The UK decision to withdraw from the EU: parliament or government?

The litigation concerning the triggering of Art 50 TEU is under way, with hearings this week and next. It is the constitutional case of the century. The government’s skeleton argument has been published. This reveals that one of the pillars of its defence is that the decision to withdraw from the EU has already been taken. Consequently, all that is in issue is the authority to notify the EU of that decision, and to start the two-year negotiation period provided for in Art 50. That, the government’s case goes, is a decision of high policy which is rightly in the government’s hands, and not in those of parliament.

In an excellent blog Mark Elliott and Alice Young dissect and critique this framing of the litigation. They point out that it is difficult to identify who took the momentous Brexit decision, given that the referendum was advisory and there is no formal government decision either – only political statements. Their critique is informed by UK constitutional authority.

In this blog I also want to focus on this question, but more from an external and EU law perspective. The theses I want to present are twofold. First, and at the expense of coming across as completely divorced from reality, I argue that there is as yet no Brexit decision. Second, if the principle of UK parliamentary sovereignty is to continue to have real meaning, the decision has to be taken by parliament, not the government.

Ever since the debate about the respective roles of parliament and government in the Brexit process gathered steam, there has been an excessive focus on the notification question: is it for the government to “trigger” Art 50 by notifying the EU, or is it for parliament? This kind of framing of the debate overlooks the wording of Art 50 TEU. The first paragraph of that provision proclaims that “any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements”. The second paragraph states that “a Member State which decides to withdraw shall notify the European Council of its intention”. So first, there must be a constitutionally orthodox decision to withdraw. The notification is secondary.

The first paragraph of Art 50 distinguishes the article from standard treaty clauses governing termination. Those clauses usually conflate the withdrawal decision and its notification. They reflect a traditional international law and international relations paradigm, according to which foreign affairs are mostly a matter for the executive. The clauses themselves do not mention the executive, but they treat states as unitary actors, and the practice is simply that the state expresses itself internationally through executive action. It is the government which acts on the international plane. How such executive action comes about as a matter of domestic law is irrelevant, except in blatant cases (see e.g. Art 46 on provisions of internal law regarding competence to conclude treaties). By contrast, Art 50 expressly requires that there is first an internal decision to withdraw, adopted in accordance with the Member State’s own constitutional requirements. Once that decision has been taken, the Member State must notify, and I have no issues whatsoever with the position that this is properly governmental action. Indeed, it is the European Council which needs to be notified, and that EU organ is itself composed of heads of state and government. Nor would I argue that it is for anyone else than the Member State concerned to determine what its own constitutional requirements are, for taking the withdrawal decision. The other Member States and the EU institutions do not, on the face of things, have the power to review whether the withdrawal decision is constitutionally orthodox.

And yet the reference to such a constitutionally orthodox decision is critical. The EU is not a classical international organisation. It establishes an ever closer union among the peoples of Europe (Art 1 TEU). It is founded on representative democracy (Art 10 TEU), with both direct representation (in the European Parliament) and indirect representation (democratically accountable governments acting in the European Council and in the Council). EU law directly confers rights on individuals (Van Gend en Loos judgment). These rights are extensive and significant, ranging from free movement, over trade, to fundamental rights in the EU Charter, including social rights, to a panoply of rights in EU legislation (consumer rights; environmental rights; rights to agricultural subsidies; company law rights; transport rights; rights to enforce foreign judgments; rights to asylum; etc etc). As far back as 1974 Lord Denning likened the then EEC Treaty to an incoming tide, flowing into the estuaries and up the rivers, and said that it could not be held back because parliament had decreed that it was part of UK law. It is undeniable that since then the tide has waxed tremendously, but the point remains the same. EU law is automatically part and parcel of UK law for as long as the UK is an EU Member State. Or for as long as parliament maintains the effect of EU law, through the European Communities Act (ECA). UK courts fully accept this.

It cannot therefore come as a surprise that Art 50 requires that a decision to withdraw be taken in accordance with a Member State’s constitutional requirements. Indeed, in a large majority of other EU Member States the constitution makes provision for EU membership, and withdrawal would require constitutional amendment.

Much of this EU law orthodoxy may not be to the liking of Brexiters and Leave voters. But if the UK chooses to withdraw in conformity with its international obligations (which the ECA makes part of UK law!), rather than through some type of revolutionary act, Art 50 must be taken seriously. And these international obligations are not trivial, precisely because they have created all these rights, effectively for the whole of the populations of both the UK and of the other Member States.

So when the matter is looked at from an EU law perspective, there is a great legal question looming over Brexit: has the decision to withdraw been taken, and if so when and by whom? I fully realise that even asking this question invites ridicule. Politically, the Brexit decision is a fact. But politics and law are distinct, and for good reason, as a core function of the law is to constrain politics in order to establish and safeguard liberal democracy. And from a legal perspective, the difficulty to locate the Brexit decision needs little elaboration. Parliament organised the referendum without spelling out its consequences, and it is generally accepted that the vote was merely advisory. There is no formal government decision to withdraw, nor has parliament taken such a decision. Just read the government’s skeleton argument in the current litigation and Elliott and Young’s blog to see for yourself what intellectual contortions are required to argue that there is indeed a Brexit “decision”.

Why is this the case? For the following reasons I would surmise. The present government does not want to recognise that the Brexit decision is for parliament because it fears that the parliamentary debate may turn out to be uncontrollable, and lead to constraints on its margin for negotiating manoeuvre. Besides, institutions usually claim that they have the power to do things themselves. But nor is the government willing to adopt a formal Brexit decision, separate from its notification, because that would expose that decision’s lack of constitutional orthodoxy. I do not claim particular expertise in UK constitutional law. But looked at from a distance, there are clearly major questions. What is really left of the sovereignty of the UK parliament if a decision as seismic as that of withdrawing from the EU, a decision with leads to the effective revocation of the ECA, this enormous estuary through which all these EU law rights flow into the UK, can be taken by the government and does not require an “act” of parliament? Of course, the people have voted. But it is equally obvious that parliament did not fully contract out the withdrawal decision to the popular vote.

I wish to state emphatically that I do not think that the UK parliament should kick Brexit into reverse. That would be an affront to the vote, and thus to democracy. But there is a clear need for parliament to get involved because the British people (and indeed those from other Member States affected by Brexit) deserve an open debate among democratically elected representatives about what Brexit means, and how best to organise the future relations between the UK and the EU. And I think it would put the UK in a much better negotiating position if its proposals emanated from such democratic debate, rather than from mere cabinet meetings and Conservative party cenacles.

 

 

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Brexit and trade: the view over the hill

In a recent TV debate, a member of the audience complained to Michael Gove, one of the leaders of the Leave campaign, that Leave were like a WW I general shouting “over the top” to his troops, without anyone knowing what awaits them there. Gove called it an arresting image, and I agree. Here is an attempt to make some sense of what may await the UK “over the top”, with respect to international trade.

If the UK leaves the EU, it will have to set up its own external trade regime. The only exception to that requirement is if the UK were to keep its current customs union with the EU, and therefore also keep the EU’s external trade regime. A customs union means free trade between the parties, and a common trade regime – the EU is a customs union. That is an unlikely scenario, though, as it would effectively also mean keeping the UK inside the internal market. Indeed it would make little sense for the UK to give up its opportunities for determining its own trade regime, and for concluding trade agreements with other countries, without also maintaining full access to the internal market. At any rate, the customs union/internal market option involves the kind of transfer of sovereignty which Brexiters find so objectionable. Note also that both the Norway and Switzerland models are not customs unions. Both Norway and Switzerland maintain their own external trade regime.

The UK has not had a trade regime of its own since its accession to the EEC. What does setting up a trade regime involve?

First of all, the determination of customs tariffs for all physical products (goods) which could be imported into the UK. As a member state, the UK applies the EU tariffs. Of course the government might attempt to find shortcuts, such as keeping the equivalent of a number of EU tariffs. Still, the exercise is a big one, and a wholesale adoption of the EU tariffs seems to me unlikely. Tariffs are a way both to protect domestic producers and to raise revenue. There are surely economic sectors for which the UK would want a different tariff regime from the EU one.

Second, the UK needs to adopt trade legislation of its own. For example, the EU operates a detailed and extensive Customs Code, which will need to be substituted with UK legislation. Also on other trade matters, such as anti-dumping, safeguard, and anti-subsidy measures, etc etc, new legislation will be needed.

Third, the UK will have to look into trade in services, to see whether it wants to change any rules on access to its services markets.

If the UK does not keep the customs union with the EU, there will need to be a WTO negotiation on the UK’s new external trade regime. The WTO Director General has already warned the UK about this. Why is this required, and what does it involve? The reasons are very simple. Tariffs are “bound” in the WTO. Where the UK makes changes to the pre-existing tariffs (in this case the EU ones), particularly changes involving an increase, it needs to negotiate these “bindings” with any other WTO member (basically any other country around the world) with an export interest in the products concerned. Effectively, this looks very similar to a WTO accession. Of course, the UK is already a member, but it does not have a trade regime of its own. So in substance the withdrawal from the EU is comparable to a full WTO accession, and accession negotiations can easily take years. These negotiations would need to be completed before the UK starts negotiations with other countries on free trade. This is the logical sequence: you determine your external trade regime, which applies to all your trade, and you can then conclude free-trade agreements with preferred partners.

Some might say that this WTO negotiation will be straightforward, because the UK will adopt more of a free-trade position: not raising tariffs, but cutting them. One of the Brexit economists, Patrick Minford, even suggests completely free market access – meaning no tariffs. Of course other WTO members would like that, yet there are quite a few comments to be made on that course of action.

First, if the UK opted for total free trade (no tariffs), it would be giving up revenue – and it would be interesting to see how that would affect the alleged financial gains resulting from non-membership of the EU. Currently the income from customs tariffs is part of the UK’s financial contribution to the EU. The UK would also lose most bargaining chips in any future trade negotiations. Why would countries around the world still be interested in negotiating free-trade agreements with the UK, if they already have full access to the UK’s market because of the UK’s free-trade regime? The free-trade model is wholly inconsistent with the idea that the UK will be able to strike better trade deals than the EU. Trade negotiations are about reciprocity, and if you have nothing to offer, others will simply not be interested. Complete, unilateral free trade is of course also an ultra-liberal policy, giving up on any protection of domestic industries.

Second, even with a cut in tariffs, or with complete free trade, other WTO members are likely to call for a negotiation, in which the EU will also need to be involved. The reason? Well, there will be EU tariffs on imports from the UK into the EU. Even if the UK concludes a free-trade agreement with the EU (the ‘Canada’ option), such an agreement covers only products originating in the respective parties. This means that products which are imported into the UK from outside the EU, will no longer benefit from free circulation in the EU. So other WTO members lose the advantage of having the UK as one of the gateways into the EU internal market. For example, it is not inconceivable that an EU-UK free-trade agreement might mean that cars assembled in the UK by Japanese car manufacturers, do not benefit from free access to the EU market: the agreement’s rules of origin may determine that these are not UK products, because of the use of imported components. Also, the EU market effectively becomes smaller. So WTO negotiations there will need to be. And the potential effects on companies’ investment in the UK are obvious: if such investment does not guarantee free access to the EU internal market, there will inevitably be cases were certain companies decide to invest inside the EU, to have guaranteed market access, and not in the UK.

In other words, the first enemy encounters over the top are not so nice, and it may take a long time to get past them.

But then the UK will be able to start a golden age of concluding its own free-trade agreements (FTAs)! The conception among Brexiters appears to be that the UK will not be the last in the queue, and that, with its dynamic and flexible economy, it will in fact find it easier to conclude FTAs than does the EU. Again there are quite a few hurdles, though.

First, the UK will need to catch up, compared to its current position as a member of the EU benefiting from a whole series of EU-concluded FTAs. The view that the UK will be able to maintain its contracting-party status to those agreements seems to me politically and legally untenable. It is true that most of these EU FTAs are so-called mixed agreements, with the UK as a contracting party in its own right. But UK exit will change the terms of trade, and for the same reasons as those requiring a WTO negotiation, the terms of free trade between the UK and existing EU-FTA partners will need to be renegotiated. As was pointed out by Thomas Sebastian at a recent seminar, the rules of origin do not allow the UK to be an autonomous party to such FTAs.

Second, the UK’s market is but a fraction of the EU internal market. It is hardly realistic to think that no major economy will take that into account in determining its trade policy priorities. Access to the EU internal market is a much bigger prize.

Third, modern trade negotiations are as much, if not more, about regulatory issues than about pure trade measures, such as customs tariffs. The EU is a regulatory giant – on that much there is agreement between Leave and Remain. I have argued, before, that Brexit is not an escape from EU regulation. The UK may aim to replace EU regulations with its own, but to the extent that it keeps trading with the EU – currently accounting for a little less than half its trade – it will be a regulation-taker, and it will of course lose its ability to influence those regulations. This is a further reason why major economies will be less interested in negotiating with the UK.

So what could be the gain, really? What does the conquest of the last bulwark, deep down in the valley which lies beyond the hill, actually offer? What a long and uncertain battle to reach a position where the UK is most unlikely to be an important player in international trade policy, and where it is most unlikely that its terms of trade will be any better than the ones resulting from current EU membership. And that is leaving to one side the loss of full access to and participation in the internal market, which accounts for more than 40% of the UK’s external trade.

 

 

The Real Record of the EU Charter of Fundamental Rights

Reposted from UK Constitutional Law Association blog, at https://ukconstitutionallaw.org/2016/05/06/piet-eeckhout-the-real-record-of-the-eu-charter-of-fundamental-rights/

Brexit debates have started focusing on the EU Charter of Fundamental Rights, after it has become clear that the economic effects of the UK departure from the EU are likely to be negative.  Michael…

Source: Piet Eeckhout: The Real Record of the EU Charter of Fundamental Rights

Facts of Life: How Michael Gove misrepresents the effects of EU law and the ECJ case law

The Brexit debate is starting to crystallise. The Treasury’s report on the negative impact of the alternatives to full membership presents the Leave campaign with considerable difficulties. The one EU policy that has always met with broad-based approval in UK political circles is the single market. At least membership gave that purely economic benefit – “if only the EU could be confined to constructing this free internal market” has been a persistent rallying cry. For the Leave campaign now to argue that it does not matter too much whether the UK is inside the EU internal market is rather incongruous, and aims to puncture the political consensus. Not an easy thing to do.

It is therefore not surprising that Michael Gove, in his headline speech in response to the Treasury report on how “the facts of life say leave”, struggles to take issue with the report’s findings. Instead, the focus is on democratic self-government, even “independence” (as if the EU were a colonial master), and on removing the yoke of EU law and of the ECJ case law. The broad argument is that the limited negative economic effects of Brexit – if there are any – are outweighed by the return of full democratic self-government.

At an aggregate level, the extent to which EU membership equals abandoning national sovereignty, to the benefit of an organisation that is not democratic in the ways of a nation state, is a matter of personal assessment. The Leave campaigners are of course entitled to take the view that it is all too much. But facts are facts, and particularly when he speaks about EU law and the ECJ case law, Mr Gove is less than accurate – to put it as mildly as possible. So here are a series of statements that plainly misrepresent the facts.

  • “And if we try to object, the European Court of Justice – the supreme court of the EU – can force us to submit to the judgment of others regardless of what our population, our parliament or even our own judges might think is right.” But in the next sentence Michael Gove states that it is the European Communities Act 1972 (yes, a UK Parliament Act) that is the basis for EU law trumping UK law. So it is the UK Parliament itself that has agreed to the primacy of EU law – an indispensable principle if EU decisions and laws are ever to work, as I have argued before.
  • Mr Gove then argues that “the European Court now has the perfect legal excuse to grab more power – the Charter of Fundamental Rights”, and that “we were promised that we had a cast-iron opt-out” from the Charter by the Blair Government. He adds that the ECJ “has now informed us that our opt-out was worthless”.   Only, the man who negotiated this, then Attorney General Lord Goldsmith QC, has always said that the Protocol to which Gove refers is not an opt-out. And that was always clear: the Protocol does not use the term opt-out, and anyone reading it will conclude that it cannot be construed as an opt-out. It “clarifies” what the Charter is and what it isn’t. It is true that the Blair Government fudged this, but please do not blame the ECJ for it.
  • The speech goes on to take issue with how the ECJ applies the Charter, in various judgments. What Mr Gove conveniently omits to mention is that the Charter is not, in contrast with the European Convention on Human Rights, a freestanding, generally applicable human rights instrument. The Charter only applies within the sphere of EU law – not outside it. It binds the member States “only when implementing EU law” (Art 51(1)). This means that any UK laws which have nothing to do with the EU (believe it or not, still the overwhelming majority), are not subject to the Charter and to the ECJ’s jurisdiction.
  • Several further claims in the speech fail to identify this significant limit to the Charter’s application. For example, Mr Gove states that “the ECJ has recently used the Charter to make clear that it can determine how our intelligence services monitor suspected terrorists.” Fortunately there is a footnote, referring to the relevant case law, in particular Digital Rights Ireland. Anyone trying to get to the bottom of this: don’t look for any such statement by the ECJ, it’s simply not there. What this judgment did was to strike down an EU Directive (yes, the vilified ECJ, always pro integration, now regularly strikes down EU legislation) on the retention of telecommunications data by mobile phone companies, for surveillance purposes. Not at all a case about any member State legislation, let alone about the UK intelligence services. The ECJ indeed applied the Charter, but against the EU itself. This is the Charter’s primary objective: to ensure that the EU respects fundamental rights of EU citizens, and of anyone else who is subject to EU law.
  • It is interesting to explore this a little further. It is true that there are now further questions, before the ECJ, on whether the privacy and data protection principles which were applied in Digital Rights Ireland, are also binding on the UK and affect the legality of the Data Retention and Investigatory Powers Act 2014. But again the ECJ would be able to apply the Charter in this case, only if it established a clear link between this Act and EU data protection legislation. No decision yet. However, what is really interesting in this connection is that the German Constitutional Court decided, back in 2013, that the EU Charter did not apply to German legislation on a counterterrorism database, because that legislation was not implementing EU law. The Court considered that the law was clear about this, and it effectively put the ECJ on notice that it should not extend the scope of the Charter too far. It also used a simple technique for ensuring that the ECJ could not, in that case, disagree: it did not refer any questions of EU law to it. UK courts have also used this technique of saying that EU law is clear, and dispensing with a so-called reference to the ECJ. In those cases the ECJ simply does not have an opportunity to “interfere”. So when Mr Gove states that the ECJ can force through its decisions “regardless … of what our own judges might think is right”, he misrepresents the extent to which national judges are able to influence the ECJ – or even to ignore it altogether, in worst-case scenarios. This is not a personal view. There are whole libraries on the dialogue between national judges and the ECJ, and on how member State courts are capable of influencing the ECJ.
  • Mr Gove also claims that the ECJ can now apply the Charter in cases involving refugees. He is right. But where he says that “Britain has lost control of a vital area of power and the European Court will increasingly decide how our policy must work”, he forgets to mention that the UK has an opt-out/opt-in for EU asylum legislation. It is only because the UK Government decided to opt into some of this legislation (not all of it) that the ECJ case law interpreting that legislation also binds the UK.
  • “The ECJ recently used the Charter to make clear that the European Court – not our Parliament – will decide the issue of whether convicted felons can vote and if so how far this right should be extended.” Well, the case is not about “our Parliament” – it is a French case. And the convicted felon who brought the case objected to the fact that he could not vote for the European Parliament. This, the ECJ found, rightly in my view, is within the sphere of EU law. The judgment cannot be extended to national elections. At any rate, Mr Gove is of the opinion that the European Parliament is “a mock parliament”. And the European Court of Human Rights has long established that a general ban on prisoner voting violates the European Convention on Human Rights. So even if the UK left the EU, there would still be a prisoner-voting problem (withdrawal from the Convention is of course not on the ballot paper in June).
  • There are more misrepresentations. “The ECJ used the Charter to tell us that the European Court will decide whether we can deport Abu Hamza’s daughter-in-law.” Allow me to clarify. First, there is as yet no judgment in the case; only an Opinion by one of the ECJ’s Advocates General. Such Opinions are “reasoned submissions” to the Court, and the Advocate General is independent and has comparable status to an ECJ judge. But the Advocate General never decides; the Court does that. Many Opinions are followed, but not all of them. What is more, this Opinion finds that there may be public security grounds for deporting this person, and suggests leaving it to the referring court (the Upper Tribunal (Immigration and Asylum Chamber) London) to decide upon deportation. It is worth adding that the case is anonymised (“CS”), by the Upper Tribunal, and that it is only because of her identity having been revealed in the House of Commons that we know this is Abu Hamza’s daughter-in-law. Guilt by association?
  • The ECJ “has even used the Charter to increase the price of insurance for women”. Well, not exactly. What it has done is to strike down (again) a provision in an EU Directive that allowed member States to derogate from the principle of equal treatment of men and women, in insurance matters. The Directive prohibits gender-based discrimination in goods and services markets. But it contained a permanent exception for insurance – particularly car and life insurance (women cause fewer accidents, and live longer). The ECJ found that this exception violated the principle of gender equality. The effect is to equalise car and life insurance premiums for men and women. I might add that the ECJ has always been at the forefront of ensuring gender equality, particularly in matters of employment. Its first judgment on equal pay dates back to 1976. Of course I’m sure that the Leave campaigners are not in favour of abandoning equal pay and equal treatment.

I rest my case.

Brexit, sovereignty and the EU Court of Justice

It has been a momentous couple of weeks for Brexit, with the European Council settlement, the announcement of the referendum date, the Cameron-Johnson tussle, and the questions about the legally binding nature of the settlement. On this last point, nearly everything sensible and non-sensible has been said. Of course the settlement is binding, but it has different parts, most of which require further legislative action, either at Treaty level or by way of amending EU “secondary” legislation (which is really not secondary). This is in the very nature of the settlement, as it is prospective: it sets out what the UK will achieve if the referendum outcome is “remain”. But that there is a legally binding commitment, entered into by the 28 states that make up the EU, and which is taken very seriously by them, is beyond all reasonable and unreasonable doubt.

It was mainly comments by Mr Gove, in a BBC interview, which catapulted the “legally binding” question to the media forefront. But this also connects with Boris Johnson’s preference for sovereignty – UK parliamentary sovereignty – over being bound by EU law. I looked at the Gove interview, and found that his comments were actually very measured, in the face of rather aggressive questioning. There was however one line, which he kept on repeating, which paints a false picture. He insisted that as long as the EU Treaties were not amended, the EU Court of Justice could step in, because it stands above the nation states. I think the Court is the elephant in the Westminster rooms, and perhaps also in the wider Brexit debate. The trouble with making sense of what the Court is, and what it is not, is that it requires quite a bit of knowledge of its case law, and of how EU law works. But let me nevertheless try to bring across some basic points.

It is a misrepresentation to say that the Court is supreme over the EU member states. What the Court does is to interpret, authoritatively, EU law, and to require member States to comply with EU law. If anything is supreme, it is EU law, not the Court. And EU law is made by the member states, which have drafted the EU Treaties, and a majority of which need to consent to new EU legislation in the Council of Ministers.

Now it is true that the Court has said that the supremacy of EU law is an inherent feature of the Treaties. But again a lot of care is required with the use of terms. I personally don’t like the term supremacy, even if it is often used, also in the expert literature. I prefer the term primacy, which more adequately reflects the effect of EU law. Primacy means that in the event of a conflict between EU law and the laws of a member state it is EU law which needs to be respected; conflicting national law must be “disapplied”. This is the Court’s instruction to courts in the member states dealing with EU law issues. Primacy is a conflict rule. It does not establish an overall “supremacy” of EU law.

But I can already see the eye-brows of critical readers being raised. What is really the difference in these terms? Are you not simply confirming that EU law – and the Court interpreting it – are supreme, and that national sovereignty has gone out of the window? Before we take a further look at how all of this works, let me make a bit of a case for the defence of EU law primacy. It is, at heart, a rule-of-law and contractual matter. The EU is not about mere political cooperation. It is about making binding agreements on matters of common interest. For those agreements to stick, they must have the force of law. Every member state has an interest in the effectiveness of EU law, but I should think the UK’s interest in ensuring that EU law is respected is even greater than that of some other member states. If anything, the rule of law is taken seriously in the UK, and a complex and far-reaching venture such as creating an EU internal market – to name the EU’s most significant policy – could never work without respect for EU law. The UK – UK companies, the government, and UK lawyers – have been at the forefront of much EU law litigation, and London is a centre of EU law practice. This has all been much to the benefit of the UK’s free trade and internal market agenda. And it will be clear to all that the often advocated position that the UK Parliament should be able to decide, case by case, which EU laws apply in the UK cannot work at all. If all member states adopted such a position, there would be no EU law left worthy of that name. Any agreement in Brussels would immediately unravel.

The next point is that the EU Court may well say that primacy is inherent in EU law, but that is not the position under UK law – or indeed under the laws of about any other member state. Under UK law it is the European Communities Act 1972 which proclaims and establishes the force of EU law. This is the core sovereignty point. As my columnist hero Philip Stephens points out in the FT, Parliament can at any time amend or revoke this Act, and throw EU law primacy out of the window. Of course, in the absence of a withdrawal from the EU such a revocation of primacy would create a membership crisis, precisely because membership cannot work without respect for EU law. But is that not simply a normal club membership issue?

So the EU could not work well without the primacy of its laws. Now it is the case that the EU Court is the ultimate interpreter of EU law, and that it is at times activist and creative, particularly when it comes to the interpretation of the founding Treaties. Criticisms of this activism are a current staple of EU law academic commentary, and flare up with reassuring regularity. But a large majority of court-watchers also agree that the Court is not unchecked. Its case law can only work if courts in the member states accept and implement it. There is a well-established judicial dialogue, particularly between supreme and constitutional courts, and the Court of Justice. The German Constitutional Court has been something of a protagonist, but the UK Supreme Court has also been an effective interlocutor. The other point is that the Court of Justice is generally sensitive to the political times, as a supreme court should be. A recent example is the case law on EU citizenship, where in the last couple of years the Court has become more conservative, for example in the area of …, yes, social benefits for EU citizens.

My last point, and perhaps the most significant one. If I were asked how often EU law has prevailed over primary legislation enacted by the UK Parliament, in the course of the UK’s EU membership, I would struggle to come up with even a handful of cases. The best known case is Factortame, more than 25 years ago, where the UK courts accepted that an act of Parliament discriminating against Spanish fishermen had to be disapplied. That is about as significant as it ever got. I would really challenge those arguing that EU law, or the Court’s supremacy are intolerable to come up with specific examples of where and how EU law interferes with significant UK primary legislation. The list will be very short.

Brexit is not an escape from EU regulation

BC49YM  Businessman
Copyright The Telegraph

One of the recurring themes of the Brexit debate is that the EU is said to impose an excessive regulatory burden on UK companies and on the UK economy.  Remarkably, a substantial number of business people also adopt such a position.  As a mere academic I am of course not in a position to disprove assessments within companies that EU membership has led to more “red tape”.  But I do feel that some basic facts are missing from the conversation.  They concern the reasons for EU regulation, and the question whether Brexit equals escape from it.

Most of the EU regulation of goods and services is aimed at establishing an EU internal market – the very EU project which is met with near universal approval in the UK.  The regulation may at times be complex, because of the inherent difficulties of regulating myriads of goods and services in Europe’s sophisticated economies, but the overall goal is clear and straightforward: to substitute 28 sets of rules with harmonised ones which allow companies to trade throughout the EU (and indeed beyond, as I will show).  It is easy to lose sight of that dimension of EU regulation, which is taken for granted, precisely because the EU has been so successful at achieving free trade, at least as far as goods are concerned.

So why might this dimension of EU regulation be undervalued?  I think it may have to do with its very policy mechanics.  Where the EU harmonises national product regulations, it substitutes itself for national regulators, who do not regulate for the sake of it, but seek to achieve goals such as health, consumer and environmental protection.  That inevitably means that the EU, when harmonising, must also pursue those goals.  If it did not do so, it would be accused of simply deregulating, at the expense of public health, the environment, and the consumer.  Obviously, people and companies may disagree whether the EU strikes the right balance, in a particular case, between free trade (deregulation) and the public policy concerns underpinning regulation.  Companies may well think that the EU regulates with too much of an eye on public policy and too little on free trade.  But the overall prize is nevertheless a very big one: the ability to sell products which comply with EU regulation in a market of more than half a billion people.  Moreover, most of the academic literature has expressed concerns about excessive EU deregulation, rather than excessive regulation.

But let us assume that the UK verdict is nevertheless negative, and that Brexit is preferred because it removes the EU regulatory burden.  Well, those who favour this might come in for a surprise.  And in saying that I want to discount the so-called Norway option: that the UK would become part of the European Economic Area, and therefore continue to bind itself to EU internal market regulation.  Let us assume the UK government does not opt for this.  What would happen?

First of all, UK companies seeking to export to, or operate in the EU’s internal market would still have to comply with EU regulations.  That much is incontrovertible.  In that connection, I have to say that those who argue that, instead of exporting to Europe, the UK economy could orient itself towards trade with other parts of the world, are living in fantasy land.  There is nothing whatsoever in EU membership which compels UK companies to trade with Europe, at the expense of trade with the rest of the world.  Quite the contrary.  The EU has concluded free trade agreements with many non-EU countries, from which UK exporters currently benefit.  And it is negotiating the biggest free-trade agreement of all, TTIP, with the US.  If anything, Brexit might make it more difficult to trade with certain countries.  Also, why would successful UK companies want to forego the huge market which lies just across the Channel?

Second, and this is perhaps the most significant yet least noticed feature of EU regulation: being outside the EU does not equal escaping from regulation, even for businesses whose trading with Europe is limited.  There is indeed, if you will, a dark, hegemonic side to EU regulation.  In lawyers’ parlance, it often has extraterritorial scope or effects.  When I say this is least noticed, I am particularly referring to the UK.  Other parts of the world are much more aware of this phenomenon, and complain about it.  This is particularly the case for the US.  How exactly this extraterritoriality phenomenon works is not for this blog to disentangle, but there is very serious academic work on this, for example by Anu Bradford at Columbia, who speaks about the Brussels effect; and by my colleague Joanne Scott at UCL.  Let me just give some quite telling examples.

Exhibit 1.  The EU Court of Justice has interpreted EU data protection and privacy legislation as including a so-called “right to be forgotten”.  This was in a case involving Google, which is now obliged to remove certain links, when so requested by an individual who considers that the links are outdated and affect their privacy.  Wherever you log onto Google, you will see a message about this.  If there was ever a UK competitor to Google, it would have to comply with this right to be forgotten because of the very nature of the world-wide web.

Exhibit 2.  The same EU Court of Justice has recently decided, in a case involving Facebook, that the US is not a “safe harbor” as regards the processing of personal data.  There are insufficient guarantees in US law for the protection of such data, and unless and until a new deal is reached with the US, internet companies could not hold the data of EU citizens on US servers.  That would constitute a violation of the relevant EU legislation.  After Brexit, such legislation would continue to apply to any processing of EU-originating personal data in the UK.

Exhibit 3.  EU policies on climate change have aimed to include airline CO2 emissions into the EU’s emissions trading scheme.  But this has not been limited to intra-EU flights: the goal is to extend it to all flights to or from EU territory, including those operated by non-EU airlines.

There is a wider political point about all this.  Even in the cleanest Brexit scenario, where the UK decides not to negotiate access to the EU internal market of the kind from which Switzerland or Norway benefit, much EU regulation will continue to apply in the UK.  Of course, the UK could try to object to some of this regulation, but it would need to negotiate with the EU in order to change things.  From the outside, that is inevitably going to be much harder than from the inside, as a full EU member.

Brexit and the illusion of immigration control

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Consider the following excerpt, from an article which appears in the Financial Times, in June 2020:

The UK’s determination to preserve its independence creates an additional risk hanging over the economy. The country is not a member of the EU, but depends hugely on access to EU markets. This year it must renegotiate its relationship with its big neighbour.

After a referendum vote in favour of tougher immigration controls, UK politicians must in the next 12 months implement curbs on EU migrants. The difficulty they face is squaring that with the EU principle of the free movement of people. The UK’s trading relationship with the EU is based on a web of bilateral contracts. In a worst-case scenario, those contracts could be terminated.

Failure to secure future access to EU markets and recruit skilled labour would pose a threat at least as great as a soaring currency. The uncertainty already worries UK business leaders.

Their assumption is that a pragmatic solution will be found; both sides would have much to lose and the EU has bigger problems to resolve without picking on the UK. But symbolically, the Prime Minister will spend the Brexit anniversary on Friday in Brussels meeting the European Commission president. Reaching a deal with the EU, a government spokesman says, “is probably the biggest challenge facing the UK in 2020”.

Is this complete fiction? My argument is that it is not, and the above excerpt is in fact taken from a piece by Ralph Atkins, in the FT of 14 January. Except that Atkins talks about Switzerland, today – the changes I have made are limited to substituting references to Switzerland with the UK…

Indeed, i is becoming increasingly clear that Brexit, if it happens, is unlikely to result in a severing of all ties between the UK and the EU. Two pieces published this week, by the EU Council’s former lawyer, Jean-Claude Piris in the FT, and by Jonathan Portes for The UK in a Changing Europe, draw attention to what is likely to happen in the event of a Brexit vote. Let me add my own voice to these analyses, as they are critical for the referendum vote.

It is now crystal clear that immigration is among the major concerns which may determine how votes go in the Brexit referendum. Voters may think that Brexit will mean that future UK governments will be able to limit immigration from the EU, in much the same way as they are able to limit non-EU immigration today. A return of full sovereignty over the UK’s external borders. However, they are likely to wake up in a very different world, with a big Brexit hangover. Why is that?

A Brexit vote means that the UK government needs to negotiate its withdrawal from the EU – see Art 50 of the Treaty on European Union. This is a legal requirement, binding on the UK, and it is of course a necessity of life, too, because withdrawal from the EU is a most complex kind of divorce, with a lot of joint assets and a thick web of legal commitments. The other EU leaders (the European Council) will give guidelines to the EU Commission, which will need to negotiate with the UK on the Brexit arrangements. There is a lot at stake here, both for the UK and for the EU. Although the contents and outcomes of this negotiation are in the realm of conjecture, there are clear forces, present today, which are likely to drive this negotiation. It seems highly implausible that the UK government would not want to maintain a high level of access to the EU internal market. It would definitely be under pressure, from the side of business, to minimise the Brexit disruption by maintaining market access as much as possible. But the EU will, in return, make demands. And it has always been part of the EU’s ethos that the internal market is about more than trade in goods and services: it includes free movement of persons. When the internal market was extended to the EFTA countries, in the early 1990s, through the EEA Agreement, free movement of persons was fully included. When Switzerland rejected the EEA, it subsequently requested a series of agreements on access to the internal market, but again the EU insisted that there be an agreement on free movement of persons. The above excerpt, in its original wording, concerns the issues Switzerland currently faces as a result of its own anti-immigration referendum.

But in the UK, too, there will be forces advocating the continuation of free movement after a Brexit referendum: businesses, universities, perhaps even the NHS; and not to forget UK citizens living in other EU countries.

This last constituency highlights another dimension of the Brexit negotiation. The EU Commission is likely to insist that EU citizens currently living in the UK may continue to do so, and will not be discriminated against – in return of course for protecting the rights of these UK citizens living in Europe. If this were accepted, the status quo would linger on, making it even harder to move to an entirely different regime for new entrants (and leavers): why should they be treated differently?

Of course all this might be different if the main political parties made firm promises that a Brexit vote will mean a return to full immigration control, also for those from the EU. But neither the Conservatives nor Labour make such a promise. Those voters who choose Brexit with a view to the UK regaining such control are at great risk of being completely desillusioned with the ultimate outcome. This needs to be emphasised