What is required for a Free Trade Agreement to enter into force and be applicable on trade relations between the EU and the UK?
The United Kingdom has exercised its Article 50 right to withdraw from the EEC by way of referendum. “Withdrawal (Article 50 TEU) 1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements. 2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.”
The FTA between UK and EU should eliminate tariffs, fees, charges or quantitative restrictions across all sectors that the parties unanimously agree upon. Important to note here is that the ERTA doctrine applies to the agreement with the UK stipulating that Member states of the EU may lose exclusive power to negotiate with the UK, provided that thet EU has already acted internally on the matter. The European commission has put forth that it shall be in charge of the negotiations with the UK. The European council shall take the decision on the signing of the negotiations and Member states signing this too.
When the agreement finally reaches a conclusion, then national parliaments may have a say about their views on the agreement and finally the European parliament needs to provide their consent. The TFEU contains provisions on competences it shall safeguard when concluding an agreement on external matters with another country. These are envisaged in the articles as mentioned below, and these also consist of the requirements set for a FTA to be concluded. “Article 3 TFEU 1. The Union shall have exclusive competence in the following areas: (a) customs union; (b) the establishing of the competition rules necessary for the functioning of the internal market; (c) monetary policy for the Member States whose currency is the euro; (d) the conservation of marine biological resources under the common fisheries policy; (e) common commercial policy. 2. The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope.
Article 207 TFEU The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade” The common commercial policy has been ever evolving through as evidenced by the below
“Article 113 EEC Treaty: … with regard to…the conclusion of tariff and trade agreements.” “Article 133 EC Treaty (modified) defined cultural and audio- visual services, educational services, social and human health services as shared competences.”
“Article 207(1) TFEU: … with regard to … the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment…”
Now, what is required for the FTA to come into force is consensus by both the EU and the UK on the terms of the FTA.
Indeed, both the EU and the UK have diverging opinions on the exact terms of the agreements as summarised below. EU perspective: Anti Brexit : Von der Leyen: “Without free movement of people, you can’t have free movement of capital and goods. Without a level playing field on environment, labor and state aid, you cannot have the highest quality access to the world’s largest single market. The more divergence there is, the more distant the partnership will be.” (2020-01-08) EU insists on”robust commitments ensuring a level playing field for open and fair competition” UK perspective:
Pro-Brexit: Barnier: “We will insist on making our economic partnership subject to a level playing field on environmental and social standards, state aid and tax matters” (no race to the bottom). (2020-01-09) UK insists on sectoral agreements and refuse and does now want to have in place any institutionalized relationship and in particular a role for the EU Court o Justice. Moving on, a dispute settlement court (as in the WTO) can be beneficial, were there to be a dispute to arise, however the UK has been reluctant to bestow that authoritative responsibility on the CJEU. “Article 218.11 TFEU- Court of Justice of the EU – A Member State, the European Parliament, the Council or the Commission may obtain the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the Treaties. Where the opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised.”
Seeing the above provisions, the UK and EU have to be at a consensus in relation to the applicable rules governing the FTA between the two where both, as of now, are at odds with the future structure and powers conferred to the FTA. On one hand, Theresa May announced at the commencement of Brexit that “We are not leaving the European Union only to give up control of immigration all over again … And we are not leaving only to return to the jurisdiction of the European Court of Justice. That’s not going to happen. We are leaving to become, once more, a fully sovereign and independent country.” (Theresa May in October 2016). On the other hand the structured approach with the EU gives to its FTA’s such as having a Dispute settlement system (in the case of Switzerland and EU FTA) may dissipate fair, juridical outcomes of the foundation of the EEC established after WWII, in my opinion
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