British Influence, a pro-EU think-tank, is launching judicial review proceedings into the government’s position on whether a withdrawal from the EU would also mean exit from the single market. The organisation wishes to challenge No 10’s stance that membership of the EEA ends automatically with withdrawal from the EU.
The EEA was formed in 1994 to extend the EU’s (then the European Community’s) internal market to countries in the European Free Trade Area (EFTA). The EEA is therefore a distinct entity to the EU, which implements EU legislation through EFTA bodies and a ‘Joint Parliamentary Committee’. Additionally, not all sectors of the internal market are binding on EEA members and nor are all policies under the EU treaties. These areas include the common agricultural policy, the customs union, the common trade policy, the common foreign and security policy, the field of criminal justice and home affairs and economic and monetary union.
Article 127 of the European Economic Area Agreement provides that:
‘Each Contracting Party may withdraw from this Agreement provided it gives at least twelve months' notice in writing to the other Contracting Parties.
Immediately after the notification of the intended withdrawal, the other Contracting Parties shall convene a diplomatic conference in order to envisage the necessary modifications to bring to the Agreement.’
This is an exit mechanism separate from the Lisbon Treaty’s Article 50 procedure. The Government’s position is that ‘as the UK is party to the EEA Agreement only in its capacity as an EU Member State, once we leave the European Union we will automatically cease to be a member of the EEA’. Article 126 lends support to this because it provides that the EEA Agreement applies to the territories to which the Treaty of Rome applied and those of the three EFTA members. Conversely, however, the contracting parties are the ‘European Community’ and the respective member states including the United Kingdom are expressly identified.
The international law question, therefore, is: how do the Lisbon Treaty and the EEA Agreement interact with each other? Does utilising the exit mechanism under the former obviate the need for using the Article 127 procedure under the latter? It can be argued that the fact that there is an express procedure for withdrawal from treaty obligations means that the UK would not automatically leave the EEA just because it ceased to be a member of the EU. This is because, as Article 56 of the Vienna Convention on the Law of Treaties makes clear, a treaty containing no provision regarding termination, denunciation or withdrawal is not subject to denunciation or withdrawal unless it is shown that the parties intended to admit the possibility of withdrawal or the right of this may be implied by the nature of the treaty. Conversely, therefore, where there is a procedure it has to be followed.
It is, at this stage unclear what executive act any potential judicial review application will attach to. If it is right, however, that leaving the EU does not mean automatic departure from the EEA, a transitional arrangement permitting undisrupted single market access has just become a lot more likely. In practical terms, if notice were given under Article 127, that would necessarily trigger the exit mechanism from the single market but it would also be susceptible to challenge and, therefore, delay, much like the government's Brexit strategy.
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