Photo of Atli Stannard

Atli Stannard

Atli Stannard has broad experience related to genomics, distributed ledger technology (blockchain), tax, and trade policy issues.

Mr. Stannard has particular experience in EU trade policy and regularly advises on EU market access and customs classification issues. He has assisted a number of clients affected by EU trade policy developments relating to the imposition of U.S. tariffs, and the potential disruption of Europe-wide supply chains due to Brexit.

Mr. Stannard also advises clients on developments in EU policy and regulatory action relevant to genomics (the in vitro diagnostic medical devices regulation, data protection and data transfer, provision through national health systems), and technology clients on EU and international regulatory initiatives on Blockchain. His practice also encompasses EU tax policymaking, and he has advised clients on the EU Digital Services Tax proposals.

Last month, the U.S.-EU Trade and Technology Council (TTC) met in Paris-Saclay for the second time since its launch in June 2021. (The first ministerial took place in Pittsburgh in September. France hosted this session as holder of the rotating presidency of the Council of the EU.) The meeting was co-chaired by Secretary of State Blinken, Secretary of Commerce Raimondo, and U.S. Trade Representative Tai, and European Commission Executive Vice Presidents Vestager and Dombrovskis. European Commissioner Breton also joined the discussions and the French ministers for foreign affairs, economy, and trade (Le Drian, Le Maire, and Riester) hosted the opening dinner.

The TTC is a new model of economic integration through regulatory coordination. Although both sides reserve their “regulatory autonomy,” they have also invested significant political capital, time, and effort into this process. The TTC spans broad policy areas including tech standards, climate, supply chains, export controls, and investment screening. It operates through ten working groups, which meet at staff working levels and seek input from outside stakeholders. For instance, the European Commission sponsors a “Trade and Technology Dialogue” facility to conduct outreach to the private sector and civil society. Through this technical work, the TTC’s aim is to shape the “rules of the road” for the global economy to favor liberal democracies, leveraging the transatlantic community’s half of global GDP. The ministerials set the themes and political direction for the working groups.

Against the backdrop of Russia’s ongoing aggression against Ukraine, the U.S. and EU noted that the TTC has become a “central pillar” of the transatlantic partnership, “indispensable” in facilitating coordination on sanctions and export controls. It will serve as a forum to monitor and discuss the Russia sanctions and may coordinate their eventual removal. Indeed, the TTC has arguably become more of a geopolitical tool than originally intended. Its 48-page joint statement reflects the breadth and depth of the underlying discussions and signals various future policy directions.Continue Reading U.S.-EU Trade and Tech Council: Paris Takeaways and Next Steps

The UK Government recently announced that it is developing legislation that would make it illegal for large businesses operating in the UK to use certain commodities that have not been produced in line with local laws, and require in-scope companies to conduct due diligence to ensure that their supply chains are free from illegal deforestation

Last week marked a hand-over from the technical Brexit negotiations back to the negotiators’ political masters.  After four rounds of talks on the future EU-UK relationship, it appears that the UK and the EU are increasingly talking past each other.  With both sides seeming to accept that the transition period will finish at the end of this year, a no-deal exit from current arrangements at year-end looks increasingly likely.  It will take significant political will on both sides to step back from the brink, yet their focus is on the more immediate challenges of COVID-19.

This blog post outlines the negotiations to date, the main points on which the UK and EU disagree, the prospects for the “high level meeting” that will follow this June, and the principal considerations in whether a deal can be reached this year.  If no deal is reached, the UK will either have to trade with the EU on World Trade Organization terms – which would hit UK businesses and consumers hard – or accept an extension of transitional arrangements with the EU – which it has repeatedly ruled out.

Opening Positions

Both UK and EU had to expedite the preparatory work on their initial positions.

Thanks to informal “seminars” conducted in January, the Commission was able to present proposals for the negotiating mandate, which would then be given to the EU negotiator, Michel Barnier.  These “Negotiating Directives” were approved by the Council on February 25 (see here).

These are very similar to the initial mandate given by the Council in 2018, and focus on preserving the EU’s internal market. The EU, however, had to adapt to the UK’s new position, set out in the Political Declaration of October 17, 2019, asking for a trade relationship “on the lines of the FTAs already agreed by the EU in recent years with Canada and with other friendly countries”. The EU stated that it was prepared to offer a “zero tariffs, zero quotas” agreement, but on the condition that the UK commits to a “balance of rights and obligations, and a level playing field”. It also insisted that the entire deal should fall under an “overall governance framework”.

Two days after the presentation of the EU mandate, the UK published its own “negotiating strategy” (see here).  This makes it clear that London is not prepared to compromise on the recovery of its full national sovereignty.  It confirms the UK Government’s strong intention to fully regain its “legal autonomy” and the “right to manage (its) own resources”.  The UK “will not agree to any obligations for our laws to be aligned with the EU’s, or for the EU’s institutions, including the Court of Justice, to have any jurisdiction in the UK”.  As to the structure of the deal, the UK would also like to see the comprehensive free trade agreement concluded separately, and “supplemented by a range of other international agreements covering, principally, fisheries, law enforcement and judicial cooperation in criminal matters, transport, and energy”.

The distance between these two positions showed just how difficult a negotiation this was likely to be.

The Negotiations’ Terms of Reference

On February 28, the two sides agreed on the “Terms of Reference” for their talks – essentially, their format and calendar (see here).

  • The negotiations are led by the Commission’s chief Negotiator (Michel Barnier), Head of the Task Force for Relations with the United Kingdom (UKTF) and on the UK side by the UK’s Chief Negotiator (David Frost), Head of Task Force Europe (TFE).
  • Several “negotiating groups” meet alongside the plenary negotiating sessions, working under the guidance of the Chief Negotiators and/or Deputy Chief Negotiators. There are 11 such groups: on “Trade in goods”, “Trade in Services and Investment and other issues”, “Level Playing Field for open and fair competition”, “Transport”, “Energy and Civil Nuclear Cooperation”, “Fisheries”, “Mobility and Social Security Coordination”, “Law enforcement and judicial cooperation in criminal matters”, “Thematic Cooperation”, “Participation in Union Programmes”, and “Horizontal arrangements and governance”.
  • Full rounds of negotiations were, in principle, supposed to take place every two to three weeks, alternating between London and Brussels.

Continue Reading The Brexit Negotiation – In Deadlock?

On September 10, Ursula von der Leyen, President-elect of the European Commission, presented her new team. If approved by the European Parliament, they will take over from the Juncker Commission on November 1, 2019.

This blog outlines the proposed structure of the new Commission, each Commissioner’s portfolio, and the key regulatory priorities that the President set for each member of her team.

A Three-Tier Commission

The new President of the Commission was confronted with the same problem as her predecessor: each Member State sends a Commissioner to Brussels, but there are not 27 substantive portfolios to dole out. (The UK does not intend to send a Commissioner to Brussels, reflecting Prime Minister Boris Johnson’s stated aim of leaving the EU on October 31, before the new Commission takes office, “come what may”.)

President Juncker addressed the issue by establishing a “cluster” system, with seven Vice Presidents and 20 “simple” Commissioners. In practice, however, Juncker’s Vice Presidents were not given control of specific Commission Directorates General (“DGs”), meaning that they were often relegated to “coordinating” the work of other Commissioners, without the support of officials needed to develop their own policy priorities.

President von der Leyen has only slightly modified this structure, and focused on restructuring the various Commissioners’ competences to fit her “political guidelines”—the new Commission’s policymaking priorities.

The new College will effectively have three “tiers” of Commissioner:
Continue Reading The New European Commission 2019-2024

After the election of the new European Parliament on May 24-26, the European Council met three times to discuss the package of appointments of EU’s new leaders (see our blog ‘elections and appointments in the European Union’ …) .

The white smoke came on Tuesday July 2 with the selection of new presidents for the European Commission, the European Council and the European Central bank as well as the High Representative for Foreign affairs. The day after, on July 3, the European Parliament elected its new president.

The new Parliament, on July 16, ‘elected’ Ursula von der Leyen as president of the EU Commission, confirming the choice made by the European Council.  The new European Commission will be assembled over the summer, in time for hearings in the Fall, before they take office on November 1.

 A Team of Convinced Europeans

The new leaders selected by the European Council have one characteristic in common: they are all convinced Europeans, favoring further EU integration and a leading role for EU and other multilateral institutions. This is noteworthy, at a time when nationalism, populism and euroscepticism seemed to have gained ground in many European countries. The message is that there is still a strong majority for the continuation of an ambitious European project.

  • Ursula von der Leyen, appointed to succeed Jean-Claude Juncker as president of the EU Commission, is a close ally of Angela Merkel since her first term as chancellor. As German Defense minister she was a strong promotor of European defense: “Europe’s army is already taking shape,” she said recently. In 2016, she published a very ambitious White Paper on Defense – in shop contrast with the traditional German reticence on the issue.
  • Charles Michel, who will replace Donald Tusk as president of the European Council in December, is a convinced European, as are the vast majority of his compatriots. As Belgian prime minister for the past five years, he led a coalition including a Flemish nationalist party, the N-VA, but this did not prevent him from promoting further European integration. This made him one of the closest allies in the Council of French President Emmanuel Macron.
  • Christine Lagarde, appointed as successor to Mario Draghi as president of the European Central Bank, played an important role in EU policy during the financial crisis of 2008. As the French Finance Minister, she presided over the Ecofin Council during the French presidency, at the peak of the crisis. She is credited, together with president Sarkozy, with keeping the EU united and even able to influence the global reaction to the crisis. As IMF president during the past eight years, among her many achievements she can count contributing to the preservation of the Eurozone by having the fund participate in the rescue of Greece.
  • Josep Borrell, the Spanish Foreign Minister and the nominee for the post of High Representative, entered politics as a close ally of Spanish socialist leader Felipe Gonzales, who brought Spain into the European Union during the Eighties. He was President of the European Parliament from 2004 to 2007. Being himself Catalan, he is a strong opponent to the secession of Catalonia from Spain.
  • The leaders also suggested giving senior positions in the new Commission to Frans Timmermans and Margarethe Vestager, who were among the most prominent operators in the Juncker Commission and had been nominated by their party groups as “Spitzenkandidaten”, or lead candidates, for the Commission Presidency.

Continue Reading The new European Leadership

The EU elections began on Thursday, May 23, and run to Sunday, May 26.  These are likely to see a significant change in the make-up of the European Parliament, with the main center-left and center-right parties losing overall control.  It will also kick off formally the process for appointing a new European Commission – which, this year, comes alongside the appointment of a number of other senior European figures.

Indeed, the five most important institutional leaders of the EU – the presidents of the European Commission, the European Parliament, the European Council and the European Central Bank, as well as the High Representative for Foreign Policy – will be replaced in the months to come.  None of the current incumbents will remain in post.

This change of guard will shape the future of the continent for years to come.  The main player in the appointment process, which will start at the end of May 2019, is the European Council made up of Heads of State and Governments.  The 28 EU leaders will have appoint four of the five most senior EU positions almost simultaneously.  As usual, they will need to respect a subtle balance between political groups, larger and smaller countries, Eastern and Western, Northern and Southern candidates, and a gender balance.

A dinner of the European Council has been planned for May 28, just after the Parliamentary elections.  The Council’s president, Donald Tusk, hopes to arrive at a “package deal” in the regular European Council on June 20-21.  Considering the difficulty of the task, as outlined below, this objective is ambitious.  But the EU leaders have a clear interest in not postponing the decision until after the summer, when other challenges will await them – notably, the decision on the new seven-year financial framework, and Brexit.

After a brief overview of the likely results of the European Parliament election, we will examine what is at stake for each of the five positions to fill.

The Election of the European Parliament

Elections take place simultaneously in the 28 Member States between May 23 and 26.  The turnout is expected, as previously, to be lower than for national elections – for the 2014 elections, it was an average of 42,54%.

In the European elections, fringe and populist parties tend to get more votes than at the national level, this election being seen by many as an opportunity to cast a protest vote with fewer consequences.  In the current political context, this phenomenon will probably be amplified.

It is thus expected that, this year, the two main political groups combined (the center-right Christian Democrats of the EPP and the center-left Socialists of the S&D), will no longer have the absolute majority.  They will therefore lose control of Parliamentary proceedings and major committee appointments.  This time, they will have to take into account the centrist Liberals, who will likely be boosted by the arrival of Emmanuel Macron’s party, “La République en Marche” (campaigning for the European elections as “Renaissance”), which will want to reproduce in the Parliament the influence their leader exerts on the European Council.

Contrary to what some believe, the “Eurosceptic” wing is unlikely to dominate the Parliament and will almost certainly not be able to influence the appointment of the leaders of the institutions.  But if some of the larger populist parties manage to assemble in one political group, they might have a sizeable “nuisance” value.  Indeed, it is expected that Salvini’s Lega, Le Pen’s “Rassemblement National” and the “Alternative für Deutschland” (perhaps joined by UKIP or Farage’s Brexit party) will assemble in a new right-wing block, dubbed the “European Alliance of Peoples and Nations” political group, which could secure more than 80 seats (out of 751).
Continue Reading Elections and Appointments in the European Union

Four major issues dominated the EU agenda in the first quarter of 2018: institutional adaptations in view of next year’s elections and appointments; a threat by the United States to impose tariffs on imports of steel and aluminium; a proposal for a tax on technology companies; and the beginning of the second phase of the Brexit negotiations, focused on the transition period following the UK withdrawal. 

Budget and Institutional Arrangements 

On February 23, the European Council, in an informal meeting, discussed two communications from the Commission: one on the multiannual financial framework 2021-27, the other on the institutional “options” for the 2019 European elections – as to which, see our fuller analysis here.

On the budget, apart from the void left by the UK leaving the EU, the most sensitive issue discussed was the possibility of linking EU structural fund payments to Member States’ respect of “EU values.”

The institutional debate covered three main topics:

  • The replacement of Jean Claude Juncker, next year. The discussion in the European Council indicated clearly that the EU leaders want to get back to the letter of the treaty.  Read strictly, this gives them the right to select a candidate for the Commission presidency, to be confirmed by the Parliament – and not the so-called “Spitzenkandidat” or “lead candidate” procedure, in which the chosen President must be the lead candidate chosen by the political group in the European Parliament that received the highest number of seats in the elections.
  • The composition of the European Parliament after Brexit. The Parliament itself had suggested placing 46 of the 73 British seats in reserve for future accessions, and distribute the remaining 27 among 14 EU countries that are currently under-represented in the Parliament. This proposal is likely to be approved, the Parliament having renounced an earlier proposal for a “transnational constituency,” with parliamentarians elected across the EU – which was not popular with most Member States.

Continue Reading EU Policy Update for Q1 2018 – Budgets and Upcoming EU Elections, Steel and Aluminum Tariffs, a “Digital Tax” proposal, and Brexit

As we mentioned in our previous reports (here and here), “sufficient progress” in the first phase of the Brexit negotiation could not be achieved before the European Council of October 19-20, 2017 – so the heads of government decided to wait until their next meeting, on December 14-15, to assess whether the second phase, dealing with the future relationship, could be launched.

By the end of November, the UK government made progress on the sensitive issue of the financial settlement, but it took a frantic week of high political drama to finally reach the “sufficient” agreement, just in time (see our post here on her abortive lunch with President Juncker, and the agreement that was reached following objections from Northern Ireland).  British Prime Minister Theresa May was warmly applauded by her 27 EU colleagues when the decision to launch the second phase was made by the European Council on December 14.

The second phase will start formally in February 2018 with a discussion on the “transition period” between the day of withdrawal and the entering into force of the new treaty.  To that end, the European Council adopted guidelines in December (here), and on January 29, the Council of Ministers agreed a new mandate for the Commission negotiator Michel Barnier (here).

The discussion on the future relationship itself will only start later in spring.  The talks will initially concentrate on a political declaration on the framework of this future relationship, which will be attached to the withdrawal treaty.

The Second Phase of the Brexit Negotiations

As is now well-known, the logic for the two-phase approach in the Brexit negotiation stems from Article 50 of the EU treaty. The withdrawal treaty is a specific instrument which should be agreed upon by qualified majority within 2 years after the procedure has started under Article 50.  However, it must take account of the future trade relationship between the remaining EU Member States and the country leaving the EU.  The negotiation on the future relationship, however, will take more time, and will be conducted based on the model of trade negotiations between the EU and third countries, which at the end of the process requires the agreement of all EU Member States, ratified by national parliaments.

The EU therefore split the negotiation of these issues in the separation that posed the greatest political difficulty off into the first phase, with negotiations on the framework for the future trade relationship only beginning in phase two. The end of the first phase, however, does not mean that the negotiation over the past is over.  Numerous technical issues still need to be addressed and the December joint report (see here) will need to be translated into a legal instrument that will form the basis of the
Continue Reading Brexit Negotiations, Phase 2: Transition, Trade, and Trouble Ahead

The third round of the Brexit negotiations, at the end of August, was not very productive. This was despite the British side’s publication of an impressive number of position papers over the course of the summer. These covered various technical questions but also the sensitive issue of the participation in the customs union and how to avoid reestablishing a border between Northern Ireland and the Republic of Ireland.

The documents were not well received by the EU side, not only because a number of them anticipated negotiations on the future relationship, but mainly because they brought no realistic solutions. Rather, they confirmed the EU’s view that there was no real leadership on Brexit in London and that the negotiators were constrained by an official position that had become unrealistic: that the UK could, with no harm, leave the customs union and the internal market as soon as by the end of the two years foreseen by Article 50 of the EU Treaty.

In view of the impasse, the EU therefore asked for a postponement of the fourth round of talks scheduled for the week of 18 September. The talks were indeed postponed for a week.

A Softening in the UK’s Position

In the interim, in an attempt to break the deadlock, Prime minister Theresa May, in a speech in Florence on September 22, presented a revised UK position aimed at relaunching the negotiations on a better footing.

The most important novelty in the Prime Minister’s “Florence speech” related to the transition period, aimed at bridging the gap between the UK withdrawal in March 2019 and the beginning of a new trade relationship. Theresa May suggested in her speech that this period should last “around two years,” in order for the UK and the EU to be able to “implement smoothly” the new arrangements concluded. Importantly, she accepted that, during that period, market access “should continue on current terms” and that the framework would be “the current structure of EU rules and regulations”. This means that, contrary to the UK’s former position, during that period it would remain in the EU internal market and customs union, and would respect the principle of free movement of people as well as the jurisdiction of the Court of Justice of the EU (“CJEU”).

A few days after the Florence speech, on 26 September, the president of the European Council Donald Tusk travelled to London to discuss the way ahead. After his talks, he said that he felt “cautiously optimistic about the constructive and more realistic tone of the prime minister’s speech in Florence and of our discussion”, adding that the speech indicated that “this philosophy of having a cake and eating it is finally coming to an end”.

Nevertheless, the fourth round of negotiations, held in the last week of September, saw little concrete progress on the “separation” issues currently under discussion – citizens’ rights, the Irish Border, and the UK’s financial settlement (the “exit bill”).

All attention then turned to the Conservative Party Conference, which took place in London on October 1 to 4. Discussions at Conference in London confirmed that the Cabinet remains divided on Brexit. Notably, the Foreign Secretary, Boris Johnson, in a newspaper column, expressed positions much harder than those outlined by the Prime Minister. However, amid speculation that he was about to mount a leadership challenge on the Prime Minister – an attempt that was seen as having failed – the Foreign Secretary rowed his comments back somewhat towards the Prime Minister’s softened line.

There was minimal progress during the fifth round of negotiations, which took place on October 9 to 12.

Changing Views on a “No Deal” Brexit

At the start of the negotiation process, the view in Brussels had been that there as a significant risk that the UK would “crash out” of the EU without a deal – either by choice, or simply because the negotiations would not succeed in the time available, and given the divergent positions either side of the English Channel. (For further analysis on this scenario, also known as the “cliff edge” scenario, see Sir Michael Leigh’s blog post, here.) This view was reinforced by the Prime Minister’s statement, in her Lancaster House speech of January 17, 2017, that “no deal is better than a bad deal” for the UK.Continue Reading Brexit Negotiations in October: Softened Stances, but no “Sufficient Progress”