Brexit is throwing up a huge number of legal issues – everything from divorce payments to the jurisdiction of the European Court of Justice during a transition period. And one person who has been closely engaged with the debate from a legal perspective is the barrister, Martin Howe, QC. Howe is the head of 8 New Square, a specialist intellectual property chambers, is an expert in EU law, and is chair of the pressure group Lawyers for Britain.
Lawyers for Britain was set up during the EU referendum to provide a rallying point for lawyers who supported the Leave campaign. However, after the vote they decided to continue because they wanted to “counter the numerous attempts to disrupt Brexit” as a well as “provide solutions for the various legal problems that are arising”. In terms of the former, Howe is happy to report that, while a “few people have been making noises” with various legal challenges, “none of them have been serious”. They are unlikely to stop Britain from leaving the EU.
There are two aspects to the debate over Brussels’ demands for a divorce payment, says Howe. “Legally, we don’t owe them a penny, since any question of liability ceases as soon as we leave he says”. However, “the politics of the question is another thing, since there may be benefits in making some sort of payment if it will help up close a deal”. The problem is that “Brussels is demanding money for the privilege of engaging in trade talks, without specifying what sort of deal is on offer”. This means, says Howe, that we could end up paying large sums of money only to end up with a very poor deal.
He is similarly sceptical about plans for a transitional agreement. He notes that it is going to be “very difficult” to get a deal that is legally binding, especially since Article 50 doesn’t allow for such an agreement, unless a framework for a trade deal has been agreed. What’s more, Brussels seems to be adopting a “take it or leave it” attitude, which would involve us making continued payments to the EU budget, adopting EU regulations and staying within the customs union. Staying within the customs union postpones any new trade deal to 2021, which is important because “there may be a new President who’s not as enthusiastic about trade with us as Trump is”.
Indeed, Howe thinks that cutting trade deals with the rest of the world is key to making a success of Brexit. “I’m no economist but the latest trade figures show that the proportion of our trade with the EU-27 has been falling for the last two decades, even if the absolute amount has increased”, he notes. Even if we were to stay in the EU, this is set to continue as, “the rest of the world is outpacing Europe”. While it “would be good to have unhindered access to Europe’s markets, putting our relationship with the continent ahead of other countries, would be letting the tail wag the dog”.
The ability to cut trade deals with the rest of the world is one reason why the “Norway’’ solution of staying within the European Economic Area would be a bad idea. Such a solution would be “the worst of both worlds”, as “we would have to follow European regulations without having a say in how they are made”. What’s more, while EEA members are theoretically free to cut trade deals with third countries, the need to follow EU rules, means it is hard for them to make the regulatory concessions that are a big part of modern agreements. For example, any trade deal with the US would involve us accepting their rules on GM foods.
Howe also throws cold water on the argument that we could stay in the EEA without Brussels’ agreement calling it “not faintly arguable”. Admittedly there are a few differences between the EU and EEA, such as the fact that we’d be answering to the EFTA Court, rather than the ECJ. However, in reality they are minor and a “fig leaf” to hide the fact that the whole point of the EEA was “as a stepping stone to full membership, rather than as a final destination”. As such it “is not a long term solution”.
Indeed, Howe thinks that many in the business and financial community don’t appreciate the extent that an EEA style agreement would require the UK to follow European rules. Such an outcome “would make us vulnerable to regulatory warfare”. He’s also sceptical of a looser arrangement where we’d shadow European regulations in return for access under “equivalence”. This would give us a bit more freedom “since equivalence doesn’t have to involve identical regulation”. However, there would be a risk that Europe could “pull the plug” at any time, since access under equivalence is at the discretion of Brussels. In any case, “if we don’t gain any regulatory freedom then there’s no point to leaving the EU”.