EU Insight 11 January, 2021

Brussels, 8 January 2021

NEW CHAPTER IN EU-UK RELATIONS BEGINS AFTER LAST MINUTE DEAL

After months of protracted and difficult negotiations, the EU and the UK reached a deal on a post-Brexit “Trade and Competition Agreement” on 24 December. The Agreement consists of (i) an unprecedented free trade agreement, (ii) ambitious cooperation on economic, social, environmental and fisheries issues, (iii) a close partnership for citizens’ security, and (iv) an overarching governance framework. The European Commission described the deal as a fair and balanced agreement while the UK Government said it is a victory for the UK which delivers on all their red lines. The Agreement began applying provisionally on 1 January but will now have to be ratified by the European Parliament.

ESMA AND FCA AGREE ON MEMORANDA OF UNDERSTANDING FOR FINANCIAL SUPERVISION

This week the European Securities and Markets Authority (ESMA) released a Memorandum of Understanding (MoU) with the UK Financial Conduct Authority (FCA), together with a Multilateral MoU between each of the European Economic Area (EEA) competent authorities and the FCA. The former concerns arrangements for the cooperation and exchange of supervisory information related to certain regulated entities whose cross-border activities subject them to regulation and supervision by both the UK Authority and ESMA. The latter provides the grounds for cooperation as regards investor protection, market integrity and transparency. Both MoUs became applicable on 1 January.

EU-CHINA INVESTMENT DEAL MAY FACE EUROPEAN PARLIAMENT’S OBSTRUCTION

On 30 December, the EU and China concluded in principle the negotiations for a Comprehensive Agreement on Investment (CAI). The deal aims to improve the current trade balance between the two economic giants, with China committing to a greater level of market access for EU investors, a better level playing field for EU companies and ambitious provisions on sustainable development. But formal adoption by the co-legislators is not going to be a smooth affair. The deal has received criticism not only from US officials but also from several Members of the European Parliament, who claim the CAI does not go far enough in terms of addressing China’s implementation of international labour rights conventions.

VON DER LEYEN CONDEMNS ATTEMPT TO OVERTHROW RESULT OF US ELECTIONS

The European Commission President, Ursula von der Leyen, described the recent riots in the US Capitol as “appalling” and “outrageous”. In a press release, the President highlighted that, despite the scenes coming from Washington, Joe Biden’s confirmation showed “how resilient the American democracy is”. Von der Leyen also reinforced the message of unity that she had displayed in occasion of the US Presidential elections in November, and reinstated that Europe stands ready to work very closely with the new US administration – particularly on the objectives identified in the transatlantic agenda put forward by the Commission on 2 December 2020.

PORTUGAL TAKES THE HELM OF THE COUNCIL OF THE EU AND SET ITS PRIORITIES

From January to June, Portugal will lead the Council’s activities and priorities, and will do so at a turbulent and uncertain time. The coronavirus pandemic, the EU’s new relationship with the UK, the recent budget standoff, and the necessity to adopt forward-looking policy amidst all these issues represent challenges to which Portugal said will respond by strengthening Europe’s resilience and people’s confidence in the EU. In particular, the Portuguese Presidency’s agenda will focus on: implementation the EU budget and NextGenerationEU; strengthening the EU’s social model; implementing the European Green Deal; prioritising initiatives that accelerate the digital transition; and promoting Europe’s geopolitical position.

COMING UP NEXT WEEK

• No relevant events taking place next week.

Karl Isaksson, Managing Partner Brussels, Kreab

____________________________________________________________________

Kreab • Tel: +32 2 737 6900 • karl.isaksson@kreab.com • www.kreab.com/brussels • Twitter: @KreabEU.