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The EEA Agreement: the key to a simplified Brexit process?
Sir Richard Aikens, Professor George Yarrow and Professor Guglielmo Verdirame reach the view that the UK is currently a member of the European Economic Area and is likely to be able to continue membership if it wishes. Its treaty rights under the EEA Agreement afford the UK a considerable degree of control over the post-Brexit outcome. Continued membership can be viewed as an ‘interim measure’ that would, in one step, meet most of the Leave agenda, whilst allowing time for reflection on longer-term issues.
The UK is currently a contracting party to the EEA Agreement (EEAA), a multilateral international treaty that has a succinct, well-defined economic aim that could have come straight from the pages of Adam Smith: to promote trade by developing a market (markets being economic institutions whose primary function is to facilitate trade).
The UK signed and ratified the Agreement in the early 1990s as one of the original contracting parties. The EEAA is what the EU calls a mixed agreement. For such agreements it is reasonably clear that, even under EU law (before getting to international law), EU Member States are contracting parties “in their own right”, not simply as adjuncts to the EU.
There is nothing in the text of either the EEAA or the Treaty of Lisbon that states or clearly implies that withdrawal from one treaty entails withdrawal from the other. The EU negotiators have not asserted that there is. Neither the EU nor the other contracting parties to the EEAA have sought to call the international conference required by the EEAA in the event of an impending withdrawal of one of its parties.
By way of background, it is important to note that the rules on the termination and suspension of the operation of treaties are set out in the Vienna Convention on the Law of Treaties (VCLT) at Articles 42-45 and 54-64. As a general rule, a treaty remains in force unless it is terminated on the basis of the application of either its own specific provisions on termination or the VCLT (see Article 42(2)). Save in the case of the conclusion of a later treaty designed to replace an earlier one (Article 59), there is no basis in the Vienna Convention or the EEAA for withdrawal/termination by implication.
It is possible for other parties to seek to terminate the participation of one of their number, for example by alleging that a party is in material breach. Under Article 60(2)(a)(i) of the VCLT, however, in the case of multilateral treaties like the EEAA, the material breach of one party requires the “unanimous agreement” of all other parties to suspend or terminate the treaty between themselves and the defaulting party. So the EU27 and the 3 EFTA States, as well as the EU itself, would all need to agree that the UK has committed a material breach of the EEAA by its decision to the leave the EU, and formally invoke termination on the grounds of material breach against it. There is no indication that the 30 States concerned are giving serious consideration to this possibility.
Another ground for terminating a treaty is fundamental change of circumstances. Although it is not clear whether it would be necessary for all parties to the EEAA to agree that the UK leaving the EU constitutes a fundamental change of circumstances, this route too presents formidable difficulties. First of all, Article 62 of the VCLT does not operate automatically and parties to the treaty intending to invoke Article 62 would need to notify the others. Absent such a notification, the EEAA would remain in force.
Furthermore, international law sets the bar for the operation of Article 62 very high. Those wishing to terminate a treaty on this basis have to show that: (a) the circumstances that have now changed constituted an essential basis for the consent of the parties; and (b) the effect of the “fundamental change” is radically to transform the extent of the obligations owed to it the relevant contracting party or still to be performed by it under the treaty.
In one of the leading cases on treaty law, Gabcikovo-Nagymaros (Hungary v Slovakia), the International Court of Justice emphasized that the stability of treaty relations requires Article 62 to be applied only in exceptional cases. The Court rejected the argument that profound political changes (the transition from communism to a market economy) diminished economic viability of the project, and that wide-ranging changes in both environmental law and scientific knowledge about the environment amounted to a fundamental change of circumstances in terms of Article 62 of the VCLT.
To gain some insight into where the Article 62 bar might be set, it is interesting to look at the case concerning the termination of the Cooperation Agreement treaty between the (then) European Community and Yugoslavia. The relevant circumstances were clearly much more extreme than the UK’s decision to leave the European Union: they involved the dissolution of Yugoslavia itself and the civil war that followed. The European Court of Justice endorsed the Council’s decision to terminate the agreement but on the basis that “the pursuit of hostilities and their consequences on economic and trade relations, both between the Republics of Yugoslavia and with the Community, constitute a radical change in the conditions under which the Cooperation Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia and its Protocols … were concluded”.
In a nutshell then, in the EEA context, and in light of the general principles of treaty law, forced termination seems a remote possibility to begin with and it is certainly not something that could easily be achieved.
Voluntary withdrawal from the EEAA is explicitly provided for by its Article 127 which specifies a twelve-month notice period. The very existence (fifteen years before the appearance of Article 50 in the Treaty of Lisbon) and relative permissiveness of the exit mechanism are not accidental. Given that the EEAA was concluded in the immediate aftermath of the fall of the Berlin Wall, with Europe in a state of flux, Article 127 was tailor made for countries that might soon wish to transition into the EU. It is also a good fit for a country that wishes to transition away from the EU.
The UK Government has chosen not to give Article 127 notice and, in the absence of other actions, the UK will remain a party to the EEAA following Brexit. It therefore makes perfect sense for the UK to fully reserve its rights under the EEAA given that there is no automatic ending of the obligations and rights acquired on signing (in Porto on 2nd May 1992) and ratifying the Agreement. “Pacta sunt servanda” (Art. 26, VCLT).
Given that the UK has not given notice of withdrawal from the EEAA and the fact that a forced termination of the UK’s membership of the EEAA is very unlikely for both legal and political reasons, the UK’s position of strength should be recognised. Put bluntly, the UK currently enjoys a considerable degree of control over the post-Brexit outcome stemming from its current Treaty rights under the EEAA. If it chooses to remain a party to the EEAA, committed to its Article 1(1) aim – to promote trade and better economic relations between the contracting parties – and consistently acts in good faith, it should expect to be able achieve that proximate objective.
Recognition of these points has major implications for the UK Government’s negotiating strategy. First of all, the UK/EU divergences consequential on Brexit will necessarily occur over a period of many years and continuing EEA membership appears much the most expedient and effective way of handling the earlier stages of the process. It can be viewed as an interim measure that would, in one step, meet most of the Leave agenda, whilst allowing time for reflection on longer-term issues.
Secondly, the UK’s current Treaty rights under the EEAA would greatly reduce the risk of chaos in the event of failure to conclude a withdrawal agreement. This stems from the fact (which does not appear to be widely appreciated), that the EEAA is an extant Free Trade and Economic Cooperation Agreement, made ‘deep’ by its establishment of a harmonised –though not uniform — system of regulations that serves to reduce non-tariff barriers to trade. This system would be retained in the immediate, post-Brexit period.
Thirdly, EEA membership would also remove the prospective ‘cliff edge’ at the end of the transition period (likely to prove problematic in light of the difficulties in getting a major new UK/EU agreement up and running by the 1st January 2021, now only 28 months away); and it would resolve the greater part of the Irish Border issues, which are more to do with regulatory harmonisation than with customs. Since the fact of membership of the EEAA constitutes a status quo position, continued membership of the EEAA would not need an affirmative vote by a parliamentary majority, which might be a very handy feature for a government that finds majorities hard to achieve.
There would be one major outstanding issue to resolve. The EEAA as it stands requires the UK to participate in one or other of its two governance pillars, either the EU pillar or the EFTA pillar, which establish parallel institutions and mechanisms for monitoring compliance with the Agreement. In the EU pillar the UK would continue to cede sovereignty to the EU (the ‘vassal State’ characterisation is not inapt); in the EFTA pillar there would be an immediate return of UK sovereignty over the relevant, trade-related matters. The latter is clearly much preferable although it would require UK accession to the Surveillance and Court Agreement between Iceland, Liechtenstein and Norway, subject to the consent of those three States.
Just as Article 127 contemplates “necessary modifications” to the Agreement in the event of the withdrawal of one of the parties, so the change in the EU-status of the UK will call for certain adjustments to the text. The most basic one is that the UK’s name be added to the list of non-EU contracting parties at Article 2(b).
There are good reasons for believing that the other parties to the EEAA would consent to the amendments required to ensure the effective continued participation of the UK. The EU, consistent with its own EEAA commitments, has itself suggested the EEA as a Brexit option. For non-EU members of the EEA the minor inconveniences of adjusting the existing surveillance and court arrangements to accommodate the UK would likely weigh lightly by comparison with the prospect of the loss of an enhanced Free Trade Agreement with the UK, which for them is a very major trading partner.
However, in the event of any major obstacles the UK should make it clear that it will reserve its rights under the EEAA and seek international dispute resolution if necessary. That need not delay things: as an emergency measure to sustain the continued operability of the EEAA, the UK could offer to quickly set up its own surveillance body and, for judgments, rely on the domestic courts, which have a high international reputation for impartiality.
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Sir Richard Aikens is a former Lord Justice of Appeal and is Visiting Professor at King’s College London and Queen Mary University of London.
Professor George Yarrow is Chair of the Regulatory Policy Institute and an Emeritus Fellow of Hertford College, Oxford.
Professor Guglielmo Verdirame is Professor of International Law at King’s College London and practises at the Bar.
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With an avg. 1.2M voters per MEP & Britain with 16% of EU GDP and 13% of the EU’s population yet having only 8% (if united) say, whilst holding less than 3% of the various offices within the EU Do note The EUropean Parliament has no ability to make policy and has a Commission of unelected bureaucrats, thus clearly the EU is not even a pretence of being a democracy despite its protestations!Do note that many senior apparatchicks and even elected politicians speak openly of the ‘Post Democratic era’ with no sense of shame or irony and in complete contempt of the so called electorate – yet The EU & many of its vassal States/Regions are all too willing to slaughter people in Sovereign States, to impose The EU’s chosen brand of democracy on them!
Now as President Junker announced in his ‘State of the union’ speech 2017 the aim is to create an EU military force and centralise ever more of the decision making and control!
The imposition of a Government and policies upon its vassal regions such as the peoples of Greece shows just how far from being a democracy the EU is.
Just follow the recent EU display of so called ‘Democracy’:
France and the Netherlands voted against the proposed EU constitution in 2005, only to have those votes ignored.
Ireland voted against ratifying the Lisbon treaty in 2008, but then later under pressure & threats had to change its mind.
Greece for me was the final straw. It became clear in 2015 that it didn’t matter which way the Greek people voted. The birthplace of democracy had become its tomb. That was enough. I was going to vote to leave the EU when the chance came.
No political party of any significance in Britain took active steps to achieve a Referendum – the task was eventually taken by an Indipendent West Midlands MEP Nikki Sinclaire who personally launched and funded the gathering of a petition of 225,000 signatures delivered to Parliament via Downing Street, thus forcing a debate in the House of Commons on an IN/OUT Referendum, which led to David Cameron’s first consequential rebellion.
It was due to winning that debate, officially opposed by every party including Ukip that David Cameron was forced to include a promise of an IN/OUT Referendum in the Tory Manifesto at the next General Election. The rest is history & despite no Parliamentary Party backing the OUT vote & Government spending Millions of Pounds of public money leafletting & promoting ‘Project Fear’ to try to persuade the British people to Remain just as they had at the first Referendum in 1975 – This time their lies and threats were not heeded and in the largest vote in British history Britain voted by a clear majority to Leave.
Nikki Sinclaire’s OUT result left Cameron & his co conspirator Osborne with no option but to resign, sadly some of the other traitors have remained to try to hinder progress to BreXit, aided by their corrupt allies in the EU and \eu funding and bribes!
There will be little or no change in Britain’s economic position, if we leave the EU, using a better negotiated, customised & updated version of the ‘Norway Model’ as a stepping stone to becoming a full member of the Eropean Economic Area, where all will benefit, as we secure trade relations with the EU’s vassal regions, with an EFTA style status and can trade and negotiate independently on the global stage, as members of The Commonwealth and the Anglosphere.
This is of course dependent on a modicum of intelligence on the part of Britain’s politicians and negotiators but it also requires the integrity of Parliament to uphod democracy and the integrity of EU politicuians & apparchicks to act ethically and without their normal vindictive mallice.
I believe Leaving the EU will be turned into something of a rough ride by the ignorant and the corrupt but I have no doubt that in the long run Leaving the EU will prove conclusively to be in the best interests of Britain and our true allies. I also believe that Britain leaving the EU will prove to be the catalyst to great changes within the EU and hopefully its democratisation as without great changes it is indubitably doomed.
Do not overlook the fact that politicians have plotted and schemmed since the 1950s and we have actually been vassals of the EU, when it was still using the aesopian linguistics and calling itself The Common Market in the early 1970s, a name the bureaucrats arbitrarily changed to EUropean Union in the early 1990s as they worked towards their long term goals of an ever closer centrally controlled Political and economic Union with its own anthem, currency, flag and rigid central control by its self appointed bureacrats towards a new Empirate –
It will take many years to rectify the mess our political class got us into and we have no other peacefull means by which to extricate ourselves than to depend on that self same self styled elite, who all too often forget they work for us!
One huge benefit of BreXit will be that we can negotiate with bodies like the WTO, UN, WHO, IMF, CODEX and the like, directly, in our own interest and that of our partners around the world, in both the Commonwealth and the Anglosphere at large; rather than having negotiations and terms imposed by unelected EU bureacrats and their interpretation of the rules handed down, as if they were some great achievement of the EU’s!The greatest change and benefit will be political, as we improve our democracy and self determination, with the ability to deselect and elect our own Government, with an improved Westminster structure, see >Harrogate Agenda<.How we go about the process of disentangling our future wellbeing from the EU is laid out in extensive, well researched and immensely tedious detail see >FleXcit< or for a brief video summary CLICK HERE
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