In her Mansion House speech delivered on 2 March 2018 the Prime Minister, Theresa May, said that a vote to leave the EU ‘was not a vote for distant relationship with our neighbours’. As to the shape of the future relationship, Theresa May rejected existing models for economic partnership, such as the Norway model (membership of the European Economic Area (EEA)) or a Canada-style free trade agreement (the Comprehensive Economic and Trade Agreement (CETA)).
Instead, she called for a unique agreement which offers the ‘broadest and deepest possible partnership covering more sectors and cooperating more fully than any free trade agreement anywhere in the world today’. The Prime Minister referred to an association agreement (AA) with Ukraine as an example of an EU treaty tailored to the needs of a particular relationship.
In its recently published policy document the European Parliament suggested that an AA ‘provides a flexible framework allowing for varying degrees of cooperation across a wide variety of policy areas’ (for more on the European Parliament’s position – see [blog post]).
It seems that, at least for now, some form of an association agreement is a dish potentially available on the Brexit menu. So what exactly is an AA?
An AA is a bilateral agreement between the EU and a third country (i.e. a non-EU country). The purpose of an AA is to establish a framework for cooperation between the EU and its partners. The legal basis for AAs is provided in Article 217 of the Treaty on the Functioning of the European Union (TFEU) which states that the EU may conclude with one or more third countries or international organizations agreements establishing an association involving reciprocal rights and obligations, common action and special procedure.
The EU currently has more than twenty AAs which are concluded both with neighbouring countries (e.g. the EU-Serbia Stabilization and Association Agreement of 2013) as well as geographically distant States (e.g. EU-Chile Association Agreement of 2002). The titles of AAs differ. For example, the so-called Cotonou agreement between the EU and the African, Caribbean and Pacific Group of States (2000) is described as an Association Agreement as are the Stabilization and Association Agreements with the Western Balkans countries (e.g. the 2006 agreement with Albania).
Because AAs differ in titles, it is not always easy to distinguish them from other forms of cooperation between the EU and a non-EU country. For example, the EU-Cuba Political Dialogue and Cooperation Agreement, which has provisionally applied since last year, is an agreement for development cooperation concluded under Article 209 TFEU (on development cooperation), not an AA. Generally AAs aim at establishing a close economic and political cooperation which is more than simple cooperation. They also include a Most-Favoured Nation (MFN) treatment obligation (on MFN – see here).
AAs should also not be confused with accession agreements. An accession agreement establishes conditions which a candidate country wishing to join the EU must meet (e.g. how to adapt its institutions, improve infrastructure, ensure a functioning market economy etc). The purpose of an AA is the creation of a close relationship with a non-EU country outside the membership of the EU.
In some cases, the two can be related – an AA can serve as a basis for the implementation of the accession process. For example, AAs were previously concluded with countries which joined the EU in the 2004 enlargement (e.g. the Baltic States, Hungary, Poland and others). Such AAs expire when a candidate country becomes a Member State of the EU. Another difference is procedural – accession agreements are signed between a candidate country and the Member States under Article 49 TEU whereas AAs are concluded by the EU in addition to Member States under Article 217.
There is no template for the content of an AA – it depends on the nature and needs of a particular relationship. Such agreements can cover security cooperation, deeper political ties, taxation, science and technology, economic relationship (e.g. economic restructuring, consumer protection, investment opportunities). An AA can also include the so-called Deep and Comprehensive Free Trade Area (DCFTA).
The DCFTA which is part of the Association Agreement with Ukraine (2017), for example, calls, among other, for a progressive removal of customs tariffs and barriers. A typical DCFTA, however, requires a binding convergence mechanism (i.e. a commitment to keep third country’s laws in line with those of the EU laws) and a binding role for the Court of Justice of the European Union. The UK Government has so far rejected both.
The process of conclusion of AAs is governed by Article 218 of the TFEU. AAs are negotiated by the European Commission on behalf of the EU. Consent of the European Parliament is necessary to conclude an AA. The agreement is signed by the Council following a unanimous vote. AAs are concluded as mixed treaties, that is ratification by the Member States is required (for more on mixed agreements – see [explainer]).
It is yet to be seen whether the future EU-UK relationship will take up a form of an AA and if so, what will such AA look like. Since the UK Government is seeking a close relationship with the EU, it is likely that an AA between these two partners would be the most comprehensive AA concluded so far.