protection or introduce new areas in the level playing field. This reflects the evolving nature of the agreement as explained on other occasions by the chief negotiator Barnier. Under the monitoring and enforcement part, public authorities and individuals of the two Parties should be able to bring actions against violations of the environmental law that are not in line with the treaty obligations. An “independent body” shall ensure the effective monitoring in regard to treaty provisions covering the non-regression, legislative improvements above the non-regression level and the ratchet clause.

Before being published, the text was discussed with the Members States in the Council. The Commission’s text proposal underwent minor changes concerning dynamic alignment: Member States want the robust commitments for the level playing field to be “long-lasting”. Under the environment and health section, a new article was added; it says that the level playing field should also include targets that are agreed within the Union at the end of transition but will be achieved after the transition period ends. If the transition period is extended, this clause has the potential to cover new legislation under the European Green Deal.   

First version of the draft text of the agreement (proposed by the EU Commission)
Second version of the draft text of the agreement (after Member States changes)

The UK published its approach to future negotiations with the EU, confirming what government officials have said already in public: the UK rejects any obligations on alignment and wants a comprehensive trade agreement similar to Canada.

The UK wants the same ambitious market access as the EU is aiming for: no tariffs, fees, charges and quantitative restrictions, the most ambitious trade access ever considered by the EU. But the UK does not want to accept stricter trade-related conditions than those applied to other EU trade agreements such as with Canada or Japan.

The chapter on environment and labour lacks the ambition of the EU’s proposal. The UK wants a trade and sustainable development chapter with more basic provisions similar to Canada’s agreement.

The UK seems open for a more developed cooperation on chemicals management, showing willingness for data and information sharing mechanisms, as well as peer agency cooperation.

There is no position yet on institutional arrangements. 

According to the text of the mandate, a public consultation on the economic implications of the future agreement will be organised this spring.

UK’s approach to negotiations on a future relationship with the EU

EU Member States approved a tighter negotiation mandate on a new partnership agreement with the UK. The level playing field (LPF) requirements have been strengthened, which the European Parliament also asked for in its last resolution. LPF is now going well beyond the Commission’s proposal, which only required that non-regression from environmental and employment standards is in place by end of 2020. Barnier warned in a press conference that the EU will not go for a deal at any price and will firmly stick to the mandate’s conditions as well as to the general principles agreed with British counterparts in the Political Declaration.

While the negotiating directives stay in large part the same, there are five new paragraphs added (11, 33, 46, 58 and 78) and multiple adjustments in different parts of the mandate. According to newly added paragraph 11, “the negotiations will be conducted in a way to ensure parallelism among the various sectoral tracks of the negotiation”.

The chapter on the level playing field (LPF) has been strengthened at the request of France. There is a temporal dimension which has been added: the LPF must “stand the test of time” (paragraph 10), “last over time” (paragraph 94) which has echoes of dynamic alignment. This LPF temporal conditionality aims to ensure a sustainable and long-lasting relationship between the Parties. The EU standards are mentioned as a point of reference for the LPF. The enforcement side has also been strengthened, as the text now says that each area included in the LPF should have an adequate mechanism for implementation.

Council, negotiating directives on a new partnership agreement with the UK

The EU Parliament wants the EU to be more forceful on the level playing field conditions, stating that the “level of quota and duty free access to the world’s largest single market fully corresponds to the extent of regulatory convergence and the commitments taken with respect to observing a level playing field for open and fair competition with a view to dynamic alignment.”
The mandate proposed by the Commission sets out that the level playing field is different for state-aid, requiring dynamic alignment, while for environment and employment it mainly relies on non-regression (i.e. not lowering standards which were in place before 1 January 2021).

Here are the main asks the EU Parliament put forward:

• strong requirements on the level playing field, which is considered a general principle for the whole agreement and for the economic part, as well as an indicator for the ambition of the future partnership;
• dynamic alignment is also mentioned as a possible next step of the level playing field, being also a determinant factor for the comprehensiveness of the deal;
• alignment on the chemicals safety legislation (REACH) and ensuring cooperation with ECHA;
• legislation developed during the transition period should apply to the UK. The main legislative package with potential important consequences is the European Green Deal; and
• application of the precautionary principle.

The resolution was approved by 543 votes, with 39 votes against and 69 abstentions.
EU Parliament, resolution on a new partnership with the UK (provisional edition)

The EU Parliament wants the EU to be more forceful on the level playing field conditions, stating that the “level of quota and duty free access to the world’s largest single market fully corresponds to the extent of regulatory convergence and the commitments taken with respect to observing a level playing field for open and fair competition with a view to dynamic alignment.”
The mandate proposed by the Commission sets out that the level playing field is different for state-aid, requiring dynamic alignment, while for environment and employment it mainly relies on non-regression (i.e. not lowering standards which were in place before 1 January 2021).

Here are the main asks the EU Parliament put forward:

• strong requirements on the level playing field, which is considered a general principle for the whole agreement and for the economic part, as well as an indicator for the ambition of the future partnership;
• dynamic alignment is also mentioned as a possible next step of the level playing field, being also a determinant factor for the comprehensiveness of the deal;
• alignment on the chemicals safety legislation (REACH) and ensuring cooperation with ECHA;
• legislation developed during the transition period should apply to the UK. The main legislative package with potential important consequences is the European Green Deal; and
• application of the precautionary principle.

The resolution was approved by 543 votes, with 39 votes against and 69 abstentions.
EU Parliament, resolution on a new partnership with the UK (provisional edition)

The EU chief negotiator Barnier presented on Monday the most comprehensive negotiation mandate (the negotiating directives) ever prepared by the Commission. The 25 pages long text has three main substantive chapters: economic, security and institutional and other horizontal arrangements.

There are several distinct features that makes it stand out in comparison to other free trade negotiation mandates in the past: 

• the evolving nature and the possibility of periodical review (para 8 and 143)
• the governing body in charge of overseeing the implementation of the treaty, and with the power to take decisions and recommendations in regard to the evolution of the partnership (para 150)
• the level playing field (LPF) requirements are covered in an own chapter but also referred in the trade-related section, highlighting their importance. LPF requirements, as a condition for the partnership, are justified in the draft mandate by the “geographic proximity and economic interdependence” of the EU and UK. The areas covered by the LPF requirements are (para 89): state aid, competition, social and employment standards, environmental standards etc. The LPF requirements are supposed to evolve over time and the governing body will be in charge of modifying and extending them.
• a ratchet clause has also been included to prevent both Parties from lowering high standards and the level of protection in the following areas: carbon pricing, labour and social protection, environment (para 105)

The negotiating directives will be discussed by the Member States in the Council configurations and are expected to be adopted on 25 February at the General Affairs Council.

EU Commission, communication on the negotiating directives
Video of the chief negotiator Barnier
Full statement of the chief negotiator Barnier

The UK Prime Minister Johnson started his speech on the future partnership UK-EU with a eulogy of free trade.

He said the UK will not engage in a race to the bottom by undermining EU standards and engage in commercial, social and environmental dumping. However, he made clear the UK will not accept to take EU standards and rules in exchange for a free trade deal. He added the UK will maintain high standards without the compulsion of a treaty. The Prime Minister ended by saying the UK wants a free trade deal similar to Canada or even Australia (which is still under negotiation).

The UK government published a written statement on the future negotiations, which makes clear the deal cannot include any regulatory alignment, any jurisdiction of the EU Court of Justice or supranational control in any area. In regard to competition, labour and environment policies, the government will not agree to go beyond what is typically included in a comprehensive free trade agreement.

Video of Prime Minister Johnson
Full statement of Prime Minister Johnson
Written statement on UK-EU relations