×

13 July 2017

The UK can legally sign new trade agreements before Brexit is complete

by Andrew Lilico

Originally published by Brexit Central.

Once Article 50 was invoked, one of the first things Guy Verhofstadt, the EU Parliament’s Brexit negotiator, was quoted as declaring was that the EU could not accept Britain starting bilateral trade talks with non-EU countries before the process of leaving the EU is complete.

Here I shall set out, in detail, what I see as the case that, now that the UK has formally declared it is leaving the EU and that it intends to leave the EU customs union, the UK can negotiate and ratify trade agreements with non-EU countries that would come into force only after the UK has left the EU.

The case put by the EU and others that the UK cannot commence negotiations of, and certainly cannot ratify, new trade agreements with non-EU countries until after it leaves the EU is as follows:

– The Treaties grant the Union, in TFEU Article 3.1(e), exclusive competence over its Common Commercial Policy, including in particular its trade policy.

– The Treaties set out the procedures, in TFEU Article 207 and 218, whereby the Union negotiates and ratifies trade agreements with non-EU members.

– The Treaties set out for the Member States, in TEU Article 4, a duty of “sincere cooperation…in carrying out tasks which flow from the Treaties” and a duty to “refrain from any measure which could jeopardise the attainment of the Union’s objectives”. In particular, ECJ judgements have shown that these duties prevent Member States from independently negotiating with third countries over matters which, once they came into force, would fall under the exclusive or shared competences of the EU.

This argument appears to me to be entirely decisive in respect of the negotiation of any trade agreement that would come into force whilst the UK remains a member of the EU.

It is, however, an argument with no merit or force in respect of the negotiating and ratifying of a trade agreement that would come into force only after the UK had left the EU.

Why? Well, first the UK’s post-Brexit trade policy is not, and cannot be, part of the “Common Commercial Policy” of the EU. The UK is permitted to leave the EU and its commercial policy once it leaves (from that very moment) is in no way constrained by the Treaties. The Treaties include no commitment by the Members that their commercial policies, once they leave, will be constrained thus and so.

The UK’s commercial policy could be constrained by whatever deals the EU and UK make as part of the Brexit negotiations or subsequently, but that would be a new obligation, not anything falling currently within the Treaties. Since the UK’s post-Brexit trade policy is not part of the Common Commercial Policy of the EU, it cannot fall within the scope of Article 3.1(e) and is thus not a competence of the Union.

The EU and Member States’ roles in the negotiation of trade deals explicitly fall under Common Commercial Policy in Article 207, and then Article 218 refers explicitly to Article 207. The roles of the EU and Member States set out in these articles in the negotiation of trade policy flows from the EU’s competence over trade policy (and of Common Commercial Policy in general). Thus since the EU is not competent over the UK’s post-Brexit trade policy, it cannot be competent over the negotiation of the UK’s post-Brexit trade policy.

Therefore the first case is that the EU is not, as it happens, granted competence over the UK’s post-Brexit trade policy.

And that is well and good, because a second argument is that it is not possible in principle for the EU to negotiate and ratify trade deals that would bind the UK post-Brexit. The EU cannot negotiate trade deals for one Member State to the exclusion of others and it cannot negotiate a trade deal for the whole bloc that would bind the UK after it left that bloc.

Since the EU does not, even in principle, have the power to make trade agreements for the UK, it cannot claim to have the competence over the making of such agreements – for it is a general principle that there cannot be a competence where there cannot be a power.

The claim that the UK cannot negotiate post-Brexit trade deals pre-Brexit is not a claim that doing so is someone else’s competence. No-one else has, or even in principle could have, competence to negotiate such deals. It is thus a claim that we are not permitted to have post-Brexit trade deals in place ready to commence when we leave. And that is not something the Treaty says at all.

The third point is that some commentators suggest that the EU’s exclusive role in trade negotiations flows from the TEU Article 4 duty of “sincere cooperation”. But there is only a duty of sincere cooperation in respect of “carrying out tasks which flow from the Treaties”. More specifically, sincere cooperation applies only to matters which fall within the exclusive or shared competences of the EU.

As Prof. Marise Cremona puts it: “The Member States are bound by the obligation of sincere cooperation to ‘refrain from any measure which could jeopardise the attainment of the Union’s objectives’ and this means that where EU competence is exclusive they should not engage in making even non-binding proposals, where such proposals may lead to legally binding measures which would affect EU rules.

Indeed, even in cases where EU competence is not exclusive, Member States are bound not to depart from an agreed common position in international negotiations, and once the Council has authorised the Commission to start negotiations with a third country the Member States are under a duty of close cooperation with the EU institutions “to ensure the coherence and consistency of the action and its international representation.”

But the flip side of this is that where there is no exclusive or shared competence, there is no duty of sincere cooperation. Since the Union has no competence over the UK’s post-Brexit trade policy, because (a) it has not been granted such a competence; and (b) it could not, even in principle, have the power to negotiate post-Brexit trade deals and there cannot be a competence where there cannot be a power, there is no duty of sincere cooperation in respect of post-Brexit trade policy. The sincere cooperation argument simply never gets off the ground.

I want to emphasise one other thing. Sometimes in discussions there are points that are subtle and clever and that work, even though they run against one’s basic intuition as to how things ought to be. But my argument here is not of that nature. It is simply blatantly obvious that the EU ought not to have any ability to prevent the UK from negotiating and ratifying its own post-Brexit trade deals, provided they do not come into force until after we leave. I’m not arguing for anything that is not clearly and obviously how things must have been intended to be.

So the points that I make are not “all very clever, but not very sensible” sorts of point. I am arguing that what blatantly ought to be the situation in fact is the situation: that the UK is not forbidden from negotiating and ratifying trade deals for the post-Brexit period where we will not be in the EU and the EU has no power to make any deals for us. My points and my answer should be no surprise. They should be exactly what any sensible person would have expected to have been the case before they analysed it.

My final remark on this is that it so obviously ought to be the case that the UK can negotiate and ratify its own post-Brexit trade deals, provided they do not come into force until after we leave, that even if, for some obscure reason I have not considered above, it did turn out that the Treaty forbade the UK from doing that, the overwhelming pragmatic imperative should be for the UK to be exempted from that rule, either (preferably) by coming to a political agreement with the EU that it should be authorised to negotiate and ratify its own deals or (if really required) by changing its own laws so that it was permitted to do that.

There should be absolutely no question of the UK accepting that when it leaves the EU its only trade deal must be with the EU and that it must then start from scratch negotiating with other countries from outside. The EU might well want us to be in that situation. We should not consider it an option at all.

SHARE

LATEST

COMMENTARY

LATEST

NEWS

STAY INFORMED

@IFTtweets

iFreeTrade

@iFreeTrade

NEWSLETTER SUBSCRIBE