This is Part III in a series of V – to read the Market Solution proposal in full go here
The context of Brexit negotiations
Our negotiations with the EU will be conducted under the Article 50 framework. In proposing a method of secession it is essential to face the political reality that this creates.
UK negotiators will be under a considerable amount of pressure having to deal with the political and economic consequences of our withdrawal on a less than ideal tight timescale. After a successful Leave campaign and the announcement of the referendum result there will be strong public pressure to secure the earliest possible exit from the EU and there will be little patience for prolonged discussion and a process that delays our exit any longer than necessary.
Although negotiations can be extended in theory, this requires unanimous agreement and thus cannot be relied upon. Therefore, all things considered, we argue that an agreement must be concluded within the initial two year period stipulated and this should be considered a maximum.
Underpinning the negotiations will be the necessity of a quick conclusion, which in itself would be beneficial. A speedy conclusion will avoid market uncertainty and political instability. Nations proposing to leave the euro have been advised that it is best done quickly, the same applies to leaving the EU.
Our proposal to adopt an “off the shelf solution”, and to repatriate the whole of EU law in the first instance, and concede freedom of movement and refrain from unpicking treaties is designed to prevent complicating the secession process and thereby facilitate expeditious negotiations. To unravel a vast bundle of highly complex budgetary, legal, financial, commercial, political, and personal obligations and liabilities would be a guarantee of remaining at the table negotiating for 5-10 years, or worse yet, severing ties after two years in a painful sudden exit.
If we look to the negotiations we undertook for entry into the European Economic Community, which lasted from June 1970 to January 1972, we see that the swift success of this process was due to the British negotiators working under a similar precept to the one proposed here.
Lead negotiator Con O’Neill described this strategy as “swallow the lot, and swallow it now”. The reason for this was that the treaty was a compromise between competing interests – just as our secession negotiations will be – and to “open it up at any point”, O’Neill wrote, “”and the whole laborious basis of the compromise will fall apart“.
This is the logic behind basing our new relationship on an existing model, an “off the shelf” solution, with the best one available being the EEA agreement. To ensure a successful arrangement is concluded the UK should again “swallow the lot”, to begin to unpick treaties at this stage, and open up the process, could lead to negotiations breaking down and dragging out for a very long time.
A frequently asked question regarding any proposal to build a post-secession relationship; is why would the EU cooperate? Leaving the EU would be a major historical event with vast political fallout, would the bitterness not fester? Would the EU look to punish us, to turn away and isolate us? Why would the EU agree to any arrangement that benefits us?
The response often thrown back from eurosceptics is the misguided and arrogant assertion that “they need us more than we need them”, as if we have the EU over a barrel so they will have to conclude a beneficial arrangement. This is generally the same misguided, presumptuous arguments that are used to argue that a free trade agreement could be concluded in two years. It is classic overstatement.
Both sides of this typical debate need to be more realistic. Negotiations undertaken after citation of the withdrawal clause of the Lisbon Treaty will be a matter of practical politics. Although the application of EU and international law is not a settled issue, especially in this as yet untested area, the notion that the EU would refuse to cooperate, or even seek to “punish” the UK in the event of secession – thereby clearly violating EU law as well as failing to comply with international law – is beyond the realm of realistic politics.
Although Article 50 negotiations conducted under a framework of treaty law will be first and foremost a political matter, it is clear that lawyers will be consulted regarding the laws application. What we can be certain of is that – as Sir David Edward, the first British Judge of the European Court, has said – EU law requires all parties to negotiate in good faith and in a spirit of cooperation.
Article 50 requires the EU to conclude an agreement with the seceding state, “taking account of the framework for its future relationship with the Union“. Notably, Articles 3,4 8 and 21 of the Treaty on European Union require the EU to “contribute to … free and fair trade” and to “work for a high degree of cooperation in all fields of international relations, in order to … encourage the integration of all countries into the world economy, including through the progressive abolition of restrictions on international trade” and to adhere to the “principle of sincere cooperation […] in full mutual respect” and “assist each other in carrying out tasks which flow from the Treaties.”
Moreover, the Vienna Convention of the Law of Treaties obligates negotiators to act in “good faith” and “good faith” itself is an underlying principle of international law, and certainly a principle of WTO law.
The EU negotiators must therefore endeavour to reduce trade restrictions in accordance with treaty provisions and, crucially, their actions are justiciable. If EU negotiators were to veer away from treaty provisions, or indeed if any other EU member sought to impose sanctions or restrict trade, the UK could opt to lodge a formal complaint with the European Court of Justice (ECJ), and block the discriminatory action.
It must be remembered that during the Article 50 negotiations the UK remains a member of the EU and enjoys the full rights and privileges of membership. The Commission itself may be legally obliged to step in and begin infringement proceedings against the offending member state.
However, it is important to note that negotiations conducted within the remit of the aforementioned treaties still allows the EU flexibility in the nature of the trade agreement concluded with the seceding state. As previously discussed, the EU is not obliged to conclude a FTA within two years (even if this was feasible there is no legal obligation).
What we can claim unequivocally is that the notion that the EU would refuse to negotiate or seek to unilaterally to impose trade barriers on Britain is simply false. It would be a violation of EU law, which is further reinforced by international law, and in any case is beyond the realm of practical politics. Blocking our access to markets is not feasible or desirable. It is nothing more than mutually assured destruction, with recession across Europe an inevitable consequence.
Still, a more valid concern may be that the EU would not necessarily readily embrace an outcome favourable to Britain and perceivably detrimental to the EU. Hence the absolute necessity of choosing the option that is right for the UK, but also acceptable to the EU.
Negotiations will be a matter of give and take; we must strive to maintain good relations and nurture a relationship acceptable to both sides. Being itself bound by all the same legal provisions discussed, the UK must also act in good faith. Negotiations in successful international agreements, much like in business, are founded upon the principle of “equally shared misery”. No agreement will be go ahead if one side feels as if the other has gained an advantage at their expense, hence the UK must be ready to make concessions.