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The Chair welcomed EAG members to the videoconference and the 3rd meeting to be held remotely during the COVID-19 pandemic.

The videoconference was scheduled instead of the meeting in light of the continuing challenges and pressures resulting from the Coronavirus outbreak.

The Chair updated the group that Welsh Government Official Simon Brindle, former Director, Brexit Strategy had moved within the organisation to take up a new position as Director, Covid Recovery and Restart. The Chair put on record his thanks for Simon’s contribution to the Group and that the group wished him well for the future.

The Counsel General and Minister for European Transition (CGMET) updated the group on progress on future relationship negotiations between the UK and the EU.

As context to this item the CGMET highlighted that, the priority of the Welsh Government had been to protect the health of its Welsh citizens and to stabilise its communities and the wider economy. The minister also highlighted that whilst the lockdown and people’s efforts had resulted in reducing the spread of the virus and saved lives; the COVID-19 pandemic had also had an immediate and catastrophic effect on many sectors, including the aerospace and aviation sectors globally. The minister explained that immediate action had been taken to safeguard the position and wellbeing of the Airbus workforce and supply chain.

Other key points in his update included:

  • The 4th, full virtual round of negotiations had taken place without any meaningful convergence between the 2 sides. The UK government continued to restate their position and expect the EU to move. This had resulted in a deadlock on 4 issues:
    • the level playing field
    • fisheries
    • governance
    • security
  • A high-level stock take meeting had been held between the Prime Minister and the Presidents of the European Commission, the European Parliament and the European Council. This meeting had been intended to take stock of progress and inject political impetus into the flagging negotiations, but whilst there were slightly warmer words exchanged about reaching a deal at this meeting, there was little evidence of any substantive progress.
  • Following the high-level meeting, it had been agreed that scheduled face-to-face ‘restricted’ discussions would supplement two more formal rounds with the hope of concluding and ratifying a deal in the next 6 months.
  • Following the first of the ‘restricted’ discussions, which had taken place in Brussels on 29 June it was clear that both parties would need to find common ground during the 2nd of the ‘restricted’ discussions to bridge the differences that remain. The EU had highlighted their concern that the UK government had moved away from the basis of an agreement that the Political Declaration provided for.
  • The WG had real concerns that the UK government’s approach continued to overlook the potentially devastating impact a breakdown in negotiations would have on business, jobs and the economy.
  • The UK government had confirmed that they would not request an extension and were continuing to argue that the negotiations, and all the extensive necessary work to implement a full agreement, could be concluded at the same time as dealing with the pandemic emergency despite logic and evidence suggesting otherwise.
  • The UK government’s announcement of the final decision not to request an extension had been made without a full and proper discussion across the governments in the UK. In the WG’s view, this only served to increase the likelihood of leaving the transition period without a comprehensive agreement in place.
  • The Welsh Government continued to take all opportunities to seek to influence constructively the UK’s negotiating position to reflect the interests of Wales.
  • The CGMET had written a series of detailed letters to the Chancellor of the Duchy of Lancaster (CDL) covering each of the 11 work-streams in the negotiations. In these letters, he set out how the UK government could and should take account of the economic, social, environmental and cultural interests of Wales. However, there was little evidence that the UK government was paying regard to Welsh priorities.
  • It was unclear what would happen if a deal had not been reached following the final scheduled formal round in August. There were some indications that the European Council meeting in October was the critical end point.

The Chair led an exchange of views which covered:

  • Wales having a stricter equality duty under the Equality Act 2010 than England, and whether the UK government were made aware that this required Wales to complete an equality impact assessment. The CGMET confirmed that ministers had expressed their worries to the UK government about vulnerable communities / groups and the human rights implications of this and would check whether it was put in terms of the equality act obligation and statutory context.
  • A discussion around what a deal would mean for Wales with a focus on the need for:
    1. a deal that maximises access to markets, with no tariffs, and minimal non-tariff barriers and
    2. the closest possible cooperation on economic and security matters.
  • Participation in EU programmes, notably Erasmus + and Horizon: it was highlighted that the UK government want a time-limited, partial participation in Erasmus+ whilst Welsh Government want continued full access to these programmes. The Welsh Government had pressed for the option for devolved administrations to participate should they choose to, even if the UK as a whole did not. This had never been answered definitively and so the Welsh Government had written directly again to UK government on this, as had the Scottish Government.
  • On the issue of Welsh fishing interests, it was noted that the Welsh Government position was clear: access to EU markets was more important than sovereignty over waters.
  • The Welsh Government had taken every opportunity to be clear and categorical that the UK government had simply not listened to the constructive, reasonable and rational ask for meaningful engagement in relation to matters that were devolved.
  • CGMET had written to CDL on the Welsh Government’s priorities in respect of services. Letters to be shared with the Group.
  • The NI protocol paper was discussed. The paper had set out the broad parameters but did not engage with the level of detail that would be needed to be able to properly assess the impact on transit routes and the possibility of diversion of freight away from the Welsh ports towards ports with service from Northern Ireland as a result of less / no checks on goods on those routes. On operational matters, there had been an increase in dialogue as borders checks were largely a reserved matter, but one which had a huge impact on those areas such as road traffic management, which were not.
  • Public recognition that readiness work was not where it needed to be.
  • Impacts on aerospace / aviation and the possibility of regulatory alignment between the CAA and EASA. Their struggle to reach an agreement between these 2 agencies had potentially added significant costs and time penalties to aviation and aerospace. Current redundancies arising from COVID-19 in aerospace / aviation were running at about 30% + with 4000 in Wales alone. There was praise for the action the Minister for Economy, Transport and North Wales had taken to respond to the needs of the sector.
  • The importance of manufacturing to Wales and the high level of skills associated with that sector: this was a part of the economy that Wales could not afford to lose.

The Counsel General and Minister for European Transition updated the Group on the work to prepare for the end of the transition period.

Key points included:

  • The continued lack of progress around negotiations, UK government’s confirmation that there will not be an extension beyond the end of December of this year and the ongoing implications of the COVID-19 pandemic which continue to intensify the pressures and risks the Welsh Government faces in preparing for the end of the transition period.
  • Welsh Government’s focus will continue to be, and will intensify around, the following priority areas:
    • Inter-Governmental Relations (IGR) Review;
    • Common Frameworks and the UK internal market;
    • Preparedness for a future deal (or no future deal);
    • Legislation work to prepare for the end of transition;
    • Future UK government and Welsh Government post-transition policy – (such as migration); and
    • Key finance issues (such as the Shared Prosperity Fund).

The Chair led an exchange of views which covered:

  • Support and praise for the constructive and professional approach being taken by the Welsh Government to protect Welsh interests and influence the UK negotiating position.
  • The importance of the UK internal market and getting the balance right should be a priority for the Welsh Government.
  • Recognition and praise for the amazing work carried out by those businesses who had responded to the challenges and opportunities presented by COVID-19 with remarkable agility and kept the supply chain going during this time.
  • The need of businesses in Wales for support and a tone of hope from Welsh Government in these uncertain times. This could be fostered by a new approach to economic development with an arm’s length agency to foster regeneration and combat the combined realities of COVID-19 and Brexit.
  • There was also a discussion about mutual recognition (MR) and its place in EU law. There was no objection to the principle of MR but it was argued that the process by which this MR is developed that is all-important, there has to be discussion and compromise and an understanding from all sides. Divergence had been managed across the EU and UK for 20 years by a process built on agreed common standards. This was more consistent with a frameworks-based approach than a MR obligation that it was expected might be proposed by the UK government.
  • The challenges around communicating and working with the UK government and the added importance on the relationship between devolved administrations.
  • Concerns around the weakening of environmental protections particularly the links to human health. The gap in governance which would likely occur with no overarching body to replicate the EU Environment Agency. The real concern was that the UK government would weaken its approach to environmental protection and the knock on effects this would have on the freedom of action of the Welsh Government.

Any other business

  • The relationship between the Welsh Government and the EU Delegation to the UK was discussed. It was essential that the Delegation understood the Welsh Government perspective. The Counsel General confirmed that discussions were already in hand to set up a meeting between the First Minister and the EU Ambassador to the UK.
  • The Chair confirmed the next EAG meeting / conference call was scheduled for Thursday, 24 September, but that this would be kept under review
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