On 19 May, the UK and EU announced their latest agreement, Common Understanding. It paves the way for new arrangements in the five following areas:
There is some read-across between the First Minister’s nine priorities for EU relations and what’s been agreed, including for trade, youth opportunities and energy. In Plenary on 20 May, she said that there are “lots of very significant things that will benefit Wales” and on 3 June said that “this is a good deal for Wales”.
As with every main UK-EU agreement, Common Understanding covers areas of devolved responsibility which the Welsh Government, the Senedd and others will need to put into place.
This article focuses on devolved areas covered by the agreement and outlines what its new commitments for people, trade and energy could mean for Wales.
People
The UK and EU made commitments designed to put people “at the centre” of their relationship. Use the drop-downs to find out more.
The UK and the EU have agreed to work towards the UK rejoining Erasmus+ and a new youth visa scheme to facilitate activities like work, study, au-pairing, volunteering and travel, with duration and numbers to be agreed.
The Welsh Government launched Taith in 2022, which offers exchange opportunities across adult education, further and higher education, schools and youth work. It’s considered a success by both the Welsh Government and the EU, but its future was uncertain until an extension to March 2028 was announced on 3 June. In 2024, Taith’s budget was cut from £8.1m to £6.5m and the reduced amount was maintained for 2025-2026, when Taith was originally due to end.
Evidence to Senedd committees across multiple inquiries shows support for continuing Taith and for rejoining Erasmus+, including in current work on the Trade and Cooperation Agreement’s (TCA) implementation review and the Welsh Government’s International Strategy. On 3 June, the First Minister said that “I'm really pleased that we were able to introduce our own Taith programme, but it’s much better if we can do that as the UK as well”.
Common Understanding says only that the UK and EU “recognise the value of travel and cultural and artistic exchanges, including the activities of touring artists” and will continue supporting travel and cultural exchange.
The Senedd culture and international relations committee’s 2024 Culture Shock report paints a bleak picture for the creative sector of lost opportunities, reduced activity, increased costs and lost income since Brexit.
Those hoping for improvements will be disappointed that Common Understanding doesn’t go further.
Trade
The UK and EU have agreed to develop new trade arrangements for certain products. Use the drop-downs to find out more.
Welsh Ministers are responsible for Wales’ biosecurity, food safety and sanitary and phytosanitary (SPS) controls. SPS controls protect animal, plant and public health.
Senedd evidence shows support for a UK-EU SPS agreement, which could reduce or even eliminate the need for SPS controls. The Senedd’s trade committee has discovered that an SPS agreement could mean that new Border Control Posts (BCPs) at Fishguard, Pembroke Dock and Holyhead, currently under construction, may not be needed. In January 2024, the Welsh Government said it expected further BCP costs not to exceed £70m. Its 2025-26 budget includes a UK Government contribution of £28.96m capital and £357k revenue.
Common Understanding says that a future SPS agreement should remove certain requirements, such as export health certificates, and reverse bans on exporting products like shellfish and seed potatoes.
It should ensure the same rules apply at all times between the UK and the EU. To achieve this, the UK would follow current and future EU rules, often referred to as ‘dynamic alignment’.
Our article on EU alignment explains how this approach could create a democratic deficit because the UK isn’t represented at EU institutions. However, Common Understanding says the UK can give its view on EU policy and legislation at an early stage.
The UK must also make “an appropriate financial contribution” to support the EU’s work.
For disputes, there’ll be an independent arbitration panel, with the EU’s Court of Justice (CJEU) as the “ultimate authority” on EU law.
It is not clear how this would all be managed internally in the UK where responsibilities are devolved. Key questions include how devolved governments would input, whether they’d have to contribute financially, and how decisions would be transparent to parliaments. Concerns about the transparency of UK-EU decision-making have been raised by the Senedd.
Full reciprocal access to waters to fish will continue to 30 June 2038.
The TCA’s fisheries arrangements are significant to the whole UK-EU relationship. They can be terminated at any time via written notice but doing so would also terminate UK-EU arrangements on trade, aviation and road transport, nine months from the date of the notice.
The Welsh Government is responsible for fishing, fisheries and fish health in the Welsh zone, for which the Senedd gained full legislative competence in the Fisheries Act 2020.
The First Minister’s said “she would have liked more discussion” on what was agreed on fisheries but welcomed the possibility of reversing the ban on shellfish exports to the EU. If negotiated, this would come under the proposed SPS agreement and not the TCA’s fisheries provisions.
Our guide explains what the TCA’s fisheries arrangements mean for Wales.
Energy
The UK and EU have agreed to extend their energy cooperation. Use the drop-downs to find out more.
The UK and EU agreed to explore the UK’s participation in the EU’s single electricity market, including its trading platforms.
As with the SPS agreement above, an electricity agreement should ensure the dynamic alignment of the UK to the EU – meaning the UK would follow current and future EU rules. It should respect the role of the CJEU within an arbitration-based dispute resolution mechanism and allow for the UK to contribute to decision-making.
The First Minister’s said this could “help to bring down bills in this country”.
The UK and EU should work towards linking their emissions trading systems (ETS) via a new agreement which should exempt UK and EU goods from each other’s respective carbon border taxes, known as Carbon Border Adjustment Mechanisms (CBAMs).
As with the proposed new SPS and electricity agreements above, the linking agreement should ensure the dynamic alignment of the UK to the EU, meaning the UK would automatically follow current and future EU rules.
For the linking agreement, the UK:
- can give its view on EU policy and legislation at an early stage; and
- must make “an appropriate financial contribution” to support the EU’s work.
For disputes, there’ll be an independent arbitration panel, with the CJEU as the “ultimate authority” on EU law.
Conclusion
Common Understanding sets the course for the next phase of UK-EU relations.
First, it’s a roadmap for future negotiations. Second, a proliferation of UK-EU agreements now seems inevitable as the negotiations produce multiple new deals. This approach is important because the TCA sets rules for UK-EU agreements that come after it, like how decisions are made.
One aspect that looms large for the devolved nations is their role. Another will be how the new arrangements work in practice: will they replace what’s already there or be added-on?
And while it appears to take steps towards reducing barriers for some, it doesn’t cover all sectors. Common Understanding is an unprecedented step towards EU alignment since the UK’s exit and it’s bound to spark intense debate on post-Brexit priorities and their trade-offs.
Article by Sara Moran, Senedd Research, Welsh Parliament.
