Garvan Walshe: Breaking the Withdrawal Agreement risks the No Deal Brexit this Government was elected to avoid

10 Sep

Garvan Walshe is a former National and International Security Policy Adviser to the Conservative Party.

The trouble with international agreements is that they are, well, international. By this I mean that sovereignty can’t be used as a trump card in the way that parliamentary sovereignty can in most domestic law.

This strongly suggests that the Government’s course of action in seeking, in the disarmingly frank words of Brandon Lewis, “to break international law in a specific and limited way” has not been properly thought through.

The domestic problems with this approach are well known. Any legislation to break international law will run into trouble in the Lords, which will feel entitled to block it, as it was not only absent from the election manifesto, but in fact directly contradicts its promise to implement the Brexit deal sealed in November 2019.

There is also the matter of the ministerial and civil service codes, which forbid the breaking of the law (the removal of the word “international” from the code makes no difference in practice), and are likely also forbid actions openly directed towards that aim.

It is therefore an open question of constitutional law whether legislation to this end, introduced improperly by ministers, and drafted by civil servants would be valid. It is rather clearer that ministers or officials participating in the production of such legislation risk falling within the ambit of the common law offence of misconduct in public office.

But my concern here is international. The foundation of international law has long been that states are sovereign. As well as meaning that they begin with full powers to arrange their internal affairs, it also means they have the power to make agreements with each other. An agreement means that the states accept obligations to each other, which is what makes a treaty different from a state making a unilateral declaration to itself. While a state retains the practical power to break an international agreement, it cannot change the meaning of the agreement on its own.

It is also a consequence of this sovereign power that states are able to revise treaties they make, by mutual agreement, and it is of course often the case that this revision is dictated by power politics, but even that is different from mere reneging on a treaty. Nevertheless, the power of revision is usually held collectively by the states that signed the agreement, not by individual signatories. Some treaties, like indeed the Treaty of European Union provide an exit mechanism (Article 50), but others, like the Withdrawal Agreement, do not.

The Government might have been better placed to argue that it was trying to use its residual sovereign power to seek to renegotiate the Withdrawal Agreement, which it had concluded under the duress of the two-year withdrawal period contained in Article 50.

While that would probably not have gone down well in Brussels, openly seeking to break these particular parts of the withdrawal agreement is rather more challenging, because Michel Barnier’s team built in three levels of safeguards against what it would consider to be “perfidious Albion.”

First, the relevant aspects of the Ireland/Northern Ireland protocol are governed by EU law, interpretable by British courts and, ultimately, European Court of Justice. Because of the way the UK incorporates treaties (including treaties that give effect to legal systems like the EU’s) into its domestic law, sufficiently explicit legislation could probably escape disapplication by UK courts.

But this in itself would be a direct violation of the agreement, which the European Court could be expected punish with a fine. Though the UK could refuse to pay the fine, on the grounds that it was acting according to it own law, this would just trigger the second level of dispute resolution, which is the Joint Committee established to be established under the agreement.

If the Joint Committee cannot resolve the dispute to both sides’ satisfaction, and in this case it is hard to see how it could, the case would be submitted to an arbitration panel at the Permanent Court of Arbitration. Lewis’s declaration that the UK intends to “break international law” is unlikely be helpful to the British case.

Now, the UK may as a sovereign state in practice refuse to abide by the arbitration panel, but in that case the agreement (Article 178, paragraph 1) provides for the panel to “impose a lump sum or penalty payment”.

If the UK refuses to pay that, the subsequent paragraph allows the EU to suspend either parts of the Withdrawal Agreement with the UK, or of other agreements it has. These include agreements on aviation freedoms, equivalence for financial services, “data adequacy” vital to the tech sector, and the right of truck drivers to travel to the EU. This would amount to the “no deal Brexit” that the Prime Minister’s withdrawal agreement, endorsed in the 2019 general election, was supposed to avoid.

Now that the Government does not need the votes of the DUP, it should think carefully about whether it would rather spend the rest of its term engaging in an optional legal fight with the EU, or, having got Brexit done at the end of the year, stick to running the country it was elected to govern.

Garvan Walshe: Italian governments have failed to revive Naples for centuries. What are the lessons for Red Wall seats?

30 Jul

Garvan Walshe is a former National and International Security Policy Adviser to the Conservative Party. 

A mad weekend dash for sun has just taken me to Naples. The city, its old historical centre, continuously inhabited long before the Roman Empire, lived up to its long-standing reputation for liveliness and chaos.

From the tiny alleys on a Roman street plan overlooked by eight or nine storeys, the abbeys built by Angevin kings, decaying masterpieces of baroque architecture, to fishmonger-restaurants with live produce and massive loins of tuna selling for €10 a kilo, and traffic that makes Rome’s resemble a sedate town in Baden-Württenberg, forty-eight hours there subject you to constant sensory bombardment.

The energy offers the thinnest of disguises of poverty we think vanished from Western Europe. The better-preserved old districts look like East Berlin; the worst reminded my companion of her childhood in Communist Albania. Prices, as well as physical conditions, reflect people’s limited purchasing power.

Below the Port’Alba (a city gate named after the Spanish viceroy notorious for his brutal suppression of the Dutch revolt) hang two nets to prevent falling masonry killing pedestrians that pass through it. The second net has been hung to catch the rocks that pierce the first one. It’s a city heavy with the pall of lost greatness, unable to pay to maintain the memory of its glorious past.

This can’t merely be attributed to the destructive effects of organised crime. Palermo, for instance is in far better shape. Rubbish collection, once a disaster, now compares favourably with that of Brussels.

The city betrays evidence of attempts to revive it through physical and cultural infrastructure. A smart new subway station adjoins the main railway terminus, though the square above it resists attempts to gentrify it with a success only matched by Manchester’s Piccadilly Gardens.

A whole new commercial neighbourhood, the Centro Direzionale, replaced former warehouses with Canary-Wharf style towers. The National Archeological Museum and the art gallery in the former Bourbon Palace of Capodimonte are superb and show signs of plentiful public investment.

Rather, they show the limitations of public-spending-led regeneration that concentrates on physical capital, and present a warning of how the Government’s attempts to revive the economy in the “red wall” seats could go wrong.

At its height under the Spanish and later the Bourbons, the Neapolitan economy thrived because of its position as a political centre. The aristocracy extracted wealth from the peasants on their estates and used it to commission palaces, paintings, and other luxury goods, and for political patronage.

This stimulated a strong service-based economy that fell into decline following Italian unification. Though, as Italy’s largest port it had docks, it never had much industry.

The financial and legal services that had served the Kingdom of Two Sicilies were displaced by Milan and Rome, leaving a void as big as the decline of industry in Manchester or Sheffield. Post-war Italian governments tried repeatedly, but without success to fill it. They could reallocate resources from the north, but never managed to get a southern economy to grow on its own.

Naples also stands out as being the largest European city never to have had a home-grown governing class. It has been ruled by Greeks, Romans, Byzantines, Normans, Angevins, Aragonese, Spanish and finally Bourbons, before being reluctantly integrated into modern Italy.

The Bourbons stifled the enlightenment while post-unification Italy focused its energies on the interests of the industrialising north. Anyone who has spent time in the North of England will recognise its identification as unruly, authentically peripheral and ungovernable: the ironic rejection of central authority a badge of honour that covers up the fact their city doesn’t exercise it any more.

Here’s the first trap into which infrastructure-based redevelopment falls: it is liable to be seen as charity for which its recipients, already struggling with a chip on their shoulder, are supposed to feel grateful.

In this respect Naples has much in common with the de-industrialised communities that form the “red wall”. They lack infrastructure, of course, but it is control over the means to define their own purpose that matters more. They lack the political institutions to revive themselves, not only the money to pay for it.

But to receive money is also to give up power: to the ministries in Whitehall and Rome that control the funds, and want, on behalf of the taxpayers to which they are accountable, to ensure the money is well spent (the principle applies even more strongly to the EU’s Covid rescue package, in that the taxpayers and spenders are accountable to entirely different publics).

The second is that it mistakes the results of economic regeneration for its causes. Successful attempts at revival, like Dresden’s or Manchester’s for example, involved making the places attractive for ambitious and creative people to move to.

Now, as Richard Florida and Daniel Finkelstein have observed, that the age of capital-intensive mass manufacturing is over, people don’t move to jobs, but jobs move to where the people are. This means that expanded to include schools, childcare, decent housing, good entertainment and other things that make it easier to have a good life in a town or city, matter more than glitzy new stations. Get these things right and private capital will follow.

This is not to say that depressed areas cannot benefit from financial help, but that if public spending-based revival is to work, it has to be done in a way that enhances the power of the communities into which it is invested, rather than turning them into recipients of the end result of central government cheques paid to large infrastructure companies. If not we’ll end up with a load of melancholy mini-Napleses, but without Neapolitan food, sunshine, or views of Vesuvius.

Stephen Booth: While UK-EU talks gather momentum, Britain should continue to diversify its trading relationships.

25 Jun

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

There are signs that the UK-EU negotiations on the future relationship may be gathering some momentum.

Last week’s stock take meeting between the Prime Minister and Ursula von der Leyen and Charles Michel, the European Commission and European Council Presidents, respectively, confirmed there will be no UK request to extend the transition period beyond December 31 this year.

Both sides agreed to inject fresh impetus into the negotiating process, with talks set to intensify in July, August and September. This marks the make-or-break period to reach a trade agreement and new arrangements in other areas such as cooperation on policing and security.

In my previous column, I argued that the nature of the impasse – essentially whether the EU is prepared to cut a deal under which the UK would be free to leave Brussels’ regulatory orbit – means that it is incumbent upon the EU to move on the key sticking points.

These are fishing and the demand for ongoing UK alignment with EU law on the “level playing field”, particularly with regard to state aid. Important UK-EU differences remain but there are encouraging signs that this is now happening.

Following her meeting with Boris Johnson, von der Leyen signalled in a speech to the European Parliament that the EU was prepared to compromise without, of course, putting into question “our principles and the integrity of our Union”.

In her speech, von der Leyen made no mention of the EU’s initial demand to maintain EU boats’ access to UK waters on the basis of the status quo. “No one questions the UK’s sovereignty on its own waters,” she said. “We ask for predictability and guarantees for our fishermen and women, who have been sailing in those waters for decades.”

Neither did von der Leyen mention the demand for ongoing alignment with EU law on state aid or a role for the Court of Justice (ECJ) in overseeing the level playing field. “It should be a shared interest for the EU and the UK to never slide backwards, and always advance together towards higher standards,” she said.

Notably, she limited her remarks on the role of the ECJ to the part it should play “where it matters” in the area of police and judicial cooperation, rather than in the wider trade deal. If the UK wishes to retain access to EU crime and policing databases, these are underpinned by EU law and there is no escaping that the Court has the role of interpreting how law applies on the EU side.

Though, as the UK has pointed out, the EU has consistently agreed treaties with non-EU countries on policing and judicial matters without requiring the ECJ to settle disputes between the two parties. Equally, the Government has said it will not agree to the extraordinary EU demand for treaty provisions that would oblige the UK to maintain its existing implementation of the European Convention of Human Rights in domestic law.

Meanwhile, there is speculation that a compromise on the level playing field is being explored, under which Britain would assert the right to deviate from the EU rules that it will inherit after the transition period expires. And, in return, the EU would have the ability to apply tariffs on British exports if regulatory divergence amounts to unfair competition.

Neither side has formally adopted the idea yet, but there are reasons to suggest it might have legs. The UK would regain regulatory independence (and the consequences), while the EU would retain the ability to control access to its market in instances where it perceived the UK was lowering standards.

Brussels would need to give up on its desire to export its regulatory model to the UK indefinitely by treaty and the UK would need to compromise on its current position that any commitments on subsides, labour and environmental rights should be exempt from dispute resolution.

It is also an idea hiding in plain sight. The EU’s draft UK trade agreement text already proposes so-called “temporary remedies” and “interim measures” in the event of non-compliance with treaty commitments.

Such a model would not be without difficulties. The UK and EU would still need to agree on the relevant benchmark for identifying a breach of level playing field commitments. The UK could insist that evidence should be required to show that the effects of divergence are harmful to open and fair competition. The EU could continue to insist that the letter of EU law is the benchmark.

Equally, the prospect of the EU using tariffs or market restrictions as a political tool to secure leverage over the UK in other areas of the agreement cannot be discounted. This has been a feature of the EU-Swiss relationship in recent years. However, this needs to be weighed against the prospect of UK-EU trade facing the full panoply of tariffs on day one, if talks break down completely and trade reverts to World Trade Organisation terms.

Critics have noted that rather than providing for managed divergence, such a mechanism would create perpetual conflict. But, ultimately, while it would be nice to avoid it, the likely reality is that the UK and the EU will face disputes in the future, just as they have in the past. This is a feature, rather than a bug, of an independent UK. Some disputes may be easily resolvable through treaty dispute mechanisms, others will require political resolution.

One way for the UK to insure itself in the event of such disputes is to diversify its trading relationships outside of the EU. And negotiations with the UK’s priority non-EU markets, the US, Australia, New Zealand and Japan, are also intensifying over the coming months.

This week, Hiroshi Matsuura, Japan’s chief trade negotiator, called for a UK-Japan deal to be secured in just six weeks to be ready for ratification in the Japanese parliament. The challenge is to replace the existing EU-Japan agreement, which is due to expire at the end of the Brexit transition period, and Japan is insisting on a bespoke UK deal rather than a simple rollover of the existing EU agreement.

This may mean that the deal is less ambitious than the UK would like on agricultural tariffs but Japan and the UK could go further than the EU was prepared to in areas of mutual interest such as services and digital.

Unlike the Japanese deal, the talks with the US, Australia and New Zealand are about fresh deals and the talks are expected to run into next year. UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is next on the agenda. India would be another potential candidate for the future.

With this week marking the fourth anniversary of the EU referendum, the contours of the UK’s international trade policy are beginning to take shape.