Richard North, 07/02/2018  

As the Brexit debate in the UK internalises (or increasingly so), with the legacy media transfixed by Tory plots and other distractions, the EU is quietly turning the screws, seeking to lock the UK into the most abject state of subordination during the transition period that it is possible to imagine.

The bones of the latest developments are set out in a series of slides produced by the European Commission as part of the series of internal EU27 preparatory discussions on the framework for the future relationship, dealing with "International Agreements".

The screws are then turned still further in a document seen by Politico and now published.

This "position paper" translates into legal terms the principles laid down in the European Council Guidelines of 29 April and 15 December 2017 and in the supplementary negotiating directives annexed the Council Decision of 29 January 2018. In so doing, it sets out the text intended to form part of the legally binding withdrawal agreement.

Given that this gives legal form to our "vassal state" status, it does not make for happy reading. For instance, within the five-page document, the EU invokes the principle of "sincere cooperation" as a means of prohibiting the UK from taking "any action or initiative … likely to be prejudicial" to the EU's interests in any international body or forum during the transition period.

This could bar the UK from taking an independent stance at the UN, the WTO, or in the G7 or G20, if it ran counter to the EU's position. But that might also take in the Basel Committee and bodies such as the OECD and the all-important Financial Stability Board (FSB).

As expected, the text bans for the duration of the transition period, the UK enacting trade - and other international agreements in the areas of exclusive competence of the Union – that it concludes, unless specifically authorised to do so by the Union.

To enable it to supervise and enforce the transition provisions, the EU is also demanding that all the institutions, bodies, offices and agencies of the Union shall be recognised under UK law and as "natural and legal persons residing or established in the United Kingdom. In particular, the text says, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties.

The text also includes a tighter definition of the UK's minimal influence over EU decision-making, while a new provision is proposed, allowing the EU to suspend certain benefits arising from the UK's participation in the Single Market when there is not enough time to bring the matter to the ECJ.

This will prevent the UK from taking advantage of its imminent exit, breaching market rules and then using judicial delaying tactics to avoid any sanction. The Commission can step in and take direct action without waiting for the ECJ to act.

Confirming that already proposed in the latest set of negotiating directives, the text requires the EU to consult the UK - but not necessarily act on its input - only in regard to setting new fishing quotas. On other issues, such as sanctions policy, and issues directly affecting the UK, the EU may consult but would be under no obligation to do so.

As far as the slides in "International Agreements" go, the really interesting provision here is the assertion that, after Brexit, the UK will no longer be covered by "EU only" agreements: agreements concluded by the EU (and/or Euratom); or by the Member States on its behalf.

This is straightforward enough, but it also refers to "Bilateral mixed agreements", those concluded on the one hand by the Union and its Member States, and on the other hand by the third country partner.

These are taken to include association agreements, cooperation and partnership agreements, aviation agreements and, intriguingly, the European Economic Area (EEA) Agreement.

While the EU concedes that the UK will remain party to multilateral agreements to which the EU is also a party, such as the WTO agreements and the Paris climate accord, its failure to recognise the EEA Agreement as a multilateral agreement means that it believes it can take the back door approach to easing the UK out of the EEA, even if the UK does not invoke Article 127, giving notice to quit.

The exact definition and constitution of "bilateral mixed agreements" comprises some of the most arcane elements of EU treaty law, verging on the theological. Highly contentious views are very far from being settled international law and it remains to be seen whether the EU's treatment of the EEA Agreement can prevail – and especially if the UK switched from EU to Efta membership.

However, if the UK and the EU are in accord that Brexit means that the UK has voided the EEA Agreement, it is very hard to see who will have the legal status to object. We could drop out of the EEA by default, simply because all the parties agreed and there was no one capable of challenging our departure.

Since Mrs May's government looks set to follow down the path of the "vassal state" transition, this could very well be the outcome of the Efta/EEA option.

Current parliamentary moves are simply too little too late and, in any case, promotion of this option for an "end state" Brexit is very far from idea. Yet no one outside of Flexcit is promoting the idea of the option as the launch pad to something better.

The current documents, however, make plain the parlous position of the UK and, while the transition period is time-limited, the expectation that we will move from there to a free trade agreement does not remove the "cliff edge" of catastrophic loss of market access. Pressure to extend the period is certain and may be hard to resist.

Before that, though, there is the Mogg factor. It seems distinctly possible that he and his ERG colleagues will be able to muster enough leverage to block agreement of any withdrawal agreement which includes such draconian provisions which go so far as to state that, "For the purposes of the treaties, during the transition period, the parliament of the United Kingdom shall not be considered to be a national parliament" and "during the transition period, the Bank of England shall not be considered to be a national central bank".

Rees-Mogg has already said that the legal draft is "not something that we (the ERG) can accept". He particularly objects to the Commission power to, as he says, "punish us" for infractions of market rules without the UK being able to plead its case in the ECJ.

This rather puts him rather on the spot as the man is already on record as rejecting the idea of any ECJ involvement. Now he must insist – at the very least – on a compromise agreement, or its complete rejection. Failing that, he must limb down and take the humiliation that goes with it. It would almost be worth accepting the transitional agreement just for that.

As for Downing Street, a government spokesperson is taking a fairly laid back approach. "This is a draft document produced by the EU that simply reflects their stated directives", the person says. "The Secretary of State (David Davis) set out the UK's position in his speech in Teesside last month. Together these provide a solid foundation for the negotiations on the implementation period, which have begun this week with the aim of reaching agreement by March European Council".

Nevertheless, officials in Brussels are making it clear that they have little appetite for prolonged negotiations. And the UK has virtually no leverage if it wants a transition as opposed to the "sudden death" of a drop over the edge of the cliff.

This week may take us that bit closer. From Tuesday, for four days, negotiations have started anew. They are being fronted by Sabine Weyand, the EU's deputy chief negotiator, and the Cabinet Office adviser, Olly Robbins. On these, we might just see some progress. Miracles have been known to happen.

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