Blog

  • A new UK Parliament and a new deal: What are the implications for Brexit?

    A new UK Parliament and a new deal: What are the implications for Brexit?

    Renaldo Weekes, Guest Contributor

    Renaldo Weekes

    On December 12, 2019, the United Kingdom (UK) held its second general election since 2015 which resulted in Prime Minister (PM) Boris Johnson retaining his position as the Conservative party regained the majority it lost in 2017.  It is apparent that Brexit dominated the campaign leading up to the election and some argue that the Conservatives’ win shows that the country is in alignment with PM Johnson’s views on the matter. Now that Mr. Johnson has a comfortable majority of 365 seats in the House of Commons, he is free to push through his Brexit agenda without the shackles of a minority that held him and his predecessor Theresa May back. We have already gotten a demonstration of his new found power as the second reading of his Withdrawal Bill has been passed on December 20 without any hiccups. The Bill that was passed, however, is somewhat different from the Bill the PM presented before Parliament agreed to an election. With a new Bill and a new Parliament, one must now consider what changes are contained in the new deal, the implications of those changes and the road from here on out.

    What is in the new deal?

    As Boris Johnson inherited a minority Government, he had to grant many concessions to opposition Members of Parliament (MPs) to increase his chances of getting his bill passed. This meant adding clauses favourable to the opposition. They included allowing MPs to approve extensions to the transition period and approve negotiating objectives; aligning UK workers’ rights with those of the European Union (EU) and adhering to the political declaration that accompanied the withdrawal agreement. With a newly secured majority, Mr. Johnson no longer needs to retain those concessions and as such, has removed them. The PM has also taken the liberty of adding his own clauses which, among other things, outlaw extensions to the transition period, grant Ministers power to change laws through secondary legislation and remove the Northern Ireland backstop that his predecessor put in place to prevent a hard border from being erected between Northern Ireland and the Republic of Ireland since Northern Ireland would be leaving the EU with the UK while the Republic of Ireland remains a member.

    Implications of changes in the new deal

    With no ostensible obstacle in Mr. Johnson’s way, one must seriously consider the implications of the changes to his withdrawal bill as they will likely become law. The removal of the concessions previously granted to MPs essentially strips power related to Brexit away from the Commons. Concomitant with that is the granting of Ministers with more power over the process. This bolsters Johnson’s position as he no longer has to submit to what may be an uncooperative House of Commons.

    Of main concern to the main opposition UK Labour Party was UK workers’ rights not being aligned with EU workers’ rights. Much of the UK’s employment standards are derived from EU standards so leaving the EU without any guarantee that EU standards will be retained is quite concerning for good reason. Mr. Johnson has not completely dismissed the idea, however, as he opted to address the issue of worker’s rights in a separate employment bill. The question is how long will it take for his Government to address those issues? This also brings up the broader question of the UK’s ability to make its own laws which was a motivating factor behind Brexit. Some argue that Brits should have faith that their country can competently draft its own laws. Some go further by saying that in many respects, UK law actually goes further than EU law. For example, UK maternity law goes up to 52 weeks versus the EU’s 14 week minimum.  Employer-employee relationships will certainly change as employers may have less responsibility to their employees, even if only for a short time.

    The decision to outlaw extensions to the transition period signals to MPs and the wider public that the Prime Minister is serious about getting Brexit done, even if no deal is reached by the end of the transition. In the context of almost back-to-back general elections, MPs’ stubbornness and a divided UK, Mr. Johnson feels it is his duty to end the Brexit issue, no matter what. As mentioned earlier, the fact that he returned with a comfortable majority reflects that the public agrees with him. His attempt to prevent an extension to the transition period may not necessarily stand as, depending on how negotiations go, he may seek an extension and amend the law as necessary.

    PM Johnson’s new arrangement for Northern Ireland is one that is welcomed by many Brexiteers who previously opposed Mrs. May’s backstop because they viewed it as tethering the UK to the EU; preventing a true Brexit. They did not buy into the idea that the backstop was necessary. Under Mr. Johnson’s new bill, Northern Ireland will be a part of Great Britain’s customs territory but will remain somewhat aligned to the EU’s single market. This creates special status for the territory and goods travelling between it and Great Britain. Goods travelling between the two areas will be subject to EU tariffs and other EU procedures if they are at risk of moving into the EU, whether in part or in whole.

    Critics argue that this new arrangement divides the UK by virtue of checks that will have to be performed on goods travelling between Northern Ireland and Great Britain; similar to what would have happened between Northern Ireland and the Republic of Ireland. Given the large amount of goods that will be subject to checks due to trade that occurs between the UK and EU members, especially since Northern Ireland and the Republic of Ireland share a physical space, the UK divide is a real possibility in theory. In practice, however, the UK will be free to make ambitious trade agreements with countries all over the world including the US, the UK’s largest trading partner. This may help to mitigate any UK dependence on the EU and thus, mitigate any split that may occur between the Northern Ireland and Great Britain.

    Considering that Northern Ireland will be partially under two different regulatory regimes, the UK and the EU will have to coordinate with each other to ensure that goods travelling through the territory are classified correctly. The UK has also taken the extra step of giving the Northern Ireland Assembly the ability to consent to the arrangement. If the assembly decides to not retain it, then the issue of the hard border will arise once again, meaning that in theory, the issue is not completely solved. Given the consequences should they not consent, the assembly is likely to approve.

    The road from here

    Passage of PM Boris Johnson’s Brexit bill without any major defections from his party shows that we are on our way to the Brexit that many envisioned we would have since March 29, 2019. ‘Remainer’ MPs and citizens hoping to have Brexit reversed have even less of a chance of doing so in the face of a more united Conservative party; though the chances were already quite slim. The chance for even a delay has been, on its face, eliminated as the Government has made it illegal to delay the transition period, thus making no extra time for negotiations. Though this may be subject to change if the Government has a change of position, without the pressure from the House of Commons that PM Boris Johnson and his predecessor had before the December 12 general election, it is very unlikely that this will be the case.

    With a more certain path for the UK’s future, UK businesses and citizens, and the wider world can rest assured that plans for their future will no longer suffer from uncertainty either. The constant questions of “will they?” or “won’t they?” may no longer pervade casual discourse. Though some persons will still argue that the UK should not leave the EU, the voters have spoken twice; in the 2016 referendum and in the 2019 general election. Nevertheless, considering how divisive Brexit has been since the referendum results were announced, we can only hope the PM Boris Johnson secures the best he can for the UK and mend a country that has been too focused on Brexit, much to its detriment at times.

    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 manoeuvre across the international political and legal stage.

  • Africa-Caribbean cooperation, regional integration and climate change action among priorities of new CARICOM chairman

    Africa-Caribbean cooperation, regional integration and climate change action among priorities of new CARICOM chairman

    Alicia Nicholls

    Within the next six months, the Caribbean Community (CARICOM) will seek to jointly host the first ever African Union-CARICOM Summit. This announcement was made again by Barbados’ Prime Minister, the Hon. Mia Amor Mottley, QC, who assumed chairmanship of the 15-member grouping from January 1, 2020 under its six month rotating chairmanship system.

    In her New Year’s Message as incoming chairperson, Prime Minister Mottley intimated that the summit should lay the foundation for tangible progress in  “direct air and sea access across the Atlantic, greater trade in goods and services, and more cultural exchanges between our regions.”

    2019 saw renewed interest in deepening Africa-Caribbean relations, with two African leaders (President Nana Akufo-Addo of Ghana and President Uhuru Kenyatta of Kenya) making official state visits to the region. In late 2019, Prime Minister Mottley accepted on behalf of CARICOM an offer of shared office space in Nairobi from the Government of Kenya for the hosting of a joint CARICOM Mission. For many CARICOM countries, such a mission would be their first on the African continent.

    Regional Integration

    Barbados has lead responsibility for the CARICOM Single Market and Economy (CSME) under the CARICOM quasi-cabinet. Many regional observers hope that the invigorated leadership provided by Prime Minister Mottley will add much needed energy to the regional integration process, especially in the aftermath of the mirror image provided by the Jamaica-commissioned Golding Report.

    Indeed, there appears to be renewed commitment by Barbados to the CSME under current leadership. Barbados became the first country to ratify the Protocol on Contingent Rights and will also be the first to offer other CARICOM nationals free access to public schools once certain requirements are met.

    Likening the regional integration process to a relay race, Prime Minister Mottley stated that Caribbean leaders “are duty bound to continue this journey across the Community whether as a collective of the whole or in twos and threes”. However, she also sought to temper unrealistic expectations, noting that the much more resource-endowed and longer-established European Union (EU) was still working on perfecting its own regional process.

    The new CARICOM Chairman outlined several priorities with regard to the regional integration process. These are: removing the obstacles to passport-free movement and facilitating movement for work where there are opportunities; advancing the process of a single domestic space for transport and communications in the region by working to provide more affordable and reliable air and sea links between our countries; to establish a single domestic rate for telecommunications and phone calls within CARICOM; and to work with the private sector and the labour movement to provide further opportunities.

    Climate Change Action

    Since taking office as Prime Minister of Barbados, Miss Mottley has made climate change one of her signature issues on the international stage. She noted the need “to pool the funds of the region in order to be able to finance our own development trajectory for sustainable development so that we may adapt to the new realities of the climate crisis”.  

    Prime Minister Mottley took over the chairmanship from St. Lucia Prime Minister, the Hon. Allen Chastanet, whose term was July 1 – December 31, 2019. Barbados’ chairmanship will last until June 30, 2020. The last time Barbados held the chairmanship was in 2015 under then Prime Minister, the Hon. Freundel Stuart.

    The new CARICOM chairman’s speech may be watched 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.

    DISCLAIMER: All views expressed herein are her personal views and do not necessarily reflect the views of any institution or entity with which she may be affiliated from time to time.

  • Season’s Greetings from CTLD Blog!

    Season’s Greetings from CTLD Blog!

    Dear Valued Readers,

    The Caribbean Trade Law & Development Blog will be on Christmas hiatus from today until the New Year.

    At this time, I would personally like to thank each of you for your readership and kind support of this Blog throughout the year. I look forward to your continued readership in 2020 when this blog will be celebrating its 9th year of existence!

    Here’s wishing you and your loved ones a very Merry Christmas and a wonderful 2020!

    Best,

    Alicia

  • Global Trade Policy Year in Review – 2019

    Global Trade Policy Year in Review – 2019

    Alicia Nicholls

    As is customary at this time of the year, here is where we at the CTLD Blog do our review of the top trade policy developments over the past twelve months.

    It has indeed been another mixed year for global trade. In this article, we will first outline some of the major trade policy news globally for 2019, and then hone in on those significant trade policy developments for 2019 particularly affecting the Caribbean region.

    GLOBALLY

    Globally, some of the major trade policy developments for 2019 were as follows:

    1. Paralysis of the WTO’s Appellate Body

    Perhaps the saddest trade policy development for 2019 was the WTO’s loss of its final arbiter – the Appellate Body – as of December 11, 2019 – the day after the terms of two of its three remaining Members expired without replacement. It is the sad culmination of two years of US blockage of appointments to the Appellate Body in protest of so-called ‘failure’ of WTO Members to address US concerns with substantive and procedural issues pertaining to the Appellate Body’s operation.

    The loss of the world’s final arbiter of trade disputes comes at a time of escalating trade tensions and increased resort to unilateral measures. One possible outcome of the indefinite suspension of the Appellate Body may be increased resort to unilateral measures.

    The two outgoing Appellate Body members have reportedly stayed on temporarily to hear several on-going appeals. In anticipation of the WTO Appellate Body’s collapse, the EU had come up with an interim arbitration arrangement premised on Article 25 of the Dispute Settlement Understanding. However, only Norway and Canada have signed on to such an arrangement.

    With no immediate solution to the WTO Appellate Body’s paralysis to be found, this will be one of the main trade policy developments to watch in 2020. Read more

    2. Global Trade Growth slows and unilateral action increases

    Trade tensions have continued to have a negative impact on global trade growth. In its October report, the WTO revised downward its global merchandise trade growth forecasts for 2019 and 2020. According to the WTO, world merchandise trade volumes are now forecast to rise by only 1.2% in 2019. This markedly slower than the 2.6% growth forecast in April. The projected increase in 2020 is now 2.7%, down from 3.0% previously.

    Unilateral trade action is also increasing. The WTO Director-General’s annual report to the TPRB of trade-related developments shows that between mid-October 2018 and mid-October 2019, the trade coverage of import-restrictive measures implemented by members was estimated at USD 747 billion – the highest trade coverage recorded since October 2012.

    3. US-China Phase One Deal Announced

    In December, the US and China have announced completion of a ‘phase one’ trade deal. As such, the anticipated December 15 US tariffs on Chinese goods have not been implemented. The text of the Agreement has not yet been released and it remains to be seen whether this is just a temporary ceasefire or an actual armistice. See USTR factsheet on the phase one agreement here.

    4. US-EU trade tensions simmering

    Tensions between the US and France over the latter’s Digital Services Tax may mean trade tensions between the US and EU may again reach a boiling point. The US has proposed additional duties of up to 100% on French goods and additional fees and restrictions on French services. This is based on an investigation under Section 301 of the US Trade Act which found that the French DST is “unreasonable or discriminatory and burdens or restricts U.S. commerce”.

    5. AfCFTA comes into force

    The African Continental Free Trade Agreement (AfCFTA) is now in force. The continent-wide agreement, which was opened for signature in March 2018, entered into force on 30 May 2019. The operational phase was launched after a summit of Heads of State and Government of the African Union (AU) in Abuja, Nigeria. It is an exciting development as the agreement will not only transform the African continent into a single market, but is expected to be a major economic boost. Phase II of the AfCFTA will be a key development to watch in 2020.

    6. TPRM celebrated 30 years in existence

    The WTO’s Trade Policy Review Mechanism (TPRM) celebrated its 30th year in existence in April this year. The WTO Secretariat marked the occasion with a conference later in the year. The TPRM is the main WTO body used to promote accountability, predictability and transparency in the rules-based multilateral trading system. This year Trinidad & Tobago and Suriname were among the WTO Members reviewed under the TPRM. Read more

    7. US-Mexico-Canada Agreement (USMCA)

    The Trump Administration finally struck a deal with congressional Democrats on changes to the USMCA – the agreement to replace NAFTA. This should hopefully clear the path for US domestic ratification of the deal which was originally signed in November 2018 and whose amended version was signed by the three countries this week. Read the Protocol of Amendment here.

    8. Conservatives win decisive majority – a clear path for Brexit?

    United Kingdom (UK) Prime Minister Boris Johnson and his Conservative Party won the December 12 snap General Election. Conventional wisdom says that with a clear majority now, it should be easier for Prime Minister Johnson – a Pro-Brexiteer – to get the House of Commons’ backing he needs to get his Brexit deal with the EU passed in time for the revised exit date of January 31, 2020. However, the departure might not be guaranteed as Scotland remains committed to staying within the EU, which might trigger a constitutional crisis and have implications for the continued unity of the UK. This will be another key development to watch in 2020. Read more

    9. India pulls out of RCEP negotiations

    India withdrew from the negotiations on the Regional Comprehensive Economic Partnership (RCEP). Read more

    REGIONALLY

    Regionally, the main trade policy news affecting the Caribbean were:

    1. UK-CARIFORUM EPA signed

    On March 22, 2019, the United Kingdom of Great Britain and Northern Ireland (UK) and nine of the fifteen States comprising the Caribbean Forum (CARIFORUM), a subgroup of the African, Caribbean and Pacific (ACP) countries, signed the CARIFORUM-UK Economic Partnership Agreement (CARIFORUM-UK EPA) which seeks to ensure that the current trade preferences between the UK and CARIFORUM remain after the UK’s departure from the European Union (EU). Read more

    2. Second 5-year review of EU-CARIFORUM EPA begins

    The European Commission on April 17, 2019 launched an evaluation of the CARIFORUM-EU Economic Partnership Agreement (CARIFORUM-EU EPA) which governs trade between the current EU-28 and CARIFORUM countries. The CARIFORUM-EU EPA has been provisionally applied since 2008. Read more

    3. Barbados to host UNCTAD XV in October 2020

    Barbados made history when it was chosen as the first Caribbean country and small State to be a host to events as part of UNCTAD’s quadrennial. Barbados and the United Arab Emirates will co-host the UNCTAD XV in October 2020. Read more.

    4. Caribbean countries deepening ties with Africa

    CARICOM countries will establish a joint diplomatic mission in Kenya – which for many CARICOM governments, like Barbados, will be their first diplomatic mission on the African continent.  In August 2019, it was also announced that CARICOM and the African Union “will shortly sign a Memorandum of Understanding establishing a framework for engagement and cooperation”. Read more

    5. Renewal of CBERA waiver at WTO

    The WTO’s General Council on October 16, 2019 approved the request by the US for a further extension of the waiver for the trade preferences it extends to certain Caribbean countries pursuant to the Caribbean Basin Economic Recovery Act (CBERA) of 1983 and its subsequent amendments. Read more

    6. ACP Renamed and Post Cotonou Negotiations continue

    The ACP has been renamed the Organisation of Africa, Caribbean and Pacific (OACP) at the 9th Summit of ACP Heads of State and Heads of Government.

    ACP countries and the European Union (EU) are currently negotiating an agreement to replace the Cotonou Agreement which was signed in 2000 and expires in 2020. Public details on the negotiations have been limited, but it has been revealed that the negotiations will take place in two phases: a foundation agreement and the negotiation of bespoke protocols with each of the three regions.

    We hope you enjoyed this review! Is there any major development we missed? Let us know!

    NOTE: This Article has been updated.

    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.

    DISCLAIMER: All views expressed herein are her personal views and do not necessarily reflect the views of any institution or entity with which she may be affiliated from time to time.