The UK government has published a series of papers in advance of formal negotiating rounds with the EU to inform discussion and provide clarity to its position.
The documents released covered:
- Confidentiality and access to documents
- Goods on the market
- Civil judicial cooperation
- Enforcement and dispute resolution
- Data protection.
The increase in clarity was roundly welcomed by the EU and the wider business community, including insurers. However, criticism has been expressed around the level of detail provided for such complex negotiations, together with certain inconsistency in providing a clear UK stance. While some were ‘position papers’, others were 'future partnership papers’ that served to initiate an exchange of opinions, rather than drawing a line in the sand for the next stage of negotiations.
The UK’s paper addressing dispute resolution was the most politically sensitive for Theresa May, given the red line she had set in her promise to end the jurisdiction of the European Court of Justice (ECJ) and “take control of our laws”. In what was perceived to be a minor retreat from that position, the government committed to ending the “direct jurisdiction” of the ECJ.
Though no explicit priority was expressed in the paper, the government is expected to consider the European Free Trade Area (EFTA) Court a workable compromise, while the enforcement section of the paper sought to address agreements between businesses and individuals.
Brussels is expected to hold firm to its view that it won’t discuss trade until “sufficient progress” is made addressing big ticket issues including the Irish border, Brexit bill and citizens’ rights. Such progress is not expected to have been made by the next EU council meeting in October for Phase 2 talks to begin.
Overall, the Brexit papers reflect a slight softening of the UK’s position (when compared to the Lancaster House speech) but continues to seek a bespoke arrangement based on leaving the Customs Union and ending Freedom of Movement - in effect ruling out a Norway-style model.
What does this mean for industry?
In a similar vein to the wider services industry, the insurance sector is left wondering what plans the government has for services. Speculation had built that a services-specific paper was due to be published by the government, but that is not known for certain.
For UK insurers, clarity provided within the data protection was highly relevant, though the detail largely mirrored the Data Protection Bill due unilaterally in the UK parliament. In many respects then, it did not provide new news.
The paper addressing the enforcement and dispute resolution sought to offer a renewed sense of clarity around the politically contentious issue of the future role of the ECJ. However, the paper left open the possibility that decisions of the CJEU could still be taken into account in resolving any disputes, leaving necessary wiggle room for the government.
Overall, the sector remains eager for clarity on how Brexit more, broadly and a lack of a transitional period, specifically will impact business.
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