Caribbean Trade Law and Development

Category: Trade

  • 5 Main Points from PM May’s Davos Speech

    5 Main Points from PM May’s Davos Speech

    Photo source: Pixabay

    Alicia Nicholls

    At the World Economic Forum (WEF) Annual Meeting 2017 currently underway in Davos, Switzerland this week, Prime Minister of the United Kingdom, Theresa May, presented what may be considered a follow-up to the major Brexit speech she had given in London earlier this week in which she had outlined her 12-point Brexit plan.

    It was the Prime Minister’s first appearance at Davos in her capacity as Prime Minister of the UK and she reiterated many of the main points she had made in her speech earlier this week, focusing most of her attention on Brexit and outlining her plans for building a “truly Global Britain”.

    Below are some of the main points from her Davos Speech:

    (1) Brexit is not a rejection of Europe

    Mrs. May reiterated that the Brexit vote was not a repudiation by Britain of the EU but “simply a vote to restore, as we see it, our parliamentary democracy and national self-determination”. She further explained Britain’s desire to pursue a “bold and ambitious Free Trade Agreement between the UK and the European Union” while also being free to negotiate new trade deals with both longstanding and new allies around the world.

    (2) UK to be leader of free markets and free trade

    To this extent, she expressed the intention for the UK to “step up to a new leadership role as the strongest and most forceful advocate for business, free markets and free trade anywhere in the world”. Mrs. May noted that discussions on future trade ties have already begun with a number of countries, while others have already signalled their interest.

    (3) She will build a “Global Britain”

    Aiming to dispel the notion that the UK was turning “inward”,  Mrs. May emphasised her desire to build a “Global Britain” which would be in control of its own destiny once again and would help to underpin and strengthen the multilateral rules-based system. She reiterated that she believes strongly in a rules based global order and that “we must continue to promote international cooperation wherever we can”.

    Although Mrs. May has  previously highlighted the need to take control of the UK’s immigration policy, she did mention in this speech that the UK derives “much of our strength from our diversity”, emphasing that “we are a multi-racial, multi-ethnic, multi-faith democracy, and we’re proud of it”.

    It is here that her rhetorical tone is strikingly different from that of her counterpart across the pond, incoming US President Donald Trump who has not only expressed his disdain for both the United Nations but called the World Trade Organisation a disaster. Moreover, Mr. Trump has been consistently anti-immigrant, seeing immigration as a threat rather than a strength.

    (4) Britain has embarked on “an ambitious programme of economic and social reform”

    Mrs. May noted that the UK has embarked on what she termed “an ambitious programme of economic and social reform”. The issues of growing income equality and popular discontent with trade and globalisation have been a consistent theme in the Davos discussions, which is not surprising given the political ramifications which these issues have already delivered.

    In tackling these issues Mrs. May outlined what she believed should be the roles of both governments and businesses and that the status quo could not remain. She noted the need for leaders to work together to shape new policies and approaches in order to deliver for all people in their respective countries.

    Interestingly, she noted that the role of governments was not to just “get out of the way” as has been the mantra of neoliberal economic theory, but to “step up to a new, active role that backs businesses and ensures more people in all corners of the country share in the benefits of its success”. Turning to businesses, she noted that “it means doing even more to spread those benefits to more people”, including paying their far share of tax and recognising their obligations to their employees, inter alia.

    (5) Support for the Compact for Responsive and Responsible Leadership

    To this effect, she expressed her support for the World Economic Forum’s new “Compact for Responsive and Responsible Leadership” initiative proposed for signature to all participants of the Annual Meeting 2017. This initiative aims to “create a corporate governance framework with a focus on the long-term sustainability of corporations and the long-term goals of society”.

    The full text of her speech may be read here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

     

  • TTIP: Joint US-EU State of Play Report Published

    TTIP: Joint US-EU State of Play Report Published

    Source: Pixabay

    Alicia Nicholls

    “The EU and the United States have made considerable progress in negotiating a Transatlantic Trade and Investment Partnership (TTIP) agreement since the negotiations were launched in July 2013”. This is the assessment according to a Joint Report released today January 17, 2016 by EU Trade Commissioner, Cecilia Malmström and outgoing United States Trade Representative (USTR), Michael Froman, which outlined the state of play of negotiations on the TTIP to date.

    In 2013 the US and EU set out to conclude an “ambitious, balanced, comprehensive, and high-standard agreement”. Since then fifteen negotiating rounds have been held between July 2013 and October 2016. The future of the TTIP is currently uncertain given incoming US President Donald Trump’s seeming aversion to mega free trade agreements which he argues could undermine American workers and manufacturing, and his stated preference for bilaterals. While he has railed against the concluded but not yet ratified 12-country Trans-Pacific Partnership (TPP), President-elect Trump has said comparatively little on TTIP and the agreement’s future appears uncertain. It is worth noting though that similar to TPP there has been a significant popular backlash against TTIP. Another spanner in the works is the impending exit of the UK from the EU. President-elect Trump has already indicated an interest in pursuing a US-UK free trade agreement post-Brexit.

    The Joint report reiterated the perceived expected benefits to accrue from TTIP, including increased trade and investment flows, promotion of higher standards in the global economy, and strengthen an already strong trans-Atlantic partnership.

    In explaining the current state of play, the Joint Report noted some of the things on which the EU and US have found common ground:

    • Exchanged offers to eliminate duties on 97% of tariff lines
    • Identified steps to reduce unnecessarily burdensome requirements and delays at borders
    • TTIP must include strong obligations to protect the environment and foundamental labour rights.
    • Negotiated a dedicated chapter focused on small medium-sized enterprises (SMEs)

    However, the report did note that there was still significant work to resolve differences in several important areas. A few of the several areas identified were:

    • how to treat the most sensitive tariff lines on both sides
    • how to expand and lock in market access in key services sectors
    • how to reconcile differences on sanitary and phytosanitary measures; how to encourage the recognition of qualifications to facilitate licensing of experienced professionals
    • how to improve access to each other’s government procurement markets
    • how best to achieve our shared objective of providing strong investor protection while preserving the right of governments to regulate

    In perhaps a last ditch to make the case for TTIP before the Trump administration assumes office on Friday, the report expressed the view that political will and continued engagement by both sides could lead to a successful outcome.

    To this effect, EU Commission’s press release quotes Commissioner Malmström as stating “We have made considerable, tangible progress, as this summary demonstrates. I look forward to engaging with the incoming US administration on the future of transatlantic trade relations.“

    The full report may be read here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • UK Supreme Court to deliver ruling in Article 50 Brexit Appeal next Tuesday

    UK Supreme Court to deliver ruling in Article 50 Brexit Appeal next Tuesday

    Alicia Nicholls

    Mark the date Tuesday, January 24th at 9:30 am on your calendars! That is the date on which the United Kingdom’s highest court will deliver its highly anticipated judgment in the appellate case of R (on the application of Miller and another) (Respondents) v Secretary of State for Exiting the European Union (Appellant), known more familiarly as the Article 50 Brexit Appeal. The Supreme Court made this announcement via its official Twitter account today, a day after UK Prime Minister Theresa May laid out her 12-point Brexit strategy.

    This case is one of the most consequential constitutional cases in recent UK history. The legal question before the Supreme Court is whether the Government has the power to give notice pursuant to Article 50 of the Treaty on European Union (Lisbon Treaty) of the UK’s intention to withdraw from the EU, without an authorising Act of Parliament. Or put more simply, is it the executive or the legislature which has the power to decide whether Article 50 is to be triggered. While some Brexiteers have seen the case as an attempt to delay or derail the “inevitable” (i.e. the UK’s leaving of the EU), the Court is not being asked to consider the more political question of whether the UK should leave the EU.

    The genesis of this case was a legal challenge brought by investment fund manager Gina Miller and hairdresser, Deir Dos Santos in the High Court against Prime Minister May’s assertion that the Government could use its prerogative powers to make the Article 50 notification without first seeking parliamentary approval. Ms Miller argued that due to the principle of parliamentary sovereignty, a crux of UK constitutional law, only the parliament could make such a determination. Relying primarily on the principle of parliamentary sovereignty, the High Court in its October ruling in R (Miller) v Secretary of State for Exiting the European Union held that the Government did not have the power under the Royal Prerogative to make the Article 50 notification. The Government swiftly appealed.

    In a rare sitting of all eleven justices on the bench, the UK Supreme Court held a four-day (December 4-8) hearing to consider the Government’s appeal against the High Court ruling. The Court’s ruling will be final.

    In her major speech on Tuesday before the announcement was made, Mrs. May stuck to her end of March deadline for making the Article 50 notification. However, the feasibility of that deadline will depend on whether the Supreme Court upholds or overturns the High Court’s ruling. If the Supreme Court dismisses the Government’s appeal, a bill would have to be laid and debated in Parliament. Depending on the length and robustness of debate, it may delay the March 2017 deadline Mrs May has insisted upon. The Government is likely to draft a bill which is as simple as possible to reduce the length of time for debate or for amendments.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • Why PM May’s “Hard Brexit” Choice is no surprise

    Why PM May’s “Hard Brexit” Choice is no surprise

    Alicia Nicholls

    In a much anticipated speech delivered at Lancaster House on Tuesday, Prime Minister of the United Kingdom, Mrs. Theresa May, confirmed speculation that the UK’s membership of the European Single Market was off the table, an option which has been colloquially dubbed a “hard” Brexit. The news may be dismaying (no pun intended) to some who preferred a “soft” Brexit (remaining in the single market). However, it is not unexpected given the main reasons why 52% of Britons voted in favour of leaving the EU in the first place, inter alia, stemming the tide of immigration and getting away from the “intrusiveness” of Brussels.

    In a speech that was both conciliatory but also declarative, Mrs. May said as much as she succinctly outlined the reasons for the UK’s decision. It should be noted that while serving as Home Secretary, Mrs. May was part of the “Remain” camp during the Brexit campaign. However, during her bid to assume the office of Prime Minister, she  strongly and famously stated that “Brexit means Brexit“. Among the reasons enumerated by Mrs. May include Britain’s “profoundly internationalist” history and culture and the belief that EU membership has come at the expense of the UK’s external trade relations. To this effect, she noted that trade as a percent of UK GDP (an indicator of a country’s trade openness) had stagnated.

    She went further by noting the difference in political traditions between the UK and EU, including the incongruity between the UK constitutional principle of parliamentary sovereignty and the power of supranational institutions in Brussels to make laws for the UK, and the inability to hold those institutions accountable. While stressing that she did not wish to see a disintegration of the EU, she ultimately argued that there was need for greater flexibility by the EU if it is to succeed.

    12-point Brexit Plan

    In her biggest speech since coming to 10 Downing Street, Mrs. May sought to quell criticisms over the lack of clarity of her Brexit strategy by outlining a 12-point plan which would guide the UK’s Brexit negotiations, and with the overarching goal of fostering “a new, positive and constructive partnership” between the UK and the EU.

    Mrs. May, therefore, ruled out membership of the Single Market, citing instead her preference for a comprehensive free trade agreement (FTA) with the remaining 27 countries of the EU.Five main models of arrangement have been proffered in the literature but Mrs. May has strongly stated that she wants a model unique to Britain.

    She has stated that the UK would not have to contribute to the EU budget but noted she was prepared to make contributions if there are any specific European programmes in which the UK may wish to participate.

    More confusingly, however, was her statement that she wanted to remain a partial member of the EU Customs Union (EUCU), yet still control the UK’s trade policy by not being bound by the common custom tariff or the EU’s Common Commercial Policy. To my mind, this is at cross-purposes. There is, of course, precedent in the EU of countries being in a customs union relationship with the EU, while not being EU members, such as Turkey, San Marino and Andorra  who apply the CET on only certain goods. However, the essential element which differentiates a customs union from an FTA is that parties to a customs union apply a common external tariff (called the Common Customs Tariff in the EU). I am at pains to see how the UK can be a member of the EUCU without being bound by the CET to some extent. In such a case, it would be best to simply just negotiate an FTA.

    More Outward Looking Britain

    Besides outlining her vision for a future relationship with the EU, Mrs. May also elaborated that she wanted to build “a truly global Britain” and significantly expand its trade with the world’s fastest growing export markets, as well as have its own tariff schedules in the WTO. As an EU member, the UK was bound by the Common Commercial Policy and was unable to enter into third party trade negotiations.

    The outward looking Post-Brexit UK is good news for Caribbean countries. As I noted in previous articles, countries of CARIFORUM (countries of the Caribbean Community plus the Dominican Republic) currently enjoy preferential access to the UK market under the CARIFORUM-EU Economic Partnership Agreement (EPA). Once the UK leaves the EU, it will no longer be bound under the EPA and Caribbean countries will no longer have preferential access to the UK market. Since the UK is a major trading partner for the region and the region’s largest in Europe, it is within the region’s interest to negotiate some form of WTO-compatible preferential agreement with the UK post-Brexit, even though admittingly the region would likely be at the back of the queue.

    On this note, she highlighted her newly created Department of International Trade (headed by Mr. Liam Fox) and mentioned the large queue of countries eager to negotiate an agreement with post-Brexit UK, including the US under incoming President Donald Trump. It is worth noting that recently the Dominican Republic indicated its interest in an FTA with the UK.

    Deadline and Preparedness to walk away empty-ended

    Of interest is that Mrs. May has stuck to her previously stated end of March deadline for making the Article 50 notification under the Lisbon Treaty (which is the only way the formal process of withdrawing from the EU can begin). The UK Supreme Court is set to render its judgment in the appeal on whether parliament or the executive branch has the power to decide to make the Article 50 notification. Depending on the ruling, Mrs. May’s timeline may not be realistic. Mrs. May has called for a phased-in approach to the withdrawal and has also reiterated that Parliament would have a vote on the final withdrawal agreement.

    Highlighting that a punitive approach by the EU would be “an act of calamitous self-harm for the countries of Europe”, Mrs. May has indicated that she is prepared to walk away with no agreement rather than a bad one.

    Reaction in Europe to Mrs. May’s speech has been mixed as this Telegraph article notes.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.