Brexit - the legal intricacies in rolling over EU PTAS

• Author: Girish Deepak
• Position: PhD Candidate, University of Vienna
• Pages: 679-734

BREXIT –THE LEGAL INTRICACIES IN ROLLING

OVER EU PTAS

GIRISH DEEPAK*

ABSTRACT

Considering the severe impact of Brexit on the United Kingdom’s trade regu-

latory mechanism, the focus of most scholarly work has been on the structure

and possibility of concluding a deal with the European Union to regulate trade

once the United Kingdom leaves the European Union. Since this forms the bulk

of the United Kingdom’s trade, it is understandable that the primary focus has

been on concluding these negotiations. However, equally important to this exer-

cise would be the replication of the EU’s existing agreements with third party

countries. This exercise of rolling over EU treaties has received comparatively

less scholarly attention, which is what this research attempts to remedy.

Considering the number of such agreements which need to be replicated, this

Article focuses on the key treaty negotiation issues that the United Kingdom

may face and suggests a structured negotiation strategy that the United

Kingdom could follow while forming these roll-over arrangements. This is di-

vided primarily into two categories of general modifications and substantive

modifications. Following this exercise of studying the current strategies, the

research suggests potential areas of improvement, including in the GSP regime.

This exercise is crucial to achieve some of the highly publicized gains of Brexit,

so that some benefits may be reaped finally from this otherwise expensive

divorce.

I. BREXIT –POLITICAL,ECONOMIC,AND LEGAL CONSIDERATIONS ... 680

A. Introduction .................................. 680

B. List of Provisionally Applied and Concluded Treaties ...... 683

C. Comparison of Post-Brexit Options ................... 687

D. Importance of PTAs after Brexit ..................... 688

II. ISSUES IN THE ROLLOVER OF EU TRADE TREATIES ............ 689

A. Position of United Kingdom in Existing EU Treaties ...... 689

1. Types of EU PTAs ......................... 690

2. Personal Scope of the PTAs .................. 693

3. Territorial Scope of the PTAs ................ 694

* PhD Candidate, University of Vienna. I would like to thank Professor Joost Pauwelyn for his

suggestions and generous support in this research. Special thanks to the editors of Georgetown

Journal of International Law for all their comments and suggestions to improvethe quality of this

work. All errors are my own. V

C2021, Girish Deepak.

679

4. Terminating the Treaty ..................... 696

5. Unforeseen Change in Circumstances ......... 697

6. Survival Clauses ........................... 698

III. MODIFICATION OF ROLLED-OVER TREATIES ................. 699

A. General Modifications ........................... 701

1. Replacing EU References ................... 701

2. Territorial Scope of the Treaty ............... 701

3. Temporal Scope of the Treaty ................ 702

4. Provisions for Amendment of the Treaty........ 703

B. Substantial Modifications......................... 703

1. Tariff Rate Quotas ......................... 703

2. Rules of Origin and Cumulation .............. 709

3. Mutual Recognition of Standards and Conformity

Assessment ............................... 715

4. Trade in Services .......................... 719

a. Benefits of Services Chapters in PTAs .......... 719

b. MFN Clauses........................... 721

5. Generalized System of Preferences – Opportunities

to Improve ............................... 724

a. Extended Product Coverage ................. 728

b. Improved Eligibility Criteria for Countries....... 729

c. Improving Rules of Origin in GSP Schemes ...... 730

IV. THE WAY FORWARD FOR THE UK........................ 731

I. BREXIT –POLITICAL,ECONOMIC,AND LEGAL CONSIDERATIONS

A. Introduction

The exit of Britain from the European Union (“Brexit”) has come at

the time of extensive unrest within the trade regime. With the restruc-

turing of the World Trade Organization (“WTO”) Appellate Body on

the one side and the withdrawal of the United Kingdom from the

European Union on the other, trade lawyers are faced with a host of

issues that have never been anticipated or legally analyzed. The trade

debate on the latter controversial decision to leave the EU rages

between naysayers who warn of economic havoc,

1

and those pointing to

1. Holly Williams, No Deal Would Bring Economic Havoc Like Collapse of Lehman Brothers, Warns UK

Fiscal Watchdog,INDEPENDENT (Mar. 20, 2019), https://www.independent.ie/business/brexit/no-

deal-would-bring-economic-havoc-like-collapse-of-lehman-brothers-warns-uk-fiscal-watchdog-37932559.

html; David Goodman & Larry Meakin, Brexit Havoc Adds to Misery for Nation Battling with Debt,

BLOOMBERG (Mar. 22, 2019), https://www.bloomberg.com/news/articles/2019-03-22/brexit-cliff-

edge-is-already-real-for-some-people.

GEORGETOWN JOURNAL OF INTERNATIONAL LAW

680 [Vol. 52

the potential gains of retaining the autonomy to strike new trade deals

with the rest of the world.

2

In the latter line of argument, which is championed by the United

Kingdom’s political brass, Brexit would effectively allow the conclusion

of preferential trade agreements (“PTAs”) with the leading economies

of the world. This positive vision of Brexit has driven the discourse

within the United Kingdom, which has always been a reluctant member

of the EU. From the initial stages of joining the EU, the United

Kingdom has remained wary of deeper integration. This is evident

from its decisions to avoid adoption of the Euro,

3

to not join the

Schengen free border system,

4

and to exempt itself from the applica-

tion of the Charter of Fundamental Rights, 2000.

5

This wariness finally manifested itself in the form of a movement to

renegotiate the terms of the relationship between the EU and the

United Kingdom and strike a more favorable compromise.

6

Though

there was an agreement reached between the European Council and

the United Kingdom, which sacrificed several foundational EU princi-

ples to appease the United Kingdom’s requests for change,

7

a referen-

dum was called to finally decide the issue. However, with the now

infamous referendum of 2016, this renegotiation changed into a move

to simply exit the EU.

8

The Brexit story has since become a controversial process with several

political parties coming into power and then stepping down as they

failed to navigate the legal and political conundrums this has raised.

9

The focus of these negotiations has been on the future EU-U.K. rela-

tionship, which will effectively decide the economic future of the

2. Liam Fox, Int’l Trade Sec’y, Free Trade Speech at Manchester Town Hall (Sept. 29, 2016),

https://www.gov.uk/government/speeches/liam-foxs-free-trade-speech.

3. Protocol (15) on Certain Provisions Relating to The United Kingdom of Great Britain and

Northern Ireland, June 7, 2016, O.J. 1 202/284.

4. Consolidated Versions of the Treaty on European Union and the Treaty on the Functioning

of the European Union, May 9, 2008, O.J. C 115/290.

5. Protocol (30), June 7, 2016, on the Application of the Charter of Fundamental Rights of the

European Union to Poland and to the United Kingdom,2012, O.J. 1202/312.

6. Letter from Prime Minister David Cameron to European Council President Donald Tusk

(Nov. 15, 2015), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/

attachment_data/file/475679/Donald_Tusk_letter.pdf.

7. Paul Craig, The Stability, Coordination and Governance Treaty: Principle, Politics and Pragmatism,

37 EUR.L.REV. 231 (2012).

8. European Union Referendum Act 2015, c. 36 (Eng.).

9. Ryan Bourne, Opinion, How Ambiguity on Brexit is Hurting Britain’s Main Political Parties,

WASH.POST (May 28, 2019), https://www.wash ingtonpost.com/opini ons/2019/05/28/how -

ambiguity-brexit-is-hurting-britains-main-political-parties/?noredirect=on&utm_term=.cb108ff85300.

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