Wednesday, 26 February 2020

Negotiating the future relationship between the UK and EU: the EU negotiating mandate

Professor Steve Peers, University of Essex*

*Thanks to Georgina Wright, of the Institute for Government, for a 'track changes' version of the negotiation mandate. The usual disclaimer applies.

This week the process of negotiating the future relationship between the UK and the EU took another step. On the EU side, the Council adopted the negotiation mandate for the talks.  This text differs somewhat from the proposed mandate for the future EU/UK relationship, which I discussed here. This blog post is an updated version of that one, and explains the main differences between the Commission proposal and the final text.

The following analysis summarises the EU negotiating mandate, further comparing it to the mutually agreed political declaration on the future relationship (which I previously annotated here). It explains where the EU position has departed from or elaborated upon the political declaration. Obviously, the EU position differs in some respects – but not all – from the UK position, which is why negotiations are expected to be difficult. (Update: the text of the UK position has now been published)

Legal basics

On the EU side, the adoption of the negotiation mandate is the latest step in the procedure. Under Article 218 TFEU, which sets out how the EU negotiates international treaties, first of all the Commission proposes a mandate to negotiate with a non-EU country. Next, the Council, ie Member States' ministers, decides on adoption of that mandate. When adopting the negotiation mandate the ministers acted unanimously (more on that below).

The next step is the formal negotiations with the UK, in which the Commission is the negotiator. These start next week. Note that the Commission now has a mandate from Member States when doing so: Michel Barnier will not be on a frolic of his own. (This point was often missed during the withdrawal agreement negotiations). As the mandate states, during the negotiations the Commission will be reporting back to a 'special committee' of Member States’ officials. In fact this committee was set up recently. It's made up of Member States' officials who keep an eye on the Commission as negotiator. This isn't unique to these talks; it's a requirement in Article 218 TFEU as regards all international treaty negotiations.

There's no formal role for the European Parliament at this point, although it can pass non-binding resolutions (such as the one passed earlier). It will have a veto over the final agreement. The negotiating mandate doesn't take a view on whether ratification by each national parliament will be needed. This will depend on the content of the final text, as the Commission’s Q and As explicitly point out.

Timing of the talks

The transition period in the withdrawal agreement (discussed here) expires at the end of the year, meaning that the de facto current treatment of the UK as a Member State of the EU will then expire. While the withdrawal agreement’s provisions on issues like citizens’ rights and Northern Ireland will still apply, most of the relationship between the UK and EU will end at that point unless new treaties replace it.

Although the transition period could be extended by one or two years if both sides agree (the deadline to agree this is 30 June 2020), the UK objects in principle to any extension. The negotiation mandate decision mentions a possible extension, but aims to get as much as possible done during the available time. It does refer to the jointly agreed ‘best endeavours’ to agree a new fisheries treaty by July 2020 (para 74 of the political declaration), saying that a fisheries treaty ‘should’ be agreed by that point. But it does not explicitly make this a condition for further negotiations, and the mandate refers to ‘parallel’ negotiations, not to negotiations on fisheries exclusively at first.    

Form of the relationship

The Commission proposal referred to a ‘single package’ with general provisions, economic arrangements, and security arrangements. This possibly implies a single treaty, although the Council mandate does not say so expressly.  It would also be possible to have separate treaties which are linked in some way.

Furthermore, the Council gave the Commission legal authority to negotiate an association agreement on the basis of Article 217 TFEU, although it avoids using those actual words. The Q and As note that when it comes to the end of the negotiations, things might be different. (For instance, the scope of the agreement might be narrower, or it might take the form of multiple treaties: either way, this could change the ‘legal base’ of the treaty or treaties concerned).

Legally, an association agreement (if that's what is eventually negotiated) requires unanimity in Council and consent of the European Parliament. It might need ratification by national parliaments but that depends on the content (as the Q and As point out). It can be put in force provisionally (at least partially) if needed.

Territorial scope

Gibraltar is outside the scope of the negotiation mandate (para 167). This is not a new EU position, and is not a territorial claim: the point has often been misreported. As the Commission pointed out, the EU position goes back to 2018, when the European Council took the view that any agreement regarding Gibraltar would be separate, and subject to the agreement of Spain:

After the United Kingdom leaves the Union, Gibraltar will not be included in the territorial scope of the agreements to be concluded between the Union and the United Kingdom. However, this does not preclude the possibility to have separate agreements between the Union and the United Kingdom in respect of Gibraltar. Without prejudice to the competences of the Union and in full respect of the territorial integrity of its Member States as guaranteed by Article 4(2) of the Treaty on European Union, those separate agreements will require a prior agreement of the Kingdom of Spain.

In any event, every Member State will have a veto over the future relationship treaty with the UK anyway, if it remains an association agreement.

Data protection

The negotiation mandate (para 13) refers to an adequacy decision on UK data protection law. Note that an adequacy decision is a unilateral decision by the EU under the GDPR. The political declaration (para 9) referred to an objective to adopt such decisions by the end of 2020. There is another reference to data protection in the security part of the mandate (see below). Cooperation between regulators, which was mentioned in the political declaration (para 10), is not mentioned explicitly in the mandate.

EU programmes

The negotiation mandate (para 14) covers UK participation in EU programmes, such as research funding and Erasmus. The wording of the mandate reflects the political declaration (para 11). Northern Ireland peace funding is also mentioned (para 15, mandate; compare para 13, political declaration). However, there is no explicit mention of association with European research infrastructure (which was mentioned in para 12, political declaration). Note that the EU has not yet agreed the conditions for non-EU countries to access the next phase of EU programmes: for the draft text on this, see Article 16 of the proposed new Erasmus programme.

There’s no explicit mention of negotiation of UK links to the European Investment Bank, although the political declaration (para 15) only referred to the UK’s intention to seek such links, without suggesting that the EU side shared this objective.

Economic partnership

The core of the UK/EU economic partnership would be a free trade agreement (FTA) covering both goods and services (para 17 of the negotiation mandate). It's often inaccurately claimed that there's no intention for an FTA in services between the UK and EU, but both sides have always intended to negotiate one (paras 19 and 28 of the political declaration). But note that an FTA falls short of single market participation. Unlike the political declaration, the mandate makes an explicit link between the economic partnership and fisheries and a ‘level playing field’.

Free trade in goods

The negotiation mandate (para 20) provides for no tariffs or quotas. However, unlike the position as a Member State (and during the transition period), the mandate refers to rules of origin, to determine where goods come from (para 21). This is an extra burden on trade between the UK and EU compared to EU membership, and is a consequence of the UK's decision not to negotiate a customs union. This reflects the political declaration (para 22); indeed a reference to a need for rules of origin was added to the revised version of the political declaration (whereas the first version of the political declaration ruled them out).

The reference to using the EU’s standard preferential rules of origin is new compared to the political declaration, and presumably refers to the pan-European rules (PEM Convention) in use between the EU and other countries across Europe, the Middle East and North Africa. Using the standard rules will be simpler and quicker than negotiating from scratch (rules of origin often take some time to negotiate in FTA talks).

Next, the negotiating mandate refers to introducing anti-dumping duties, anti-subsidy duties and economic safeguards between the UK and EU, referring to WTO rules. Again, this is a new possible barrier in UK/EU trade. Such measures are provided for in most FTAs (not just the EU’s: the US applies anti-subsidy duties to some Canadian products, for instance). For EU FTAs, the only exception is the European Economic Area (EEA), which rules out anti-dumping and anti-subsidy duties for most products, because the countries concerned have signed up to EU single market laws. The possibility of such measures is therefore not a ‘punishment’, but the inevitable consequence of the UK’s decision to leave the EU without remaining a participant in the single market. However, there is an inconsistency between the EU approach to the UK compared to the EEA countries: if the UK signs up to EU State aids law, as the EU proposes, it would still be subject to possible anti-subsidy measures.

The possibility of such measures would be there even without an FTA between the UK and EU. The objective of such measures is, respectively, to react to goods sold below their normal value (anti-dumping), subsidised by States (anti-subsidy), or which damage domestic producers (economic safeguard) – subject to more detailed definitions and procedural obligations in the WTO Codes dealing with these issues. 

The negotiation mandate also extends to customs facilitation and agreement on non-tariff barriers (technical and sanitary rules), going beyond WTO provisions. However, it does not mention the possibility of UK links with EU medical, chemical, and aviation safety agencies, even though the political declaration referred to this possibility (para 23).

Finally, the Council added a para referring to cooperation on return of stolen cultural property. Some interpreted this as a demand for the return of the Elgin marbles, but the text refers to cooperation on the basis of current EU law - which only applies to property stolen after 1993.

Free trade in services

The negotiation mandate refers to an FTA in services going beyond WTO commitments, but as usual the EU will exclude audio visual services. This exclusion was not mentioned in the political declaration, but is hardly unexpected. On the other hand the proposed mandate mentions free trade in certain services sectors that were also expressly mentioned in the political declaration: professional and business services, telecommunications services, courier and postal services, distribution services, environmental services, financial services and transport services.

This will include movement of service providers (as required by WTO rules on FTAs in services), but this falls short of free movement of people. There is a general reference to agreement on investment (not just in services industries), but as under the political declaration there is little further detail. The mandate also includes recognition of professional qualifications, as referred to in the political declaration (para 34). Financial services equivalence decisions will be unilateral.

Intellectual property

It’s usual for FTAs to include provisions on intellectual property, going beyond WTO and other international rules. Here the big EU ask here is protection for future ‘geographical indications’ (GIs: these are rules which specify that, for example, ‘feta cheese’ must originate from Greece). Note that current GIs are protected in the withdrawal agreement, so the negotiation here would be about future GIs. There’s also a reference to maintaining current protection in many other areas of IP, where there is extensive EU legislation going beyond international IP treaties. There’s no reference to what happens to the plan that the UK hosts part of the planned Unified Patent Court, which is linked to an attempt to create a unified EU patent. Some specific references to IP issues in the political declaration (databases, resale rights, exhaustion of rights) do not appear explicitly in the proposed mandate. The notion of still applying EU standards might be an issue in the case of the controversial recent EU copyright law, which the UK supported when it was adopted but now intends not to apply (see discussion here).

Public procurement

As is common for FTAs, the negotiation mandate envisages opening up public procurement markets more than under the WTO procurement agreement. This reflects the political declaration, although note that the rhetoric on this issue in the UK is inconsistent, with an obvious conflict between the competing slogans of "Buy British" economic nationalism on the one hand, and export oriented "Global Britain" on the other. Since the UK is signing up to the WTO procurement agreement in its own name and non-EU countries may also wish to include additional procurement obligations in FTAs, the “Buy British” folks may be disappointed – although opening up markets reciprocally enables exporting British companies to sell their goods and services too.


The negotiation mandate falls short of free movement of people here. It refers to waiving visa requirements for short term travel, which the EU has done already unilaterally on the condition of reciprocity (see discussion here). A visa waiver treaty between the two sides could go further – most notably waiving visa requirements for paid activities (which is now an option for Member States), which would be useful for the music industry, for instance. But it is not clear if the mandate is referring to a visa waiver treaty.  Note that the section on mobility is in addition to the planned negotiations on services, which would include some movement of people (discussed above).

The mandate also refers to “setting out conditions” relating to migration of students and researchers (areas where the EU has already legislated on non-EU migration, as discussed here). There could also be agreement on social security coordination, but note that this would be for future UK/EU migration. Those who moved before the end of the transition period are covered by the withdrawal agreement (see discussion here), which also covers the common travel area referred to in the mandate. Note that there’s no reference to possible negotiations on retaining free movement rights for UK citizens who move to the EU before the end of the transition period.

There’s no mention of the political declaration’s reference to facilitating travel (para 53 of the declaration), perhaps because of the UK government’s plan to match the EU’s planned advance travel authorisation system. However, the Council added a reference to negotiations on family law civil judicial cooperation, as mentioned in the political declaration (para 56), even though the proposed mandate had omitted this issue.


On air transport, the negotiation mandate states that the UK will not have the same market access as an EU Member State, but is willing to negotiate. It also refers to aviation safety standards.

On land transport, it refers to market access for road haulage, but not cabotage (haulage within a single Member State/multiple Member States). This would be linked to a standstill on social rules relating to drivers plus tachograph discussions (this concerns the devices keeping track of how long drivers are driving for). There’s no reference to private motorists, although the political declaration referred to them.

The mandate refers to international law on coach transport, which suggests that the UK and EU would not negotiate additional provisions. On rail transport, there’s a reference to the Channel Tunnel, and the Council added a reference to Dublin/Belfast rail links here, in accordance with a reference in the political declaration.

The Council also added a reference to possible negotiations on maritime transport, matching a reference in the political declaration. The reference to cooperation with the EU maritime safety agency in the political declaration was not retained.


The negotiation mandate has a number of references to renewable energy, along with a level playing field on carbon pricing, and a Euratom deal including a standstill on nuclear safety standards and isotope issues. (On post-Brexit relations with Euratom, see my earlier discussion). The Council added a reference to nuclear waste, perhaps reflecting Irish concerns about Sellafield.


The focus of the negotiation mandate is EU traditional fishing in UK waters, with a link to the rest of the economic partnership, and a reference to agreed July target date. As noted above, the target date does not seem to be an absolute demand.  The Council strengthened the EU’s position here, referring to ‘upholding’ the existing degree of access. The topic is a prime candidate for crashing the whole negotiations – as is the next topic...

Level playing field

The term ‘level playing field’ might be used differently in other contexts, but for these discussions it refers to law on State aid, competition law, and aspects of tax, labour and environmental law. It’s common for the EU (and also the US and Canada) to require some form of LPF clauses in its FTAs, but the question is whether to go beyond the EU’s usual provisions in the EU/UK FTA – with the rationale for the EU side being that the FTA would go further in abolishing all tariffs than other EU FTAs go.

The first point to emphasise is that in addition to LPF clauses being in other EU FTAs, the UK signed up to the concept of LPF in the political declaration. Both sides agreed that the LPF:

…should be commensurate with the scope and depth of the future relationship and the economic connectedness of the Parties. These commitments should prevent distortions of trade and unfair competitive advantages. To that end, the Parties should uphold the common high standards applicable in the Union and the United Kingdom at the end of the transition period in the areas of state aid, competition, social and employment standards, environment, climate change, and relevant tax matters. The Parties should in particular maintain a robust and comprehensive framework for competition and state aid control that prevents undue distortion of trade and competition; commit to the principles of good governance in the area of taxation and to the curbing of harmful tax practices; and maintain environmental, social and employment standards at the current high levels provided by the existing common standards. In so doing, they should rely on appropriate and relevant Union and international standards, and include appropriate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement as part of the future relationship. The future relationship should also promote adherence to and effective implementation of relevant internationally agreed principles and rules in these domains, including the Paris Agreement.

So the commitment was to ‘uphold common high standards’ applicable in the EU and UK at the end of the transition period; ‘maintain’ standards ‘at the current high levels provided by the existing common standards’; ‘rely on appropriate and relevant Union and international standards’; and include provisions on implementation, enforcement and dispute settlement. So there were several references to EU rules, most in the context of a standstill, but partly more open-ended (ie possibly application of future rules too); and a general reference to dispute settlement, with no specific reference here to the CJEU (but see the reference to the CJEU role below).

The negotiating mandate partly repeats this text, but also adds many points. On LPF enforcement in general, it states that the EU ‘should also have the possibility to apply autonomous, including interim, measures to react quickly to disruptions of the equal conditions of competition in relevant areas, with Union standards as a reference point’ (italics indicate that the Council added words to the Commission proposal). On future measures, it states that the ‘envisaged partnership should commit the Parties to continue improving their respective levels of protection with the goal of ensuring corresponding high levels of protection over time’ (italics are the Council’s added words), with the governing body having power to extend the LPF or add to it over time (note that the governing body would have to act jointly). The Council also added general references to ‘a sustainable and long-lasting relationship between the parties, referring not only to ‘common high standards’ but also ‘corresponding high standards over time with Union standards as a reference point’.

On specific issues, EU State aid should apply ‘to and in’ the UK, although they would be enforced by an independent UK body, not the Commission; and disputes ‘about the application of State aid rules in the United Kingdom should be subject to dispute settlement’. For competition law, general provisions similar to EU law (although here there is no specific cross-reference to EU law) should apply as regards EU/UK trade, along with a commitment to ‘effective enforcement’. There should be limits on special rights for state-owned enterprises, with no specific reference to EU law or enforcement.

On tax, there should be a commitment to international standards, and also the UK should apply ‘the common standards applicable within the Union and the United Kingdom at the end of the transition period in relation to at least the following areas: exchange of information on income, financial accounts, tax rulings, country-by-country reports, beneficial ownership and potential cross-border tax planning arrangements’, along with ‘the fight against tax avoidance practices and public country-by-country reporting by credit-institutions and investment firms’, and (without reference to common standards) ‘the Parties’ commitment to curb harmful tax measures, taking into account the G20-OECD BEPS Action Plan’ and the UK reaffirming ‘its commitment to the Code of Conduct for Business Taxation’.

On employment law, there should be no reduction ‘below the level provided by the common standards applicable within the Union and the United Kingdom at the end of the transition period in relation to at least the following areas: fundamental rights at work; occupational health and safety, including the precautionary principle; fair working conditions and employment standards; and information and consultation rights at company level and restructuring’. There should also be provision on enforcement within the UK, ‘through adequately resourced domestic authorities, an effective system of labour inspections and effective administrative and judicial proceedings’.

On the environment and health (‘health’ being added by the Council), again the LPF should provide that ‘the common level of environmental protection provided by laws, regulations and practices is not reduced below the level provided by the common standards applicable within the Union and the United Kingdom at the end of the transition period’. The text refers to ‘at least the following areas: access to environmental information; public participation and access to justice in environmental matters; environmental impact assessment and strategic environmental assessment; industrial emissions; air emissions and air quality targets and ceilings; nature and biodiversity conservation; waste management; the protection and preservation of the aquatic environment; the protection and preservation of the marine environment; health and product sanitary quality in the agricultural and food sector; the prevention, reduction and elimination of risks to human and animal health or the environment arising from the production, use, release and disposal of chemical substances; and climate change.’ The words in italics were added by the Council; note that food standards issues, in the EU mandate, therefore cross over between the pure trade issues (SPS checks, mentioned above) and the LPF clauses.

Also, the LPF ‘should lay down minimum commitments reflecting standards, including targets, in place at the end of the transition period in those areas, where relevant’; ‘should ensure the Parties respect the precautionary principle and the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay’. For enforcement, again, the LPF ‘should ensure that the United Kingdom implements a transparent system for the effective domestic monitoring, reporting, oversight and enforcement of its obligations by an independent and adequately resourced body or bodies’. (Note that the proposed Environment Bill would include some provisions to this effect).

There are also some specific provisions on climate change: the UK should maintain ‘a system of carbon pricing of at least the same effectiveness and scope as provided by the common standards, including targets, agreed within the Union before the end of the transition period and applicable for the period thereafter’, and the two sides ‘should consider linking a United Kingdom national greenhouse gas emissions trading system with the Union’s Emissions Trading System (ETS)’ which should be ‘based on the conditions agreed within the Union, ensure the integrity of the Union’s ETS and a level playing field, and provide for the possibility to increase the level of ambition over time’. Besides carbon pricing systems, the LPF should ensure that the UK ‘does not reduce the level of protection below the level provided by the common standards, including targets, agreed within the Union by the end of the transition period and applicable for the period thereafter’.

The negotiation mandate also refers to ‘adherence to and effective implementation of relevant’ international rules, which ‘should include’ International Labour Organisation conventions, the Council of Europe European Social Charter and multilateral environmental agreements including those related to climate change, including the Paris Agreement. On top of that, where the parties have higher standards above the minimum commitments, ‘the envisaged partnership should prevent them from lowering those additional levels in order to encourage trade and investment.’

Has the EU ‘moved the goalposts’ here? The agreed text in the political declaration refers explicitly to both EU and UK standards, vaguely to dispute settlement, and indirectly to future measures. It’s not surprising that the EU puts forward a maximalist interpretation of this, or that the UK puts forward a minimalist interpretation – although it cannot seriously be argued that the political declaration made no commitment to a standstill as regards EU standards. Compared to the political declaration, then, the issue of dispute settlement remains vague, although there is a specific demand for potential EU reaction in the event of divergent future standards. The reference in the political declaration to maintaining current standards is maintained. It’s unclear if the EU position is that the UK must keep up with future EU measures in these areas, or whether it simply wants to reserve the right to react in the event that the UK does not.

The dispute settlement point is significant because in the first withdrawal agreement, which contained some of the detail which appears in the negotiation mandate, dispute settlement was limited: only some issues could be subject to the dispute settlement regime in that text (in particular, disputes about the substance of labour and environmental commitments could not be subject to dispute settlement; only disputes about enforcement systems for those obligations could be). So even the references to EU law in the LPF part of that agreement did not mean that the CJEU would have jurisdiction via dispute settlement arbitrators to interpret those references, since the dispute settlement arbitrators would never get hold of such disputes in the first place.

This also meant that EU retaliation for the breach of such obligations was impossible, since retaliation was only possible via the dispute settlement system. While the negotiation mandate refers to possible EU retaliation for breach of LPF rules, it’s not clear if the limits on such retaliation (both in terms of which issues are subject to dispute settlement and the constraints on retaliation within the dispute settlement system) would be different from the limits in the first withdrawal agreement. It should be noted that in the first withdrawal agreement, UK retaliation against EU breaches was also possible within the dispute settlement system; one might expect that the UK would argue that it should similarly have reciprocal powers to retaliate in the future relationship treaties.

As compared to EU FTAs with other countries, the negotiating mandate is different as regards the references to EU law (although the UK had previously signed up to this), but it is not clear if the arrangements on dispute settlement will be different. The prospect of the EU withdrawing preferences due to divergences already appears in the EEA, which avoids CJEU jurisdiction on this issue by making the process automatic (if attempts to settle the issue have not worked). Furthermore, the EEA has an approach to dispute settlement which might possibly work between the EU and the UK: if attempts to settle a dispute fail, arbitrators can rule on whether a reaction by one party is disproportionate, but not on the underlying EU law dispute (if there is one) – thereby avoiding the mandatory involvement of the CJEU.

Security cooperation

In the negotiation mandate, the security cooperation is not linked to the LPF or fisheries. But instead it would be made dependent not only on UK adherence to the ECHR, but also the Human Rights Act (HRA), along with the unilateral adequacy decision on data protection - expressly referring to possible CJEU challenges (see the challenges to adequacy decisions relating to the US, discussed here). The ECHR and data protection points reflect para 81 of the political declaration, which referred to the ECHR ‘underpinning’ the relationship; the HRA point goes beyond it. Also, there would be fair trial and double jeopardy standards.

The mandate here reflects the issues that would be litigated anyway about data protection and human rights standards in the UK. They are already litigated as regards non-EU countries and other Member States.

For police cooperation, the mandate refers to passenger name records, DNA/fingerprint/vehicle info, and exchange of information in individual cases. There is no mention of the Schengen Information System (which the UK currently applies as regards criminal law data) and the exchange of information in individual cases can't simply copy it. As regards PNR, the mandate refers to a CJEU case discussed here, which sets out limits on what the EU can exchange with non-EU countries to comply with data protection standards. On PNR and DNA data et al, the mandate reflects the political declaration. On individual exchanges of information instead of the Schengen Information System, the mandate is explicit on the issue whereas the political declaration fudged it (because the two sides did not agree).

On criminal justice cooperation, there is a reference to fast track extradition. Note that the EU, Norway and Iceland have agreed an extradition treaty which is very similar to the European Arrest Warrant applied between EU countries, but with certain exceptions. On this, the Council added a reference to Member States possibly refusing to extradite their own citizens (three Member States already do this during the transition period), plus unspecified other guarantees.  Also the mandate refers to exchanging evidence and criminal records (the Council removed the reference to doing so in a similar way to existing EU laws), which would limit the impact of the UK leaving the EU on these issues. Note that this would probably go further than the EU has gone with other non-EU countries.

Foreign policy

In this area, the negotiation mandate proposes "alignment" on sanctions (the only explicit use of the word in its proposal). There would be case by case involvement in defence missions or defence industry projects (reflecting the wording of the political declaration, which makes clear that the UK would not be tied to EU defence cooperation against its will), and limited access to Galileo (the Council watered down the latter bit).

The Council added a timely reference to cooperation on health security at the end of this section.

Governance and dispute settlement

Finally, the future relationship treaties would have a joint committee to oversee and implement them (which is standard in international treaties). To settle disputes, there would be consultation then binding arbitration.  The Council added a reference to dispute settlement between different agreements. The CJEU would be involved if an issue concerns the interpretation of EU law (as explicitly agreed in the political declaration). There is NO reference to CJEU involvement otherwise (note that the political declaration explicitly ruled that out). The mechanics of dispute settlement are not spelled out in detail; it is possible that they might be based on the provisions in the withdrawal agreement (see my annotation and analysis of them here).

As discussed in the LPF section above, it is possible that some parts of the agreement might not be subject to dispute settlement at all, in which case there is no issue of CJEU involvement or any other remedies issue (unless the agreement allows for remedies to be applied without such remedies being subject to dispute settlement). So the CJEU would only have jurisdiction over the UK in the future relationship treaty where the agreement a) refers to EU law AND b) provides for dispute settlement. Again: key parts of the level playing field in the first withdrawal agreement met condition a) but NOT b). The details of the future treaty therefore will be crucial.

Barnard & Peers: chapter 27
Photo credit: Michael D Beckwith, via Wikimedia commons

Sunday, 23 February 2020

How do you solve a problem like Suella? The legal aspects of breach and termination of the withdrawal agreement

Professor Steve Peers, University of Essex

Today’s papers bring another story that the UK might be planning to breach the Brexit withdrawal agreement – including the report that the new Attorney-General Suella Braverman is poised to attempt to justify this legally. So what happens if the UK (or the EU) breaches the withdrawal agreement is not a hypothetical issue. I’ve previously discussed the dispute settlement rules in the agreement, as well as the Withdrawal Agreement Act giving effect to the treaty in the UK, but it’s useful to bring the key issues together, and also to look at the issues from the point of view of international law.  This blog post summarises in turn the dispute settlement provisions of the withdrawal agreement and the rules on termination etc of treaties in international law, discussing the interaction between them.  (Update, Feb 24 2020: I've summarised the main points of this blog post in a Twitter thread)

A few basic parameters first. It’s likely that any (alleged) breach of the withdrawal agreement would have political consequences as well as face legal action. Political consequences might include not only reaction from the EU, but reluctance of the US Congress, concerned about the position of Ireland, to agree to the legislation implementing a US/UK trade deal. Which of the two would be most important is hard to guess in advance. It’s also harder to guess the route that the political aspects of the dispute would take, as compared to the legal route, which in principle follows a set of rules laid down in advance. Also the two routes will overlap: as discussed below, there’s political discretion as to whether and how to pursue legal proceedings.

Second, international law aims for treaties to remain in force if possible. A breach of a treaty by one side does not trigger its automatic collapse, or even an automatic reciprocal breach by the other party. The goal is to resolve disputes about treaties, not terminate them with every passing spaff.

Third, it’s not just the view of the parties to the agreement (the UK and EU) that will be relevant. Arguments about the breach of the treaty can be brought via the courts of both sides by individuals; and even the termination of the treaty could be challenged via the national courts and the CJEU, at least on the EU side. 

Fourth, the withdrawal agreement is distinct from the political declaration on the future relationship (discussed here), which is not binding as such. While the withdrawal agreement does require the parties to negotiate their future relationship in good faith, it might be difficult to establish a breach of such a vague obligation. The withdrawal agreement, including in particular the provisions on citizens’ rights (discussed here) and the Northern Ireland protocol, is also distinct from any failure to negotiate any treaties on the future relationship: in the event that negotiations on future treaties between the UK and EU are unsuccessful, this does not lead to automatic termination of the withdrawal agreement.

Finally, I am not assuming that the UK government has breached or will breach the withdrawal agreement, just discussing what might happen if it did from a (mainly) legal perspective. Recent statements by the UK government refusing to carry out checks in the Irish Sea have not been framed as an intention to breach the agreement, and the relevant part of the treaty doesn’t apply yet, so can’t yet be breached in practice. Although the title of this blog post focusses on the UK, because it’s the UK government’s recent statements that have caused some people to doubt its intentions to apply the withdrawal agreement, it’s also possible that the EU might breach the withdrawal agreement. The blog post therefore applies equally to any breach that might be committed on the EU side.

It’s obviously relevant that, as things stand, the UK has passed an Act of Parliament to give effect to the withdrawal agreement in domestic law. While a further Act of Parliament could amend the current Act in order to give effect to an intention to breach the agreement, there’s no proposal to do so at present. Any secondary legislation or government action in breach of the agreement could be struck down by the courts; although the government has indicated an intention to restrain judicial review of government action, it has not put its intentions into effect yet. (While the recent Withdrawal Agreement Act gives the executive powers to direct the judiciary how to interpret retained EU law, such powers do not apply to the withdrawal agreement itself). 
Dispute settlement and the withdrawal agreement: an overview

There are two distinct parts to the withdrawal agreement (and the UK legislation giving effect to it fully reflects this). During the transition period (discussed here), applying to the end of 2020 unless the two sides agree to an extension of one or two years (which the UK currently opposes in principle), substantive EU law as such, including all the usual rules of CJEU jurisdiction (references from national courts on the interpretation of EU law, Commission infringement actions for alleged breach of EU law) still apply to the UK. There’s no provision to reduce the transition period, either unilaterally or bilaterally, whether as a ‘punishment’ for not complying with the agreement or for any other reason.

After the end of the transition period, things change significantly. Most substantive EU law stops applying to the UK, along with most CJEU jurisdiction. There are special rules for cases pending at the end of the transition period, along with pending proceedings that might lead to litigation later. There is also special jurisdiction for the CJEU over citizens’ rights (for eight years after the end of the transition period), for disputes over EU budget legislation, and for cases concerning parts of the Irish border protocol and the whole protocol on UK army bases in Cyprus.

Furthermore, the main dispute settlement system then also kicks in. It provides for disputes on the interpretation of the agreement between the two sides to go to arbitration, if they cannot be settled by negotiation.  There’s nothing in the agreement to rule out parallel cases under national and EU courts on the one hand, and the dispute settlement system on the other.

There’s a general obligation for the parties to stick to the processes in the withdrawal agreement to settle disputes about that agreement (Article 168, which applies from Brexit day already):

For any dispute between the Union and the United Kingdom arising under this Agreement, the Union and the United Kingdom shall only have recourse to the procedures provided for in this Agreement.

If a dispute is not settled after three months of consultation, either side may request an arbitration panel to be set up. The two sides could jointly agree to start arbitration even before that point. The panel will consist of five arbitrators, from a list of 25 to be drawn up jointly (the EU and UK have not agreed this list yet). It must be set up within 15 days of the request to set it up. If the two sides cannot agree on a list of arbitrators, or the arbitrators who will serve on a particular case, there are tie-break rules. So it will not be possible to paralyse the dispute settlement system by refusing to agree on these names. The arbitration panel must give a ruling within 12 months. If it agrees to a request to give its ruling urgently, that deadline is reduced to six months.

If a dispute raises questions of EU law (which is likely as regards citizens’ rights in particular), the arbitrators must ask the CJEU to rule on it. The CJEU’s judgment will bind the arbitrators. Asking the CJEU to rule on the EU law stops the clock on the deadline for the arbitrators to give their ruling. 

An arbitration decision is binding on both sides. But when does it have to be complied by, and what happens if it isn’t? If the arbitrators have determined a breach of the agreement, the losing party has 30 days to notify the complainant of how long it thinks it needs to implement the ruling. If the complainant is unsatisfied by this, the issue of how long is necessary to comply with the ruling can go back to arbitration.

At the end of the deadline to comply with the ruling, if the winning party is unsatisfied with what the losing party has done to comply with the ruling, it can go back to the arbitrators to ask if the losing party has properly complied with it. The CJEU might again be asked to rule on an issue of EU law.

If the arbitrators rule that the losing party has not complied with the prior ruling, then at the request of the winning party, they may impose a ‘lump sum or penalty payment’ on the losing party. The arbitrators must consider ‘the seriousness of the non-compliance and underlying breach of obligation, the duration of the non-compliance and underlying breach of obligation’ when deciding how big the financial penalty should be.

If the losing party refuses to pay up after one month, or refuses to comply with the ruling confirming its non-compliance with the first ruling after six months, further sanctions might apply. The winning party can suspend any part of its obligations under the withdrawal agreement other than the citizens’ rights part, or under another treaty as agreed between the two sides (obviously, no such other treaties exist yet). This suspension has to be ‘proportionate’, and must take into account ‘the gravity of the breach and the rights in question’. If the losing party thinks that the suspension is disproportionate, it can ask the arbitrators to rule on the point within 10 days; the suspension is postponed from taking effect until the arbitrators rule on the point.

Suspensions are meant to be temporary until the losing party complies with its obligations, or the two sides agree to settle the overall dispute. If the losing party claims later on that it is now complying with its obligations and the winning party disagrees, the arbitrators can be asked to rule on the point; again the CJEU could be involved if there is an EU law issue. If it’s agreed, or the arbitrators rule, that the losing party is now complying with its obligations, the financial penalties or suspension of obligations by the winning party have to end.

As we can see, the dispute settlement system is not a means to terminate the withdrawal agreement. Even if part of the agreement is suspended by one side, the citizens’ rights provisions cannot be suspended. The intention is that any suspension or financial penalty is temporary, until the party breaching the agreement complies with its obligations. This suggests that termination is not a possible remedy – as does the provision stating that the parties must settle disputes in accordance with the agreement.

Also, as noted above, the dispute settlement system co-exists with some jurisdiction for the CJEU (as distinct from the CJEU jurisdiction within the dispute settlement system), as well as possible litigation in national courts. Traditionally, the CJEU has said that WTO dispute settlement rulings do not form part of EU domestic law, since the EU institutions preserve their political discretion whether to comply with WTO dispute settlement rulings or face proportionate suspension of trade from the winning party under the WTO rules – which are broadly similar to the dispute settlement system in the withdrawal agreement. On the other hand, the big difference between the WTO and withdrawal agreement dispute settlement systems is that the CJEU must be involved under the withdrawal agreement, where there is an issue of EU law. Whether that is enough to convince the CJEU that it should take a different approach remains to be seen. 

For the UK, the Withdrawal Agreement Act makes no specific reference to dispute settlement rulings forming part of UK law or not. The UK’s ‘dualist’ approach to international treaties (treaties do not form part of domestic law unless Parliament says otherwise) would suggest that they do not form part of UK law, unless it could be argued that Parliament’s implementation of the withdrawal agreement in domestic law was implicitly intended to apply to dispute settlement rulings too. Also, given that the CJEU still has jurisdiction to rule on citizens’ rights via the UK courts for awhile yet, the approach that the CJEU takes to the legal effect of the dispute settlement system is relevant to the UK as far as EU citizens are concerned.

Termination of treaties

As it relates to treaties, international law has two sources: customary international law and the Vienna Convention of the Law of Treaties (VCLT). The VCLT sought to codify the customary rules but differs in some respects. Some EU countries have not ratified the VCLT; nor has the EU, as the Convention is open to States only.

The starting point in the VCLT is that the validity of a treaty or a State’s consent to be bound by it can only be impeached under the VCLT. Termination, suspension, denunciation or withdrawal can only take place under the treaty or the VCLT. Other international law still applies between the parties even if the treaty no longer does.

Denouncing, withdrawing from or suspending a treaty (as provided for in that treaty, expressly or by implication) must apply to the whole treaty unless the treaty otherwise provides. Invalidating, terminating, withdrawing from or suspending a treaty as provided for in the VCLT must apply to the whole treaty, except (among other exceptions) if there is a ‘material breach’ of the treaty, or if the ground for termination etc relates to certain parts of the treaty and they are severable from the others and they were not an ‘essential basis’ of the consent to the treaty. A State loses its ‘right to invoke a ground for invalidating, terminating, withdrawing from or suspending the operation of a treaty’ if it agrees expressly that the treaty is valid or remains in force, or its conduct suggests the same.

The conclusion of a treaty can be invalid where a State’s consent to be bound was very obviously in violation of its internal law, if an error in a treaty was an ‘essential basis’ the consent to be bound, by fraud by another negotiating State, corruption of the State’s representative procured directly or indirectly by another negotiating State, or coercion (acts or threats against the State’s representative, or the threat or use of force against the State in violation of the UN Charter). A treaty is void if it conflicts with ‘a peremptory norm of general international law (“jus cogens”)’.  

States can terminate or withdraw from a treaty only in accordance with its provisions or consent of the parties. If a treaty does not provide for termination, denunciation or withdrawal, a State cannot denounce or withdraw from it unless either: ‘(a) it is established that the parties intended to admit the possibility of denunciation or withdrawal; or (b) a right of denunciation or withdrawal may be implied by the nature of the treaty.’ Twelve months’ notice to leave is required in that case.

As for suspension of a treaty, this is possible ‘in conformity with the provisions of the treaty’ or if all the parties consent. Either termination or suspension is possible in the event of a ‘material breach’ by one party, which ‘entitles’ the other party ‘to invoke the breach as a ground for terminating the treaty or suspending its operation in whole or in part’. The VCLT defines a ‘material breach’ of a treaty as ‘(a) a repudiation of the treaty not sanctioned by the present Convention; or (b) the violation of a provision essential to the accomplishment of the object or purpose of the treaty’. But all this is ‘without prejudice to any provision in the treaty applicable in the event of a breach’ and does ‘not apply to provisions relating to the protection of the human person contained in treaties of a humanitarian character, in particular to provisions prohibiting any form of reprisals against persons protected by such treaties’.

A party can also terminate or withdraw from a treaty due to the ‘impossibility’ of applying it if that ‘results from the permanent disappearance or destruction of an object indispensable for the execution of the treaty’, but this cannot be invoked if the impossibility was caused by the party which wants to escape its obligations. Termination, withdrawal or suspension could also follow a ‘fundamental change of circumstances’ since the treaty was concluded, if it was ‘not foreseen by the parties’, if the original circumstances were an ‘essential basis of the consent of the parties to be bound by the treaty’ and ‘the effect of the change is radically to transform the extent of obligations still to be performed under the treaty’. Again, this cannot be invoked if the change in circumstances was caused by the party wanting to end its obligations.

The VCLT also regulates the process of termination or other forms of ending a treaty. A party seeking to end a treaty must give the other party three months’ notice. It can then proceed as planned if there’s no objection. But if there is an objection, the parties must try to find a solution. This does not affect anything in force regarding dispute settlement between the parties, so it is obviously possible that either the EU or UK would invoke the dispute settlement provisions in the withdrawal agreement.

If there is no negotiated solution within 12 months from raising the objection, one party may ask the International Court of Justice to rule, or both can ‘agree to submit the dispute to arbitration’, or the conciliation process set up by the VCLT itself might apply. The process of termination etc must be in writing and communicated formally, and can be revoked at any time before it takes effect.

As for the consequences of termination etc, an invalid treaty is void and has not legal force. In case of termination, ‘[u]nless the treaty otherwise provides or the parties otherwise agree’, the parties have no further obligation to perform the treaty, but this ‘does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination’.

As for suspension, ‘[u]nless the treaty otherwise provides or the parties otherwise agree’, suspension means that the treaty does not apply ‘during the period of the suspension’ and ‘does not otherwise affect the legal relations between the parties established by the treaty’. The parties must ‘refrain from acts tending to obstruct the resumption of the operation of the treaty’. As noted already, however, the withdrawal agreement has specific provisions on suspension.

In general, the various references in the VCLT to suspension and termination of a treaty unless the treaty otherwise provides need to be read in light of the rules in the withdrawal agreement itself, as summarised in the dispute settlement section above. These rule out dealing with disputes otherwise than in accordance with the treaty, allow for suspension as a possible outcome of the dispute settlement process except for the citizens’ rights chapter, and make no mention of termination of the withdrawal agreement, referring instead to the ‘temporary’ nature of partial suspension or financial penalties. The only reference to termination of the withdrawal agreement is in the Irish protocol, which provides (in Article 18 of the protocol) for the unilateral termination of part of that protocol (not the whole withdrawal agreement) in the event that it lacks continued consent in Northern Ireland, following a particular detailed procedure in that protocol. One can therefore argue that termination of the entire withdrawal agreement in response to a breach of it is therefore ruled out by the agreement itself.

In the alternative, what happens if the EU or UK believe that it is still possible to terminate the entire withdrawal agreement on the grounds set out in the VCLT? Even if actions by one side are arguably a ‘material breach’ of the withdrawal agreement as defined by the VCLT, it’s important to remember that invoking that breach in order to terminate that treaty is an option: as pointed out at the outset, a breach of a treaty by one side does not automatically terminate or suspend that treaty.  So in the event, for instance, of a breach of the Irish protocol by the UK, the EU might judge that it would be unwise to invoke its right to terminate the withdrawal agreement, as that would (among other things) throw the rights of EU citizens in the UK under the proverbial bus.

What about the role of individuals in all this? More than you might think, at least on the EU side. The international law rules on termination of treaties have been applied by the CJEU in the context of cases brought by individuals. In Racke, the EEC (as it was then) terminated the EEC/Yugoslavia cooperation treaty immediately (rather than in accordance with the terms of that treaty) on grounds of a fundamental change in circumstances, when the Yugoslav war broke out. An importer of wine from Yugoslavia, being affected by the termination of the treaty, challenged the EEC’s decision in the German courts, which asked the CJEU if the EEC’s termination of the treaty was valid.

According to the CJEU, ‘even though the Vienna Convention does not bind either the Community or all its Member States, a series of its provisions, including Article 62 [on change in circumstances], reflect the rules of international law which lay down, subject to certain conditions, the principle that a change of circumstances may entail the lapse or suspension of a treaty.’ The International Court of Justice had ruled already that on this point, the VCLT ‘may in many respects be considered as a codification of existing customary law on the subject of the termination of a treaty relationship on account of change of circumstances’.

Next, the Court asserted that it had jurisdiction to rule on the validity of an EEC act in light of the rules of public international law.  Before it applied those rules, it insisted that the rules in the treaty which the importer sought to invoke had to confer rights on individuals. It found that they did, based on its usual test for ‘direct effect’ of an international treaty in EEC (now EU) law. (This test should easily be satisfied as regards the citizens’ rights provisions of the withdrawal agreement).

The Court then observed that international treaties concluded by the EEC (now EU) form an integral part of EU law, and that if the termination of the treaty were invalid, the company would still have rights regarding the import of Yugoslavian wines.  So the EU has to ‘respect international law in the exercise of its powers’ and ‘is therefore required to comply with the rules of customary international law when adopting a regulation suspending the trade concessions granted by, or by virtue of, an agreement which it has concluded with a non-member country’. On that basis ‘[i]t follows that the rules of customary international law concerning the termination and the suspension of treaty relations by reason of a fundamental change of circumstances are binding upon the Community institutions and form part of theCommunity legal order.’

Applying these rules, the Court noted that international law was based on compliance with treaties (the pacta sunt servanda principle), ‘which constitutes a fundamental principle of any legal order and, in particular, the international legal order. Applied to international law, that principle requires that every treaty be binding upon the parties to it and be performed by them in good faith (see Article 26 of the Vienna Convention).’ Its importance had been further underlined by case law of the International Court of Justice, ruling that 'the stability of treaty relations requires that the plea of fundamental change of circumstances be applied only in exceptional cases.

Individuals could therefore invoke ‘obligations deriving from rules of customary international law which govern the termination and suspension of treaty relations’ to challenge the EU’s termination of a treaty. (Note that the Court did not confine itself to the ‘fundamental change in circumstances’ rule here). However, since the rules in question were complex and imprecise, the Court limited its judicial review to whether ‘the Council made manifest errors of assessment concerning the conditions for applying those rules’. It decided that the civil war in Yugoslavia met the conditions to justify terminating the treaty.

As for application of the procedural rules for terminating treaties in the VCLT (ie sufficient notice and consultation), the CJEU thought that prior warnings of termination were sufficient, and that ‘[e]vven if such declarations do not satisfy the formal requirements laid down by’ the VCLT, ‘the specific procedural requirements there laid down do not form part of customary international law.’

The Court came back to these procedural requirements in the recent well-known judgment in Wightman (discussed here), on the issue of whether the UK could unilaterally revoke its notification to leave the EU. In the Court’s view, its various reasons for ruling that unilateral revocation was possible were ‘corroborated’ by the provisions of the VCLT, ‘which was taken into account in the preparatory work for the Treaty establishing a Constitution for Europe’ (which later became Article 50 TEU). So the ‘clear and unconditional’ possibility in the VCLT to revoke a notification of withdrawal from a treaty before it takes effect supported the view that the Article 50 notification could be revoked too.

How would this work in practice for the withdrawal agreement? If the EU terminated or suspended the agreement, anyone who argued that their rights conferred by the agreement (UK citizens in the EU, or traders with Northern Ireland, for instance) were affected as a result could bring a challenge to the EU’s decisions, arguing that they were in violation of public international law generally and/or the withdrawal agreement in particular. A direct challenge before the EU courts would likely lack standing, but a challenge via the national courts (as in Racke), which could request the CJEU to rule on the issue, probably would not. Challenges concerning the Brexit process and withdrawal agreement are hardly hypothetical, as we have seen over the last two years.

Even if suspension or termination is valid, there are specific issues relating to citizens’ rights. As we have seen, suspension of the agreement expressly cannot affect them. And while the VCLT provisions concerning retention of rights in the event of termination of a treaty, or the ban on reprisals in the event that a treaty of a ‘humanitarian character’ is terminated for a material breach, arguably do not literally cover those covered by the citizens’ rights rules, it could be argued that in conjunction with the EU law principle of legitimate expectations, such rights cannot be removed.

What about the UK side? Public international law rules do not form part of the domestic legal order. But there are domestic legal and political issues nonetheless. In the event that the government aims to breach or terminate the withdrawal agreement by primary legislation, the House of Lords can delay it by up to a year. It rarely uses such powers, but it could be argued that there’s a ‘reverse Salisbury convention’ justifying it doing so when a government explicitly aims to reverse a commitment in its election manifesto – throwing its own ‘oven-ready deal’ in the bin. If the government aims to breach or terminate the withdrawal agreement by secondary legislation or executive action, there could be legal challenges on the basis that the secondary legislation is ultra vires the Withdrawal Agreement Act, or that executive action cannot simply suspend rights which are guaranteed by an Act of Parliament – leading to litigation which we might dub ‘Miller III’. But this brings us back to the government’s reported intention to nobble the judges.  

Barnard & Peers: chapter 27
Photo credit:

Tuesday, 18 February 2020

Regulatory divergence post Brexit: Copyright law as an indicator for what is to come

Martin Kretschmer, Professor of Intellectual Property Law (CREATe Centre, University of Glasgow)

Here we have it. The first instance of regulatory divergence. The UK is leaving the European Union, and already the rules of the single market are starting to break.

In response to a parliamentary question by Labour MP Jo Stevens, then-Intellectual Property Minister Chris Skidmore said on 21 January that the UK Government had no intention of implementing the most recent EU Copyright Directive, for which the UK Government had voted in the EU Council in spring 2019. There was significant dissent among EU Member States and the Directive would not have been adopted without the UK’s support.

Does this matter? Copyright law may not be what people expected to be the first post-Brexit regulatory fault line. The public debate has been dominated by standards for labour, the environment, public subsidies and taxation, where the EU’s concern is regulatory dumping. Yet Brexiteers have said many times that leaving the EU only makes sense if it leads to the UK becoming a more attractive destination for business. This means entering into a process of regulatory competition with its closest neighbouring market. So it is advisable to pay close attention to how this negotiation will play out. And copyright law is where the choices start.

Let’s consider the parliamentary exchange in the House of Commons in full:

On 16 January 2020, a written question was asked by Jo Stevens, Labour MP for Cardiff, headed “Copyright: EU Action” (4371):

“To ask the Secretary of State for Business, Energy and Industrial Strategy, what plans the Government has to bring forward legislative proposals to implement the EU Copyright Directive in UK law.”

Chris Skidmore, then Minister of State for Universities, Science, Research and Innovation (which includes responsibility for intellectual property) answered on 21 January 2020:

“The deadline for implementing the EU Copyright Directive is 7 June 2021. The United Kingdom will leave the European Union on 31 January 2020 and the Implementation Period will end on 31 December 2020. The Government has committed not to extend the Implementation Period. Therefore, the United Kingdom will not be required to implement the Directive, and the Government has no plans to do so. Any future changes to the UK copyright framework will be considered as part of the usual domestic policy process.”

Which future domestic policies may diverge from the aims of the Directive? The Directive on Copyright in the Digital Single Market contains three different groups of measures.

The first group harmonises a number of copyright exceptions affecting cross-border uses. New provisions also make it easier to use out-of-commerce works (Article 8) and ensure that works of visual art that have reached the end of their copyright term remain in the public domain (Article 14). This first group of provisions modestly benefits cultural heritage, educational and research institutions.

The second group of interventions seeks to improve the contractual position of authors and performers. A general fair remuneration principle is established, and greater transparency of royalty statements encouraged. Article 22 also gives authors and performers a new right to revoke a licence or transfer of rights where there is a lack of exploitation. These new contractual regulations could be considered a challenge to common law principles of freedom of contract, but they lack teeth. While they have been widely welcomed by creators, routes to enforcement remain unclear. Again, there is no obvious alternative policy path.  

The third group of measures is much more controversial. They are introduced in the Directive under the innocuous sounding label of “Measures to achieve a well-functioning marketplace for copyright”. The headline intervention is a change to the liability regime of platforms that host user-uploaded content. Article 17 (formerly 13) creates a new category of ‘online content sharing service provider’ that will no longer benefit from the ‘safe harbour’ of the e-Commerce Directive, a core piece of internet legislation adopted in the year 2000. The e-Commerce Directive exempts platforms from liability for unlawful content found on their services (if removed “expeditiously” following notice).

In the polarised debate of the Copyright Directive, Article 17 was pushed as a decisive industrial policy measure that would enable the music industry to improve licensing deals and revenue sharing offered by Google’s YouTube service. In an effective trope coined by the UK music industry, Article 17 was to close the “value gap” between European creators and US technology giants. Opponents characterised the measure as a “censorship law” that would lead to the default use of upload filters and the disappearance of “memes” (because they re-use identifiable copyrighted materials).

A typical exchange between the two sides of the debate can be found in these letters published by the Financial Times (paywalled) during the final stages of the legislative process: Julia Reda: State-of-the-art copyright filters threaten freedom of expression; Michael Grade: Copyright reform will put an end to this freeloading. Recent evaluations of the Copyright Directive can be found here and here.

Boris Johnson (then out of government) had tweeted near the end phase of the European legislative process on 27 March 2019: “The EU’s new copyright law is terrible for the internet. It’s a classic EU law to help the rich and powerful, and we should not apply it. It is a good example of how we can take back control”.

On the balance of evidence analysed by independent experts (to which I contributed), the Prime Minister seems to be correct. The industrial policy measures of the Copyright Directive will have numerous unintended consequences beyond the music sector, and will make market entry and user-led innovation harder.

So, has the UK suddenly seen the light? Does evidence matter? Are we observing the emergence of a coherent policy addressing the creative industries?

There is a possibility that the UK acted cynically, supporting the Directive in the European policy making process in the anticipation that it would damage the economy of the EU’s digital single market. This suspicion is implied by the outrage felt towards the UK’s policy U-turn last week. More likely, the UK civil service just kept their heads down during the copyright negotiations. They may not have wanted to draw attention at a moment of sensitivity over the Withdrawal Agreement. And perhaps the UK’s politicians were distracted. But this position will not do for much longer.

Post Brexit, regulatory divergence on copyright will not simply be a matter of domestic policy choice, as implied by the ministerial answer. Critically, it will depend on what new trade arrangements look like. Keeping a safe harbour for content sharing platforms in place may attract tech firms to set up in the UK. Yet there is also an agenda targeting the major digital platforms. The UK government is already committing to impose a “duty of care” liability (Queen’s Speech of 19 December: “My Ministers will develop legislation to improve internet safety for all [Online Harms Bill].” The government also says it will continue to pursue a Digital Services tax.

It is already clear that these platform measures cannot be insulated from wider Free Trade Agreements (FTAs) sought with both the EU and the US. In addition, looking at past FTAs negotiated by the US, there is a track record of taking aggressive intellectual property positions. For example, in 2004 Australia was unable to shelter its drug price control scheme (Pharmaceutical Benefits Scheme PBS) from significant change, and conceded increased intellectual property standards.

When studying the UK’s options as they affect culture and the creative industries, independent evidence on raising or decreasing obligations of platforms (with or without intellectual property dimensions) will be critical. There is an urgent need to develop a more coherent framework as trade negotiations begin in earnest. The AHRC funded Creative Industries Policy & Evidence Centre (PEC) is already studying the UK’s international competitive position. In this context, Prof. Philip Schlesinger and I are in the process of mapping the regulatory landscape for online platforms.

The legitimacy of governments is increasingly in doubt. The Brexit process itself is a challenge to established procedural principles that lend legitimacy to a ruling power. Legitimacy requires that a government can explain the reasons for its actions.

The UK Government needs to be held to this standard. We need to know on what basis, and for what aims and purposes, the UK intends to regulate contested norms, such as the liability of platforms under copyright law. Why does the UK wish to diverge? Just to signal that it is taking a different stance? Or is there actually a game-plan? Answers are needed before we enter into trade negotiations that will then fundamentally shape “domestic choices”.

Barnard & Peers: chapter 27
Photo credit: Gero Nagel, via Wikicommons