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Reports about events about Brexit etc.

GATT Article 24- How it can Provide a Managed Brexit

Whenever you mention ‘Article 24’, you receive much hysterical abuse from the remnants, in most cases those with big academic titles. An indication they are scared we are about to achieve something. Also, Article 24 of GATT (General Agreement on Tariffs and Trade) follows the World Trade Organization(WTO).

Some have been saying, “The EU cannot agree to it”, ‘’ If we will exit on bad terms, the EU will not agree to do the deal”. Also, others have been saying, “It is impossible in a no-deal case”. And, we must levy tariffs on EU goods, as well as those from all over the world”. In fact, in a discussion about Article 24 on Radio 4’s, someone made the last point.

However, all these suggestions are wrong. They are all wrong because the chief negotiator of EU, Michel Barnier, the trade advisers, and personnel have been participants of the International Trade Committee of the European Parliament undertaking trade deals. Also, the senior individuals at the WTO and the best trade lawyers like Lorand Bartels of Cambridge University, an impartial Article 24 professional has been about the suggestions.

According to them, GATT Article 24 is desirable and doable. Some facts about Article 24 are:

  1. We should not confuse the ‘no-deal’ or ‘deal’ talks. In fact, we are not looking for renegotiation on the Withdrawal Agreement, or try correction of the deal before 31st October. It has been made clear by Angela Markel and other EU leaders that negotiation on the deal is impossible.
     
    Thus, it is not a deal founded on the Withdrawal Agreement in the EU law like the Lisbon Treaty’s Article 50. Also, it is not a trade deal carried out in the EU’s “Political Declaration” or “Future Relationship” provisions by its legal binding legislation. Instead, it is a different deal performed under the rules of the World Trade Organization.
  2. Trade rules are not made by the EU. Instead, they are made by WTO. So, the EU operates within the global trade rules through the WTO. Indeed, many EU free trade agreements includes WTO level agreements such as GATS.
  3. The WTO’s predecessor was GATT, and Article 24 is in the global GATT rules that all WTO members are in agreement to establish.
  4. The main aim of the WTO is to enhance free trade all over the world. Thus, the WTO does not support barriers to trade, tariffs, or quotas. For this reason, the WTO will be against the UK and the EU is they will get back to impose tariffs on EU goods, and on British goods in the EU.
  5. The GATT Article 24 lets either blocs or two countries to progress to a customs union or free trade area. Actually, it lets two countries to have their tariffs and quotas lower than the “Most Favoured Nation Rules”. However, it is ironic that this is the foundation of the EU’s zero-tariff Customs Union that happened from 1957 to 1968 for enactment.
  6. Therefore, since the WTO is against tariffs, it is amenable to means of preventing tariffs without the other members getting disadvantaged.
  7. It is certain that GATT 24 requires a temporary agreement from the UK and the EU, although this might be written at the back of an envelope. By good luck, Lorand Bartels has written an effective one-page FTA that is enough to let Article 24 apply. It is a temporary FTA. However, it completely legal and manageable.
  8. What will make the EU accept?

    Apart from the UK being the 5th largest economy in the world, it is also the EU’s biggest single market. Also, more than a million German jobs depend on British consumers who buy German goods. Thus, lack of a basic GATT 24 deal will lead to goods from the EU having tariffs. Hence, their suffering would be more than that of the UK, as they make more sales to the UK. For this reason, Germany does not well this idea, as it makes almost a quarter of the entire EU trade to the UK

Further, the UK might be ready to pay a fair amount linked with the Withdrawal Agreement. However, this is in line with the basic deal.

Without the EU agreement to GATT 24, the UK may internationally and globally alter its import tariffs. Also, be ready to cut all tariff rate quotas. But, it is obvious the UK is not capable of regulating the import tariff rates from the EU.

Renegotiating the Withdrawal Agreement

On three different occasions, the withdrawal agreement which got signed by the European Union and the UK government got reviewed and rejected by the House of Commons. At the moment, there are some disputes regarding the chance of renegotiating the withdrawal agreement before the UK leaves the EU.

This article will make it clear if there is room renegotiating about the November 2018 withdrawal agreement. Further, if the UK parliament may block the UK from leaving the EU without any deal.

The deadline and extensions of Article 50

Article 50 about the Treaty on European Union(TEU) was the foundation of the initial negotiations, as well as the resultant withdrawal agreement. In fact, this explains the procedure an EU member state should follow to exit the EU.

According to Article 50(3), the EU treaties “ceases to apply to a questionable state starting from the day of entry in the force of the withdrawal agreement. Or, failure to that, then two years after issuing the withdrawal notification, unless the European Council has agreed with the concerned member state, and without opposition, it decides to prolong this duration.”

29th March 2019 was the deadline of the starting two-year duration. However, the UK government plus 27 other EU member states have without opposition agreed on two extensions of this duration. So, the recent day of leaving is on 31st October 2019. It is on this date that the UK will exit the EU, with the exception of these cases:

  • Article 50 has been revoked by the government, and the UK remains in the EU.
  • The government has requested and has been offered an extra extension of Article 50.
  • After approval, correction, and establishment of the withdrawal agreement by the UK and EU within the new extension duration.

To what extent is it possible to renegotiate the withdrawal agreement?

On 7th June, the Conservative and Unionist Party leader, Theresa May stepped down. However, there are suggestions that a future UK Prime Minister might receive a better deal for the UK by renegotiating the Withdrawal Agreement.

Indeed, Article 50 allows renegotiation or amendment of the withdrawal agreement at the extended duration. Moreover, it does not specify whatever should happen or not at this time. As a matter of fact, the adoption of the Withdrawal Agreement has already taken place, to cater to the Article 50 extensions.

Therefore, the UK has room for trying and renegotiating the Agreement under Article 50. This comprises of, for instance, the task of the UK paying a financial settlement to the EU. Or, renegotiating the Irish backstop.

What is the EU saying on reopening negotiations?

There has been consistent say from EU27 leaders, Jean-Claude Juncker who is the commission president, and Donald Tusk who is the EU president. They are on record saying time and again those renegotiations on the Withdrawal Agreement cannot and will not happen. For example, on 11th June, Mr. Juncker stated that the Agreement is not a treaty between him and Theresa May. Instead, it is a treaty between the UK and the EU. So, the next British Prime Minister must respect it.

Further, the EU stated the Withdrawal Agreement remains, although they are ready for more clarifications and extensions to the Political Declaration.

Legal barriers to re-opening the Withdrawal Agreement

The renegotiation has additional barriers. Decisions that binds the EU legally got adopted by the EU27, and the UK agreed on them after they were offered extensions to Article 50. In addition, these decisions are listed on the provisions of Article 50(3), and strictly prohibits the re-opening of the Withdrawal Agreement.

Further, the 22nd March European Council Decision and the 11th April EUCO Decision stated the condition for the extension. Both of them stated the extension “does not include even a single re-opening of the Withdrawal Agreement”. Also, on 22nd March and 11th April, the UK confirmed its agreement to the extensions and set conditions by Sir Tim Barrow, the Permanent Representative of UK to the EU.

Still, the procedure of exiting the EU is under the EU law, and it is part of the EU legal order, thus applying until the UK exits the EU. Thus, these decisions are legally binding for both the UK and the EU27. However, they can be revisited, although that requires the EU27’s political will for revisiting them, as well as the Withdrawal Agreement. Nonetheless, the political will is absent at the moment.

Can the “no-deal” Brexit be stopped by the parliament?

The opposition MPs on 12th June rejected the UK exiting the EU with no deal tabled a motion on the Business of the House. Its objective was to let MPs regulate parliamentary time on the 25th of June. And, maybe debate a bill connected to blocking a “no-deal” Brexit. However, the motion got defeated by 309 votes against 298, and it is reported to be the final way of the parliament preventing a no-deal Brexit.

This was a gift to the parliament to stop the “no-deal” Brexit. Since exiting the EU is an EU law procedure, the ‘no-deal’ Brexit can be avoided at the national level if:

  • The parliament ratifies or approves the Withdrawal Agreement Or,
  • The government without opposition revokes Article 50 and remains in the EU.

Too, the government or parliament has nothing else to do, which depends upon to block the ‘no-deal’ Brexit on the 31st of October.

In fact, the parliament cannot by itself block the ‘no-deal’ Brexit, as it needs support from the government. So, it might instruct the Prime Minister to request the EU for an additional extension of Article 50, for an automatic delay of ‘no-deal’ exit. But, the parliament managed to do this as expected through the Cooper-Letwin Bill in March. Also, it made another trial of doing so on 12th June. Nevertheless, the approval of the extension and the set conditions will be decided by the EU27, and not either the UK parliament or government.

Ensuring Brexit to happen on time

Only a reliable un-cooperative plan that can’t be stopped by either the EU or Parliament will result in the exit of Britain from EU by October 31, 2019. Also, a reliable person will be ensuring Brexit to happen on time. And the new prime minister of Britain must implement this policy with rigorous belief and dedication. His first journey overseas should be to the US to kick-start the UK-US Free trade deal to demonstrate his assistance for Global Britain.

As the biggest ever list of applicants to submit their names as the next British Prime Minister has been narrowed down to the final two, it is evident that we are in dire risk of confirming Einstein’s concept of insanity – doing same thing over and over again and anticipating a distinct outcome.Boris Johnson and Jeremy Hunt said they wouldnegotiate a new withdrawal agreement and its outcomes & exit the EU on 31st October with a ‘ deal ‘.They also want their deal to be approved from the parliament. They both are considered to have the potential of the position of PM. Also, they are also good negotiators. However, there are some differences in their ideologies. Johnson does not believe much in the withdrawal agreement and want to procure only a few features of the agreement. On the other hand, Hunt wants to delay the exit from EU for a short time period so as to attain a ‘better’ deal. 

The current Prime Minister can ensure Brexit to happen on time

The Brexit will not happen and everything will be in a haphazard unless the new PM of the UK possesses a better strategy to leave EU. The political scientists usually refer it as a non-cooperative solution. This is something that the EU cannot prevent if it is not prepared to collaborate in generating an alternative that helps both parties to be content with the agreement.

This implies that the WA will not be the reference point for any discussions with the EU.The EU states it will not negotiate this and it stays totally undesirable to the majority of the Britishers.Martin Howe QC, the chairman of lawyers for Britain, says that the Britain’s Prime Minister should collaborate with the EU & negotiate a withdrawal agreement for the greater good of the nation.

In any case, the Withdrawal Agreement does not in any meaningful sense offer a ‘ deal ‘ about a future relationship. For instance, there are no negotiations about the services sector that account for 80 percent of UK’s GDP. Trade in facilities will be discussed after the EU exits the UK. It is totally weird for MPs to oppose to exiting the EU without a good deal when the Withdrawal Agreement itself includes exiting the EU without a deal.The PM needs to strike a balance between the two opposing parties of Britain.

The Prime Minister should present a non-cooperative alternative or solution to define both the conditions. The one condition under which it will exit the EU and the other condition under which it will trade with the EU in the future. And he or she has to do so in a way that the EU can’t avoid.

The non-cooperative solution has three steps

The very first step for the new prime minister is to reiterate that the safe Brexit set out in the Lancaster House speech will be enforced by October 31, 2019. This is reliable and does not involve the approval of the EU.In combination with this, the current Prime Minister should immediately discuss with the US President that Britain will eagerly put efforts to swiftly reach a US-UK Free Trade Agreement (FTA).This is a reliable step and does not involve EU permission once the departure of Britain happens from the EU.The PrimeMinister can create significant strides in setting the phase suitable for it in post-Brexit talks over the few weeks that remain before 31 October.

The second step is to lay out a fresh Departure Statement on how the main problems associated in separating from the EU will be addressed: citizens ‘ liberties, transition deal and the border issue between Northern Ireland and the Republic.The PM can ensure the freedoms of EU citizens residing in the UK by discussing it in the Withdrawal Agreement.

The third & final step is to issue a Future Relationship Statement stating out the conditions on which the UK will agree to negotiate and collaborate with the EU. Again, this must be done in a way that the EU cannot block or oppose it.

No matter when the Brexit happens, the Prime Minister has a lot of responsibilities on his or her shoulders. For a Brexit to happen on time & also which is not harmful for the nation is a huge task. This can be achieved only by a fairly responsible person.