Recently, an esteemed gentleman called Jean-Claude Piris wrote an article entitled ‘Why the UK will not become an EEA member after Brexit‘.
We respectfully disagree with some of the conclusions he has drawn and will attempt to explain why.
Before we continue, we must concede that Mr Piris is a skilled legal expert with decades of specialized experience.
For just some of his impressive CV please read HERE.
Mr Piris states in the article:
“When the UK leaves the EU, the best option for the British economy would be for the UK to become a member of the EEA”
We agree that the UK should aim to be in the EEA after it leaves the EU, to help provide a ‘Soft Brexit’.
However we believe that the UK can (and should) maintain uninterrupted membership of the EEA.
The UK is currently a member of the EEA (European Economic Area) which allows (amongst other things) for tariff-free trade between all its members (all EU member states plus Norway, Iceland and Liechtenstein), customs co-operation and the minimization of non-tariff barriers.
This arrangement is managed by The EEA Joint Committee (EEA JC) and supervised and regulated on the non-EU side by the EFTA surveillance authority and EFTA Court.
Whether the EEA agreement can continue to apply to the UK after Brexit is legally debatable based on three key points:
- The UK is a Contracting Party to the EEA Agreement in its own right, listed as THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND.
- In order for parties to leave the EEA, parties must give “at least twelve months’ notice in writing to the other Contracting Parties.” [Article 127]
- The EEA specifically applies to the EUROPEAN COMMUNITY [EU Member States] and specified EFTA states however.
It is the argument of many including Mr Piris that the UK will
therefore no longer be covered by the geographical scope of the Agreement as described under Article 126 EEA after March 2019 (assuming no Article 50 period extension).
Our key argument is as follows:
It is in the best economic interest of the UK, the EU and EFTA 3 (Norway, Iceland and Liechtenstein) for the UK to remain in the EEA. Not only would the UK dropping out mean the re-imposition of tariffs; but it would also lead to an increase in costs and delays due to Non-Tariff Barriers (NTBs).
At some stage between now and 2019 the UK government will (hopefully) realize this to be the case and so not issue notification to leave.
If the UK expressed the desire to remain in the EEA after Brexit, it is our opinion that the EU and EFTA3 would find a way to make that happen, whatever legal technicalities exist.
This would either be by the UK rejoining EFTA (using articles 56 1-3 of the Vaduz Convention) or adding the UK as a separate, specific contracting party to the EEA agreement.
Mr Piris states:
“Accession Treaties for EFTA and EEA cannot be signed before Brexit. Moreover, to enter into force, they would involve a ratification by all contracting parties in accordance with their own procedures (art 128(2) EEA). Experience shows that this will take time. During that time, and if a period of transition had not been agreed on the relations between the UK and the EU in the Brexit agreement (based on art 50 TEU), the rules of WTO would have to be applied to trade between the UK and the EU”
We believe that the parties will not allow any interim period during which trade depends solely on WTO rules and associated MFN tariffs.
If the EEA Agreement cannot be amended in time for the UK’s intended exit date, or if the UK’s return to EFTA cannot be ratified in time, we believe the parties will simply continue trade as if the UK was still a valid EEA member even if a legal argument could be made that it no longer was.
The UK would continue to be treated during this period as if it was in the EEA, even if it did not strictly speaking fulfill all the criteria.
As the American Philosopher William James once concluded:
“A difference which makes no difference is no difference at all.”
Who exactly would complain if the UK continued to de facto remain in the EEA during this period?
The only parties we can imagine would have any interest in complaining would be third countries who feel that this arrangement somehow damaged their own trade with the EU.
Even if this hypothetical third country did object and took it to the WTO or International Court of Justice (ICJ) then the EU/EFTA3/UK could make the following counter-arguments:
- UK is a contracting member of EEA in own right.
- GATT Article XXIV permits interim agreements “within a reasonable length of time”
- If the UK and other EEA members treated each other no differently then there would be no ‘material breach’ of the treaty under Article 60 of the Vienna Convention on the Law of Treaties, there would be no ‘impossibility of performance’ (outlined in Article 61 VCLT) and no ‘fundamental change of circumstances’ (Article 62) so all parties could continue to make use of the EEA Agreement in relation to the UK.
Even if the court didn’t immediately agree, what are the chances that an adverse decision would be reached before the UK re-entered the EEA proper?
Mr Piris seems to concede this as he writes in his article “an EEA option would legally be possible in theory but not politically realistic in the case of the UK after Brexit”
So now we have looked at the procedural aspects of the UK staying in the EEA, what about the political hurdles?
One of the key demands of Brexit supporters is the ability for the UK to make its own trade deals.
The EFTA/EEA states are outside of the EU’s Common External Tariff (CET) and Common Commerical Policy (CCP) so can make their own trade deals – an example is that Iceland has a FTA with China.
Mr Piris admits that the UK in an EFTA/EEA scenario would not be “part of the EU Customs Union, being thus able to conclude its own bilateral trade agreements” however he says that such an arrangement would still be politically unsuitable for the UK as it would still be obliged to respect the principle of free movement of persons.
An EFTA/EEA deal for the UK would allow us to make our own trade deals around the world, have better controls over migration, be cheaper than our current EU membership, Subject to the EFTA Court not ECJ, mean reclaiming our seat that the WTO (Currently the EU speaks for us there) and involve us taking vastly less EU rules and regulations.
If Mrs May can’t persuade her cabinet and the nation to accept it, then frankly there is something lacking in her persuasive abilities.
In conclusion then, an EEA option would legally be possible and politically realistic in the case of the UK after Brexit.
For further reading on this topic please read: https://www.law.ox.ac.uk/business-law-blog/blog/2017/01/brexit-reeamain