Monday 18 July 2016

Does UK need a dynamic agreement with the EU ?


The leave campaigns did not offer any common receipt for a Brexit before the referendum. And neither did the government. So when PM May says
I won’t be triggering Article 50 until I think that we have a UK approach and objectives for negotiations, I think it is important that we establish that before we trigger Article 50
it seems very reasonable. Invoking Article 50 without a strategy would be risky, as the negotiations will have a two-year limit unless the European Council and the Member States - unanimously - decide to extend the period.

Both the government and the parliament now explore the possibilities. Lots of ideas and preferences are presented. According to Daily Mail Ministers say they are going to secure ground-braking free trade deals with 12 countries, having a total area ten times the size of the EU, "before Britain leaves in 2019".

UK is barred from striking individual trade deals until it officially leaves the EU, but Liam Fox, the new International Trade Secretary, hopes to have agreed the terms of the new trade deals beforehand so they could take effect immidiately after Britain is no longer an EU member state.

The Ministers seem to have different views over when to trigger Article 50. David Davies, the Brexit Secretary, wants Britain to start the formal process of leaving the EU this year, but last week the PM insisted she would not trigger it until she had agreed a UK-wide approach to the process for leaving the EU.

In this process of establishing a new platform for trade the question of what kind of future relationship UK will have with the EU remains to be solved. Will trade agreements be enough, and what will the EU accept ? This is important also because the Single Market is not static, it develops every day.

The EEA-agreement takes care of this aspect. A central feature of the agreement is its dynamic aspect; the common rules of the EEA-agreement are updated continuously with new EU legislation. Economically this dynamic arrangement has served the EEA-EFTA countries (Lichtenstein, Iceland and Norway) well, but there is a democratic problem connected to it: the EEA-EFTA countries do not take part in the EUs formal decisions about the Single Market. To call it a "fax-democracy" is a good picture, but not entirely correct because the EEA-EFTA countries have possibilties to influence new EU rules. 

Switzerland rejected in a referendum to join the EEA-agreement. They do not have a fax-democracy problem. Instead - to catch up with new EU legislation - they have to negotiate new agreements every time it is needed. This is a laborious procedure for both for Switzerland and the EU.

There is not a quite obvious answer to how the UK should handle the dynamic aspect of the EU, but it is hard to imagine that they will wish for a Swiss solution. But if they go for a dynamic agreement, then it will be more or less a fax-democracy or some kind of arrangement where UK can have a say in the relevant EU decisions, i. e.  a relation which could look like a membership light. But perhaps that might be acceptable ?


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