Prime Minister Boris Johnson will announce a new plan with senior ministers this week, aimed at breaking the deadlock that has characterised the talks on Britain’s future relationship with the EU for the past five months. According to the Financial Times, hopes are rising that a month of “intensified” negotiations starting on June 29 will yield results. However, despite the EU side signalling its willingness to move on key sticking points in order to strike a deal, it warned that it would not sacrifice its principles.
Britain is also determined to maintain its red lines, including not asking to extend the Brexit transition period, meaning that the chances of leaving without a deal are now higher than ever.
A source close to the Prime Minister’s chief adviser Dominic Cummings told The Times last month that there was already a view in Number 10 that the UK was heading for “no deal”.
According to David Collins, a Professor of International Economic Law at City, University of London, leaving without an agreement in place, would have significantly adverse implications for the UK.
In a recent report for Global Vision, Mr Collins explained that unless an FTA is concluded with the EU before the end of the year, under the ratified Withdrawal Agreement, the revised Irish Protocol will come into effect from January 1, 2021.
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The revised Irish Protocol provides for Northern Ireland to remain in the EU’s single market for goods and means there will be customs, VAT, state aid and EU regulatory formalities for goods moving between Great Britain and Northern Ireland.
This, Mr Collins argued, would be damaging to Britain for a number of reasons; the most important of which is in relation to State Aid, which could remain under the EU’s jurisdiction throughout the UK indefinitely.
The Professor wrote: “State Aid, also known as subsidies, broadly covers any advantages granted by public authorities to organisations that could potentially distort competition. Accordingly, the laws which govern when State Aid can be used are a vital aspect of any country’s economic planning across many sectors. Having these controlled by the EU in perpetuity is simply unacceptable because it negates the very purpose of Brexit – sovereignty over laws.
“While it appears at first glance that, via the Protocol, that the EU will retain control only over State Aid laws as applied in Northern Ireland, in fact the EU (and by extension the ECJ which will ultimately interpret the scope and application of these rules) could have a say on State Aid throughout the entire UK.”
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According to Mr Collins, though, the coronavirus pandemic does provide a way out.
The Vienna Convention on the Law of Treaties (VCLT) sets out when states can lawfully withdraw from international treaties.
The Professor recalled that the document was examined by a number of international legal experts in early 2019 in relation to the previous iteration of the Irish Protocol.
Some experts had suggested that one way to withdraw from the Protocol could have been via Article 62 of the VCLT, which requires a “fundamental change in circumstances” since the Treaty is signed, allowing parties to escape their legal obligations under the instrument.
While at the time, there was no “fundamental change”, the situation today is arguably very different from 2019, rendering the possibility of relying on Article 62 of the VCLT significantly stronger.
Mr Collins noted: “This is because a fundamental change of circumstances, indeed a transformative one, has now arisen and it was unforeseen, in fact painfully so.
“That situation is the COVID-19 epidemic and its aftermath. By all accounts, the COVID-19 epidemic is the most severe public health crisis in a generation, if not longer.
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“The UK has fallen into an economic recession that is poised to become among the very worst in its history. The EU has also fared badly in COVID, if perhaps not quite as badly as the UK, which is expected to suffer a double figure decline in GDP in the coming years. It is no understatement to declare that the world, and certainly the UK, has changed utterly.”
Mr Collins added that in light of the COVID-19 crisis, it is quite rational to argue that the commitments the UK made in the revised Protocol of October 2019 should no longer apply.
He concluded: “The justification for withdrawal from the Protocol would be that the UK would never have agreed to surrender its capacity to use State Aid to the EU’s determination had it known that its economy would be engulfed in the worst economic crisis in 300 years.
“If an FTA cannot be concluded before the end of the year, the UK must urgently contemplate withdrawing from the revised Irish Protocol or else the EU will be left in control of a wide segment of government policy, a situation which would clearly conflict with the purpose of the UK’s departure from the EU in the first place.
“International law may have the solution and COVID-19 has supplied the context.”