Brexit update May 2018

Professor de Mestral has recently retired from the Faculty of Law at McGill University where he was the Jean Monnet Chair in the Law of International Economic Integration.  Armand taught courses in the law of the sea, public international law, international trade law, international arbitration, the law of the European Community, and public international air law. He has produced a huge volume of books, articles and studies in English and French on international trade law and international law.  He has also served on WTO and NAFTA dispute settlement and arbitration tribunals. He was made Member of the Order of Canada in 2007 and is the 2017 recipient of the John E. Read Medal.

CIGI, in conjunction with its partner the British Institute of International and Comparative Law (BIICL) launched its latest book Complexity’s Embrace: International Law Implications of Brexit in London on May 3. Based on papers presented to a conference in London on January 31 2017, the book covers a wide range problems posed to the British government by Brexit. In retrospect, the choice of topics was remarkably prescient and, unfortunately, few of the issues raised appear to have been resolved either to the satisfaction of the British government or the negotiators of the European Union. With less than eleven months left to the Brexit date of March 29, 2019 it seems appropriate to take stock of the negotiations and their uncertain outcome.

What does Britain want? The British government continues to have difficulty in fully defining its negotiating position. Starting with the narrow and somewhat unexpected victory of the Leave campaign and the pledge by Prime Minister May that “Brexit means Brexit,” neither the Prime Minister nor her Trade Minister Davis have succeeded in clearly defining the preferred outcome. Options continue to range from no deal, falling back on basic WTO most favoured nation (MFN) rights, a free trade agreement such as the Canada – EU Comprehensive Economic and Trade Agreement (CETA), a “customs partnership” defined as close association based on but not fully implementing a customs union under which the UK would collect EU customs duties, the EU customs union involving free movement of goods services persons and capital or the customs union completed by the disciplines of the EU internal market, in an arrangement similar to the European Economic Area which links Norway to the EU or the100 bilateral agreements between the EU and Switzerland.

The Prime Minister is reported (The Guardian May 4, 2018 p 2) to favour the customs partnership but reportedly was unable to reach agreement in the inner “War Cabinet” committee which is charged with guiding the negotiations with the EU Commission. The Labour Party has opted for maintaining the EU customs union, but so far has lacked the will to disrupt the negotiations and force the hands of the government by a vote of no confidence. In recent weeks the House of Lords has become the centre of opposition to a hard Brexit with the adoption of a series of amendments to the Repeal Bill which would, if adopted by the House of Commons, require the government to maintain the customs union with the EU and require a parliamentary scrutiny of any future negotiated settlement before it becomes binding on the UK.

Negotiations continue with the EU Commission to agree upon a Leave Agreement to define the terms of departure of the UK from the EU. A lengthy and complex text, which includes many agreed provisions, such as the cost of withdrawal to be borne by the UK, but also a number of unresolved articles – particularly those referring to the maintenance of a free and open border between Northern Ireland and Eire. Until complete agreement has been reached with the EU on the terms of leaving, the Commission has refused to begin formal negotiations to define the economic relationship which would replace the EU treaties after Brexit.

The deadline of March 29, 2019 is so short that both the UK and the EU have agreed on the necessity of a phaseout period of another 21 months. On both sides, there is growing realization that a complete long-term arrangement is unlikely to be achieved within the time available, but so far there has been no suggestion that the deadline of March 2019 might be extended, as permitted by article 50 the TFEU.

The watchword on both sides is that negotiations are continuing and will succeed in due time, but Commissioner Barnier, who leads the EU negotiating team continues to express skepticism on the acceptability of various UK proposals such as the “customs cooperation” option currently mooted in London, and there is uncertainty that the next Heads of State EU Summit in June will be able to sign off on a leave agreement and authorize the beginning of negotiations on the future economic relationship between the two parties.

The situation of the government of Prime Minister May is made more difficult by the divisions within her parliamentary caucus which appears to be divided between some 90 “hard Brexit” MPs and others who may favour softer options and possibly some who would support maintenance of the EU customs union with the Labour Party. The 10 Northern Irish unionist MPs continue to reject any suggestion that their region might remain in the EU customs union if the rest of the UK is out.  Further complicating the position of the government are a number of potential constitutional issues ranging from the exercise of powers devolved to Scotland and Wales to the propriety of allowing the Executive to take various decisions regarding the status of EU law which will remain applicable in the UK after Brexit. The authority of Parliament to have the last word over the terms of Brexit is seen by all to raise high political questions and by some to raise constitutional issues as well.

The future remains uncertain. Many things may happen, including an election provoked by some Conservative MPs joining the opposition to accept amendments of the Leave Bill. The most probable unfortunately is that Britain will muddle on towards an uncertain future.

What is certain is that the Canadian government should be preparing for a situation where new international arrangements with the UK on trade, civil aviation, atomic energy and other issues may be urgently required if provoked by a sudden and hard Brexit on March 29, 2019.

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