The UK Minister will co-chair the Partnership Consultation which will resolve trade disputes between the UK and the EU

Today’s 1,246-page document sheds light on the conduct of the new Partnership Consultation – which will resolve any disputes between the UK and the EU.

The council will be chaired by a UK minister and an EU representative, but it is not yet known how members of the arbitration group will be chosen.

The secret group will be set up on 1 January to act as a point of call for any dealings between Britain and EU member states.

Council members will have the power to vote on future changes to the Brexit deal, impose taxes, ensure adherence to the trade agreement and establish a list of individuals to go to a settlement tribunal.

The council sits at least once a year in Brussels and the UK respectively. There will be two co-chairs – one from the UK and one from the EU – and a Secretariat will be responsible for all communications between the two parties.

The document states: ‘The Partnership Council will be co-chaired by a member of the European Commission and a representative of the United Kingdom Government at ministerial level.

‘It shall meet at the request of the Union or the United Kingdom, and at least once a year, and shall set the agenda for the meeting and its agenda by mutual consent.’

The tribunal will be made up of five experts from the UK, five from the EU and five independent experts in a number of areas from outside both countries. It governs issues of disagreement between the EU and Britain.

Its chair will be elected from among the five independent members.

The tribunal will have the power to agree on the imposition of taxes on the EU or the UK if it is felt that one of the parties has failed to follow the terms of the trade agreement.

It means there is no longer room for the European Court of Justice and the UK is cut off from union.

The document stated: ‘Co-chairs may, by mutual consent, invite experts (ie non-government officials) to attend meetings of the Partnership Council to provide information on a specific topic and directly for the parts of the meeting where such specific topics are discussed. ‘

The council will also have a number of sub-committees to manage various aspects of the contract.

Boris Johnson had previously said that an ‘independent third-party settlement’ would be used if both sides felt ‘unfairly imbalanced’ by the other side.

It is a sign of the Prime Minister’s continued commitment from the Brexit campaign to bring Britain out of the EU’s sphere of legal influence.

One of the bones of controversy in the trade talks was Brussels’ fear that Britain could take advantage of leaving the bloc by lowering rates to make its companies more competitive.

The EU was also concerned that the UK could provide more financial support to its own companies.

As a result, he wanted a ‘fair park’ to avoid race to the bottom on issues such as workers’ rights and environmental regulation.

They also called on Britain to continue to comply with EU rules.

The UK said this would be a ‘permanent threat’ to its sovereignty. Britain said it would settle for No Deal rather than oppose being bound by EU rules after Brexit.

Under the deal announced on Christmas Eve there will be zero access, a zero quota to the EU single market – and Mr Johnson has maintained the ability to move away from Brussels standards, with no place at the European Court of Justice.

Disputes will be resolved by the independent settlement panel, similar to the structures already in the Withdrawal Agreement and those commonly used in international trade situations.

At a press conference on Downing Street this week, Mr Johnson said: ‘In the context of this huge free trade zone that we are collectively creating the stimulus of regulatory competition I think will benefit us together.

‘And if one side thinks it is somehow unfairly disparaging the other, then subject to an independent third-party settlement and as long as the measures co -really, either of us can decide – as an equal landlord – to protect our customers.

‘But this consensus clearly sees that such activity should be infrequent and the concepts of dress and harmony are abolished in terms of mutual respect and recognition and free trade. ‘

A comment on Downing Street said: ‘The agreement is based on international law, not EU law. The European Court of Justice has no place and there are no requirements for the UK to continue to follow EU law or be forced to keep EU law as it currently stands. .

This agreement includes a commitment to adopt high standards of work, the environment and climate without giving the EU a say in our rules and to introduce unique clauses that will ensure that is [our commitments never restrict our law makers.

‘If the UK exercises its sovereign right to have different rules to the EU, any issues arising will be dealt with fairly by an independent arbitration process with no role for EU judges.’

They added: ‘A formal review of the arrangements can take place after four years. If the UK or EU does not believe the system is working fairly, either side will have the ability to bring the agreement on trade to an end. The UK and EU would then trade on Australian-style terms.’ 

The UK will leave the EU’s single market and customs union on December 31, so the rules and regulations on trading everything from car parts to camembert cheese will change. 

In the end, both parties have agreed a common baseline of regulations on some issues, below which neither side will plunge.

However, the EU had also been insisting that if one side raised standards and the other did not, the latter should be penalised if failure to keep up resulted in unfair competition.

Instead the two sides have agreed an independent mechanism to resolve matters if one side diverges too far from common standards. This would ultimately make rulings on retaliatory tariffs in the event of a dispute.

The Government claims it ‘won’ five of the eight key sticking points in this part of negotiations, including EU law, the ability of the UK to set its own subsidy rates, competition and tax rules.

In a ‘scorecard’ it produced before the talks were agreed, it said: 

‘The UK rejected the EU’s asks for an ‘equivalence’ mechanism, and instead secured a review and rebalancing clause which allows either side to initiate a formal review of the economic parts of the deal, including the level playing field provisions, and  update the balance of the agreement over time. 

‘Any short-term rebalancing measures are strictly limited and proportionate and subject to the approval of an independent arbitration panel.’

This was billed as a ‘win’ for the UK. 

Asked at a Brussels press conference how the EU will make sure the UK will stick to its side of the agreement, Ms Von der Leyen said: ‘We have strong measures that can be taken if one party does not play by the rules. 

‘So starting from re-balancing mechanisms that are built-in with dispute settlement mechanisms, to review clauses and overall review for example, after four years, to see whether both sides played by the rules, that the level playing field is level indeed. And there is the commitment to follow whatever has been agreed in this deal.

‘So from the experience we have had we built in safeguards that are necessary to make sure there is a strong incentive for both sides to stick to what they have agreed to.’