Following the PMs Lancaster House speech, her meeting with Donald Trump promising a UK-US trade deal, and with a short Bill passing through Parliament authorising the triggering of Article 50, Brexit would appear to be in full swing.
However there is a large fly, or perhaps even a small scorpion, in the ointment. EU officials are arguing that the UK may not even begin negotiating trade deals with countries outside the EU prior to actually leaving, i.e. at the end of the two-year Article 50 process.
According to Federica Mogherini, the EU’s foreign affairs commissioner:
“It’s absolutely clear on the EU side that as long as a country is a member state of the EU, which is something the UK is at the moment, there are no negotiations bilaterally on any trade agreement with third parties. This is in the treaties and this is valid for all member states as long as they remain member states, until the very last day,” she said after the meeting.” Trade negotiations with Trump must wait, Brussels warns
Now the whole point of a Customs Union is that trade deals are negotiated collectively. Under the Consolidated EU Treaties:
1. The Union shall have exclusive competence in the following areas.
(a) customs union;
1. The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.
So it would certainly be against the rules to agree a new trade deal to come into force before we cease to be a member of the EU. But common sense suggests a country which is leaving (in full accordance with the treaties) will want to put new arrangements in place, and the idea that it can’t even begin talking about such a thing until it has left is absurd. It is like saying that, having given notice on your job, you can’t sign a new contract until you have worked your last day. All any reasonable employer can ask is that you don’t actually start work for you new employer until your notice period is finished.
There would seem to be no good reason why the UK should not negotiate and conclude new trade agreements, provided they don’t come into force until we have left the EU. It does the EU no harm. By insisting on a literal interpretation of the ban on negotiation the EU is behaving as a dog in a manger. Such an attitude is, to borrow a phrase from the PMs Lancaster House speech “not the act of a friend”.
Nigel Farage has said “Britain should crack on with a UK/US trade deal. What can they do, kick us out?”
Well, actually they can take us to court.
(11): A Member State, the European Parliament, the Council or the Commission may obtain the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the Treaties. Where the opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised. [My emphasis]
What would be the effect of such a ruling by the European Court of Justice (ECJ)? Here I must issue the warning that IANAL (I am not a Lawyer). But it seems to me that the ruling that the agreement may not enter into force is moot, if it is not intended to enter into force anyway until the date the UK leaves the EU, and the ECJ ceases to have jurisdiction over us. (In fact the wording of 218(11) rather confirms that is is the entering into force of a trade agreement that is at issue, not the negotiation or conclusion of such an agreement). So perhaps we should be entirely relaxed about an adverse ruling by the ECJ on any new UK-US trade deal?
In fact we could make a good case at the ECJ, as Lawyers for Britain set out here. But LFB also argued persuasively that Article 50 could be triggered under the Royal Prerogative. Eight out of eleven supreme court judges begged to differ. What you have to remember about lawyers is that it is their job to argue the best possible case for any conceivable position. The fact that a persuasive case can be made does not mean it will prevail.
The problem is that while we are members of the EU, and the European Communities Act with all its amendments is still in force, EU law is incorporated in UK domestic law. So if something is illegal under EU law then it is, currently, illegal under UK law too. It would be open to Gina Miller, or anyone else who feels so inclined, to seek an injunction against the Government to prevent it entering into “illegal” negotiations. Now, 218(11) itself only talks about a “Member State, the European Parliament, the Council or the Commission” having standing to obtain the opinion of the ECJ. But (and IANAL) I don’t think anyone can guarantee that an argument can not be made that an individual UK citizen is somehow personally affected and so has standing to bring such an injunction. And in the event of an adverse ECJ ruling the whole issue would be up for grabs again. Such a case could prove a severe embarrassment and delay or derail any new trade deals.
Now, there is nothing we can do to prevent the ECJ making such a ruling. But Parliament can ensure that action can not be taken under UK domestic law. What we need is another one-section Bill saying something like:
(1) The Government may negotiate and conclude trade agreements with states that are not members of the European Union, provided such agreements do not come into force while the United Kingdom remains a member of the European Union.
(2) Negotiations under this section shall not be held to constitute a breach of any United Kingdom obligation under the European Union treaties.
(3) The interpretation of this section shall not be subject to appeal to the European Court of Justice.
This amounts to an early declaration of independence, if only on this single issue. The UK could still be held by the ECJ to be in breach of the treaties. But the Government would be immune from action in the UK courts. What can the ECJ do? Kick us out?