A strictly time-limited stay in the EEA is the best transitional option for the UK

A strictly time-limited stay in the EEA is the best transitional option for the UK

I believe Martin Howe was too absolute when he asserted in his pre-election analysis of the nature of the Single (Internal) Market: “Contrary to ill-founded suggestions which have been made by some commentators, the UK has no right to stay automatically in the EEA after exit from the EU.”

I imagine I am one of those commentators! By contrast, I have set out in a detailed paper why, after we leave the EU in March 2019, the ‘implementation period’, already referred to by Theresa May, is best spent as a non-EU Contracting Party to the European Economic Area Agreement (EEAA).

As I have suggested, it would be purely a transitional period of no more than three years to be ended by the UK government giving the statutory notice period no later than one year before the next General Election, which must take place by May 2022.

To put it as succinctly as possible: as a Contracting Party, if the UK soon notifies all the other parties that we want to continue to participate after March 2019, re-affirming a commitment to the EEAA’s objectives and substantive structures, it would put the ball in the EU’s court. International law would make it very difficult for them to expel us (without breaching that law). Martin Howe fails, like all other objectors to this strategy, to take account of the two relevant Vienna Conventions (on Treaties, and on Succession of States). He just says the claims are ‘unfounded’, without any further elaboration or reasoning as to why.

In my experience, you do not have to be a lawyer to recognise that there is a political choice as to whether, in a situation where Article 50 has been invoked, relatively minor amendments will be made to the EEA Agreement which would need to be ratified. For Sweden, Austria and Finland, when they left EFTA for the EEAA that was done semi-automatically (there was no hassle), precisely because the basic substance of the Agreement was not at issue. That is the nearest comparator to Brexit and we could simply ask for the precedent to be followed. If it wasn’t, that would be another arrow in the UK’s quiver if matters had to go to international dispute resolution. Judges do not like double standards and are attracted by obvious precedents.

The bottom line is that any EU/UK Trade Agreement will also require EU ratification coming after we have left the EU. Hopefully we will have a Heads of Agreement on trade matters as part of the package under Article 50. If not, we will have a period of our choosing with no arbitrary ‘cliff edge’ to further determine the chances of a trade agreement when the emotions over leaving subside. Also time to make our own predispositions. Where else will the UK best position itself as we negotiate the nitty-gritty detail on trade during an ‘implementation period’ for perhaps as long as three years?

The EEAA option is better, by a large margin, and can be expected to give rise to the least hassle (not only because it calls for the fewest adjustments, but also the EU is much more constrained – by the terms of the EEA Agreement and by international law – in what it can reasonably resist).

I am very clear that I do not wish to remain in the EEA for longer than three years, largely for the reasons Martin Howe spells out in his earlier comments. What makes the EEA Agreement attractive as an option for the immediate post-Brexit period is that it is doable by March 2019, whereas other FTA options probably aren’t. I think that this is a point worth stressing, when we want to carry confidence in Europe and globally at a time of international strain and stress.

We need to guard against people tending to benchmark against their own ‘ideal outcomes’ rather than against feasible and realistic alternatives. Once we remain in the EEAA we will be free to take issue with the interpretation of its terms (freedom of movement, whether regulations do or do not apply to non-traded goods and services, etc.) This follows from the full restoration of our Parliamentary sovereignty. We are no longer as a Non-EU Contracting Party bound by the ECJ nor by the European Commission, consequent on departure from the Lisbon Treaty. We are free to sign our own trade agreements immediately. No doubt there will be challenges to our interpretation during this transition period but there is the EEAA’s dispute resolution provisions, and these are well able to take care of that.

Anyone interested in assessing this option in detail will I hope find the answers to any of their points in my longer paper below.

Lord Owen EEAA