Brexit and Public Procurement: Transitioning into the Void?

Abstract

On 29 March 2017, the UK notified its intention of leaving the EU. This activated the two-year disconnection period foreseen in art.50 TEU, thus resulting in a default Brexit at the end of March 2019. The firming up of a draft agreement on a transition period to run until 31 December 2020 could provide a longer timescale for the Brexit disconnection, as well as some clarity on the process of disentanglement of the UK’s and EU’s legal systems. The draft transition agreement of 19 March 2018, updated on 19 June 2018 and still under negotiation at the time of writing, provides explicit rules on public procurement bound to regulate “internal” procurement trade between the UK and the EU for a period of over 15 months. However, the uncertainty concerning the future EU–UK relationship remains, and the draft agreement does not provide any indication on the likely legal architecture for future EU–UK trade, including through public procurement. The draft agreement has thus not suppressed the risk of a “cliffedge” disconnection post-Brexit, but rather only deferred it. The transition is currently not into an alternative system of procurement regulation, but rather into the void. There have also been very limited developments concerning the UK’s and EU’s repositioning within the World Trade Organization Government Procurement Agreement (WTO GPA), which creates additional legal uncertainty from the perspective of “external” trade in procurement markets due to the absence of a “WTO rules” default applicable to public procurement. Against the backdrop of this legal uncertainty, this article critically assesses the implications of the 2018 draft transition agreement, both for the re-regulation of “internal” EU–UK procurement, and for the repositioning of both the EU and the UK within the WTO GPA, as the basis for their “external” procurement trade with third countries. The article concludes that it is in both the UK’s and the EU’s interest to reach a future EU–UK FTA that ensures continued collaboration and crystallises current compliance with EU rules, and to build on it to reach a jointly negotiated solution vis-a-vis the rest of WTO GPA parties. The article constitutes a detailed case study that provides insights applicable to other areas of Brexit-related trade reregulation.