Saturday, 5 August 2017

There is legal scope for remaining in the EEA on Brexit Day

One of the problems with trying to keep up with everything Brexit is working out who is and who isn't worth listening to. In recent months, my list has shortened and I have become better able to distinguish between valuable and non-valuable content. And by that I do not necessarily mean that soft Brexiteers are solely worth the time and column inches and Remainers and FTA advocates aren't. Useful information on the subject comes from a wide variety of sources. 

With some caution, I decided to park myself in the EFTA camp a couple of months ago. My reasoning for doing so was basically three fold. I thought that EFTA membership would offer the UK the best trading terms away from the EU and thus least economic damage, I considered it the option less likely to encounter parliamentary or other domestic resistance, and I thought it would promote the kind of coalition building necessary to help prize the European Union away from the EEA's acquis. 

As a result, I now spend much of my time arguing with advocates of an FTA between the EU and UK. There isn't any hostility and needn't be. If a productive FTA were negotiated within, or just after, the Article 50 period (it looks increasingly likely that an extension to the two years will have to be unanimously agreed upon), I'd jump at it. I am not in principle against a Free Trade Agreement with the European Union. Why would I be? The divide between Brexiteers has mostly been about which kind of Brexit is the most realistic and the most achievable. 

As things stand, a few different schools of thought have emerged and diverged from one another. There are those who believe an associate membership model with EFTA is possible, those who favour full EFTA membership, those who favour associate EEA membership, those who favour the WTO option (which incidentally no major economy has pursued in its trading ties with the European Union) and those who advocate an UK-EU FTA. I hope that is it for relationship proposals. This is all getting rather confusing, even for the experts. 

What I do now understand, though, is that much of the plausibility behind each trading option now weighs upon the technicalities behind leaving the single market. Because before we discuss the merits of EFTA or a Free Trade Agreement, we need to ascertain whether or not leaving the European Union equates on a legal basis to leaving the single market. As is characteristic of most facets of the Brexit debate, here there is strong divide. It will therefore help to start by understanding the nature of the legal instruments at play. Articles 126(1) and 127 of the EEA Agreement, 1994 outline:





These two legal provisions create confusion concerning how the UK would leave the single market. Brussels has, unsurprisingly, taken the position referenced in Article 126, which tells us that since Britain is one of the territories 'to which the Treaty establishing the European Economic Community is applied', when it leaves the European Union it leaves the EEA simultaneously. In other words, we are party to the single market only by virtue of our EU membership. 

This is what I too believed was the case until I spoke to Adrian Yalland, quoted in this Institute for Government paperHe informed me, I think importantly, that the United Kingdom is in fact a signatory to that Treaty independently. This EEA briefing paper, which includes points put to government in an EEA Judicial Review, points out:

"The United Kingdom is a separate “Contracting Party” to the EEA Agreement in its own right: so it is bound, in its own right, by the EEA Agreement. It owes obligations under the EEA Agreement to States that are not members of the EU (Norway, Iceland and Liechtenstein), and since it is a basic principle of international law that States are not affected by Treaties to which they are not party, it is impossible to see how the rights of those States (and the rights of their citizens) could be affected by action under the EU Treaties.
Some commentators have pointed to the fact that Article 126(1) refers to the territory covered by the EEA Agreement as being the “territories” to which the EU Treaties apply (in addition to Norway, 3 Iceland and Liechtenstein). Indeed, this was the Government’s initial position prior to the commencement of the EEA Judicial Review. However, the Government then abandoned this position and finally accepted that Article 126 did not “giv[e] rise to termination of the EEA Agreement ipso jure”. In fact, if the intent of Article 126 were to limit the Agreement only to states which are at any time member states of the EU (and Norway, Iceland and Liechtenstein), the use of the word “territories” would then be incongruous. 
It is made clear by Article 126(2) that “territories” refers to territories which are not included within the Contracting Parties’ national borders, but for which the Contracting Parties have diplomatic responsibility. Article 126(2) then disapplies the Agreement from some of those territories." 

So there does appear to be significant legal scope for the ability of the UK to remain temporarily jammed inside the single market (itself much better than being temporarily jammed outside of it) whilst it makes its next move. There is also the question of the Miller Supreme Court case, back in January of this year, which stated in paragraph 121:

"Where, as in this case, implementation of a referendum result requires a change in the law of the land, and statute has not provided for that change, the change in the law must be made in the only way in which the UK constitution permits, namely through Parliamentary legislation."

...meaning that parliament must pass legislation in order to activate Article 127 of the EEA Agreement. This was, after all, our constitutional path into the Agreement, so it makes sense for it to be the way out. I think it is also important that parliament decides on leaving the single market because there doesn't appear to be the same clarity in mandate. Control over whether we leave the EEA will be useful in blockading against economic disruption. Business will certainly be pleased if we can show Brussels that legally there is no necessity for us to leave the single market on Brexit Day in March 2019. 

This appears to be what Brexiteers should be turning their attention towards for the time being. The technicality here could end up determining our permanent trading relationship with the EU when this is all said and done. 





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