It is absurd to claim that the UK must keep ECJ jurisdiction to maintain close trade with the EU

It is absurd to claim that the UK must keep ECJ jurisdiction to maintain close trade with the EU

In last weekend’s Observer it was claimed that the UK will not be able to quit the jurisdiction of the ECJ if it wishes to maintain close trading relations with the EU after Brexit. There is an important and sensible point behind this claim, but the claim itself is, I am sorry to say, an absurd one which is bound to mislead those who wish to understand Brexit but find the legal language in which that claim is made daunting.

Though the extreme difficulties of doing so mean that the process is complicated to say the least and that its results are very uneven, the EU aims to create a unified regulatory system of trade, a Single Market, internal to the borders of the EU. Part of the process of doing this is the harmonisation of the regulatory systems of the Member States. Harmonisation logically requires a single court at the apex of the regulatory system, and this in turn requires that that court is sovereign over the legal systems of the Member States. Were there no such sovereign court, then inevitable disputes over the terms of regulation would remain unresolved or, effectively the same thing, be resolved by national courts in different ways. This essential role is performed by the ECJ.

After Brexit, a UK firm wishing to sell goods in the EU will have to meet the EU’s regulatory standards. The UK firm indisputably will have to comply with regulations over which the ECJ is ultimately sovereign. This is the important and sensible point behind what was claimed in the Observer. But it is seriously misleading to say that the firm therefore is subject to the sovereignty of the ECJ because, of course, the firm’s position is a matter of economic choice, not legal duty.

The situation is in no way different than it would be for the firm when selling into any other export market. If it wishes to sell goods in the US, it must comply with regulations over which the US Supreme Court ultimately is sovereign. But we would not think of saying that the firm thereby is subject to the jurisdiction of the US Supreme Court. To say this of the ECJ is very unhelpful when we try to orient ourselves to the real issues at the national and international levels.

For, of course, Brexit opens up the possibility of negotiating the terms of trade with the EU in a way which is not subject to the sovereignty of the ECJ. This is to say, most importantly, that the final decision about those terms will not lie with the ECJ but will be a matter of negotiation between the EU and the UK as equally sovereign authorities. This will be made crystal clear when, as I am sure will occur, any free trade agreement that is reached will provide for disputes between the UK and the EU to be resolved by an independent tribunal. If the undesirable option of falling back on WTO Most Favoured Nation rules has to be exercised, then WTO bodies will form this tribunal.

What is even more important is that, if it remained a member of the EU customs union, the UK’s terms of trade with countries outside the EU would remain subject to the sovereignty of the ECJ. The UK would have to accept the terms of global trade which are determined by the EU. The choice of specific trade policies is a matter of economics and politics, not law, but, since the inception of the EEC, part of the economic essence of the EU has been the creation of a tariff wall against the rest of the world. In particular, barriers to agricultural imports are so huge that one might say that the EU’s main trade function is agricultural protection. Brexit means that the UK will have the legal capacity to demolish this tariff wall for itself.

But that one has the legal capacity to take decisions does not mean one can decide anything one wishes. One’s decisions are, of course, always subject to constraints. It is wrong to do so but let us ignore the international regulatory frameworks for trade and just focus on the UK and the EU. The UK’s ability to secure terms of trade it believes are to its advantage could be limited by the economic and political stance of the EU.

I myself do not expect the UK to obtain the terms for agricultural exports it would prefer because this would run counter to the EU’s main trade function of agricultural protection. I do, however, expect the UK to obtain broadly the terms it prefers for most industrial goods such as cars because EU manufacturers will want to agree those terms in their own interests, and, though one only has to look at Greece to see how far the EU Commission is prepared to use ruin as a policy instrument in the pursuit of a more perfect union, I expect those manufacturers to prevail.

All this, however, is a matter of the economic and political constraints of negotiation. It is quite wrong to conflate recognising such constraints of negotiation with remaining subject to the legal sovereignty of the ECJ. What Brexit does that seems fundamentally unacceptable to those who wish to remain in the EU is that it restores to the UK the capacity to determine its own future, which also imposes the responsibility to do so. This is an awful responsibility which will not be discharged without great difficulty in the face of constraints, some of which will be imposed by the EU.

Those voting for Brexit believed, however, that addressing those difficulties and facing those constraints was a price worth paying for the prize of self-determination. This is my own opinion, to which it is merely incidental that I expect the UK, when freed from the suffocating embrace of the EU, to enjoy greater economic success than would ever be possible within that embrace.