Although the Brexit negotiations have been proceeding slowly and painfully, the government has started producing Brexit-related legislation and setting out its position on future trading arrangements.

The EU Withdrawal Bill

A major development in 2017 was the publication of the EU Withdrawal Bill (formerly known as the ‘Great Repeal’ Bill). Before the General Election, it was assumed that the Bill would have a fairly smooth passage to enactment. With the loss of the Tory majority, however, the Bill is currently delayed in committee stage in the House of Commons. Further time for debate is to be scheduled in January and the government seems poised to make compromises in order to get the Bill through.

In its current form, the Bill will:

  • repeal the European Communities Act 1972 from date of exit;
  • preserve the rights in EU treaties that can be relied on directly in court by individuals;
  • convert existing EU law (as it applies to the UK) into national law;
  • preserve all laws made in the UK to implement EU obligations;
  • give pre-Brexit CJEU law the same binding precedent status as Supreme Court decisions;
  • create powers to make secondary legislation in order to enable corrections to be made to laws which would no longer work appropriately;
  • set out the order of precedence after exit, from which point:
    • new UK legislation will trump EU-derived law;
    • EU-derived law which applies at the time of exit will trump non-EU derived law in force at the time of exit; and
  • give Parliament a vote on a commons motion relating to the final Brexit deal before it is voted on by the European Parliament (although this is likely to change – see below).

Withdrawal and Implementation Bill

Under pressure from both houses, the government now looks set to restrict the use of the ‘Henry VIII powers’ and to give Parliament a vote on a new Act of Parliament which will put the terms of any withdrawal agreement and exit terms, as well as the detail of transitional arrangements, into law. The government argues that this is a meaningful vote on Brexit but if there is no deal on which to vote, and we simply fall out of the EU on 30 March 2019, then there is currently no option for Parliament to have any further influence. Moreover, the government suggests the vote would be on a ‘take it or leave it’ basis so if Parliament were to vote down the new law, we would be leaving on a ‘no deal’ basis. The government recently announced the Withdrawal Agreement and Implementation Bill, which is intended to put the terms of any withdrawal agreement with the EU and any transitional arrangements into statute.

The role of the Court of Justice

One of the problems with the concept of a transitional period is the role of the Court of Justice of the European Union (CJEU). There has been a definite shift in the government’s ‘red line’ on the CJEU. Having started from the position that the CJEU’s influence in the UK would end on exit, there is now somewhat confusing talk about direct and indirect control, and a growing recognition that the CJEU will retain influence during any transitional period, although it is still unclear whether that would be in all areas or only in relation to EU citizens’ rights.

While many Brexiters are appalled by compromise on the CJEU red line, it is difficult to see how the UK can continue to participate in the Single Market and the Customs Union, whether during a transitional period or beyond, if the CJEU does not continue to play a role (at least indirectly as for EFTA countries such as Norway). This is because the main function of the CJEU is to resolve questions of EU law and ensure it is harmonised throughout the EU.

As we have commented before, regardless of any legal issues, from a practical perspective, if the UK wants to trade with the EU, it will be obliged to take note of relevant CJEU decisions in any event.

Trade Bill 2017-19

The government recently introduced a Trade Bill 2017-19 into Parliament which provides the legal framework to put in place trade policy outlined in its white paper on future UK trade policy (TWP).

The government has reiterated its commitment to forging a new trading relationship with the EU and transitioning existing EU trade agreements with non-EU countries. It intends to pursue future agreements between the UK and non-EU countries during any transitional period after leaving the EU, but these will not come into effect during that time unless consistent with the terms of the exit agreement.

Priorities include:

  • the UK will need to develop its own WTO goods and services schedules;
  • remaining a party to the Governmental Procurement Agreement;
  • participation in a finalised Environmental Goods Agreement;
  • becoming a member of the Trade in Services Agreement in its own right once finalised;
  • putting mechanisms in place to deal with trade disputes and setting up an independent trade remedies framework if necessary.

Position papers

The government has also set out position papers on other areas which are vital to cross-border trade including preserving the free flow of personal data post-Brexit: cross-border civil judicial co-operation, enforcement and dispute resolution, confidentiality and continuity in availability of goods.

Of particular note is the position paper on post-Brexit customs arrangements. UK government policy is that the UK will leave the customs agreement when it leaves the EU. In its paper, the government sets out the following objectives:

  • UK-EU trade arrangements should remain as frictionless as possible;
  • a ‘hard border’ between Northern Ireland and the Republic of Ireland should be avoided; and
  • the UK should be free to establish an international trade policy.

See here for a fuller look at the events of 2017 in relation to Brexit and at what lies ahead in 2018.