The UK is already a Member of the EEA – But will it be Forced to Leave?

The UK is already a member of the European Economic Area. But will it be forced to leave the EEA when it leaves the EU?

The 1992 EEA agreement is here:-

http://www.efta.int/media/documents/legal-texts/eea/the-eea-agreement/Main%20Text%20of%20the%20Agreement/EEAagreement.pdf

The UK was (and still is) a contracting party, as well as (what is now) the EU.

Adding territories:- Further countries have been added since 1992 – such as Croatia – but their membership only comes into force once it is ratified under the law of that country – which has not yet happened in the case of Croatia.

Withdrawal from the EEA:- Countries can withdraw from the EEA – although the EU treaties require EU member states to join the EEA, as Croatia is now doing. This has the interesting consequence that the UK cannot leave the EEA before it leave the EU, but it can linger in the EEA after leaving the EU. (But see the debate about the meaning of Article 126 – below.)

The EEA withdrawal legislation is in Article 127:-

article-127

Article 2(c) governs the interpretation of the EEA agreement if and when there is any doubt about whether obligations fall upon the EU (as one of the contracting parties) or upon individual contracting parties such as the UK.:-

article-2c

But this Article does not appear to be relevant to the question of whether the UK remains in the EEA once it has left the EU. A more detailed explanation is in Annex A below.

Article 126:- On the above analysis, it seems that the UK will remain a member of the EEA even if we leave the EU, unless we deliberately withdraw by giving notice under Article 127. However, Article 126 defines the territories to which the agreement applies as follows:-

article-126

But the meaning of this Article is not entirely clear. Does it apply ‘only’ to those territories? If so then the UK will be compelled to leave the EEA after Brexit. But Professor Yarrow thinks not; his paper is here:-

http://www.rpieurope.org/Publications/Yarrow_Brexit_and_the_single_market.pdf

I reproduce the key part of his paper below, at Annex B.

If Professor Yarrow is right then the UK will remain in the EEA post-Brexit unless we give notice to leave under Article 127 of the EEA agreement.

Postscript:  A QC agrees – see comment attached to this blog, reproduced here for convenience:-
“Isn’t the short answer that, given Article 127 provides an express mechanism for withdrawal, it implicitly excludes other implied mechanisms for withdrawal such as ceasing to be a member of the EU? Moreover, the notion that withdrawal from the EU automatically delivers a withdrawal from the EEA is weakened by the fact of other, non-EU, EEA members?”

And several more interesting comments have since been added and are well worth reading. You will find them at the end of this blog.  

Martin Stanley

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Annex A: Article 2(c)

The position is that there is a set of Contracting Parties (the UK is one:  it signed as the UK, and the Agreement was ratified in the usual (UK) constitutional way).  Another (one of 32) Contracting Party is the “EU”.

Any agreement obviously places obligations on the parties – e.g. there will be provisions that say “a Contracting Party is expected to do X”.  The EU however, operates with shared competences – on some things the “EU” has competence, on other things the competence lies with the “Member State”, in yet others there is a joint competence.  The question is then as follows:  When text in the Agreement says “Contracting Parties are expected to do X”, where does the responsibility to do X lie?  The “EU” is, in fact, a distinct Contracting Party precisely because, on some things, it has a responsibility to do X.

The question – where does the competence lie – only arises for the EU and its member states.  For Liechtenstein, Iceland and Norway (and for the UK post Brexit) there is no ambiguity about who should do X.  The responsibility lies with the Contracting Party concerned.  That is why Article 2(c) only addresses the Community and its Member States.  It simply says “If, within the EU set up, you want to know who is responsible for doing X, look at what the relevant provision in the Agreement is about and then look to see where, within that set up, the relevant competence lies.

Art 2(c) has nothing to do Contracting Party status, its acquisition or its abandonment.  The list of Contracting Parties is set out at the outset.  It is as it is.  As for leaving, there is only one provision, Article 127, which can only be invoked by the Contracting Party wishing to withdraw (in our case, the UK).

Annex B: Professor Yarrow on Article 126

Article 126 of the EEA Agreement may look like a small matter, but it has very large potential consequences for the Brexit negotiations and their outcome. It therefore merits some careful thought.

In discussions of the proposition that UK exit from the EU does not imply UK exit from the EEA – and hence that it does not imply that the UK, should it wish to remain part of the Single Market, will have to apply for and negotiate “access” – the most frequent objection elicited from lawyers is that this is to ignore Article 126 of the Agreement. Their argument is a simple one and goes as follows.

The text of Article 126(1) is:

“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.”

Post-Brexit, the UK will not be a member of the European Economic Community (now the EU) and the UK obviously isn’t Iceland, Liechtenstein or Norway. Ergo the Agreement shall not apply.

Response

An error of logic

The first point to note 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 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.

A possible counter-response is that the word ‘only’ can reasonably be inferred from the surrounding text, the economic and political context in which the Agreement was made, the original intentions of the Contracting Parties to the Agreement, and so on. If that point is made, it goes without saying that there is a burden of proof to be discharged by those who would argue for it, and in this case I think the burden is a heavy one, because this particular flap of a butterfly’s wings would have obvious, very major consequences: it would compel UK exit from the Agreement.

In fact, the arguments for the wing-flap are weak. 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, and the EU’s broad policy goals in the period 1989-1992 were to bring countries together, not to create new barriers to participation in the Single Market.

De facto the Contracting Parties were, and to date have been, members of the EU or of EFTA, but it is hard to see that this reflects anything other the fact that, in the period 1989-1992, this was an Agreement that would not only contribute in and of itself to the EU’s wider policy goals of the time, but also was feasible within a relatively short time period and could serve as a first, significant step in a more comprehensive programme of economic co-operation.

Another argument for the inclusion of ‘only’ is that without it Article 126(1) is simply descriptive, conveys no information, and therefore would not have appeared in the Agreement at all, but this too is unconvincing. The ‘therefore’ is itself questionable, relying on implicit, auxiliary assumptions to the effect that re-statement, or stating the same thing in a different way, can have no value and that drafters will never ever be inclined to state the obvious. However, the main reason that this argument can be discounted is that Article 126(1) is not informationally redundant: it serves a specific, additive function, and its interpretation and implications should be assessed on the basis of this function.

Inconsistency with principles of international law

Next, consider the argument that an ‘only’ can reasonably be inferred from an interpretative maxim such as expressio unius est exclusio alterius (to express one thing is to exclude another, alternative thing).

The difficulty then is inconsistency with the general intent of the Vienna Convention to protect and preserve as much as is feasible of international co-operation in the face of extraneous political events, illustrated for example by the discrepancy between this maxim and the Convention’s own guidance on interpretation.

To illustrate, if the EU were a fully-fledged political union and had entered into a multilateral agreement with Iceland, Liechtenstein and Norway, Brexit would have the effect of creating two successor states, the UK and the EU minus the UK. The Vienna Convention on Succession of States says, in Article 34, that: “1. When a part or parts of the territory of a State separate to form one or more States, whether or not the predecessor State continues to exist: (a) any treaty in force at the date of the succession of States in respect of the entire territory of the predecessor State continues in force in respect of each successor State so formed; …” In the hypothetical circumstances, therefore, the multilateral agreement would still apply to the UK.

These are not, of course, the actual circumstances. The UK is a Contracting Party to the EEA Agreement in its own right, having signed it and ratified it, factors that serve only to strengthen the case against any forced exclusion. The point is simply that, given the Convention’s approach to successor states, it would be extraordinary to over-ride its purposes and intent via recourse to an interpretative maxim such as expressio unius est exclusio alterius.

Oddities as signifiers

To elaborate further, consider the situation if the word ‘only’ were somehow conjured into the text. There would then be a number of oddities.

First, the question of who can and cannot be a Contracting Party is an important one. Why then is it not set out much earlier in the Agreement where most of the Articles, in the final part, Part IX, of the Agreement which is entitled GENERAL AND FINAL CONDITIONS and which can reasonably be said to be focused on tidying up a number of loose ends.

Second, why do the words “under the conditions laid down in that Treaty” appear in Article 126(1)? What do they mean? Could they not be omitted?

Third, most of the text of Article 126 comes in its second paragraph, which is its only other paragraph. Article 126(2) states that:

Notwithstanding paragraph 1, this Agreement shall not apply to the Åland Islands. The Government of Finland may, however, give notice, by a declaration deposited when ratifying this Agreement with the Depositary, which shall transmit a certified copy thereof to the Contracting Parties, that the Agreement shall apply to those Islands under the same conditions as it applies to other parts of Finland subject to the following provisions:

(a) The provisions of this Agreement shall not preclude the application of the provisions in force at any given time on the Åland Islands on:

(i) restrictions on the right for natural persons who do not enjoy regional citizenship in Åland, and for legal persons, to acquire and hold real property on the Åland Islands without permission by the competent authorities of the Islands;

(ii) restrictions on the right of establishment and the right to provide services by natural persons who do not enjoy regional citizenship in Åland, or by any legal person, without permission by the competent authorities of the Åland Islands.

(b) The rights enjoyed by Ålanders in Finland shall not be affected by this Agreement.

(c) The authorities of the Åland Islands shall apply the same treatment to all natural and legal persons of the Contracting Parties.

The Åland Islands lie in the Baltic Sea between Finland and Sweden. The inhabitants, who number around 28,000, are Swedish speakers, but the islands are part of the territory of Finland. The islanders enjoy a significant degree of autonomy.

The question is: why should these provisions relating to the Åland Islands be bundled together, in the same Article, as a proposition that can, so it is argued, be determinative on such an important matter as entitlement to participation in the EEA Agreement?

Examination of such oddities can often be informative, and in this case it certainly is.

States and territories

The EEA Agreement is an agreement among governments, who are the Contracting parties and of which the UK is one. However, membership of the EU does not require that the whole territory of a State be subject to the EU Treaties. In relation to the Kingdom of Denmark, for example, Greenland and the Faroe Islands are ‘contracted out’.

Similarly, what can be termed ‘special member state territories’ may be ‘contracted in’ to the EU, but with certain conditions applied. For example, the Spanish enclaves of Ceuta and Melilla are part of the EU, but they are excluded from the common agriculture and fisheries policies.

The EEA Agreement necessarily has to address issues arising from these special territories, of which there are a significant number, including overseas territories that became attached to Europe in the age of empires: they are a kind of fossil record of European history. UK examples are the Channel Islands, the Isle of Man and Gibraltar. The reason for this necessity is Article 29 of the Vienna Convention on the Law of Treaties, which states that: “Unless a different intention appears from the treaty or is otherwise established, the treaty is binding on each party in respect of its entire Territory”.

The issues are therefore addressed in Article 126, which expresses the intention of the Agreement in respect of the territories to which it is to apply. It takes the set of Contracting Parties as a given and then, in effect, defines the parts of their territories (generally all or the great bulk of the territories) that are to be covered by the Agreement, applied either in its entirety or subject to special provisions. The relative policy significance of the matter, which reflects the small, relative economic sizes of the special territories, explains its late occurrence in the text of the Agreement.

The potentially complicated exercise of ‘geographic market definition’ for EEA purposes is simplified by the fact that the EU had already gone through this exercise for those of the Contracting Parties who were its own members at the time. The Agreement therefore simply adopts the outcomes of that earlier process – “The Agreement shall apply to the territories to which the Treaty establishing the European Economic Community is applied …”. Further, as noted, certain territories may be ‘contracted in’ to the EU Treaties, but subject to certain conditions. This explains the words “… and under the conditions laid down in that Treaty”. Any conditions in the EU Treaty that are relevant to the operation of the Agreement are simply mapped from the EU Treaty into the EEA Agreement, and a potentially time consuming, administrative exercise is avoided.

The same, administratively expedient option was not available for those Contracting Parties who were not members of the EU, and hence these had to be dealt with separately, country by country. Fortunately, these countries, which originally included Austria, Finland and Sweden as well as Iceland, Liechtenstein and Norway, do not have appeared to have raised ‘special territories’ issues, save in the case of Finland.

Finland was the only country with a special territories issue that was a Contracting Party of the EEA before joining the EU. This explains why the matter of the Åland Islands, uniquely among special territories, needed be addressed in the EEA Agreement, and it is so addressed in Article 126(2).

Brexit would imply that that there would need to be “necessary modifications” to the Agreement, but this doesn’t mean that the special territories issue needs to be re-opened in a way that would lead to significant administrative burdens. For example, the text of Article 126(1) could be adjusted to read: “The Agreement shall apply to the territories to which the Treaty establishing the European Economic Community is or has been applied …”. That would map the UK arrangements at the time of Brexit into the EEA Agreement without further ado.

Conclusion

The perceived oddities exist only as a result of misinterpretation and the conclusion from all this is simple: there is no case for conjuring the word ‘only’ into the text of Article 126(1). Article 126 was not intended to be, and as it stands is not, determinative of the ability of a country to participate in the Agreement. It is not exclusionary, either by intent or by effect. The purpose of the Article is, starting with the territories of the Contracting Parties, to make negotiated, generally marginal adjustments that take account of the interests of the inhabitants of a number of special territories.

END

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