In the below article, Patrick Minford writes in a personal capacity.
In the latest discussions on the Brexit Withdrawal Agreement and Political Declaration (WAPD), two views have emerged about the UK’s future choices. One, which I will call the lawyer view, is that once signed, the WAPD binds the UK indefinitely; this view is held by many of my friends and Brexit allies who are largely lawyers and as such tend to believe that the letter of the law will prevail. The other, which I will call the realist view, is that it can be ‘evolved’, to use a word popular with some politicians, in line with the mutually evolving interests of the two sovereign parties, the EU and the UK. The latter view is the one generally adopted in the economic analysis of international treaties, as the following quotation from a recent paper in a leading economic journal makes very clear.
At the national level, such conflicts [over payment for/usage of public goods] between individual and collective rationality can be resolved by the intervention of the government (Demsetz, 1967). At the international scale, however, there is no supranational authority that could coerce states into adopting efficient policies if they run counter to national interests. Filling the void are international agreements. Under the terms of the Vienna Convention on the Law of Treaties, a state that ratifies a multilateral treaty chooses partially to surrender its sovereignty and to subject its policies in a specific domain to the rules and prescriptions of the treaty. In so doing, sovereign states agree to coordinate their policies in mutually beneficial ways. By the very nature of sovereignty, however, the agreement is fundamentally non-binding and states can always withdraw from it. Therefore, the fact that public good provision is implemented through an international agreement should not change a country’s incentives to contribute per se — unless the treaty alters the country’s incentives to cooperate in other ways. (Wagner, 2016)
The point of economic analysis of treaties therefore is that a sovereign state only continues as a party to any treaty if it remains in its interests to do so. Therefore one must analyse treaty development over time with reference to how these sovereign interests evolve; and how at any time the sovereigns reach an accommodation based on their mutual interests. The basic reason, as explained in the quotation, is that there is no supranational power that enforces treaties in the way that a national state, with a monopoly of force, enforces domestic law.
The realist view is therefore asserting that once the UK is out of the EU, how it deals with the WAPD is a matter of subsequent choice and negotiation with the EU, which also has freedom of the same sort. Anyone supporting the lawyer view must therefore demonstrate that the WAPD remains an agreement that it is in the interests of both sides to maintain in the same form. It is not sufficient to say that because it has been signed it is indefinitely binding; this would only be sufficient if there was a supranational power that could enforce this, and I shall assume it as obvious that indeed there is no such power. In a recent posting on the Lawyers for Britain website my old friend and longtime Brexit ally, Martin Howe, argues that the Treaty of Utrecht binding Spain into Gibraltar’s status illustrates that treaties bind long-term. However, in fact this well illustrates the point about self-interest. Spain, like the UK, has had a strong interest in Gibraltar not accidentally becoming a casus belli, much as the Falklands, with a population similarly determined to remain British, became, at great expense to both the UK and Argentina. Ceaseless ongoing diplomacy on both sides to accommodate mutual complaints has found the Treaty a useful figleaf.
In the rest of this piece I will discuss what the interests of the UK and EU are and how, if at all, they might evolve, and with them the UK/EU future Treaty relationship. This type of analysis is a branch of game theory, which can involve highly complicated mathematics, as in the paper cited, but fortunately not in this case here.
Current UK and EU interests and the Withdrawal Agreement
Based on economic analysis within a rather standard World Trade model and other models described in Should Britain leave the EU? An economic analysis of a troubled relationship by Minford et al (2015) I suggest the following broad interests of the EU and the UK:
The EU: for the EU the status quo is optimal. The UK contributes 10% of the EU budget. Its food and manufacturing industries sell to UK consumers at 20% above world prices because the Customs Union places trade barriers of this tariff-equivalent value against products from the rest of the world. EU regulations prevent UK practices that would reduce UK costs and so undercut EU competition, driving down margins. Unskilled EU workers can be exported to the UK labour market where their wage is supplemented by the UK taxpayer by about 20%.
The UK: for the UK the optimal policy is abolition of protection against the non-EU; this ‘free trade’ policy eliminates the 20% premium paid to EU producers of food and manufactures and it also lowers consumer prices, pushing up productivity via trade competition. At the same time the UK would want to sign a Free Trade Agreement with the EU that keeps the current free access with zero tariffs between them; nevertheless it turns out that any tariffs or equivalent that are imposed will benefit the UK and be paid by EU traders, because UK prices of both imports and exports are set by world prices, so UK tariffs must be absorbed by EU exporters while EU tariffs must similarly be absorbed by EU importers. It follows that although the UK would be willing on the ‘good neighbour’ principle to sign an EU-UK FTA, it would strictly speaking be better off under WTO rules with no deal.
These descriptions of economic interests take no account of current political pressures. A natural question is: given its interests why on earth did the UK Government sign up to the WAPD? This effectively makes the status quo the most achievable agreement, given that the backstop endows the EU with effective veto power over anything it dislikes; under the backstop the UK effectively stays in the EU as now until the EU deems there to be an agreement.
The only way to account for this is in terms of the votes in Parliament. With a part of the Tory party led by Philip Hammond having a Remainer view of UK interests – that is wanting protection for reasons of preserving current jobs (notice not gaining the most jobs in the long term as would occur under free trade etc), following vested interests like the CBI – the Government of Mrs. May seems to have assumed that only the ‘soft Brexit’ WAPD could get through Parliament. Similarly, it assumed that Parliament would not support No Deal, because this too would sacrifice some current jobs to a free trade strategy under WTO rules; as a result the Government did not prepare for No Deal and so lost its only bargaining counter with the EU so that the WAPD failed to favour UK interests. As a result, the WAPD too cannot get through Parliament because the ERG Conservatives and DUP votes oppose it.
Now Mrs May is trying to get Labour votes to push through some even ‘softer’ WA, with a PD promising EU customs union in some shape or form. Hence the EU have not had any difficulty achieving a WAPD that favours its interests, because of parliamentary politics. Add to this that the EU was in any case determined – due to its own politics – to show that exiting countries get a bad deal, to discourage others. It is clear that the politics of the divorce situation was bound to produce a bad deal from the UK viewpoint. One does not need to go further and accuse Mrs May of being a closet Remainer, which she may well be, to account for what has been agreed.
The Economic Analysis puzzle
How those Remainer ideas took hold in the face of strong economic arguments to the opposite effect, as set out above, for the long-run gains of Brexit, is rather baffling. As I explained in a recent paper in World Economy, Remainers and their economist allies (e.g. Breinlich et al, 2016) used ‘gravity theory’ to argue that leaving the EU would be damaging to the UK and that gains from free trade with the rest of the world would be small. However, the ‘gravity models’ they used did not obey the canons of good general equilibrium modelling, in which all causal factors are simultaneously analysed for the effect of a major policy change like Brexit. All the gravity models were ‘partial equilibrium relationships’ in which trade, GDP, FDI and productivity were separately related without any overall inter-linking.
This approach was originally – in 2016 – also adopted by the Treasury; but at the end of 2017 the Treasury for this reason finally abandoned it, in favour of a full general equilibrium model, the GTAP model, bought in from the Purdue University Trade Modelling Project. This was used to reevaluate Brexit in the Cross-Whitehall Civil Service Report of that time. Given the strong Whitehall bias against Brexit the new model was given assumptions that produced similar negative results to the previous ones. These consisted of a) few and limited FTAs with the non-EU world; and b) large border barriers, even with an EU FTA, between the UK and the EU.
However, plausible alternative assumptions reverse the Brexit effect on GDP under a WTO No Deal for example from highly negative (-7%) to firmly positive (+3%).These assumptions are that the UK uses FTAs with the non-EU to eliminate all trade barriers on goods against them while also gaining wide market access; and that it signs an FTA with the EU that prevents any new barriers, or if it goes to WTO rules then only tariffs spring up at the border, other interferences being illegal under WTO obligations.
As this debate has unfolded between our critique and the Treasury, academic economists espousing the previous gravity methods have stayed strangely quiet while the Treasury dropped their methodology. Meanwhile we published another paper in which we tested a full ‘Computable General Equilibrium’ (CGE) model with gravity mechanisms against a plain Classical CGE trade model without them, to see how well each matched the UK trade facts. Using an elaborate and thorough Indirect Inference test we found that the gravity version was strongly rejected while the Classical one fitted the facts. Furthermore when we did the Brexit policies on the Gravity version the effects were much the same as with the Classical, our main tool; this was because Brexit gives gains with the rest of the world while not much disturbing our relations with the EU and so stirring up the negative gravity effects. Therefore it is clear that the anti-Brexit claims based on the gravity approach are invalid.
Unfortunately in the present fevered atmosphere, calm academic debate cannot take place; it is reminiscent of wars of religion where each entrenched side only wants to hear confirmation of its prejudices. One of the side benefits of Brexit occurring is that people may move on to normal technical discussions about optimal UK policies.
The way forward in Parliament
There are now three main parliamentary scenarios. In two of them, one or another WAPD – Mrs May’s or some even softer one agreed with Labour – gets through Parliament. The UK then leaves the EU in these two scenarios, initially for the transition period, as soon as either gets through.
In the third, there is no WAPD agreed and the possibility strengthens of a second referendum with Remain on the ballot paper, leading to either no Brexit or a renewed demand for Brexit. This third scenario is one in which Brexit uncertainty continues for a year or more, with unknown political consequences, given that the Leave voters in the first referendum would feel betrayed. This third scenario will only be welcomed by Remainers determined to reverse the democratic referendum decision. From a Brexit viewpoint, the only hopeful outcome would be a new Conservative leader and government determined to change the WAPD and get it through Parliament before exit. But how could this be achieved without an election to change Parliament’s composition? Also, what would be the odds on the Conservatives winning such an election, given the fury of the populace with the Conservatives for failing to deliver Brexit? Such hopes look forlorn.
Scenarios 1 and 2, if Brexit occurs: What of UK and EU interests post-Brexit?
In this section I ask what, given we have a WAPD as described, opposed widely by Brexiteers, is likely to occur if, as seems probable, Mrs. May steps down and is succeeded by a Brexiteer Conservative leader? Such a leader is likely to agree with my account above of UK interests. If so, what can such a leader do, if saddled with the WAPD?
Under the realist view espoused by economic analysis, this leader’s government moves to re-open bargaining with the EU. This would be done via normal diplomatic processes, in which the EU would face a possible general lack of UK political cooperation in a wide array of areas, including key ones like security and military matters; also the WTO option would be reactivated as a ‘walk away’ trade strategy, should the EU be unwilling to move away from its status quo aims.
The UK having left the EU after resolving basic administrative issues such as citizens’ rights, aviation/transport/visa agreements, there would probably be little appetite to revisit these issues; and the focus should be on the trade relationship quite narrowly. Nevertheless were it to be widened, the new government would make active preparations for a breakdown in these areas.
At the same time the UK would proceed to negotiate FTAs with non-EU countries, informing them of their aims on EU relations. These would be widely welcomed, as we already know.
How would the EU/UK bargaining go from here? We can think of the ‘game’ now as a series of proposals and counter-proposals. Start from the opening WAPD ‘proposal’ for the status quo. This violates UK interests radically, breaching its basic ‘red lines’. The UK counter-proposal is to walk away to WTO rules and No Deal. This UK counter-proposal damages EU interests radically, as we have seen: they face world prices in the UK market and tariffs in both directions are paid by EU traders. In order to counter this the EU now offers an FTA: Canada+ which consists not just of zero barriers on goods (Canada) but also the plus of mutual recognition in services where EU interests are served by free trade, given a wide reliance on UK service industries. The UK wants either Canada or Canada+ more or less indifferently as its service industries are all highly competitive around the world. As noted earlier, while No Deal gives strictly better gains, the UK is likely to agree to this proposal for the sake of neighbourly relations.
The bargaining round, which may well take a few years to play out, is therefore likely to be resolved by Canada+. We can essentially rule out any other resolution because all other alternatives leave one side unacceptably badly off – beyond its red lines – or can be improved on by one side without making the other worse off.
What I mean by ‘unacceptably’ is literally that it will not accept it in the long run, when by walking away or co-operating it can avoid it. The EU can avoid No Deal by co-operating. The UK can avoid the status quo by walking away.
All this is illustrated in the following diagram: the top line shows how the UK ranks all options, with No Deal the best; the second line shows the EU rankings, with the status quo the best. Each side’s red lines of unacceptability are marked out on each side. Any resolution must be inside these. Canada+ within these is better than Canada for the EU and an equals with it for the UK. So Canada+ gets chosen.
Notice that all this diplomacy is carried out between ‘consenting sovereigns’. Neither will bring in outsiders because no outside power has jurisdiction or indeed wants it. In so far as third parties have preferences, they tend to favour the UK as they typically want to agree FTAs with the UK. As for the WTO, it allows states to negotiate FTAs freely; and in general favours all agreements that in net terms reduce trade barriers, just as will occur under the EU-UK renegotiation.
The need for a new Conservative leader and government
In order for this new diplomacy based on the UK’s true economic interests, not sandbagged by Remainers within the tent like Hammond and Co., there plainly needs to be a new Conservative leader and government, fully seized of the Brexit case for free trade and so on. The current leadership/government has proved that it has neither the understanding nor the will to pursue the UK’s true interests. Without it changing no progress along the lines discussed here is possible.
It is now very likely that the Conservative Party will change its leadership, if only for reasons of pure survival. With the agreed extension, the Conservatives face carnage in the local elections and if the European elections take place, annihilation in those. This will inform the party of how unpopular its failure to deliver Brexit has made it. Its best hope then is for Mrs. May to go and for a new leader to chart a new direction, while making it clear that the new government rejects and regrets the old government’s failed Brexit agenda.
What are the implications of the realist view for parliamentary votes?
MPs now have some time for reflection during their Easter recess. They need to ponder the effects of their votes. Any MP that wants to avoid the chance of that third scenario of possibly No Brexit needs to consider voting for one or other WAPD. With either of them, Brexit occurs and the renegotiation can be launched under a new Prime Minister.
An ERG Brexiteer will prefer Mrs May’s original WAPD since it does not contain extra ‘soft’ commitments put in to satisfy Labour. These become yet another element to be renegotiated. In principle that too will be jettisoned; but it adds complication.
A DUP Brexiteer will remain nervous about the backstop in Mrs May’s WAPD; and could be less nervous with a softer one including a customs union because with that the backstop does not come into play. Nevertheless a DUP MP should reflect that none of these will survive renegotiation and should not therefore be unduly concerned. What it really needs from Mrs May and her potential successors is a guarantee that whatever is renegotiated it will never include differential treatment for Northern Ireland, or indeed any other devolved part of the Union. But they should feel confident on this: the Conservatives have been robustly and consistently a unionist party.
It should be noted by both these groups that in opposing any WAPD they are playing the role of ‘useful idiots’ to Remainers who want no Brexit, leading to a second referendum.
When one turns to Labour MPs and Mrs May, both involved in negotiations over a softer WAPD, they should reflect that their new WAPD causes both sides difficulties – Mrs May because it infuriates most Conservatives, Labour because it will infuriate the substantial Labour group that wants a second referendum rather than any sort of Brexit; but at the same time achieves no extra long-term ‘softness’ in the outcome, as the added-on soft elements will simply be the first to go in the inevitable renegotiation.
Reflection on all sides should therefore have the effect of terminating the May-Labour negotiation while logically inducing ERG and DUP Brexiteers to push the May WAPD over the line.
The realist view of post-Brexit affairs clearly implies that the UK, once it is out of the EU will behave like any other sovereign power and see that its foreign relationships evolve to suit its interests. So far, these have been stitched up in talks with the EU due to a Remainer group of Tories who have opposed the Government’s Brexit policies in favour of industrial vested interests, in alliance with Labour opponents, and undermined its bargaining position vis-à-vis the EU which was in any case politically determined not to agree a good trade deal. No sovereign state could put up with this sort of stitch-up in the long term. This piece has described how a new government, fully seized of the UK interest in free trade and domestically set regulation, besides control of borders and the ending of budget transfers to the EU, will have both the incentive and the scope to achieve a logical renegotiation that reaches an EU agreement tolerable to both sides.
Under this view the key aim for Brexiteers should be to get the WAPD in some form – it does not much matter what form – over the line, so that Brexit definitely happens as demanded in the referendum. Policy in the future will then evolve to meet UK interests.
The threat of an Article 50 extension is causing anxiety for some sincere and committed Brexiteers. Some say they should back Theresa May’s deal to “get Brexit over the line”.
But the deal won’t deliver Brexit. Worse than that, it’ll lock us in to not delivering Brexit for many years to come.
If the deal goes through, the next day we will not have left the EU in anything but name. For at least 21 months of “transition” – extendable up to four years – we will have to obey the EU’s laws and rules, and be subject to the Commission and the ECJ as now. The big difference is that we will no longer have a vote or voice in the EU institutions. So no vote or veto against EU law changes which damage the City, or against the Commission’s use of State Aid controls to suppress our competitiveness.
The Brexit process will not be “over”, or “done and dusted” by signing the deal. Those 21 months – or longer – will be filled with the turmoil of ongoing negotiations about our future relationship. We will be negotiating against a real “cliff edge” at the end of the transition – unlike the largely mythical and Project Fear 3.0 “cliff edge” we face now. If we do not submit to the detailed terms offered by the EU for our long-term relationship, we will automatically fall over the cliff edge into the backstop Protocol.
The threat of this happening will put huge negotiating power – blackmail power – into the EU’s hands, since the backstop locks us out of having an independent trade policy and divides the United Kingdom.
Some people say the negotiations are like a game of football where we have done badly in the first half. They hope maybe we can do better in the second half under a new captain. But these negotiations are more like a game of chess: our current leadership has sacrificed all the major pieces and left the remaining pieces in positions where check-mate is inevitable in a few moves. The most competent and Brexit-committed future Prime Minister could not magically get us out of that situation.
Being locked in the backstop
The Attorney General rightly reiterated his advice that if negotiations with the EU drag on or break down, then under international law the UK risks being locked indefinitely in the backstop. The key danger was spelt out in the last paragraph of his advice: if through no demonstrable failure to exercise good faith “but simply through intractable differences” the negotiations deadlock, then there would be “no internationally lawful means of exiting the Protocol’s arrangements, save by agreement”.
The fundamental problem is that there is no need for the EU to engage in bad faith conduct in order for us to be locked in indefinitely: they just need to negotiate hard for terms we can’t stomach.
But some arguments have been flying around that we might be able to get out by showing the EU is acting in “bad faith”, or because there had been a “fundamental change of circumstances” under Article 62 of the Vienna Convention on the Law of Treaties.
The “Star Chamber” group took the best public international law advice, and concluded that these arguments have little substance. Leading public international law experts such as Professor Philippe Sands QC and Sir David Edward (the former British ECJ judge) have publicly expressed similar views.
Professor Guglielmo Verdirame of King’s College London takes a different view from other experts. He says that it is “not fanciful” that the EU might be found in bad faith if it “persistently and unreasonably” refused to conclude an agreement.
Let’s assume that he is right and that other distinguished public international lawyers are wrong. After an unknown period of time stuck in the backstop, and depending on the behaviour of the EU, the UK might have a case which is “not fanciful”. That case would then go to an international arbitration panel which would take months or years to rule. Before coming to a decision that panel is required to refer any issues of EU law to the ECJ in Luxembourg for a binding ruling. If Prof Verdirame is right, it is “not fanciful” that the UK might win: but if the arbitration panel rules against the UK, then we are completely and utterly snookered.
If the best advice I can give a client about a case is that it is “not fanciful” that he might win it, the client would need to be mad to go ahead with it – particularly if the downside of losing is huge, and other lawyers thought that the chances of winning are near zero.
The upshot is that if we agree the deal, we will be locked into the backstop and there will be no way out of it which is under our own national control. These theoretical legal arguments do not change the dynamics of the negotiations in practice. We would still have to negotiate with the EU on the basis that we are certain to have to go into the backstop if no deal is agreed before then, and that we would then have no reliable way out of it except with the EU’s agreement. The prospect of hanging the whole fate of the country on the roulette wheel of presenting some novel legal arguments to an international arbitration doesn’t help in the real world.
But what happens if Mrs May’s deal is defeated for a third time?
What has spooked some Brexiteers is President Tusk’s talk about a possible 21-month extension to our EU membership under Article 50. Such talk is cheap – it does not commit the EU’s leaders to grant an extension. Tusk is clearly trying to influence the political process within the UK. People shouldn’t be naive and fall for it.
There are big obstacles against a long Article 50 extension actually happening. All 27 EU member states need to agree it unanimously. If the EU offer it at all, it needs to get through our Parliament with whatever conditions the EU attach to it – and these conditions could require Parliament to pass primary legislation.
The leaked ‘Room Document’ prepared by officials for the forthcoming European Council meeting makes it clear that if an extension goes past 2nd July at the latest, then the UK must as a matter of EU primary treaty law (which cannot be changed in the time available) hold European Parliament elections in May. This is a big downside for the EU, as is the prospect of the UK as a full voting member state causing trouble for the next two years.
But what if the worst happens and an extension is agreed? That would be an appalling betrayal of the referendum result by arrogant parliamentarians who would rightly be held to account for their actions.
But the actual legal consequences would be much less damaging than the May deal. We would be hugely better off than under the deal. We would have effectively the same transition period as under the deal, with the big difference that we would still have a vote and voice in the EU institutions. But the biggest difference is that we would not be locked into the backstop at the end of 2020 or into the other very damaging parts of the deal which have been overlooked in the furore over the backstop.
It is understandably difficult for people to follow the different parts of this complex deal, what is in the Withdrawal Agreement itself, what is in the backstop Protocol, and what is in the Political Declaration attached to the deal. At Lawyers for Britain we have published a master chart which shows where the main problems are and has links to more detailed explanations.
There are some very bad parts of the deal apart from the backstop Protocol. We would have to carry on paying vast sums of money after 2020 which we do not owe under international law. The EU law which the deal applies to us even after the transition period is over would carry on having direct effect and supremacy in our courts over UK law for the indefinite future – something that leaving the EU was meant to end.
And the overlooked Political Declaration contains very damaging provisions. People think that because it is not legally binding, it can just be ignored and we can negotiate with the EU afresh. That is not true. Article 182 of the Withdrawal Agreement commits the UK as well as the EU to use best endeavours to negotiate an agreement in line with the Political Declaration. This means that if we ask for something in the future agreements that contradicts the Political Declaration, the EU can legitimately say that we are not complying with our obligation to negotiate what is in the Political Declaration and therefore the EU has no obligation in turn to give us an agreement which departs from it. Result: we are locked into the backstop with no way out, and no way to complain.
Although much of the contents of the Political Declaration are mere outlines, it does contain prescriptive provisions which are contrary to UK interests. The most damaging is probably Paragraph 23 on tariffs, which is simply not compatible with us negotiating the Canada-style Free Trade Agreement with the EU favoured by most Brexiteers. Instead, it requires “ambitious customs arrangements… that build and improve on the single customs territory” in the backstop. Dominic Raab resigned over the inclusion of this wording in the Political Declaration.
Paragraph 124 of the Political Declaration pre-commits the UK to carry forward the unequal disputes procedures of the Withdrawal Agreement, under which the ECJ will maintain jurisdiction via a backdoor (but effective) mechanism under which the ECJ’s rulings on EU law issues will bind the neutral arbitration panel. This extraordinary mechanism is totally contrary to international treaty practice under which sovereign states do not submit themselves to the courts of the other treaty party, and has so far only been imposed by the EU on the desperate former Soviet republics of Ukraine, Moldova and Georgia.
Paragraph 75 states that: “Within the context of the overall economic partnership the Parties should establish a new fisheries agreement on, inter alia, access to waters and quota shares”. This does not contain detail but is a concession in principle by the UK on there being fishery quota sharing as part of the economic partnership with the EU. The EU will undoubtedly leverage this concession to demand continued access to UK fishing waters for EU boats and the UK will be in a very weak negotiating position to resist the EU’s demands.
Mrs May trumpets the end of free movement of persons as her great achievement. But Paragraphs 50 to 59 of the Political Declaration commit the parties to establish “mobility arrangements” to replace free movement, and “to consider addressing social security coordination in the light of future movement of persons”. The precise content of these arrangements is not spelt out, but in view of its weak negotiating position up against the backstop, the UK may well be hard pressed to resist pressure to expand these arrangements.
If we are subjected to an Article 50 extension instead of the deal, none of these damaging provisions or negotiating constraints would apply to us, leaving a future Prime Minister in a position to negotiate with a free hand.
Conclusion – the choice
The threats of an Article 50 extension have created a dilemma which worries many committed Brexit supporters. I understand those worries. An emotional response is to just grab onto the deal, even if it is horrible, in order to “get Brexit delivered”.
But at this critical time it is vital that our MPs should vote not just on emotion but after looking very carefully at the legal as well as the political consequences of the courses of action.
The deal does not deliver Brexit except in name. Not only does in not deliver Brexit, it also makes it impossible for a future Prime Minister to deliver a real Brexit as well, for many years to come or indefinitely. The momentary relief from some Leave supporters at nominally leaving the EU is sure to turn to anger, disillusionment and blame when it becomes clearer and clearer that Brexit has not been delivered, and that the Conservative Party in particular – including the Brexiteers – has failed to deliver real Brexit and has delivered a locked-in fake Brexit instead.
But if the deal is rejected, the most likely outcome is that we get out on 29th March with the referendum objectives achieved of taking back control of our laws, our borders, our trade and our money. Please see the excellent article by Christopher Howarth which explains why it is so difficult for Remainers to force through an Article 50 extension in the remaining few days if the deal is rejected again.
It was bound to get rough as we approach the point of actually leaving the EU. Now is not the time to lose our nerve and back a gravely damaging deal which would betray Brexit supporters and be very bad for the country. Contrary to the Prime Minister’s contention that it is patriotic to support her deal, the patriotic thing to do is to throw it out again.
The post Theresa May’s deal remains “fake Brexit” – the alternatives are far less damaging appeared first on BrexitCentral.
The Attorney General, Geoffrey Cox, has been tasked with coming up with a legal solution to the ‘backstop’ that the Government hope will persuade or bamboozle the DUP and Conservative backbench MPs into backing the Prime Minister’s EU deal largely as it is. We do not know what he will come up with, but there is a range of options from a legally impotent ‘codicil’ to a full replacement of the backstop with alternative arrangements as mandated by the Commons’ vote on Sir Graham Brady’s amendment.
If the Attorney General concludes a legal agreement the Government may bring back a new ‘meaningful vote’ to approve the deal next Wednesday. To understand the importance of this we need to go through his options. But before starting, lets recap as to what the ‘backstop’ is and why it is a problem.
The problem with the backstop
The ‘backstop’ is the ‘Protocol on Ireland/Northern Ireland’ attached to the Withdrawal Agreement. The Withdrawal Agreement, if approved, would become an international treaty and the Protocol would have the same legal force as the main text.
The backstop would commit the UK to placing Northern Ireland in a Customs Union with the EU. Among other things, it commits the UK to keeping EU regulations in Northern Ireland, to EU policing of ‘state aid’ to prevent the UK Government using public money to Northern Ireland’s advantage and to following the EU VAT regime in the province.
These provisions are controversial on many levels. Firstly, imposing EU law on Northern Ireland over which they have no say is undemocratic. Secondly, as these provisions do not apply to the rest of the UK, it opens up the probability of an internal UK border. Goods going from mainland Great Britain to Northern Ireland will cross a regulatory and customs border. GB goods would require an archaic ‘A.UK movement certificate’, a paper form requiring a physical wet stamp (Article 4 of Annex 3 to the Protocol) which would in all probability not work. Creating an internal border with Northern Ireland on the other side has obvious economic (60% of NI’s exports/imports are with GB) and political problems for Unionists and is potentially in contravention of the principle of consent agreed in the Belfast Agreement.
No exit clause
So far so dreadful. The Protocol would divide the UK, lock Northern Ireland in a Customs Union following EU law under the European Court of Justice and subject UK trade with the EU to an archaic paper based system that is already obsolete.
If that is not bad enough, the real killer problem is that there is no way out. If the UK ended up in the backstop there is no exit unless the EU wished to let us leave.
The only route out of the backstop is contained in Article 20 of the backstop – the ‘review clause’. This states that if the UK notifies the Joint EU/UK committee of a desire to leave the “union and the United Kingdom decide jointly” on the outcome – i.e. the EU can say no. To make matters worse, the EU could only decide to let the UK out if the conditions in Article 1 (3) of the backstop are fulfilled: These are “the necessary conditions for continued North-South cooperation, avoid a hard border and protect the 1998 Agreement in all its dimensions.” These are all disputed and vague terms that are designed never to be met.
If the review clause is designed to keep the UK cemented in the backstop, it fulfils another vital task. It prevents the UK using the Vienna Convention on the Law of Treaties to denounce the backstop and escape. If there were no review clause, the UK could use Article 56 of the convention to give notice and walk away. The presence of the clause closes off that option.
Why did the Prime Minister agree the Backstop?
It is clear to me that no MP could in any good conscious agree a treaty that divides the UK permanently with no exit. So why did the Prime Minister and her advisers agree to it?
To the Downing Street Europe Unit, that dreamt up this horror, it is actually rather clever and fulfils many of their main objectives.
The central objective and current planning assumption in Downing Street remains the adoption of the Chequers Customs Partnership. This Chequers plan is based on technology and practices that do not exist that would create a virtual Customs Union between the UK and EU with associated regulatory alignment. This involves a complex system for tracking goods around the UK to ensure they do not enter the EU.
This plan is currently unworkable and will probably never be workable. It is also highly undesirable as it would lock the UK into EU rule-taking and prevent the UK having its own trade policy. But that is of little concern in Downing Street.
For Downing Street whether Chequers works or not is of little concern: the immediate aim is to remain in a Customs Union with EU rule-taking. The backstop was vital to get them there. With the backstop, Downing Street has a method of permanently cementing the UK into a Customs Union for Northern Ireland which they could then build on during the implementation period to get to Chequers/CU for the entire UK. For them, the permanence of the backstop is its primary quality and purpose. The UK at the end of the implementation period must stay in an all-UK Customs Union so the future framework will by necessity be a Customs Union.
Very clever, notwithstanding the fact that a Customs Union was ruled out in the Conservative Manifesto, would leave the EU in charge of our trade policy and our legislation without any UK say. No doubt it may even have crossed some of their minds that this would be a good platform to re-join the EU in a few years – in order to give us back our say etc. We now know this was all cooked up behind the backs of the FCO and DExEU.
So what might the Attorney General have asked for?
If the Attorney General believes he has been tasked with finding an exit to the backstop, he has an immediate problem. If he replaces or gains an exit from the backstop, he will unravel the entire strategy Downing Street has been working on for the last two years. If he does not, MPs are unlikely to be impressed and vote down the deal again. So here are his options:
1. Treaty Change
The text of the draft treaty could be opened up and replaced with something in line with the Conservative manifesto. Depending on what is changed, changing the treaty text is the only 100% legally fail-proof way of altering the meaning of the agreement. Options might include:
- Change Article 20 of the backstop – the review clause – and the linked objectives in Article 1 (3). If this article were changed to make the decision to leave one that either party could take, that would allow a guaranteed UK exit.
- Add a sunset clause. A new termination date could be added in the treaty text. For this it would be important the date was not too far in the future so as to be effectively permanent. In truth, there is no reason for it to be any later than the end of the implementation period, but that would be to misunderstand its real purpose.
Verdict: Potentially Potent—————————————————
2. A new Protocol
If the parties were keen to preserve their backstop unamended, they could agree a new Protocol. Protocols in EU treaties have the same legal force as the main text and derive their legal potency from it. Unfortunately, the existing text of the backstop is so clear in its objectives that there would seem to be little a new Protocol could say that would not cut straight across it – i.e. create an exit – or be irrelevant. If they do conflict and one declares it is superior, will the European Court of Justice find in the UK’s favour?
One weak idea might be to add a Protocol that puts a greater obligation on the EU to deliver a trade agreement that would replace the backstop. This is hardly an ideal solution. A legal commitment to deliver Chequers would arguably make the deal worse and effectively just replace one backstop with another backstop.
Verdict: Unlikely to be Potent———————————-
3. An ‘interpretive instrument’
Under international law, parties to a treaty that is imprecise can agree an additional ‘interpretive instrument’ that would set out in more detail how they intend it to operate. These are accepted under Article 31 of the Vienna Convention. The important point to note here is that the draft Withdrawal Agreement is actually very clear. It has a commencement clause (Article 185) and a review mechanism (Article 20 of the backstop) that gives the EU a veto. It would be impossible to interpret these clauses away.
If an interpretive instrument could not interpret an exit where one does not exist, it could potentially strengthen the “best endeavours” clause in Article 184 on achieving a new trade deal (based on the Political Declaration) to replace the backstop. This, however, would only make matters worse. As long as the backstop is there, any future trade agreement will be a Customs Union. Creating a further UK commitment to deliver a deal based on the Political Declaration and the parameters of the backstop would further tie the hands of any future Prime Minister seeking to negotiate a genuine trade agreement.
Verdict: Minimal legal value as it cannot overrule the treaty text
4. Amend the Political Declaration
The Withdrawal Agreement comes with a Political Declaration that is of itself not legally binding. The EU itself has said that it would be open to changing the Political Declaration – a tell-tale sign that this is a reasonably futile gesture. [The current one referenced in Article 184 is dated DD/MM/2018]
The Political Declaration sets out the broad parameters of a future trade agreement. While the wording is vague, it is clear that the current Withdrawal Agreement + the Political Declaration means a Customs Union. Indeed it is not well disguised. Paragraph 23 of the declaration refers to “single customs territory.”
So could the Political Declaration be amended to help allay concerns over the backstop? There are multiple problems. Firstly, the Political Declaration is not legally binding; it cannot touch the text of the backstop (and nor would we want it to be legally binding, given that it takes us to somewhere we don’t want to go). What it could do is redouble a joint commitment to move on with trade talks to come up with a replacement.
The problem with any potential replacement to the backstop is that the backstop itself sets a test that can only be met by agreeing a Customs Union. Article 1 (3) of the backstop as interpreted by the EU and Irish Government (with UK connivance) leads you to an all-UK Customs Union or a separation of Northern Ireland from the UK.
The Attorney General could insert lots of fine wording on sensible minimal border procedures, based on the Malthouse Compromise, into the Political Declaration. We could agree to move forwards on them at speed, using ‘best endeavours’ (Article 184) so they can be implemented at the end of the implementation period with no need for the backstop. We could put all of this in the non-binding declaration, but it would come straight up against the actual text of the backstop. The UK could still not leave unless the EU agrees and the Irish have made it perfectly clear that they would not accept any change at all. It would lead us back to a Customs Union.
Verdict: Almost worthless and could potentially make matters worse
5. A Council Conclusion including basic ‘assurances’ or comfort wording
In addition to amendment of the existing Withdrawal Agreement or text, the EU might seek to make the Attorney General accept some lesser form of life. Perhaps a standard Council Conclusion including basic ‘assurances’ or some other comfort wording.
The point to note here is that political agreements are not binding in EU law or international law. There is little these could add if the existing wording remains as is.
Verdict: Of no value whatsoever
6. No change, but the Attorney General changes his legal advice anyway
The Attorney General is supposed to be an independent legal adviser to the Government. This principle is long standing. The appearance of partiality by A-G Hastings led to the 1924 Campbell case and the fall of a Labour Government. More recently we have had the appearance of politically influenced advice in the run-up to the Iraq war.
In this case, the Attorney General has already put his thoughts down in public in the House of Commons and privately in a memo to the Prime Minister that was subsequently released. In this private advice, the Attorney General was emphatic that there was no escape from the backstop. It would not be credible if he decided to change this advice while leaving the Withdrawal Agreement untouched. A lawyer who negotiates a new agreement and then gives his opinion on the outcome of the negotiation is no longer impartial. He has himself for a client…
Verdict: Worse than useless———————————————–
We do not know what the Attorney General will come back with – but I will have a guess.
The key priority from Downing Street is for a minimal change that looks as if they have solved the backstop permanence problem while leaving them open to use it to build a permanent Customs Union.
On past performance, the EU is open to interpretive instruments as a way of avoiding tricky problems with treaties. An “interpretive instrument” was given to Belgium to help overcome Wallonian objections to CETA. The Dutch Government gained an interpretive instrument in a Council Conclusions annex, having voted down the EU-Ukraine agreement in a referendum. None of these made any difference.
So potentially they could agree an interpretive instrument that seeks to reinterpret the review clause and add in more commitments to future trade talks. In addition to that, Cox may seek to change the Political Declaration to add new options for the Northern Irish Border based on the Malthouse Compromise. They could even grant a modicum of treaty change – the date on the political declaration in Article 184…. Perhaps some new wording in Article 1 of the backstop setting a more manageable test.
This will then get packaged up and given a grand and meaningless name – a codicil. To add more theatre, the Attorney General will then try the same trick David Cameron tried and ‘lodge it at the UN’. This has no legal importance, and does not, as with David Cameron’s renegotiation, make a document a ‘treaty’ (see David Lidington here). So there we would have it, a legally worthless document announced with fanfare – game set and match…
Not so fast
Let’s stand back a moment. The Withdrawal Agreement was defeated by 230 votes, the largest in history for a government. It was defeated for good reason. It will cost £39bn, potentially split up the UK, prevent us having a trade policy, make the UK a rule-taker for years to come and puts the ECJ in charge of rules applied to the UK, penalties and even the calculation of the £39bn.
Of this deal, the backstop is undoubtedly the worst and most permanent feature – but not the only one. Taking this into account, the Commons voted to support Sir Graham Brady’s amendment that “requires the Northern Ireland backstop to be replaced with alternative arrangements to avoid a hard border”.
These should be the tests we set when looking at the Attorney General’s package:
- Does it replace the backstop with something reasonable? If it does not replace it, does it come to a guaranteed end in the near future or allow the UK the right of unilateral exit? If there is a technical legal way out, is it drafted in a way we think the UK Government would actually be able or willing to use it?
- Does the new agreement still tie the UK into remaining in a Customs Union / Chequers using the backstop as a means to get there? Or could a new Prime Minister be free to negotiate a genuine Free Trade Agreement?
- Taken as a whole, is what remains of the Withdrawal Agreement once the backstop is removed – essentially the £39bn for two years’ negotiating time – worth the money? Is there an alternative free trade deal on the table we want and need the implementation period to negotiate and implement?
The post As the Attorney General explores solutions to the backstop, how potent will Cox’s codpiece be? appeared first on BrexitCentral.
As the vote on Theresa May’s deal grows near, some people seem to be looking desperately for means of escape from the backstop Protocol – or worse still, persuading themselves that means of escape exist or can be invented which will prove to be a mirage.
The Attorney General’s advice to the Cabinet explained the position with stark clarity. If the UK ratifies the Withdrawal Agreement, we cannot prevent the backstop coming into force, nor escape from it once it is in force, except with the agreement of the EU – and if there is a breakdown in negotiations then it will “endure indefinitely” with no legal route of escape.
Despite the clarity of the advice, some Members of Parliament seem to be convincing themselves – or maybe are being convinced by others – that there could be other routes out of the backstop if only the right amendment is framed in Parliament. It is vital that Parliament should not vote based on a mistaken understanding or wishful thinking about the legal situation. So some of these ideas need to be examined very carefully.
We can get out of the backstop Protocol by arbitration
There is a clause in the Withdrawal Agreement which commits the UK and the EU to use “best endeavours” and “good faith” to agree a future trade treaty which would replace the backstop. 10 Downing Street were publicly arguing that this could be enforced against the EU by arbitration. Conservative Party Chairman Brandon Lewis described the “best endeavours” obligation as a “very high legal bar” in a teleconference call with Conservative Party activists.
But the Attorney General’s advice to Cabinet explains with great clarity why it is “highly unlikely” that the EU would conduct themselves in such a way as to be vulnerable to an adverse arbitration finding. The clause does not require the EU to set aside its own interests or propose terms which the UK would like or find acceptable; “all they would have to do to show good faith would be to consider the UK’s proposals, even if they ultimately rejected them. This could go on repeatedly without such conduct giving rise to bad faith or failure to use best endeavours”.
So the Government and Party machines have been pushing in public legal arguments which the Government’s internal advice reveals they know to be rubbish. It is regrettable that Theresa May’s desperate political struggle to sell her deal to a sceptical Parliament, Party and country has gone beyond the realms of normal political spin and exaggeration into the territory of relying on misrepresentation of the legal consequences of the deal.
Now that this illusion about good faith arbitration has been put to bed by the publication of the Attorney’s advice, it is worrying that credence is apparently being given to other mistaken legal perceptions.
Vienna Convention and fundamental change of circumstances
An amendment to the Government’s motion has been tabled by Sir Edward Leigh. This “notes that the Vienna Convention on the Law of Treaties makes it absolutely clear that a sovereign state can abrogate any part of a treaty with an international body in case of a fundamental change of circumstances since the Treaty was agreed; notes that making the Northern Ireland backstop permanent would constitute such a fundamental change of circumstances; and therefore calls for an assurance from the Government that, if it becomes clear by the end of 2021 that the European Union will not agree to remove the Northern Ireland backstop, the United Kingdom will treat the indefinite continuation of the backstop as a fundamental change of circumstances and will accordingly give notice on 1 January 2022 to terminate the Withdrawal Treaty …”
In fact Article 62 of the Vienna Convention makes it absolutely clear that a fundamental change of circumstances cannot be used to excuse a State from complying with its treaty obligations, except in the most limited and extreme circumstances which certainly do not apply here. If the negotiations between the UK and the EU deadlock in the way envisaged in the Attorney General’s advice, that doesn’t even count as “a change of circumstances”: it is just one possible way in which the terms of the treaty pan out, not a change in circumstances external to the treaty. Even if you call it a change of circumstances, it cannot be relied upon to excuse non-compliance with the treaty because it is “foreseen by the parties” at the time of conclusion of the treaty.
The Attorney General’s advice (rightly) does not even mention this Vienna Convention argument as a possible route out of the deadlock, because it is a complete non-starter. It is a matter of puzzlement and considerable concern that Sir Edward Leigh and his colleagues have somehow been given the impression that a notice of termination could be given on this ground on 1 January 2022 as suggested by the text of their amendment.
Can there be a Parliamentary lock on the UK entering the backstop Protocol?
This suggestion arises from remarks by the Prime Minister on the BBC Today programme on 6th December, and the tabling of an amendment by Sir Hugo Swire and others which is billed as giving Parliament control over the coming into force of the backstop Protocol.
The wording of this amendment is long and involved, but the fundamental problem is that the United Kingdom under the treaty has no “lock” against the backstop coming into force. For international law purposes, Parliament is an organ of the United Kingdom and therefore cannot exercise any greater powers than are allocated to the UK under the treaty.
Confusion is caused on this point by the domestic law doctrine that Parliament can make or unmake any law, including in cases where that would cause the UK to be in breach of its international treaty obligations. But breaching international treaty obligations is a grave matter and it is therefore extremely doubtful if Parliament were given a theoretical right to block the Protocol that it would ever be exercised.
The amendment asks that Parliament be able to approve the commencement of the powers implementing the backstop. Parliament has that power anyway, since an Act of Parliament will be required to give effect to the Protocol inside the United Kingdom. In theory as a matter of UK law, Parliament could refuse to pass that Act. But if the backstop comes into force as a matter of international law, Parliament would have no choice but to legislate and to approve commencement of the powers, unless it were willing to put the UK into overt breach of its obligations under international law.
The amendment also calls for a legal duty on the UK Government “to have an agreed future relationship” or other replacement arrangements for the Protocol one year after it comes into force, and an assurance by the EU that “both parties intend to agree” by that date.
That is an assurance which the EU can easily give, and no doubt will give in a stage-managed and choreographed way, but which is completely meaningless in practice. Saying that they intend to agree does nothing to stop the EU from holding out for terms which are totally unacceptable to the UK, and blaming the failure to reach agreement on the UK’s intransigence in not submitting to their demands. Likewise, a legal duty on the UK Government to agree a future relationship by a certain date is completely meaningless, since it would only be possible to reach an agreement if the EU were to offer acceptable terms.
Unfortunately what this amendment contains is a mixture of legal nonsense in the form of meaningless or unenforceable legal duties and assurances, coupled it would appear with a good dose of wishful thinking or even self-delusion.
The UK has a ‘choice’ about whether to enter the backstop
The Prime Minister claimed in her interview on BBC Radio 4’s Today on 6th December that it was “not automatic” for the backstop to come into effect, and that the UK has a “choice”. This is only true in the sense that the backstop will indeed automatically come into effect, unless the EU is willing to do an acceptable deal with us before the end of the transition period, or unless the transition period is extended.
The limited element of “choice” which the UK has is whether to extend the transition period in order avoid the backstop coming into force for a time. That defers but does not solve the problem of the backstop automatically kicking in, at great cost in terms of money and greater cost in terms of keeping the UK under EU laws in a state of vassalage for a longer period. The UK would have no vote or veto on regulatory changes to EU rules which could cause severe damage to the UK financial services industry, and the risk of this kind of damaging regulatory attack against UK interests would go up and up the longer the transition period is extended.
Even the choice to extend the transition period is not unfettered. Under Article 132, a decision to extend the transition period is by the Joint Committee. This means that the EU and the UK must both agree to the extension within that Committee. Under Art.132(3) that decision must deal with a number of matters including establishing the amount of the UK’s contribution to the EU budget.
That is rather like having an “option” to buy a house which does not specify the price, allowing the seller to charge what it likes if the option is exercised. If the UK were for whatever reason desperate to extend the transition period and so defer (but not avoid) the backstop, the EU would have us completely over a barrel on the financial payments.
The UK now has a “choice” to avoid the backstop, by a very simple means. That is to reject Theresa May’s deal.
The Grieve amendment allows Parliament to take control of Brexit
It has been widely reported in the media that Dominic Grieve’s amendment would allow Parliament to take control of the negotiations with the EU after Theresa May’s deal is rejected, or even “stop Brexit”. This is not the case and these suggestions may be attempts to induce Brexit-supporting MPs to back the deal out of misplaced fears of what a Remain-dominated Parliament might do.
The amendment does not change any law. It simply waives a rule in the Standing Orders of the House of Commons which would prevent amendments being made to motions before the House when the Government reports its future intentions. But a resolution of the House of Commons does not, except where specified by statute or in very special circumstances, have any legal force. It cannot amend any law. It cannot direct the Government in the exercise of its foreign relations powers as a matter of law. Any effect it has in that context is political only.
Leaving on 29th March 2019 without a deal is the default course of action which is now hard-coded into the law. Any alternative route – whether a different deal with the EU, an extension of the Article 50 period, a referendum, or (most radically) a withdrawal of the Article 50 notice – would require the active cooperation of the Government in all cases, and in almost all eventualities the passage of a Bill through both Houses to Royal Assent between now and 29th March 2019.
Therefore Brexit-supporting MPs who do not think that this deal is in the national interest should not be deterred from voting against it by the Grieve amendment, or by implausible claims by the Prime Minister that rejection of her deal might lead to “no Brexit.”
Members of Parliament would be well advised not to accept any assertions about the legalities of the deal which emerge directly or indirectly from the government machine, without first obtaining independent legal advice.
The post Exposed: the legal myths being promoted about the backstop and the Withdrawal Agreement appeared first on BrexitCentral.
In my recent paper for Politeia, I show that, since its inception, the European Court of Justice (ECJ) has never been an impartial court in disputes between the EU and its Member States or indeed between the EU institutions and other bodies or international entities. In these circumstances it is hard to believe anyone could consent to continued post-Brexit ECJ jurisdiction: why would the ECJ treat the UK any better or at all fairly once the UK is no longer a Member State?
The ECJ’s pro-Union legal interpretation is rooted in its own conception of its role as an EU institution committed to further integration which is brought to bear on its distinctive ultra-flexible approach to treaty interpretation.
The general rules of treaty interpretation are set out in Articles 31 and 32 of the Vienna Convention on the Laws of Treaties (“VCLT”).
The Vienna Convention is not free from uncertainty and it does refer to the context and the objective as aids to textual interpretation. However, Art 31 VCLT emphasises the crucial importance of the ordinary meaning of the treaty text, and that the words of the text must be interpreted in good faith. If this means anything at all, it must mean that purposes cannot simply be read into the text and that the text itself is the primary guide to meaning and purpose. Only if there is real uncertainty, should other interpretative criteria be applied.
The EU is not a signatory to the VCLT. However, almost all its Member States have signed the Convention. Indirectly, therefore, the EU and the ECJ too are under an obligation to follow its provisions.
The ECJ has summarised its interpretative approach in Merck v Hauptzollamt Hamburg-Jonas as follows:
…in interpreting a provision of [Union] law it is necessary to consider not only its wording, but also the context in which it occurs and the objects of the rules of which it is part.
At first sight the ECJ’s own position appears to echo Art. 31 VCLT.
But the reality is very different. The ECJ, to my knowledge, has mentioned the VCLT only twice in the tens of thousands of judgments it has handed down over the last seventy years, but on at least one of those occasions went on simply to ignore the Convention’s approach.
First, although the ECJ frequently refers to the words used in the legal instrument it interprets, this in itself establishes little. The ECJ cites the text in a perfunctory manner and without proper textual analysis. Crucially, compared to many other courts, the ECJ is more likely to give priority to purposive criteria over linguistic criteria.
Second, the ECJ extremely rarely uses historical arguments.
Third, amongst the purposes the ECJ relies on, it liberally includes meta-teleological criteria. Meta-teleological arguments refer to general ‘umbrella purposes’ which may not even be written into the treaty. For example, the ECJ has referred to the ‘spirit of the Treaties’ in dozens of cases. The spirit has an established place in Hegelian philosophy – legal certainty, however, spiritual guidance promotes not.
Fourth, EU law has no doctrine of the ratio decidendi. Any ECJ decision, and indeed any statement on the law, may effectively become a precedent. The importance of de facto precedents in the ECJ’s argumentation is illustrated by the fact that there is now hardly any case in which the ECJ does not refer to at least one previous decision.
In referring back to its own case law, the ECJ implicitly also relies on meta-teleological considerations and the body of precedents itself acquires a communautaire — or pro-Union — flavour. Over time the Treaties in this manner acquired a distinctly more integrationist flavour than their wording suggests. Moreover, the appeal to previous decisions enhances judicial credibility in the sense it suggests judicial objectivity and creates the impression that the court did not exercise a choice but instead reached its decision subject to the constraints of legal consistency and certainty. The appeal to precedent also lends later decisions the aura of legal objectivity, simply because in analysing a case not every relevant previous case is excavated and subjected to legal analysis.
Fifth, The ECJ’s variable or cumulative approach, combined with its meta-teleological dimension, gives its decision-making a distinctive pro-Union communautaire tendency: a predisposition, in other words, to resolve legal uncertainty in favour of further integration. Reliance on precedents then solidifies and reinforces the ECJ’s communautaire leaning.
Finally, the ECJ operates in an extremely permissive political and judicial environment. ECJ judgments can be overruled only by the ECJ itself or by unanimous treaty amendment by the Member States. In these circumstances general acceptance throughout the EU of the ECJ’s activist and integrationist approach to treaty interpretation means that the ECJ acquires a de facto power of amending and extending the EU’s quasi-constitution.
The ECJ’s communautaire predisposition tends to be irrelevant in most run-of-the-mill cases, which concern the application of more or less clear, detailed and technical provisions. Examples of these are agriculture, customs union, and tariff cases.
By contrast, the areas of substantive law where the Court’s integrationism has been most evident are the internal market, free movement of persons, asylum and the euro rescue cases and those concerning the relationship of EU law to national law on the one hand and international law on the other.
Most relevant here is the Court’s pro-Union decision-making in the field of international agreements, about which the following points should be made.
First, the ECJ has ensured the supremacy of EU law over potentially conflicting international law by transposing large chunks of international law and then asserting its own jurisdiction to interpret and give effect to international law on its terms – an approach which may be called ‘the strategy of incorporation’. This has allowed the ECJ either to give effect to international law when it suits it – for example, to extend its own jurisdiction to review national law for compliance with obligations under international treaty and customary law – or to circumvent, qualify or ‘adapt’ the effects of international law on the EU legal order by interpreting EU law ‘autonomously’, i.e. without reference to precedents or guidance laid down by other international courts.
Second, whilst the ECJ has not questioned that international agreements entered into by the EU or so-called mixed agreements may be used by individuals to challenge national law, it has generally adopted a ‘dualist’ approach and resisted the direct effect of provisions of international agreements in actions challenging the legality of EU legal acts.
Third, in the case of Van Parys the ECJ went so far as to deny binding status to WTO dispute settlement body decisions in EU law.
Fourth, the ECJ has jealously guarded its own autonomy and judicial pre-eminence over the interpretation of every aspect of EU law both in relation to the extension of EU law to the EEA Agreement (Opinion 1/91) and in its more recent Opinion 2/13 concerning the accession of the European Union to the ECHR. More recently, it has done so even in relation to arbitration clauses governing bilateral investment treaties between Member States, which the Court declared invalid in the recent Achmea decision.
Fifth, it is thus all the more surprising that in the area of free trade agreements between the EU and other countries the ECJ recently adopted a more relaxed approach to safeguarding its own jurisdiction. In Opinion 2/15 concerning the Free Trade Agreement (FTA) between the European Union and the Republic of Singapore, the Court declared binding dispute settlement by a bilateral arbitration panel procedure compatible with EU law.
Let me sum up:
The EU’s insistence that a free trade agreement requires final dispute resolution by the ECJ is spurious and at variance with the ECJ’s case law regarding the legality of, for example, the EU-Singapore trade agreement.
The UK has nevertheless accepted ECJ supervision in the proposed Agreement. Apart from the fact that it is degrading for a sovereign nation to submit itself in bilateral treaties to the jurisdiction of the domestic court of the other side, I hope I have demonstrated that the ECJ will never be an impartial arbiter in disputes between the EU and other parties – including former members. It is not even impartial in respect of EU members. How may it be assumed that post-Brexit the ECJ would accord the UK even the very minimal respect it currently pays EU member states? Whatever the British people may have had within their contemplation when they voted for Brexit in June 2016, it surely included the conviction that the UK should not remain subject to an imperial foreign court.
Sentiment about a Brexit deal fluctuates wildly almost by the hour. Whatever the current state of speculation, we surely have to prepare ourselves for what happens if Chequers falls over.
I know this is anathema to many Brexiteers. But my personal view is that while No Deal would likely be fine in the long run, in the short term it would be an embarrassing economic fiasco. The consumer story from hell. It would be to Brexit what Gerald Ratner was to cut-price jewellery.
Instead of going down that risky route, I want to ask BrexitCentral readers to consider falling back on the UK’s membership of the European Economic Area. This is the so-called “Norway then Canada” or “Norway for Now” strategy advocated by myself, Nick Boles MP and others.
Please hear me out. It is quite possible that neither Chequers, nor “No Deal” nor trading on World Trade Organisation terms, nor a second referendum will pass in Parliament. In which case, the European Economic Area will be the only thing left on the table. Should we not seize it?
Far from reducing Britain to a “fax democracy”, where we have to pay huge sums into the EU and yet have no say over the rules and regulations passed in Brussels, the EEA is a commercial treaty between sovereign nations and could be a good resting point, outside the EU, the Common Agricultural Policy, the Common Fisheries Policy and the jurisdiction of the European Court of Justice – but with useful legal and economic options. We would effectively be members of the Single Market, but with sovereign protections.
George Yarrow, the Oxford professor who is the intellectual godfather of the strategy, also estimates that our payments to the EU – which would be limited to participating in relevant programmes – would fall from around £9.5bn to £1.5bn.
What is more, we are already contracting parties to the EEA. It is not true, as some have asserted, that we are leaving by virtue of having given notice under Article 50 to leave the EU. The EEA is a separate treaty, which we have signed on our own right, and has its own withdrawal arrangements. If we want to make the EEA treaty operative, all we have to do is to apply to the related European Free Trade Association (EFTA). This is the other “governance pillar” to the EEA.
There is not much the EU could do to stop us exercising our treaty rights without falling foul of a higher law, the 1969 Vienna Convention on the Law of Treaties. Don’t take my word for it. Take the word of Sir Richard Aikens, a former appeal court judge, on the Briefings for Brexit website. If the EU cut up rough, we could take them to the International Court of Justice (ICJ).
As for the infamous Irish backstop, the EEA would put in place the legal structure to make the technical border solution suggested by David Davis work. As we would be members of the Single Market, it would anyway be unnecessary.
On any measure, the EEA is also superior to the proposed transition arrangements. Inside the EEA we would have decision-shaping rights, and also the right to adapt and veto new legislation. We would, anyway, only be in the Single Market which accounts for just 28% of EU legislation.
If, while in the EEA, there was a dispute with the EU, it would be adjudicated by the EFTA Court, on which we would have two out of five judges. Contrary to myth, it is not bound by the ECJ. They do have to develop a homogenous area of law together but frequently the EFTA Court has disagreed with the ECJ.
Nor is it true that we would not be able to control freedom of movement. The EEA Treaty focuses in freedom of movement of workers and includes various measures to impose limits and restrictions, including an emergency break (as used by Liechtenstein). There is no common citizenship and British passports would be back.
Let’s be honest. It isn’t perfect. And it seems to me the biggest risk, which some Brexiteers have already pointed out, is we get stuck. Like Income Tax (introduced temporarily in 1798, it remains with us) the EEA might perpetuate itself. Some have called for a hard legislative commitment to leave before 2021.
However, I would contend that is a glass half empty way of looking at the EEA treaty. The exit mechanism, giving one year’s notice under Article 127, is much more permissive than the Article 50 process. Rather than put a hard stop on our departure date, which creates another cliff edge against UK interests and upsets the Norwegians, we should commit to a review and a break clause to be voted on by Parliament. If it did not work, we could leave to join a Canada-style free trade agreement. And in the meantime it might evolve into a congenial home for us.
The question to which the EEA is the answer is clear. So let me repeat it. What happens if Chequers falls over and the other options are blocked too? It is hard to see any other realistic, legally deliverable alternative. I urge Brexiteers not to rule it out.
The post The ‘Norway for now’ option is far from perfect, but Brexiteers should consider its merits appeared first on BrexitCentral.
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