“Global Britain” Adopts the EU’s Normative Approach to New Trade Agreements

 By Sterre van Campen and Rebecca Poort

As for now, the United Kingdom will leave the European Union on 31 October 2019, unless a withdrawal agreement is ratified before this date. The UK aims to sign “continuity” agreements with third countries to replace existing agreements with the EU before Brexit to avoid disruptions in trade flows. With smaller market leverage and under political pressure to deliver results, there would be an incentive for the UK to adopt an approach that is more lenient than the EU’s in its negotiations of post-Brexit trade agreements. There have been reports of requests from non-EU trade partners for the UK to lower its human rights standards and to soften its food standards once it is out of the EU. However, there are indications that the UK will stick to a normative approach comparable to the EU’s when it comes to development cooperation and environmental standards, as can be seen in the UK’s first continuity agreement with a group of Eastern and Southern African States,. In this post, we argue that despite the pressures, the UK does not diverge from the normative approach that the EU takes in its post-Brexit trade agreements.

‘Rolling over’ Trade Agreements post-Brexit

With Brexit looming, the UK is in the course of ‘rolling over’ existing trade agreements between the EU and third countries. The UK has thus far managed to agree on deals with relatively few states. As of April 2019, the UK has signed nine continuity trade agreements to replace the 36 EU trade agreements with external partners. One of these is the Economic Partnership Agreement (EPA) with the Eastern and Southern Africa (ESA) countries, which comprise the Comoros, Madagascar, Mauritius, the Seychelles, Zambia, and Zimbabwe. This EPA, which aims to replace the EPA between the EU and ESA, was claimed by Theresa May to be the first secured post-Brexit trade deal. The agreement has not yet been ratified by the UK nor is there an official version with signatures of the parties attached. As it would be the first such continuity agreement with developing countries, the EPA provides an opportunity to examine the UK’s normative approach to post-Brexit trade relations.

Status Quo Ante Brexit

The EU has an interim EPA with ESA countries, which has been provisionally applied since May 2012. The EU-ESA EPA has a relatively broad scope. The general objectives of the EPA include contributing to the reduction of poverty “through the establishment of a strengthened and strategic trade and development partnership consistent with the objective of sustainable development” and fostering a gradual integration of the ESA states in the world economy (Article 2). It aims to reduce barriers to trade, including EU duties and quotas for imports, and to increase exports to the ESA countries as stipulated in the specific objectives of its Article 3. Moreover, the agreement includes rules on development cooperation between the parties and sets out the mechanism for the settlement of disputes in its Chapter VI. Furthermore, the agreement includes a so-called rendez-vous clause in Article 53, which provides for the continuity of negotiations in a number of areas provided, including “trade, environment and sustainable development” and “development issues”.

Continuity Agreement or New Agreement?

The UK’s continuity EPA aims to maintain the EU agreement, recalling the success of the EU-ESA EPA. However, the UK-ESA EPA does not “incorporate” provisions from the EPA between the EU and ESA, as is the case for the agreement between the UK and the Palestinian Authority, for example, where direct reference is made to the EU agreement. The UK-ESA EPA instead reproduces provisions, as can be seen in Article 1 for instance, where the general objectives are identical to those in the EU-ESA EPA. Other provisions concerned with reduction, or removal, of tariffs for trade in goods and services are also duplicated from the EU-ESA EPA. In particular, the continuity EPA aims to guarantee the UK’s development support and to enhance trade, as well as investment in the same way as the EU-ESA EPA. The agreement allows for a reduction, or removal, of tariffs for trade in goods and services. Other trade obstacles, such as quantitative restrictions, are to be removed as well. Additionally, non-trade clauses have been included in this agreement, such as promoting sustainable development. The agreement stresses development and economic cooperation to promote sustained growth for the ESA nations by addressing structural transformation and competitiveness of their economies. Areas for further negotiations are also incorporated, such as agriculture and other development issues.

The tariffs on goods, included in the annexes of the agreement, are equal to those agreed upon in the EU-ESA agreement. The provisions concerning the rules of origin have been altered to reflect the bilateral trade flows observed in recent years and taking into account that the UK is a smaller market than the EU28. Thus, instead of incorporating provisions by reference, the UK-ESA agreement aims to ensure continuity by directly reproducing many of the provisions of the EU-ESA agreement.

The UK’s Normative Approach

A point of concern with regard to the UK’s post-Brexit trade agreements is whether the proclaimed “Global Britain” will follow the same approach as the EU, or whether it would loosen this normative position in order to extract better terms. Looking at the EPA with the ESA countries as a case study, one can see that there are only few changes in the continuity agreement compared to the original EU agreement. Development cooperation still constitutes one of the core objectives of the agreement. Additionally, the provisions included in the EU-ESA EPA concerning sustainable development are incorporated as well into the UK-ESA Agreement. Furthermore, the chapter on natural resources and environment has also been reproduced.  Similar to the EU-ESA EPA, the importance of sustainable management of both natural resources and the environment is emphasised. In addition, there is a specific focus on fisheries in both agreements, which takes into account both environmental and economic aspects. The UK continues to commit to contributing to the reduction of poverty. Hence, the UK does not diverge from the EU’s approach with regard to emphasising development cooperation and environmental protection in this trade agreement.

There were certain policy incentives for such a divergence. For instance, it might have been easier for the UK to conclude new agreements if it would have been more lenient with regard to environmental standards. This would have helped to improve its record in signing new trade deals around the world before even leaving the EU. Nonetheless, the UK continued to emphasize normative standards in the areas of development and environment, vindicating to some extent Michael Gove’s claims for a “Green Brexit”, though the UK does not go beyond the EU;s standards here; it merely maintains them. Nonetheless, the UK’s post-Brexit trade policy might be greener than was initially expected.

A Future Outlook on Global Britain’s Normative Approach

The UK has attempted to replicate the agreement of the EU and the ESA states in order to preserve trade relations after Brexit. Contrary to what may have been expected, the UK did not diverge from the EU’s normative approach in important respects. The EU’s trade strategy is mainly enshrined in the New European Consensus on Development – Our world, our dignity, our future. When assessing the EU’s external trade agenda as set out in this policy document, it can be concluded that the approach the UK is currently taking is fairly similar. The new EPA continues to highlight development cooperation and environmental protection.

Looking to the future, the question is whether “Global Britain” will retain this normative approach, pursuing similar goals to those of the EU, or whether continuity agreements such as the EPA with the ESA countries in its current form only represent cases of temporary path dependency. This EPA could be seen as a stopgap that was rushed through, as there was increased time pressure due to the then impending Brexit date. The lack of time for negotiations might have caused the UK to rely on the previously existing provisions of the EU-ESA EPA, as time for negotiations was expected to be limited. It remains to be seen whether the UK will continue to pursue this kind of normative trade policy for future trade negotiations. It might stick with this approach or change its stance when time pressure is not a factor.

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  1. Pingback: Brexit Highlights 20 – 26 May 2019 | Middle Temple Library Blog

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