Having written briefings for frontbenchers on the treaties of Amsterdam and Nice, and having wandered in lonely eurosceptic errantry the corridors of Brussels during the Convention on the Future of Europe, it is, I suppose, refreshing to sit down and analyse a document whose intention is finally to take the country in the other direction, away from the EU orbit.
It is, however, a great shame that the designers failed to fill up the tank with petrol.
I’ve spent some hours scouting the text of the draft Withdrawal Agreement and Outline Political Declaration. As an initial review, it is of course impossible to delve into the minutiae of case law that apply to any single line and cross reference all of the cited directives, but as an exercise in reconnaissance at least you can over a few hours get a reasonable map picture of what is going on.
The problem is not singular, but a mosaic of issues.
There are some real shockers in there, such as over fisheries. There are serious ambiguities and strategic vagueries, such as over Justice and Home Affairs and Defence. There are also huge gaps – particularly over budgetary commitments and the assets which I fear have been simply written off.
I’ve not even dared dig into the Northern Ireland small print – which will take days to properly unravel. The ‘cover page’ that is the “Joint Statement” makes a heck of an admission to kick off with: “Neither the Union nor the United Kingdom wish to see the backstop enter into force.” I haven’t worked out how much share of the total word count and pagination is taken up by the Northern Ireland arrangement, but the percentage it comprises of the whole deal is telling in many ways. It’s certainly an indictment of those who led the focus and obsession of the negotiations to that pass, largely to the detriment of everything else (Although, paradoxically, for other states seeking in turn to replicate Brexit, they might see their own routes as being far more appealing now on reflecting that their own border politics is simpler).
Now, a lot of eurosceptics could buy into this deal on the assumption, despite the flaws, that landfall is near. But this is predicated upon the assumption that a transition agreement does what it says on the label – it transits.
That approach works for a time. Until you hit that most remarkable of paragraphs. It’s what you might call the Odysseus Clause. It’s Article 132 – where the drafters can barely commit to finally fully leaving the EU this century. Here’s what it says:
“Notwithstanding Article 126, the Joint Committee may, before 1 July 2020, adopt a single decision extending the transition period up to [31 December 20XX].”
That’s a bit of a variable.
Given the EU preference to plan around MAGP (multi year) timeframes, that could conceptually see a Brexit date of 2098. But there’s no reason why they might tweak the financial admin and go the whole hog. Why not have full Brexit on the first day of the 22nd century? That would be enough planning time for the CBI at least. T+Cs apply as the CAP falls away, but budgetary elements get recalibrated and most of the rest stays glued onto the UK.
But this variable is a massive trap. The drafters have not even bothered to put in 202X to make a point that they expect transition to take a decade or so at most. So all the problems with the transitional deal, accepted because they are seen as transitional, could quite plausibly turn out to be permanent – or at least, long lasting enough to cause serious damage to our economy, to our democracy, and to our national credibility.
The only real safeguard here is that the extension time limit needs to be sorted out by December 2020, making it a domestic political issue. Given what’s happened over the past two years – and indeed in the last two weeks – that is slender reassurance against an unknown future Prime Minister, still failing to grapple with a Northern Ireland customs union alternative, who has lost his or her key leverage on the EU to play ball, foisting some last minute arrangement on the country and locking the UK into a permanent non-transition transition.
So much for the big picture. Given there are hundreds of pages of text, it may help if I briefly here outline some of the other crags and marshes ready to snare the unwary.
OUTLINE POLITICAL RELATIONSHIP
This is what we hope to end up with. Maybe. The promised sunlit uplands. But it only constitutes seven pages – 1.2% of the transition deal. This is a bit B+Q as pegs go, and a rather slender thing to hang £39 billion on.
The UK is locked into the ECHR, so bang goes that long-vaunted Conservative reform. You may remember that Theresa May was reported as advocating repatriating ultimate jurisdiction to UK judges in 2015, with Michael Gove continuing preparatory work undertaken by Chris Grayling on the issue and generating a new Bill of Rights and Responsibilities. Gove’s proposals were, incidentally, supported by a certain Mr Raab.
Then there is the dichotomy of ambition. I’m not sure that if you have “deep regulatory and customs cooperation” and a “single customs territory” you are necessarily going to end up with a model Free Trade Agreement. “Equivalence assessments” are to be run – allowing for the prospect, but not the guarantee, of mutual recognition and divergence. This would be a big win if achieved, but the wording allows for just a couple of minor ones to happen. That absolutely leaves the prospect of the end deal being one that sees the UK in a fax democracy version of a Regulatory Union, and probably in a form of Customs Union. Replacing the Northern Irish backstop is an “intention” to be ‘recalled’, rather than a stated pledged target within a timeframe.
The assertion is made that the UK will become an independent coastal state (thus with control over its own waters) – but without defining what is meant by future shared stocks, leaving the UK’s territorial waters on the table. There is also no clarity on the intended mechanism for actually managing them. This is a bit of an issue as it appears to concede future arrangements will freely give foreign trawlers quota shares of what is a UK national asset.
It appears to concede there will be a long term role for the Court of Justice of the Europan Union (CJEU) in UK participation on JHA issues.
On Defence again, the long term ambition is “Collaboration on relevant current and future projects of the European Defence Agency through an Administrative Arrangement, participation in European Defence Fund supported projects, and collaboration […] […] in Permanent Structured Cooperation projects where invited on an exceptional basis, under the conditions in Union law.”
So not exactly clear blue water here, in an area where in the past few days alone we have seen President Macron and Chancellor Merkel waxing lyrical on EU military aggregation. Meanwhile, we see a pledge to participate EU’s Civil Protection Mechanism, rather than the counterpart UN scheme.
The drafters might usefully have inserted a few caveats into the ambition to build structures that include “the possibility for specific governance arrangements in individual areas”, unless you want to rebuild a mini-EU Mk 2.
In summary, I’m not sure how much of this couldn’t have been written in the summer of 2016. There are some good individual ambitions, but they aren’t locked in. The consistency of the guarantee is sadly more porridge than cement – and heavily dependent on the good faith and generosity of the other party.
As to how that interrelates with the short Joint Statement – well, again, there’s a profound lack of certainty over the extent to which the future deal will require the UK to copycat and suck up future EU regulations, rather than coming to a deal that mutually recognising each others’. I fear Sabine Weyand had a point. Nor are we necessarily given much confidence in the peculiar ending:
“Negotiations on the full Political Declaration continue, and the negotiators are determined to reach a successful conclusion by the end of November.”
We can’t even be sure that the document we have in front of us now is actually the end trade deal sketch outline.
One suspects that MPs of all parties will find this section ‘challenging’. Article 128 (A128) means that MPs will get sent EU green and white papers. However, there is a big gap here. MPs won’t be able to complain about breaches of subsidiarity – they’ll just have to lump it. They won’t be able to suggest proposals. They won’t be on the circulation list for Council agendas. Or Court of Auditors reports.
If this and the protocol is as I read it, in effect what this is doing is blindsiding MPs to future decision-making even more. And right now, MPs are hardly in the loop (some proposals on how to fix that can be found here; but few are deployable in this framework).
It is not difficult to anticipate a lot of cross-party annoyance at that. Even the authorisation for UK experts to attend if necessary reads grudgingly – if “the presence of the United Kingdom is necessary and in the interest of the Union”, and even then like naughty schoolchildren they turn up, wait outside, get called in, and will then be booted out – a process which while administratively understandable hardly entails stylish agenda management for third parties. And of course they don’t get a vote, so they can just be ignored anyhow
THE COMMON FISHERIES POLICY
Under A130 of the transition deal, the UK is merely consulted about the management of the Common Fisheries Policy (CFP). It gets to supply comments.
The UK does not, however, regain control of its fisheries during transition. This is despite this being the default under international law (and specifically, the United Nations Convention on the Law of the Sea i.e. UNCLOS).
The only interpretation arising from this must be that fishermen’s interests here were bartered away. For what? The answer might be informative – as would knowing if DEFRA was ever actually informed.
As fishing campaigners point out, since the UK does not regain management of its assets, stocks can be bartered to the point of pillaging by Council members without the UK being even now in the room. This is as bad a stitch-up as when the CFP was set up, ironically, to capture the assets of the North Sea states applying to join in 1973. At least then the Dutch had the grace to feel bad about it.
It is something of a small positive that the EU’s anti-fraud unit OLAF gets a mention. It will still be UK taxpayers’ money that’s at stake. However, there is no reference, even in marginal papers, to resolving ongoing cases involving whistleblowers. This is an egregious omission, even if it had been slipped into a footnote of one of the annexes. Here’s why.
The moves of EU agencies based in the UK out of this country, referenced in A119, have long been touted and indeed the Medicines Agency move made major headlines. For reference, the Galileo site move was announced back in January.
What is seemingly absent here is any commitment to radically pare back on the UK’s entanglement with the astonishing array of these Euroquangos, most of which the UK can disassociate itself from, and most of the remainder from which it can remain a detached associate. Background on what an aspirational change could have entailed can be found here.
FREEDOM OF MOVEMENT
No doubt a lot of analysis will focus on this, so we will confine ourselves to just a preliminary observation or two.
Article 21 (A21) cross-references the 2004 directive for the safeguard system, for people to legally challenge being deported. A15 of that references a later A31 on judicial review. Presumably, therefore, UK courts during transition will still need to base their judgements on not only past but also emerging ECJ case law.
A22 provides for family rights, so relatives of those with residency rights also have work rights. No doubt at some point the statistics will arise on what that means for potential figures for ongoing visa-free access to the UK labour market – they may be very significant and have an impact on long-term immigration targets, and with it visa allocations.
This section sets out ambitions for common rules for emissions, public participation, sea life, global warming and a big list of similar policies. Astonishingly, this is supposedly done “with the aim of ensuring the proper functioning of the single customs territory”.
This is perhaps the most brazen element of treaty deception I have seen outside of Soviet practices. The Commission, and indeed both sides, should at least be honest about it: this section is about making sure the UK doesn’t become more competitive than the EU.
Surely if a bad law costs UK businesses a packet without providing a demonstrable social benefit, it has no reason to be on the statute book? I would challenge the reader, the next time they are in a room with someone from the CBI on a panel, to ask them which laws they think are unnecessary and which they’d like to repeal. It may get them thinking about the consequences of not having that option. Or at least get them to have an open debate about the merits of having policy based on the Precautionary Principle (which sits on p357 of the text).
Personally, I’m not entirely sure that citing the purported effectiveness of the carbon trading scheme as a target to aim for (p358) is going to be uncontentious as a concept either. It certainly sets an interesting bar.
Article 54.2 asserts that geographical indicators (such as that old favourite example, Parma ham) will be respected. A more recent introduction to the EU lexicon, “traditional term for wine”, even gets several mentions – it’s not difficult to see which countries this is aimed at buying off. One suspects this has been cheaply sold.
It is both notable and symbolic that EU termination of a listing automatically triggers a UK one. A peculiar caveat does allow divergence, though one suspects applying this will be problematic, and the clause will prove contentious if another Feta dispute arises and the British Government tries to save its businesses from fresh repackaging costs by claiming it doesn’t affect us as ‘we’re not Greek’.
Article 4 (A4) requires the UK to ensure compliance with EU rules. Parliament is required to pass laws to ensure public authorities and judges follow EU rules during transition – which, as we have seen, will be of elastic duration.
It means following ECJ case law and “concepts or provisions thereof” and UK judges applying “due regard” to this. We might well counsel against anyone relying on a UK judge testing the prospect of divergence. Article 162 even gives the Commission the right to intervene and send legal opinions to judges, when it doesn’t want to turn up in person.
The Luxembourg Court’s role remains paramount. Article 86 provides for continued jurisdiction during transition. New cases will still come under CJEU procedures in the meantime. And A87 asserts CJEU supremacy over not only UK judges but over the UK Government transposing its EU obligations during transition – and four years after it.
Added to that is Article 5, which puts into the script a good faith clause. It’s precisely this principle that has been encouraging Whitehall not to cause a nuisance of itself to get the best deal. It might be recalled that the principle of “sincere cooperation” is somewhat variably applied across governments, and indeed by the EU against ones with which they have had issues (not least the Austrians, Greeks and Italians, down to working on removing premiers). As a ‘rule of law’ state, however, by contrast we can expect the UK to pursue it more rigorously to a self-defeating level. For precedent here, one might reflect on how the UK was treated over the Health and Safety get-around for the Social Chapter opt-out, or the Disaster Clause bail out to tap the Treasury for money for Greece.
The dispute appeal process is always a pointer on how much an arrangement is intergovernmental or supranational. Article 168 keeps any disputes in house, unlike other trade deals where you can appeal to neutral third party arbitration – like a WTO panel. Instead, any dispute in the arbitration panel on interpreting what the EU precedent says goes before the CJEU judges under A174. The decision is binding.
This becomes more of an issue, the greater the prospect of the UK getting jammed into transition. Article 37 not only legally authorises, but encourages, publicity campaigns. While it will be helpful to ensure that people know what their rights and obligations are, the track record of what happens in EU PR budgets is atrocious. Here’s why historically, and why it is an issue today.
DEFENCE AND INTERNATIONAL AFFAIRS
EU Defence policy is actually a very complex area, much of which is ongoing along several parallel streams and off the radar. For deep background, the reader is encouraged to look at a range of papers produced by Veteran for Britain.
The UK has taken a step back from the more blatant and obvious elements of EU defence integration, particularly with respect to unit integration. These texts in this regard are problematic, as they still provide scope over the long term for forms of UK affiliation, which will have a negative impact on relations with NATO and the US. As a consequence, the transition agreement carries additional baggage, since it anticipates over the immediate term the UK will not engage in any significant EU operation justifying it taking an operational leadership role. Consequently, an extended transition deal presents the peculiar prospect – which obviously needs to be avoided – of the UK providing a large share of troops or assets without being able to provide a commander or sufficient input into deployment policy.
But this is a marginal risk in comparison with the core problem. Under the transition arrangements, the UK continues to be institutionally associated with the key EU Defence agencies, which are now engaged in accelerating moves towards a Common EU Defence. The nature, limits and safeguards in a number of areas are ill-defined. In the longer term plan, there is not even a clear directive to make a clean break after the end of transition, so the UK does not achieve a guaranteed escape momentum.
Perhaps most problematic, and not even considered in the draft, are the treaty elements covering trade risk providing a back door for the EU as it develops a Common Defence Industrial Strategy. The UK, moreover, will remain associated with the core institution behind Defence Integration, the EDA.
On Cyprus and the Sovereign Base Areas (SBAs), anyone familiar with them can see it makes perfect sense and is uncontroversial to keep them in a Customs Union with the Republic of Cyprus. For instance, it is a bit of a pointer that their currency is the euro. That said, the wording on p483 and the derogation on p484 may need tightening with respect to “all goods intended for use in the Sovereign Base Areas”, since some overly officious Commission desk warrior might take a burdensome interest in RAF inventories. It might also be interesting to learn what assessment has been made of estimated duties that might now fall to the MoD, and which would be payable to Cyprus, under Article 4.2 (p487).
I also note the inclusion of a readmission clause on p490 for asylum seekers who make it to the SBAs and who don’t want to claim asylum in RoC. While this has been tested latterly in the courts, the result has not been favourable to UK interests or indeed one suspects general SBA management, and this was an opportunity to deter migrants risking their lives and targeting landfall there.
Finally here, on international affairs, under Article 129, the UK is bound to avoid actions “likely to be prejudicial to the Union’s interests” in any international organisation, agency, conference or forum. How is that to be judged?
JUSTICE AND HOME AFFAIRS (JHA)
It’s worth remembering before we look at this section that the Home Office has a long track record of being far more keen on signing up than its fellow opt-out/opt-in state, Denmark. For some dated but salutary statistics, see here.
Given past policy and attitudes within the Home Office (and of a past Home Secretary), it came as no real surprise that the Chequers strategy saw the development of four pillars of cooperation, one of which would be JHA. Consequently, there is a list of agreements included, including the European Arrest Warrant, where the UK will stay signed up, but which have caused serious political issues in the past.
The question again here must arise as to whether, in its enthusiasm to maintain bilateral agreements that the other side were even more keen to retain, the Cabinet Office has too cheaply sold a prize, at negotiating cost elsewhere.
Thoughtfully, and perhaps with an eye to a long-term transition term, the drafters have inserted where to post the bill for the UK’s IT and admin access.
For all its contention and controversy, the £39 billion is remarkably translucent.
Quite where this leaves what is styled in the Recitals (the opening section of the draft) as the “single financial settlement” is very much an open question – and a critically important one. There is perhaps good reason for this, not least the apparent decision to write off the UK’s share of EU assets.
The European Parliament’s art collection is abominable. But properly speaking on budget share, the UK owns a tenth of it. That applies equally to the wine reserve, the official bicycles, one of the nine floors in the Council building, a proportion of the legations occupied by the External Action Service and its assorted vehicles, and so on.
But there is little reference to assets as opposed to several references to liabilities and debts.
There is RAL, Reste à Liquider, meaning the long-term liabilities that have been signed off by an overpledging Commission and MEPs. This, incidentally, is heavily in areas (transport, Social funding) where the UK gets half the share it is statistically due, so logically the UK might have argued it should consider itself bound by half the liabilities (it could at least have made a negotiating play of it – there are no signs it did). Article 140 covers outstanding commitments (in Section 3a). The UK is liable. And the EU works the share out.
The list of assets provided in Article 142 assets is a very partial list, and only appears to have been put in as they come with associated liabilities that the EU is keen to share. At first sight, for example, it looks like the UK assumes ownership of – but also the disposal liabilities of – Joint Research Centre nuclear assets – this is hardly a generous Commission concession, as it is a bit difficult to stack a nuclear reactor on the back of a truck and move it away. Sadly, by the time we get to Annex V (p547) we learn that the UK gets the Euratom assets in the UK, but has to pay for them.
Again, the UK share of EU pension liabilities will be unfair, given the very low percentage share of UK staff in institutions (see here, for example). No doubt assuming a budget-based rather than staff-based share of liabilities was inevitable, but it would be nice to know that the UK made the point and tried.
As for anyone potentially claiming that getting the assets back from the winding up of the ECSC (Article 145) and from UK money held at the EIB (A146), the slight win is getting the money from the latter back in five years and not, say, thirty, but again it’s a location where the UK has paid in and only got half its share back.
There’s one miniscule glimmer in this fog. While it is chicken feed in comparison, someone at the Treasury seems to have remembered that (Article 149) the Bank of England has contributed €55.5m of capital subscription to the ECB. We get that back.
As for future payments, Article 136.1 rings alarm bells about the UK’s long term financial contributions, including the rebate, if transition is extended. The applicable contribution will be subject at any time to change, presumably of course under the new rules with the UK not in the room. Nor is there any express guarantee for the Rebate, which leaves it open to challenge. As for the general budget itself and thus the UK contribution, the track record shows it only ever faces the prospect of being increased. After all, it is practically the European Parliament’s mission statement, asking for more money to manage.
Taken as a whole it really does look as if the Cabinet Office negotiating team, except for one Treasury desk officer, didn’t fight the money corner hard.
Taken together, this is, I’m afraid, a bad deal. I wish it were otherwise. As a temporary structure it might work to a point – though with clear structural flaws and damage – if it had a clear dismantling date. But it’s a pontoon bridge that’s been put up on a flood plain.
We might usefully conclude by turning to what Lurcio would call “The Prologue”. The Recitals element contains a couple of useful pointers here, not least in the assertion that “this Agreement is founded on an overall balance of benefits, rights and obligations for the Union and the United Kingdom” – a warning if ever there was one that no one in the UK, be they judge or elected politician, should mistake this text for something other than written in stone.
It is perhaps an appropriate situation that the drafters didn’t appear to have had the time, or even reach the basic level of agreement, to come up with a snappy name for the “JPD” (Joint Political Declaration). Its title in the text was left to be filled in later. No doubt that will now leave plenty of scope for inventive and colourful suggestions by MPs who will now get the chance to study the text in depth.
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