The Regulatory Policy Institute Research Group

31 letters making 8 points

In the Sunday Times today, in the form of a letter to Parliamentarians, David Owen summarises a suggestion that we have both advocated since 2016. It is an approach that has been consistently blocked by Mrs May’s red-line against participation in the European Economic Area (EEA).

If the Withdrawal Bill is defeated in Parliament on 11 December, it would pass beyond the bounds of sanity to maintain the red-line. In such an uncertain moment it would be certain folly to refuse seriously to contemplate and consider an option that could be of significant value in the new circumstances. And by serious consideration I mean an assessment stripped of myths and erroneous ‘assumed facts’ when engaging with issues such as rule-taking, budget contributions, and free movement of workers provisions in the EEA. If the facts change substantially, only the most inflexible of minds would fail to contemplate a change of opinion.

Lord Owen poses the issue in a very concrete context. The Withdrawal Bill has been defeated and we are faced with Lenin’s question: What is to be Done? The answer he gives is very specific: ‘this’ is what should be done.

Almost identical letters should be sent to each of the other 31 contracting parties of the EEA Agreement (EEAA) making 8 points, as follows:

• The UK reaffirms its full commitment to the Article 1(1) aim/purpose of the EEA Agreement and intends to continue its membership of the EEA from 29 March 2019.
• The UK assures all other parties that it will continue, post Brexit, to perform its obligations under the Agreement, recognising that these obligations will expand in scope as EEA competences currently lying with the EU are transferred to the UK (an automatic consequence of the transfer of sovereignty that Brexit entails).
• The UK reaffirms its commitment to the existing territorial scope of the application of the EEAA to the territories for which it has responsibility.
• The UK expects all other parties to the Agreement to continue to meet their own obligations to the UK under the Treaty, again recognising that, for the EU, these will be diminished by the transfer of competences that will occur in consequence of Brexit.
• The UK expects its obligations to be equivalent to those of Iceland, Liechtenstein and Norway.
• The UK notes that a switch of EEA governance pillar status occurred, with relative ease, when Austria, Finland and Sweden ceased to be ‘EFTA States’ and became members of the EU in 1995. Though it would have been arguable on a narrow reading of EEAA Art 128(1) that those countries should have re-applied to join the EEAA, that is not what happened.
• In the event of any serious dispute the UK will seek arbitration under international law, for example via the Permanent Court of Arbitration.
• The UK formally gives notice that it reserves its EEAA Treaty rights under international law, recognising that, after 29 March 2019, it will be international law that will be relevant for the settling of any disputes.

Taken together, these points amount to an exhortation to follow international law in relation to the issue of the UK’s immediate post-Brexit EEA status. No action has to date been taken by any party to change the contracting party status of the UK: the UK has not given Article 127 notice to withdraw from the EEAA, no other party has taken steps to remove the UK from the Agreement. There would be modalities to settle as to the operation of the Agreement in the new circumstances, but no issue of membership to settle. The letters would resolve any uncertainties surrounding the UK’s intent,

The proposal merits some additional commentary. First, keeping minds focused on the proposal (and not letting them wander immediately off on to other issues), there is no question of feasibility. The government can write 31 letters making 8 points, if it so chooses. It can’t of course control the responses, but it has 100% control of the act itself. That may look to be a trivial point, but I suspect the sending of the letters would itself feel liberating. The people yearn for a government capable of taking initiatives and it would be liberating in the very real sense of releasing policy thinking from the choking grip of an irrational red-line.

Second, the act itself has near zero cost. It might be argued that it would eat up valuable time, but, if the alternative is further delay and dithering with no other Parliamentary consensus is in sight, it could also speed things up. And there is good reason to think that an EU first response would not be long in coming.

The EU negotiators have tracked the Article 127 debate in the UK since the Autumn of 2016; they have developed temporary (ultimately unsustainable) holding positions on the issue that can and have been repeated by officials and friendly lawyers in those debates, and have been played as a straight bat when questioned by inquisitive journalists; they have considered what to do on 29 March 2018, the last day on which Article 127 notice could have taken the UK out of the EEA on Brexit Day. They will have contemplated the situation that has now arisen and have likely formed views on how to respond.

As to what the response will be, we simply do not know, although over-confident assertions will no doubt abound, as they always do (it is amazing how many people think they have possession of a reliable crystal ball). There is a range of possibilities, at least some of which would be highly favourable to both parties, and that is enough to make the exercise valuable. At a minimum we will discover something new, getting more insight of how things would stand in the absence of the limiting red-line.

The EU could say something along the lines of “Our position remains fixed, see you in Court”. Then again it may not. It might be the case, for example, that Michel Barnier spoke truly when he offered the EEA as an option in the past and when he said that, if the UK’s red-lines were changed, that would draw a positive response from the EU (and I think he did speak truly, although the lateness of the hour would provide some ground for resiling from that position now). Or that the EU will behave as it usually has in the past by being willing to keep talking until nearly the last moment in search of a better outcome. Or that it will be very wary of being seen to be operating beyond the limits of international law in its response: the parties to the EEAA having made promises/ commitments to each other in signing an Agreement to work together in pursuit of the Treaty’s Article 1(1) aim: and, as the Vienna Convention on the Law of Treaties states firmly, Pacta Sunt Servanda
For the non-ideological empiricists who make up the bulk of the UK population, I think that the best way to look at David Owen’s proposal is to think of it as an experiment. That may sound scary, but it’s not. The situation calls for adjustments and adaptations and the only realistic way to find out what will and won’t work is to experiment, to try something new and different. The great bulk of human knowledge has accumulated in this way. Every significant advance, including in economic policy, has been made without foreknowledge of the full consequences of the step to be taken. (To which it might be added that where innovations are perceived as having potentially substantial effects, they are generally opposed by a much more numerous band of naysayers.)

What is more certain is that: we will at least learn something new; the response will not be long in coming; and there are potentially valuable things to be discovered. Defeat of the Withdrawal Bill therefore presents the UK Government and Parliament with an opportunity and, as Sun Tzu said, and as all followers of the former ECJ Judge Franklin Dehousse will know, “Opportunities multiply as they are seized”, to which I will add “and diminish as they are not seized”.

Finally, I think the saddest type of domestic response to the proposal would be – and I anticipate there will be responses of this kind – ‘it just won’t work, so its not worth trying’. That is defeatism pure and simple: it is way out of line with what is advised by a cost-benefit analysis and, I suspect, with public attitudes too.

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