In this post, Alfred Artley of Monckton Chambers provides a summary of the fourth Cambridge Law Faculty – Monckton Chambers EU Relations Law seminar.
In the fourth of a series of five webinars jointly organised by Monckton Chambers and the Centre for European Legal Studies at Cambridge University, barristers from Monckton Chambers, a leading EU law academic, and a Parliamentary legal adviser considered how a future trade deal with the EU might still be struck, as well as the legal questions relating to the UK’s new independent trade policy. However, as both the Chair (Philip Moser QC) and the speakers regularly pointed out, much is still very uncertain, with no clear outline of a UK-EU trade deal less than a month before the implementation period ends.
A recording of the one-hour webinar is available here.
Brexit and managing the ratification and implementation of any new deal
Professor Catherine Barnard (University of Cambridge) had originally intended to speak about ‘The EU-UK Future Trade Relationship – What Changes?’, but of course the nature of that trade relationship is very much still to be determined at a political level. Instead, she instead considered how a deal could still be done and some of the difficulties ratification will entail, not least in a very limited timeframe.
The prospects of simply extending the current implementation period looked remote, based on the lack of any EU power to agree this. EU lawyers tended to take the view that the vires of Article 50 TFEU (used for the Withdrawal Agreement itself) is now exhausted, and the deadline for agreeing an extension under the mechanism within the Agreement is now long past. The best option might be to bolt on a relatively long new implementation period as part of a deal now agreed – but that of course presupposes some sort of deal can still be done before the end of the year.
As to how ratification might work on the EU side if there is a deal, the current intention is to use Article 217 TFEU (also deployed recently in relation to various association agreements with Eastern European countries). Under the procedure in Article 218, this requires a decision by the Council with the consent of the European Parliament. One important question will be competence: are the matters within the agreement within the exclusive competence of the EU or are there also areas of mixed competence? If the latter, then national ratification would be required; this could delay the process significantly, as in some countries the consent of regional parliaments will be necessary – something that could take as long as five years.
The EU-Japan Agreement may provide a helpful precedent here: though this did encompass areas of mixed competence, the Member States nevertheless agreed that the deal could be ratified by EU-level processes. Article 218(5) TFEU could also prove significant: this allows for the possibility of provisional application of an agreement before it formally enters into force. Strictly, this requires only a Council decision, though in practice the Parliament has tended to be involved when new agreements have applied provisionally before.
‘Approving and Implementing the New Relationship in Domestic Law’
Gerry Facenna QC (Monckton Chambers) then examined the domestic side of the ratification/implementation question.
Given the timings, it will not now be practical to lay any deal before Parliament for 21 days before approval is given as required under the Constitutional Reform and Governance Act 2010 (“CRAG 2010”), but primary legislation may simply be used to override this.
In essence, there were three options for implementation available (though in practice some combination of the three was likely to be adopted).
- Parliament could make the agreement directly effective, but this would raise too many difficulties. Not only was this unprecedented, it would not even be sufficient – where there were only outline arrangements in some areas in the deal itself, these would inevitably need detailed domestic implementation provisions.
- Primary legislation could be used to implement the agreement clause by clause. This would be the most sensible and comprehensive way to ensure implementation is done properly. But the problem is one of timing, requiring not just time to draft up extensive new legislation but also for Parliament to scrutinise its details – heralding the further prospect of (unwanted) amendments. When implementing the EU-Canada deal, the Canadian government took years to draft the legislation required, and the Canadian Parliament a further six months to approve it all.
- Lastly, the Government could use existing provisions to make regulations to give effect to the agreement. However, this could not cover everything, such as a creating a new state aid regulator, so some kind of primary legislation will almost inevitably be needed. There could be a bill giving ministers additional powers to make secondary legislation (this has often been the approach taken by the Government hitherto, such as in s.2 of the Trade Act), but it remains not without difficulty: there is still a good deal of work for civil servants simply to identify the gaps and the relevant power to use, and then to draft the new regulations. Moreover, the extensive use of statutory instruments to change the law also creates a degree of disquiet on a political level – especially where primary legislation is amended.
Beyond this, though, very little is known at this stage. Lord Frost (the UK’s chief negotiator) indicated in October some primary legislation would be required, but the timetable for that is wholly unclear. Provisional application of a last-minute deal might be possible, but would still probably require some primary legislation – though some aspects might be possible to implement provisionally under existing powers.
All this comes at a time when there are already a considerable number of significant pieces of primary legislation before Parliament dealing with related areas, such as the Environment Bill, the Trade Bill, and the controversial Internal Market Bill. The complexities of all this will take years to realise as it is – even more so alongside any deal now agreed.
‘Parliamentary Scrutiny of Trade Agreements’
Alexander Horne, Legal Adviser to the House of Lords International Agreements Committee, then explained in his role and set out some of the historical context relating to parliamentary scrutiny of international agreements.
This has been remarkably limited hitherto, despite concerns being expressed as long ago as the nineteenth century. The convention that treaties are laid before the House for 21 days prior to ratification dates back to the Ponsonby Report of 1924, and allows some opportunity for parliament debate and supervision. However, it was only in 1996 that governments began to produce explanatory memoranda so legislators could better understand what had been agreed. Though the 21-day rule was placed on a statutory footing by CRAG 2010, the force of this is limited practically: under the negative resolution procedure, a negative resolution in the House of Lords is merely advisory, while the Commons can only postpone ratification. Moreover, the Government may choose to disapply CRAG in exceptional circumstances anyway.
Now that the UK has an independent trade policy rather than just allowing the EU to conclude agreements on its behalf, the issue of Parliamentary scrutiny is becoming increasingly important. Already the UK has had to conclude some 53 agreements to replicate the position under EU equivalents; each of these has been scrutinised by the House of Lords Committee, and some have also been debated. The Committee has also conducted inquiries into the state of the current negotiations with the EU, and produced a substantial report on the UK-Japan deal. Problems areas identified include provision of rules of origin and state aid, as one might expect, but also (lack of) consultation with devolved governments and lack of scrutiny of Memoranda of Understanding which are not routinely deposited before Parliament alongside the agreements. Timing also remains problematic: the UK-Canada agreement, for example, though in theory a ‘roll-over’ deal, in practice extended to a number of new areas, but still only ten days were allowed to consider it. The Japan deal was only easier because so much of it was simply ‘cut-and-paste’ from the existing EU-Japan agreement, so most of the terms had been clear in advance.
Finally, once negotiations have concluded, there is at present little possibility of Parliament being able to change what has already been agreed by the executive, unless the agreement itself contains appropriate review clauses. Hence the practical consequences of the scrutiny that does occur may end up being relatively minimal.
‘External relations: Ireland and Northern Ireland’
The last speaker was Dr Brendan McGurk (Monckton Chambers), who considered one specific (and particularly vexed question) in relation to future trade: the effect of the Northern Ireland Protocol and the new Internal Market Bill in Northern Ireland (“NI”).
Starting with the Protocol, the purpose of this is to keep NI effectively within the EU single market and customs union. But there are of course internal tensions here, as the Protocol also proclaims that NI is to remain part of the UK single market too (see Articles 4 to 6 of the Protocol).
The key provision to consider here is Article 5(4), which implements a large amount of EU legislation in UK law (as listed in Annex 2). But what happens if the EU amends this legislation, so as (for example) to raise the standards for CO2 emissions in relation to passenger cars (currently Regulation 2019/631)? Under Article 13(3) of the Protocol, references to Union acts ‘shall be read as referring to that Union act as amended or replaced’, overriding Article 6(1) of the Withdrawal Agreement, which only covers enactments and amendments passed before the end of implementation period. Will cars that meet the (lower) UK standard, but not the (improved) EU standard no longer be able to be imported from the rest of GB and put on the market in NI?
The Internal Market Bill, which sets out UK market access principles of mutual recognition and non-discrimination, provides some possible answers here. Mutual recognition (s.3) would indicate that this should be possible; but this would of course require disapplying the EU standard. Section 12 makes certain modifications to this in respect of NI, limiting mutual recognition to ‘qualifying goods’ (genuine NI goods produced there), and hence not (for example) cars that had been imported into NI from the rest of the EU, but this only solves the latter problem.
More important for those seeking to import UK-standard cars into NI therefore may be s.11, which allows public interest derogations from market access principles where these pursue a legitimate aim, are proportionate and not disguised restrictions on trade. Section 11(2)(a) would provide a legitimate aim in the car example (‘contribution to the achievement of environmental standards and protection’), but the proportionality requirement in s. 11(3) may be difficult to meet in relation to product standards where the UK standard is lower. It may be easier for more evaluative standards, however.
Hence, in practice, there may for certain products be a somewhat bifurcated market as between NI and the rest of the UK, as products that meet only a lower UK standard will not be able to avail of the mutual recognition principle in NI. This can only be avoided entirely if the UK as a whole simply chooses to regulate in lockstep with EU; though it may be that some British manufacturers decide to make products consistent with EU standards in any event.
What’s up next?
The next webinar will focus on what the new ‘level playing field’ for EU-UK economic relations might involve, and how potential distortions to competition will be managed within the new EU relations legal framework. The event will be chaired by Judge Ian Forrester, a former judge at the General Court in Luxembourg , and will take place on Monday 7 December at 5pm. Details of how to register are available here.
Full details of the entire Cambridge-Monckton webinar programme (and registration forms) are also available here.