UK TRANSPORT AND BREXIT NEWS & VIEWS NO. 122

Mark’s EU Week for Transport 

To be, or not to be, that is the question. To be aligned with EU regulations or to diverge after Brexit, that is the question we must all answer, after the UK Chancellor declared last Friday in the FT that  “There will not be alignment, we will not be a rule-taker, we will not be in the single market and we will not be in the customs union — and we will do this by the end of the year.” Do we agree? 

I don’t think so, for a number of reasons. 

Firstly, the Chancellor’s statement will make uncomfortable reading for British businesses, particularly car manufacturers, the aerospace industry, pharma and chemicals industries and transport, because the more divergence there is the more checks at borders there will be, with inevitable delays coming as a consequence.

Secondly, there is something even more disruptive and costly for business, and that is that Britain may have to develop two sets of regulations, one for domestic purposes and one for EU exports Because if you trade or travel with or in the EU we will have to follow EU rules. 

Thirdly, because the Government agreed a Political Declaration with the EU, with a commitment to a level playing field for on state aid, competition, social and employment standards, environment, climate change and relevant tax matters, and it seems unlikely that we would tear up this deal completely.

Fourthly, the reality of divergence. It is inconceivable we will want to diverge from EU law in a whole host of areas. For example it is inconceivable on environmental standards we will want to sanction more pollution or more carbon emissions from transport. On passenger rights it seems inconceivable we would sanction reduced compensation. On safety, it seems inconceivable we would not want to work with the EU’s rail, maritime and aviation agencies, or sanction lower safety standards. On product standards it seems inconceivable we would produce equipment that didn’t meet the rules of our largest market. Moreover, even if we did, it would take Parliament decades to write a whole new rule book. It’s just not going to happen. 

This is of course is just the opening gambit in what will be difficult and time consuming negotiations, and my hunch is just like the border down the Irish sea which in the end the UK accepted, we’ll end up agreeing to regulatory convergence. We may just end up calling it something else. 

This week’s song of the week, is Roads by Portishead.

1. UK Task Force publishes future relationship documents on transport
Last week, the European Commission’s UK Task Force, which will lead negotiations on the future relationship between the EU and the UK, published the “Internal preparatory discussions on future relationship: Transport”. This document outlines what the transport relationship will look from January 2021 onwards.

Aviation
Last week, the European Commission’s UK Task Force, which will lead negotiations on the future relationship between the EU and the UK, published the “Internal preparatory discussions on future relationship: Transport”. On aviation, the slides outline that the ‘baseline scenario’ will be that the UK will cease to be part of a fully liberalised EU Aviation Market, with all EU law-based rights, obligations and benefits ceasing such as market access and ownership and control rules. On aviation safety, despite connectivity being granted to third countries, an “agreement on aviation safety not a prerequisite to ensure continued connectivity”. Another crucial point that the document highlights is that there will be regulatory cooperation on aviation but no UK membership of EASA nor will there be any mutual recognition. 

Road
On road, the document outlines that “in the absence of any other agreement, the only way to access each other’s road haulage market post transition is based on limited quota system of the European Conference of Ministers of Transport ( ECMT”. The UK’s participation in the Single Road Haulage Market will cease as it is only open to members of the EU or members of the Single Market (EEA countries). The document also outlines that the UK will need to comply with level playing field requirements for operators and drivers in road transport. 

• 29 March 2017 – A50 triggered.
• 5 April 2017 – European Parliament adopted Brexit guidelines.
• 22 May 2017 – Brexit negotiating directives approved by Council.
• 19 June 2017 –  Negotiations formally began.
• 23 March 2018– European Council agreed guidelines on the future trading relationship.
• 23-26 May 2019 – European Parliament election.
• 12 December 2019  – UK General Election.
• 20-21 January 2020 – Next ENVI Committee Meeting
• 20-21 January 2020 – Next TRAN Committee Meeting
• 31 January 2020 – The UK will formally leave the EU. (tbc)
• 31 December 2020 – End of Transition Period (tbc).