The United Kingdom as a third country

Some  people are confused about the meaning of this term with regard to our extrication from the EU and have become needlessly indignant.  It does not mean “third rate” or “Third World”.   In the EU situation  in international law, the phrase means more or less what “third party” does in an ordinary insurance policy or other legal document – but it refers to a country or state which, in this case,  is not a member of the EU or its associated organisations such as the European Economic Area (EEA).

Background

This non-membership is exactly what Mrs. May demanded in her Lancaster House speech of January 2017.  She wishes to replace our EU membership  with a completely new but unspecified “deep and special” relationship which can only come into being after we have left the EU.  The EU does not “give” us third country status.

We acquire it automatically through leaving at our own request.   Yet this seems to have come as a bit of a surprise to David Davis.

I started to take the Daily Express when it was the first national paper to advocate leaving the EU, so I was rather surprised to read this article in its edition of Wednesday 10th January which suggests either that Mr. Davis is ill-informed or that the reporter misunderstood him.

Row over EU giving UK 3rd country status

David Davis has attacked a Brussels threat to punish British business ahead of Brexit trade talks.

The Brexit Secretary has written to Theresa May raising concerns about EU planning for a “no deal” giving Britain “third country status”  in what appears to be an act of bad faith.

Mr. Davis told the Prime Minister he would urge the EU to drop the measures which would require UK firms to relocate to Europe or risk contracts being terminated in the event of no deal.

He said he had sought legal advice but the chances of a successful challenge were “low” and could be “high risk politically and financially”

But he said he would urge the European Commission’s Brexit task force to withdraw the statements in light of the deal reached last month to start trade talks. Mr. Davis said that EU agencies have issued guidance to businesses stating the UK will become a “third country” after March 2019 with no reference to a future Trade deal.

The guidance says “compliance activity” such as quality control of goods “ would need to be based in the EU or European Economic Area.

Other statements on legal services and the transport industry do not take into account a transition period or trade deal, he said.

Mr. Davis called the moves “potential breaches of the UK’s rights as (an EU) member  state” and insisted “we cannot let these actions go unchallenged “. John Longworth of Leave Means Leave added that  the EU’s negotiating team is increasingly out of step with the mood of many of the EU27 national governments who recognise the importance for their own economies  that a free trade deal is reached with the UK…..”

Meaning of Third Country Status

The Department for Exiting the EU employs some 400 highly paid specialists and the expertise of the Foreign Office and our Representation in Brussels are claimed to be world class, so it is surprising that nobody  took the trouble to  look up some elementary rules of international law on the internet and tell Mr. Davis.

oxfordindex.oup.com/view/10.0903/01/authority

Pacta tertiis nec nocunt nec prosunt – Treaties neither harm nor benefit third parties. A maxim meaning that non-parties to a treaty cannot claim benefits under it…   And, once we are out of the EU, we are no longer a party to any of its treaties.

 https://en.oxforddictionaries.com/definition/res_inter-alios-acta

Res inter alios acta – a thing done between others – to which a given person or entity was not (or is no longer) party .

 From “Third Parties and the law of treaties  – Max Planck UNYB 6 (2002)

Basic Classical Rules

 The relationship between third parties and treaties is defined by a general formula pacta tertiis nec nocunt nec prosunt (see above). This principle has been recognised in states’ practice as fundamental and its existence has never been questioned.. For states non-parties to the treaty, the treaty is res inter alios acta (see above). It has been reflected in numerous cases before the World Court. For example in the German Interests in Polish Silesia case the PCIJ *observed that “ (a) treaty only creates law as between states which are party to it; in case of doubt no rights can be deduced from it in favour of third states.

 Lord McNair, in the Law of Treaties (1961, 309 Harvard Research Article 18) ( a) a treaty may not impose obligations upon a state which is no longer party thereto….”

*Permanent Court of international Justice

The UK as a Vassal State

By  demanding a “Hard Brexit”  from March 29 2019, the government has placed itself in the position of a supplicant to the EU for a “transition” or “implementation” period so that Mrs. May’s unspecified “deep and special” relationship may be agreed without disruption of trade.

If what we have been told is correct, all existing  EU laws will continue to apply during this period and new ones could be sprung on us without our having any say at all – complete vassal status.

Conclusion

There are strong economic reasons for both sides to come  to a mutually beneficial agreement.

However there is no good reason to suppose that the EU will abolish its external frontier procedures with a newly independent UK.  If it did that, not only would it breach its own principal trading rules, but also the World Trade Organisation would be overwhelmed with complaints from other third country states.  Every other country in the world would be demanding that the EU did the same for them.

 

Brexit hangs over the port of Dover

This article is copied by kind permission of the author, Mary Kenny. It appeared in The Oldie, edition of March 2018

Without an ingenious deal, the place could be clogged up with thousands of becalmed freight lorries.

As an Irish citizen, I abstained from the Brexit vote, although I sympathise with the argument that a country is entitled to control its own borders and make its own laws. But, living just eight miles from Dover, I am beginning to grasp that entering and leaving Britain’s major port post-Brexit could be a huge headache unless some very clever deal is accomplished.

A well-informed Doverian, Mick Tedder, who has forty years of experience of working at the port, and is a member of the Port and Community Forum, is very “pessimistic” about Dover’s immediate future. The port of Dover can see more than 10,000 freight vehicles pass through daily; he worked there before 1973 when there was only a fraction of such traffic and a truck might have to park up for two or three hours while the paperwork was completed. Mr Tedder, who voted Brexit (as did most of the Dover referendum voters) predicts that if border controls are introduced, there will be “Armageddon” in the garden of England. He envisages the need for a huge parking holding area for vehicles awaiting processing, and congestion spiralling out in all directions.

Supposing everything has to be stopped and checked too, at the Channel Tunnel? Imagine the traffic jams and delays.

The local MP, Charlie Elphicke, seems to place his confidence in electronic scanning, as occurs between Canada and the US, but local lobby groups, such as EU Thinking Deal + Dover are sceptical that this can be done at a huge maritime port such as Dover, which handles 17 per cent of Britain’s imports. There are other issues too, such as the transport of animals – animals can only be confined in lorries for a certain amount of time, and long waiting periods would be disastrous.

The authorities at the Port of Dover have little to say about the situation because it seems still so hazy. Talk about Continent cut off by fog!

Mr Tedder, a Brexit voter, is now keen on a soft Brexit to allow Britain’s major port to function effectively, although he does add, “You’re not just dealing with the EU. You’re dealing with the French!” (French industrial stoppages have been known to cause mayhem.)

On the plus side, there’s a boat in Dover Museum dating from the Bronze Age, witness the fact that there’s been trading across the narrow twenty mile Channel since the time of the Pyramids. Though not at the rate of 10,000 trucks per day.

Photo by ketmonkey

Fishing for Leave’s comments on the proposed transitional arrangements

Below is the EUs recommendations for the transition. Those with the particular detrimental implications for the United Kingdoms trade are Clause 14 and 15 as amended by the Council. Indeed, the implications defeat the whole point of HM Governments raison-d’etre for a transition.

TRADE

14. During the transition period, and in line with the European Council guidelines of 29 April 2017, the United Kingdom will remain bound by the obligations stemming from the agreements concluded by the Union, or by Member States acting on its behalf, or by the Union and its Member States acting jointly; while the United Kingdom should however no longer participate in any bodies set up by those agreements.

The Council replaced the words ‘will no longer benefit from’ with ‘will remain bound by the obligations stemming from’. It also deleted the words Where it is in the interest of the Union, the Union may consider whether and how arrangements can be agreed that would maintain the effects of the agreements as regards the United Kingdom during the transition period’.

The intention seems to be that the UK will still have obligations to the EU to apply agreements concluded with non-EU countries by the EU (or the EU jointly with its Member States).

However, since the withdrawal agreement cannot bind non-EU countries, those non-EU countries will no longer have obligations to the UK as the UK will no longer be an official member of the EU but merely maintaining regulatory alignment.

The UK would only be able to be recognised within such agreements if other non-Eu countries agree to continuing existing obligations in force.

The negotiation of treaties between the UK and non-EU countries is the subject of the next paragraph which seemingly makes that an impossible contradiction. 

15. In line with the European Council guidelines of 15 December 2017, any transitional arrangements require the United Kingdom’s continued participation in the Customs Union and the Single Market (with all four freedoms) during the transition. The United Kingdom should take all necessary measures to preserve the integrity of the Single Market and of the Customs Union. (full regulatory alignment is the only way to do so and this complies with Clause 49 of Phase 1 regards UK vs EU border on island of Ireland)

The United Kingdom should continue to comply with the Union trade policy. It should also in particular ensure that its customs authorities continue to act in accordance with the mission of EU customs authorities including by collecting Common Customs Tariff duties and by performing all checks required under Union law at the border vis-à-vis other third countries. During the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the fields of competence of Union law, unless authorised to do so by the Union.  

The final sentence added by the Council. This paragraph ensures no change in the application of the single market or the customs union to the UK during the transitional period.

This limits the UK’s power to enter into treaties and subjects the UK to more constraints than it would have as a Member State.

The UK will not be free to negotiate and sign treaties within the transitional period, even if those treaties only come into force afterward – we will only be able to begin to negotiate treaties AFTER the transition period.

How will this allow the UK to sign a trade deal with the EU for post-transition as David Davis claims the transition is necessary to facilitate?

One has to ask how under the terms of Clause 15 the UK will be able to respond to Clause 14 where the UK (as a non-EU member) would have to seek recognition by other non-EU counties for the UK being party to agreements they have concluded with the EU.

One struggles to see how we can enable a continuation of any agreements the EU has concluded with the rest of the world as per Clause 14 yet still comply with Clause 15?

This revised text means they have amended Clause 14 to appear a lifeline that doesn’t actually attach to anything.

We take this contradiction to mean we are locked into the single market and customs union but if other non-Eu nations fail to recognize the UK being party to the agreements they concluded with the EU (as we’re no longer a member – merely maintaining regulatory alignment) and we are unable to pursue our own agreement with such other non-EU nation then we are on WTO with the rest of the world which defeats the point of a transition in the first place.

It would be interesting to hear the government and DexEUs response to how Britain can conclude a future “deep and special” trade deal with the EU under the transition as David Davis professes is required if Clause 15 bars us from concluding agreements…?!?

 

FISHING INDUSTRY

Clause 20 obliges the UK to “consult” on fishing opportunities in full respect of the Acquis – i.e. obey the entire CFP!

20. Specific consultations should also be foreseen with regard to for the (interesting change/use of language..?)  fixing of fishing opportunities during the transition period, in full respect of the Union acquis.

Therefore, the UK delegation would possible be allowed to sit in the room yet the UK will still be bound by the ENTIRE ACQUIS and therefore the entire CFP – Equal Access, Relative Stability Shares and Quota system.

A continuation of the quota system where fishermen have to discard in order to find the species their quota allows them to keep conjoined with a fully enforced discard ban will finish the UK fleet.

Under the discard ban rather than address the cause of the discard problem, that a quota system does not work in mixed fisheries, the symptom of discards is banned. Under the discard ban a vessel must stop fishing when it exhausts its smallest quota allocation – these “choke species” will bankrupt 60% of the UK fleet as detailed by the governments own figures through Seafish.

This would destroy our catching capacity and allowing the EU to claim the “surplus” of our resources we would no longer be able to catch under terms of UNCLOS Article 62.2 due to such a culling of our fleet.

Signing up to a transition on will see the ruination of what is left of the UK fishing industry when Brexit should be its salvation. Another 2 years of the CFP and a continuation of the quota system will see our fishing industry become yet another British industry consigned to museum and memory.

CONCLUSION

Under the auspices of this proposed “deal” (more a dictation) the UK will be on WTO with the rest of the world, unable to conclude deals with the rest of the world until after the transition and will be locked into maintaining regulatory alignment whilst obeying the entire Acquis (with continued freedom of movement) and trapped in the CFP where our fishing industry will be culled to make way for the EU fleet. All whilst being subject to the ECJ and ruled by the Commission and Council as some sort of vassal state.

It is nearly unbelievable that the political establishment could contemplate locking the 5th most powerful nation in the world into such a subservient position especially against the expressed wish of the British people to leave the EU in its entirety as voted for in the biggest vote in British history.

Mrs May’s trashing of the Successful Nobo Industry

Notified Bodies (Nobos), together with Designated Bodies (Debos) and Assessment Bodies (Asbos), are one of our country’s least known success stories. Yet they could easily largely disappear, together with thousands of well paid jobs and millions if not billions of pounds in export earnings, if Mrs May persists in her determination to take this country out of the Single Market and European Economic Area (EEA).

A wide range of products – from equipment used in explosive atmospheres to toys – are required by EU product law to undergo third party conformity assessment and/or testing by suitable independent accredited organisations (Nobos) in order to be placed on the market in the European Union (EU) and often by extension the EEA. This is to ensure that they meet EU legal requirements, which often includes compliance with specified requirements in European Standards (ENs).  This assessment, depending upon the relevant EU product legislation and ENs may require continuing surveillance (of manufacture) and testing of the product by the Nobo.  Certification can also be time limited as well, requiring reassessment after a number of years.  Over the years, the EU has increased the scope of its legislation, which may in part originate elsewhere in world bodies or agreements and it carries out periodic updates of existing product legislation.

In turn, the Nobos need to be resident in the EEA, Switzerland or Turkey, be accredited with relevant competence(s) and are listed on the EU’s NANDO database.  Each Member State also has an accreditation organisation which regularly checks the competence of Nobos to carry out assessment and testing work. The UK-based list of Nobos includes famous and respected names such as British Standards Institute (BSI), Lloyd’s Register, the National Physical Laboratory and The Vehicle Certification Agency. There are also many other less well known, smaller organisations in the private and public sectors.

Through mutual recognition, a product with a conformity certificate issued by an accredited Nobo in one Member State is accepted in all the others without further assessment or testing.  Sometimes, however, a product may undergo further assessment as part of an overall system, but this is not intended to repeat previous work.

Recently the European Commission has published guidance for manufacturers and Nobos for after 29th March 2019 Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of industrial products.  After this date Nobos registered in the United Kingdom (as a ‘third country’ outside the EU and EEA) will lose their EU Nobo status and be removed from the EU’s database.

A manufacturer (or supplier) of a product requiring third party conformity assessment after 29th March 2019 will have to use a Nobo based in the EEA, Switzerland or Turkey in order to place a new or modified product on the EU market.  When placing a new or modified product on the UK market, the manufacturer is likely to opt for an EEA- or Switzerland-based Nobo for all conformity assessment to prevent duplication of work and costs. After all, Mrs May intends that after Brexit (if it ever happens instead of EU Vassal State status) UK legislation (presumably including product legislation) will follow EU legislation.

UK-based former EU Nobos could then see much of their work disappear quickly, including any work related to putting products on the UK market.  The Annex to the EU’s Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of industrial products lists the EU product categories covered. This, however, may be just the ‘tip of the iceberg’ since, depending upon the EU product legislation, components making up a particular product may also need some form of independent conformity testing and inspection.  Manufacturers or suppliers may also like to use a ‘one stop shop’ approach developing a longer term relationship with one Nobo to cover a wide range of their independent conformity, testing and quality assessment requirements, not merely to comply with EU product legislation.

A further blow to UK based Nobos is that without the potentially larger market provided by the EU, some investment decisions, say for testing facilities, may not be justified or even feasible.  In the current climate of uncertainty, prudent UK-based Nobos could already start transferring work and jobs to other EEA members in order to retain existing EU based customers.  They may also consider working through an EU-based Nobo who will ‘rebadge’ their work and obviously charge for so doing. This would in turn undermine their unique selling proposition – competitiveness.

It is possible that this impending loss of EU accreditation by Nobos can be successfully resolved by the Department for (not) Exiting the European Union.  However, at the moment, this does not look promising given that some of the inaccurate and uncompromising statements in the EU’s Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of industrial products relating to Nobos may not be legal under EU law; Nobos are not solely within the EU.

Third party testing and certification appears to have a very promising future worldwide. It provides confidence that safety, environmental impact and energy consumption have been independently assessed.  It may be essential when assessing some of the products of the future, such as autonomous or driverless cars. Sadly the UK is potentially going to face a huge handicap if Nobos cannot viably operate here through political decisions of the government.

The potential loss of UK and EU markets for UK based Nobos would not arise if Mrs May had not made such a rash decision in ruling out any ongoing membership of the EEA after Brexit.  She could have decided instead after Brexit on 29th March 2019 to re-join the European Free Trade Association (EFTA). This provides a breathing space. enabling us to remain in the EEA (whilst outside the EU) under different conditions which, for example, allow unilateral control of immigration (see Chapter 4, Schedule 112 The Safeguard Measures in the EEA Agreement).  Will she have the courage after 29th March 2019 to face people from these UK-based former EU-accredited Nobos who have worked hard over the years to build expertise, facilities, reputations and long-term relationships with customers and yet face unemployment, because of her premature rejection of a useful “holding position” without any consideration of an alternative?

Crony capitalism – how it works:- a letter from our Chairman

This letter from our Chairman appeared in the Derby Telegraph.

Whilst Mr. Corbyn is rightly making a great fuss about the terms on which private providers like Carillion contract for the provision of public services, the fashion for this type of arrangement reached giddying heights under Labour government.

One of the most notorious contracts was the sale in 2001 by the Inland Revenue of two thirds of its office buildings for £370 million which they leased back for £144 million per annum, including maintenance costs. Over the period of the whole contract period , the actual cost is estimated to be £4.2 billion. The much increased value of the office premises will benefit the contractor, a firm based in a tax haven!

Why does any government make such a silly bargain? Our old friend, the EU comes into it. Under the Growth & Stability Pact, governments are required to restrict their borrowing. By making the contractor put up the necessary money, the government keeps the debt off the public accounts. Of course, the contractors pay a much higher rate of interest than the government would have done and then have to add a profit on top. The increased cost is spread over many years and few people notice but the taxpayer is far worse off.

There is another advantage for those in the know. Ministers and senior civil servants, who awarded large lucrative contracts during their careers, retire from public office and spend a year with their inflation-proof pensions. They then reappear as directors and consultants for the contractors, using their insider knowledge to sell their services to their former colleagues in government. This process is known as “the revolving door”. They come back in again to their old ministries, demonstrating that private finance contracts provide very well-paid second careers for those who have left the public service.

The privatisation of Royal Mail demonstrates another aspect of EU influence. The EU’s Postal Directives decreed that letter and parcel deliveries must be part of a European market in postal services and not a nationally provided public service. Many people of widely ranging views supported the retention of this national institution. The Labour and Trade Union Movement did so too but suppressed the fact that this privatisation was the result of EU laws and continued to support EU membership.

Back in 1983 Michael Foot was the Labour leader and his policies were very similar to those of Mr Corbyn. Ken Clarke remarked then “The great thing about Europe is that it makes most of Labour’s policies illegal” . At least Mr Foot drew the obvious conclusion – that we should leave the then EEC. So it is strange today to see all but a handful of Labour MPs trying to wreck the European Union (Withdrawal) Bill. It has now passed its third reading in the Commons which is one step along the way of removing those EU influences which drove the process of privatisation.

Yours faithfully,

Edward Spalton

Awaiting the storm (or explosion!)

It cannot be much longer before the penny finally drops regarding the terms being proposed by the EU for the UK’s 21-month “transitional arrangement.”

Businessmen like John Mills and John Longworth, both of whom met Michel Barnier in Brussels last week, are distinctly unimpressed with what we are likely to be offered, but it is surprising that there haven’t already been even louder cries of outrage from the Conservative back benches. Last November, at a meeting organised by Conservative MEP David Campbell Bannerman, Rt Hon David Jones MP was quite unequivocal that any further involvement of the European Court of Justice (ECJ) in the legal affairs of the UK after Brexit would be an “absolute red line” for himself and a number of his colleagues, who would rather leave with no deal.

As more details emerge, it is becoming clear that it’s not just a role for the ECJ in our affairs which the EU wishes to incorporate into the transitional deal. According to an article in The Times, the EU will insist on the free movement of people throughout the period and the inclusion of people moving to the UK before 31st December 2020 in any post-Brexit agreement on citizens’ rights.. This again is a slap in the face for leave voters. It’s not just that many of us voted leave because we want to see a drastic cut in immigration; more to the point, we voted leave because we wanted our institutions to be sovereign – and this means that the EU must have no say in determining who can or cannot come into the UK or how long they can stay.

This tougher stance is contained in a new document dated 15th January. It is not the final word on the EU’s position, which will not be published until the end of the month, but it certainly gives us an idea of the general direction of travel. The guidelines produced last year by the European Parliament, although essentially a consultative document, were bad enough. We would be, in effect, a colony of the EU, unable to sign any trade agreements with other countries and still subject to the Common Fisheries and Common Agricultural policies. This document was bad enough, but according to Bloomberg, the latest document also states that we would need to seek the EU’s permission even to start negotiations on trade deals with third parties. We would be unable to strike out on our own path. The net “divorce bill” may also be increased.

Perhaps ironically, the Council President Donald Tusk told the European Parliament that “our hearts are still open “that the UK might “have a change of heart” and stay within the EU. This suggests a warmth towards us which just is not reflected in the negotiating guidelines which seem designed to squeeze and humiliate us as much as possible. Chancellor Philip Hammond claimed recently that the EU is “paranoid” that other countries will follow us out of the door. It has also been claimed that the EU is pressurising Switzerland not to make a bilateral deal with the UK The EU’s tough stance may well all be technically justifiable from the treaties, but it clearly wishes to interpret them in the toughest way possible as far as Brexit is concerned. No one with any sense of self-respect should give in to this bullying.

The transitional deal must therefore be kicked into the long grass as soon as possible, especially as there is no guarantee that a new trade deal will be ready to replace it after 21 months. The EU’s ambassadors have signalled a willingness for the transitional period to be extended, but this would only prolong an unsatisfactory situation which is not Brexit in any real sense of the term.

A further complication is looming on the horizon. The Norwegians have indicated that they would seek to renegotiate their trading arrangements with the EU if we were given favourable access to the EU’s single market  while not being a member of it.  This, of course, refers to any long-term deal and therefore is not an issue for Mrs May at the moment as the EU has insisted that negotiations on a long-term trading arrangement cannot start yet.  Let’s face it, she has enough on her plate as her team prepares to negotiate the transitional arrangements. We must hope that there is already a storm brewing up on the Conservative back benches which will rapidly knock these unacceptable proposals on the head and force the government to take a different approach.

If not, the storm is likely to strike with far greater ferocity  in four years’ time. A botched Brexit where we leave in name only is not what we voted for and not what Mrs May promised us when she became leader.   Brexit must mean Brexit or our Prime Minister will not only find herself consigned to a “rogues gallery”, excoriated by posterity alongside the likes of Lord North, Neville Chamberlain, Heath, Blair and Brown, but she may well take her party down with her.