Martin Howe is a Fellow of the Centre for Brexit Policy.
As a possible EU deal nears, there are two critical questions: will we get back our sovereignty next year; and will the deal be good in trade terms?
Regaining sovereignty and control is the whole point of Brexit. It is the ability of our Parliament – elected by and answerable to the people – to decide upon the laws of this country, without being dictated to by foreign institutions or foreign courts.
Boris Johnson’s 2019 manifesto could not have been clearer about sovereignty. It’s title was “Get Brexit Done – Unleash Britain’s Potential”. Within, it promised (in bold type): “We will keep the UK out of the single market, out of any form of customs union, and end the role of the European Court of Justice.”
And our future relationship with the EU “will be one that allows us to:
Commendably, the Prime Minister has kept his manifesto promise not to extend the transition period beyond December 2020. In public at least the UK has firmly resisted the EU’s demands to include sovereignty-threatening clauses in the future relationship agreement (FRA) which are not matched in the EU’s trade treaties with other countries: a penal system of “governance” with ECJ jurisdiction, obligations to retain the Human Rights Act, and “level playing field” and State aid clauses.
But contrary to widespread misconceptions, unless something is positively done to change it, the WA (including its Northern Ireland Protocol) will automatically continue ECJ jurisdiction over the United Kingdom for many years after 2020.
Continuing ECJ jurisdiction
The three most important areas of continuing ECJ jurisdiction will be: “interpreting” the rights of EU citizens in the UK, settling the amounts of the (imprecisely defined) multi-billion pound post-membership payments which the WA obliges the UK to make to the EU, and last but not least, interpreting and enforcing the Northern Ireland Protocol and the EU single market and customs laws which it applies within Ulster.
Under generally-accepted international treaty practice, sovereign States never agree to be bound by the courts of the other treaty party, but will only accept adjudication by neutral bodies.
Now that we have left the EU, the ECJ has ceased to be neutral and has become a wholly foreign court as far as the UK is concerned (we no longer appoint a judge). It is appointed by, and owes its loyalty solely to, the EU and its members. The clauses in the WA giving post-Brexit jurisdiction to the ECJ were one of Theresa May’s most damaging and humiliating capitulations.
No other country has accepted such clauses in a treaty with the EU – not Norway or the other EEA States, not even tiny Andorra or San Marino – except for the desperate former Soviet republics of Ukraine, Georgia and Moldova.
The ECJ has a long track record of “interpreting” treaties by discounting their wording and applying a meaning designed to achieve its policy objective of furthering European integration.
This is why the sloppy wording of the NI Protocol – described by Johnson as “contradictory” – is so dangerous when coupled with binding ECJ interpretation. A clause intended to control state aid to businesses within Northern Ireland who trade across the open border into the EU is so badly drafted that the ECJ will amost certainly interpret it as requiring many businesses in Great Britain to be subject to direct control by the European Commission if they receive government grants or tax reliefs.
And it is likely that the ECJ will interpret the Protocol as requiring customs declarations and up-front EU tariffs on all goods sent from the mainland to Ulster except where the EU gives permission, and as requiring onerous customs and regulatory formalities for goods passing in both directions. This will suit the economic interests of the EU, because by contrast there will be no tariffs or other formalities or barriers on good exported to the Northern Ireland market from anywhere in the EU.
The WA contains a carefully balanced package of rights for EU citizens in the UK and for UK citizens in the EU. These rights should be honoured. But the problem with these one-sided ECJ jurisdiction clauses is that these rights will be subject to arbitrary changes over the years under the guise of “interpretation”, by a body over which the UK has no control and against whose decisions it will have no remedy. This goes equally whether it is damaging and unforeseen extensions to the rights of EU citizens in the UK, or unfair curtailment of the rights of UK nationals in the EU – in either case, the ECJ’s decision will be binding and final.
Pushing back on EU jurisdiction
Refusing to extend the ECJ’s jurisdiction any further under the FRA, while commendable, does not end its continuing jurisdiction under the already ratified WA. But the Government’s UK Internal Market Bill, with its controversial but justified clauses allowing certain parts of the NI Protocol to be over-ridden under UK law, will provide a defence against some of the more damaging aspects of that jurisdiction.
Contrary to the frenzied hysteria of the legal profession and the House of Lords, there are perfectly respectable international law arguments justifying these clauses. The most potent of these arguments is that the EU has failed in its own obligation under the WA to negotiate an FRA with “best endeavours in good faith”. It has refused to offer to the UK terms which are comparable to those in its trade agreements with third countries, and has deliberately exploited negotiation “sequencing” to force its unacceptable demands on the UK against the clock.
However, if a deal is done on the FRA which leaves in place all the ECJ jurisdictions under the WA and the Protocol, these international law arguments become very much more difficult. If we accept the EU’s proffered terms for an FRA, however poor they are, how can we then credibly maintain that the EU has failed to use best endeavours in good faith to conclude an acceptable one? And if the ECJ jurisdictions are left in place, how can the Government then achieve its manifesto pledge to “end the role of the European Court of Justice”?
Is the trade deal worth having?
The trade terms the EU is now offering would be a poor deal for the UK, definitely inferior to (for example) Canada’s EU deal.
The EU has a massive surplus of £95bn per year in goods trade with the UK, with EU exports heavily concentrated in high-tariff sectors, meaning that EU exporters will gain more than double the benefits of UK exporters under a zero tariff deal. The UK is a service-based economy and has a (smaller) surplus in services trade with the EU of £23bn.
The EU wants the zero tariff concession while giving back almost nothing in access for UK services exports, and denying to the UK important benefits it routinely includes in its other trade deals, such as home country certification and wide ‘cumulation of origin’.
Once the EU has pocketed the huge zero tariff concession by the UK while giving very little in return, how will it ever be possible to negotiate something better?
The danger: our birthright for a mess of thin gruel?
There is huge political pressure on the government to reach a deal – any deal – with the EU. That pressure is intensified by Covid. But doing the wrong deal now would have very serious long term consequences – botching Brexit at the last hurdle, instead of getting Brexit done.
I am looking forward to when we no longer have to spend time on Brexit issues because we have restored our sovereignty, and the whole Conservative Party can focus on finding the best way to “Unleash Britain’s Potential”.
A deal which which cements in long-term EU and ECJ jurisdiction over the UK would not allow us to do that. It would be a national and political disaster. We would face hard-to-refute claims from Nigel Farage and a revived Brexit Party, amongst others, that the Tories had breached their manifesto promises and are not to be trusted.
So I am holding firm in my hope that our Government and our negotiators will resist the intense short term pressures, and if they come back with a deal it will be one that restores our sovereignty. . What would be unforgiveable would be to sell the birthright of our independence and sovereignty not for a mess of pottage, but for the watered-down gruel of the trade terms now on offer from the EU.