They go beyond a simple trade deal and reports suggest the government is open to the ideaby Aarti Shankar / June 29, 2018 / Leave a comment
The Prime Minister is finally expected to lay out her vision of the future UK-EU economic partnership at the start of next month. Despite this being only weeks away, reports suggest that a common government position on key substantive elements—including customs and immigration arrangements—are yet to be finalised. However, an idea of what the framework of the overall relationship could look like has surfaced.
Reports last week suggested the government is considering an “Association Agreement” structure for the future bilateral relationship. A senior cabinet source has argued that this model would allow for a “wide-ranging” partnership, covering “a number of different pillars” of cooperation.
So what is an Association Agreement (AA)? AAs are a special form of bilateral agreement that go beyond a simple trade deal. They create “privileged links” between the European Union and a third country and foster close economic and political cooperation. AAs do this by providing an overarching framework for a package of cooperation agreements, from trade, to defence and security, environmental commitments, taxation, research and education, science and technology etc.
There is no single, prescriptive model for what an Association Agreement should include—the European Parliament’s Guy Verhofstadt recently referredto AAs as “a blank canvas—a box into which we can place different areas of cooperation.” The EU has over twenty AAs of varying forms, primarily with countries in its neighbouring region. Most recently, the EU concluded three Deep and Comprehensive Free Trade Agreement (DCFTA) style AAs with Ukraine, Georgia and Moldova. These provide privileged access to the EU’s single market in goods and services in return for approximating relevant EU legislation and respecting common EU values. They also cover broader cooperation in foreign and defence policy and justice and home affairs.
The EU’s Stabilisation and Association Agreements with the Western Balkans also provide more liberal access to the single market based on approximating EU laws—but, unlike the Ukraine agreement, focus on promoting fair competition, fostering regional cooperation in the Balkans, and are structured as pre-accession agreements. Turkey’s AA with the EU was different still. The 1963 agreement established Turkey’s customs union with the EU and sought to align Turkey’s economic policies with the EU’s internal market.
“AAs tend to adopt a more flexible approach to the four freedoms”
While there is no standard template for these agreements, AAs do have some central, defining features. As is clear from the above examples, they usually require third countries to adopt aspects of the EU body of law in order to benefit from deeper economic integration. They also include clauses on human rights and democratic principles, as a key foundation for greater political cooperation. Finally, while individual bilateral agreements between international partners are usually overseen by their own joint committee, an AA brings multiple agreements under one governance framework—i.e. one joint ministerial Association Council is created to supervise and enforce the whole package of agreements. This provides a more straightforward and stable process for jointly ensuring compliance and addressing disagreements.
Association Agreements are an important political and strategic instrument in the EU’s broader neighbourhood policy. While they are not always intended to shift countries towards EU accession—and indeed non-European countries, such as Chile, also hold AAs—they are often used to draw neighbouring nations into the EU’s economic and normative sphere.
This therefore begs the question: should the UK and EU pursue an Association Agreement after Brexit? After all, you wouldn’t be mistaken to view the UK’s withdrawal as a form of “disassociation” from the EU.
It is worth noting that the European Parliament earlier this year also proposed negotiating a UK-EU Association Agreement based on four key pillars: trade and economic relations, internal security, cooperation in foreign and defence policy, and broader cooperation in research and innovation programmes. A UK-EU post-Brexit AA would be symbolic, demonstrating that Britain would remain a close European partner after Brexit.
But the logic of establishing an Association Agreement will depend on the depth and scope of the future UK-EU partnership. An AA framework would certainly match the government’s expressed ambition to strike a “deep and special partnership” with the EU, covering a variety of policy areas from trade, to security, data-sharing, aviation and research. The single governance framework established under an AA is likely to appeal to both the UK and the EU, given it would provide a stable and coherent joint forum for supervising the partnership and managing disputes. It is well known, for instance, that the EU is highly averse to the complex and unwieldy governance arrangements created by Switzerland’s web of bilateral agreements.
Equally, if the UK is gearing-up to propose remaining highly-integrated with the EU in goods trade—as Open Europe recently suggested—an AA structure designed to foster “privileged” economic links might be a useful complement.
It is worth noting that AAs tend to adopt a more flexible approach to indivisibility of the single market’s four freedoms, in line with the EU’s political interests. For instance, the EU-Ukraine agreement provides largely for the free movement of goods, but does not include provisions on the free movement of people. While these usually represent stages on the path to further integration, in some cases—such as the EU-Turkey relationship—they have de factobecome a long-term arrangement.
If, however, the UK and EU negotiate a more limited free trade deal, with fewer flanking agreements, the symbolic and structural value of an AA is less clear.
It makes sense for the UK and EU to consider framing the future bilateral partnership in terms of an Association Agreement. But while this generally indicates a close and wide-ranging relationship, it does not address the key substantive issues in negotiations: how economically integrated will the UK and the EU be in the future? What will the dispute settlement mechanism look like? How will the Irish border issue be resolved? Only once the details of the future relationship are clear will the broader framework fall into place.