Category Archives: European Union

Britain, Economic, European Union, Government, Politics, Society

Brexit: The Single Market & Related Options

BREXIT – ACCESS TO MARKETS

Single-Market

Brexit Briefing: The Single Market

AS Brexit negotiations begin to extricate the UK from the European Union, one of the biggest factors ministers will have to contend with is the issue of the single market. The EU has said that Britain will not be allowed to benefit from the free-trade arrangements once it has left the bloc, a major part of why the EU exists for the mutual benefit of constituent members. So, if the UK were forced to leave the single market (very much against its wishes), what could we end up with?

. The Norway Model

MEMBERSHIP of the European Economic Area (EEA) would put Britain alongside Norway, Iceland and Liechtenstein, and is what Remainers mean when they talk about staying in the ‘single market’. It would keep existing trading rules but take Britain out of the Common Agricultural Policy. However, we would also have to swallow EU laws without being able to influence them, accept rulings by European judges and carry on paying into the budget (Norway’s fee is estimated at around 90 per cent of the UK’s per person). Uncontrolled immigration would continue. Unacceptable to Tory Eurosceptics.

. The Swiss Model

A SORT of EEA minus. The Swiss are members of the European Free Trade Association but not the EEA. They have a series of bilateral trade deals with the EU, which cover trade in goods but very little in services such as banking. The Swiss can negotiate trade deals with third countries, but also make a huge financial contribution to the EU. They are inside the passport-free Schengen zone and have to accept free movement. This option is also toxic for Eurosceptics.

. The Ukraine Model

A JANUARY 2016 agreement between the EU and the Ukraine could form the basis for the UK deal. It includes trade market access and co-operation on defence and security but doesn’t require free movement or the application of EU law. However, the UK would also require a deal on financial services.

. PM’s ‘free trade deal’

IN JANUARY, the Prime Minister said she wanted a ‘deep and special partnership’ covering trade and security. At the same time she says – echoing the Leave campaign – that Britain should take back control of its laws, borders and money. That means no acceptance of EU laws, no more free movement and an end to ‘vast contributions’ to the EU budget. Open issues include immigration rules, how much the UK pays to belong to EU agencies such as Europol, the ‘divorce bill’ and what the new trade rules are. The time it takes to implement such a deal could give Mrs May room for manoeuvre.

. No deal

BRITAIN would revert to World Trade Organisation rules – meaning tariffs on some goods and services. Likely to mean no ‘passporting’ rights for the City of London to trade on the continent. It would create a legal and administrative vacuum on the rights of EU nationals in the UK and British ex-pats, the Irish border, security co-operation, and deals on aviation, agriculture and fishing. Chaotic in the short term.

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Britain, European Union, Finance

Macron tells British PM that UK can ‘always’ change its mind on Brexit

FRENCH-BRITISH RELATIONS

French President Emmanuel Macron Receives British Prime Minister Theresa May At Elysee Palace

The summit in Paris was intended to set out a joint approach to tackling terrorism and online radicalisation.

The French President, Emmanuel Macron, has told Theresa May that the door is “always open” for the UK to change its mind about Brexit.

Emmanuel Macron appeared to hold out the prospect of allowing Britain to re-enter the EU as the pair held a joint news conference in the garden of the Elysee Palace in Paris.

Mr Macron said: “Of course the door remains open, always open, until the negotiations come to an end.”

But he stressed that “once the negotiations have started, we should be well aware that it will be more difficult to move backwards”.

Their first bilateral meeting had the uncomfortable backdrop of Mrs May – abroad for the first time since losing her majority – meeting the President following his recent comfortable election victory and on the brink of big gains for his party in parliament.

It comes as the UK’s Brexit strategy has been thrown into doubt by the shock election result, with pressure on Mrs May from factions within and outside her party to water down her threat to withdraw Britain from the EU with “no deal”.

The Prime Minister insisted that the Brexit negotiations – due to start next week – would start on time and that there would be no requests for a delay from the British side.

But she dodged a question on whether she now intended to pursue a “soft Brexit”, saying: “We want to maintain a close relationship and close partnership with the EU and individual member states.”

She added that after the election there was a “unity of purpose that having voted to leave the EU, that the Government gets on and makes a success of it”.

The President – asked if he believed that is what Mrs May intended as the leader of a minority Government – said it was for her to comment on the UK’s intentions.

Mrs May is said to be close to formalising a confidence and supply agreement with the Democratic Unionist Party, which has reservations about leaving the EU Customs Union and would refuse a hard border with the Republic of Ireland.

The summit in Paris was intended to set out a joint approach to tackling terrorism and online radicalisation, including levying hefty fines on the tech giants such as Facebook, Twitter and YouTube for failing to remove extremist content.

Echoing some of the rhetoric from British ministers about the need to allow the security services to access encrypted messages, Mr Macron said the intelligence agencies must be able to access digital content “no matter where it is located”.

Both leaders have stressed their “solidarity” in the face of terrorism. Mrs May said that “nowhere is our co-operation closer than in the area of defence and security”, with both countries leading international efforts to attack Islamic State with airstrikes.

Earlier, the German finance minister Wolfgang Schauble said in an interview with Bloomberg that if the UK changed its mind on leaving the EU, “of course they would find open doors” in Europe.

 

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Britain, Economic, European Court, European Union, Government, Legal

Free-trade deal possible post-Brexit following landmark EU court ruling

FREE TRADE AGREEMENT

ECJ

The court ruled that Brussels has trade negotiating competence over all goods and services.

Britain’s ambition to sign a quick Free Trade Agreement with the European Union after Brexit has received a significant boost after a landmark ruling by the European Court of Justice handed expanded trade negotiation powers to Brussels.

The much-anticipated decision from the court in Luxembourg surprised experts by ruling that on key areas – including financial services and transport – the European Union does not need to seek ratification of a trade deal by the EU’s 38 national and local parliaments.

Trade experts said the ECJ ruling could substantially reduce the risk of any future EU-UK free trade agreement getting bogged down in the EU national parliaments, opening the way for an FTA to be agreed by a qualified majority vote of EU member states.

“The Court of justice says all services – even transport – can be ratified by a qualified majority vote, which is potentially quite a big opening for the UK,” said Steve Peers, professor of EU law at Essex University. “It could certainly make things easier.”

In the ruling, the ECJ was asked to decide whether the new-generation bilateral EU-Singapore trade deal should be treated as a so-called ‘mixed’ agreement – that requires ratification by national parliaments – or could be agreed by a qualified majority vote of member states.

The court ruled that the EU did not have exclusive competence to conclude the Singapore deal, but said that only in two narrow areas – namely non-direct foreign investment and the investor-state dispute resolution mechanisms – did it need to seek ratification by national parliaments.

By contrast, the court said the EU did have competence to conclude agreements without ratification across the great majority of the Singapore agreement – contradicting parts of a previous opinion by the court’s advocate-general.

The court ruled that Brussels has trade negotiating competence over all goods and services.

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Definition, meaning and purpose of a Free Trade Agreement (FTA).

Areas covered by EU competence include all goods and services, “including all transport services”, as well as intellectual property rights, competition policy, labour and environmental standards and the rules relating to exchange of information.

Legal and trade experts said the ruling had potentially massive implication for Brexit if the UK formulated its own FTA to avoid investment provisions and investor-state dispute mechanisms, relying on alternative arrangements such as bilateral investment treaties and WTO panels.

“This is the most significant ECJ case on EU trade policy for twenty years and has huge ramifications for any UK-EU FTA,” said Nicole Kar, head of international trade at Linklaters, the law firm.

“In policy terms, now the UK government will want to consider whether it moderates its ambition for the UK-EU FTA to those matters where there is exclusive competence in order to secure agreement through EU Member State governments by qualified majority voting.”

If Britain took a more expansive approach, Ms Kar warned, it risked any FTA getting mired in member state politics as happened last year when the regional Walloonian parliament of Belgium held the EU-Canada trade deal to ransom.

This problem arises because some EU member states, like Belgium, have domestic law that requires local parliaments to sign off on trade deals before they can be ratified by at a national level.

Allie Renison, head of EU and trade policy at the Institute of Directors, said the court ruling was to be welcomed and would make it easier for the EU to conclude deals “without fear of as many hold-ups from national and sub-national legislatures”.

“How this affects Brexit negotiations will depend on whether the final trade agreement includes investment provisions or not, although neither the UK or EU has expressed much interest in this to date,” she added.

“It’s important to remember that any eventual UK-EU trade agreement would not be about opening up each other’s markets in controversial areas, but trying to limit the amount of disruption to trade, and so it is unlikely to encounter the same resistance from other EU countries once concluded by the Commission.”

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