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Brexit: in the EEA without Efta?

2016-10-05 03:59:42

Professor George Yarrow, writing for the Regulatory Policy Institute, has recently (July) produced a 31-page briefing entitled Brexit and the Single Market , in which he proposes that the UK continues its participation in the EEA after it leaves the EU.

What makes the paper different is that Yarrow argues that the UK can continue that participation without necessarily being members of either the EU or Efta – and without having to re-apply when we leave the EU.

There is no explicit provision in the Agreement, he writes, for the UK to cease to be a Contracting Party other than by unilateral, voluntary withdrawal. Furthermore, he adds: the "commonly held assumption that only EU and Efta members can be Parties to the EEA Agreement – and hence that the UK has to be a member of one or other of these two organisations to be in the Single Market – is not well grounded …".

This is an intriguing assertion which, if it was to stand up, could transform the Brexit negotiations, releasing us from the potential hazards of being blocked either by Efta members in seeking to rejoin Efta, or by any of the Co0ntracting Parties in attempting to rejoin the EEA Agreement.

Sadly, though, it is difficult to accept that Prof. Yarrow is correct in his assertion, but it is worth rehearsing the arguments, to see where we actually stand.

Yarrow's key points, it would seem (he devotes a five-page Annex to it) relate to the wording of Article 126(1), which states:
The Agreement shall apply to the territories to which the Treaty establishing the European Economic Community is applied and under the conditions laid down in that Treaty, and to the territories of Iceland, the Principality of Liechtenstein and the Kingdom of Norway.
The first point to note, he says, is the "logical error". The deduction would be correct if the Article opened with the words "The Agreement shall only apply …". Without the word "only" there is nothing to indicate that the Agreement cannot also apply to countries that do not satisfy the conditions set out in Article 126(1).

A fortiori, he thus concludes, there is nothing to indicate that the Agreement ceases to apply to one of its own Contracting Parties which, by dint of circumstances, no longer satisfies one of the conditions specified.

However, much as one would like to accept this, there seems to me a slight problem with the general tenor of this argument, in the Brocard: Ubi lex voluit, dixit; ubi noluit, tacuit.

Broadly, this means that, if the law wishes to regulate on a specific matter, it does so. When it does not want to regulate on the matter in further detail, it remains silent. The effect of this principle is that an "excessively expansive interpretation" might perhaps go beyond the intention of the legislator (or treaty-makers). Thus, we should stick to the text of the law and draw no material consequences from the law's silence.

In short, one might argue that if the EEA Agreement was meant embrace members who were neither EU nor Efta members, then it would say so. That it is silent in the issue does not allow the inference that non-membership of either body is permitted.

As to what the treaty intended, Yarrow asserts that there is nothing in the rest of the Agreement’s text that provides a clear pointer to an intention that membership of either the EU or Efta was an essential characteristic for Contracting Parties.

Yet, what we must recognise is that recitals are an integral part of any treaty, and it is these that indicate the intentions of the parties. And in the EEA Agreement, we see reference to the high priority attached to "the privileged relationship between the European Community, its Member States and the EFTA States", clearly indicating the nature of the treaty.

But that is not all. To determine the precise nature of a treaty, reference is also made to what are known as the travaux préparatoires - the official records of the negotiations. Their relevance is given force by Article 32 of the Vienna Convention on the Law of Treaties (VCLT). This allows recourse to supplementary means of interpretation, "including the preparatory work of the treaty and the circumstances of its conclusion" as an aid to determining the aim of a treaty.

And, as the record shows, from the Efta summit in Vienna on 13 May 1977 to the Luxembourg Declaration of 1984 and beyond, there can be little question that the EEA Agreement was a treaty between EU Member States and Efta states.

I am open to counter argument on this, but by my reckoning, the EEA Agreement, as it stands, is not open to participation by states other than members either of the EU or Efta. If the UK is to remain a Contracting Party of the EEA when it drops out of the EU, it must rejoin the Efta, or fall foul of Article 60 of the VCLT.

That said, Yarrow's point about participation in the EEA without EU or Efta membership does deserve further consideration. It could be the defining point of a successful Brexit. 

Here, on the face of it, there is nothing to stop the Contracting Parties amending the EEA Agreement to allow participation by a non-aligned member (as would the UK become after Brexit). Institutional changes would have to be made, and the unanimous agreement of all parties would be required, but it could be done. 

To my mind – if it is feasible - that's better than the UK rejoining Efta. It begins to add substance to the idea of a "European Village". Efta could be left to the Nordic bloc – including Sweden, Finland and Denmark – and the Baltics, paving the way for the UK and the Republic of Ireland to join as a separate bloc.

Taking this idea further, we could see and expanded Visegrad Group peeling off from the EU and joining the EEA, and even the "Adriatics" comprising FYG and Greece, and the "Club Med", or the Iberians.

For the EU to survive, it is my view that it needs to do this – retreating back to the original Six (or even five if Italy splits off). A united Europe under the banner of a European village, trading and cooperating on an intergovernmental basis, was always a better idea than Monnet's supranationalism, and now Brexit is giving Europe an opportunity to correct a historic mistake.