Withdrawal Agreement - Not a done deal yet

Hanover from space

Author NASA/Chris Hadfield
Licence Copyright waived by copyright owner

Jane Lambert

Monsieur Barnier was is Hanover last Monday and he gave a speech at the 8th EU Policy Reception: How hard will Brexit be for industry?. A transcript appears on the Commission's website (see Speech by Michel Barnier at Hannover Messe 23 April 2018). In it, he sketched out the sort of trade relationship that he hopes to negotiate with the British government but he also warned of the difficulties that could destroy the progress that has already been made and that "companies must waste no time, and prepare for all scenarios now" including a disorderly Brexit.

The vision that he sketched out would suit most people in the United Kingdom very well:

"Even with the UK's current red lines, our intention is to reach an ambitious and wide-ranging free trade agreement with:

• Zero tariffs and no quantitative restrictions on goods;

• Customs cooperation to facilitate goods crossing the border;

• Rules to limit technical barriers to trade and protect food safety [sanitary and phytosanitary measures];

• A framework for voluntary regulatory cooperation to encourage convergence of rules;

• An open market for services, where companies from the other party have the right of establishment and market access to provide services under host state rules – I repeat, under host state rules;

• Access to public procurement markets, investments and protection of intellectual property rights."

The future relationship could even extend to such fields as coordination of social security and the recognition of professional qualifications, air transport, and participation by the UK in programmes in the field of research and innovation, where participation of third countries is allowed.

However, such a relationship will be possible only if there is an agreement on the terms of the UK's withdrawal from the EU. Monsieur Barnier noted that there had been a lot of progress in the negotiations of those terms but nothing is agreed until everything is agreed. There are plenty of potential stumbling blocks such as the border between the Irish Republic and Northern Ireland and the governance of the withdrawal agreement.

During the referendum campaign and at various times since, proponents of British withdrawal have argued that our market is so important to German car makers, Italian white goods manufacturers and French farmers that they will force their governments to make concessions.   Monsieur Barnier gave two reasons why that is unlikely in his speech.  First, the trade of the remaining member states with UK may be big but but not all that big:

"Let me remind you that, for the EU27 today, 6% of trade in goods is with the UK, while 60 % of this trade is inside the EU27 Single Market. Ten times as much!"

Secondly, the single market and the principles on which it is founded matter more to the remaining member states than trade with the UK.  Professor Grey suggested a possible third in Business gets vocal about Brexit 12 April 2018 The Brexit Blog.  If the supposedly pro-business government of the UK refuses to pay heed to business interests in its own country, why should  the Commission that represents the whole EU be any more inclined to listen to the voices of business leaders of individual member states?

We may get a 20 month implementation period to allow the UK to adjust to its new status in accordance with the draft withdrawal agreement (see The Draft Withdrawal Agreement: Getting Down to Business at Last 3 March 2018) but then again we may not.  My advice to British business is the same as Monsieur Barnier's in Hanover.  Hope for the best but prepare for the worst.

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Fourth Round of Brexit Talks: Still a Logjam

Author Gene Daniels

Jane Lambert

In Dispute Resolution: A Potential Deal Breaker? 8 Aug 2017 and Has Mrs May done enough to break the Logjam? 24 Sep 2017 I argued that the real stumbling block to a settlement in the withdrawal negotiations is not the size of the divorce bill but what guarantees, if any, can be given of our performance of our obligations under a withdrawal agreement. As I said in my latter article, Mrs May's offer to incorporate such a withdrawal agreement into national law and make sure our courts may refer directly to it is a step in the right direction but it does not address the problem that a future British government could repeal any statute that incorporates a withdrawal agreement at any time.

In their closing statements, Monsieur Barnier and Mr Davis seemed to agree. Monsieur Barnier said:

 "On citizens' rights, our priority, the UK has agreed to give direct effect to the Withdrawal Agreement.
This is very important.
It will give the assurance to our citizens that they will be able to invoke their rights, as defined by the Withdrawal Agreement, before UK courts.
We agreed to guarantee - for the citizens concerned - that the UK will apply EU law concepts in a manner that is consistent with EU law after Brexit.
But we failed to agree that the European Court of Justice must play an indispensable role in ensuring this consistency. This is a stumbling block for the EU" (see Press statement by Michel Barnier following the fourth round of Article 50 negotiations with the United Kingdom 28 Sept 2017 Commission website)

Mr Davis replied:

"But we must also acknowledge that a major question remains open between us – it relates to the enforcement of citizens’ rights after we leave the European Union.
The UK has been clear that, as a third country outside of the European Union, it would not be right for this role to be performed by the European Court of Justice.
But we have listened to the concerns that have been raised – and as a direct result of hearing those concerns the United Kingdom has committed to incorporating the final withdrawal agreement fully into UK law. Direct effect if you like.
We also recognise the need to ensure the consistent interpretation of EU law concepts.
We have not agreed the right mechanism for doing this yet but discussions this week have again been productive" (see David Davis' closing remarks at the end of the fourth round of EU exit negotiations in Brussels 28 Sept 2017 Department for exitng the European Union).

Monsieur Barnier acknowledged the progress that had been made in the talks but warned in his speech that the parties were not yet in a position to move on to discussing future trading relations. That was confirmed today by the President of the Commission who warned that such movement would require a miracle (see Brexit: Miracle needed to advance talks, says Juncker 29 Sept 2017 BBC website).

This will be a great disappointment for the British government, particularly those members of it who had campaigned for Brexit in last year's referendum. They had hoped that the remaining member states would back down on the ground that as they export far more manufactured goods to us than we export to them they had at least as much to gain from a trade deal as we would. That may be true but I doubt if it will happen for two reasons. The first is that the benefit of maintaining the union between themselves outweighs (or at any rate is perceived to outweigh) the value of their trade with us, significant though that may be. The second is that it is by no means certain that they would lose that trade as we are unlikely to lose our predilection for German cars and white goods, French wine and cheese, Spanish shoes and Italian handbags just because prices rise a little to take account of whatever tariff on those items that we may impose. They also know we want a trade deal and that Mrs May has already made concessions in her Florence speech to get one. They might be forgiven for believing that hanging tough delivers rewards.

So is there any way to break the logjam?  From a British lawyer's perspective, yes there is. We may not have a written constitution but we do have rules that known as conventions that are at least as robust as those of other countries' constitutions.  For instance, any Parliament could extend the 5-year limit to the duration of a Parliament originally contained in the Parliament Act 1911 and now re-stated in the Fixed Term Parliaments Act of 2011 but it would never do so. Would not an agreement between the main political parties not to repeal a withdrawal agreement statute be enough?  The political reality for those who understand our constitution is that it probably would, but that may not be how they see things from across the Channel.

Could we give in?  It would solve a lot of problems if we did.  It might enable us to continue to participate in a number of institutions that we like such as Euratom and the Unified Patent Court but it would probably re-open divisions in the Tory Party (and perhaps also the Labour Party) that the referendum was intended to heal. I remain pessimistic.