EFTA Court chief talks Brexit

Earlier this month, an interview with EFTA Court President Carl Baudenbacher was reported on the website http://www.eu-infothek.com/ which we thought was very enlightening and deserved a UK audience – so here are some excerpts. We hope the site (and Prof Baudenbacher) doesn’t mind – if so, please e-mail us and we can take this down.

NOTE: Apologies if this is an imperfect translation – feel free to offer a better one!

Brexit i.e. the departure of Great Britain from the European Union, has officially begun. The EU Information Center spoke with the President of the EFTA Court, Carl Baudenbacher, on various models for the future relations between the UK and the continent:  

Carl Baudenbacher: Of Brexit there are two phases: the departure of Great Britain from the EU and the time after. I follow the first phase with great interest. But I am concerned mainly with the second. Then Britain will no longer be the EU state. In the models that will be discussed for the subsequent period, the European Free Trade Association EFTA and the European Economic Area EEA play an important role. And here there is a great need for explanation. I would add that the United Kingdom was a founding member of the EFTA in 1960. The EFTA spirit is still noticeable. By this I mean the conviction that free trade is positive that the markets are open and that economies must be competitive. And people are basically responsible for their actions themselves.

Interviewer: They have been judges at the EFTA Court since 1995 and [you’ve been] since 2003 their President. Is it up to you to get a new member state and thus an additional judge or judge?

Carl Baudenbacher: Within the EFTA pillar of the EEA, there are three states since 1995: Iceland, Liechtenstein and Norway. It is irrelevant to me whether there is an extension. But many Britons are looking for a solution that gives them a broad access to the single market. Namely the Scots, Welsh and Northern Irish, but also large parts of the City of London and industry. Plus the 48% who voted against the Brexit. EEA membership on the EFTA side would secure this access. The EEA has existed for over 23 years, and the EFTA institutions, the EFTA Surveillance Authority and the EFTA Court are working well.

Interviewer: The Norwegian Government does not seem to be overly interested in EEA accession by the United Kingdom in the EFTA pillar. Or is this impression false?

Carl Baudenbacher: No, that is not a false impression, and that is understandable. In this context, the Oslo professor Mads Andenæs recently pointed out during a panel discussion at the University of Liechtenstein that Britain has twelve times as many inhabitants as Norway. At the same time, Norway has the position of a super-power in the EFTA pillar, which no one likes to make. Mads Andenæs also expressed the opinion that the Norwegians would not refuse if the United Kingdom actually knocked. Moreover, a model would be conceivable in which the British would share the EFTA Court without fully joining the EEA.

Interviewer: One of Brexit’s main aims was the ending of the jurisdiction of the European Court of Justice, according to the British Prime Minister Theresa May. Why should the British, if they have succeeded, enter the jurisdiction of another supranational court, the EFTA Court?

Carl Baudenbacher: This is indeed a crucial question. Of course the British have to decide for themselves. But the EFTA pillar of the EEA leaves the EFTA States more sovereignty than the EU states have in the EU pillar. There is no direct effect and no priority in the EU legal sense. EFTA governments failing to implement a breach of the Treaty can not be subject to a penalty. There is then no written obligation on the part of the EFTA States’ courts of last instance to submit unclear questions of EEA law to my Court of Justice.

There is also the general obligation of loyalty here, but our relationship with the national supreme courts is, as we have said in the Irish Bank case, a partnership. Finally, our preliminary rulings are not as binding as those of the ECJ, They are an intermediate between a judgment and an opinion. These are all things that the British are interested in, which I have found during discussions in London, Edinburgh and Cardiff. In addition, the EFTA Court’s jurisprudence is quite marked by the EFTA spirit. We decide on facts. One could speak of a pragmatic Scandinavian-Alemannic approach, which also includes the economic foundations.

Interviewer: Now the British government has announced a hard separation, but everything that the British want to achieve when they enter into a comprehensive free trade agreement with the EU will need arbitration?

Carl Baudenbacher: Whether the EU and, in particular, the ECJ will be ready to conclude a comprehensive, large-scale free trade agreement without an arbitration court will be highlighted. Switzerland has been told by the EU since 2008 that it can only conclude new market access agreements if it recognizes a monitoring and judicial mechanism. There are two main jurisdictional mechanisms: the ECJ and the EFTA Court.

Interviewer: The comprehensive free-trade agreement which the British are striving for is intended only to refer to goods and services, but not to the free movement of persons. This also applies in the EEA. Will the EU as the Contracting Party to the EEA Agreement allow it to be weakened?

Carl Baudenbacher: As far as freedom of movement is concerned, you are right. The British want to control immigration again. The view that the free movement of persons is not to be discussed is the current line of the EU. But the voices are increasing, even within the EU, which here demand a readjustment. Economists point, for example, to the emigration of highly qualified workers from the economically weaker countries of southern Europe, the so-called ‘brain drain’. In the stronger states, this leads to wage pressures. The Brussels Think-tank Bruegel, in contrast to the other basic freedoms, describes the free movement of persons as not economic, but as politically motivated. The World Economic Institute in Kiel encourages a retransmission of the corresponding competence to the member states.

Interviewer: The EFTA States which are members of the EEA do not have the right to vote in the adoption of new [EU] legislation. Do you think this would be acceptable to the United Kingdom?

I know that this is criticized above all by the Norwegian politicians. However, three things should not be overlooked: the EFTA countries are equated with the EU countries on the expert level, where the course is often set. European Law is also often based on global law, where the EFTA States have equal rights. Finally, the EFTA States are, in some other respects, better placed than the EU countries: they have retained their sovereignty in the common policies. This applies in particular to foreign trade, agriculture and fisheries. Added to this is an aspect that has so far hardly been seen: the EU should have a genuine interest in keeping the input of Common Law.The Common Law is a world right and has led to the formation of very competitive economies.

Thank you for the interview.

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