THE DEAL – With the EU

TEMPORARY FTA – under GATT Article XXIV

The Withdrawal Agreement – as a whole – is an unacceptable International Treaty and has been rejected by the HoC in three separate votes. It remains unacceptable and is dead.

The WA was intended to trap the UK in the EU – Article 4 demonstrated that. It was composed by the EU under Union Law and the whole of its 585 pages with footnote references to EU Directives would all have to be complied with under Union Law.

Its sole purpose was to tie the UK into the legislative process coming under Union Law and the jurisdiction of the European Court of Justice. Not just during the implementation period but thereafter if the future relationship between the UK/ EU is not agreed. In addition the EU has to give permission for the UK to finally exit the EU. 

That is not a game 17.4m voters agreed to during the Referendum. They voted to bring back control to our sovereign realm.

– The UK must leave the EU on 31 October and should do so on WTO terms indicating that the UK wants a tariff free mutual recognition Free Trade Agreement with the EU that allows the UK to import / export goods between the UK / EU. 

– The political declaration is to prescriptive and should be revisited in a different way

– If the EU takes the view that the proposals for the “backstop” alternative arrangements that have been proposed by the government are unacceptable or indeed if the HoC are not prepared to accept the government proposals then the UK should propose a DEAL with the EU on the following basis

PROPOSAL FOR A REVISED DEAL

If what we want is a Free Trade Agreement between the UK and the EU then all is not lost. 

Perhaps the Deal that both parties can agree at this stage in the negotiations is for a new approach but with a positive strategic outcome.

• The UK to Leave the EU on WTO terms with the government’s current proposals on the table but extend the same arrangements relating to standards to the whole of the UK for a fixed term one year Transition period under GATT Article XXIV to cover trade

• The UK and EU accept that the current Withdrawal Agreement is not acceptable and delete it from future discussion

• The UK / EU accept that the UK leaves the EU on WTO terms on 31 October 2019

• Agree a Statement of Undertaking to have a FTA between the UK/EU as we invoke GATT Article XXIV and Enter into negotiation with the EU to establish a Free Trade Agreement between the UK and the EU 

• Introduce a fixed term Transition period of one year declaring that the negotiations are to establish a FTA as the objective whereby the UK continues to comply under EU standards and rules with the proviso that any new, revised standards are consulted with the UK during that Transition period

• Establish an Agreement for a temporary FTA to be adopted immediately between the UK and the EU for the fixed period of the one year Transition period (see below the explanation taken from the web site of Lawyers for Britain)

• The Customs Union issue would be resolved not just for the NI / I border by the establishment of a Temporary FTA but for all other export / import borders in / out of the UK until a complete non tariff mutual recognition FTA is finalised at end of the fixed term Transition Period

• The Internal Market integrity would be maintained 

• The Good Friday Agreement would be honoured

• Agree that the UK as a sovereign nation should have its own independent Customs Union regime to enable FTA’s to be negotiated with Third countries. Some level of mutual understanding could be established

• Other issues of a political, economic and social nature to be discussed and agreed for mutual cooperation under specific Undertakings between the UK and the EU

The UK can enter into a temporary FTA immediately so that free trade continues uninterrupted on non tariff rates

THIS EXPLANATION IS TAKEN FROM THE WEB SITE OF LAWYERS IN BRITAIN

The Lawyers for Britain answer the question whether a Temporary FTA can be agreed

“The answer is that it can. The UK and the EU can enter into a temporary FTA, intended to last only until the full FTA is negotiated and concluded. A temporary FTA dealing only with tariffs can be extremely simple. Dr Lorand Bartels, an expert in trade law at Cambridge University, has produced a one page draft of such an agreement. 

Link here https://www.dropbox.com/s/xaesprui8veacrb/Basic%20FTA%20copy.docx?dl=0

In practice, such a temporary arrangement on tariffs would need to be accompanied by temporary arrangements on continued recognition of EU standards on goods imported into the UK, and recognition by the EU of UK standards on goods going in the opposite direction. These temporary arrangements on standards do not raise MFN problems under GATT because it is objectively justified for the UK and the EU to generally recognise each others’ standards because they are now identical, and will only diverge over time and when specific changes to rules are made by one or other party. END

Full Article

A simple explainer about Article XXIV of the GATT

• LEAVE the EU on 31 October 2019 on WTO terms, 

• Invoke Article XXIV of GATT, based on a future aim to negotiate a genuine non tariff, mutual recognition Free Trade Agreement. 

• Agree a Deal for a fixed Transition Period of one year during which standards in the UK will follow the EU regime

• Part of that DEAL to negotiate an immediate temporary non tariff FTA ( where EU standards and rules will apply for the one year duration of the Transition Period 

• The UK to have its own Customs Union regime allowing for independent FTA’s with Third countries to be negotiated 

• Discuss other political, economic and social issues to establish cooperative measures

Some facts need to be explained.

A non tariff mutual recognition FTA is what is required on a long term basis to provide for frictionless trade between the UK and the EU member states. That includes trade between NI / I

Currently standards and rules for the export / import of goods are covered by the various EU Directives under the rules governing the Internal Market. These standards have all been harmonised under EU legislation. This allows for the free movement of all goods between member states of the EU which currently includes the UK

The EU Internal Market relates only to those member states in the EU

This arrangement means that under EU law a manufacturer of goods has to comply with these standards if they want to export their goods to a EU member state. They do not have to comply with these standards if they are being exported to a third country (where the manufacturer has to comply with the standards / rules of the host country). UK practice has deemed that even to supply goods for domestic marketing must comply with EU standards

The trade between Ireland and Northern Ireland works because both parties follow the same harmonised standards and rules (the argument about alignment does not apply as they are recognised standards under EU harmonisation).

In effect the new proposals to replace the backstop are but allowing the current status quo to continue under a new arrangement between the UK / EU with the added arrangement for the extra provision of consent which should apply for both Northern Ireland (and perhaps Ireland too).

This arrangement maintains the integrity of the EU Internal Market (single market) and allows for any customs checks to be undertaken away from the border by any acceptable means agreed between to parties involved.

It is essential that the United Kingdom maintains it’s position on the Customs Union as Northern Island is a part of the UK for both internal trade between the two and that of external trade with Third countries. It is impossible for NI to remain in the EU Customs Union for ever. Equally in order to negotiate FTA’s with the rest of the world the UK as a whole must utilise it’s own Customs Union regime and not have to seek authorisation from  nor follow the EU regime

If the EU rejects the backstop proposals put forward by the PM where do we go from here.

• Do we fall back on the original Withdrawal Agreement but that would trap us in the regulatory confines of Union Law, Perhaps for ever yet without the right to refuse to accede to those laws

• Do we seek a further extension under the terms of the Benn Act 2019 but that would kick the can down the road. We remain in the Internal Market, Customs Union and subject to Union Law. We in the UK are surely not going to lie down to such tactics

• We exit the EU on 31 October 2019 on WTO terms but agree conditions to negotiate a non tariff, mutual recognition Free Trade Agreement under Article XXIV of GATT. We don’t ask for an extension of Article 50 as we don’t need one but our DEAL with the EU is to have  a Transition period for a fixed time (one year) to negotiate this new FTA. 

• That would be a DEAL

During the Transition Period a similar arrangement could also apply for the whole of the UK as is being suggested for the NI / I border since import / export of goods would continue to abide by the current (EU) standards and rules. This would cease once a FTA was concluded at the end of the one year fixed term transition period.

The UK would comply with EU standards and rules for the fixed term transition period

This could all be agreed very quickly including an immediate Temporary non tariff FTA which would regularise the whole process of continuity

The UK would exit on a DEAL to produce what everybody says they want and the undertaking to follow the standards of the Internal Market for the duration of the Transition period. This would resolve the border situation between Northern Ireland and Ireland.

The mandate given by the UK electorate in the 2016 Referendum would have been honoured

To put this process on the table would exercise the EU to understand that the UK is leaving the EU but still wants an orderly exit that aims to produce a long term relationship between the UK and the EU through a non tariff mutual recognition Free Trade Agreement and other political, economic and social issues to be discussed and agreed by cooperative means

As mentioned above the UK must retain its own customs union regime in order to be able to enter into serious negotiations with third country governments like any sovereign state. Close cooperation would exist between the UK and EU to coordinate, where possible, tariff rates to avoid trade discrepancies.

In any case by agreeing a Temporary FTA under Article XXIV of GATT much of the issues that the EU appear to be concerned about would be ironed out

Before anybody mentions issues concerning non trade such as security, foreign policy, defence, human rights, employment rights, energy markets and so on remember that many of these issues are but cooperative measures which, although discussed in the Withdrawal Agreement are not fully covered as competences of the EU. If it became desirable to have a cooperative relationship between the UK and the EU these could be covered by separate undertakings. Certainly not in a binding International Treaty

The government’s proposals for NI / I are perfectly practical but as some of us have been saying the Withdrawal Agreement was a means under an International Treaty to trap the UK 

The HoC Benn Act insists that if no deal is negotiated with the EU by 19/10 the Prime Minister will have to seek an extension resulting in a standstill in the negotiations. This will continue uncertainty and simply kick the can down the road. Parliament has a responsibility to honour the Referendum result. 

It was a mandate given by the electorate.

By agreeing a DEAL as set out above the Benn Act would not apply

For the record:-  

My submission on a EU Strategy made in October 2016 can be read here

www.eustrategy.wordpress.com

The introduction of the Internal Market White Paper In 1985

I was involved when the policy to harmonise standards through the EU Internal Market White Paper was introduced by the Commissioner Lord (Arthur) Cockfield In 1985 some of us at that time suggested that like the UK where standards are set by the British Standards Institute future EU standards should be set by a non political body. It was argued that political involvement was not necessary. This body could involve non EU states who wanted to follow EU standards. I am still of that opinion

The EU Commission rejected that proposal as they wanted to make a statement to the world and, at that time, wanted as many third countries to adopt EU standards. Furthermore they wanted to compete with the United States regime for control of standards. They thought EU standards would become the world order in the same way that the EU thought the development of the euro would become a reserve currency.

As it turns out by having political involvement in the setting of standards, often involving debate by those who know nothing about the industry or products involved, has meant considerable bureaucratic delays when introducing new or revised measures.

The last time I was involved in such a revision it took 10 years to revise the Construction Products Directive.

To aid the negotiations we established a Forum in the European Parliament for Construction to bring together Industry Representatives; Members and Officials from the EU Institutions (the Council of Ministers, Commission, European Economic and Social Committee and Members of the European Parliament) to explore the technical operations and inform everybody of the practical implications. Practical explanations were useful to understand how the standards were applied.

We are at a stage in the BREXIT talks where practical exit from the EU is taken over by political issues. Where it might appear that some MPs in the HoC are but going through the process without having read the Withdrawal Agreement and understand the implications. Not understanding what the 17.4m electorate meant by voting to Leave the EU (out of the Internal Market (single market), Customs Union, Control of our borders, trade policy. Not involved in a EU army, diplomatic missions controlling foreign policy. Making our own laws and not coming under the jurisdiction of the European Court of Justice). They were, in my view wanting the UK to be unfettered by EU regulation which challenged our national sovereignty 

The Future Agreement – A DEAL

• We do not need an extension under Article 50 therefore the Benn Act is not required as this would simply kick the can down the road

• We need a Deal with the EU for a one year Transition Period to establish a practical non tariff mutual recognition Free Trade Agreement between the UK and the EU

• We need a new strategic approach that brings about a temporary non tariff mutual recognition FTA immediately dealing with a continuation of non tariff rates during the Transition Period 

• We need to have a medium / long tern strategy to establish a non tariff mutual recognition Free Trade Agreement between the UK and the EU

• We need the vision of both the UK and EU to fully accept that the UK Referendum of 2016 has to be honoured as a mandate to maintain SOVEREIGNTY vested in the UK

• Politicians need to listen to those with experience of negotiating a deal and with knowledge of how the EU operates in order to achieve an ever lasting arrangement.

• We need to negotiate a DEAL with the EU that brings about all the above to avoid disruption of trade between the UK and the EU member states

• We need a DEAL that caters for the UK to enter into FTA’s with Third countries unfettered by any restriction from the EU and outside the EU Customs Union

• We need to establish a long term relationship with the EU covering both political, economic and social issues but this can be developed over a period of time. In the interim rolling over existing well established cooperation regimes

• If it becomes apparent that this objective is not shared the UK electorate will then know where they stand