Michel Barnier and David Davis were reunited in Brussels yesterday to deliver another joint press conference on the state of the negotiations, but this was a far cry from the awkward set pieces of last year where the two were frequently talking at cross-purposes. Barnier declared that the two sides had made a “decisive step” forwards in the negotiations, with Davis echoing Barnier’s assessment. Alongside the press conference, both sides jointly issued a revised draft of the legal text of the Withdrawal Agreement – the cause of much controversy when initially published by the EU last month – now colour-coded to identify the areas of full agreement (green), of political agreement but with details still to be finalised (yellow), and where the two sides are yet to agree (blank). So what have the two sides actually agreed, and is it indeed a decisive step forward? And are Brexit supporters happy with it? Barnier: The joint legal text we are presenting today is a “decisive step” pic.twitter.com/75hhXnInGd — BrexitCentral (@BrexitCentral) March 19, 2018 Time-limited transition period agreed The main headline is that a time-limited transition period has been agreed, as set out in Article 121 of the draft text: There shall be a transition or implementation period, which shall start on the date of entry into force of this Agreement and end on 31 December 2020. While many Brexiteers remain somewhat uneasy about the idea of a transition period, the majority have accepted the need for one, provided that it is strictly time-limited and there are appropriate safeguards in place. Leavers will hence be happy that the UK has now accepted the EU’s preferred end date of 31st December 2020, with the UK having been the side requesting a longer transition period, much to the bemusement of some. Michel Barnier said that the the future relationship agreement would need to be finalised during this time, acknowledging that it was a “short period of time to do so”. However, he called for “intense” and “demanding” negotiations to achieve this, rather than a never-ending negotiation as Hilary Benn’s much-criticised Committee Report suggested over the weekend. Theresa May has been under intense pressure from business lobby groups and pro-Remain politicians to secure a transition deal as soon as possible, so the fact that she has delivered will satisfy many, notwithstanding the likes of “vociferous” Remain campaigner Chris Leslie who conducted a bizarre interview yesterday afternoon complaining that the transition deal had been agreed too soon, despite tabling an amendment calling for just that last year. The transition period will effectively be a ‘standstill’ of current arrangements (Article 122), but with the UK ending much of its participation in EU institutions including the European Council and European Parliament (Article 123). The UK has sought safeguards and exemptions to ensure that it can not be put at too great a disadvantage by the EU during this ‘vassal state’ period, although with limited success thus far. EU concedes on trade deals The draft text includes a specific point of agreement that the UK will be able to negotiate, sign and ratify new trade deals during the transition period to come into effect once the transition period is over. This is despite both sides continuing to abide by the “principle of sincere cooperation” towards each other, which is the EU’s (hitherto unchallenged) legal basis for arguing that the UK is not able to negotiate such deals now. As set out in Article 124 (4): Notwithstanding paragraph 3 [the principle of sincere cooperation], during the transition period, the United Kingdom may negotiate, sign and ratify international agreements entered into in its own capacity in the areas of exclusive competence of the Union, provided those agreements do not enter into force or apply during the transition period, unless so authorised by the Union. Davis: The UK will be able to sign and ratify new trade deals during the implementation period which will come into force when it is is over – providing new opportunities for businesses across the UK and seizing one of Brexit’s greatest opportunities pic.twitter.com/gtaMtEavCD — BrexitCentral (@BrexitCentral) March 19, 2018 The UK will remain party to existing EU international agreements during this period, giving it time during the transition period to negotiate the rollover of international agreements on a new bilateral basis after Brexit. The UK has also secured agreement that it can opt out of new EU Council decisions in the areas of border checks, asylum and immigration in “exceptional” cases for “vital and stated reasons of national policy”, as set out in Article 124 (6): Following a decision of the Council falling under Chapter 2 of Title V TEU, the United Kingdom may make a formal declaration to the High Representative of the Union for Foreign Affairs and Security Policy, indicating that, for vital and stated reasons of national policy, in those exceptional cases it will not apply the decision. In a spirit of mutual solidarity, the United Kingdom shall refrain from any action likely to conflict with or impede Union action based on that decision and the Member States shall respect its position. Davis: There may be occasions during the implementation period when our vital national policy means we can’t agree with an EU decision. In those cases, the UK could choose not to apply it. pic.twitter.com/EIFVW2Xx5w — BrexitCentral (@BrexitCentral) March 19, 2018 However, this power falls far short of a full opt-out from new EU laws which many in the UK had hoped for, while the insertion of a “Good Faith” clause (Article 4a) is of little practical legal use. “Complete agreement” on citizens’ rights although UK concedes on free movement during transition In very welcome news to the 4.5 million total UK citizens living in the EU and EU citizens living in the UK, the text confirms that both sides have reached “complete agreement” on the citizens’ rights chapter (Articles 8-35) of the deal. Less of a cause for celebration is the news that the financial settlement (Articles 127-150) chapter of the deal is also fully concluded, but again it is worth stressing that the ‘Brexit bill’ is less than what Britain would have paid in anyway by 2022, equivalent to barely more than a year’s extra net contributions once the transition is factored into account. Barnier: The joint legal text we are presenting today is a “decisive step” pic.twitter.com/75hhXnInGd — BrexitCentral (@BrexitCentral) March 19, 2018 EU citizens will be able to start the process of obtaining settled status in the UK as soon as the transition period begins, allowing them to gain legal certainty about their residency status at the earliest opportunity. This should finally put to bed the cynical and irresponsible claims made by certain Remain campaigners that EU citizens have been used as “bargaining chips” in the negotiations or have had their right to remain in the UK threatened. This was never the case – there has always been a high level of political agreement that all citizens legally resident in either party would be allowed to stay – and now this has been confirmed in the legal text. However, after making a belated bid to restrict free movement of people from March 29, 2019, the UK has now relented and accepted that reciprocal free movement, along with subsequent eligibility for settled status, will continue in its current form until the end of the transition period, as set out in Article 9 (1) and elsewhere: Without prejudice to Title III, this Part shall apply to the following persons: (a) Union citizens who exercised their right to reside in the United Kingdom in accordance with Union law before the end of the transition period and continue to reside there thereafter; (b) United Kingdom nationals who exercised their right to reside in a Member State in accordance with Union law before the end of the transition period and continue to reside there thereafter; Fishing agreements sparks major backlash The one area which has caused the most disquiet by a significant margin is the UK’s agreement to remain within the EU’s hated Common Fisheries Policy during the transition period (Article 125). David Davis announced that the UK would be consulted by the EU in the course of the negotiating of fishing quotas during the transition period and that its share of overall catch would stay the same: Davis: We’ve agreed specific safeguards for annual fishing negotiations during the implementation period. The UK’s share of total catch cannot be changed. pic.twitter.com/f5WEwmPAF8 — BrexitCentral (@BrexitCentral) March 19, 2018 However, this was not even close to acceptable for many Leave supporters, particularly Scottish Conservative MPs, many of whom represent coastal constituencies, with some responding in very robust fashion: Douglas Ross, MP for Moray: “The UK Government has delivered far less than I hoped and expected… it would be easier to get someone to drink a pint of cold sick than to try to sell this as a success.” Ruth Davidson, Scottish Conservative Leader: “Having spoken to fishing leaders today, I know they are deeply frustrated with this outcome. There is no ignoring the fact that this falls short of what they had hoped for in the short-term.” Jacob Rees-Mogg: “Many [ERG] supporters think that the caving in on fishing is a serious and unnecessary mistake.” Iain Duncan Smith: “There does seem to be a real concern… it appears that at least through the implementation period nothing will change, and I think that will be a concern and the government clearly has to deal with that because a lot of MPs are very uneasy about that right now.” Richard Tice, Leave Means Leave: “Under the current plans, we will not be taking back control of our fisheries when we leave the EU – something which the Government had previously promised. Ruth Davidson is absolutely right on this – our fishermen must have absolute control of our waters and fish from the end of March 2019 and anything less is totally unacceptable.” Scottish Fishermen’s Federation: “It’s far short of an acceptable deal – we leave the CFP and hand back sovereignty over our seas a few seconds later.” Aberdeen South MP Ross Thomson responded on BrexitCentral directly, saying that the Government should “be clear that UK national fisheries resources are not negotiable and that we will therefore be setting our own fisheries policy from 29th March 2019. We cannot remain party to the CFP during the proposed implementation period”, while Environment Secretary Michael Gove also previously called for the UK to leave the CFP immediately. BrexitCentral’s David Scullion explained yesterday why staying in the Common Fisheries Policy has the potential to be particularly damaging beyond the issue of simply being subject to EU fishing quotas for two further years, in light of the impending introduction of the ‘no discards’ rule next year, and various legal traps which could significantly harm the UK’s fishing prospects in the long term. The decline of the UK’s fishing industry is one of the most totemic Brexit-related issues, with Edward Heath still the subject of intense anger over four decades on for selling out Britain’s fish upon entering the then Common Market, and clearly it is not an issue which is going to go away this time. The Government – and the EU – will be under much pressure to change their stance. Governance and the Irish border put off for now The most notable sections left unmarked (i.e. no agreement) in the draft were those concerning the governance of the agreement – i.e. whether the European Court of Justice should have a role in enforcing the agreement – and to what extent a potential “solution” for the Irish border should be included in the legal text. Both sides agree that implementation and application of the agreement should be carried out by a Joint Committee, co-chaired by the EU and the UK. However, the EU also wants to include provisions for either party to be able to unilaterally refer unresolved disputes to the ECJ, which will still be empowered to make rulings which are directly binding on the EU and the UK, as set out in Article 162: 3. The Joint Committee may, at any point, decide to submit the dispute brought before it to the Court of Justice of the European Union for a ruling. The Court of Justice of the European Union shall have jurisdiction over such cases and its rulings shall be binding on the Union and the United Kingdom. 4. If the dispute has not been settled within 3 months after it was brought before the Joint Committee and has not been submitted to the Court of Justice of the European Union by the Joint Committee pursuant to paragraph 3, the dispute may be submitted to the Court of Justice of the European Union for a ruling at the request of either the Union or the United Kingdom. The Court of Justice of the European Union shall have jurisdiction over such cases and its rulings shall be binding on the Union and the United Kingdom. This would clearly be unacceptable to the UK, as is the EU’s draft protocol for a ‘fallback’ option to resolve the Irish border, which would see Northern Ireland remain in the EU Customs Union and aligned with much of the Single Market after Brexit. Theresa May has already rejected it as a proposal “no UK Prime Minister could ever accept”, raising the question – which Barnier was unable to answer last month – of what the point is of including a supposed ‘fallback’ option which could never be agreed to. Although Barnier and Davis both referenced the Irish border issue during the press conference, all sides (including Irish Foreign Minister Simon Coveney who was in Brussels to meet Barnier later that day) appear to have elected not to press the issue at this stage, with “intensive” three-way discussions instead reportedly scheduled to run from 26th March to 18th April in an attempt to secure a breakthrough on the border then. Their work in this regard may be significantly aided by the IEA’s Shanker Singham, who has yesterday published a comprehensive article assessing all the key issues arising from the border and how they can be successfully addressed. Conclusion There is a danger with any sort of agreement like this of failing to see the wood for the trees. The transition terms may not be especially favourable to the UK, but they are largely tolerable for a strictly time-limited period of 21 months (except perhaps the provisions on fishing). With this level of progress likely to be deemed sufficient and the EU’s negotiating guidelines for the future relationship expected to be rubber-stamped at the European Council summit this Friday, this will give the green light for the substantive negotiations on the future partnership to begin. This ultimately remains a highly significant development in the Brexit negotiations, if not quite truly “decisive”. It is worth recalling that many commentators and politicians were continuing to dismiss the entire negotiating process as doomed a mere matter of months ago before the December deal was secured. But the UK must remember that upcoming challenge of negotiating the future relationship is where it really needs to focus its negotiating capital to secure the best long-term outcome for the country, rather than using it all up on securing perfect terms for a transition period which will only be fleeting in the grand scheme of things anyway.