Brexit, rights of access to EU trade deals and the importance of an asterisk
Article 129 (1) of the EU-UK Withdrawal Agreement essentially confirms that during the transition period extending from 11pm (UK time) on 31 January 2020 to 11pm (UK time) on 31 December 2020 will continue to be bound by international trade agreements concluded by the EU prior to and operational at the time of the commencement of the transition period.
An asterisked footnote to this provision (which appears in the official text) states:-
"*The Union [ie the EU] will notify the other parties to these agreements that during the transition period [the UK] is to be treated as a Member State for the purposes of these agreements."
Much turns on this asterisk at the present time because, as reported in The Times of 27 January 2020, UK businesses (particularly those with goods in international transit at the time of Brexit, which coincides with the commencement of the transition period) have been expressing concern as to whether third countries will continue to recognise the UK as if it were an EU member state for the purposes of international trade agreements, even if notified by the EU to that effect. This affects such matters as preferential trading terms and tariffs covered by such international trade agreements.
Under English law (and the same may apply under other legal systems), an agreement is not normally binding upon a third party without its consent and the concern is that the provisions of the Withdrawal Agreement dealing with the transition period providing for the UK to be treated as if it were an EU Member State for the duration of that period might not be accepted by all third countries who have international trade agreements with the EU.
Adam Marshall, director-general of the British Chambers of Commerce, is reported as saying that businesses "were still asking whether there are any immediate changes they will face when trading with third countries as the UK moves into the transition period".
In this context, Pauline Bastidon, head of European policy at the UK Freight Trade Association, is reported as saying that companies already had goods at sea "heading for Asia and other regions of the world" scheduled to arrive at their destinations during the post-Brexit transition period and that "it is of critical importance for them to know how these goods will be treated when arriving at destination".
It is to be hoped that there will be no problem in practice but, like the Millennium Bug (for those of us who remember what that was!), the economic consequences of there being such a problem could be pretty dire, at least for the parties involved.
For lawyers, there could be interesting questions of international trade law and international contracts as to who is responsible for what, not to mention the political consequences of such a problem arising. Their clients, however, would be most unlikely to see it that way.
The EU apparently has some 40 trade deals with some 70 countries and, therefore, this is an issue which certainly needs to be resolved.
By an announcement dated 29th January 2020 , the UK Government has now confirmed that it will be pro-active in liaising with third countries to ensure where necessary that the UK continues to be recognised as if it were an EU Member State for the purposes of such international trade agreements during the transition period.
