Sometimes the stream of Brexit hysteria in the Daily Express yields the odd interesting nugget. Last week the paper reported that the European Commission wants to “torpedo” the Brexit negotiations by putting “a legal lock on discussions about the UK’s access to the single market, meaning that the issue cannot be brought up during the negotiations.”
The source of this story is Ryan Heath’s Politico column, in which he reports on a conversation with “a senior Commission source”:
There may be a few months where the parties are not really talking to each other. [If] the U.K. says we want to discuss tariffs and the [location of] the European Banking Authority and the space program, and what happens to [Britain’s European Commissioner Julian] King … [the EU’s Brexit negotiator Michel] Barnier will have a simple answer: ‘This is not in my mandate to negotiate with you.’
Barnier will not be legally allowed to negotiate on trade, on customs, on whether the U.K. can still participate in the Horizon 2020 research program.
In other words, there will be a legal barrier to discussing trade. The only negotiations allowed will be those about the separation agreement.
There is nothing here that the EU trade commissioner hasn’t already said. Last summer, Cecilia Malmstrom insisted that, under EU law, the EU can only negotiate trade agreements with third countries. Therefore the UK must become a third country before it can talk trade with the EU. In other words, it must leave the EU before it can do a trade deal.
She hasn’t changed her tune on this since. If the Express’s Nick Gutteridge had read one of his own articles from earlier this year, he would have found this quote from Ms Malmstrom (my emphasis):
First of all they have to formally invoke the Article 50, the letter of divorce. Then the European Council will discuss that and based on that they will give a mandate to the Commission to negotiate.
Then, if they do leave as the prime minister has said the internal market and also probably the customs union, there will have to be all the exit procedures and then there will be a trade agreement between us and the United Kingdom which would be negotiated after they have left.
When she says a deal can be negotiated in two years, she’s talking 2021, not 2019.
She said it again earlier this month:
.@MalmstromEU: “First exit, then we start to discuss the next phase. We will not discuss the trade agreement in parallel.”
— Marcus Leroux (@marcusleroux) March 2, 2017
If she is right, the triggering of Article 50 next week will take us straight to trading under WTO rules two years from now.
Luis González García of Matrix Chambers thinks she’s over-egging it though:
Can the UK negotiate a trade agreement with the EU while being a member of the EU?
According to the EU’s Trade Commissioner, Cecilia Malmström, the answer is no. In a recent interview she said, “There are actually two negotiations. First you exit, and then you negotiate the new relationship, whatever that is.” Her position seems to favour a strict interpretation of Article 50. This interpretation may be supported by the fact that a formal trade deal between the UK and the EU would be in conflict with the EU rules and practice in the negotiation and conclusion of trade agreements.
But in my opinion nothing in Article 50 prevents the EU from initiating formal trade negotiations with the UK during the withdrawal process. Article 50 (2) provides in the relevant part that
A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.
This formulation requires the EU to conclude a withdrawal agreement with the UK, taking into account the framework of the trading relationship between the withdrawal Member State and the EU. What could be included in the “framework” is unclear but it seems to me that the spirit of Article 50 envisages the adoption of an instrument setting out the new rules which would govern the bilateral trade relations between the UK and the EU, including the technical aspects of a future trade agreement which could only be concluded once the UK has formally exited the EU.
This paper from Sussex University comes to a similar conclusion:
Article 50(2) TEU addresses the content of the withdrawal agreement. It is open-ended, stating that ‘the Union shall negotiate and conclude an agreement with [the UK], setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.’ This does not preclude trade talks forming part of the Article 50 TEU withdrawal agreement or taking place in parallel. In practice, as Article 50 TEU has never been implemented before, legal debates about whether the UK faces restrictions in pursuing trade talks are highly politicised.
In other words, there’s a bit of posturing going on here and the law isn’t really clear.
The European Parliament’s committee on constitutional affairs seems to agree, arguing that, in practice, it is very difficult to disentangle the two agreements:
The treaty provision establishing that the withdrawal treaty will be concluded in a manner “taking account” of the future relationship is also a challenge in several aspects. This implies that the content of that future relationship should be known not only at the time of the signature of the withdrawal agreement but, ideally, from start of the negotiations. The greater the level of understanding on the future relationship, the easier drafting the withdrawal agreement will be.
What seems desirable is that the withdrawing state has a clear projection of the future relationship when negotiating the withdrawal agreement, and that both agreements are negotiated in parallel. Ideally, when the rights and obligations deriving from the Treaties for the UK and its citizens extinguish, as agreed in the withdrawal agreement, the transitional provisions and/or the new partnership provide for a clear legal framework so there is as little legal vacuum as possible.
As does Steve Peers, professor of EU law at Essex University:
Since the UK is going to be in a different situation, it could be argued the normal rules can’t really apply and the UK should be able to have informal trade negotiations that could be enforced from the day it leaves.
All very sensible. It’s in all countries’ interests to reach some sort of trade deal after Brexit so why would anyone want to put a legal block on trade negotiations?
The trouble is, common sense seems to be in pretty short supply at the moment and we don’t really know what the law says because none of it has been tested. As the BBC’s fact-check concluded:
Under current EU rules, EU countries cannot make separate trade deals with individual member states or non-EU countries. However, there is no legal precedent for a country to leave the EU and renegotiate a trade agreement with the bloc. Legal experts say the UK could argue its official status has changed once it invokes Article 50, but this is largely hypothetical at the moment.
There are all sorts of competing interests in the other 27 countries. Any one of them could bring a legal challenge if they thought there might be some advantage to be gained by holding up the trade negotiations. Even if they were not successful, what would happen to the timing of the negotiations? Would it be like a rugby game where the clock stops or would the 2-years keep running down while the court case was heard?
In normal times we would assume that someone somewhere in Whitehall was looking at this, discussing it behind the scenes with EU lawyers and making a contingency plan. But when a senior government minister can come before a Commons select committee and revel in his government’s ignorance and lack of preparation, these are clearly not normal times.
There is a great quote on one of those demotivational slides which is a warning to anyone about to embark upon a major change:
When the winds of change blow hard enough, the most trivial of things can become deadly projectiles.
This may be one of those trivial things. Let’s hope it never gets much of a wind behind it.