As rapporteur for the Economic and Monetary Affairs Committee’s opinion on the EU-UK Trade and Cooperation Agreement (TCA), lead deputy on the implementation of the Withdrawal Agreement as well as the S&D Group’s representative on the UK Coordination Group, Pedro Silva Pereira knows a thing or two about the UK’s tortuous break from the European Union.
The Portuguese MEP and European Parliament Vice-President adds that despite the assembly’s decision, late last month, to give the green light to the TCA, effectively clearing the final legal hurdle in the long-running Brexit saga, he cannot avoid “mixed feelings” about the UK’s departure. “On the one hand, I regret Brexit, but I also recognise that the TCA is a positive step for our future relationship. Yes, we have concerns regarding the implementation of the Withdrawal Agreement, but I think that we’ve done the right thing, here in the European Parliament, in giving our consent to the TCA.”
“I regret Brexit, but I also recognise that the TCA is a positive step for our future relationship. Yes, we have concerns regarding the implementation of the Withdrawal Agreement, but I think that we’ve done the right thing, here in the European Parliament, in giving our consent to the TCA”
However, following the political furore over the UK’s recent alleged breaches of the Withdrawal Agreement, which damaged trust in Boris Johnson’s government and led to the threat of infringement procedings against the UK, Silva Pereira warns of continued surveillance. “We will have to be vigilant for the future and pay due attention to the implementation of this TCA, as well as the Withdrawal Agreement, where we rightly have serious concerns. We do support the infringement procedure initiated by the European Commission.”
Top of the ‘vigilance’ list for Silva Pereira is the Withdrawal Agreement’s contentious Northern Ireland Protocol. Recent violent rioting in Belfast and Derry by sections of the province’s Loyalists, who oppose what they see as economic and political barriers between the province and mainland UK via the Irish Sea, as well as comments from Boris Johnson that he may “take further steps” to end what he called the “absurd” trading arrangements of the protocol, set alarm bells ringing in Brussels.
“The European Parliament has always paid close attention to the full implementation of the Northern Ireland Protocol and we will continue to do so, because what is at stake there is very important. We have a solution that avoids a hard border between Ireland and Northern Ireland and which implies border controls in the Irish Sea. We have to implement these controls fully to ensure the integrity of the EU’s Single Market. However, we now see that there is no clear political will from the UK in doing so and so, yes, we will have to be demanding there. The European Parliament demands nothing less than the full implementation of the Withdrawal Agreement signed with the UK, including the Northern Ireland Protocol.”
“From the start of Brexit, the European Parliament has been engaged in ensuring that the Good Friday Agreement and the Peace Process can be safeguarded. But I really don’t think that the Northern Ireland Protocol is actually the issue here; the real issue is Brexit itself”
Turning to the newly-ratified TCA, he says the zero tariffs/zero quotas deal has set an unprecedented economic relationship with the UK for the future. “But this will only be possible if we keep what we know as the ‘level playing field’. We have to ensure that competition with our big British neighbour is not only open but also fair. This means state aid principles and rules must be applied; we have to ensure non-regression regarding EU standards on environmental, social, and labour protection.” This, adds Silva Pereira, will be a key issue during the TCA’s implementation phase.
Despite overwhelming support for the UK’s exit from the EU by Northern Ireland’s Unionists, the imposition of the Protocol is being blamed for the wave of violent demonstrations by that community. Despite initial downplaying by the British government, images of the rioting swept the globe, with US President Joe Biden urging all parties to ensure the Good Friday Agreement “doesn’t become a casualty of Brexit”. Silva Pereira says he fully shares people’s concern.
“Yes, we have a situation on the ground and that is very worrying. From the start of Brexit, the European Parliament has been engaged in ensuring that the Good Friday Agreement and the Peace Process can be safeguarded. But I really don’t think that the Northern Ireland Protocol is actually the issue here; the real issue is Brexit itself. Brexit has a number of contradictions including the illusion that you can leave the EU, not have to keep the same rules and principles as the EU has and still be in the Single Market without any kind of border controls.”
This, for obvious reasons around Single Market integrity and fair competition, he explains, was never an option for the EU during the Brexit negotiations. “So, something has to be adopted in order to avoid a border being placed where nobody wanted it - between Ireland and Northern Ireland - and the solution was the Northern Ireland Protocol. So, I think that the political commitment of the Northern Ireland Protocol, to have border controls in the Irish Sea, and then [as Boris Johnson is arguing] not to apply them or provide the illusion to people that this was not going to be applied, is simply impossible.”
“We are not looking for a fight, but I’m glad we have those instruments in the EU-UK Trade and Cooperation Agreement allowing us to ensure enforceability”
What, therefore, does he think needs to be done to take the rhetoric on the Protocol down a notch or two? “I think that what we can do is what the EU is already doing in the Withdrawal Agreement Joint Committee [co-chaired by European Commission Vice-President, Maroš Šefčovič and Michael Gove MP], looking for flexible solutions, verifying which kind of border controls are really needed and which can be avoided. I believe the Commission has shown strong political will in finding flexible solutions. But what we cannot do is avoid any kind of border controls because that would, in the end, be inconsistent with protecting the integrity of the Single Market.”
Regarding the level playing field provisions in the newly-ratified TCA and in particular the so-called ‘non-regression’ clauses that aim to ensure neither party can undercut the other, Silva Pereira says that the EU’s view on this is clear, “that we should not have any regression from the standards that we share now in terms of environmental, social, and labour protection. We agreed on this principle of non-regression because if there is any regulatory divergence, with economic implications, then the economic balance of the TCA is at stake."
"Yes, we will have zero tariffs and zero quotas, providing a level of access to each other’s markets - which I want to emphasise, is unprecedented in trade agreements - but of course; this is only possible if the economic balance of the agreement is kept. So, if future regulatory divergences are of such a magnitude that they would introduce an imbalance, then the agreement itself foresees that we should look for another kind of arrangement. That would mean the introduction, in a proportional manner, of tariffs or quotas.”
Though reticent to speculate on what kind of potential future divergences could arise between the EU and UK, Silva Pereira is firm that the principle is clear and should be plainly understood. “We have in the TCA a number of unprecedented enforcement mechanisms including trade sanctions and cross-suspension measures, which allow us to maintain this parity in case either side decides to introduce any new regulation that might disturb the economic balance. So, both sides are free to make their own political choices in terms of regulations for the future, that is not an issue, but if that happens in terms that disturbs the economic balance, then we have to find another economic balance and a proportional solution.”
However, concerns have been raised that the non-regression clauses, dubbed ‘ratchet’ clauses by UK negotiators, could all too easily trigger a series of tit-for-tat disputes between the two trading partners. “We are not looking for a fight. I think the fact that the European Parliament approved the TCA by an overwhelming majority shows that Michel Barnier managed to deliver a good agreement. It also shows that the European Parliament is united in its will to build a positive and sound relationship with the UK for the future. So we are not looking for a fight, but I’m glad we have those instruments in the TCA allowing us to ensure enforceability. This, I believe, was crucial, especially after the crisis we had with the implementation of the Withdrawal Agreement.”
He continues, “Agreements have to be applied; there are serious commitments in the TCA under international law. So we have the necessary enforcement instruments and I believe that the EU is now in a stronger position in having the TCA than it was with only the Withdrawal Agreement. It’s obviously down to both parties on how they take decisions and react to any problems in terms of implementation. But I hope that both the EU and the UK can understand that this agreement is important, and that we should use it in order to promote a sound political and economic relationship.”
One aspect of the Brexit negotiations that appeared to take the UK government and British media by surprise was the outward solidarity shown by EU Member States throughout the process, particularly on the EU’s red lines, and the collective faith in Michel Barnier as chief negotiator. “Well, you are fully right,” says Silva Pereira, adding, “I think this is a fundamental element and I even mentioned this in my speech in plenary during the TCA debate last month, saying that the fact that Michel Barnier managed not only to negotiate a good agreement but to keep the European Union united is in itself a major achievement."
"I think that shows we have a united vision regarding our interests and in what we have to do to defend our principles, values, and economic interests. This is in itself, a positive sign for the future of the European project. That is not always the case and, as your readers will know, there are a number of discussions going on with differences on several important issues. But we have proven that we can be successful if we are united and that we can, in fact, reach positive outcomes when we want to.”
“I think that we have to have a discussion on what brought us to Brexit. The upcoming Conference on the Future of Europe is a good opportunity to do that because the important thing is to really address the concerns of citizens”
So what lessons, if any, does he think the EU has learnt from the UK’s somewhat fractious divorce? “Well, I think that we have to have a discussion on what brought us to Brexit. The upcoming Conference on the Future of Europe is a good opportunity to do that because the important thing is to really address the concerns of citizens. The European Union has to deliver results that can meet its citizens’ expectations. The lack of this meeting of expectations was probably a factor behind Brexit. So, going forward, we have to learn to pay more attention to citizens’ concerns.”
He adds, “For a very long time, we have debated about the democratic deficit of the European Union and the few opportunities for citizens’ participation in the EU decision-making process. However, now that the Conference on the Future of Europe is about to become a reality, with an open invitation to citizens to participate, it would be a huge mistake to waste this chance. I see this Conference as part of a bigger effort to bring the European project closer to EU citizens and to match their hopes and expectations.”