Opinions & Ideas

Category: BREXIT Page 1 of 8

UNDER WHAT RULES DOES THE UK UNION WORK?

IS DEVOLUTION BEING UNDERMINED?

“Can the British State handle the challenges of devolution?” is the question asked by Michael Kenny, Philip Rycroft and Jack Sheldon in a recent paper published by the Bennett  Institute of Public Policy in Cambridge University.(see below)

Gordon Brown, former Prime Minister, asked a similar question, in a Guardian article last year, claiming that it will soon be

” impossible to hold together a UK of nations and regions in the straitjacket of a centralised state.”

His main criticism is that the UK government takes decisions, like setting the terms for Brexit, without ,properly and formally, taking into account the views of the devolved parliaments in Edinburgh, Cardiff and Belfast.

All three of these clearly stated that they wanted to stay in the EU Single Market, but the Westminster government ignored them. It was guided instead by the opinion of English MPs.

 The contradictions are profound. It was in a speech in which she spoke of the 

“precious union” 

of the four nations, that the then PM, Theresa May, also announced that the UK would leave both Customs Union and Single Market( something to which 3 of the 4 nations were opposed).

 Later she went outside the  long settled  Barnett formula for dividing up finance between  the devolved administrations, so she could give an extra £1 billion to Northern Ireland, in return for the support of the DUP for her minority government. 

She only showed the devolved administrations the text of her Article 50 letter, initiating UK withdrawal from the EU, on the day she sent the letter to Brussels.

When Boris Johnson replaced Theresa May, he weakened the consultative structures she had used to avoid conflicts with the devolved governments.  He left it to Michael Gove to consult them and stayed away personally from the issue.

 Subsequently, in its (UK) Internal Market Bill, designed to replace the EU Internal market,  the Johnson government took back powers to London from the devolved administrations in areas of transport and education.

 It is believed Boris Johnson said privately that devolution has proved to be a “disaster”, which is hardly reassuring for those who want to preserve and strengthen devolution, to prevent a complete break up of the Union.

The underlying problem with the UK Union is that it is not underpinned by any written constitution or rule book, with which civil servants and Ministers in London could familiarize themselves.

 Every problem is tackled on an ad hoc basis by bilateral bargaining. This is in contrast with the EU, which has a very detailed set of rules, most recently updated in the Lisbon Treaty.

Just as most English MPs never understood the multi level system of government through which the EU worked when they were in the EU, they have not yet come to understand the multi level and variable system, under which the UK Union itself is supposed to operate. They still think of the UK as a centralised unitary state.

 For them, the unlimited “sovereignty of parliament“  over rules everything else.

 Devolved powers can simply be taken back at the will of the Westminster parliament (often after minimal debate there).

 This might work if everybody trusted everybody else. But that is no longer so. Now that power is held by different and often antagonistic parties in London, Edinburgh, Cardiff and Belfast, the casual “make it up as you go along” model of governance of the UK has run out of road.

The London civil service is not designed to cope with a union of four nations (of radically unequal size) .

Legally speaking, the problems of the UK Union are not the business of other countries, like Ireland. 

But we have problems, with which we need the active cooperation, and intellectual engagement, of the UK government, notably but not solely to do with Northern Ireland.  So we have an interest in ensuring that the internal governance of our neighbouring island is settled and stable.

A NO DEAL BREXIT ON 1 MAY?

©AP Images/European Union-EP 

The risk that we will wake up on 1 May, to find we have a “No Deal “Brexit after all, has not disappeared.

The deadline for ratification by the European Parliament of the Trade and Cooperation Agreement (TCA) with the UK was to be 28 February 2021.But the European Parliament postponed the deadline to 30 April. It did this because it felt it could not trust the UK to implement the TCA properly and as agreed and ratified. 

This distrust arose because the implementation of the Ireland Protocol of the Withdrawal Agreement had been unilaterally changed by the UK.

If any party to an international agreement takes it upon itself unilaterally to alter the agreement, the whole basis of international agreements with that party disappears.

The matters in dispute between the UK and the EU( the Protocol and vaccines) remain unresolved.

The EU is taking the UK to court about the Protocol , but the court is not likely to decide anything before the new deadline of 30 April.

In the normal course of events, the Trade and Cooperation Agreement between the UK and the EU would be discussed in the relevant Committee of the European Parliament, before coming to the Plenary session of the Parliament for ratification.

The next meeting of the Parliament’s Committee on International Trade is due to take place on 14th and 15th April, and the agenda for the meeting has been published.

It includes a discussion on the enforcement of trade agreements, the General System of Preferences, and (significantly) trade related aspects of Covid 19.

It makes no mention at all  of the TCA with the UK!  

Trade related aspects of Covid 19 will inevitably include a discussion on vaccine protectionism, a highly contentious issue between the EU and the UK that has poisoned relations and led to bitter commentary in the media.

The fact that the Committee has not even included a discussion of  the TCA with the UK, on its agenda for what may well be the only meeting it will have before the 30  April deadline is potentially very significant.

The TCA runs to 2000 pages , and its contents, if ratified,  will take precedence over EU law.

To ratify such an agreement, without proper scrutiny in the relevant committees of Parliament, could be seen as a dereliction of Parliament’s responsibility of scrutiny. We should not forget the scrutiny that was applied to the much more modest EU Trade and Cooperation Agreement with Canada. The same goes for the deal with Mecosur.

Furthermore, the TCA would, if ratified, set up a network of committees to oversee its implementation. These will meet in private and their work will diminish the ongoing oversight by the European Parliament  of a host of issues affecting all 27 EU member states.

The TCA also contains a system of disputes resolution mechanisms that will quickly be overwhelmed by work.  The TCA has  many items of unfinished business, on which the European Parliament will want to express a view. It is hard to see how any of this can be done before 30 April!

The UK government of Boris Johnson has adopted a deliberately confrontational style in its negotiations with the EU.  The more rows there are, the happier is the support base which Boris Johnson is seeking to rally to his Conservative Party. Johnson’s European strategy has always been about electoral politics, not economic performance. This has led to almost complete mutual incomprehension between the UK government and EU.

If the European Parliament ratifies the TCA, without their  first having been seen to be a satisfactory outcome to the  EU/UK negotiations about the Ireland Protocol and about the exportation of vaccines, it will be a political setback for the Parliament and a source of  immense satisfaction for Boris Johnson.

One should never underestimate the role emotion can play in politics. The entire Brexit saga is a story of repeated triumphs of emotion over reason. And the European Parliament is not immune to this ailment.

Boris Johnson could be pushing his luck a bit far this time.

THE ARTICLE 16 ROW IS LIABLE TO HAPPEN AGAIN UNLESS LESSONS ARE LEARNED

What lessons are to be learned from the unfortunate controversy around the European Commission’s brief consideration of using Article 16 of the Northern Ireland Protocol to stop exports from the EU of some Covid 19 vaccines to Britain, via Northern Ireland?

The UK Minister, Michael Gove said “it was a moment when trust was eroded and damage done” and the chairman of the  UK’s House of Commons EU committee described it as a “vindictive act”.

On the other hand, the EU has a sovereign right to impose export restrictions, and also to protect its market from imports of goods that do not comply with EU standards (whether these come into Ireland or to any other part of the EU)

Lessons must be learned, because this sort of Article 16 problem could recur over and over again for years to come, as the UK diverges more and more from the EU.

The first thing to say is that the proposed EU restrictions on exports of certain vaccines are still going ahead.

All that has changed is that Article 16 of the Protocol is not now being used to enforce these restrictions. The restrictions will presumably be enforced in, and by, the pharmaceutical manufacturing plants themselves, inside the EU rather than on the border.

Secondly, the restrictions only apply to vaccines that were subject to an Advanced Purchase Agreement with the European Commission, where the European taxpayer had put up money to help the pharmaceutical manufacturers to develop and test the vaccines. This was agreed on the basis that the EU would then get supplies of the vaccines under an agreed schedule from the manufacturer.

 This is not unreasonable in itself.

 It is open to question whether the present elaborate process of export restriction and authorisation was really necessary to ensure the EU got the supplies. A threat of civil legal action for breach of contract would seem to be a more targeted approach, than the highly bureaucratic export ban we now have.

Of course, it is theoretically possible that Northern Ireland could have been used as a backdoor to circumvent the EU restriction of exports to the rest of the UK. To avoid this, the regulation, now in force, still requires information to be provided on vaccines going to Northern Ireland.

SHOULD ARTICLE 16 HAVE BEEN USED?

 But it is quite clear that Article 16 was not the right tool to use to achieve the goal the Commission had set for itself.

 We should look at what Article 16 of the Protocol allows.

It provides for unilateral safeguard measures to be adopted by either the EU or the UK, where there are difficulties that “are liable to persist”.

Under Article 16 the safeguard measures should only be ones that are “strictly necessary to remedy the situation”.

Arguably neither condition was met in this case.

 The vaccine supply difficulties are inherently temporary.  They are not likely to persist.

Other measures could have been or be adopted, within the EU itself, to require the vaccine manufacturers to meet their obligations, without using Article 16 of the Protocol. So the use of Article 16 was not “strictly necessary.” It should be a last resort, not a first resort.

DID THE COMMMISSION MAKE ITS DECISIONS IN THE BEST WAY?

So why did then use of Article 16 come to be considered by the Commission at all?

There was a degree on panic in many countries, notably Germany and France, about the pace of supply of vaccines.

The Commission was coming under pressure.

 Even though it was the manufacturers that were failing to fulfil their contracts, it was the Commission that had negotiated those contracts. The fact that negotiating this sort of contract was something new for the Commission was not an acceptable excuse, nor was it enough to say that the delays might have been much greater, and the price to the taxpayer much higher, if each the 27 EU countries had been left to negotiate their own contracts, and outbid one another. But the Commission President Ursula Von der Leyen felt she had to show she was “doing something”.

She decided on the speedy introduction of selective export restrictions.

 In the interests of speed, she adopted a decision making procedure, that maximised the possibility of mistakes. Rather than call a meeting of the full Commission, which could have been done by secure video, she decided to push the ban through using a written procedure, leaving minimal time for scrutiny.

Adopting such a radical measure, like an export restriction by this short cut written procedure was inherently problematic.  While the EU has a sovereign right to restrict exports outside its borders, it is an inherently serious step, and should never again be attempted in this way.

Article 17 (8) of the Treaty makes clear that the Commission, as a body, is responsible for its acts, and the Commission’s own rules of Procedure state clearly that “ the Commission shall act collectively”.

 The last minute use of the written procedure to make an important international decision minimised the possibility of genuinely collective decision making by Commissioners. That is why it should not happen again. It weakens the authority of Commission, and thus of the EU as a whole.

THE NORTHERN IRELAND PROTOCOL IS A FRAGILE COMPROMISE

 The other lesson to take from what happened is that it exposed the inherently fragile nature of compromise that is the Northern Ireland Protocol.

 The Protocol requires the UK to implement and enforce EU law in respect of goods standards within part of the UK, and to prevent goods entering that part of the UK, if they do not comply with these standards. That is no small thing on principle.

 It may not be so difficult to implement it now, when the UK has only just left the EU, and UK and EU goods standards are almost identical. But, gradually, as the UK begins to adopt different standards for goods to those applicable in the EU, the risks of future controversies will increase.

Every time either the UK or the EU adopts a standard for goods that is different from the one the other is applying, there will be an additional barrier or restriction between Britain and Northern Ireland. Because the issues are highly technical, the flare up could be sudden and unexpected, with the risk of wholly unintended consequences, as the latest controversy shows.

One should add that there is also the possibility of disputes on the interpretation of the Trade and Cooperation Agreement (TCA) between the UK and the EU.

Under Article 9.4 of the TCA, either side may adopt “rebalancing measures”, where there is a significant divergence from the Level Playing Field provisions of the TCA, if they feel they have been put at a disadvantage by the divergence.

To the extent, if any, that these “rebalancing  measures” affect Northern Ireland, there will be an additional issue to be solved.

So one must hope that it never comes to this, and that the UK and the EU work in harmony in future, because the more disharmony there is, the greater will be the political problems for both parts of Ireland.

This will require a lot of tedious work by diplomats and officials in Brussels, London, Dublin and Belfast to operate an early warning system to avoid conflicts like the recent one. This is a permanent, but inevitable, extra burden of Brexit.

EACCNY Pulse: Transatlantic Business Insights

Listen to this final “Brexit Musing” episode with John Bruton, the former Irish Prime Minister (Taoiseach) and former EU Ambassador to the United States who will share his wisdom on what Brexit means and his thoughts moving forward with regard to not only the UK and EU, but also the U.S.

THE TRADE AND COOPERATION AGREEMENT

UK GAINED A LITTLE EXTRA SOVEREIGNTY OF THE ISLAND OF BRITAIN, BY GIVING UP SOME UK SOVEREIGNTY IN NORTHERN IRELAND

The EU/UK trade deal maintains Ireland’s agricultural export market in Britain. A “No Deal” would have destroyed it. The imposition of tariffs would have imposed huge costs on consumers and disruption to business.

That said, the fact that the Agreement had to be rushed through at the last minute left little time for debate which side lost the least in the negotiation.  For it is in the nature of a divorce, like Brexit, that both sides actually lose.

First let us look at the British side.

 For them, the goal was “sovereignty”. In sum, Boris Johnson gained more UK sovereignty over the island of Britain, but did so by sacrificing a considerable measure of UK sovereignty over Northern Ireland.

Traditionally sovereignty in Britain was seen as the unfettered power of the British Parliament to legislate.  Brexiteers have interpreted it as taking back control into the hands of British Ministers, rather than into the hands of Parliament as such.

On the other hand, EU rules, in which neither the UK, nor the people of Northern Ireland, will have  a direct say, will continue to be made for, and apply in, Northern Ireland. This creates a democracy deficit, even if the subject matter will be highly technical.

After much effort and controversy, the UK has won the right to diverge from EU rules for the island of Britain. To show that the effort was worthwhile, it will be tempted to adopt different rules on trade and regulatory matters just for the sake of it.

THE MORE BRITAIN DIVERGES FROM EU, THE MORE WILL IT DIVERGE FROM NORTHERN IRELAND

But the more British rules diverge from EU rules, the more will Northern Ireland diverge from the rest of the United Kingdom.

 This creates a political mine field and a strategic dilemma.

The implications for NI unionists could be quite destabilising. A sense of losing control over their future, and of not being represented when decisions are being made, could encourage irrational politics. This will require serious reflection in Brussels, London and especially Dublin before there is any new divergence between the UK and the EU.

The Joint EU/UK Committee, already set up under the Withdrawal Agreement, will need to monitor the political and security consequences. Title X of the Agreement requires advance notice, and consultations, on any changes in regulations as between the UK and the EU. It will be important for peace and security of these islands  that these consultations include representatives of all major interests in Northern Ireland.

 THE GAINS FOR THE UK SIDE, AT A PRICE

On the other hand, the Agreement contains significant gains for the UK side from a “sovereignty” perspective, at least as far as the island of Britain is concerned.

 Firstly, there will be no direct application of decisions of the European Court of Justice on the island of Britain.

Secondly, while the UK has accepted that it will not regress from present high social and environmental standards, it will be free to set for itself the detail of those standards. These may be different from those in the EU and thus in Northern Ireland.  This right to diverge is what UK Brexiteers saw as an expression of UK’s sovereignty. There will be strong temptations to use this power if only to show that Brexit was worth the effort.

But the UK also accepts that divergence will not come for free.

 It has had to accept that services exports from the UK have lost automatic access to the EU market, a large and incalculable sacrifice. It has also lost the European Arrest Warrant and access to eU data bases.

 As one advocate of Brexit, Dr Liam Fox MP, put it in Westminster last week

“If we want to access the Single Market, there has to be a price to be paid.  If we want to diverge from the rules of the Single Market, there has to a price to be paid”

The Agreement establishes detailed mechanisms to settle what ”price” will  have to be paid for any new  divergence .

Already, the UK is contemplating allowing genetically edited crops. If these are not permitted in the EU, there could be trade frictions and competitive losses for EU farmers.

HOW WILL DISPUTES BE SETTLED?

These new mechanisms , a Partnership Council, Joint Committees, and Arbitration Tribunals, are completely untested at this stage.

A great deal will depend on how much use the UK will make of its new freedoms. The more EU and British policies diverge, the greater will be the strain on the Agreement.

 In the last 5 years of debate about Brexit, UK politicians have actually advanced very few ideas of how they might use the new freedom conferred by Brexit.

So it is impossible to assess, at this stage, whether or not they might do things that would push the EU to seek redress through the mechanisms of the Agreement, or contribute to instability in Northern Ireland.

 If problems arise and these cannot be settled in the committee system, there is an agreed provision for arbitration. Three person Arbitration Tribunals which will operate on strict time limits. If the Arbitrators find that either the EU or the UK has breached the agreed principles, the other party will be allowed to impose tariffs or prohibitions, to compensate for losses it has suffered.

BETTER THAN NO DEAL

 This Dispute settlement aspect of the Agreement is valuable from an EU point of view.

 Without it, any disputes would have had to be referred to the WTO.  The WTO system is both cumbersome and narrow. Parties can stall, adopt delaying tactics, or  ignore WTO rulings.

 Disputes in the WTO can drag on for years, as we have seen with the US/EU dispute about subsidies to Boeing and Airbus.

 That said, we will now  be replacing a single set of rules, interpreted by the European Court of Justice (ECJ), with individual Arbitration Tribunals, operating under tight deadlines.

This could lead to inconsistent decisions in different areas of trade. If a Tribunal interprets EU law differently to the interpretation later made by the ECJ, there could be real difficulties. Some of the problems that have arisen in EU relations with Switzerland could be replicated in EU relations with the UK, but with added complications in respect of Northern Ireland.

The UK will also be free to negotiate trade agreements of its own with non EU countries. These negotiations may create additional pressure for even more divergence between UK and EU standards, than the UK authorities themselves might have chosen.

 It may come under pressure to allow the imports to the UK that would not meet EU standards, for example chlorinated chicken, hormone treated beef, or genetically modified food . If these products are then incorporated into exports to the EU, the EU will have to ban them.

  UK or EU policy decisions could also skew the level playing field on which EU and British producers must compete.

In Title XI of Part One, and in Part Six of the Agreement, there are provisions for resolving disputes .

 If the dispute is about unfair subsidies, firms can go directly to the courts, citing the text of Title XI.

 If the dispute is about something else, the remedy  will be under Part Six  and  will be indirect, requiring either the EU or UK side to take the matter up in one of the many Committees set up under the Agreement. There could eventually be recourse to an Arbitration Tribunal.

In global terms, the continent of Europe as a whole has been weakened by Brexit.   The day to day effect remains to be seen.

WHAT THE BREXIT TRADE DEAL MEANS

The Trade and Cooperation Agreement between the EU and the UK is an exercise in damage limitation. The UK will face numerous obstacles because of its decision to leave the EU, including leaving the Customs Union and Single Market.

 But it was in nobody’s interest to add to these obstacles. That was the spirit in which the EU approached the negotiation.

The Agreement may run to 1256 pages, but it boils down to some fairly simple and sensible ideas.

 While no longer a member of the EU, the UK still wants to do business with the EU, and the EU members want to do business with it. 

So, for the future, there needs to be a system for ensuring that there are no surprises, or unfair trading , that would disrupt mutually beneficial business. That is essentially what the Agreement is all about.

 While the UK was a member of the EU, that goal was achieved by having a common set of business rules, made democratically and together, and interpreted in a consistent way by the European Court of Justice (ECJ). These rules could be enforced in national courts. In other words the goal of predictable and fair business conditions between the UK and its fellow EU members was achieved directly by common action. 

Under the new Agreement, the same goal will be pursued, but indirectly.

 Common rules, made and interpreted in common, will be replaced, as far as trade between the EU and the UK is concerned, by understandings set out in the Agreement, which will be interpreted by arbitrators appointed under the Agreement.

 These understandings will have legal force, but will generally only be enforceable under the procedures set out in the Agreement, rather than directly in national courts.

While the EU and the UK will each be free to determine their own policies on the environment, social and working conditions, and subsidy controls, Article 9.4 of the Agreement allows for “rebalancing” measures to be taken by the other side if it feels its own businesses are being put at a disadvantage. This is supposed to restore the level in the level playing field. 

The Agreement contains principles, now to be enshrined in international law through the Agreement, that are shared by the EU and the UK. These cover environmental, social and subsidy issues. Arbitration Tribunals to be set up under the Agreement will interpret these agreed principles in specific cases. They will have a legal, but also a political, task.

Most of the text of the Agreement is taken up with procedures for resolving disputes. 

Matters, currently resolved in national courts under EU law, will have to be resolved at inter state level between the UK and the EU, rather than in the national courts. This is inherently more cumbersome.

Sometimes the issue will be settled by political agreement in one of the myriad of committees set up under the Agreement. 

ARBITRATION…. THE CORE IDEA

If the issue cannot be settled in this way, it will go the arbitration. 

So, instead of the interpretation being done by Judges of the ECJ, they will be done by an Arbitration Tribunal set up under the Agreement.

An Arbitration Tribunal will consist of three people. There will be lists of qualified arbitrators from which the three may be chosen, one by the UK and one by the EU and the Chair of the Tribunal will be someone who is not from EU or the UK. 

 I think this idea that the chair must come from outside either the EU or UK may prove difficult. It will not  always be easy  to find suitable chairs who are not either British or EU citizens, especially as the work will have to be done at short notice and under tight time limits.

To qualify for appointment, an arbitrator will have to have “demonstrated expertise in law and international trade” .  They will all have to be people “whose independence is beyond doubt”. They will serve in their individual capacities, and not take instructions from anyone. They will have to be people who would qualify to be judges in their home countries.

I suspect there will be a lot of intense haggling over the composition of particular Arbitration Tribunals.  The nationality of the arbitrators and their past records will be scrutinised by the governments most affected by the issues in dispute. 

There are detailed provisions in the Agreement to prevent stalling by either the EU, or the UK, in appointing Arbitrators. Once established, the Tribunals will have to deliver their ruling within 130 days . Within 30 days after that, the affected party will have to say how they will comply with the ruling.

This entire structure of dispute resolution will be presided over by a Partnership Council to be chaired jointly, by a UK Minister and an EU Commissioner. It will be assisted by over 20 specialised committees and a number of Working Groups, all of which are listed in Title III of the Agreement.

EVEN MORE MEETINGS THAN BEFORE!

 I expect that there will, in the future, be even more EU related meetings for UK officials than in the past.  But the dynamic will be different.

 Instead of being able to build alliances on particular topics with other EU member states, the UK will in future find itself alone in the room with the European Commission.

 The Commission side will have instructions, negotiated in advance with the 27 member states, so there will be a high degree of rigidity in the process.

As the EU member state most affected by relations between the UK and the EU, this will be a particular challenge for Ireland. Irish officials in Brussels and will have to stay on top of all that is going on in the various EU/UK committees. Cultivating an understanding with the Commission officials serving on these committees will be a priority.

No longer in the EU, the UK will, notwithstanding the provisions of the Agreement, encounter significant extra bureaucracy and uncertainty in doing business with the EU. 

PARTING COMPANY GRADUALLY

This will lead to a gradual divergence between the UK and all its European neighbours, including Ireland. That, in turn, will have cultural and political effects. 

The UK, and the EU states including Ireland will, so to speak, be mixing in different company .They will increasingly be seeing the world from diverging angles of vision. Issues that were previously depoliticised will become more political.

 Eventually, this may affect the way the UK sees its physical and military security. NATO is already under strain, and Brexit creates a new fault line within NATO.

 While Ireland is not in NATO, we live in a part of the world which has sheltered under the NATO umbrella, and we are deeply interconnected with NATO’s biggest member, the US.  

Brexit may be over and done with, but the forces which led to it…identity politics and suspicion of foreigners….have not gone away.

A NO DEAL OUTCOME IS STILL POSSIBLE

So the EU/UK talks are back on again, after all.

There seems to have been a change in the negotiating method, but the underlying reasons for the UK initiated suspension still remain. A No Deal outcome is still possible.

The UK Prime Minister said last Friday that the talks on a possible trade deal between the UK and the EU were over because the EU was not willing to offer the UK acceptable terms.

 He said that, since the outset of the negotiations, all the UK had ever wanted was the same terms the EU had agreed with Canada.

This was misleading.

The UK asked the EU for a full no tariff deal on all goods and services, whereas, under its deal, Canada still has to pay some tariffs , and has little access for services. 

Canada is an ocean away, whereas the UK has a land border with the EU. The EU and UK economies are so entangled that the UK, unencumbered by EU rules, would be much more of a threat to the integrity of the EU’s single market, than Canada, on the far side of the Atlantic, could ever be.

 That has been explained to the UK over and over again. 

Boris Johnson based his dramatic announcement on Friday on the fact that the European Summit had, on Thursday, dropped the adjective “intensified” in its reference to resumed  trade talks with the UK.  He followed this up by rudely telling Michel Barnier, the EU negotiator , not to come to London for planned talks on Monday.  The UK Minister, Michael Gove then   demanded what he called a “fundamental “  change in the EU’s stance.  

 This all seemed to come out of nowhere. 

There was nothing new in the conclusions of last week’s EU Summit as far as Brexit was concerned. The talks were progressing normally, and had narrowed the issues down substantially.  The European Summit had given the Commission its negotiating mandate on 25th February 2020, and there had been no suggestion of any fundamental change in it since .

 In fact, real progress has been made under that mandate. 

Even Boris Johnson himself admitted on Friday that 

“a lot of progress has already been made , by the way, on such issues as social, security, aviation and nuclear cooperation”.

He could have added that here has also been substantial progress on trade in goods, and some on services. An agreed approach to police cooperation, and to road haulage had  also been reached. The UK and EU positions had also come much closer on the overall governance of a future agreement, including on dispute settlement.

The stand off  about the Ireland Protocol has arisen because  the Joint Committee, set up to work out the implementation of the Protocol, had  not had enough meetings, and started far too late, mainly  because the UK side was not ready.  

So how do we explain Boris Johnson’s dramatic gesture?

 It is about negotiating tactics……and domestic politics.

The UK wants to settle everything else first and leave the most politically visible issue of all, fisheries, to the very end. 

Given that EU trawlers catch more fish in UK waters than vice versa, that sequence would put the EU side on the back foot. The EU prefers to deal with fisheries in conjunction with other open issues, and refuses to be rushed.

Fish is a politically sensitive national identity issue, and there is nothing Boris Johnson would like more than to be able to say that he has settled everything else, and is left defending Britain’s sovereign fishing grounds from rapacious foreigners.

 Standing up to Brussels unifies the Tory Party and distracts from the domestic difficulties about Covid 19.

But  It can also raise unrealistic expectations and lead to accidents.  

The actual cost of bringing about a No Deal Brexit, because of a disagreement over fisheries would be a hundred times greater than the value of the entire fishing industry. This is true for both sides. 

Tough talk now may also make it harder to sell any eventual deal in Westminster, unless it can be radically repackaged.

The UK never really worked out what it wanted to do with its new found freedom after Brexit. Different factions in the pro Leave coalition had different ambitions.

 Some wanted a less regulated economy, some a more regulated one.

Some wanted to government to leave business to do its own thing, others wanted the state to take the lead.

The argument about the EU’s demand for strict level playing field rules goes to the heart of these unresolved dilemmas.

If Boris Johnson gives specific commitments to the EU on the level playing field, he will have to disappoint one section or another of his pro Leave coalition. He will not want to do that.

So he may find it politically easier, in the short term, not to make a deal with the EU, and contrive a situation in which he can blame the EU for that disaster, and thereby avoid dividing his own party.  

Boris Johnson’s focus on a deadline around last week’s EU Summit was a mistake in terms of negotiating strategy. But it might make sense as part of a narrative the end point of which is blaming the EU for a No Deal outcome.

The EU Heads of Government continue to leave the negotiations of trade agreements to the European Commission.  This is to prevent attempts at divide and rule, and is one of the reasons the EU, notwithstanding its tiny budget and lack of military clout, has become a trade super power. Even though the UK was an EU member for 45 years it seems never to have learned that this was one of the reasons for the EU’s success as a trade negotiator.

 So,If the UK continues to insist on  a fundamental change in the EU approach to the negotiation, we are  heading for a No Deal Brexit on 1 January 2021.

This would have dire consequences for the Irish and British economies.  Irish farmers would be shut out of their traditional markets for beef and dairy products .  In this it would be like the Economic War of the 1930’s all over again. British consumers would face higher prices for almost everything, but especially for food. Protecting the EU Single Market in Ireland could become politically fraught.

Professor Tom Sampson of the LSE estimated that the economic cost to the UK of a No Deal would be three times as great as the costs to it of Covid 19. That is a lot.

The Covid effect will be short and sharp, with a quick recovery, whereas the cost of a No Deal Brexit would be slower to emerge, and be much larger, and much more long lasting. Some of this will happen even if there is a deal. But a No Deal will be worse because it will involve tariffs and bad blood..

It is not too difficult now to sketch out how one might  avoid a No Deal Brexit, if that is what the UK really wants.

The Level Playing Field issues on subsidies to industry, and  on differing environmental and food standards, can be settled by agreeing a fast track arbitration system between the EU and the UK. 

Relying on the WTO disputes mechanism is too cumbersome, as we have seen with the long running Boeing/Airbus saga. 

There will have to be an independent and robust system to prevent subsidized or sub standard goods entering the EU market across the Irish border. Trust will have to be built between EU and UK Customs officials. That may take several years.

Obviously there will have to be big changes in EU fishing rights in UK waters, now that the UK has left the EU. But these could be phased in over 15 or 20 years. In any event, the UK would not be able to consume all the fish it could catch in its own waters, and will need to export them to the EU. Free access to the EU market for British fish could be linked to fishing quotas for EU boats in British waters.

Of course, agreeing a Trade deal would not end all controversy.  And a No Deal would not end all negotiation.  Talk would restart after much damage had been done.

In any event, there will be lots of small disputes, not least over Customs checks in Belfast port. With goodwill and patience, these disputes can be settled .  

But , Deal or No Deal,  the EU and the UK will gradually draw further apart, as will Ireland and Britain.

 Irish people will need to pay much more attention to politics in Paris, Berlin and Warsaw, and a little less to the English speaking world. 

This will involve a major psychological reorientation, with profound implications for our educational system.

THE EU SUMMIT AND BREXIT

Brexit is only one of the topics this weekend’s EU Summit has had to address.

Approving the massive 1.8 trillion budget, ensuring that the rule of law is respected by Poland and Hungary, agreeing a line on how to deal with Russia and Turkey, and giving teeth to its climate action plan are also on the agenda. Vital issues are at stake here for all 27 members. 

This reduces the time that can be devoted to the seemingly interminable Brexit negotiations.

On paper the issues to be sorted out on Brexit are manageable. Sharing fishing rights, and policing state subsidies to industry, should not be deal breakers.

The real problem is lack of trust in the seriousness of any commitments the UK might give. There is a sense that the UK is more into the short term optics than the long term substance.

A Trade Agreement between the EU and UK would not be worth the paper it is written on, unless both sides have the same understanding of what the words in the Agreement mean. There also has to be a robust system for mediating and arbitrating disputes, that is consistent with the EU’s global trade policy..

Nobody wants a disruptive “No Deal”.  But a poorly drafted, last minute, Agreement that, within a year, breaks down in a multitude of legal disputes would be no use.

This explains why France is looking for provision for rapid retaliatory action, if the UK backslides on the Agreement. 

It also explains why European Commission is so promptly taking the UK to Court over the Internal Market Bill. 

This Bill, passed by the House of Commons, gives the UK government power to break the Irish Protocol in the Withdrawal Agreement. The EU is suing the UK even though the Bill is not yet law, and the powers have not yet been used. This again illustrates a lack of trust.

The Commission objects a provision in the Internal Market Bill, which gives UK ministers powers to breach the Northern Ireland protocol on state aid and customs duties. Even taking the power to this is seen, in itself, as a breach on the Withdrawal Agreement.

The UK is still be subject to EU law, although no longer an EU member, up to 31 December 2020. During this period, the Commission has the power to use EU remedies to enforce the Withdrawal Agreement. This is what the Commission is doing by taking this case.

It has decided to act straight away, because it believes the UK needs to be made to understand that the EU takes the literal meaning of words in Agreements very seriously.. 

The UK has one month to reply to the notice of proceedings and if its answer is not satisfactory, the Commission can take the next legal step. The end game would be a lump sum and/or penalty payment by the UK imposed on the UK by the European Court of Justice (ECJ).

The EU target is not the detail of the Internal Market Bill, it is the breach of good faith.  Article 5 of the Withdrawal Agreement requires the UK , in good faith,  to take

 “all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising from this agreement and  refrain from any measures which could jeopardise the attainment of the objectives of this agreement”.

The offending portions of Internal Market Bill do the direct opposite. They take powers to allow the UK NOT to honour Article 5! 

The Commission also  is acting because it has to be seen to enforce Treaty obligations on members and ex members alike. 

Some EU member states (eg. Hungary and Poland) are threatening to breach the rule of law in other matters. So the Commission cannot be seen to let the UK get away with the same thing . It has to be seen to be consistent.

There is another issue that could lead to a problem with the UK Conservative government when it gets down to finalising the text of any Free Trade Agreement with the EU, and having it approved on the Tory backbenches.

This is the continuing role of the European Court of Justice (ECJ) after 1 January 2021.

 The rule of the ECJ will still apply to the UK, in the following matters  

  • cases pending at the end of the transition period and  relating to events that took place before that, 
  • cases to do with citizens’ rights, for which the ECJ will remain partly competent;
  • EU budget legislation (‘financial settlement’), that is financial commitments  to which the UK committed when it was an EU member state, 
  • parts of the Protocol on Ireland/Northern Ireland  and
  •  UK army bases in Cyprus 

For Brexiteers, any continuing role for the ECJ is allergic. It is the sort of thing Jacob Rees Mogg railed against when Teresa May was Prime Minister.

In addition, the ECJ will have a role, albeit indirect, in any settlement mechanism  designed to resolve disputes under the Trade Agreement, if there is one.

If there is a dispute, either the UK or the EU may bring the dispute to an arbitration panel. If that does not work, and the interpretation of EU law is at issue, then the ECJ will have to make that interpretation.

This is normal under EU Trade Agreements. It is in Agreements the EU signed with Ukraine, Georgia and Moldova.

 This provision is there to ensure that EU law is interpreted in a consistent way across all agreements involving the EU. There cannot be one law for the UK and a different one for Ukraine.

Although logical in its own terms, this will be a hard sell for Boris Johnson.

His political authority has been reduced by Covid and the restrictions it is imposing on some parts of the UK. Despite his large parliamentary majority, he may even have to seek Labour support to get a compromise with the EU through Parliament.

But, with the UK economy in difficulty, he may have no choice. The stakes are high.

ALL TRADE RESTS ON RESPECT FOR TREATIES

The fact that the UK government is now saying it will pass legislation that will break an international Treaty it signed and ratified little over a year ago, is very serious. It undermines Britain’s aspiration to be a globally trading nation.

All trade between nations rests, ultimately, on respect for Treaties and contracts.

Deliberately breaching commitments, freely given in a Treaty, undermines the whole structure of global relations between states.

 If one cannot rely on a commitment in a Treaty, nothing is reliable.

The EU only continues to exist because its member states respect the Treaties that set it up ( as some seem to have forgotten in another context recently).

If the UK, by its breach of the Withdrawal Treaty commitments it gave  on checks on goods going from Britain to Northern Ireland, forces Ireland to introduce checks on the Irish land border,  in order to protect Ireland’s status as a fully complaint EU member, it will undermine the structure that has brought peace to these islands. 

We could be living with the consequences of this long after Boris Johnson has passed from the political scene.

A FAILURE TO PROTECT THE INDEPENDENCE OF THE EUROPEAN COMMISSION

LACK OF FAIR PROCESS, OR OF RESPECT FOR THE EU TREATIES

I have always believed that the independence of members of the European Commission was a keystone of successful European integration.

 Commissioners are obliged by their oath of office to seek a European solution to problems, rather than just seek a balance between conflicting national interests.

 Since 1958, they have done so, and this is why European integration has succeeded, while efforts at integration on other continents have failed, under the weight of national egoism.

The larger the membership of the European Union became, the more important did the independence of Commissioners from national politics become.

Some believe the Commission is too large. From an efficiency point of view, they have a point. 

But Ireland, among others, has insisted that, despite this, each member state should have one of its nationals as a member of the Commission at all times. 

But if the “one Commissioner per member state” rule is to be kept in place, as the Union enlarges, Commissioners, from all states large and small, must demonstrate that they put the European interest first, and are not subject to the vagaries and passions of politics in their country of origin. 

In other words, European Commissioners must be independent, and be seen to be so. All member states must be seen to respect this.

This is why I am so deeply troubled by the attitude take by the Irish government, and then  by President Von Der Leyen of the European Commission, to calls for the EU Trade Commissioner Phil Hogan to resign.

 Both of them failed in their understanding of the European Union, and of one of its vital interests….. namely the  visible independence of members of the European Commission from the politics of any one EU state, large or small. 

I was genuinely shocked by what happened.

 Late in the evening of 22 August,  the leaders of the Irish Government called on the EU Trade Commissioner, Phil Hogan to “consider his position”. Those words mean resign.

 They piled on the pressure thereafter, with a further statement, on 23 August, containing a political determination that he had broken their Covid 19 rules. 

Phil Hogan did resign on 26 August.

 That was his decision and one he was entitled to make.

LESSONS FROM THIS PRECEDENT

But there are profound lessons to be learned by President Von der Leyen, and by the Commission as a whole , as to how, and to whom, Commissioners should be held accountable,  and a need to understand what this precedent means for the future political independence of Commissioners from their home governments.

 Separately, there are also questions to be asked about the internal management of, and the collegiality, of the Commission.

I will set out my concerns here, drawing on the words of the EU Treaty, which I helped draft as a member of the Convention on the Future of Europe.

On the 26 August, President Von der Leyen clearly withdrew any active support from Commissioner Hogan, and unquestioningly accepted the line of the Irish Government. This influenced him to resign his position.

 In this action, I contend that she did not fulfil all her responsibilities under the Treaties.

 I know she faced a genuine political difficulty. But the Treaties were framed do deal with fraught political situations, while preserving the independence of the Commission and due process.

 The Commission is guardian of the Treaties, and should be seen to defend the rules laid down in the Treaties in all circumstances, even when it is politically difficult. 

Article 245 of the Treaty requires member states to respect the independence of Commissioners. Ireland is bound by that article having ratified it in a referendum.

 One should note that Article 245 refers to respecting the independence of Commissioners individually, not just to the Commission as a whole.

 It is for the Irish government to say whether publicly demanding a Commissioner’s resignation, for an alleged breach of purely Irish rules, is compatible with the Irish government’s Treaty obligation under Article 245 to respect his independence, It had other options,

If any Commissioner is visiting a member state for any reason, he or she is subject to the laws of that state, on the same basis as any other citizen. A visiting Commissioner would not be above the law, but nor would she be below it either. 

If she breached the law, due process in the Courts ought to be applied, as to any citizen.

 This what would have happened if the visiting Commissioner was from any country other than Ireland and had had the difficulties which Phil Hogan had….due process would have been followed. 

 The statements of the Irish government, and the unsatisfactory explanations by Phil Hogan, did create political problems for the President of the Commission.

 She had to do something, but not necessarily what she did do.

 But there were options available to her which, inexplicably, she failed to use or even consider.

RULES IGNORED

 Commissioners are subject to a Code of Conduct, last updated in 2018. Under that Code,

 there is an ethics committee to determine if the Code has been breached. If the matter was urgent, there is provision for a time limit  to be set for a report by the Committee.

 But a reference to the Ethics Committee would have allowed for due process, and a calm and fair hearing. More importantly using this process would also have asserted the independence of the Commission as an institution.

 The Code says that it is to be applied “in good faith and with due consideration of the proportionality principle” and it allows for a reprimand. where the failing does not warrant asking the Commissioner to resign. 

Now, because of the course followed, we will never know if there was any breach at all of the Code at all by Phil Hogan. 

President Von der Leyen’s failure to use these mechanisms seems to be a serious failure to defend due process and proportionality, and to protect  the independence  of individual Commissioners, as she was required to do by the Treaty.

 The Commission and the Parliament should enquire into why she did not do so.  There are consequences now for the viability of the Code of Conduct, if it is not to be used in a case like this. 

CRITERIA NOT APPLIED

Was what Phil Hogan did a resigning matter anyway ?

Article 247 allows for only two grounds for asking a Commissioner to resign. There are that he or she is

“no longer being able to fulfil the conditions for the performance of his duties”

Or

” has been guilty of serious misconduct”.

I do not think either condition was met in this case.

Phil Hogan would have been fully capable of carrying out his duties while the Ethics Committee did its work. Instead his position is now effectively vacant.

Most people I have spoken to do not think the breaches committed by Phil Hogan, while foolish, amounted to “serious misconduct” within the meaning of Article 247.

 Failure to recollects all the details of a private visit over 2 weeks, or to issue a sufficient apology quickly enough, may be political failings, but they hardly  rise to the level of “serious misconduct”. Any deliberate and knowing breach of quarantine should have been dealt with in the Irish courts without fuss. 

 In any event, President von der Leyen would have been far wiser to have got an objective view on all these things from the Ethics Committee, before allowing Phil Hogan’s resignation.

WHY DID THE COMMISSION NOT MEET?

Another issue is the President’s failure to call a Commission meeting, if she was considering that a Commissioner should resign.

Under article 247 it is the Commission, not the President alone, who may compulsorily retire a Commissioner, and even then, they must have the approval of the European Court of Justice.  These safeguards were put in the Treaty to protect the independence of the Commission. They were ignored in this case.

The resultant weakening of the institutional independence of the Commission is very damaging to European integration and to the interests of smaller EU states. This should be of concern to the European Parliament.

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