Caribbean Trade Law and Development

Category: United Kingdom

  • Theresa May’s Resignation: What are the implications?

    Theresa May’s Resignation: What are the implications?

    Renaldo Weekes, Guest Contributor

    In 2016, the United Kingdom (UK) held the now famous ‘The United Kingdom European Union (EU) Membership referendum’ in which it voted to leave the EU. Due to then-Prime Minister David Cameron’s resignation over the result of the referendum, Theresa May became the Conservative party leader and concomitantly, Prime Minister of the United Kingdom of Great Britain and Northern Ireland. What followed was a tumultuous few years as Mrs. May tried to negotiate a deal that would satiate the country and the House of Commons.

    As she came to realise, however, this was no easy task. Disagreements over whether there should be a clean break from the EU with no deal, trading on World Trade Organization (WTO) rules, or a deal that would tie the UK to the EU in some form ensued. When a deal was finally crafted, Members of Parliament (MPs) from all across the Commons, including those in May’s own Conservative party, showed their displeasure for it as they rejected it three times. Though she tried to secure some changes, the EU effectively ruled that out. Fed up with the situation, many of her cabinet members began to resign and many MPs started calling for her own resignation as well.

    Amidst of all this, Theresa May argued that her deal was the best deal they could get and that she would not resign. That, however, did not last long. In an effort to persuade the Commons to support her deal, she promised she would resign if they voted for it. That was not enough, however, and now she has finally announced on Friday, May 25, 2019, that she will resign as Conservative party leader on June 7 and subsequently, Prime Minister of the UK. All problems do not end with Theresa May, however. In fact, some new ones now arise. One must ask what Theresa May’s resignation means for the Brexit withdrawal deal and the United Kingdom’s trade policy with other countries.

    A New Prime Minister and a new deal?

    Theresa May’s resignation has sparked a competition for leadership of the Conservative party and the UK as a whole. This means that all conservative MPs who were dissatisfied with May’s handling of Brexit now have the chance to correct all of her wrongs. At first, it may seem as though the party may choose one of the many vocal, hardline Brexiteers who wish to see a no-deal scenario, such as former Foreign Secretary Boris Johnson, to become the next Prime Minister since those hardliners are often credited as obstructing the passing of May’s deal. However, we must not forget that the Conservative Tory party is also made up of persons who wish to have a close relationship with the EU or even to remain in the Union. Those varying stances have all played a part in why May’s deal has been rejected. They all agreed on what they didn’t want but must now agree on what they want. Some Tory MPs have publicly said that will oppose the selection of someone like Mr. Johnson as his plans for a no-deal Brexit are too reckless.

    Let us consider a scenario where a no-deal supporter became the Prime Minister. Presumably, he may just rip up the deal and choose to exit the EU on WTO terms. This is next to impossible, however, as the House of Commons has already rejected a no-deal scenario under Theresa May. It is far less likely that those opposed to a no-deal withdrawal will change their minds just because of a new face. Especially if that new face is acting more ideological than pragmatic. If a no-deal scenario were to succeed, it would create massive disruption to operations and supply of goods as many businesses have deep ties within the EU that help them to survive. There will be an eventual recovery but how long will that recovery take? Would it really be wise to risk financial stability for the sake of satisfying an ideological point?

    What about a deal-supporting Conservative? There are many MPs who want to leave the EU with a deal but they differ on what they want in the deal. Some want an arm’s length relationship in the deal while others want to be as close as possible to the Union with a customs union or what has been dubbed as the common market 2.0. Though those scenarios would be more preferable than a no-deal, the House has also rejected those through the series of indicative votes that it held in late March and early April. On the face of it, no matter what the new Prime Minister brings, it may suffer the same fate as May’s deal. Of note though, is the margin by which each indicative vote failed. In the second round of indicative votes, the customs union vote tabled by ‘europhile’ Tory Kenneth Clarke, lost by only 3 votes; the lowest margin. The new Prime Minister who knows how to play politics better than Theresa May may able to swing people to the customs union provided that it is his or her preferred option.

    Forgetting Brexit entirely?

    Other options such as holding a second referendum and revoking article 50 are also desired by some but that may not be the wisest thing to consider at this time. The public will perceive that the Government is holding a new referendum simply because the first one produced an undesired result. Revoking article 50 goes directly against what the people voted for. Avoiding Brexit may be the desired outcome for some, but the public upheaval that may arise through the methods of trying to stop it may not be worth it. Implementing these options with support from the House and the public will be quite laborious. 

    The EU’s role in the deal

    Amidst of all this, no matter what the new Prime Minister puts forward, he or she still has to deal with the EU. The EU has made clear that they will not change the current deal. There is no more room for tweaks or changes, especially relating to the contentious Irish backstop that seeks to prevent a hard border between Northern Ireland and the Republic of Ireland. If a new Prime Minster believes that he or she can sway the EU to remove the backstop or any other restrictive conditions then he or she is sorely mistaken. It will be especially difficult to renegotiate the deal so late into the timeline with someone who may be hostile toward the EU. By all means, however, the EU will welcome anyone willing to build its current relationship with the UK. It will be easier to renegotiate the deal in that regard. The EU will also still be wary of crafting any kind of deal considering that the House has effectively ruled out all options on the table.

    The United Kingdom’s Trade policy with other Countries

    It is quite clear that Brexit will shape who becomes the next Conservative leader and the next Prime Minister but there are other trade policy issues that exist beyond Brexit. With a change in leadership and subsequent change in team, other world leaders must now adapt to what could be a change in trade policy approach. There could be a new Prime Minister who is more of a hardliner as it relates to overall trade policy or someone who has a softer approach. This will be of special interest to leaders like United States (US) President Donald Trump who wishes to renegotiate the US’ trade deals with other world leaders that he considers as conciliatory parties. This may not be much of a big concern, however, as a change in leadership is normal as this happens whenever there is a general election.

    Additionally, a Conservative is a Conservative. There may be no real major policy changes for the country as a whole. The relationship between the UK and the EU is also one that is unlike other relationships the UK has and issues surrounding Brexit will be far more complex than normal trade relationships. Others may claim that the EU is being a bully as it is merely concerned for its own sustainability.

    Conclusion

    Considering that all surrounding factors remain the same, those being Parliament’s and the EU’s stubbornness, and the fact that practically speaking, there are no changes that can be made unless they seek to bring the UK and the EU closer together, the new Prime Minister has to be one that looks at the situation in a pragmatic way rather than ideological. He or she must also be able to play politics. Though the legal relationship is what really matters, people must be sold on the idea that this is the best possible deal rather than simply being told it is the best. Whoever the new Prime Minister is, one can only hope they can achieve these things and solve the current Brexit problem rather than exacerbate it or even create new ones. The Conservatives must realize that Britain’s future, Brexit and beyond, is in their hands.

    Renaldo Weekes is a holder of a BSc. (Sociology and Law) who observes international affairs from his humble, small island home. He has keen interest in how countries try to maneuver across the international political and legal stage. Read his other postings here.

  • Text of UK-CARIFORUM EPA Published

    Text of UK-CARIFORUM EPA Published

    Alicia Nicholls

    The text of the United Kingdom-CARIFORUM Economic Partnership Agreement (UK-CARIFORUM EPA) has finally been published online. Whether you are a trade policy nerd or simply a business person concerned about the continuity of trade preferences between the UK-CARIFORUM countries post-Brexit, you would be forgiven for anxiously awaiting the release of the text.

    Brexit Day (which was to have been March 29, 2019) has passed and the UK remains an EU member and no closer to any certainty regarding its future trading relationship with the EU-27 post-Brexit.  The UK government has requested a further extension to June 30, 2019 in hopes of getting British MPs to back the Draft Withdrawal Agreement which they rejected three times already.

    Brexit chaos aside, on March 22, 2019, it was announced that the UK and CARIFORUM countries had signed a trade continuity agreement called the UK-CARIFORUM Economic Partnership Agreement which would preserve the preferences between the UK and CARIFORUM currently under the CARIFORUM-EU EPA. The CARIFORUM-EU EPA has been provisionally applied since 2008.

    This means that CARIFORUM is one of the handful of trading partners with which the UK has managed to so far conclude trade continuity agreements. The UK is the most important trading partner in the EU for CARIFORUM countries and CARIFORUM leaders quickly recognised the need to ensure the continuity of trading conditions post-Brexit between the UK and CARIFORUM States.

    The UK-CARIFORUM EPA was signed by the UK and nine CARIFORUM States (Barbados, Belize, The Commonwealth of Dominica, Grenada, The Republic of Guyana, Jamaica, St. Christopher & Nevis, St Lucia and St Vincent and the Grenadines) on March 22, 2019. Trinidad & Tobago signed on April 1, 2019, while the remaining CARIFORUM States have indicated they will sign shortly.

    As it currently stands, UK-CARIFORUM trading relations remain governed by the CARIFORUM-EU EPA, and the UK-CARIFORUM EPA is only expected to take effect once the CARIFORUM-EU EPA no longer applies to the UK. For it to enter into force, ratification will be needed by each of the parties. The Agreement’s utility stems from the fact that it ensures the continuity of preferential trading relations between the UK and CARIFORUM States once the UK leaves the EU, particularly in the case of a no-deal Brexit.

    The UK-CARIFORUM Economic Partnership Agreement replicates the provisions of the CARIFORUM-EU EPA to the extent possible, including its development cooperation provisions. It also establishes a Joint CARIFORUM-UK Council with responsibility for implementing the Agreement, as well as a CARIFORUM-UK Trade and Development Committee. For further information, please feel free to read my commentary on it here: UK-CARIFORUM Economic Partnership Agreement: What does it all mean?

    The text of the UK-CARIFORUM Economic Partnership Agreement may now be found  online here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international 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.

     

  • ‘Brexit Plan B’: Key Points from PM May’s Speech

    ‘Brexit Plan B’: Key Points from PM May’s Speech

    Alicia Nicholls

    After suffering a historic and crushing rejection  of her Draft Withdrawal deal in the House of Commons and barely surviving a no confidence vote brought by the Leader of the Opposition last week, United Kingdom (UK) Prime Minister Theresa May today outlined her ‘Brexit Plan B’ in the House of Commons.

    Prime Minister May is in the unenviable position of having to formulate an alternative Brexit Plan which secures the support of MPs of diverging views on the way forward for Brexit, and which would be palatable to the EU. All the while the clock continues to tick on the UK’s scheduled departure from the EU on March 29, 2019, now less than seventy days away. In an effort to break the Brexit impasse, Mrs. May has been holding talks with leaders of the major parties in Parliament.

    Prime Minister May noted that in light of Parliament’s overwhelming rejection of the current withdrawal agreement, it was clear that the Government’s approach had to change. But has it?

    Here are the key points from Prime Minister May’s address:

    1. While the Prime Minister noted that a ‘no deal’ Brexit should be avoided, she did not explicitly rule it out as an option. Labour Leader, Jeremy Corbyn, has indicated he would not participate in talks with the Prime Minister, unless the ‘no deal’ option is off the table.
    2. Prime Minister May, however, explicitly ruled out the revocation of Article 50 of the Treaty on European Union (TEU) as an option, saying doing this would go against the referendum result of June 23, 2016.
    3. Prime Minister May also ruled out seeking an extension of Article 50 of the TEU, doubting that the EU-27 would agree to any such extension.
    4. She again stated her opposition to a second referendum saying it would set a dangerous precedent for how referendums are handled in the UK. She noted that it would also require an extension of Article 50 and could damage social cohesion in the UK by undermining faith in their democracy. She also doubted there was a majority in the House for a second referendum.
    5. She has promised a more ‘flexible, open and inclusive’ approach in how her Government engages Parliament in the negotiation of the UK’s future partnership with the EU. The Government will consult the Parliament on its negotiating mandate for the next phase of negotiations.
    6. She also promised a more consultative approach, and greater engagement with the devolved administrations, elected representatives in Northern Ireland and regional representatives in England, businesses, civil society and trade unions.
    7. She emphasized that the UK’s exit from the EU should not erode the UK’s protection for environment standards or workers rights and that they would support the proposed amendment to the meaningful vote that Parliament should be able to consider any changes in these areas made by the EU.
    8.  In perhaps the only major policy change of note, Prime Minister May noted that her Government will scrap the £65 fee for EU nationals resident in the UK to register to remain in the UK following Brexit. Those who apply in the pilot phase will have their fees reimbursed. She recommitted to EU nationals resident in the UK continuing to access benefits in the UK both in a deal and no deal scenario.
    9. With regard to the controversial Irish backstop option in the current Withdrawal Agreement, Prime Minister May vaguely noted that her Government will work to identify how they could ensure that they respect the terms of the Belfast Agreement and their commitment to no hard border between Northern Ireland and the Republic of Ireland in such a way that commands the support of the parliament and the EU.

    In substance, there was little difference between Prime Minister May’s Plan A and the Plan B outlined. Members of Parliament will vote on the Plan B on January 29, 2019, which would pretty much be the same as the Plan A which they so soundly rejected by 230 votes last week.

    The next phase will be continued discussions between Mrs. May and MPs and other stakeholders, which would (or should) inform Mrs. May’s re-engagement with the EU on the way forward.  The uncertainty continues, but it appears that a ‘no deal Brexit’ is increasingly more likely. This also comes against the backdrop of the International Monetary Fund’s downward revision of its global growth forecast, warning today (and not for the first time) that a ‘no deal Brexit’ was a major risk for the global economy.

    The text of Prime Minister May’s speech may be read here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international 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.

  • Brexit Withdrawal Agreement Overwhelmingly Rejected by British MPs

    Brexit Withdrawal Agreement Overwhelmingly Rejected by British MPs

    Alicia Nicholls

    With just over seventy days to go before the United Kingdom’s (UK) impending withdrawal from the European Union (EU) on March 29, 2019, British Members of Parliament (MPs) in the House of Commons voted overwhelmingly against the current Draft Withdrawal Agreement negotiated by Prime Minister Theresa May’s government. With only 202 MPs voting in favour and 432 voting against the deal, the 230 margin of defeat represents the worst legislative defeat inflicted on a British Government in modern history.

    The vote, termed the ‘meaningful vote’, was highly anticipated. Originally scheduled for last December, Prime Minister May had postponed the vote at the last minute in the face of overwhelming opposition to the current deal, particularly the fall-back provisions on the Northern Ireland/Ireland Border – the so-called ‘backstop’. In the interim, Mrs. May unsuccessfully sought to obtain greater concessions from the EU in order to assuage skeptics, including those in her own party. However, the EU had been adamant that the  500-page Draft Withdrawal Agreement was not open for renegotiation.

    Indeed, the reaction by the EU to the outcome has been swift. In a statement released immediately thereafter, President of the EU Commission, Jean Claude Juncker, lamented that “the risk of a disorderly withdrawal of the United Kingdom has increased with this evening’s vote.” President Juncker further reiterated that “the Withdrawal Agreement is a fair compromise and the best possible deal. It reduces the damage caused by Brexit for citizens and businesses across Europe. It is the only way to ensure an orderly withdrawal of the United Kingdom from the European Union.”

    In her remarks after the outcome, Mrs. May lamented that the vote gave no indication of what the Parliament does support. She promised to continue her pursuit of Brexit as instructed by the British people in their referendum result of 2016. She has again ruled out a second referendum. However, her future appears to be in the balance. Labour leader, Jeremy Corbyn, who has called for a general election, has immediately tabled a motion of no confidence which will be debated tomorrow. In December, Mrs. May survived a no confidence motion within her own party.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international 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.