Legal implications of Brexit : customs union, internal market acquis for goods and services, consumer protection law, public procurement.
Date: 2017-10-11
Institutions: Directorate-General for Internal Policies of the Union
Subjects: EU law - national law, European Economic Area, European Union, European Union membership, United Kingdom, consumer protection, customs union, domestic market, goods and services, public contract

DIRECTORATE-GENERAL FOR INTERNAL POLICIES

ECONOMIC AND SCIENTIFIC POLICYA

POLICY DEPARTMENT

Economic and Monetary Affairs 

Employment and Social Affairs 

Environment, Public Health and Food Safety

Industry, Research and Energy

Internal Market and 
Internal Market and Consumer Protection 
Consumer Protection 

Legal Implications 
of Brexit 

Study for the IMCO Committee

EN

2017

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DIRECTORATE GENERAL FOR INTERNAL POLICIES 
POLICY DEPARTMENT A: ECONOMIC AND SCIENTIFIC POLICY 

Legal Implications of Brexit 

Customs Union, Internal Market Acquis for Goods 
and Services, Consumer Protection Law, Public 
Procurement 

STUDY 

Abstract 

This study addresses the implications of several scenarios of the UK withdrawing 
from  the  EU  in  relation  to  the  EU  Customs  Union,  the  Internal  Market  law  for 
Goods and Services, and on Consumer Protection law, identifying the main cross-
cutting  challenges  that  have  to  be  addressed  irrespective  of  the  policy  choices 
that  will  be  made  in  due  course.  The  analysis  takes  the  fully-fledged  EU 
membership  as  a  point  of  departure  and  compares  this  baseline  scenario  to  a 
membership of the UK in the European Economic Area (EEA), the application of 
tailor-made arrangements, as well as the fall-back scenario, in which the mutual 
relationship  is  governed  by  WTO  law.  Following  an  analysis  of  the  EU,  legal 
framework  defining  the  withdrawal  of  a  Member  State  from  the  EU  the  study 
develops  an  analytical  framework  that  allows  for  the  identification  of  the  legal 
impact of different Brexit scenarios on policy fields falling within the ambit of the 
IMCO Committee. In this context, the general impact of the EEA model, the tailor-
made model and the WTO model on key pieces of the currently existing acquis 
communautaire in these policy areas are highlighted. 

IP/A/IMCO/2016-13

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August 2017

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Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

This document was requested by the European Parliament’s Committee on Internal Market 
and Consumer Protection 

AUTHOR(S) 

Fabian AMTENBRINK, Menelaos MARKAKIS and René REPASI 
Erasmus School of Law, Erasmus University Rotterdam /  
European Research Centre for Economic and Financial Governance (EURO-CEFG) 

RESPONSIBLE ADMINISTRATOR 

Mariusz MACIEJEWSKI  

EDITORIAL ASSISTANT 

Laurent HAMERS, Iveta OZOLINA 

LINGUISTIC VERSIONS 

Original: EN 

ABOUT THE EDITOR 

Policy departments provide in-house and external expertise to support EP committees and 
other parliamentary bodies in shaping legislation and exercising democratic scrutiny over EU 
internal policies. 

To contact Policy Department A or to subscribe to its newsletter please write to: 
Policy Department A: Economic and Scientific Policy 
European Parliament 
B-1047 Brussels 
E-mail: Poldep-Economy-Science@ep.europa.eu 

Manuscript completed in June 2017 
© European Union, 2017 

This document is available on the Internet at: 
http://www.europarl.europa.eu/supporting-analyses 

DISCLAIMER 

The opinions expressed in this document are the sole responsibility of the author and do not 
necessarily represent the official position of the European Parliament. 

Reproduction  and  translation  for  non-commercial  purposes  are  authorised,  provided  the 
source is acknowledged and the publisher is given prior notice and sent a copy. 

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
_________________________________________________________________ 

CONTENTS 

LIST OF ABBREVIATIONS 

EXECUTIVE SUMMARY 

1.  INTRODUCTION 

1.1.  Available literature and materials on the legal consequences of ‘Brexit’  

for specific policy areas 

1.2.  Structure of the study 

2.  THE EU LEGAL FRAMEWORK DEFINING THE FUTURE RELATIONSHIP  

BETWEEN THE EU AND THE UK 

2.1.  Dealing with the legacy of currently applicable EU legal framework:  

the withdrawal agreement under Article 50 TEU 

2.2.  Defining the future relationship between the EU and the UK:  

the future arrangement 

2.3.  Article 50 TEU: the role of parliaments in the withdrawal agreement 

2.3.1.  European Parliament 

2.3.2.  National Parliaments 

2.4.  The future EU-UK trade agreement: the role of parliaments 

2.4.1.  European Parliament 

2.4.2.  National Parliaments 

3.  THE FUTURE RELATIONSHIP BETWEEN THE EU AND THE UK:  

BREXIT SCENARIOS 

3.1.  Introduction: the various degrees of trade cooperation 

3.1.1. 

Intensity of trade cooperation 

3.1.2.  Legal means to implement trade cooperation 

3.1.3.  Enforcement of trade cooperation 

3.1.4.  Scope of trade cooperation 

3.1.5.  Analytical grid 

3.2.  Baseline: EU membership 

3.3.  Fall-back scenario: hard Brexit without any arrangements 

3.4.  Hard Brexit with arrangements concerning WTO 

3.4.1.  WTO schedules and commitments 

3.4.2. 

Joining WTO agreements 

3.5.  Joining the European Economic Area Agreement 

3.6.  Other tailor-made arrangements 

3.6.1.  Comprehensive Single Market access: Ukraine Agreement 

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Policy Department A: Economic and Scientific Policy 
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3.6.2.  Comprehensive Free Trade Agreements with limited Single Market 

access: CETA 

3.6.3.  Free Trade Agreements: South Korea 

3.7.  Summary and preliminary conclusions in relation to Brexit 

3.7.1.  Summarising table 

3.7.2.  Preliminary conclusions 

3.7.3.  State of affairs: Policy choices made so far concerning the  

future trade cooperation between the UK and the EU 

4.  FRAMEWORK FOR ANALYSING THE IMPACT OF BREXIT ON                  

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EU POLICY AREAS AND EU LAW 

4.1.  Preliminary remarks 

4.2.  Designation of the applicable law 

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4.2.1.  Designating the applicable law under the conditions of a ‘hard Brexit’  53 

4.2.2.  Legal situation in the UK after a withdrawal 

4.2.3.  The legal situation in the EU after a withdrawal of the UK 

4.3.  Principles of intertemporal law 

4.3.1. 

Immediate application of new law in the moment of the change  
of the applicable law 

4.3.2.  Application of previously applicable law to the creation of a legal 

relationship 

4.3.3.  Continuous application of previously applicable law due to  

‘acquired rights’ 

4.3.4.  Continuous application of previously applicable law based on  

the principle of legitimate expectations 

4.3.5.  Continuous application of previously applicable law due to  

solutions de lege ferenda 

4.4.  Analytical framework 

5.  BREXIT SCENARIOS AND THE POLICY AREAS COVERED BY THE  

IMCO COMMITTEE 

5.1.  Customs Union 

5.1.1.  Application of the analytical framework 

5.1.2.  Hard Brexit: WTO rules 

5.1.3.  European Economic Area Agreement 

5.1.4.  Tailor-made arrangements 

5.2.  Internal Market in Goods 

5.2.1.  Application of the analytical framework 

5.2.2.  Hard Brexit: WTO rules 

5.2.3.  European Economic Area Agreement 

5.2.4.  Tailor-made arrangements 

5.3.  Internal Market in Services 

5.3.1.  Application of the analytical framework 

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
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5.3.2.  Hard Brexit: WTO rules 

5.3.3.  European Economic Area Agreement 

5.3.4.  Tailor-made arrangements 

5.4.  Consumer Protection 

5.4.1.  Application of the analytical framework 

5.4.2.  Hard Brexit 

5.4.3.  European Economic Area Agreement 

5.4.4.  Tailor-made Arrangements 

5.5.  Public Procurement 

5.5.1.  Application of the analytical framework 

5.5.2.  Hard Brexit: WTO rules 

5.5.3.  European Economic Area Agreement 

5.5.4.  Tailor-made arrangements 

5.6.  Summarising overview 

6.  CONCLUSIONS 

6.1.  Scenarios for a withdrawal of the UK from the EU 

6.1.1.  No withdrawal agreement 

6.1.2.  Withdrawal agreement 

6.2.  Scenarios for the future relationship between the UK and the EU27 

ANNEXES: IMPLICATIONS OF ‘BREXIT’ ON IMCO LEGISLATIVE FILES 

Annex I: Impact of Brexit on the existing acquis communautaire 

Annex II: Impact of Brexit on other arrangements, currently not part of the  

EU acquis 

LIST OF RELEVANT ACADEMIC LITERATURE AND OTHER SOURCES 

RELATED TO BREXIT 

CASE LAW 

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Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

LIST OF ABBREVIATIONS 

CETA  Comprehensive Economic and Trade Agreement 

CJEU  European Court of Justice 

DCFTA  Deep and Comprehensive Free Trade Area 

EEA  European Economic Area 

EFTA  European Free Trade Association 

FTA  Free Trade Agreement 

GATS  General Agreement on Trade in Services 

GATT  General Agreement on Tariffs and Trade 

GC  General Court 

GPA  Agreement on Government Procurement 

TEU  Treaty on European Union 

TFEU  Treaty on the Funtioning of the European Union 

UK  United Kingdom of Great Britain and Northern Ireland 

WTO  World Trade Organization 

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
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EXECUTIVE SUMMARY 

A withdrawal of the UK from the EU raises many complex legal questions that can be placed 
in several main categories, including the substantive legal obligations arising from Article 50 
TEU concerning the withdrawal of the Member State from the EU; the possible legal nature 
and  scope  of  the  UK’s  future  (legal)  relationship  with  the  EU;  and  the  implications  of  this 
future legal relationship for the EU internal market law and notably the policy fields falling 
within the ambit of the IMCO Committee. This study makes, based on a review of the avail-
able academic literature and materials produced for governments and Parliaments, a prelim-
inary assessment of the legal implications of a possible  withdrawal of the United Kingdom 
from the EU on the policy areas relating to the internal market for goods and services (ex-
cluding financial services), to consumer protection and to the customs union. 

At the outset it has to be stressed that since major policy choices regarding the nature of the 
future relationship between the UK and the EU are still to be made, any assessment of the 
legal impact of the future relationship between the EU and the UK on EU policy fields is for 
the  time  being  a  measured  approximation  to a  moving  target.  Beyond the  analysis  of  the 
legal implications of Article 50 TEU namely for the policy fields falling within the ambit of the 
IMCO Committee, the main purpose of this first in-depth study is thus to provide an analytical 
framework that allows for the identification of the legal impact of different Brexit scenarios. 

Brexit – The Constitutional Dimension 

Based on Article 50 TEU the withdrawal of a Member State from the EU results either from 
‘the  entry  into  force’  of  a  so-called  withdrawal  agreement  or,  in  the  absence  thereof,  two 
years after the formal notification to the European Council from the Member State that wishes 
to withdraw. Since the UK government notified the European Council of the intention of the 
United Kingdom to withdraw from the EU on 29 March 2017, the negotiation period of two 
years elapses on 30 March 2019 at 00:00 (Brussels time). 

The withdrawal agreement is ‘backward looking’, in the sense that it deals with the legacy 
of currently applicable EU law. In the absence of a withdrawal agreement at the end of the 
two-year period, primary and secondary Union law cease to apply without any (transitional) 
legal arrangements governing the relationship between the withdrawing Member State and 
the EU. A prolongation of the negotiation period is possible, but, next to the agreement by 
the withdrawing Member State, requires a unanimous vote in the European Council. As be-
comes clear from the inclusion of the two-year deadline, an agreement is not a conditio sine 
qua  non  for  the  withdrawal  of  a  Member  State,  and  a  country  may  leave  the  EU  without 
concluding such an Article 50 TEU withdrawal agreement with the EU27.  

There  is  considerable  disagreement  in  legal  scholarship  as  to  whether  the  Article  50  TEU 
process can be reversed unilaterally by the United Kingdom after it has handed in its notifi-
cation  of  withdrawal.  In  other words,  could  the  UK  Government  change  its  mind  after  the 
‘Brexit’ process has been set in motion (but the Member State has not yet left the EU)? This 
uncertainty  is  linked  to  the  fact  that  Article  50  TEU  has  never  been  triggered  before  by  a 
Member State wishing to leave the EU. There are arguments both in favour of and against 
recognising the existence of such a unilateral right for the withdrawing Member State, but 
the prevailing view seems to be that the process of leaving the Union could nevertheless be 
reversed in agreement with the EU27. However, what is not in doubt is that when the with-
drawal of the departing Member State becomes a reality, there is arguably no returning to 
the former status by means of some form of ‘withdrawal from the withdrawal’. The path to 
re-joining the EU is an application for membership pursuant to Article 49 TEU. 

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Policy Department A: Economic and Scientific Policy 
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Next to a withdrawal agreement, the future relationship between the UK and the EU has to 
be  determined  (‘forward-looking’  agreement).  While  the  withdrawal  agreement  and  the 
agreement setting out the future relationship between the EU and the UK have to be consid-
ered as two separate items, Article 50 TFEU links these two agreements by stating that the 
withdrawal agreement should set out the arrangements for the withdrawal, thereby ‘taking 
account of the framework for its future relationship with the Union’. The requirement to take 
into account the framework for the future EU-UK relationship mostly becomes relevant in a 
scenario involving tailor-made solutions, as under the EEA and WTO scenarios the framework 
for the future relationship would be defined by EEA and WTO law respectively. The applicable 
decision-making procedure in the case of a free trade agreement depends on the substance 
of the agreement (qualified majority or unanimity in the Council after obtaining the consent 
of the European Parliament). 

As the debate in legal scholarship stands today, comprehensive free trade agreements are 
considered mixed agreements, thereby requiring ratification by all Member States in accord-
ance with their respective constitutional requirements. The EU Treaties and protocols may 
also need to be amended in order to take stock of the post-Brexit reality. Ideally, both the 
withdrawal and future agreements should be negotiated and concluded within the same two-
year period, though legal and practical reasons discussed in the study may demand other-
wise. 

The Council further needs to obtain the consent of the European Parliament, which requires 
a simple majority of at least one third of the total number of MEPs. Throughout the ‘Brexit’ 
negotiations, the Commission and Council have to inform the committee responsible regularly 
and  fully  on  the  progress  of  the  negotiations,  if  necessary  on  a  confidential  basis.  At  any 
stage of the negotiations, the Parliament may adopt recommendations and require that these 
be taken into account before the conclusion of the Article 50 agreement. When the negotia-
tions are completed, the draft agreement must be submitted to the Parliament. 

There is disagreement between commentators as to whether the British MEPs may still par-
ticipate in the vote on the withdrawal agreement in the European Parliament once this agree-
ment is concluded. Article 50 TEU is silent on this issue, but it is argued in the study that the 
British MEPs will be participating in the vote as they represent the citizens of the Union and 
not just of their home Member State. Further, the British MEPs will continue to be involved 
in the on-going legislative files until ‘Brexit’ becomes a reality.  

The withdrawal agreement does not need to be ratified by the national parliaments of the 
Member States. There is, however, ambiguity about the UK constitutional requirements on 
the role of the UK Parliament in the process leading to ‘Brexit’. Though it was clarified by the 
UK courts in the case of Miller that the UK Parliament’s approval was required before trigger-
ing Article 50 TEU, it is not yet clear what would be required for the ratification of the with-
drawal agreement once it is concluded. The Constitutional Reform and Governance Act 2010 
requires that the agreement be submitted for review by the UK Parliament, acting separately, 
under the negative resolution procedure. However, the regime under the 2010 Act may not 
be held to be applicable if some greater parliamentary involvement is required, with some 
commentators arguing that an Act of Parliament and a referendum may be needed. 

The European Commission must report regularly to the European Parliament on the progress 
of the ‘Brexit’ negotiations (Article 207(3) TFEU). The role of the European Parliament in the 
negotiation and conclusion of the future EU-UK agreement is spelled out in Article 218 TFEU, 
and the default position is consultation by the Council with the European Parliament. A com-
prehensive trade agreement would require the consent of the European Parliament. The Par-

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
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liament will further need to pass all the necessary legislation in the course of Britain’s with-
drawal from the EU. Furthermore, it may request the opinion of the CJEU as to whether the 
envisaged EU-UK agreement is compatible with the EU Treaties. 

The role of the European Parliament in the operation of trade agreements is, however, lim-
ited.  It  is  suggested  that  interparliamentary  cooperation  would  strengthen  the  role  of  the 
European Parliament in the operation of the future EU-UK agreement. Such cooperation may 
take different forms. Notably, interparliamentary activities could be either informal or em-
bedded in a future EU-UK agreement. 

Various scenarios for shaping the future relationship between the UK and the EU 
in legal terms 

In  legal  terms,  this  future  relationship  may  take  different  legal  shapes,  depending  on  the 
policy  choices  that  the  EU  and  UK  have  yet  to  make.  The  present  study  identifies  on  an 
abstract level the parameters that determine the basic scope of a future trade cooperation, 
therewith offering an overarching analytical grid for future references. These include the in-
tensity of trade cooperation (ranging from mere information obligations to full harmonisa-
tion), the legal means to implement trade cooperation (ranging from non-discrimination prin-
ciples to setting common standards), as well as the compliance mechanisms (ranging from 
mere consultation obligations to direct effect with a centralised Treaty-based court). These 
parameters can differ in relation to different economic sectors. Applying this set of factors to 
the currently existing forms of trade cooperation between the EU and third countries (such 
as KOREU with South Korea, CETA with Canada or DCFTA with Ukraine) reveals that all these 
forms of trade cooperation fall short of the state of trade cooperation achieved within the EU 
internal market. Hence, any free trade agreement between the EU and the UK that merely 
replicates one of these existing FTAs will result in a significant deterioration of the trading 
conditions for both EU market operators in the UK and UK market operators in the EU. 

The discussion on the various ‘Brexit’ scenarios commences with the baseline scenario of EU 
membership, which is the status quo. The focus then shifts to the ‘fall-back’ scenario of ‘hard 
Brexit’ with no EU-UK arrangements.  It is noted that the UK is a member of the WTO in its 
own right but does not have an individual schedule of concessions. Instead, it is part of the 
EU’s combined schedules. The United Kingdom would have to negotiate its own schedule on 
tariffs, quotas and subsidies, which would then need to be approved by all other 163 WTO 
members, including the EU. Alternatively, an agreement could be concluded between the EU 
and the withdrawing Member State, which would separate the WTO commitments of the EU 
and the UK. This would again demand the approval of all other WTO members. The UK would 
further have to consider whether it would sign and ratify a number of special WTO agree-
ments that are not compulsory for WTO members but have been ratified by the EU. 

The ‘Brexit’ scenario that comes closest to the baseline scenario in terms of trade cooperation 
is the European Economic Area (EEA) option. Assuming that the UK would implicitly lose EEA 
membership if it left the EU, a return to the European Free Trade Association (EFTA) would 
be necessary in order for the UK to be part of the EEA Agreement. The terms and conditions 
for such participation would be the subject of an agreement between the Contracting Parties 
to the EEA Agreement (Norway, Iceland and Liechtenstein) and the applicant state. The study 
further examines the possibility of the EU and the UK making tailor-made arrangements for 
their future cooperation. Such tailor-made arrangements can differ widely on the parameters 
examined  above,  and  the  study  draws  on  the  examples  of  the  DCFTA  with  Ukraine,  CETA 
with Canada, and KOREU with South Korea. This broad range of ‘Brexit’ scenarios reinforces 
uncertainties  amongst  citizens  and  internal  market  operators  as  to  the  legal  fate  of  their 
current status and their future activities. At this moment of time it appears unpredictable in 

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Policy Department A: Economic and Scientific Policy 
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which way rights lawfully acquired under EU law will be maintained (if at all) and how the 
status of UK citizens and UK based market operators on the territory of the EU27 Member 
States and vice versa will look like. 

Policy documents by the UK and the EU27 published so far sketch the future relationship to 
be embodied in a free trade agreement that includes some sort of dispute settlement mech-
anism. Yet, neither the scope nor the intensity of trade is yet defined by the parties in these 
documents.  Hence,  at  this  point  of  time,  uncertainties  created  by  the  Brexit  vote  are  not 
addressed  in  a  manner  that would  reduce  them.  Whilst  the  vagueness  in  the  policy  docu-
ments is not surprising at the current very early stage of negotiations, uncertainties linked 
to the unprecedented withdrawal of a Member State from the EU create a major problem for 
economic operators and citizens.  

Estimating the implications of Brexit scenarios in legal terms – A two-step test to 
assess the impact of a scenario on EU policy areas 

Based  on  these  considerations  it  can  be  observed  that  the  impact  of  Brexit  on  EU  law  in-
creases  the  more  the  EU  and  the  UK  opt for a  trade  cooperation  that  resembles  the  WTO 
principles of free trade, rather than the full harmonisation model including mutual recognition 
of standards under the terms of EU membership. The more the future relationship between 
the EU and the UK takes after trade cooperation based on negative integration the less ex-
isting and future acquis communautaire can be applied to goods and services from the UK. 
In such a constellation, the focus must shift from questions revolving around how to extend 
the acquis and its further development to the UK to questions addressing the challenge how 
to protect the high standards set by the acquis against any weakening through a free trade 
agreement. The acquis then turns into a trade barrier for UK goods and services, which are 
subject to the rules of negative integration. Depending on the scope of negative integration, 
the acquis would only be affected if it discriminates directly or indirectly against UK products 
or otherwise creates unjustifiable restrictions. In this scenario, the EU must focus on broad 
possibilities to justify the current acquis and its further development. 

Having established the range of trade cooperation that can be realised between the EU and 
the UK, the study identifies the policy areas and legal rules in the current EU framework that 
will be affected the most by a Brexit. To this end a two-step test is developed and applied. 
First, it has to be established whether the change of the legal regime (from EU law to UK 
law) entails a change of the applicable law to a cross-border legal situation involving the EU 
and  the  UK.  This  is  done  by  applying  so-called  conflict  rules.  Secondly,  if  a  change  of  the 
applicable law applies, it is assessed whether principles of intertemporal law require the con-
tinuous application of the previously applicable ‘old’ law. This relates to cases of ‘acquired 
rights’  (which  are  to  be  understood  as  only  covering  absolute  property  rights)  that  were 
created lawfully under the previous legal regime, as well as to cases of legitimate expecta-
tions, according to which an individual can, in principle, rely on the fact that the currently 
applicable law continues to apply in the same manner. The presumption of legitimate expec-
tations  is  however  rebutted  in  the  case  of  explicit  rules  that  prevent  the  creation  of  such 
expectations. In the context of ‘Brexit’, arguably reference can be made to Article 50(3) TEU. 
With the formal notification of a Member State to withdraw from the Union, it may be argued 
that  individuals  cannot  expect  any  longer  that  EU  law  continues  to apply  in  the  future,  as 
Article  50(3)  TEU  states  that  even  if  there  is  no  withdrawal  agreement,  EU  law  ceases  to 
apply two years after the notification. 

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Applying the two-step test for assessing the impact of Brexit scenarios on policy 
areas falling within the ambit of the IMCO committee 

In the following this two-step test is applied to the policy areas and implementing rules falling 
within the ambit of the IMCO Committee. What results from this is that, first of all, the impact 
of Brexit on consumer protection is relatively limited inasmuch as consumers purchase prod-
ucts that were directed or advertised to them (active sales). The international procedural law 
and private international law applicable in the EU and in the UK (the present study shares 
the view that after a Brexit materialises the 1968 Brussels Convention and the 1980 Rome 
Convention will revive on the UK territory) designate the law of the Member States where 
the consumer is domiciled as the applicable law. By that, contracts that are concluded by EU 
domiciled  consumers  with  UK  professionals  are  subjected  to  EU  consumer  protection  law. 
This assessment changes, however, once consumers purchase products from professionals 
that do not direct their activities to the home countries of these consumers (passive sales).  

With a view to this constellation and to the other policy areas, the first step of the analytical 
framework establishes that the change of the legal regime entails also a change of the appli-
cable law. Yet, in relation to services and public procurement, ‘acquired rights’ come into play 
that require the continuous application of EU law. This concerns EU professional qualifications 
for  service  providers  that  exercise  at  the  time  of  the  withdrawal  of  the  UK  from  the  EU  a 
regulated profession in the UK and vice versa, as well as awards and concessions granted to 
EU tenderers by UK contracting authorities under the application of EU public procurement 
law and vice versa. In the same context, legitimate expectations are to be respected as to 
the  rules  on  contract  performance  under  EU  public  procurement  law  for  such  awards  and 
concessions so that modifications will not require new public procurement procedures under 
the legal regime.  

In  the  remaining  areas  the  withdrawal  of  the  UK  from  the  EU  will  result  in  an  immediate 
application of the rules of the new legal regime. The impact of Brexit on these areas that, in 
particular, cover standards such as product safety rules will be significant. This can be ad-
dressed by including a mechanism into an agreement on the future relationship between the 
EU and the UK that leads to an incorporation of EU product safety rules into UK domestic law 
(comparable  to  EEA  or  DCFTA).  If  such  an  agreement  provides  for  a  dynamised  common 
standard-setting option with binding effect on the EU and the UK, sufficient Parliamentary 
involvement must be ensured. If a bilateral solution is not attainable, it is recommended that 
the EU includes equivalence mechanisms comparable to the one in Article 46 of Regulation 
No 600/2014 on markets in financial instruments (MiFiR, [2014] OJ L 173/84) into its legis-
lation on standards for goods and services. Under this mechanism, the Commission is em-
powered to unilaterally adopt equivalence decisions granting third-country products access 
to  the  entire  internal market without  further  restrictions  (which would  be  justifiable  under 
WTO law), if the safety and protection standards and their supervision in the home country 
is equivalent to the one under EU law. 

Finally, it should be noted that, also in relation to goods, the impact of a Brexit is significant. 
The trade cooperation between the EU and the UK would, in the event of a Brexit without 
any arrangements concerning the future relationship, not only fall back on the non-discrimi-
nation principles under WTO law. The UK would also have to re-negotiate its schedules and 
commitments under WTO law that are currently held by the EU on behalf of the UK. Not only 
would a separation of the EU28 schedules require a consent by the EU, but also by all the 
other WTO members. 

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1.  INTRODUCTION 

This study makes, based on a review of the available academic literature and materials pro-
duced for governments and Parliaments, a preliminary assessment of the legal implications 
of a possible withdrawal of the United Kingdom from the EU on the policy areas relating to 
the internal market for goods and services (excluding financial services), to consumer pro-
tection and to the customs union. Such analysis builds on the overarching constitutional di-
mension of ‘Brexit’ concerning all EU policy areas. The outcome of such analysis at this stage 
of the process can only be an approximation to a moving target. Although both the UK gov-
ernment and the EU have further clarified their intentions in relation to the outcome of the 
negotiations,1 these outlines remain too vague in order to base a proper legal assessment on 
them. The UK government seeks to establish a ‘deep and special partnership that takes in 
both economic and security cooperation’, the terms of which it should be agreed ‘alongside 
those of our withdrawal from the EU’.2 In its white paper on the new partnership with the EU, 
published  on  2  February  2017,  the  UK  government  only  referred  to  the  aim  of  the  ‘freest 
possible trade in goods and services between the UK and the EU’ and a ‘new customs agree-
ment’,3 which should ‘ensure that cross-border trade with the EU is as frictionless and seam-
less as possible’4 in specifying what it considers to be the content of the future partnership 
in relation to the internal market and the customs union. The EU ‘shares’ this perspective, 
whilst at the same time such partnership ‘cannot offer the same benefits as Union member-
ship’.5 In the eyes of the EU, the future agreement cannot ‘amount to participation in the 
Single Market or parts thereof […]It must ensure a level  playing field, notably in terms of 
competition and state aid, and in this regard encompass safeguards against unfair competi-
tive advantages through, inter alia, tax, social, environmental and regulatory measures and 
practices’.6 

With  this  reservation  in  mind,  it  must  be  noted  that  the  findings  of  the  present  study  are 
preliminary and may need to be adapted and deepened once the more concrete policy choices 
have been made, allowing for a more study of the consequences of these choices. This un-
derstanding of the preliminary nature of any analysis at this point of time has also been taken 
up by the Briefing Paper for the British House of Commons that analyses the impact of ‘Brexit’ 
across policy fields. Thus, for example with regard to consumer protection it is noted: 

‘As already mentioned, the consumer protection regime in the UK is a complex com-
bination of EU and national law and covers a very wide range of goods and services. 
It is impossible to calculate the impact of withdrawal in any meaningful way without 
knowing the basis on which the UK would continue to interact with the EU. Clearly, 
the  crucial  question  is  whether  the  UK  retains  any  sort  of  access  to  the  European 
Single Market, and if so, how much and in return for what?’7 

1   See  for  the  UK:  May,  UK  Prime  Minister’s  letter  to  Donald  Tusk  triggering  Article  50,  29  March  2017, 

www.gov.uk/government/uploads/system/uploads/attachment_data/file/604079/Prime_Ministers_let-
ter_to_European_Council_President_Donald_Tusk.pdf;  for  the  EU:  European  Council,  Guidelines  following  the 
United Kingdom’s notification under Article 50 TEU (29 April 2017), EUCO XT 20004/17. 

2   May, (n 1), p. 3. 
3   Department for Exiting the European Union and The Rt Hon Davis Davis MP, ‘The United Kingdom’s Exit from 
and  New  Partnership  with  the  European  Union  White  Paper’  (2  February  2017),  https://www.gov.uk/govern-
ment/publications/the-united-kingdoms-exit-from-and-new-partnership-with-the-european-union-white-paper, 
p. 35.  

4   Department for Exiting the European Union and The Rt Hon Davis Davis MP (n 3), p. 46. 
5   European Council (n 1), p. 8, para 18. 
6   European Council (n 1), p. 8, para 20. 
7   Briefing  Paper,  Brexit:  impact  across  policy  areas,  26  August  2016,  p.  154.  See  in  this  context  also  Adam 
Łazowski, ‘EU Withdrawal: Good Business for British Business?’, European Public Law 22, no. 1 (2016), 115-130, 
1238, who observes that: “… the exact legal parameters  of EU withdrawal hinge upon the  model that will be 

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Formulating a position on the latter questions raised in this statement currently forms the 
core of the policy debate and is reflected by the majority of the available literature and ma-
terials. 

1.1. 

Available literature and materials on the legal consequences of ‘Brexit’ for 
specific policy areas 

It should be noted from the outset that the legal academic literature available at the time of 
writing focuses largely on the withdrawal of a Member State from the EU and its EU as well 
as UK constitutional challenges. When it comes to question of the legal impact of ‘Brexit’ on 
specific matters falling within the policy areas relating to the internal market of goods and 
services  (excluding  financial  services), consumer  protection  and the  customs union, which 
are  the  policy  areas  covered  by  the  competence  of  the  IMCO  Committee,  there  is,  in  our 
opinion, only fairly limited literature.8 This can be readily explained by the fact that the impact 
of ‘Brexit’ on single market and customs union issues is highly contingent upon the arrange-
ments that will govern the future EU-UK relationship, which are yet to be devised, as well as 
the fact that Article 50 was only recently triggered by the UK Government.  

Whilst this observation certainly holds true for academic literature, it can also be upheld in 
relation  to  materials  commissioned  by  governments,  Parliaments  and  other  public  bodies 
before the referendum and even thereafter in terms of depth concerning legal implications 
on specific policy areas. It could be said that in particular the absence of precise information 
on the impact of a ‘negative’ vote prior to the referendum might raise doubts as to the degree 
of knowledge that was made available for citizens to anticipate the massive consequences of 
voting in favour for the UK leaving the EU.9  

Materials that have been produced or at least made publicly available since the Brexit vote 
for  the  time  being  remain  sketchy  and  reluctant.  Both  can  be  explained  by  the  fact  that 
serious  scientific  legal  research  can  only  be  conducted  on  the  basis  of  clear,  precise  and 
publicly available policy choices. For this reason the Briefing Paper for the British House of 
Commons  plainly  stated,  as  cited  above,  that  ‘[i]t  is  impossible  to  calculate  the  impact  of 
withdrawal in any meaningful way without knowing the basis on which the UK would continue 
to  interact with the EU’.10  It  follows  from this  that,  from  a  legal  perspective,  the only  two 
scenarios that can unequivocally be analysed at this moment of time are the full EU mem-
bership scenario, implying no changes of the current situation, and the scenario in which no 
agreements are concluded between the UK and the EU. In the latter scenario the future legal 
relationship between the EU and the UK will be governed by WTO law and transitional ques-
tions will be legally framed by general principles of intertemporal law. These principles will 
be further outlined later (see section 4.2) and imply that all EU law stops to be applicable in 
the territory of the United Kingdom at the moment of the coming into effect of the withdrawal 
from the EU with few limited exceptions concerning certain rights legally acquired under EU 

chosen for future relations between the United Kingdom and the EU. This will remain unknown until negotiations 
are completed.”  

8   The picture is slightly different when looking at the economic implications. Here, studies cover assumed effects 
on policy areas covered by the IMCO committee within their broader analyses of the impact of Brexit on trade: 
Aichele & Felbermayr, “Costs and benefits of a United Kingdom exit from the European Union”, Gütersloh: Ber-
telsmann  Stiftung  (2015);  Busch  &  Matthes,  “Brexit–the  economic  impact.  A  Meta-Analysis”,  IW-Report  10 
(2016); Kierzenkowski et al., “The economic consequences of Brexit: a taxing decision”, OECD Economic Policy 
Papers 16 (2016): 1; Lawless & Morgenroth, “The Product and Sector Level impact of a hard Brexit across the 
EU”, ESRI, WP No 550 (2016); Ottaviano et al., “The Costs and Benefits of Leaving the EU: Trade Effects”, Centre 
for  Economic  Performance  Technical  Report  (2016);  Rojas-Romagos,  “Trade  effects  of  Brexit  for  the  Nether-
lands”, CPB background document, June (2016). 

9   Reference is made to Articles 6 and 7 of the EU Referendum Act 2015, which establishes information obligations 
on the part of the UK Government in relation to the rights and obligations linked to the EU membership of the 
UK.  

10   Briefing Paper, Brexit: impact across policy areas, 26 August 2016, p. 154. 

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law in the period before the withdrawal.11 The legal position could be different if the EU27 
and the UK reached an agreement on transitional arrangements before the end of the two-
year (or the extended) period. Moreover, it should be noted that the so-called Great Repeal 
Bill  will,  when  adopted,  incorporate  all  the  existing  EU  acquis  into UK  domestic law  at the 
time of exit.12 More specifically, the Bill will convert directly applicable EU laws (such as EU 
Regulations) into UK law and preserve the laws that have been made in the UK to implement 
EU obligations (flowing from EU Directives).13 From that moment on the UK will be free (sub-
ject to any limitations flowing from international law including the ECHR14 and/or agreed to 
in a potential withdrawal agreement) to modify rules that previously were of EU origin. More-
over, in this situation, such rules of EU origin may be subject to domestic judicial interpreta-
tion without the rights and obligations arising from Article 267 TFEU on the preliminary ref-
erence procedure. 

All other ‘Brexit’ scenarios depend highly on concrete and precise policy choices still to be 
made by both the United Kingdom and the EU. The number of possible scenarios situated 
between the above-mentioned two antipodes exceeds what can be explored in the context 
of this first study on the possible consequences of Brexit within the available timeframe. An 
example in the field of product safety rules may clarify this. In this area, the future relation-
ship could be governed by a model according to which there is a mutual recognition of stand-
ards set by the EU and by the UK. Such an extensive mutual recognition of standards would 
be a novelty in free trade agreements.15 Besides, a possible agreement could include a mech-
anism for mutually recognising conformity decisions, by which UK authorities would confirm 
that UK products are produced in compliance with EU rules. At the same time, the UK would 
reserve the right to adopt its own product safety standards. The compliance of EU producers 
with these UK standards could be certified by EU authorities. Moreover, the UK and the EU 
could establish a new mechanism that allows uniform standard-setting between both in some 
type  of  regulatory  cooperation.  Such  regulatory  cooperation  could  be  legally  binding  or 
merely consultative. Finally, it could be that the EU and the UK decide that product safety 
rules are mutually recognised only in relation to certain, but not all, product categories.  

These  glimpses  at  possible  legal  relationships  between  the  EU  and  the  UK  in  the  area  of 
product safety illustrate the complexity of an abstract assessment of all possible withdrawal 
scenarios  situated  between  the  antipodes  of full  EU  membership  and no  agreement  at  all. 
Against this background, it can be easily explained why a vast majority of written reflections 
refer to the scenario in which the UK leaves the Union without having any kind of agreement, 
whereas detailed discussions on legal implications in relation to specific policy areas in case 
of  a  future partnership  agreement  between  the EU  and the  UK  are –  for  the time  being  – 
rather rare.  

With these reservations in mind, the present study builds on an up-to-date review of existing 
material on ‘Brexit’. This includes key academic literature, materials produced for public in-
stitutions and relevant case law on ‘Brexit’, the emphasis being on the EU and the UK con-
stitutional requirements for terminating UK’s membership of the EU and the existing material 
on ‘Brexit’ for the single market (in areas of IMCO competences), the customs union, and 
consumer protection. The literature drawn upon includes leading Dutch, English, French, and 

11   Cf. Markus Kotzur, Intertemporal Law, in: Max Planck Encyclopedia of Public International Law. 
12   See Department for Exiting the European Union, The Rt Hon Davis Davis MP and the Rt Hon Theresa May MP, 
‘The Great Repeal Bill: White Paper’ (30 March 2017)  https://www.gov.uk/government/publications/the-great-
repeal-bill-white-paper> accessed 11 April 2017. 

13   ibid 13 paras 2.4-2.5. 
14   This will be further explained in section 4.2. 
15   Please  note  that  the  term  ‘free  trade  agreement’  refers  to  all  kinds  of  international  agreements  that  will  be 

concluded in the future between the EU and the UK governing their trade relations. 

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German-language law journals (all general and some sector-specific publications in areas of 
IMCO competence), materials produced for governments and Parliaments, and the most au-
thoritative online blogs on issues of EU and UK law. These are listed in detail in the list of 
references.  

Based on the review of the currently available literature, it is possible to provide a map of 
the relevant literature. The first ‘wave’ of Brexit literature primarily concerned the UK refer-
endum and the ensuing Miller litigation and accordingly focused extensively on the require-
ments of UK constitutional law for serving a notification of withdrawal under Article 50 TEU. 
It further focused on the EU constitutional law requirements for exiting the EU. There were, 
however, a number of early works that were published in the immediate aftermath of the UK 
referendum and focused in detail on the impact of ‘Brexit’ on specific policy areas.16 This body 
of work was followed by a second strand of literature focusing on the impact of Brexit on a 
number of policy areas which are regulated by the EU, either exclusively or together with the 
Member  States  (trade  in  goods  and  services,  customs  union,  financial  services,  consumer 
protection, intellectual property, tax, and so on). These were mostly academic writings, but 
the UK House of Lords’ EU Committee has produced a series of reports on a vast array of 
policy areas and issues affected by Brexit. These reports cover (in order of publication): the 
role of the UK Parliament in scrutinising Brexit;17 UK-Irish relations after Brexit;18 security 
and police cooperation;19 fisheries;20 environment and climate change;21 Gibraltar;22 Brexit 
and  the  EU  budget;23  free  movement  of  persons;24  trade  in  goods;25  civil  justice  coopera-
tion;26 trade in non-financial services;27 the Crown Dependencies,28 and agriculture.29 These 
extensive reports have, together with the academic writings published thus far, greatly en-
riched the discussion on the legal, economic and political implications of Brexit and are dis-
cussed in this study where appropriate. 

1.2. 

Structure of the study 

Taking into account the current material, hereafter the analysis is structured as follows. The 
discussion commences with the EU legal framework for defining the future relationship be-
tween  the  EU  and  the  UK  (chapter  2).  The  focus  then  shifts  to  the  basic  Brexit  scenarios 
(chapter  3).  First,  an  introduction  to  the  various  degrees  of  trade  cooperation  is  provided 
(chapter 3.1.). This is followed by an analysis of four basic scenarios that have been defined 
by the European Parliament (IMCO): full EU membership, including full access to the internal 
market as the baseline scenario (chapter 3.2.), a ‘hard Brexit’ with (chapter 3.3.) and without 
(chapter 3.4.) arrangements concerning the WTO as the ‘fall-back option’, UK accession to 

16   See, e.g., Malte Kramme, Christian Baldus and Martin Schmidt-Kessel (eds.), Brexit und die juristischen Folgen, 

2016. 

17   European Union Committee, Scrutinising Brexit: The role of Parliament (first report) (2016-17, HL 33); European 

Union Committee, Brexit: parliamentary scrutiny (fourth report) (2016-17, HL 50). 
18   European Union Committee, Brexit: UK-Irish relations (sixth report) (2016-17, HL 76). 
19   European Union Committee, Brexit: future UK-EU security and police cooperation (seventh report) (2016-17, HL 

77). 

20   European Union Committee, Brexit: fisheries (eighth report) (2016-17, HL 78). 
21   European Union Committee, Brexit: environment and climate change (twelfth report) (2016-17, HL 109). 
22   European Union Committee, Brexit: Gibraltar (thirteenth report) (2016-17, HL 116). 
23   European Union Committee, Brexit and the EU budget (fifteenth report) (2016-17, HL 125). 
24   European Union Committee, Brexit: UK-EU movement of people (fourteenth report) (2016-17, HL 121). 
25   European Union Committee, Brexit: trade in goods (sixteenth report) (2016-17, HL 129). 
26   European Union Committee, Brexit: justice for families, individuals and businesses? (seventeenth report) (2016-

17, HL 134). 

27   European Union Committee, Brexit: trade in non-financial services (eighteenth report) (2016-17, HL 135). 
28   European Union Committee, Brexit: the Crown Dependencies (nineteenth report) (2016-17, HL 136). 
29   European Union Committee, Brexit: agriculture (twentieth report) (2016-17, HL 169). 

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the  European  Economic  Area  (EEA)  Agreement  (chapter  3.5.),  and  other  tailor-made  ar-
rangements  (chapter  3.6.).  Preliminary  conclusions  in  relation  to  the  advantages  and  the 
disadvantages of the various Brexit scenarios, from the perspective of the EU27, are then 
discussed (chapter 3.7.2.) and assessed against policy choices made so far (chapter 3.7.3.). 
Thereafter, a framework for analysing the impact of a withdrawal of the UK from the EU on 
the Union’s laws and policies is developed (chapter 4). This analytical framework is thereafter 
applied to study the impact of ‘Brexit’ on areas of IMCO competence (chapter 5). To this end, 
policy  areas  or  legislation  in  force  which  are  likely  to  feature  as  part  of  the  future  EU-UK 
agreement are identified (Annexes I and II). The study ends with conclusions based on the 
findings of the study (chapter 6). 

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2.  THE EU LEGAL FRAMEWORK DEFINING THE FUTURE 
RELATIONSHIP BETWEEN THE EU AND THE UK 

In legal terms the ‘future EU-UK relationship’ is, for the time being, impossible to determine, 
as major policy choices have yet to be made both by the United Kingdom and the EU. Still, 
an examination of the EU Treaties reveals already at this early stage of the political process 
that a distinction has to be made between two types of agreement defining the future rela-
tionship between the EU and the UK. One addresses the legacy of currently applicable EU law 
(backward-looking), whereas the other deals with the definition of the further evolution of 
EU law, its implementation into the UK domestic legal order and the future position of the UK 
in the EU legal order (forward-looking).  

In legal terms, Article 50 TEU, constituting the legal base for the withdrawal agreement, in 
principle only deals with the ‘backward-looking’, whereas for the ‘forward-looking’, depending 
on the policy choices made, another legal base for an agreement has to be utilised, such as 
Article 207 TFEU for the negotiation and conclusion of comprehensive trade agreements in 
case of tailor-made arrangements. To be sure, from the wording of Article 50(2) TEU it be-
comes clear that both the agreement on ‘backward-looking’ and the agreement on ‘forward 
looking’ are linked, as the drafters of this provision have envisaged that one cannot be ne-
gotiated without taking account of the other, as will be explained hereafter in chapter 2.2. 

2.1. 

Dealing with the legacy of currently applicable EU legal framework: the 
withdrawal agreement under Article 50 TEU 

It becomes clear from the second paragraph of Article 50 TEU that the legacy of the currently 
applicable EU legal framework (backward-looking) has to be determined by an agreement of 
the Union with the UK ‘setting out the arrangements for its withdrawal’. It derives from Article 
50(3) TFEU that this agreement has to be negotiated within a period of two years following 
the formal notification of the UK to the European Council of its intention to withdraw from 
the Union. If no agreement has been reached at the end of the two-year period, primary and 
secondary  Union  law  cease  to  apply  in  the  UK  without  any  (transitional)  arrangements. 
Hence, while it becomes clear from the wording of Article 50 TEU (‘setting out the arrange-
ments  for  its  withdrawal’)  that  the  drafters  of  this  provision  aimed  at  ensuring  an  orderly 
withdrawal of a Member State through the completion of an agreement that determines the 
legacy of the currently applicable EU law (backward-looking), neither the Union nor the UK 
for that matter are under any legal obligation to conclude such an agreement. Such an agree-
ment is thus not a conditio sine qua non for the withdrawal of a Member State. A prolongation 
of the negotiation period is possible, but requires a unanimous vote in the European Council.  

Opinions differ among commentators as to whether the Article 50 TEU process can be re-
versed  once  the  withdrawal  procedure  has  been  set  in  motion  by  handing  in  the  requisite 
notification under Article 50. Article 50 has never been utilised, and it is silent on this issue.30 
Craig (2016) and Skouris (2016) argue that the process can be reversed and that this is – in 
the  words  of  Craig  –  ‘the  natural  textual  meaning’  to  be  accorded  to  Article  50(3)  TEU.31 
Craig (2016) moreover argues that once the withdrawing Member State changes its mind, 
there is no decision to withdraw from the EU in accordance with the constitutional require-
ments of that country as required by Article 50(1) TEU.32 This view is further supported by 

30   Also noting the absence of any practical experience with Article 50 TEU e.g.  L.E.J. Korsten, ‘Het hoe en wat van 

de Brexit’, Bb 2016/70, 240, 242.    

31   Paul Craig, ‘Brexit: A Drama in Six Acts’ (2016) 41 European Law Review 447, 464; Vassilios Skouris, ‘Brexit: 
Rechtliche Vorgaben für den Austritt aus der EU’, Europäische Zeitschrift für Wirtschaftsrecht (EuZW) 2016, 806, 
807. 
32   ibid 464. 

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arguments of principle, which draw on Articles 65-68 of the Vienna Convention on the Law 
of the Treaties (VCLT) – notably, on Article 68 VCLT, which provides that ‘[a] notification or 
instrument provided for in article 65 or 67 may be revoked at any time before it takes ef-
fect.’33 It is further supported by arguments of teleology, which highlight ‘the very consider-
able gain where a Member State decided to remain in the EU when on the brink of departure, 
having realized the benefit of membership’, as well as the withdrawing Member State’s wish 
that the voters be consulted on a withdrawal agreement the terms of which would be worse 
than the rights and obligations attached to EU membership (as they will most likely be).34 
Craig further argues that the contrary interpretation precluding reversal would lead to the 
following ‘untenable conclusion’: 

It would mean that invocation of art.50 could not be altered within the two-year pe-
riod, even if there had been a change of government following an intervening national 
election fought on whether the Member State should exit; it would mean that with-
drawal would have to proceed even if invocation of art.50 threatened or triggered an 
economic meltdown in the country; and it would generate intractable problems if the 
state  required  a  referendum  to  complete  the  exit,  since  the  withdrawal  agreement 
might be rejected by the voters.35   

Similar views are expressed by Wyatt (2016), who argues that: 

There is nothing in the wording to say that you cannot. It is in accord with the general 
aims of the Treaties that people stay in rather than rush out of the exit door. There is 
also the specific provision in Article 50 to the effect that, if a State withdraws, it has 
to  apply  to  rejoin  de  novo.  That  only  applies  once  you  have  left.  If  you  could  not 
change your mind  after  a year  of thinking  about  it, but before  you had withdrawn, 
you  would  then  have  to  wait  another  year,  withdraw  and  then  apply  to  join  again. 
That just does not make sense. Analysis of the text suggests that you are entitled to 
change your mind.36 

Skouris (2016) observes that that it would be ‘deplorable’, if in case a country decided to 
remain  in  the  EU  Union  law  would  force  that  country  to  still  leave  the  EU.37  Michl  (2016) 
supports this view by referring to general principles of International law, such as the principle 
of ‘favor contractus’, which is reflected by Article 68 VCLT, which allows for unilateral revo-
cation  of  a  notification  to  withdraw  under  International  law.38  Lord  Kerr  himself,  who  was 
involved  in  drafting  Article  50  TEU,  has  argued  that ‘it  is  not  irrevocable’  and  that  ‘legally 
they [i.e., the other Member States] couldn’t insist that you leave’.39 It is further argued by 
commentators that abuses of the withdrawal process – such as a State changing its mind 
after 23 months after realising that it is not going to get a ‘good’ deal (or any deal at all) 

33   ibid  463-64;  Paul  Craig,  ‘Brexit:  Foundational  Constitutional  and  Interpretive  Principles:  II’  (OxHRH  Blog,  28 
October  2016)    http://ohrh.law.ox.ac.uk/brexit-foundational-constitutional-and-interpretive-principles-ii/>  ac-
cessed 12 December 2016. See also Carlos Closa Montero, ‘Is Article 50 Reversible? On Politics Beyond Legal 
Doctrine’, VerfBlog, 2017/1/04, http://verfassungsblog.de/is-article-50-reversible-on-politics-beyond-legal-doc-
trine/. 

34   Craig (n 31), 465. 
35   ibid 464. 
36   See Derrick Wyatt’s response to Question 3 in Revised transcript of evidence taken before The Select Committee 
on the European Union, Inquiry on the Process of Leaving the European Union, Evidence Session No. 1, 8 March 
2016, discussed in European Union Committee, The Process of Withdrawing from the European Union (eleventh 
report) (2015-16, HL 138) ch 2. 

37   Skouris (n 31), 807. 
38   Walther Michl, ‘Die formellen Voraussetzungen für den Austritt des Vereinigten Königreichs aus der Europäischen 

Union’, Neue Zeitschrift für Verwaltungsrecht (NVwZ) 2016, 1365, 1367. 

39   Glenn  Campbell,  ‘Article  50  Author  Lord  Kerr  Says  Brexit  Not  Inevitable’  (BBC  News,  3  November  2016)  

http://www.bbc.com/news/uk-scotland-scotland-politics-37852628> accessed 12 December 2016. 

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agreed  inside  24  months,  revoking  the  notice  of  withdrawal,  and  then  submitting  another 
notice of withdrawal a few months later and trying again – could be dealt with by the CJEU 
if need be. The CJEU could construe Article 50 such that if there were repeated attempts to 
trigger it, which constituted a single sequence of events, the two year period should be in-
terpreted to apply to the event as a whole.40 

However, not all commentators agree that the Article 50 TEU process of exiting the EU could 
be reversed unilaterally.41 According to this opinion, a unilateral right to revoke the notifica-
tion of withdrawal is not in line with either the purpose or the structure of Article 50. It is 
argued that the process could only be reversed in agreement with the EU27. This interpreta-
tion also has the merit of deterring a State from triggering Article 50 unless it is absolutely 
sure that it wants to run the risks of getting a bad deal, which is, in this opinion, in line with 
the purpose of Article 50. 

Beyond  legal  reasoning  some  authors  argue  that  in  political  reality  it  would  be  difficult  to 
envisage that the European Council would reject an attempt by the Member State concerned 
to withdraw from the withdrawal.42  

It should be further noted that it was common ground between the parties in the Miller case 
in the UK High Court that ‘a notice under Article 50(2) TEU [could not] be withdrawn’ and 
that ‘[o]nce a notice [was] given, it [would] inevitably result in the complete withdrawal of 
the United Kingdom from the European Union and from the relevant Treaties at the end of 
the  two  year  period,  subject  only  to  an  agreement  on  an  extension  of  time  between  the 
United Kingdom and the European Council.’43 Triggering Article 50 was regarded as akin to 
firing a bullet that would inexorably reach its target (‘Brexit’) by the end of the two-year (or 
the extended) period. Working within an adversarial system has the consequence that the 
contending parties place the opposing arguments before the court,44 yet neither party sug-
gested that the notice was revocable. 

The ultimately negotiated agreement is concluded after a qualified majority vote in the Coun-
cil and the consent of the European Parliament. Poptcheva (2016) notes that ‘Article 50 TEU 
does not establish any substantive conditions for a Member State to be able to exercise its 
right to withdrawal, but only procedural requirements.’45 The European Council, that is, the 
Heads of State or Government of the remaining Member States, have to issue guidelines for 
the negotiations to take place between the EU and the UK. The withdrawal agreement has to 
be concluded by the Council of the EU, that is, by the national ministers of the EU Member 
States, acting by a qualified majority, and not by unanimity. Such ‘super’ qualified majority 
is defined as at least 72% of the members of the Council, comprising at least 65% of the 

40   Craig (n 33); Menelaos Markakis, ‘Legal Issues Arising from the Brexit Referendum: A UK and EU Constitutional 

Analysis’ (2017) 45(1) International Journal of Legal Information 14, 20. 

41   See, e.g., Jake Rylatt, ‘The Irrevocability of an Article 50 Notification: Lex Specialis and the Irrelevance of the 
Purported Customary Right to Unilaterally Revoke’ (U.K. Const. L. Blog, 27 July 2016) <https://ukconstitution-
allaw.org/2016/07/27/jake-rylatt-the-irrevocability-of-an-article-50-notification-lex-specialis-and-the-irrele-
vance-of-the-purported-customary-right-to-unilaterally-revoke/> accessed 14 September 2016. 

42   Armin  Cuyvers,  ‘Artikel  50  VEU  en  Brexit:  de  juridische  contouren  voor  een  politiek  drama’,  NtEr  september 

2016, nr. 7, 221, 225; Menelaos Markakis (n 40), 20. 

43   R. (on the application of Miller) v Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin); 
[2016] A.C.D. 134, [10]-[11]. Critical on this approach Daniel Sarmiento, ‘Miller, Brexit and the (maybe not to 
so evil) Court of Justice’, VerfBlog, 2016/11/08, http://verfassungsblog.de/miller-brexit-and-the-maybe-not-to-
so-evil-court-of-justice/, DOI: http://dx.doi.org/10.17176/20161108-171128 accessed 5 January 2017. 

44   Paul  Craig, 

‘Miller:  Winning  Battles  and  Losing  Wars’ 

(OxHRH  Blog,  4  November  2016) 

<http://ohrh.law.ox.ac.uk/miller-winning-battles-and-losing-wars/> accessed 12 December 2016. 

45   European Parliamentary Research Service, ‘Article 50 TEU: Withdrawal of a Member State from the EU’ (February 
<http://www.europarl.europa.eu/Reg-

2016) 
Data/etudes/BRIE/2016/577971/EPRS_BRI%282016%29577971_EN.pdf> accessed 17 August 2016, 3. 

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population of the Member States.46 As to the role of the exact role of the European Parliament 
in the Brexit procedure reference is presently made to chapter 2.3. 

The steps to be followed pursuant to Article 50 TEU can be summarised as follows:47 

As has been observed in the previous chapters, Article 50(2) TEU requires a notification by 
the Member State concerned to the European Council. The question of exactly which consti-
tutional organ is authorised under UK constitutional law to take a decision on the notification 
is, as pointed out by Cuyvers (2016) with reference to Hillion (2015) and Tatham (2012), 
also of importance from a European Union law perspective. Namely, does the European Coun-
cil  have  the  right  or  even  an  obligation  to  undertake  a  substantive  review  of  whether  the 
notification has indeed been done ‘in accordance with … the constitutional requirements’ of 
the Member State concerned?48 

Leaving aside the decision-making procedure, Article 50 TEU provides little clues regarding 
the scope of the withdrawal agreement other than stating in paragraph 2 that it should set 
out the arrangements for the withdrawal, stating that these arrangements are ‘taking account 
of the framework for its future relationship with the Union’. This reference to the ‘framework 
for its future relationship’ thus links the withdrawal agreement to the future framework and, 
by that, with the policy choices that the UK has to decide regarding its future relationship 
with the EU. 

2.2. 

Defining the future relationship between the EU and the UK: the future 
arrangement 

As becomes already clear from chapter 2.1., the legal framework defining the relationship 
between the EU and the UK is twofold. While the withdrawal agreement to be concluded in 
accordance with Article 50 TEU will have to deal with transitional measures, it cannot itself 
in its entirety define the future framework.49 Instead, the latter will have to be dealt with in 
a stand-alone agreement, which can take numerous shapes.  

46   Article 238(3)(b) TFEU. 
47   The figure is taken from Markakis (n 40), 18. 
48   Cuyvers (n 42), 224. For the reference to Hillion (2015) and Tatham (2012) see footnote 21 of that contribution.  
49   In a similar vain ‘Editorial comments: Withdrawing from the “ever closer union?” (2016) 53 Common Market Law 

Review 1491. 

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In this context Craig (2016) has argued that there could be a ‘thin’ withdrawal agreement 
‘that deals only with the core essentials of terminating the UK’s current relationship with the 
EU, while leaving details concerning the future to be decided by a later treaty’; or a much 
‘thicker’  agreement,  setting  out  ‘the  detailed  architecture  to  govern  future  interaction  be-
tween the EU and the UK’.50 Indeed, it appears rather unlikely that the UK would opt for a 
‘thicker’ agreement considering the tight two-year deadline, the extension of which requires 
unanimity in the European Council. This thus makes a ‘slim’ withdrawal agreement that con-
tains the necessary minimum for the withdrawal a likely scenario.  

The drafters of Article 50(2) TEU have envisaged that the substance of the withdrawal agree-
ment is to some extent determined by the character of the future relationship between the 
UK and the Union. Otherwise, the reference in the context of the withdrawal agreement to 
the framework relating to the future relationship between the UK and the EU would make 
little  sense.  Against  this  background,  a  position  stating  that  there  has  to  be  a  withdrawal 
agreement before any serious orientation concerning the future relationship can take place 
seems at least questionable. So, while the withdrawal agreement under Article 50 TEU cannot 
itself define the future relationship between the UK and the Union, as this would go beyond 
the meaning of ‘taking account of’, drawing a precise dividing line between these two agree-
ments appears difficult in abstracto and can only be attempted once the UK has taken a policy 
decision on its (envisaged) future vis-à-vis the EU. De Witte argues in this context that the 
reference to the future agreement ‘implies that the main outlines of that future relationship 
should be known by the time the withdrawal agreement is signed’. In fact, this author even 
suggests that for the negotiating parties it may be preferable not to sign a withdrawal agree-
ment in case that a satisfactory ‘deal for the future’ cannot be reached.51    

The meaning of ‘taking account’ does not become equally relevant in all withdrawal scenarios 
discussed  in  more  detail  in  chapter  3.  Under  the  EEA  option,  the  framework  of  the  future 
relationship will be defined by existing EEA law/EFTA law. Under the WTO ‘fall-back scenario’ 
option, no detailed rules on the future relationship between the UK and the Union within the 
WTO  framework  would  necessarily  be  needed.  Simply  concluding  a  withdrawal  agreement 
could in principle be a suitable solution, albeit the UK would have to negotiate its own WTO 
schedule relating to tariffs, quotas and subsidies (in particular concerning agricultural prod-
ucts), as will be further described in chapters 3.3 and 3.4. This means that the Treaty refer-
ence to ‘taking account’ becomes mainly relevant in a scenario involving tailor-made solu-
tions.  Here,  the  trade  relations  between  the  Union  and  the  UK  would  have  to  be  defined 
autonomously, requiring a comprehensive trade agreement such as CETA or TTIP, both of 
which are based on Article 207 TFEU (see further chapter 3.6.). In contrast to the withdrawal 
agreement under Article 50 TEU, which requires a qualified majority in the Council regardless 
of the contents of the agreement, the applicable decision making procedure in the case of a 
free trade agreement depend on the substance of the agreement (qualified majority or una-
nimity in the Council after obtaining the consent of the European Parliament).  

In order to conclude such an agreement, first the Council will have to define a negotiation 
mandate upon recommendation of the Commission by qualified majority without any further 
involvement  of  the  European  Parliament  (Article  207(3)  and  (4)  TFEU),  provided  that  this 

50   Craig (n 31), 465; Cuyvers (n 42), 227. On the withdrawal agreement, see further Alan Dashwood, ‘After the 
Deluge’ (2016) 41 European Law Review 469; Bruno De Witte, ‘Near-Membership, Partial-Membership and the 
EU Constitution’ (2016) 41 European Law Review 471; Pavlos Eleftheriadis, ‘A New Referendum is a Constitu-
tional Requirement’ in Pavlos Eleftheriadis (ed) and others, ‘Legal Aspects of Withdrawal from the EU: A Briefing 
Note’ (14 July 2016) <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2809285> accessed 3 August 2016, 
25-28;  House  of  Commons  oral  evidence  for  the  ‘UK’s  economic  relationship  with  the  EU  inquiry’ 
<http://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/inquir-
ies1/parliament-2015/economic-relationship-with-eu-16-17/> accessed 15 December 2016. 

51   De Witte (n 50), 471.  

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agreement does not touch upon trade in services and the commercial aspects of intellectual 
property, as well as foreign direct investment. In those cases, the Council acts unanimously 
where such agreements include provisions for which unanimity is required for the adoption 
of internal rules (Article 207(4) TFEU). The Council also acts unanimously for the negotiation 
and conclusion of agreements in the field of trade in cultural and audiovisual services, where 
these agreements risk prejudicing the Union’s cultural and linguistic diversity; and in the field 
of trade in social, education and health services, where these agreements risk seriously dis-
turbing the national organisation of such services and prejudicing the responsibility of Mem-
ber States to deliver them (Article 207(4) TFEU). The negotiation and conclusion of interna-
tional agreements in the field of transport is governed by the provisions of Title VI of Part 
Three and Article 218 TFEU (Article 207(5) TFEU). 

Furthermore, it should be noted that, as the debate in legal scholarship stands today, com-
prehensive free trade agreements are considered to be mixed agreements. More clarity on 
this  matter  can  be  expected  once  the  ECJ  has  issued  its  opinion  2/15  on  the  Free  Trade 
Agreement  with  Singapore.  AG  Sharpston  recently  opined  that  this  free  trade  agreement 
could be concluded only by the EU and the Member States acting jointly.52 Assuming, for the 
time  being,  that  such  comprehensive  free  trade  agreements  are  mixed  agreements,  their 
conclusion requires ratification by all EU Member States, in accordance with their respective 
constitutional requirements.53  

It is furthermore argued in legal scholarship that the EU Treaties and protocols may also need 
to be amended by the remaining Member States to take stock of the post-Brexit reality.54 
For this the Treaty amendment procedure laid down in Article 48 TEU will have to be initiated. 

This quick comparison of the decision-making procedures makes it clear that a tailor-made 
solution  may  not  be  achieved  by  means  of  concluding  a  withdrawal  agreement  alone,  but 
requires a set of independent agreements, amongst which there would be a CETA/TTIP type 
of comprehensive free trade agreement. Ideally, because of the interdependence of the with-
drawal agreement and the framework for the future relationship, both should be negotiated 
and possibly even concluded within the same two-year period defined in Article 50 TEU so to 
ensure coherence between the two agreements and to avoid legal lacunae. Yet, from a legal 
point of view it may be argued the competence of the EU to formally negotiate international 
agreements  relates  to  constellations  where  the  EU  is  negotiating  with  a  third  country  and 
thus not with a Member State that has the intention to withdraw from the Union. More im-
portantly in practical terms, considering past experience, the likelihood of the completion of 
the negotiations on a comprehensive free trade agreement within two years is rather remote. 

It is questionable, whether in the likely situation that the withdrawal agreement is negotiated 
much quicker than the agreement on the future relationship, the entry into force of the with-
drawal could be made conditional upon the entry into force of the agreement on the future 
relationship. The reason for this is that such a clause in the withdrawal agreements would 
have the effect of delaying the withdrawal of the UK beyond the two-year deadline foreseen 
in the third paragraph of Article 50 TEU. So in order to not circumvent Article 50 TEU, such 
a clause would arguably have to be approved by a unanimous vote in the European Council. 

52   Opinion procedure 2/15, Opinion of AG Sharpston, ECLI:EU:C:2016:992. 
53   For the fate of existing mixed agreements after ‘Brexit’, see Panos Koutrakos, ‘Negotiating International Trade 

Treaties after Brexit’ (2016) 41 European Law Review 475. 

54   Adam Łazowski, ‘Withdrawal from the European Union and Alternatives to Membership’ (2012) 37 European Law 

Review 523, 529-30. 

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Finally, it should be recalled that in order to launch the negotiations for a future comprehen-
sive trade agreement with the UK, the EU has to define its negotiation mandate before en-
tering into negotiations with the UK. This mandate has to take into account the particularities 
of free trade agreements in contrast to the EU Treaties. EU law is a ‘living instrument’ as it 
provides  for  legal  bases  to  adopt secondary  legislation,  which has to  be  implemented  into 
national legal orders. Free trade agreements traditionally do not provide for such ‘dynamisa-
tion’ but for rules of some kind of mutual recognition (be it a mutual recognition of standards, 
be it a mutual recognition of conformity decisions). This inherent danger of ‘fossilizing’ legal 
standards is the main danger to any currently applicable secondary EU legal act, which sets 
minimum standards for goods and services in the internal market. 

2.3. 

Article 50 TEU: the role of parliaments in the withdrawal agreement 

2.3.1. 

European Parliament  

As  has  been  pointed  out  above,  the  Council  needs  to  obtain  the  consent  of  the  European 
Parliament. This requires a simple majority of at least one third of the total number of MEPs.55  
Despite this involvement of the EP, some commentators consider the European Council to be 
the most important institutional player, as it determines the political direction of the negoti-
ations.56  

The  role  of  the  European  Parliament  is,  at  first  sight,  only  a  minor  one.  It  has  to  give  its 
consent by a majority of the votes cast (Article 50(2) TEU in conjunction with Rule 82 of the 
Rules  of  Procedure  of  the  European  Parliament).  Rule  81  of  the  Rules  of  Procedure  of  the 
European Parliament specifies, by reference from Rule 82, the rights of the Parliament during 
the negotiation of the withdrawal agreement. According to this Rule, Parliament may decide, 
on a proposal from the committee responsible, a political group or at least 40 Members, to 
request the Commission and the Council to take part in a debate before negotiations with the 
State commence. Yet, when adopting the negotiation mandate, the European Parliament may 
neither amend nor veto a draft mandate. Article 50(2) TEU refers in this context to Article 
218(3) TFEU, which empowers exclusively the Council to adopt the decision authorising the 
opening of negotiations. Throughout the negotiations, the Commission and the Council have 
to inform the committee responsible regularly and fully of the progress of the negotiations, 
if necessary on a confidential basis. At any stage of the negotiations Parliament may, on the 
basis of a report from the committee responsible, adopt recommendations and require these 
to be taken into account before the conclusion of a withdrawal agreement. When the negoti-
ations  are  completed,  but  before  any  agreement  is  signed,  the  draft  agreement  must  be 
submitted to Parliament.  

There is academic debate as to whether British MEPs can still participate in the voting. This 
issue relates to a future ratification of the withdrawal agreement under Article 50(2) TEU, 
but also to the current Parliamentary work in the run up and during the withdrawal negotia-
tions and any on-going legislative files. 

Article 50(2) TEU itself is silent on this issue and only addresses the situation of the member 
of the European Council or of the Council representing the withdrawing State.57 On one hand 
it  has  been  observed  by  Łazowski  (2012)  that  ‘[a]lthough  art.  50  TEU  is  silent  on  this,  it 
seems  reasonable  to  expect  that  the  same  rule  will  apply  to  the  elected  members  of  the 

55   Article 231 TFEU; Rule 168(2) of the European Parliament’s Rules of Procedure. 
56   Adrienne de Moor-van Vugt, ‘Redactionele signalen’, SEW, Tijdschrift voor Europees en economisch recht 2016, 

291.   

57   Article 50(4) TEU specifies that the UK representative in the European Council and the Council is excluded from 
the deliberations and decision-making in the European Council and Council. See also Cuyvers (n 42), 226. 

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European  Parliament  from  the  departing  country.’58  On the  other hand  it  can  be  observed 
that Article 10(2) TEU considers MEP to be representatives of the Union citizens and thus, 
expects them to act in their interest. In contrast to the Council, which represents the interests 
of the European nations, MEPs are not representing their home countries. By that, there is 
no  constitutional  ground  for  depriving  British  MEPs  of  any  right  linked  to  the  status  of  a 
Member of European Parliament.59 Thus, it is for example argued by Rieder (2013) that their 
participation in voting would further ‘allo[w] nationals from other EU Member States who are 
living on the territory of the withdrawing state to have at least some representation in the 
political  process  of  withdrawal’,60  given  that  they  have  the  right  to  vote  in  the  European 
elections in their state of residence.61 This would ‘alleviate’, it is argued, ‘the problem that 
they may be excluded from the national political process/discourse of withdrawal.’62 

The same reasoning can be applied to the involvement of British MEPs in on-going legislative 
files. Currently, the withdrawal of the UK from the EU is a legal Nullum. Until the withdrawal 
becomes effective, nothing changes in relation to the legal status of the UK in the EU. Even 
after the formal notification of 29 March 2017 to the European Council, British MEPs must 
arguably be still in a position to make use of their full rights as Members of the European 
Parliament.  

2.3.2. 

National Parliaments 

The  withdrawal  agreement  does  not  require  ratification  by  the  national  parliaments  of  the 
Member States.63 Yet, in the light of a possible future free trade agreement and the likely 
need for a ratification thereof by national parliaments, it is advisable to engage the latter in 
the process leading up to the conclusion of a withdrawal agreement, such as through regular 
a regular exchange of information on the state of affairs of the negotiations.  

Apart from the parliaments of the remaining Member States, the particular situation applying 
to the UK has to be noted and namely the rights of the UK Parliament pursuant to domestic 
constitutional  requirements  in  relation  to  the  formal  notification  and,  thereafter,  the  with-
drawal agreement concluded by the UK government.  

As has been noted above, according to Article 50(1) TEU any Member State may decide to 
withdraw from the Union in accordance with its own constitutional requirements. This means 
that the domestic process leading to invocation of Article 50 TEU is subject to the constitu-
tional legal requirements in the Member State concerned. As the exact scope of these do-
mestic requirements was not clear in the UK, this had given rise to extensive legal debate. 
As a matter of principle, the conduct of international relations and the making and unmaking 
of treaties on behalf of the UK are regarded as matters for the Crown (acting through the 
Executive Government of the day) in the exercise of its prerogative powers.64 It was none-
theless contested, whether the Executive could use the Crown’s prerogative powers to give 

58   Łazowski (n 54), 528. 
59   See,  e.g.,  Articles  10(2)  and  14(2)  TEU.  See  further  Darren  Harvey,  ‘What  Role  for  the  European  Parliament 
under  Article  50?’  (EU  Law  Analysis  Blog,  14  July  2016) <http://eulawanalysis.blogspot.co.uk/2016/07/what-
role-for-european-parliament-under.html> accessed 3 August 2016; Markakis (n 40), 18-19. See also de Moor-
van Vugt (n 56), 292, who seems to argue that EU law does not foresee the exclusion of British MEPs. 

60   Clemens  M.  Rieder,  ‘The  Withdrawal  Clause  of  the  Lisbon  Treaty  in  the  Light  of  the  EU  Citizenship:  Between 

Disintegration and Integration’ (2013-2014) 37 Fordham International Law Journal 147 (2013), 159. 

61   Article 20(2)(b) TFEU. 
62   Rieder (n 60), 159.  
63   For a different view see Łazowski (n 7), 118. This does not exclude that national parliaments may demand from 
their own governments to be involved in the negotiations. See in this regard the report commissioned by the EU 
affairs committeee of the Dutch second Chamber of Parliament: ‘Nederland en de Brexit’, Nr. 171 Verslag van 
de Rapporteurs, 21 March 2017.  

64   Craig (n 31), 462. On the royal prerogative, see e.g. Timothy Endicott, ‘This Ancient, Secretive Royal Prerogative’ 
(U.K. Const. L. Blog, 11 November 2016) <https://ukconstitutionallaw.org/2016/11/11/timothy-endicott-this-

24   

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notice under Article 50 TEU for the United Kingdom to cease to be a member of the European 
Union  or  whether  it  should  seek  parliamentary  authorisation  prior  to  triggering  Article  50 
TEU.  

In  the  literature,  it  has  been  observed  that  seeking  some  form  of  parliamentary  approval 
could be regarded as a legal or a conventional constitutional obligation or perhaps justified 
‘in terms of political expediency’.65 The prerogative power of the Crown could be said to be 
fettered by domestic legislation such as the European Communities Act 1972 (ECA 1972), 
which incorporates the EU Treaties into domestic law. The relevant literature and case law 
are listed in the bibliography chapter, and space precludes a detailed exegesis of the complex 
issues examined therein. Suffice it to say for present purposes that there was considerable 
ambiguity as to whether parliamentary approval would be required prior to triggering Article 
50 and that this uncertainty is reflected in the relevant literature.  

Barber, Hickman and King (2016) argue that ‘it is not open to Government to turn a statute 
into what is in substance a dead letter by exercise of the prerogative powers; and that it is 
not open to the Government to act in a way which cuts across the object and purpose of an 
existing statute.’66 In the opinion of these authors, triggering Article 50 through the prerog-
ative would render the ECA 1972 ‘nugatory’, in the sense that its provisions would be devoid 
of  any  substance  and  the  EU  rights  introduced  through  it  into  UK  law  would  fall  away.  As 
such,  they  argue  that  before  an  Article  50  declaration  can  be  issued,  UK  Parliament  must 
enact a statute empowering or requiring the UK Prime Minister to issue notice under Article 
50 TEU, and empowering the Government to make such changes to statutes as are necessary 
to bring about UK’s exit from the EU. 

Craig (2016) argues that ‘[t]he invocation of art. 50(1) has no legal effect as such on the 
ECA 1972, nor does the 1972 Act say anything about the procedure for withdrawal from the 
EU Treaties’.67 The ECA 1972 would need to be repealed through a statute enacted by Par-
liament.68 There is, according to this opinion, no case that comes close to establishing the 
proposition advocated by Barber, Hickman, and King.69 This should be regarded, however, 
as  a  critique  of  their  position  as  articulated  in  their  contribution,  and  not  as  an  argument 
against review by Parliament.70 Young (2016) further argues that the interpretation of Bar-
ber, Hickman, and King is not widely accepted; that unless and until a withdrawal agreement 
is reached between the UK and the EU, it is by no means clear that the invocation of Article 
50 TEU means that all of the EU rights currently enjoyed by UK citizens will be removed; that 
it is difficult to regard that provision as a one-way street to exit from the EU; and that ‘a 
prerogative power to enter into Treaties does not in and of itself create rights and obligations 
in UK law’, as ‘these rights and obligations need to be ratified – normally through legislation 
– into UK law’.71 

ancient-secretive-royal-prerogative/>  accessed  12  December  2016;  Peter  Leyland,  The  Constitution  of  the 
United Kingdom: A Contextual Analysis (3rd edn, Hart Publishing 2016) 32, 87-90. 

65   Alison  Young,  ‘Brexit,  Article  50  and  the  “Joys”  of  a  Flexible,  Evolving,  Un-codified  Constitution’  in  Pavlos 
Eleftheriadis  (ed)  and  others,  ‘Legal  Aspects  of  Withdrawal  from  the  EU:  A  Briefing  Note’  (14  July  2016) 
<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2809285> accessed 3 August 2016, 20-24. 

66   Nick Barber, Tom Hickman and Jeff King, ‘Pulling the Article 50 “Trigger”: Parliament’s Indispensable Role’ (U.K. 
Const. L. Blog, 27 June 2016) <https://ukconstitutionallaw.org/2016/06/27/nick-barber-tom-hickman-and-jeff-
king-pulling-the-article-50-trigger-parliaments-indispensable-role/> accessed 3 August 2016. 

67   Craig (n 31), 463. 
68   ibid 463. 
69   ibid 463. 
70   See further Paul Craig, ‘Brexit: Foundational Constitutional and Interpretive Principles: I’ (OxHRH Blog, 27 Oc-
tober  2016)  <http://ohrh.law.ox.ac.uk/brexit-foundational-constitutional-and-interpretive-principles-i/>  ac-
cessed 12 December 2016. 

71   Young (n 65), 21. 

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It is further noted that it would nevertheless be possible to argue that the Executive’s pre-
rogative  power  is  altered  by  constitutional  convention,  requiring  the  Government  to  seek 
parliamentary approval prior to making the Article 50 notice.72 Indeed, it needs to be recalled 
that  constitutional  conventions  are  ‘maxims  or  practices  which,  though  they  regulate  the 
ordinary conduct of the Crown, of ministers, and of other persons under the constitution, are 
not in strictness laws at all,’ meaning that ‘conventions, unlike laws, are not enforceable in 
the courts.’73 It should be noted however that it is not clear whether such a convention exists 
with respect to ‘Brexit’, though ‘that is not in and of itself conclusive – new conventions have 
to  start  somewhere’.74  In  any  event,  such  a  convention  would  not  be  enforceable  in  the 
courts.  Consequently,  a  constitutional  convention  of  parliamentary  deliberation,  even  if  it 
existed, could not be used to stop the Government from handing in the notification required 
by Article 50 TEU to set ‘Brexit’ in motion. 

The House of Lords Select Committee on the Constitution notes that triggering Article 50 TEU 
through the use of primary legislation would entail benefits in terms of legal certainty and 
legitimacy.75  Nonetheless,  the  Committee  also  observes  that,  although  parliamentary  ap-
proval by means of resolution ‘would remove any uncertainty about Parliament’s acceptance 
of the referendum result’, it ‘would not necessarily provide a water-tight legal authority for 
triggering Article 50 against challenges in either the domestic or European courts.’76  

The uncertainty in the academic debate has now been clarified by the High Court judgment 
in the case of Miller.77 The High Court confirmed that, as a matter of UK constitutional law, 
‘the Crown cannot through the use of its prerogative powers increase or diminish or dispense 
with the rights of individuals or companies conferred by common law or statute or change 
domestic law in any way without the intervention of Parliament.’78 EU law rights were treated 
by  the  Court  as  domestic  law  rights  which  were  introduced  into  domestic  law  through  the 
ECA 1972 or as rights which depend on the continued existence of the ECA 1972. The Court 
ruled that withdrawal from the EU would undo these categories of rights which were brought 
into effect by Parliament through the enactment of the ECA 1972.79 

More specifically, the High Court set out three categories of rights: EU law rights capable of 
replication in the law of the United Kingdom after ‘Brexit’ (category (i) rights); rights enjoyed 
by British citizens and companies in other EU Member States (category (ii) rights); and EU 
law rights that could not be replicated in UK law after ‘Brexit’ (category (iii) rights). Concern-
ing the first category, it is observed that this includes ‘the rights of workers under the Working 
Time Directive’.80 Moreover, for present purposes, this can arguably be said to also include 
consumer rights. Concerning the second category, it is noted that these rights include ‘the 
rights of free movement of persons and of capital and rights of freedom of establishment’.81 
Moreover, it may be argued that the free movement of goods may fall under this heading, 
as  well  as  the  ‘right’  to  import  or  export  goods  into  or  from  an  EU  Member  State  without 
them being subject to tariffs or other charges having equivalent effect to customs duties. In 

72   Craig (n 31), 462; Young (n 65), 21-23. 
73   Albert Venn Dicey, An Introduction to the Study of the Law of the Constitution (10th edn, Macmillan 1959) 24; 

Leyland (n 64), 32-42. 

74   Young (n 65), 21. 
75   Select Committee on the Constitution, The Invoking of Article 50 (fourth report) (2016-17, HL 44) 10. 
76   ibid 12. 
77   R. (on the application of Miller) v Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin); 

[2016] A.C.D. 134. 

78   ibid [33]. 
79   ibid [62]-[66]. 
80   ibid [58]. 
81   ibid [60]. 

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the third category, the right to stand for election to the European Parliament, the right to 
vote in such elections, the ‘right’ to seek a reference to the CJEU, and ‘the right to seek to 
persuade the EU Commission to take regulatory action in relation to matters within the United 
Kingdom,  such  as  to  investigate  a  violation  of  EU  competition  law  or  of  EU  environmental 
protection legislation occurring within the United Kingdom and grant a remedy in relation to 
it’ have been identified.82  

The  High  Court  judgment  in  Miller  has  received  a  mixed  reaction  from  legal  scholars,  the 
main controversy being whether EU law rights are indeed statutory rights enacted by Parlia-
ment.83 The prevailing view seems to be that the outcome in the Miller case was correct. An 
appeal  was  lodged  before  the  Supreme  Court  of  the  United  Kingdom.  In  its  judgment  in 
Miller which  was  handed  down  on 24  January 2017,  the UK  Supreme  Court  ruled  that  the 
Government  could  not  exercise  its  prerogative  powers  and  trigger  Article  50  TEU  without 
prior authorisation by Parliament by means of statute.84 It further ruled that the UK Govern-
ment was not required to seek the consent of the Northern Ireland Assembly prior to giving 
notice under Article 50. The Scottish Parliament, Welsh Assembly and Northern Ireland As-
sembly did not have a legal veto, said the Court, on the UK's withdrawal from the European 
Union.  

At  the  time  of  writing,  the  European  Union  (Notification  of  Withdrawal)  Bill  2016-17  has 
completed its journey through the two Houses of the UK Parliament and Royal assent has 
been given. The Bill confers power on the Prime Minister to notify, under Article 50(2) of the 
TEU, the UK's intention to withdraw from the EU.85 

The UK will need to ratify a withdrawal agreement that is concluded between the EU and the 
UK pursuant to Article 50 TEU.86 It is important to note for the purposes of this study that 
there is considerable ambiguity with respect to the UK rules governing the ratification of such 

82   ibid [61]. 
83   See among many others Nick Barber and Jeff King, ‘Responding to Miller’ (U.K. Const. L. Blog, 7 November 2016) 
<https://ukconstitutionallaw.org/2016/11/07/nick-barber-and-jeff-king-responding-to-miller/>  accessed  12 
‘EU  Rights  as  British  Rights’  (OxHRH  Blog,  14  November  2016) 
December  2016;  Eirik  Bjorge, 
<http://ohrh.law.ox.ac.uk/eu-rights-as-british-rights/> accessed 13 December 2016; Paul Craig, ‘Miller: Alter-
native Syllogisms’ (OxHRH Blog, 23 November 2016) <http://ohrh.law.ox.ac.uk/miller-alternative-syllogisms/> 
accessed  30  November  2016;  Sionaidh  Douglas-Scott,  ‘Miller:  Why  the  Government  Should  Still  Lose  in  the 
Supreme Court (Even with New Arguments)’ (U.K. Const. L. Blog, 15 November 2016) <https://ukconstitution-
allaw.org/2016/11/15/sionaidh-douglas-scott-miller-why-the-government-should-still-lose-in-the-supreme-
court-even-with-new-arguments/> accessed 30 November 2016; Mark Elliott and Hayley Hooper, ‘Critical Re-
flections on the High Court’s judgment in R (Miller) v Secretary of State for Exiting the European Union’ (U.K. 
Const.  L.  Blog,  7  November  2016)  <https://ukconstitutionallaw.org/2016/11/07/mark-elliot-and-hayley-
hooper-critical-reflections-on-the-high-courts-judgment-in-r-miller-v-secretary-of-state-for-exiting-the-euro-
pean-union/> accessed 12 December 2016; David Feldman, ‘Brexit, the Royal Prerogative, and Parliamentary 
Sovereignty’ (U.K. Const. L. Blog, 8 November 2016) <https://ukconstitutionallaw.org/2016/11/08/david-feld-
man-brexit-the-royal-prerogative-and-parliamentary-sovereignty/> accessed 12 December 2016; John Finnis, 
‘Terminating  Treaty-based  UK  Rights’  (Policy  Exchange,  26  October  2016)  <http://judicialpowerpro-
ject.org.uk/wp-content/uploads/2016/10/Finnis-2016-Terminating-Treaty-based-UK-Rights-v2.pdf>  accessed 
12 December 2016; Jeff King and Nick Barber, ‘In Defence of Miller’ (U.K. Const. L. Blog, 22 November 2016) 
<https://ukconstitutionallaw.org/2016/11/22/jeff-king-and-nick-barber-in-defence-of-miller/> accessed 12 De-
cember 2016; Thomas Poole, ‘Losing our Religion? Public Law and Brexit’ (U.K. Const. L. Blog, 2 December 2016) 
<https://ukconstitutionallaw.org/2016/12/02/thomas-poole-losing-our-religion-public-law-and-brexit/> 
ac-
cessed 12 December 2016; Alison Young, ‘R (Miller) v Secretary of State for Exiting the European Union [2016] 
EWHC  2768  (Admin):  Constitutional  Adjudication  –  Reality  over  Legality?’  (U.K.  Const.  L.  Blog,  9  November 
2016)  <https://ukconstitutionallaw.org/2016/11/09/alison-young-r-miller-v-the-secretary-of-state-for-exiting-
the-european-union-2016-ewhc-2768-admin-constitutional-adjudication-reality-over-legality/>  accessed  12 
December 2016. 

84   R. (on the application of Miller) v Secretary of State for Exiting the European Union [2017] UKSC 5. 
85   ‘European  Union  (Notification  of  Withdrawal)  Bill  2016-17’  <http://services.parliament.uk/bills/2016-17/euro-

peanunionnotificationofwithdrawal.html> accessed 15 March 2017. 

86   As stated above, as far as the remaining EU Member States is concerned there is no need for ratification at the 

level of the Member States.  

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an agreement, an issue which the EU27 might have an interest to seek further clarification 
about prior to concluding a withdrawal agreement with the UK. 

Turning to the UK rules governing ratification of international agreements, the Constitutional 
Reform and Governance Act 2010 provides that, subject to certain exceptions, the Executive 
should place the international agreement before Parliament for 21 days before it is ratified. 
These agreements would have to be submitted for review by Parliament, acting separately, 
under the negative resolution procedure. The House of Commons may resolve that the treaty 
should not be ratified, and it would then be unlawful to ratify the treaty concerned. The House 
of Lords, too, can resolve that the treaty should not be ratified, the difference being that its 
resolution can be overridden by the Minister.87 

There is considerable ambiguity as to the degree of parliamentary involvement that would 
be required for the ratification of a future withdrawal agreement between the UK and the EU. 
The regime under the 2010 Act may not be held to be applicable if some greater parliamen-
tary involvement is required.88 More specifically, the 2010 Act provides that the default rule 
does not apply to a treaty that is subject to a requirement imposed by Part 1 of the European 
Union Act 2011.89 Chapter 2 of the latter Act provides that ‘a treaty which amends or replaces 
TEU or TFEU’ shall not be ratified unless it is approved by means of an Act of Parliament and 
a  referendum.90  It  is  not  clear  whether  a  withdrawal  agreement  would  be  ‘replacing’  or 
‘amending’  the  EU  Treaties  within  the  meaning  of  the  European  Union  Act  2011.91  For  his 
part, Eleftheriadis (2016) argues that a referendum would indeed be required for the with-
drawal agreement, as well as for the future trade agreement to be concluded between the 
UK and the EU.92 Others argue that a withdrawal from the EU is not covered by the terms of 
the 2011 Act, as this Act does not address, in their opinion, this type of situation. 

The following figure summarises the discussion above:93 

87   Constitutional Reform and Governance Act 2010, s 20. 
88   Constitutional Reform and Governance Act 2010, Explanatory Memorandum, para. 144. 
89   Constitutional Reform and Governance Act 2010, s 23(1)(c). 
90   European Union Act 2011, s 2. 
91   See, e.g. Craig (n 31), 466. 
92   Eleftheriadis (n 50), 25-29. 
93   The figure is taken from Markakis (n 40), 23. 

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Craig (2016) highlights another feature of the law, which is that Parliament ‘would be de-
prived of voice’ if no withdrawal agreement was concluded within the two-year period.94 The 
subsequent repeal of the ECA 1972 would be ‘purely formal’.95 He argues that: 

…the executive should not legally be able to allow the two year period to run out, with 
the consequence that the treaties cease to be applicable to the UK henceforth, without 
a  fully  informed  parliamentary  debate  concerning  the  state  of  the  negotiations,  in 
which views could be expressed as to whether to proceed with exit in this manner, to 
accept the best withdrawal deal that is on offer or to remain within the EU. This would 
be giving effect to the legal principle contained in the Constitutional Reform and Gov-
ernance Act 2010 as it pertains to this situation, and it should be regarded as a cog-
nisable legal constraint that could be actionable in the courts.96 

This is clearly important for the purposes of this study, as it would not be surprising if this 
type of situation gave rise to yet more litigation on ‘Brexit’ in the UK courts, thereby further 
postponing ‘Brexit’. 

2.4. 

The future EU-UK trade agreement: the role of parliaments 

As explained above, the rules governing the negotiation and conclusion of the future EU-UK 
trade agreement are set out in Article 207 TFEU. Again, these rules should not be confused 
with  those  governing  the  negotiation  and  conclusion  of  the  EU-UK  withdrawal  agreement, 
which are set out in Article 50 TEU. 

2.4.1. 

European Parliament 

This chapter discusses the role of the European Parliament with respect to the making of a 
future EU-UK agreement, the operation of the EU-UK agreement, and the prospects of inter-
parliamentary cooperation.  

As regards the future EU-UK trade agreement, it is explicitly provided in Article 207(3) TFEU 
that  ‘[w]here  agreements  with  one  or  more  third  countries  or  international  organisations 
need to be negotiated and concluded, Article 218 shall apply, subject to the special provisions 
of this Article’. As regards the role of the European Parliament in this process, Article 207(3) 
TFEU merely provides that the Commission must report regularly to the European Parliament 
on the progress of the negotiations. It is Article 218 TFEU, which spells out the role of the 
European  Parliament  in  the  negotiation  and  conclusion  of  the  future  EU-UK  agreement  (if 
any). 

As  such,  the  default  position  is  consultation  by  the  Council  with  the  European  Parliament, 
unless the future EU-UK agreement is covered by Article 218(6)(a) TFEU. In such a case, the 
consent of the European Parliament would be required before the Council adopted the deci-
sion concluding the EU-UK agreement. At this stage of the political process, it is difficult to 
determine which set of rules precisely would be applicable to the process of negotiating and 
concluding of a future EU-UK agreement, as the shape that this agreement will take, as well 
as its substantive scope, are unknown for now.  

Yet,  it  appears  to  be  likely  that  a  tailor-made  solution  would  lead  to  the  conclusion  of  a 
comprehensive free trade agreement such as CETA. As explained above, such comprehensive 
trade  agreement  between  the  EU  and  the  UK  would  require  the  consent  of  the  European 

94   Craig (n 31), 467. 
95   ibid 467. 
96   ibid 467. 

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Parliament  in  relation  to  those  parts  of  the  agreement  that  are  covered  by  Union  compe-
tences. The European Parliament will have to pass all the necessary legislation in the course 
of withdrawal. Furthermore, the European Parliament may obtain the opinion of the ECJ as 
to whether the EU-UK agreement envisaged is compatible with the EU Treaties. Where the 
opinion of the ECJ is adverse, the agreement envisaged may not enter into force unless it is 
amended or the Treaties are revised (Article 218(11) TFEU). 

As regards the operation of the future EU-UK agreement (if one was concluded), it is argued 
by Stoll (2017) that it is for the European Parliament to secure legitimacy and the rule of law 
in the process of its operation. This is all the more important since the future EU-UK agree-
ment  is  likely  to  be  a  ‘living  agreement’,  which  would  further  be  developed  by  the  treaty 
bodies. Such bodies might take decisions on amending its Annexes (or on its interpretation) 
which would take effect without the need for ratification. The role of the European Parliament 
in the operation of agreements, Stoll argues, is limited: the Parliament receives information 
and  may  issue  declarations.  This  may  raise  concerns,  he  argues,  from  the  standpoint  of 
democracy and legitimacy. Consequently, he recommends that the role of the European Par-
liament in the operation of the future EU-UK agreement be strengthened by means of inter-
institutional agreements and by establishing an interparliamentary body in the EU-UK agree-
ments.97 

There are different models with respect to interparliamentary cooperation in the context of 
such international agreements. Interparliamentary activities could be informal, such as the 
interparliamentary dialogue in the context of CETA. Alternatively, interparliamentary activi-
ties could be embedded in a future EU-UK agreement, providing for joint parliamentary com-
mittees or setting out arrangements modelled after EEA, the EU-Turkey arrangements or the 
EU-Ukraine  agreement.  It  is  argued  by  Stoll  that  interparliamentary  structures  should  be-
come part of both agreements and that this would strengthen the role of the European Par-
liament in the operation of these agreements.98 

2.4.2. 

National Parliaments 

While  national  parliaments  of  the  remaining  EU  Member  States  do  not  have  to  ratify  the 
withdrawal agreement, they will have to be involved in the ratification of the future relation-
ship of the UK with the EU.  

Most importantly, national Parliaments of the EU Member States will be involved when rati-
fying  a  tailor-made  free  trade  agreement  between  the  EU  and  the  UK.  This  relates  to  the 
decision-making process outlined in Articles 207 and 218 TFEU. Comprehensive free trade 
agreements  are,  due  to  their  wide  scope,  to  be  considered  as  mixed  agreements  such  as 
CETA or the association agreement with Ukraine. Mixed agreements can only enter into force 
if  the  EU  (in  relation  to  policy  areas  covered  by  Union  competences)  and  all  the  Member 
States (in relation to policy areas covered by national competences) have ratified the mixed 
agreement in accordance with their respective constitutional requirements. This glimpse at 
the ratification procedure of an agreement on the future relationship between the EU and the 
UK reveals that Parliaments will have quite a significant say in the forward-looking parts of 
the ‘Brexit’ procedures. The involvement of both national Parliaments and the European Par-
liament may give COSAC (Conférence des Organes Spécialisés dans les Affaires Communau-
taire), being the platform where national Parliaments and the European Parliament may co-
ordinate their activities, a new and important role to play in relation to ‘Brexit’. 

97   Peter-Tobias Stoll, ‘The Role and Powers of the European Parliament in the Brexit Process’ (Workshop on the 

consequences of Brexit, Brussels, 28 February 2017). 

98   ibid. 

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In case the UK opts for the EEA solution, Parliaments of the EFTA Member States will have 
to approve the accession of the UK to EFTA and the subsequent accession to the EEA. In case 
the UK opts for the ‘WTO option’, several decisions within the WTO require an involvement 
of national Parliaments approving these decisions.  

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3.  THE FUTURE RELATIONSHIP BETWEEN THE EU AND 

THE UK: BREXIT SCENARIOS 

Once  a  withdrawal  of  the  United  Kingdom  from  the  EU  becomes  a  reality,  resulting  either 
from the ratification of a withdrawal agreement or the expiry of the two-year period pursuant 
to Article 50(3) TEU, the future relationship between the UK and the EU has to be determined. 
In legal terms, this future relationship may take different legal forms, which depend on the 
policy choices that have yet to be made. These policy choices revolve around the following 
general questions: 

1.  How intense should the future trade cooperation between the UK and the EU be? 

2.  Will the future trade cooperation be limited to reducing/precluding trade barriers between 

the UK and the EU or will it allow for uniform standard-setting? 

3.  Will the cooperation cover all economic sectors? 

4.  Will  the  legal  arrangement  agreed  upon  by  the  UK  and  the  EU  cover  individual  rights 

whose interpretation and/or enforcement are guaranteed at the Treaty level? 

The answers to these questions have implications for the substantive scope of a future agree-
ment between the EU and the UK.  

Hereafter, first of all, general parameters determining the Brexit scenarios will be identified 
and placed in an analytical grid. Thereafter the several Brexit scenarios will be identified and 
described against the background of this analytical grid. 

3.1. 

Introduction: the various degrees of trade cooperation 

The  type  of  (trade)  cooperation  the  UK  and  the  EU  will  establish  will  be  determined  by  a 
number of parameters, including: 

 

 

 

 

the intensity of trade cooperation (3.1.1); 

the legal means to implement the trade cooperation (3.1.2); 

the enforcement regime applicable to the trade cooperation (3.1.3); 

the scope of the envisaged trade cooperation (3.1.4).  

The determination of these parameters will allow for the identification of the most suitable 
trade cooperation instrument for the policy choices made. 

3.1.1. 

Intensity of trade cooperation 

Trade cooperation aims primarily at reducing the costs for economic operators on the national 
markets that would like to enter into a cooperation. There are various ways to deal with these 
costs ranging from a minor reduction through information to their complete abolition.99 The 
distinguishing  factor  is  the  intensity  by  which  trade  cooperation  enters  into  the  sphere  of 
national law-making. Based on the level of intrusion into a country’s autonomous law-making 
sphere, the following scenarios are conceivable: 

99   World Trade Organization (WTO), World Trade Report 2005, Exploring the links between trade, standards and 

the WTO, p. xxix. 

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  Information exchange: Trading partners inform each other concerning national regu-
lation  in  place  and  agree  to  also  inform  each  other  on  future  modifications  of  national 
regulation. The trading partners remain free in setting their own standards. 

  Mutual recognition of conformity decisions: Trading partners set and apply their own 
trading standards. Decisions confirming the compliance of products emanating from the 
one  trading  partner  to  be  in  conformity  with  standards  of  the  other  trading  party  are 
mutually recognised by the trading partners. This way trading partners delegate the con-
formity assessments to the other trading partners. 

  Equivalence: A trading partner unilaterally recognizes trade standards set by the other 
trading partner. While the trading partners remain free in setting their own standards, 
they can autonomously and unilaterally decide under which conditions they consider the 
other trading partner’s standards as equivalent and open the border for products from 
the other trading partner that are in line with these standards.  

  Mutual recognition of standards: Trading partners accept each other’s trading stand-
ards. Products originating from the other trading partner may freely enter the national 
market  and  compete  against  home  products that  must  comply  with  domestic  law.  The 
trading partners remain free in setting their own standards, but competition and market 
reactions can create pressure on the legislator to adapt its own standards to lower stand-
ards. 

  Full harmonisation: Trading partners commit to set uniform rules applicable in the ter-

ritory of all partners based on objectives commonly defined. 

3.1.2. 

Legal means to implement trade cooperation 

Reducing costs for market operators in trade cooperation knows several legal ways of how 
to implement the intensity of trade cooperation as defined by the trading partners. Roughly 
these legal means can be distinguished between negative integration, which aims at reducing 
costs linked to trade barriers established by the trading partners for market operators, and 
positive integration, which requires positive legal action by the trading partners before costs 
for market operators can be reduced. 

  Negative integration: Access to the markets of the trading partners may not be pre-
cluded through (1) discrimination and/or (2) non-discriminatory trade barriers, subject 
to case-by-case justifications for unilaterally defined policy goals.  

  Positive integration: Access to markets (‘passporting’) depends on prior legislation to 
be adopted by the trading partner. Such legislation may include (1) mechanisms merely 
based  on  mutual  recognition  of  unilaterally  defined  trading  standards  of  the  partners 
(‘equivalence mechanisms’) and/or (2) commonly set trading standards applicable within 
all trading partners.  

The presence of positive integration may cut off the case-by-case justification of unilaterally 
defined trade barriers under the concept of negative integration. It follows that the two mod-
els are not mutually exclusive and that a combination of a positive integration approach with 
the tools of negative integration is conceivable. 

3.1.3. 

Enforcement of trade cooperation 

The effectiveness of the agreed intensity of trade and of the legal means to implement trade 
cooperation depend on the compliance of the trading partners. Compliance with the rules of 
the trade cooperation is defined by two parameters: the direct effect of Treaty rules and the 

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presence of a Treaty-based court system that ensure uniformity of the rules. The following 
models of enforcement can be distinguished: 

  Traditional public international law approach: Treaty rules have no direct effect. In such 
a situation market operators may only request their home countries to consult with the 
non-compliant  trading  partner.  Non-compliance  cannot  be  sanctioned  at  the  domestic 
level. 

  Traditional  public  international  law  approach  with  a  Treaty-based  dispute  resolution 
mechanism: Treaty rules have no direct effect, but the Treaty establishes treaty-based 
dispute  resolution mechanisms.  Market  operators  can  either  (1)  request  from  their 
home countries to initiate proceedings in front of these dispute resolution mechanisms 
(comparable  to  the  WTO  panel)  or  (2)  have  direct  access  to  them  in  order  to  enforce 
Treaty rights against non-compliant trading partners. 

  Direct effect: Treaty rights have direct effect, meaning that market operators can invoke 
them directly in national courts against a non-compliant trading partner without the ne-
cessity  to  transform  Treaty  rules  into  domestic  law.  In  such  a  constellation,  national 
courts may be (1) free in interpreting Treaty rights or (2) subject to a Treaty-based court 
that is exclusively competent for interpreting Treaty rights in a legally binding manner. 

3.1.4. 

Scope of trade cooperation 

The trading partners have to define the scope of trade cooperation. As a first step, a distinc-
tion can be made between an unlimited and a limited cooperation. Trade cooperation with an 
unlimited scope means that, in principle, the intensity of trade, the legal means to implement 
trade  cooperation  and  the  enforcement  mechanisms  cover  all  economic  sectors  and  trade 
barriers.  Trading  partners  may  narrow  the  scope  by  explicitly  excluding  certain  economic 
sectors and/or trade barriers from the scope (so-called ‘negative list approach’). In the al-
ternative, trading partners may define the scope in relation to explicitly mentioned economic 
sectors and/or trade barriers (so-called ‘positive list approach’).  

Furthermore,  trading  partners  can  also  define  a  different  scope  in  relation  to  one  of  the 
abovementioned elements. Against this background it is imaginable that trading partners opt 
for an unlimited scope for negative integration understood as the prohibition of discrimina-
tion, but limit the scope in which they intend to make use of full harmonisation. Moreover, 
trading partners may choose to distinguish between economic sectors.  

3.1.5. 

Analytical grid 

The abovementioned elements for trade cooperation identified above can be translated into 
the following analytical grid. This table allows to visualise the degree of trade cooperation 
that can be achieved by a certain ‘Brexit’ scenario.  

The columns identify several parameters, including the intensity of cooperation (ranging from 
mere information obligations to full harmonisation), the legal means to implement trade co-
operation (ranging from non-discrimination principles to setting common standards) and the 
compliance mechanisms (ranging from mere consultation obligations to direct effect with a 
centralised Treaty-based court).  

The rows subdivide the various Brexit scenarios based on their substantive scope. Tradition-
ally, trade cooperation distinguishes between trade in goods and trade in services. For the 
purposes of the present analysis, the analytical grid builds on this distinction for the scope of 
the various models of trade cooperation. Based on these two main categories a further sub-
division is introduced, differentiating trade cooperation with an unlimited scope, covering all 

34   

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kinds of trade barriers (e.g. most notably the fundamental freedoms in EU law) from coop-
eration with a limited scope, covering only a predefined set of trade barriers (e.g. EU direc-
tives defining their scope). This makes it possible to visualise the degree of trade cooperation 
envisaged in relation to trade in goods and in services. It should be noted in this context that 
trade cooperation that makes use of the so-called ‘negative list approach’ is considered as 
‘unlimited scope’. 

Brexit Scenarios 

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[Trading Cooperation] 

Trade in Goods 

Unlimited scope 

Limited scope 

Trade in Services 

Unlimited scope 

Limited scope 

Hereafter, the various options for the UK and the EU to define their future relationship will 
be assessed against this analytical grid. Reference will be made to known examples of exist-
ing  trade  cooperation  of  the  EU  with  third  countries,  most  notably  the  EEA,  CETA,  DCFTA 
(with Ukraine) and the KOREU with South Korea. Placing them into the analytical grid and 
comparing them to the EU membership as the baseline scenario will reveal to which extent 
a given scenario will deviate from the current EU status.  

Moreover, this will allow to analyse the role of EU secondary law in the respective scenario. 
If a trade cooperation only makes use of negative integration, EU secondary law turns into a 
non-tariff trade barrier of one of the trading partners which has to be justified for restricting 
trade. If trade cooperation, however, includes positive integration, EU secondary law might 
theoretically be extended as a common standard applicable to both trading partners. 

3.2. 

Baseline: EU membership 

The EU membership forms the baseline scenario. It defines the trade relationships of the UK 
with other 27 EU Member States. Under EU law, all economic sectors and trade barriers are 
covered  by negative  integration  in the  shape  of  the  fundamental  freedoms  prohibiting  not 
only discrimination based on the nationality or the origin of a product, but also non-discrim-
inatory  restrictions  making  cross-border  trade  less  attractive.  Some  economic  sectors  and 
some of the trade barriers are, to the extent that there are Union competences and that the 

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Policy Department A: Economic and Scientific Policy 
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Union legislator had made use of them, even covered by positive integration, where trade 
barriers are harmonised. 100 Custom tariffs are subject to full harmonisation in the EU. 

Under the EU membership, the UK has full access to the internal market, all the legislation 
pertaining to free movement of goods and services, customs union and consumer protection 
is applicable and has, when harmonisation was achieved by means of directives, to be incor-
porated into UK domestic law. Furthermore, under the EU membership, there is secure access 
to justice, as well as the coherent interpretation and application of EU law by the Court of 
Justice of the European Union. In the context of the EU, all these elements are considered a 
conditio sine qua non for having full access to the internal market formed by the EU Member 
States. 

It must be noted at this point that any deviation of another trade cooperation than the EU 
membership from the elements that define the internal market calls the right to a full access 
to  the  EU  internal  market  into  question  and  must,  in  economic  terms,  be  considered  less 
efficient in relation to the outcome of the envisaged trade cooperation. 

3.3. 

Fall-back scenario: hard Brexit without any arrangements 

The scenario that forms the antipode to the baseline of EU membership is the withdrawal of 
the UK from the EU without any kind of arrangements. This so-called ‘hard Brexit’ is the ‘fall-
back scenario’ or ‘worst case scenario’. Using this scenario as the benchmark for assessing 
the  impact of  Brexit  on  EU  policies  allows  to measure  what  is  arguably  the worst  possible 
outcome  and  allows,  by  that,  the  identification  of  the  most  important  EU  policy  measures 
that should form part of a future EU-UK agreement.  

Under this scenario, the trade cooperation between the EU and the UK would be defined by 
the WTO law. The WTO commitments are seen as basic terms for trade between two countries 
with very little integration.101 Currently, both the EU and the UK are members of the WTO in 
their own right. Amongst the most important WTO agreements, the following ones are ratified 
by the United Kingdom: 

Legal act 

Ratified by the UK 

Year 

General Agreement on Tariffs and Trade (GATT) 

General Agreement on Trade in Services (GATS) 

Agreement on Trade-Related Aspects of Intellectual 
Property (TRIPS) 

Agreement on the Application of Sanitary and 
Phytosanitary Measures (SPS) 

Agreement on Technical Barriers to Trade (TBT) 

Agreement on Trade-Related Investment Measures 
(TRIM) 

(+) 

(+) 

(+) 

(+) 

(+) 

(+) 

1948 

1995 

1995 

1995 

1995 

1995 

100  See e.g. Paul Craig and Gráinne De Búrca, EU Law. Text, Cases and Materials, 6th edition (OUP 2015), chapter 
17  et  seq.;  Fabian  Amtenbrink  and  Hans  H.B.  Vedder,  Recht  van  de  Europese  Unie,  6th  edition  (BJu  2017), 
chapter VI-VII.   

101  House of Commons Treasury Committee ‘Oral Evidence: The UK’s future economic relationship with the European 

Union’ HC 483, 13 July 2016, pp.1-6 

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Agreement on Agriculture (AoA) 

Agreement on Government Procurement (GPA) 

Agreement on Trade in Civil Aircraft 

International Dairy Agreement 

International Bovine Meat Agreement 

Trade Facilitation Agreement (TFA) 

1995 

(+) 

(–) 

(–) 

(–) 

(–) 

(–) 

The core of all WTO agreements is the prohibition of discrimination. Most notably, this covers 
the most-favoured-nation clause (MFN) and national treatment.  

Under the MFN, each WTO member is obliged to extent the same favourable treatment that 
it accords to any other country.102 What is thus prohibited is discrimination between trade 
partners. The MFN is, however, not applicable to favourable treatment accorded within agree-
ments of ‘economic integration’ such as the EU.103 By that, once the UK withdraws from the 
EU, based on the MFN principle, it cannot claim to get accorded the same favourable treat-
ment as one EU Member States accords to another EU Member State on the basis of the EU 
Treaties.104 

Under the national treatment obligation, WTO members are obliged to treat products in the 
same manner as domestic products once they have entered the domestic market.105 It should 
be noted that, under GATS, the MFN, the ‘national treatment’ and the market access rules 
do not apply to government procurement (Article XIII of GATS). 

A ‘hard Brexit’ scenario without any arrangements between the EU and the UK would lead to 
de-facto closure of the access to the EU internal market. This is due to the fact that favourable 
treatment agreed between partners in free trade agreements that aim at achieving economic 
integration is excluded from the scope of the MFN clause, as a result of which the UK cannot 
claim the same favourable treatment from EU Member States on the basis of the MFN. Con-
sequently, it was concluded:  

‘Trading with the EU on the basis of concessions set at the WTO would provide the UK 
with a baseline of tariffs for trade in goods: the UK would have to apply those tariffs 
to  imports  from  the  EU.  EU  imports  from  the  UK  would,  similarly,  face  EU  tariffs. 
Trading  under  WTO  rules  would  also  provide  limited  commitments  on  services,  as 
contained in the GATS [i.e. the General Agreement on Trade in Services]. It would 
not provide the UK with any preferential access (which might be possible under a Free 
Trade Agreement or EEA membership) to the Single Market.’106 

There was concern expressed by expert witnesses before the House of Lords’ EU Committee 
as to the tariffs facing UK exports to the single market under the WTO rules. There was also 
concern  about  ‘[a]  host  of  other  factors,  including  regulation,  geographic  indicators  and 

102  Article II of GATS, Article I of GATT 1947. 
103  Article V of GATS, Article XXIV of GATT 1947. 
104  Mary E. Footer and Carol George, The General Agreement on Trade in Services, in: Macrory, Appleton & Plummer, 

The World Trade Organization, Volume I, 2005, p. 799-954, at 833. 

105  Article XVII of GATS (but only in relation to conditions and qualifications set out in specific schedules), Article III 

of GATT 1947. 

106  European Union Committee, Brexit: The Options for Trade (fifth report) (2016-17, HL 72) 58 para 197. 

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standards’,  which  were  in  their  opinion  ‘largely  untouched  by  WTO  agreements’.107  Under 
WTO rules, the UK would only have to comply, it is argued, with EU standards and regulations 
in those goods and services it traded with EU Member States.108  

Finally, market access rules under WTO law are subject to special schedules that are currently 
negotiated and held by the EU. In order to have its own schedules, the UK must first negotiate 
these schedules, which will require some sort of approval by the EU. These schedules and 
their relationship with EU schedules are examined more closely in the next chapter (3.4.). 
What will become clear is that even a ‘hard Brexit’ will require an arrangement of the UK with 
EU as regards the UK’s position within the WTO. 

3.4. 

Hard Brexit with arrangements concerning WTO 

Whilst  WTO  law  establishes  general  principles  such  as  the  ’most-favoured  nations’  clause, 
national treatment and market access rules, these rules are in many areas subject to sched-
ules  and  commitments,  which  have  to  be  negotiated  between  the  WTO  members  (3.4.1). 
What is more, in some areas the WTO Agreements refer to the necessity to conclude special 
agreements, most notably in public procurement law. As these plurilateral trade agreements 
are not compulsory for WTO members, some of these agreements have been concluded by 
the EU (on behalf of the UK) and not by the UK in its own capacity. A ‘hard Brexit’ would 
consequently  raise  the  question  whether  the  UK  would  have  to  join  these  supplementary 
WTO  agreements  in  its  own  right  (3.4.2).  In  this  context  the  Agreement  on  Government 
Procurement (GPA) deserves special attention. 

3.4.1. 

WTO schedules and commitments 

As explained above, the UK is a member of the WTO in its own right but does not have an 
individual schedule of concessions. Instead, it is part of the EU’s combined schedules. The 
rights, commitments, and concessions of the UK under WTO rules are currently channelled 
through the EU. The European Commission speaks for all the EU Member States at almost all 
WTO meetings, and the Member States are bound by the EU schedules of commitments on 
goods and services.109  

Little  is  currently  known  about  how  to  deal  with  these  schedules  and  commitments.  It  is 
unprecedented for a WTO member to exit a supranational organisation, which bundles the 
external trade interests of its Member States at WTO level, while remaining inside the WTO. 
Yet, as a preliminary observation it can be noted that in the absence of a separate agreement 
between a withdrawing Member State and the EU, the former would have to negotiate its 
own new schedule on tariffs, quotas and subsidies independently of what the EU has achieved 
to receive also on behalf of it as a member of the EU. One possible way of dealing with the 
issue unilaterally would be that the withdrawing Member State replicates its EU commitments 
into  its  own  membership.  Such  replication  would  require  consensus  among  all  other  WTO 
members. This ‘copying of schedules’ will likely be more difficult for politically sensitive mat-
ters such as services and agricultural WTO commitments.110 Since, in relation to Brexit, the 
WTO would treat the UK as a member in its own right, its own schedule would have to be 
approved by all other 163 WTO members, including the EU for that matter.  

107  ibid 58-59 paras 198-202. 
108  ibid 61 para 213. 
109  WTO website, <https://www.wto.org/english/thewto_e/countries_e/european_communities_e.htm>. 
110  Although see interview by Roberto Azevêdo, Director General of the WTO, who expressed the view that the UK 
would not be allowed to ‘cut and paste’ the EU’s terms of membership: Financial Times, ‘Brexit warns on tortuous 
Brexit trade talks’, 25 May 2016. 

38   

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In the alternative, some sort of agreement could be concluded between the EU and the with-
drawing Member State, separating the WTO commitments of the EU and this country. Such 
a separation could concern tonnage of imports, as well as an individual country schedule in 
the area of services trade.111 Even though an agreement between the EU and the withdrawing 
Member State would be more beneficial for this country’s position in the WTO, it would, in 
the  WTO  context,  go  beyond  the  bilateral  relations  between  the  EU  and  the  withdrawing 
Member State and touch upon the interests of all the other WTO members. This becomes 
clear  when  looking  at  areas  such  as  tariff  quotas  and  agriculture  subsidies  (e.g.  farming 
subsidies). An agreement between the EU and the withdrawing Member State would there-
fore require the approval of the other WTO members. The negotiations between the with-
drawing Member State and the EU, as well as the other WTO members, would hence most 
likely be particularly intense. In any event, in case there was no approval by the other WTO 
members, the withdrawing Member State, whilst remaining a WTO member, would legally 
speaking not be in a position to simply continue to apply the EU schedules in relation to third 
countries. 

3.4.2. 

Joining WTO agreements 

Besides negotiating own schedules and commitments under WTO law, the UK would have to 
consider whether it signs and ratifies special WTO agreements that are not compulsory for 
WTO  members  and  that  are  currently  ratified  by  the  EU.  This  refers  to  the  Agreement  on 
Government Procurement (GPA) and to the Trade Facilitation Agreement (TFA), which en-
tered into force on 22 February 2017. In this context, there is an opinion, according to which 
the UK might succeed to WTO Treaties that were only ratified by the EU in its own right.112 
Yet, this opinion refers to precedents in International law that dealt with the succession in 
case  of  a  dissolution  of  a  union  or  a  federation  but  not  to  a  withdrawal  of  state  from  an 
International Organisation that continues to exist. Hence, the majoritarian view on the matter 
is that the UK will have to adhere to these WTO agreements after a withdrawal took place. 

3.5. 

Joining the European Economic Area Agreement 

The  Brexit  scenario  which  comes  the  closest  to  the  baseline  scenario,  EU  membership,  in 
terms of trade intensity is ‘joining the European Economic Area Agreement’.113 The EEA in-
cludes negative integration in the shape of a prohibition of discrimination and non-discrimi-
natory trade restrictions, positive integration in the shape of EU secondary law, which has to 
be implemented into the domestic law of the EEA countries, and a centralised Treaty-based 
Court,  the  EFTA  Court,  that  ensures  uniform  interpretation.  The  key  element  that  distin-
guishes the EEA from the EU internal market is the non-presence of direct effect. Individuals 
may only rely on EEA law after it has been incorporated into national law. 

The European Free Trade Association (EFTA) was established in 1960 by Austria, Denmark, 
Norway, Portugal, Sweden, Switzerland, and the United Kingdom. The United Kingdom and 
Denmark left EFTA in 1973 to join the European Economic Community (as it then was). The 
Agreement on the European Economic Area, which entered into force in 1994, brings the EU 
Member States and three EEA EFTA States (Norway, Iceland, and Liechtenstein) together in 

111  House of Commons Treasury Committee ‘Oral Evidence: The UK’s future economic relationship with the European 

Union’ HC 483, 13 July 2016, p.2. 

112  Lorand  Bartels,  ‘The  UK’s  Status  in  the  WTO  after  Brexit’,  <https://papers.ssrn.com/sol3/papers.cfm?ab-

stract_id=2841747>, p. 18. 

113  Joining commentators such as Łazowski (n 7), p. 119, it is presently submitted that the UK will not in its own 
right retain EEA membership. For an overview of arguments on this point see Ulrich G. Schroeyer and Heinrich 
Nemeczek, ‘The (Uncertain) Impact of Brexit on the United Kingdom’s Membership in the European Economic 
Area’, (2016) EBLR 921-958. Generally, on the state of affairs of the EEA see Halvard Haukeland Fredriksen and 
Christian N.K. Franklin, ‘Of Pragmatism and Principles: The EEA Agreement 20 Years On’, (2015) 52 Common 
Market Law Review 629.  

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a single market. Portugal joined the EU in 1986, whereas Austria, Finland and Sweden be-
came EU members in 1995. Switzerland has not signed up to the EEA Agreement and relies 
on a separate network of bilateral treaties with the EU.  

It should be stressed that assuming that the UK would implicitly lose EEA membership if it 
left the EU,114 a return to EFTA would be necessary in order for the UK to be part of the EEA 
Agreement.  More  specifically,  the  territorial  scope  of  the  latter  agreement  only  covers  EU 
Member States and EFTA States.115 Upon its withdrawal from the EU, the UK would no longer 
be covered through its EU membership. Moreover, the UK is currently not a member of EFTA. 
The  EEA  Agreement  provides  that  any  European  state  becoming  a  member  of  EFTA  may 
apply to become a party to the EEA Agreement.116 The terms and conditions for such partic-
ipation are the subject of an agreement between the Contracting Parties to the EEA Agree-
ment (Norway, Iceland, and Liechtenstein) and the applicant state (the UK). That agreement 
would have to be submitted for ratification or approval by all Contracting Parties in accord-
ance with their own procedures.117 The EEA Agreement enables Norway, Iceland and Liech-
tenstein to participate fully in the internal market.  

EU acts that are of relevance to the EEA are incorporated into the EEA Agreement, that is, 
into one of its annexes and protocols. These amendments to the EEA Agreement are made 
by means of a Joint Committee Decision (JCD). The JCD may adapt these acts before incor-
porating them into the EEA Agreement. Proposed EU legal acts with possible EEA relevance, 
adopted EU acts under consideration for incorporation into the EEA Agreement, and acts that 
have already been incorporated into the Agreement are available on EEA-Lex. 

3.6. 

Other tailor-made arrangements 

Between the antipodes of the baseline scenario ‘EU membership’ (and close to it, ‘joining the 
EEA’), on the one hand, and of the fall-back scenario ‘hard Brexit without any arrangements’, 
on the other hand, there are ‘other tailor-made arrangements’, which differ with regard to 
the degree of trade cooperation they envisage. 

As part of this general scenario, various types of bilateral agreements are conceivable, in-
cluding (but not necessarily limited to) customs unions (to eliminate customs duties in bilat-
eral trade and establish a common customs tariff with respect to third countries), association 
agreements, stabilisation agreements, free trade agreements, economic partnership agree-
ments (to remove or reduce customs tariffs in bilateral trade), and partnership and cooper-
ation agreements (to provide a general framework for bilateral economic relations without 
eliminating or reducing customs tariffs). As such, the arrangements with Switzerland, Turkey, 
Ukraine, Canada (although CETA is not yet fully ratified) and South Korea would fall under 
this heading. However, it must be stressed that the existing models clearly do not exhaust 

114  See  further  Gavin  Barrett,  ‘How  Article  127  of  the  EEA  Agreement  Could  Keep  the  UK  in  the  Single  Market’ 
(EUROPP  Blog,  4  January  2017)  <http://blogs.lse.ac.uk/europpblog/2017/01/04/how-article-127-eea-agree-
ment-could-keep-the-uk-in-the-single-market/> accessed 11 January 2017; Panos Koutrakos, ‘Brexit, European 
Economic  Area  (EEA)  Membership,  and  Article  127  EEA’  (Mockton  Chambers  Blog,  2  December  2016) 
<https://www.monckton.com/brexit-european-economic-area-eea-membership-article-127-eea/> accessed 11 
January 2017; Steve Peers, ‘Could the UK Stay in the Single Market after Leaving the EU? The Planned Case on 
Law  Analysis  Blog,  30  November  2016)  <http://eulawanalysis.blog-
Article  127  EEA’ 
spot.co.uk/2016/11/could-uk-stay-in-single-market-after.html> accessed 4 December 2016. A ‘Brexit2’ Article 
127  EEA  challenge  is  currently  pending  in  the  UK  courts,  with  the  applicants  seeking  a  declaration  from  the 
Divisional Court on the requirement of approval from HM Treasury and an Act of Parliament to withdraw the UK 
from the EEA Agreement: <https://www.no5.com/news-and-publications/news/1495-no5-barristers-instructed-
in-brexit2-article-127-eea-challenge/>. 

(EU 

115  Article 126 of the EEA Agreement. 
116  Article 128(1) of the EEA Agreement. 
117  Article 128(2) of the EEA Agreement. 

40   

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the variety of tailor-made arrangements that could possibly inform the future EU-UK agree-
ment.  

Of these tailor-made arrangements, the UK Government appears to aim for a ‘comprehen-
sive’ free trade agreement with the EU.118 At the inevitable risk of oversimplification, there 
are two basic models for comprehensive free trade agreements. Firstly, there is CETA with 
Canada. This is a purely ‘international’ agreement, i.e. with no EU acquis. Secondly, there is 
the Deep and Comprehensive Free Trade Area (DCFTA) that is part of the EU-Ukraine asso-
ciation agreement. This includes most single market acquis.119 

It is noted by Gasiorek, Holmes and Rollo (2016) that the ‘key differences’ between these 
tailor-made arrangements and the EEA model are that ‘an FTA arrangement comes with a 
lesser degree of sectoral coverage (notably in services) and does not give automatic access 
to the Single Market’.120 ‘These FTAs typically come with no obligations on free movement of 
people, budget contributions or legal oversight by the European Court of Justice.’121 ‘Essen-
tially each FTA has some elements of free trade in goods and different coverage of Single 
Market access.’122 In sharp contrast to the EEA model, the Free Trade Agreement (FTA) and 
customs union models do not in principle have rules of origin, therefore goods flow freely and 
do not have to be stopped at the border for that reason.  

It should be further noted that association agreements seem to offer, in the opinion of the 
House of Lords’ EU Committee, a way to disentangle the four freedoms from one another – 
notably, the free movement of labour from the other fundamental freedoms. In this regard, 
the House of Lords’ EU Committee makes the point (albeit with considerable caution) that 
the EU association agreements with Ukraine (to be examined below) and Georgia provide a 
precedent whose existence the EU27 might find difficult to deny.123 ‘A FTA could also avoid 
the imposition of tariffs on goods traded between the UK and the EU, although rules of origin 
would apply.’124 It is, however, argued by Gasiorek, Holmes and Rollo (2016) that ‘both the 
UK and the EU could agree that in all industries where the UK keeps the same external tariffs 
as it has now, Rules of Origin would not be checked, and/or that where standards and en-
forcement was maintained as it had been within the EU, Mutual Recognition could be assumed 
at least temporarily.’125 

Hereafter,  three  types  of  recently  concluded  (but  not  in  all  instances  ratified)  free  trade 
agreements of the EU are briefly presented, starting with the most intense, the DCFTA with 
Ukraine (3.6.1), followed by CETA with Canada (3.6.2), and KOREU with South Korea (3.6.3). 

118  Department for Exiting the European Union and The Rt Hon Davis Davis MP, ‘The United Kingdom’s Exit from 
and New Partnership with the European Union White Paper’ (2 February 2017) <https://www.gov.uk/govern-
ment/publications/the-united-kingdoms-exit-from-and-new-partnership-with-the-european-union-white-pa-
per> accessed 17 March 2017. 

119  Michael Emerson, ‘Economic Impact of Brexit on the EU27’ (Workshop on the consequences of Brexit, Brussels, 

28 February 2017). 

120  Michael Gasiorek, Peter Holmes and Jim Rollo, ‘UK-EU Trade Relations Post Brexit: Too Many Red Lines?’ (2016) 

UK Trade Policy Observatory Briefing Paper No 5, 4. 

121  ibid 4. 
122  ibid 4. 
123  European Union Committee (n 106), 45-47 paras 145-152; 49 para 166. See further Michael Emerson, ‘Which 
Model 
for  Brexit?’  (CEPS  Special  Report  No  147,  14  October  2016):  <https://www.ceps.eu/sys-
tem/files/SR147%20ME%20Which%20model%20for%20Brexit.pdf> accessed 14 December 2016; Written evi-
dence  from  Andrew  Duff  (ETG0014)  <http://data.parliament.uk/writtenevidence/committeeevidence.svc/evi-
dencedocument/eu-external-affairs-subcommittee/brexit-future-trade-between-the-uk-and-the-eu/writ-
ten/43513.html> accessed 13 December 2016. 
124  European Union Committee (n 106), 49 para 166. 
125  Gasiorek, Holmes and Rollo (n 120), 5. 

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3.6.1. 

Comprehensive Single Market access: Ukraine Agreement 

The EU-Ukraine Association Agreement was signed by the EU Heads of State or Government 
and the Ukrainian President on 27 June 2014. It was ratified by the Ukrainian and European 
Parliaments on 16 September 2014.126 The provisional application of the DCFTA started on 1 
January  2016.  The  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA)  establishes  a  free 
trade area for trade in goods over a transitional period of a maximum of 10 years (Article 
25).  Quantitative  restrictions  on  imports  and  exports  and  measures  having  an  equivalent 
effect on imports and exports are also prohibited, unless allowed by the relevant WTO rules 
(i.e. Art. XI GATT) (Article 35 of the Agreement).127 ‘The DCFTA tariff liberalisation is asym-
metrical; the EU needs to abolish its customs duties faster than Ukraine. This should give 
Ukrainian exporters the time to prepare for competition from the EU and support the Ukrain-
ian market.’128 The EU-Ukraine Agreement also includes rules of origin, which are laid down 
in Protocol I of the Association Agreement. The DCFTA further ‘includes rules on "trade de-
fence" measures that the EU and Ukraine can take against imports from the other party that 
cause or threaten to cause injury to the domestic industry, notably anti-dumping, antisubsidy 
and safeguard measures. These DCFTA provisions essentially incorporate the relevant WTO 
rules’ (see Chapter 2 of Title IV of the Agreement).129  

As noted above, the DCFTA provides that ‘[c]ustoms tariffs between the EU and Ukraine are 
set  to  disappear  almost  completely,  so  non-tariff  barriers  such  as  technical  standards  will 
become the main obstacle to trade. In order to tackle these barriers, Ukraine will adopt the 
relevant EU legislation, standards and procedures.’130 Chapter 3 of Title IV of the Agreement 
applies to the preparation, adoption and application of technical regulations, standards and 
conformity assessment procedures. The Parties must strengthen their cooperation in the field 
of technical regulations, standards, metrology, market surveillance, accreditation and con-
formity assessment procedures with a view to increasing mutual understanding of their re-
spective systems and facilitating access to their respective markets. To this end, they may 
establish  regulatory  dialogues  at  both  horizontal  and  sectoral  levels  (Article  55(1)).  ‘The 
Agreement requires Ukraine to adopt the ‘corpus’ of European standards, which includes, in 
addition to the 5,000 harmonised standards, around 24,000 European standards (i.e. stand-
ards developed by CEN, CELELEC or ETSI)’ (see Article 56 of the Agreement).131 ‘Ukraine is 
also obliged to progressively fulfil the membership conditions for the European standardisa-
tion organisations (CEN, CENELEC and ETSI)’ (Article 56(8) of the Agreement).132  

The  Agreement  also  aims  to  conclude  an  Agreement  on  Conformity  and  Assessment  and 
Acceptance  of  Industrial  Products  (ACAA)  once  the  parties  have  agreed  that  the  relevant 
Ukrainian legislation, institutions and standards have been fully aligned with those of the EU 
(Article 57(1)). ‘ACAAs are a type of mutual recognition agreement envisaged by the EU for 
any country of the eastern or southern parts of the European Neighbourhood Policy and the 
Western Balkan countries. By concluding an ACAA, the parties agree that industrial products 
listed in the annexes of an ACAA and fulfilling the requirements for being lawfully placed on 

126  ‘Association  Agreement’  <http://eeas.europa.eu/archives/delegations/ukraine/eu_ukraine/association_agree-

ment/index_en.htm> accessed 15 March 2017. 

127  Michael Emerson and Veronika Movchan (eds), Deepening EU-Ukrainian Relations: What, Why and How? (Row-

man & Littlefield International Ltd., 2016) 35. 

128  ibid 35. 
129  ibid 46. 
130  ibid 57. 
131  ibid 61. 
132  ibid 61. 

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the market of one party may be placed on the market of the other party, without additional 
testing and conformity assessment procedures.’133 

Chapter 6 of Title IV concerns establishment, trade in services and electronic commerce. It 
is  noted  by  Emerson  and Movchan  that  ‘the DCFTA  provides  for  a  comprehensive  and  ex-
tremely detailed liberalisation of establishment and trade in services, subject still to reserva-
tions - more by the EU than Ukraine. For several services sectors, the agreement envisages 
the integration of Ukraine into the EU Internal Market. However, this far-reaching integration 
is conditional upon Ukraine’s approximation to the relevant EU legislation’.134 To this effect, 
the  various  sub-chapters  of  the  chapter  (on  postal  and  courier  services,  financial  services 
and so on) typically include a provision on ‘regulatory approximation’ (see, e.g., Article 133 
on regulatory approximation in financial services). 

As regards public procurement, ‘[t]he DCFTA provides for the gradual and reciprocal liberal-
isation  of  the  parties’  public  procurement  markets  under  the  strict  condition  that  Ukraine 
implements the EU’s key public procurement rules’ (see Article 148 of the Agreement).135 

As regards compliance mechanisms, it is noted by Emerson and Movchan that ‘[t]he Agree-
ment has two different dispute settlement mechanisms […]; one that covers disputes related 
to the agreement in general but excluding the DCFTA; and another more detailed one that 
covers the DCFTA itself.’136 The general dispute settlement mechanism is laid down in Articles 
476-478 of the Agreement and is ‘based on a traditional "diplomatic" approach, under which 
the Association Council has the key role’.137 The latter body adopts decisions ‘by agreement’ 
(Article 465(3) of the Agreement), therefore both the EU and Ukraine would need to agree 
with the decision for it to be adopted. The separate dispute settlement mechanism for the 
DCFTA is laid down in Articles 302-323 of the Agreement and is, according to Emerson and 
Movchan, ‘largely inspired by the WTO Dispute Settlement Understanding (DSU)’.138 ‘If there 
is a dispute regarding the interpretation and application of DCFTA provisions, the parties shall 
first  seek  to  come  to  an  agreement  through  consultations.  If  these  consultations  fail,  the 
complaining party may request the establishment of an arbitration panel to rule on the dis-
pute.’139 ‘Rulings of the arbitration panel shall be binding and each party must take the nec-
essary measures to comply with them.’140 It is noted, however, by Emerson and Movchan 
that ‘in practice the EU very rarely relies on the [Dispute Settlement Mechanisms] in its FTAs 
to  resolve  a  trade  dispute.  It  prefers  to  use  diplomatic  means  (e.g.  by  discussing  this  in 
bilateral meetings such as the Association Council or in unilateral statements) or, in some 
cases, the WTO DSU.’141 

3.6.2. 

Comprehensive Free Trade Agreements with limited Single Market access: CETA 

CETA establishes a free trade area between the EU and Canada (Article 1.4). Chapter Two of 
the  Agreement  concerns  goods  and  includes  provisions  on  customs  duties  on  imports  and 
exports.  Chapter  Three  concerns  trade  remedies  (e.g.,  anti-dumping  and  countervailing 
measures). Chapter Four concerns technical barriers to trade. More specifically, it provides 
for the incorporation of parts of the TBT Agreement into CETA (Article 4.2); cooperation in 

133  ibid 62-63. 
134  ibid 78. 
135  ibid 90. 
136  ibid 233. 
137  ibid 233. 
138  ibid 235. 
139  ibid 235. 
140  ibid 235. 
141  ibid 235-236. 

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the  areas  of  technical  regulations,  standards,  conformity  assessment  procedures,  market 
surveillance or monitoring and enforcement activities as set out in Chapter Twenty-One on 
Regulatory  Cooperation  (Article  4.3);  a  procedure  for  recognising  technical  regulations  as 
equivalent to the ones of the other party (Article 4.4); mutual acceptance of the results of 
conformity assessments (Article 4.5); and transparency procedures regarding the develop-
ment of technical regulations and conformity assessment procedures (Article 4.6). The agree-
ment also includes chapters on customs and trade facilitation (Chapter Six), subsidies (Chap-
ter Seven), and investment (Chapter Eight). Notably, Chapter F concerns the resolution of 
investment  disputes  between  investors  and  states.  Chapter  Nine  deals  with  cross-border 
trade in services, whereas Chapter Ten makes provisions for the temporal entry and stay of 
natural persons for business purposes. Chapter Eleven lays down rules for the mutual recog-
nition  of  professional  qualifications.  There  are  also  chapters  on  specific  sectors (transport, 
electronic commerce and so on), as well as chapters on government procurement (Chapter 
Nineteen) and dispute settlement (Chapter Twenty-Nine). 

3.6.3. 

Free Trade Agreements: South Korea 

The  EU-South  Korea  Free  Trade  Agreement  took  effect  in  July  2011.142  It  addresses  both 
customs duties and non-tariff barriers (NTB) on trade in goods (Chapter 2). There are also 
separate Annexes (Annexes 2-B to 2-E) on non-tariff barriers with respect to specific sectors 
(consumer electronics;  motor vehicles;  pharmaceutical  products  and medical  devices;  and 
chemicals). The Agreement sets up a Committee on Trade in Goods that must meet at the 
request of either party. This Committee can consider broadening the scope of NTB disciplines, 
speeding up liberalisation as well as tackling other issues related to trade in goods between 
South Korea and the EU.143 The agreement also includes a chapter on trade remedies (Chap-
ter 3). Chapter 4 concerns technical barriers to trade and is ‘intended to reduce obstacles to 
trade between the EU and South Korea arising out of technical regulations, standards, con-
formity assessment procedures and similar requirements’.144 The two parties ‘undertake to 
cooperate on standards and regulatory issues, and where appropriate, to establish dialogues 
between regulators, with the intention of simplifying and avoiding unnecessary divergence in 
technical requirements applying to products’.145 The agreement includes specific provisions 
on good regulatory practice, and a mechanism for co-ordination is set up between the EU 
and South Korea to keep these matters under consideration and to address any specific is-
sues.146 

The Agreement also includes chapters on Trade in Services, Establishment and E-Commerce 
(Chapter 7), as well as on Government Procurement (Chapter 9), the latter seeking to expand 
the coverage of the GPA. Chapter 14 on Dispute Settlement is based on the WTO DSU model. 
Accordingly, the first step is consultation between the parties, and if the parties do not reach 
an agreement the dispute is referred to an arbitration panel. The FTA also contains a media-
tion mechanism for non-tariff measures (Annex 14-a). The mediation mechanism does not 
exclude the possibility to have recourse to dispute settlement, during or after the mediation 
procedure. 

142  <http://ec.europa.eu/trade/policy/countries-and-regions/countries/south-korea/> accessed 15 March 2017. 
143  ‘EU-South Korea Free Trade Agreement: A Quick Reading Guide’ (October 2010) <http://trade.ec.europa.eu/do-

clib/docs/2009/october/tradoc_145203.pdf> accessed 15 March 2017, 1-2. 

144  ibid 5. 
145  ibid 5. 
146  ibid 5. 

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3.7. 

Summary and preliminary conclusions in relation to Brexit 

3.7.1. 

Summarising table 

Applying  the  analytical  grid  developed  in  chapter  3.1.  provides  the  following  picture  with 
regard to the degree of trade cooperation that can be achieved in different ‘Brexit’ scenarios. 

Brexit Scenarios 

Intensity of Cooperation 

Means 

Compliance 

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EU Membership 

Trade in Goods 

Unlimited scope 

Limited scope 

Trade in Services 

Unlimited scope 

Limited scope 

EEA 

Trade in Goods 

Unlimited scope 

Limited scope 

Trade in Services 

Unlimited scope 

Limited scope 

DCFTA 

Trade in Goods 

Unlimited scope 

Limited scope 

Trade in Services 

Unlimited scope 

Limited scope 

CETA 

Trade in Goods 

Unlimited scope 

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45   

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy Department A: Economic and Scientific Policy 
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Limited scope 

Trade in Services 

Unlimited scope 

Limited scope 

KOREU 

Trade in Goods 

Unlimited scope 

Limited scope 

Trade in Services 

Unlimited scope 

Limited scope 

WTO 

Trade in Goods 

Unlimited scope 

Limited scope 

Trade in Services 

Unlimited scope 

Limited scope 

 

   

 

 

     

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   

   

   

   

The table reveals the following characteristics, in which the various trade cooperation in which 
the EU is involved differ: 

  The EEA differs from EU membership in terms of ‘compliance mechanisms’ as EEA law 
has no direct effect and the EFTA Court’s judgments are neither legally binding upon the 
EEA members nor are national courts under a legal obligation to request preliminary rul-
ings on the interpretation of EEA law. 

  The DCFTA is to be distinguished from EU membership in terms of ‘compliance mecha-
nisms’  in  a way  that  it neither  has  direct  effect  nor  does  it  provide  for  a  Treaty-based 
court but only for a panel, which can resolve disputes between the Contracting Parties. 
Furthermore, the DCFTA does not foresee a mechanism to adopt common standards, but 
includes a legal obligation on the part of Ukraine to implement parts of the existing acquis 
communautaire into domestic law. Besides, the DCFTA follows the principles WTO of free 
trade cooperation, which amounts to negative integration in terms of non-discrimination 
concerning goods and services, albeit the scope is limited to certain goods and services 
and to certain trade barriers. 

  CETA  and KOREU  follow  WTO  principles  of  free  trade cooperation,  subjecting  trade  in 
goods  and  services  to  the  prohibition  of  discrimination  based  on  origin.  Compliance  is 
ensured by consultation obligations and a panel mechanism. 

  CETA differs from KOREU and WTO in relation to its scope in that it applies the negative 
list  approach  not  only  to  trade  in  goods  but  also  to  trade  in  services.  Furthermore,  it 
supplements  the traditional  international  law  mechanisms  to  ensure  compliance  with a 
Treaty-based court that is accessible for individuals claiming compensation for a breach 
of some Treaty rights in relation to goods and services (the so-called Investment Court 
System (ICS)). 

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  KOREU is modelled after the WTO principles of free trade. In relation to its scope this 
implies  that  it  makes  use  of  the  negative  list  approach  for  trade  in  goods  and  of  the 
positive list approach for trade in services. In order to ensure compliance it establishes 
consultation obligations and a panel mechanism. It differs from WTO only in relation to 
the number of services and trade barriers that are explicitly covered by the agreement. 
KOREU further includes mutual recognition of standards concerning motor vehicles pro-
duction assuming that the domestic standards implement the UN-ECE standards. 

3.7.2. 

Preliminary conclusions 

Applying these distinctive characteristics to the different Brexit scenarios leads to the follow-
ing (preliminary) conclusions: 

1.  The UK and the EU have to agree on the intensity of their future trade cooperation. 
Under  the  terms  of  the  EU  membership,  the  UK  as  a  part  of  the  EU  makes  use  of  the 
combined model of full harmonisation with a limited scope and of the mutual recognition 
of standards with an unlimited scope in order to define its trade relations to the other EU 
Member States. This intensity can only be upheld under the EEA membership. Partial full 
harmonisation and a partial mutual recognition of standards can also be achieved follow-
ing the DCFTA model. It should, however, be seen that this model includes an obligation 
on the part of the trading partner to implement the acquis communautaire autonomously. 
All other free trade models reduce the intensity of trade cooperation to a mere recognition 
of conformity assessments, which would mean a significant step backwards from the cur-
rent state of economic integration. 

2.  The UK and the EU have to decide which means they would like to make use of in order 
to achieve the intensity of trade cooperation they agreed on. Currently these means in-
clude positive integration and negative integration covering also non-discriminatory re-
strictions.  These  means  are  repeated  by  the  EEA  membership.  The  DCFTA  also  knows 
positive  integration,  but  only  in  the  shape  that  the  trading  partner  has  to  implement 
uniform rules adopted by the EU. No current trade arrangement provides for own institu-
tions adopting legally binding standards. 

If  the  UK  and  the  EU  opt  for  a  model  limited  to  negative  integration  (such  as  DCFTA, 
CETA, KOREU and WTO) it must be realised that the existing and future acquis commu-
nautaire cannot be extended to the UK territory (this would require positive integration) 
and that the existing and future acquis communautaire is then considered to be a non-
tariff (technical) barrier to free trade (subject to negative integration) for goods and ser-
vices  coming  from  the  UK,  provided  that  it  cannot  be  justified  by  grounds  of  general 
interest. 

3.  The UK and the EU have to opt for a mechanism that ensure the compliance with the 
intensity of trade cooperation and the means used to implement it. Currently, under the 
terms of EU membership, EU law has direct effect and is secured by a Treaty-based Court 
which renders legally binding judgments. Standard FTAs such as KOREU and the general 
terms of WTO provide for mere consultation obligation and a panel mechanism excluding 
direct effect in the domestic legal order of the trading partners. Only CETA (and the free 
trade  agreement  with  Singapore)  include  a  Treaty-based  court  that  protects  individual 
rights of a part of trade in goods and services, which are investments, and which is ac-
cessible for investors. 

The impact of Brexit on EU law increases the more the UK and the EU opt for a trade coop-
eration  that  resembles  the  WTO  principles  of  free  trade  instead  of  the  full  harmonisation 
model including mutual recognition of standards under the terms of the EU membership. The 

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Policy Department A: Economic and Scientific Policy 
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more the future relationship between the EU and the UK takes after trade cooperation such 
as KOREU the less existing and future acquis communautaire can be applied to goods and 
services  from  the  UK.  In  such  a  situation,  the  focus  must  shift  from  questions  revolving 
around how to extend the acquis and its further development to the UK to questions address-
ing the challenge how to protect the high standards set by the acquis against any weakening 
through free trade agreements. The acquis then turns into a trade barrier for UK goods and 
services, which are subject to the rules of negative integration. Depending on the scope of 
negative integration, the acquis would only be affected if it discriminates directly or indirectly 
against UK products or already if it creates unjustifiable restrictions. In this scenario, the EU 
must focus on broad possibilities to justify the current acquis and its further development.  

3.7.3. 

State of affairs: Policy choices made so far concerning the future trade 
cooperation between the UK and the EU 

The policy choices concerning the future trade cooperation made by the UK government and 
the EU27 so far appear still to be quite vague. They do not allow yet for a clear and precise 
definition of the trade cooperation that both seek to achieve. 

3.7.3.1.  The position of the UK government 

As regards the UK government, in its notification to the EU of 29 March 2017, it indicated to 
establish  with  the  EU27  ‘a  deep  and  special  partnership  that  takes  in  both  economic  and 
security cooperation’, the terms of which should be agreed ‘alongside those of our withdrawal 
from the EU’.147 This partnership should be based on a ‘bold and ambitious Free Trade Agree-
ment  between  the  United  Kingdom  and  the  European  Union’,  which  ‘should  be  of  greater 
scope and ambition than any such agreement before it so that it covers sectors crucial to our 
linked economies such as financial services and network industries’.148 Starting from the as-
certainment that both regulatory regimes are comparable at the moment of separation, both 
sides should focus on solving the question ‘how we manage the evolution of our regulatory 
frameworks  to  maintain  a  fair  and  open  trading  environment,  and  how  we  resolve  dis-
putes.’149 Transition from the EU membership to the deep and special partnership and uncer-
tainties linked to it should be addressed by ‘implementation periods to adjust in a smooth 
and orderly way to new arrangements’.150 Based on these statements, it seems that the UK 
government intends to choose for a comprehensive free trade agreement without specifying 
the envisaged trade intensity, the means to achieve the envisaged trade intensity and the 
mechanisms to ensure compliance. The withdrawal notification does hence not allow for more 
detailed conclusions.  

The white paper of the UK government, published on 2 February 2017, does not specify the 
three elements to define the kind of trade cooperation that is sought either. The ‘new rela-
tionship should aim for the freest possible trade in goods and services between the UK and 
the EU. It should give UK companies the maximum freedom to trade with and operate within 
European markets and let European businesses do the same in the UK. This should include a 
new customs agreement with the EU, which will help to support our aim of trade with the EU 
that is as frictionless as possible. […A new comprehensive, bold and ambitious free trade] 
agreement may take in elements of current Single Market arrangements in certain areas as 
it makes no sense to start again from scratch when the UK and the remaining Member States 
have adhered to the same rules for so many years. Such an arrangement would be on a fully 

147  May (n 1), p. 3. 
148  Ibid., p. 5. 
149  Ibid., p. 5. 
150  Ibid., p. 4. 

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reciprocal basis and in our mutual interests.’151 Turning to policy areas, the white paper es-
tablishes the aim in relation to trade in goods that the ‘new partnership should allow for tariff-
free  trade  in  goods  that  is  as  frictionless  as  possible  between  the  UK  and the EU  Member 
States’,152 in relation to trade in services that the ‘new strategic partnership we will be aiming 
for  the  freest  possible  trade  in  services  between  the  UK  and  EU  Member  States’153  and  in 
relation to customs that ‘new customs arrangement with the EU [should enable] us to make 
the most of the opportunities from trade with others and for trade between the UK and the 
EU to continue to be as frictionless as possible. There are a number of options for any new 
customs  arrangement,  including  a  completely  new  agreement,  or  for  the  UK  to  remain  a 
signatory to some of the elements of the existing arrangements. The precise form of this new 
agreement will be the subject of negotiation’.154 The white paper does not include more de-
tailed statements on specific policy areas.  

Whilst it can be deduce from the quoted paragraphs of the white paper that the UK seems to 
strive for the most intense trade cooperation, it is nowhere specified whether this trade in-
tensity is only to be guaranteed by negative integration or by some sort of mutual standard-
setting. In relation to compliance mechanisms, the white paper ‘recognise[s] that ensuring a 
fair and equitable implementation of our future relationship with the EU requires provision 
for dispute resolution’.155 It refers in this context to several dispute resolution mechanisms 
that cannot adopt decisions that are binding upon the contracting parties. It leaves the ques-
tion open whether the envisaged dispute resolution mechanism should be open for actions 
raised by individuals. 

3.7.3.2.  The position of the EU27 

The EU27 shares the UK government’s ‘desire to establish a close partnership between the 
Union and the United Kingdom after its departure’ clarifying that such a partnership ‘between 
the Union and a non Member State cannot offer the same benefits as Union membership’.156 
In contrast to the UK government, the EU27 would like to negotiate an ‘agreement on trade’ 
‘once the United Kingdom is no longer a Member State’, which ‘must ensure a level playing 
field, notably in terms of competition and state aid, and in this regard encompass safeguards 
against unfair competitive advantages through, inter alia, tax, social, environmental and reg-
ulatory measures and practices [… and] must include appropriate enforcement and dispute 
settlement mechanisms that do not affect the Union's autonomy, in particular its decision-
making procedures’.157 These paragraphs seem to suggest that the EU aims at a trade inten-
sity that also covers minimum standards including a dispute settlement mechanisms without 
further specifying details about the envisaged dispute settlement mechanism.  

Concerning the withdrawal agreement, the EU aims for ‘[n]egotiations [that] should seek to 
prevent a legal vacuum once the Treaties cease to apply to the United Kingdom and, to the 
extent possible, address uncertainties’. The withdrawal agreement ‘should include appropri-
ate dispute settlement mechanisms regarding the application and interpretation of the with-
drawal agreement, as well as duly circumscribed institutional arrangements allowing for the 

151  Department for Exiting the European Union and The Rt Hon Davis Davis MP (n 3), p. 35. 
152  Ibid., p. 40. 
153  Ibid., p. 42. 
154  Ibid., p. 48. 
155  Ibid., p. 14. 
156  European Council (n 1), p. 8, para. 18. 
157  Ibid., p. 8. 

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adoption of measures necessary to deal with situations not foreseen in the withdrawal agree-
ment.158  

3.7.3.3.  Interim conclusion 

The  vote  of  UK  people  to  leave  the  EU  on  23  June  2016  has  created  as  such  has  already 
created uncertainties not only in relation to the future relationship between the EU27 and the 
UK, but also in relation to the fate of rights lawfully acquired under EU law after UK law takes 
over in the aftermath of a withdrawal of the EU. 

The policy documents published so far sketch the future relationship to be embodied in a free 
trade agreement that includes some sort of dispute settlement mechanism. Yet, neither the 
scope nor the intensity of trade is yet defined by the parties in these documents. Hence, at 
this point of time, uncertainties created by the Brexit vote are not addressed in a manner 
that  would  reduce  them.  Although  at  first  sight  it  seems  that  uncertainties  related  to  the 
broad  variety  of  withdrawal  scenarios  might  be  diminished  by  the  choice  of  a  free  trade 
agreement, applying the analytical framework developed in section 3.1 highlights how major 
choices that define, in substance, the future trade cooperation between the EU and the EU27 
remain too vague to properly address the uncertainties. 

The same holds true regarding the withdrawal and the fate of rights lawfully acquired under 
EU law. The policy documents of both the EU27 and the UK government reveal the intention 
to  minimise  uncertainty  for  citizens  and  economic  operators  as  much  as  possible  without 
providing, however, for precise indications as to how transitional rules following a withdrawal 
of the UK from the EU could look like.  

Whilst  the  vagueness  in  relation  to  the  future  relationship  as  in  relation  to  rights  lawfully 
acquired in the past is not surprising at the current very early stage of negotiations, uncer-
tainties  linked  to  the  unprecedented  withdrawal  of  a  Member  State  from  the  EU  create  a 
major problem for economic operators and citizens. The following chapter will address un-
certainties linked to Brexit by establishing an analytical framework that allows to reveal those 
rules that are actually affected by Brexit and those that remain subject to EU law even if a 
withdrawal  materialises.  Agreeing  on  transitional  rules  at  least  with  regard  to  the  former 
rules constitutes hence an important step towards a reduction of uncertainties. 

158  Ibid., p. 5, para. 9. 

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4.  FRAMEWORK FOR ANALYSING THE IMPACT OF BREXIT 

ON EU POLICY AREAS AND EU LAW 

Once a ‘Brexit scenario’ materialises, it is crucial to analyse the impact of the scenario on EU 
law and the policy field linked thereto. Whilst an in-depth legal analysis can only be provided 
once the scenario becomes clearer, it is already possible at this stage of the process to de-
velop an analytical framework in abstracto, which allows for the identification of the impact 
of different scenarios. This analytical framework is constructed on the basis of the assumption 
that a currently applicable legal regime (viz. EU law) is replaced at a given moment of time 
by a new legal regime (viz. UK law). Emphasis is thereby put on substantive rules affecting 
the legal relationships of individuals and undertakings, in contrast to procedural rules, which 
will be neglected for the purpose of analysing the impact of a Brexit scenario. 

The first hypothesis on which the development of the analytical framework is based is that 
the change of a legal regime does not result automatically in a change of the applicable law. 
The second hypothesis is that a change of the applicable law does not automatically result in 
a loss of rights created under the previously applicable legal regime.  

The object of the analysis is a legal relationship, which has some sort of connection with both 
the EU and the UK. The change of the legal regime affects this legal relationship in such a 
way that diverging rules of different origin could be applied to it. Applying the two hypotheses 
to this situation leads to the following two question to be answered by the analytical frame-
work: 

1.  Does the change of legal regime result in a change of the applicable law? 

2.  In case the applicable law changes, are rights lawfully acquired under the previous legal 

regime insulated from the change of the applicable law? 

The first question has to be assessed based on the applicable rules determining the compe-
tent courts (international procedural law) and the applicable substantive law (conflict rules) 
(4.2). This follows from the fact that the applicable conflict rules (which decide whether there 
is a change of the applicable law) are those of the country in which the competent court is 
located. It is conceivable that although a given case involves the UK conflict rules designate 
EU law to be the applicable law in a given case. In such a situation, the impact of Brexit is 
insignificant. Brexit only becomes relevant where the applicable substantive law would be UK 
law. In those situations, the answer to the second question becomes pertinent.  

In case the applicable law changes, the fact that a right was previously lawfully created under 
a different legal regime has to be taken into account. The answer to the second question is 
governed by the principles of intertemporal law (4.3). These principles define, which rules 
are to be applied to a legal relationship that was created under a different legal regime ratione 
temporis.  Whereas,  in  general,  the  new  law  (viz.  UK  law)  is  applicable  (4.3.1),  there  are 
exceptions to this general rule that lead to the application of the previous legal regime (viz. 
EU law) (4.2.2). 

Applying the presently suggested two step approach in the analytical framework will reveal 
those policy areas that are affected by a changing legal landscape resulting from a withdrawal 
of the UK from the EU (chapter 5). To the extent that the facts and circumstances of a given 
case  may  take  place  on  the  UK territory,  for  such  policy  areas  a  future  EU-UK  agreement 
should create legal certainty. To the extent that the facts and circumstances of a given case 
may take place on the EU territory, the EU legislator can autonomously adopt own rules that 
deal with these cases.  

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It should be noted that the proposed analytical framework does not only apply to policy areas 
covered by the IMCO committee but to all EU policy areas. 

4.1. 

Preliminary remarks 

As a preliminary remark it should be noted that the issue of the continuous application of a 
legal regime although a new legal order is applicable ratione temporis is hardly addressed in 
relation to Brexit by academic writing or by documents produced by policymakers. Most no-
tably, the European Union Committee of the UK House of Lords published a report on ‘Brexit: 
acquired  rights’159  and  the  European  Parliament  published  a  study  on  the  same  matter.160 
Furthermore,  the  British  Institute  of  international  and  Comparative  Law,161  Douglas-Scott 
and Lowe in their written evidence for the EU Committee of the UK House of Lords,162 Bowers 
et al. in their briefing paper for the UK House of Commons,163 Tell Cremades & Novak in their 
study on the legal framework of Brexit for the European Parliament164 and Douglas-Scott in 
a blogpost165 analysed the issue of vested rights in more detail. Other contributions such as 
the  ones  by  Lehmann  &  Zetzsche,166  Weller,  Thomale  &  Benz,167  Gordon  &  Moffatt,168 
Rathke,169 Mindus170 and Piris171 mention that ‘vested rights’ or ‘acquired rights’ could protect 
rights that were created under EU law and whose further existence could be threatened by 
the change of the applicable law because of Brexit. Yet, these contributions do not discuss 
details  of  the  scope  and  the  nature  of  these  rights.  Against  this  background  the  following 
sections  will  develop  the  analytical  framework  on  the  basis  of  the  general  theory  of  inter-
temporal law and of ‘acquired rights’ under international law with references, where neces-
sary, to the just mentioned more detailed contributions. 

4.2. 

Designation of the applicable law 

The  applicable  law  is  designated  by  conflict  rules.  This  designation  is  done  by  defining  a 
connecting factor that allows to identify the legal order that has the closest links to a given 
legal relationship. In private law, the most prominent connecting factors are the nationality, 
which assigns the legal relationship of person to the legal order to which this person belongs 
because  of  his  nationality,  the  habitual  residence  or,  for  contract  law,  the  place  where  a 

159  European Union Committee, Brexit: acquired rights (2016-17, HL 82) 
160  Antonio Fernández Tomás and Diego López Garrido, The impact and consequences of Brexit on acquired rights 

of EU citizens living in the UK and British citizens living in the EU27, April 2017. 

161  British Institute of international and Comparative Law, BREXIT Transitional Arrangements and Public Interna-

tional Law, p. 10-14. 

162  Written Evidence AQR0001, AQR0002, AQR0003 
163  Paul  Bowers  et  al.,  Brexit :  some  legal  and  constitutional  issues  and  alternatives  to  EU  membership,  Briefing 

Paper No. 07214, 28 July 2016, pp. 19-25. 

164  Miguel Tell Cremades and Petr Novak, Brexit and the European Union: General Institutional and Legal Consider-

ations, January 2017, pp. 21-23. 

165  Sionaidh Douglas-Scott, ‘What Happens to ‘Acquired Rights’ in the Event of a Brexit?’, U.K. Const. L. Blog (16 

May 2016) (available at https://ukconstitutionallaw.org/)). 

166  Matthias Lehmann and Dirk A. Zetzsche, ‘Brexit and the Consequences for Commercial and Financial Relations 

between the EU and the UK’, EBLR 2016, p. 999 at 1013 et seq. 

167  Marc-Philippe Weller, Chris Thomale and Nina Benz, ‘Englische Gesellschaften und Unternehmensinsolvenzen in 

der Post-Brexit-EU’, Neue Juristische Wochenschrift 2016, p. 2378 at 2381. 

168  Richard Gordon and Rowena Moffatt, Brexit: The Immediate Legal Consequences, The Constitution Society 2016, 

p. 64 to 68. 

169  Hannes  Rathke,  ‘Brexit  und  die  Arbeitnehmerfreizügigkeit’,  in  Malte  Kramme,  Christian  Baldus  and  Martin 

Schmidt-Kessel (eds.), Brexit und die juristischen Folgen, 2016, pp. 211-229 at 214 to 216. 

170  Mindus, Patricia, European Citizenship after Brexit, 29 September 2016, available at SSRN: https://ssrn.com/ab-

stract=2842500, p. 6. 

171  Jean-Claude Piris, If the UK votes to leave – The seven alternatives to EU membership, January 2016, p. 12. 

52   

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contract is concluded or performed. In public law, the most used connecting factor is territo-
riality, which assigns a legal relationship to the legal order, in which the legal relationship is 
located.  

The conflict rules in private law are to a great extent EU rules such as the Rome I Regulation 
on  the  law  applicable  to  contractual  obligations172  and  the  Rome  II  Regulation  on  the  law 
applicable to non-contractual obligations.173 (Rome II). The conflict rules on public law are to 
a great extent still national law. 

If there is now a cross-border legal situation in private law, which involves a legal order of a 
third country, or a cross-border legal situation in public, there is more than one conflict rule 
available. Before using a conflict rule in order to designate the applicable law, one has first 
to determine the applicable conflict rule. This is done by the principle of lex fori, which means 
that the conflict rule of the legal order of the competent court for solving such a case is the 
applicable one. Again, in private law, international procedural law is to a great extent EU law 
such as the Brussels Ibis Regulation.174 In public law, international procedural law is national 
law. 

Based on these considerations, in order to determine which law is applicable to a legal rela-
tionship with cross-border elements, first the competent court has to be identified. This then 
determines the applicable conflict rule that designates the applicable law. 

If the application of rules of international procedural law leads to an applicable conflict rule 
that defines a connection factor that is located in the (remaining) EU territory, the impact of 
Brexit on the legal relationship subject to this conflict rule is insignificant. Thus, only where 
the applicable conflict rule provides for a connection factor that is located in the UK territory, 
the second step of the proposed analytical framework, the principles of intertemporal law, 
comes into play. 

4.2.1. 

Designating the applicable law under the conditions of a ‘hard Brexit’ 

Against the background of what has been observed above, the legal situation in relation to 
the international procedural rules and the applicable conflict rules after Brexit materialises 
has to be assessed. The basis for this assessment is the ‘hard Brexit’ scenario, in which no 
arrangements ordering the continuous application of EU rules have been provided for. 

4.2.2. 

Legal situation in the UK after a withdrawal 

Under this scenario, not much changes with regard to public law, since the procedural rules, 
as well as the conflict rules remain national law, whereby territoriality constitutes the con-
necting factor.175 If a legal relationship is taking place within UK territory, it will be UK law 
that is applicable to this relationship. 

172  Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable 

to contractual obligations (Rome I) [2008] OJ L 177/6. 

173  Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable 

to non-contractual obligations (Rome II) [2007] OJ L 199/40. 

174  Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdic-
tion  and  the  recognition  and  enforcement  of  judgments  in  civil  and  commercial  matters  [2012]  OJ  L  351/1 
repealing  Council  Regulation  (EC)  No  44/2001  of  22  December  2000  on  jurisdiction  and  the  recognition  and 
enforcement of judgments in civil and commercial matters [2001] OJ L 12/1. 

175  Cf.  Gerhard  Kegel,  ‘The  Role  of  Public  Law  in  Private  International  Law:  German  Report’,  in:  Frank  Vischer, 
Frederic-Edouard  Klein  and  Ludwigs  Wildhaber  (eds.),  Basle  Symposium  on  the  Role  of  Public  Law  in  Private 
International Law, Basel 1991, p. 29. 

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With regard to private law, the day after a ‘hard Brexit’ materialises, the EU law in shape of 
the  Brussels  Ibis-  and  the  Rome-Regulations  ceases  to  apply.176  The  same  applies  to  the 
Lugano Convention of 2007177 and to the Hague Choice of Court Convention,178 which cur-
rently  only  bind  the  UK  via  the  EU.179  This  raises  the  question  by  what  rules  the  EU  legal 
regime will be replaced. The answer to this question would in principle be domestic UK law, 
was it not for the fact that the UK has concluded international instruments that were super-
seded by EU law. The Brussels Convention of 1968180 and the Rome Convention of 1980181 
are international agreements that were ratified by the UK and given force of law by different 
means than the European Communities Act 1972.182 Both conventions were meant to regu-
late the international procedural law and private international law of the EEC Member States. 
Upon accession to the EEC, the UK also ratified both conventions.183 Although there is some 
dispute in academia whether both conventions are still existing and could be applied to the 
UK after a withdrawal,184 the more convincing arguments point in favour of a revival of these 
convention for the UK. 

The Brussels Ibis-Regulation (Article 68(1): ‘This Regulation shall, as between the Member 
States,  supersede  the  1968  Brussels  Convention  […].’)  as  well  as  the  Rome  I-Regulation 
(Article  24(1):  ‘This  Regulation  shall  replace  the  Rome  Convention  in  the  Member  States 
[…].’)  state  both  that  ‘replace’  or  ‘supersede’  the  conventions,  the  conventions  remain  in 
force. This is due to the fact that they remain applicable to all those geographical parts of 
the Member States that are not covered by Article 299 TFEU and, more importantly, Denmark 
remains party to the 1980 Rome Convention.185 Another argument put forward against the 
revival of both conventions for the UK is that these instruments were originally concluded to 
regulate the legal relationships of the EEC Member States. Hence, it may be argued that an 
unwritten rule states that third countries are excluded from their scope. Since the UK would 
leave the Union in case of a ‘hard Brexit’, it could be said to implicitly also withdraw from 
these conventions.186 Yet, whilst it is true that both convention requires a membership in the 
EEC for the signature and the ratification of these conventions, it is not stated anywhere that 
continued membership is a requirement for remaining a Convention state.187 Furthermore, 
the EU Treaties and the Convention are, from an international law perspective, two distinct 
instruments. The withdrawal from the one does not imply the termination of the other.188  

176  Andrew Dickinson, ‘Back to the future: The UK’s EU exit and the conflict of laws’, Journal of Private International 

Law 12 (2016), p. 195-201 at 197. 

177  Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 

(Lugano, 31 October 2007), [2007] OJ L339/3. 

178  Hague Convention on choice of court agreements of 30 June 2005. 
179  With regard to a future application of the Hague Convention see Mukarrum Ahmed, ‘BREXIT and English Juris-

diction Agreements : The Post-Referendum Legal Landscape’, (2016) EBLR 989. 

180  Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and com-

mercial matters [1972] OJ L 299/32. 

181  Convention on the law applicable to contractual obligations (Rome, 19 June 1980) [1980] OJ L266/1. 
182  Dickinson (n 176), 199. 
183  Civil Jurisdiction and Judgments Act 1982 and the Contracts (Applicable Law) Act 1990. 
184  See for instance Burkhard Hess, ‘Back to the Past: BREXIT und das europäische internationale Privat- und Ver-
fahrensrecht’, Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 2016, 409-417; Giesela Rühl, ‘Die 
Wahl englischen Rechts und englischer Gerichte nach dem Brexit’, JuristenZeitung 2017, p. 72. 

185  Dickinson (n 176), 203 et seq. 
186  Hess (n 184), 417. 
187  Dickinson (n 176), 204 et seq. 
188  One may argue that there could be a termination of both Conventions because of ‘Brexit’ being a ‘fundamental 
change  of  circumstances’  in  terms  of  Article  62(1)  VCLT.  Yet,  it  is  more  likely  that  the  high  threshold  for  a 
‘fundamental change of circumstances’ that refers to situations such as war between Convention states is fulfilled 
in the case of ‘Brexit’. It appears more convincing to say that in terms of legal certainty conventions such as the 
Brussels and the Rome convention remain applicable. 

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While it is presently thus argued that both Conventions revive after a ‘hard Brexit’ material-
ises,  it  should  be  noted  that  these  instruments  only  cover  15  of  the  currently  28  Member 
States since countries that joined the EU after the entry into force of the Regulations had not 
to ratify the conventions anymore. This makes in recommendable that the UK should con-
clude an agreement with EU on the application of the Brussels- and Rome-Regulations on UK 
territory comparable to the one that Denmark concluded with the EU in 2005.189  

For the purpose of the application of the analytical framework, the present study will assume 
the applicability of the Brussels and Rome Convention. 

4.2.3. 

The legal situation in the EU after a withdrawal of the UK 

If a legal relationship involving the UK is to be assessed on the EU territory, little changes 
with  regard  to  public  law,  since  the  procedural  rules  as  well  as  the  conflict  rules  remain 
national law using territoriality as connecting factor. If a legal relationship is therefore taking 
place within EU territory, it will be EU law that is applicable to this relationship. 

As regards private law, the Rome-Regulations remain applicable vis-à-vis the UK.190 Article 
2 of the Rome I-Regulation and Article 3 of the Rome II-Regulation order a universal appli-
cation of these regulation (‘Any law specified by this Regulation shall be applied whether or 
not it is the law of a Member State.’). Under the Brussels Ibis-Regulation, the regulation is 
applicable only to ‘persons domiciled in a Member State shall, whatever their nationality, […] 
sued in the courts of that Member State’ (Article 4). This means that the Brussels Ibis-Reg-
ulation would not be applicable to people and undertakings being domiciled in the UK that 
are being sued in the EU. In such a situation, the abovementioned Brussels Convention would 
have to be applied, since this convention is also ratified by at least 14 EU Member States. It 
should  furthermore  be  noted  that  the  Brussels  Ibis-Regulation  includes  exceptions  to  the 
abovementioned general rule in case consumers (Articles 17 et seq.) and workers (Articles 
20 et seq.) are involved. 

4.3. 

Principles of intertemporal law 

Once it is established that the change of the legal regime entails a change of the applicable 
law to a given legal relationship, the question arises whether rights lawfully acquired under 
the previous legal regime are protected against the change of applicable law. This refers to 
the principles of intertemporal law. The foundations for intertemporal law in public interna-
tional law were laid by Judge Huber in the judgment of the Permanent Court of Arbitration 
(PCA) in the case of ‘Island of Palmas’ of 1928: 

“[A] juridical fact must be appreciated in the light of the law contemporary with it, and 
not of the law in force at the time when a dispute in regard to it arises or falls to be 
settled. […] As regards the question which of different legal systems prevailing at suc-
cessive periods is to be applied in a particular case (the so-called intertemporal law), a 
distinction must be made between the creation of rights and the existence of rights. 
The same principle which subjects the act creative of a right to the law in force at the 
time the right arises, demands that the existence of the right, in other words its con-
tinued manifestation, shall follow the conditions required by the evolution of law.”191 

The  principles  of  intertemporal  law  hence  moderate  the  conflict  between  the  lex  temporis 
actus (the law applicable at the creation of a legal relationship) and the lex praesens (the 

189  Agreement between the European Community and the Kingdom of Denmark on jurisdiction and the recognition 

and enforcement of judgments in civil and commercial matters [2005] OJ L 299/62. 

190  Rühl (n 184), 76. 
191  Max Huber in: PCA, Island of Palmas Case (Netherlands, United States), 2 Reports of Int’l Arb. Awards 831, 845. 

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law applicable in the present time). The guiding legal principles for shaping intertemporal law 
are the principles of non-retroactivity of a law and of legitimate expectations, which are in 
favour  of  limiting  the  effects  of  the  new  law,  and  the  principles  of  legal  certainty  and  of 
legislative alignment, which speak in favour of the application of new rules.  

Based  on these  legal  principles,  the  principles  of  intertemporal  law  can  be  summarised  as 
follows:192 

1.  New rules become fully and immediately applicable at the date of their entry into force 

(‘effet immédiat de la loi’); 

2.  The creation of a legal relationship in the past is to be assessed against the law applicable 

at the time of its creation; 

3.  Legal effects generated by a legal relationship in the past are to be assessed against the 

law applicable at the time of the generation of these legal effects; 

4.  Legal effects of a legal relationship that was created in the past but that will be generated 
in the present or in the future are to be assessed against the law applicable in the present. 

4.3.1. 

Immediate application of new law in the moment of the change of the applicable 
law 

Applying  the  principles  of  intertemporal  law  identified  above  to  a  situation,  in  which  the 
change of the legal regime entails the change of the applicable law to a given legal relation-
ships entails that the new law is to be applied to the legal relationship despite its creation in 
the past, where a different legal regime was applicable to it, from the moment of the change 
of the applicable law.193 

4.3.2. 

Application of previously applicable law to the creation of a legal relationship 

The immediate application of the newly applicable law may, however, not result in a loss of 
a legal relationship that was created lawfully under the previous legal regime. The principle 
of non-retroactivity requires, as it was stated by Judge Huber in the ‘Island of Palma’ case, 
the application of the lex temporis actus. The creation of a legal relationship must be assessed 
against the rules that were applicable at the time of the creation.194 

Yet, the rule of the lex temporis actus does not lead to a situation in which the previously 
applicable law remains the same despite any changes in law. The so-called second branch of 
the statement of Judge Huber in the ‘Island of Palmas’ case is then to be taken into account: 
The further existence of a legal relationship requires the continued manifestation of this re-
lationship under the conditions set by the evolution of law. 

Whilst against this background it becomes clear that the creation of a legal relationship can-
not be challenged by the new legal regime, its continuation may be rendered less attractive 
by the immediately applicable new law as compared to the conditions of the previously ap-
plicable law. 

192  This summary draws on Paul Roubier, Les conflits de lois dans le temps, 2nd edition 1960. 
193  In this sense, see e.g. ECJ, Case 1/73, Westzucker GmbH v Einfuhr- und Vorratsstelle für Zucker [1973] ECR 

723 para. 5. 

194  Burkhard Hess, Intertemporales Privatrecht, Tübingen 1998, p. 366. 

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4.3.3. 

Continuous application of previously applicable law due to ‘acquired rights’ 

Against the immediate applicability after the change of the applicable law stands the theory 
of ‘acquired rights’, according to which rights lawfully acquired under previous law may not 
be undermined by the newly applicable law.  

In  order  to  understand  the  theory  of  ‘acquired  rights’  one  has  to  distinguish  between  the 
legal order that gave rise to a particular right, which might be deemed ‘acquired’, and the 
legal order that commands the ‘survival’ of an ‘acquired right’ over time. Both are, by defi-
nition, distinct from each other. The issue of ‘acquired rights’ only occurs, if the legal order 
that gave rise to it is not applicable any longer. Since this legal order is, in principle, not able 
to instruct judges anymore due to its inapplicability ratione temporis, another legal order that 
is still binding upon courts must command the survival of ‘acquired rights’. Already for this 
reason the legal source for the continuous application of rights that were created by EU law 
cannot be found in EU law.  

A different view195 could be based on the CJEU’s judgment in ‘Van Gend en Loos’, in which 
the EU legal order was considered to be ‘a new legal order of international law for the benefit 
of which the states have limited their sovereign rights, albeit within limited fields, and the 
subjects of which comprise not only Member States but also their nationals. Independently 
of the legislation of Member States, Community law therefore not only imposes obligations 
on  individuals  but  is  also  intended  to  confer  upon  them  rights  which  become  part  of  their 
legal heritage’.196 This quality of being a new legal order of international law could call for 
different standards when defining the scope of rights requiring the continuous application of 
EU  law  ratione  temporis  than  the  ones  established  under  the  classical  public  international 
law. The reference to the ‘legal heritage’ could be understood as meaning that all rights EU 
law confers upon individuals could outlast the existence over time of the Treaties that created 
these rights. Yet, this view ignores the question of the identifying the norm that commands 
the continuous existence of a rights that outlasted its own legal source. Whilst an ‘acquired 
right’ can remain applicable although the legal source of its creation is not applicable any-
more, the continuous application of an ‘acquired right’ must be ordered by a provision that 
is still applicable and binding. In the case of ‘Brexit’, after a withdrawal of the UK from EU, 
domestic judges in the UK are no longer subject to EU law and the case law of the CJEU, but 
instead  only  to  national  law  and  public  international  law.  Hence  one  has  to  find  the  legal 
source for the continuous application of rights lawfully acquired under EU law in public inter-
national law. The latter and thus not EU law therefore defines, within the territory of the UK, 
the scope and the effects of the theory of ‘acquired rights’.197 

In public international law, the theory of acquired rights is based on two arguments.  

The  first  refers  to  Article  70(1)(b)  of  the  Vienna  Convention  on  the  Law  of  the  Treaties, 
according to which ‘the termination of a treaty […] does not affect any right, obligation or 
legal situation of the parties created through the execution of the treaty prior to its termina-
tion’. The main weakness of this argument is, however, that the notion of ‘parties’ refers to 
states and not to individuals since parties of a Treaty are under public international law states 
and not individuals.198 

195  Cf. Jochen Herbst, ‘Observations on the Right to Withdraw from the European Union: Who are the “Masters of 

the Treaties”?, German Law Journal 6 (2005), p. 1755 at 1756.  

196  Case 26/62, Van Gend & Loos [1963] ECR 1, p. 12. 
197  Cf. Bowers et al. (n 163), p. 20; Fernández Tomás and López Garrido (n 160), p. 38 et seq.; Tell Cremades and 
Novak  (n  164),  p.  22;  Jean-Claude  Piris,  Should  the  UK  withdraw  from  the  EU:  Legal  aspects  and  effects  of 
possible options, European Issue No 355, 4 May 2015, p. 10. 

198  Anthony Aust, Modern Treaty Law and Practice, 3rd ed., 2013, p. 266. 

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The second argument refers to the judgment of the Permanent Court of International Justice 
in the case ‘Certain German Interests in Polish Upper Silesia’ of 1926.199 In this case the PCIJ 
ruled  that  the  ‘principle  of  respect  for  vested  rights  […]  forms  part  of  generally  accepted 
international law’.200 Yet, the scope of these vested rights is very narrow. It primarily covers 
property rights (including trademarks, copyright and patents).201 These are absolute rights 
whose acquisition was legally finalised in the past and whose existence can be duly evidenced 
because of its publication in registers.202  

Moreover, rights could qualify for ‘acquired rights’ if they can be considered comparable to 
property rights. O’Connell identified such comparable rights if they contain ‘any legal interest, 
other  than  the  personal  freedom  to  pursue  an  avocation,  which  is  reducible  to  monetary 
terms. Hence, real and personal estate of all kinds, including choses in action and equitable 
claims, are comprehended in the notion “acquired rights”. Political advantages, such as rights 
to public office, and certain economic advantages such as industrial or commercial monopo-
lies have not been treated as acquired rights. It is, of course, necessary that the right be 
properly  vested  under  the  municipal  law  of  the  predecessor  State  and  sufficiently  evi-
denced’.203 Hence next to property rights one can understand as ‘acquired rights’ contractual 
rights deriving from the State such as concessions or licences, and the recognition of foreign 
official certificates and documents (including judgments and arbitral awards).204 At the other 
end  of  the  spectrum  of  rights  that  cannot  be  considered  anymore  as  ‘acquired  rights’  are 
simple commercial privileges without being capable of financial valuation and business op-
portunities. This understanding is supported by the PICJ’s judgment in the ‘Oscar Chinn’ case, 
in  which  the  Court  held  that  the  reduction  of  transport  rates  on  the  Congo  River  by  the 
Belgian government resulting into a de facto monopoly of a Belgian company did not violate 
any rights of a British entrepreneur who lost his business opportunities because of this meas-
ure.205 

Having defined the scope and the effect of the continuous application of rights lawfully ac-
quired under a previous legal regime under public international law, the question might arise 
whether the scope has to defined differently (broader) when ‘acquired rights’ were created 
by the EU legal order in the event of a withdrawal of a Member State because of the high 
level of integration of an EU Member State into the EU legal order before its withdrawal. Yet, 
public international law does not define an acquired right in relation to the legal order it stems 
from. In fact it sets its criteria irrespective of the ‘quality’ of the legal order that is no longer 
applicable.  This  derives  already  from  the  fact  that  public  international  law  is  built  on  the 
assumption of the equality of legal orders. Hence, from the perspective of public international 
law, the scope of acquired rights is not be defined any different only because the source of 
the right is the EU legal order. 

4.3.4. 

Continuous application of previously applicable law based on the principle of 
legitimate expectations 

Next to the protection of ‘acquired rights’ the principle of legitimate expectation may require 
the continuous application of previously applicable law to a legal relationship. The principle 

199  PCIJ Series A no 7, ICGJ 241 (PCIJ 1926), 25 May 1926. 
200  PCIJ Series A no 7, ICGJ 241 (PCIJ 1926), 25 May 1926 at point 132. 
201  Pierre A Lalive, ‘The Doctrine of Acquired Rights’, in: Bender (ed.), Rights and duties of private investors aborad 

- International and comparative law center, New York, 1965, p. 145-200 at 183. 

202  Sionaidh Douglas-Scott, ‘What Happens to ‘Acquired Rights’ in the Event of a Brexit?’, U.K. Const. L. Blog (16th 

May 2016) (available at https://ukconstitutionallaw.org/)). 

203  Daniel Patrick O’Connell, International Law, 2nd edition 1970, p. 378. 
204  Vaughan Lowe, Supplementary written evidence, AQR0003, p. 1; Lalive (n 201), p. 183; Robert Bindschedler, 
‘La Protection de la Propropriété privée en droit international public’, RdC 90 (1956) vol. II, p. 179 at 217. 

205  PCIJ Series A/B no 63, ICGJ 313 (PCIJ 1932), 12 December 1934. 

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of legitimate expectations can be invoked by the addressee of the newly applicable law, if 
the  latter  could  expect  a  legal  situation  as  it  stood  before  the  change  of  applicable  law  to 
continue and, if the confidence of individuals in that expectation deserves to be protected.206 
The confidence of the individual in the expectation that a legal situation continues can only 
be sanctioned, if public interests in the immediate application of the new law predominate.207 

The first condition creates a presumption that an individual can, in principle, rely on the fact 
the currently applicable law continuous to apply in the same manner. This presumption is, 
however, rebutted if there are explicit rules that prevent the creation of such expectations. 
In the context of ‘Brexit’, reference can be made to Article 50(3) TEU. With the formal noti-
fication  of  a  Member  State  to  withdraw  from the  Union,  it  may  be  argued  that  individuals 
cannot expect any longer that EU law continues to apply in the future since Article 50(3) TEU 
states that even if there is not withdrawal agreement, EU law ceases to apply two years after 
the notification. 

The  second  condition,  concerning the  question  whether  the  confidence  of  the  individual  in 
the expectation of continuous application of previously applicable law requires a weighing up 
of  the  interests  of  the  individual  in  the  continuous  application  of  previously  applicable  law 
and  of  the public  interests  in  changing the  applicable  law.  This balancing  test can  only  be 
done on a case-by-case basis. In the case of ‘Brexit’ it must be taken into account that the 
change of the applicable law results from a change of the legal regime as a consequence of 
a withdrawal from the EU requested by a popular vote in a referendum and supported by a 
Parliamentary vote in the UK. Arguably, this sets the threshold for the public interests against 
which individual rights in continuously applying EU law have to be weighed quite high. 

4.3.5. 

Continuous application of previously applicable law due to solutions de lege 
ferenda 

Legislators create legal certainty through the adoption of transitory laws with a view to cases 
in which it cannot be excluded that the previously applicable law remains applicable (at least 
for a certain period of time). Hence, a continuous application of previously applicable law can 
be ordered unilaterally by domestic law de lege ferenda. 

4.4. 

Analytical framework 

In  sum, the  abovementioned  considerations  lead  to  the  following  analytical  framework  for 
assessing (1) whether or not the change of a legal regime leads to a change of the applicable 
law and (2) whether in case the applicable law changes the previously applicable law contin-
ues to apply because of principles of intertemporal law. 

206  In this sense, see e.g. ECJ, Case 1/73, Westzucker GmbH v Einfuhr- und Vorratsstelle für Zucker [1973] ECR 

723 para. 6. 

207  Opinion of AG Roemer, Case 1/73, Westzucker GmbH v Einfuhr- und Vorratsstelle für Zucker [1973] ECR 741.  

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International 
Procedural law

Connecting 
Factor: EU

EU Conflict Rule

Connecting 
Factor: UK

UK Conflict Rule

Connecting 
Factor: EU

EU law

Connecting 
Factor: UK

Connecting 
Factor: UK

Connecting 
Factor: EU

Intertemporal 
law

EU law

Creation of 
Rights: EU law

Acquired Rights: 
EU law

Further 
Existence: 
UK law

Legitimate 
Expectations: 
EU law

If EU territory: 
Legal act?

This analytical framework allows to identify rules that may want to be included in an agree-
ment on the future relationship between the EU and the UK in case they are supposed to be 
preserved to the extent that UK law would take over the regulation of matters falling within 
the  scope  of  these  rules.  Identifying  these  rules  allows  the  EU  and  UK  to  make  conscious 
policy choices with regard to whether these rules should be included in a future agreement. 

In chapter 5 this analytical grid is applied to the policy areas covered by the IMCO compe-
tence. 

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5.  BREXIT SCENARIOS AND THE POLICY AREAS COVERED 

BY THE IMCO COMMITTEE 

Assuming that the withdrawal agreement and the subsequent agreement (if any) would man-
age to secure the approval of the European Parliament, the impact of such agreements on 
areas of IMCO competence needs to be observed.  

To this end, this chapter applies the analytical framework developed in chapter 4 in order to 
identify the rules, which would be affected the most by a ‘Brexit’. The impact will be then 
assessed against the background of the ‘fall-back scenario’: a ‘hard Brexit’ without arrange-
ments between the EU and the UK. This scenario is chosen because it is not dependent on 
any  presumed  policy  choice,  which  have  yet  to  materialise.  It  furthermore  allows  to  draw 
conclusions on the worst possible impact of a withdrawal of the UK from the EU, as all other 
Brexit scenarios approximate the future relationship between the EU and the UK closer to the 
baseline scenario, which is the EU membership (see chapter 3). To the extent that already 
some interim conclusions have been drawn on the scenario of the UK joining the EEA (see 
chapter 3.5) or other tailor-made trade cooperation arrangements (see chapter 3.6.), these 
conclusions will briefly be outlined. 

The  object  of  this  chapters  is  formed  by  policy  areas  and  EU  legislation  falling  within  the 
ambit of the IMCO Committee, as well as other arrangements presently not part of the acquis 
which  could  feature  in  a  future  EU-UK  agreement.  This  refers  to  legislative  files  that  are 
currently pending. The assessment includes existing literature on the implications of Brexit 
for the policy areas forming the subject matter of this study as well as expert testimonies 
presented  at  a  workshop  organised  by  the  Policy  Department  A:  Economic  and  Scientific 
Policy  of  the  European  Parliament  on  the consequences  of  Brexit  on  28  February  2017.208 
The penultimate and final parts of this chapter offer an overview of the EU legislation and 
pending proposals likely to be affected by the Brexit options examined in this report. 

5.1. 

Customs Union 

5.1.1. 

Application of the analytical framework 

Customs law is part of public law. The connecting factor for determining the applicable pro-
cedural law is therefore ‘territoriality’. This means that, after a Brexit materialises, UK courts 
will apply UK law on customs duties due because of the entry into UK territory. Hence the 
change of the legal regime would result into a change of the applicable law.  

The  change  of  applicable  law  will  result  in  some  intertemporal  issues.  Article  50  TEU  will 
preclude legitimate expectations for the continuation of no tariffs and quotas when entering 
UK territory. However, licenses and concessions issued under EU law that concern UK terri-
tory and whose duration of validity surpasses the date of a potential withdrawal of the UK 
from  the  EU  are  considered  property  rights  and  would  therefore  be  considered  acquired 
rights, which cannot be rendered invalid without compensation. 

Against this background, the law of the Customs Union is one where the impact of a with-
drawal of the UK from the EU will be highly significant. This calls for a more detailed analysis 
of the significance of a withdrawal under the different Brexit scenarios. 

208  The workshop is documented in the ‘Proceedings of the Workshop on the consequences of Brexit’ published in 

March 2017. 

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5.1.2. 

Hard Brexit: WTO rules 

According to this scenario, there would be no agreement governing the future relationship 
between the EU and the UK. The UK would cease to be a member of the EU’s customs union. 
Its imports from and exports to the EU would be subject to tariffs (and vice versa). There 
would have to be a customs border. In this scenario, there would be no rules of origin. The 
HL EU Committee notes in this context in its most recent Brexit report on trade in goods that 
‘[t]o [their] knowledge, no precedent exists for an agreement outside a customs union that 
entirely eliminates the need for customs checks and the additional burden of associated ad-
ministration  and  costs’.209  The  UK  would  moreover  have  to  negotiate  its  own  schedule  of 
commitments in the WTO or to separate its commitments from those of the EU, as explained 
in chapter 3.4.1. While the UK is a member of the WTO in its own right, it does not have an 
individual schedule of concessions. Instead, it is part of the EU’s combined schedules (see 
chapter 3.4.1).210  

In this context it is argued by the House of Lords’ European Union Committee that ‘[b]efore 
presenting its schedules to WTO members, the UK will have to negotiate formally with the 
EU to separate out its TRQs [i.e. Tariff Rate Quotas] and levels of subsidies from those cur-
rently shared between the EU’s 28 Member States.’211 It will be recalled that ‘TRQs provide 
lower duties on limited quantities of goods imported into a country.’212 The process of dividing 
these quotas between the EU and the UK is expected by the HL EU Committee to be ‘conten-
tious’.213 The EU and the UK would further need to ‘divide those quotas that currently enable 
the EU to export to third countries on preferential terms.’214 It is not clear whether the EU 
would keep these quotas, with the consequence that the UK would need to negotiate prefer-
ential  access  itself.215  ‘The  UK  and  the  EU  would  also  have  to  agree  on  how  to  divide  the 
entitlement to domestic subsidies (most commonly agricultural subsidies), known in the WTO 
as  the  aggregate  measurement  of  support  (AMS).’216  However,  it  is  noted  that  the  EU  is 
currently ‘well below its agreed limit’, which gives some leeway for a deal to be struck.217 

It is further argued by the HL EU Committee that from the perspective of other WTO members 
it  makes  a  ‘massive  difference’  whether  the  UK  remains  part  of  the  EU’s  customs  union, 
concludes an FTA with the EU or trades under WTO rules only.218 This is because other coun-
tries might seek from the UK Government lower tariff rates on imports so as to compensate 
for the fact that their products would no longer have free access to the single market.219 This 
is more especially so with respect to the WTO option (‘hard Brexit’). 

Scheller (2016) briefly outlines the consequences for tariffs of a ‘hard Brexit’.220 Newly intro-
duced tariffs in the cross-border trade relations plus additional administrative and procedural 

209  European Union Committee, Brexit: Trade in Goods (sixteenth report) (2016-17, HL 129) 5. 
210  See further House of Commons Treasury Committee ‘Oral Evidence: The UK’s future economic relationship with 

the European Union’ HC 483, 13 July 2016; European Union Committee (n 106). 

211  European Union Committee (n 106), 53 para 177. 
212  ibid 53 para 178. 
213  ibid 53-54 para 178. 
214  ibid 54 para 179. 
215  ibid 54 para 179. 
216  ibid 54 para 180. 
217  ibid 54 para 180. 
218  ibid 55 para 187. 
219  ibid 55 para 187. 
220  Peter Scheller, ‘Brexit und die Folgen für das Zollrecht und die indirekten Steuern’, Deutsches Steuerrecht (DStR) 

2016, 2196, 2197. 

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burdens  would  have  a  negative  impact  on  cross-border  trade.221  Scheller  therefore  antici-
pates the conclusion of a most favoured nation agreement between the EU and the UK that 
would reduce tariff burdens as much as possible. 

As  to  the  process  of  modifying  the  EU  and  the  UK’s  schedules,  it  is  not  clear  whether  a 
‘rectification’ or a ‘modification’ would be needed, the latter being far more cumbersome a 
decision-making process.222 It bears mentioning that the EU had to revise its commitments 
as  more  countries  joined  the  EU.  It  is  noted  by  Ungphakorn  (2016)  that  the  schedule  for 
1995 was not certified until 2010 – it took fifteen years to account for the addition of three 
Member States.223 

At the time of writing, the most recent statement by the Rt Hon Greg Hands MP, Minister of 
State in the Department of International Trade, is that ‘[t]he UK goods and services schedules 
will be based on the most recent certified EU schedules, which is EU25 for goods, and EC12 
for services. Since these schedules were certified the EU has entered into further WTO obli-
gations, which we will also seek to replicate in our schedules.’224 

There is no discussion in the existing literature on the Trade Facilitation Agreement (TFA), 
which entered into force on 22 February 2017. ‘The TFA focuses on a different kind of NTB: 
It aims at reducing the costs that arise from administrative customs procedures, which are 
substantial. In short, the TFA aims at a simplification, harmonisation and modernisation of 
export  and import  procedures.’225  ‘Estimates  show that the full  implementation  of the TFA 
could reduce trade costs by an average of 14.3% and boost global trade by up to $1 trillion 
per year’.226 The problem here lies in the fact that the agreement was signed by the EU on 
behalf of all its Member States, including the United Kingdom.227 

5.1.3. 

European Economic Area Agreement  

In this scenario UK goods covered by the EEA Agreement would have tariff-free access to the 
single market, and EU goods covered by the EEA Agreement would also have tariff-free ac-
cess  to  the  UK  market.  However,  as  explained  above  (chapter  3.5),  rules  of  origin  would 
apply. This is because there is no common customs tariff applicable to goods imported from 
third countries under the EEA Agreement. The EEA Agreement includes a prohibition of cus-
toms  duties  on  imports  and  exports  and  of  any  charges  having  equivalent  effect  without 
prejudice to the arrangements set out in Protocol 5 with regard to customs duties of a fiscal 
nature. Yet, in contrast to the EU, the EEA may not define common customs tariffs duties. 
The EEA cannot therefore be considered a fully-fledged customs union. Moreover it has to be 
noted that there would be tariffs for farm produce and fish.228 EEA EFTA States can set their 
own tariffs on goods imported from outside the single market, but their own goods (except 

221  ibid 2197-8 with a lot of examples. 
222  European Union Committee (n 106), paras 188-190. 
223  See further Peter Ungphakorn, ‘The Hilton Beef Quota: A Taste of What Post-Brexit UK Faces in the WTO’, (Trade 
β  Blog,  posted  on  10  August  2016  and  updated  on  25  November  2016)  <https://tradebetablog.word-
press.com/2016/08/10/hilton-beef-quota/> accessed 12 December 2016. 

224  Written answer from Department of International Trade to written parliamentary question WPQ67537 by Kirsty 

Blackman MP, 16 March 2017. 

225  Christian Bluth, ‘TFA: The Trillion Dollar Trade Deal That Just Came into Force …And Which Hardly Anyone No-
ticed’ (7 March 2017) <https://ged-project.de/topics/competitiveness/challenges_in_international_competitive-
ness/tfa-the-trillion-dollar-deal-nobody-noticed/> accessed 21 March 2017. 

226  World  Trade  Organization,  ‘Trade  Facilitation’  <https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm> 

accessed 21 March 2017. 

227  World Trade Organization, ‘Members accepting the Protocol of Amendment to insert the WTO Trade Facilitation 
<https://www.wto.org/eng-

1A 
Agreement 
lish/tratop_e/tradfa_e/tradfa_agreeacc_e.htm> accessed 21 March 2017. 

Agreement’ 

Annex 

WTO 

into 

the 

of 

228  See further Catherine Barnard, ‘The Customs Union’ <http://ukandeu.ac.uk/explainers/the-customs-union/> ac-

cessed 11 January 2017. 

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for  farm  produce  and  fish)  are  imported  tariff-free  into  the  EU.  This  means  that  if  the  UK 
were  to  become  part  to  the  EEA  Agreement,  its  exporters  would  have  to  show  that  their 
goods  originated  in  the  UK  and  would  therefore  be  eligible  for  tariff-free  entry  to  the  EU 
countries. This would require the application of rules of origin.229 

It is noted by the House of Lords EU Committee that the economic impact of rules of origin, 
if  these  were  to  be  introduced,  has  not  yet  been  precisely  quantified.230  According  to  one 
study, applying rules of origin could cost the UK economy ‘around 1-1.2% GDP’.231 A CEPS 
report commissioned by the UK Government (2013) estimated that leaving the customs un-
ion could cost traders anything from 4–15% of the cost of goods sold.232 The House of Lords 
EU Committee is also ‘conscious of the practical challenges of introducing full customs con-
trols within two years’.233 The EU27, too, would of course  face similar  practical challenges 
under this scenario. 

The EEA Agreement includes a provision that waives the Common External Tariff on goods 
(except certain agricultural and fish products) exported from non-EU EEA States into the EU, 
insofar as the majority of their parts are produced in the EEA.234 It is explained by the House 
of Lords EU Committee that this could be ‘problematic’ for the UK, as ‘on average 23% of the 
value of the UK’s goods exports is derived from foreign components’.235 In this connection, 
the Financial Times report that around 60% of UK exports are intermediate goods, capital 
goods and raw materials –not final consumer goods–, with parts of the same product crossing 
the border multiple times before the latter is assembled.236 This provision in the EEA Agree-
ment could further increase, argues the House of Lords EU Committee, red tape, transaction 
costs for businesses, and costs for consumers.237 What is more, it is difficult to determine the 
origin of products with a complex supply chain.238 As shown by a CBI study, the UK aerospace 
industry, for example, rests on complex supply chains.239 

Another issue identified in the report of the HL EU Committee is that for those sectors falling 
outside  the  EEA  Agreement  which  are  not  covered  by  other  bilateral  agreements  between 
EEA  EFTA  States  and  the  EU,  the  EU  imposes  tariffs  on  imported  goods.  In  other  words, 
outside the scope of the EEA Agreement, the ‘fall-back option’ applies, according to which 
the legal relationship between the UK and the EU is governed by WTO law (section 5.1.2). 
The EU can further apply safeguard measures, such as antidumping policies, which has hap-
pened in the past with respect to fish products. This could ‘potentially pose difficulties for the 

229  Catherine  Barnard,  ‘The  Customs  Union’  <http://ukandeu.ac.uk/explainers/the-customs-union/>  accessed  11 

January 2017. 

230  European Union Committee (n 106), 31-32 paras 97-102. 
231  Raoul  Ruparel,  ‘Post  Brexit,  Leaving  the  Customs  Union  is  a  No-Brainer’  (Open  Europe,  28  July  2016) 
<http://openeurope.org.uk/today/blog/post-brexit-leaving-customs-union-no-brainer/> accessed 14 December 
2016. 

232  Centre for Economic Policy Research, ‘Trade and Investment: Balance of Competence Review’ (November 2013) 
<https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/271784/bis-14-512-trade-
and-investment-balance-of-competence-review-project-report.pdf> accessed 14 December 2016, 58. 

233  European Union Committee (n 106), 35 para 116. 
234  See further EEA Agreement Protocol No 4 on rules of origin. 
235  European Union Committee (n 106), 24 para 71. 
236  Financial  Times,  ‘UK  Faces  Struggle  to  Redesign  Trade  Relationships,  in  Charts’  (3  February  2017) 
<https://www.ft.com/content/37aa67a0-e94e-11e6-893c-082c54a7f539>  accessed  12  May  2017,  with  data 
from  the  World  Bank:  <http://wits.worldbank.org/CountryProfile/en/Country/WLD/Year/2014/TradeFlow/Ex-
port/Partner/all/Product/UNCTAD-SoP2> accessed 12 May 2017. 

237  European Union Committee (n 106), 24 para 72; 31 para 98. 
238  ibid 24 para 72; 31 para 98. 
239  CBI,  ‘Aerospace:  An  International  Success  Story’  <http://www.cbi.org.uk/global-future/case_study02_aero-

space.html> accessed 12 May 2017. 

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UK’, it is argued, because 64% of the UK’s fish and 73% of vegetable exports go to the EU.240 
This arguably creates leverage for the EU in the ‘Brexit’ negotiations. 

5.1.4. 

Tailor-made arrangements 

Much depends on the choices which are yet to be made by the two negotiating parties, the 
EU and the UK. In principle, an FTA could reduce or eliminate tariff barriers to trade for goods 
covered by the agreement. As such, it could go further than WTO commitments made by the 
EU with respect to third countries.  

Tariff-free mutual access presupposes a rich/deep FTA. It is argued by Pelkmans (2017) that 
the DCFTA is a good candidate, especially because the UK already fully ‘owns’ the EU acquis. 
However, the DCFTA is clearly based, Pelkmans argues, on ‘entrenching the single market 
acquis’, and the UK would not be a member of the customs union.241  

‘A FTA could also avoid the imposition of tariffs on goods traded between the UK and the EU, 
although rules of origin would apply.’242 It is, however, argued by Gasiorek, Holmes and Rollo 
(2016) that ‘both the UK and the EU could agree that in all industries where the UK keeps 
the same external tariffs as it has now, Rules of Origin would not be checked, and/or that 
where  standards  and  enforcement  was  maintained  as  it  had  been  within  the  EU,  Mutual 
Recognition could be assumed at least temporarily.’243 This proposal would, if implemented, 
minimise the impact of Brexit. 

5.2. 

Internal Market in Goods  

5.2.1. 

Application of the analytical framework 

The internal market in goods covers the free movement of goods provisions in EU primary 
law  (Articles  34  to  37 TFEU),  as well  as  secondary  law on  standards  that products  on  the 
internal market have to comply with. The latter refers in particular to product safety rules. 

Understood in this way, the rules concerning the internal market in goods are part of public 
law. The connecting factor for determining the applicable procedural law is therefore ‘territo-
riality’.  This  means  that,  after  a  Brexit  materialises,  UK  courts  will  apply  UK  law  to  goods 
entering the UK market. Hence the change of the legal regime would result into a change of 
applicable law.  

Furthermore, principles of intertemporal law will not lead to a continuous application of EU 
law to goods that seek entrance to the UK market. Article 50 TEU will preclude legitimate 
expectations for the expectation that goods that are in conformity with EU rules could enter 
the UK market without any further restrictions. Goods produced in compliance with EU prod-
uct  safety  rules  cannot  be  considered  acquired  rights,  in  particular  since  these  goods  can 
easily be sold within the remaining EU internal market.  

Against this background, the law concerning the internal market in goods is one where the 
impact of Brexit could be significant. Yet, the actual significance will depend on how much 
UK domestic rules would deviate from the current EU standards. If the UK lowers the stand-
ards,  EU  products  being  compliant  with  higher  standards  will  still  be  able  to  enter  the  UK 
market, whereas UK products could be prevented from entering the EU internal market. If 

240  European Union Committee (n 106), 25 para 74. 
241  Jacques  Pelkmans,  ‘Economic  Impact  of  Brexit  on  EU27:  Part  2,  Sectorial  Consequences’  (Workshop  on  the 

consequences of Brexit, Brussels, 28 February 2017). 

242  European Union Committee (n 106), 49 para 166. 
243  Gasiorek, Holmes and Rollo (n 120), 5. 

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the UK raises its standards, UK products will not meet any problems entering the EU internal 
market, whereas EU products would face difficulties to be sold on the UK market.  

5.2.2. 

Hard Brexit: WTO rules 

The basic rules of non-discrimination would still be applicable, and it is argued by Eeckhout 
(2017)  that  they  are  ‘not  so  different’.244  There  would  be  ‘very  limited’  harmonisation,  no 
mutual recognition, and no direct effect.245 Dispute settlement would be ‘international’, in the 
sense that it would be carried out by the panels and Appellate Body.246 Moreover, there would 
be  the  possibility  of  trade  defence  measures,  and  the  UK  would  be  free  to  decide  its  own 
external trade policy (subject to WTO commitments).247 

The House of Lords’ EU Committee in March 2017 has published its report on Brexit and trade 
in goods.248 It is argued in that report that the UK Prime Minister’s approach may result in 
the introduction of both tariff and non-tariff barriers to trade in goods between the UK and 
the EU. The report examines the impact of WTO rules on six sectors: chemicals and pharma-
ceuticals; capital goods and machinery; food and beverages; oil and petroleum; automotive; 
and  aerospace  and  defence.  In  the  view  of  the  HL  EU  Committee  the  significance  of  tariff 
barriers ‘varies considerably between sectors: while tariffs are zero on civil aerospace parts 
(under WTO agreements), EU tariffs set at the WTO are 10% on cars and can be more than 
200% on some agricultural products. Tariffs would be particularly damaging for sectors with 
a highly integrated EU supply chain, such as the automotive sector—tariffs could be levied 
multiple times in the production process.’249 In the view of the Committee it is thus of con-
siderable importance that the UK Government seeks to eliminate tariff barriers in its planned 
‘ambitious  and  comprehensive  free  trade  agreement’  with  the  EU.250  Further,  ‘compliance 
with rules of origin requirements would introduce a significant additional administrative bur-
den, with a particularly negative impact on sectors with a highly integrated EU supply chain. 
Companies in these sectors might be unable to comply with the local content requirements 
contained in the EU’s preferential rules of origin’.251 

5.2.3. 

European Economic Area Agreement 

Eeckhout (2017) describes this model as ‘equivalent to full membership’.252 It is equivalent 
in terms of harmonisation and mutual recognition, as the UK would keep incorporating rules 
that are of EEA relevance into domestic law. Yet, some products are excluded from the scope 
of  the  Agreement.253  As  regards  the  legal  effect  of  those  commitments,  there  is  no  direct 
effect and primacy, but there is full implementation by the EEA EFTA States. There is a cen-
tralised  Court  mechanism  (EFTA  Court).  Further,  there  is  the  possibility  of  trade  defence 
measures, and the UK would be in charge of its own external trade policy.254  

244  Piet Eeckhout, ‘The Consequences of Brexit for the EU Customs Union and the Internal Market Acquis’ (Workshop 

on the consequences of Brexit, Brussels, 28 February 2017). 

245  ibid. 
246  ibid. 
247  ibid. 
248  European Union Committee (n 209). 
249  ibid 4. 
250  ibid 4. 
251  ibid 4. 
252  Eeckhout (n 244). 
253  See Article 8(3) of the EEA Agreement; Protocol 2 on products excluded from the scope of the Agreement in 
accordance with Article 8(3)(a); Protocol 3 concerning products referred to in Article 8(3)(b) of the Agreement. 

254  Eeckhout (n 244). 

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5.2.4. 

Tailor-made arrangements 

The implications here would of course depend on the precise type of FTA (or other agreement) 
that would be concluded between the EU and the UK. The DCFTA model, for example, includes 
basic rules akin to the WTO model. Harmonisation and mutual recognition are ‘partial’.255 The 
legal  effect  of  the  commitments  is,  Eeckhout  argues,  ‘uncertain’.256  Dispute  settlement  is 
‘international’  in  the  sense  outlined  in  chapter  3.6.1.  There  is  also  the  possibility  of  trade 
defence measures, and the UK would be free to determine its external trade policy.257 CETA 
(discussed in chapter 3.6.2) diverges from the DCFTA model in that there is no harmonisation 
and mutual recognition, and its legal effect is ‘international’.258 

It is noted by Pelkmans (2017) that in this case Brexit would amount to possible deviations 
from or erosion of free movement of goods if new EU laws were not incorporated in the UK, 
the UK opted for amendments or new UK laws affecting derogations, and/or the UK did not 
accept relevant CJEU rulings.259 If, however, UK laws stayed in line with EU law, as suggested 
by the UK Government’s White Paper,260 then the costs of Brexit in goods would ‘at first be 
zero’.261 

Gasiorek, Holmes and Rollo (2016) note that an FTA could include rules on mutual recognition 
of testing and certification of standards for goods. These options may also give, they argue, 
the EU and the UK ‘some flexibility in the sectoral coverage, and like Norway or Switzerland, 
[they] could try to exclude some sectors from free trade.’262 Whether a tailor-made agree-
ment would include rules on mutual recognition of standards and/or conformity assessment 
in certain sectors clearly depends on the choices to be made by the negotiating parties. In 
this connection, it is noted by the HL EU Committee in its March 2017 report on Brexit and 
trade in goods that an FTA ‘would require a trade-off between the UK’s desire to make do-
mestic laws, and its wish to pursue close trade relations with the EU. It would be likely to 
entail a legal obligation to maintain a high level of harmonisation or mutual recognition of 
standards with the EU, and might also require the UK to agree an oversight or arbitration 
mechanism with the EU.’263 

5.3. 

Internal Market in Services 

5.3.1. 

Application of the analytical framework 

The internal market in services covers the freedom to provide services provisions in EU pri-
mary law (Articles 56 to 62 TFEU) as well as secondary law on standards that services on the 
internal market have to be up to. It excludes all those rules that aim at protecting consumers 
and those that regulate public procurement, since both are addressed in separate chapters 
(see chapter 5.4 on consumer protection and chapter 5.5 on public procurement).  

255  ibid. 
256  ibid. 
257  ibid. 
258  ibid. 
259  Pelkmans (n 241). 
260  See further Department for Exiting the European Union and The Rt Hon Davis Davis MP, ‘The United Kingdom’s 
(2  February  2017) 

Exit 
<https://www.gov.uk/government/publications/the-united-kingdoms-exit-from-and-new-partnership-with-the-
european-union-white-paper> accessed 17 March 2017. 

the  European  Union  White  Paper’ 

from  and  New  Partnership  with 

261  Pelkmans (n 241). 
262  Gasiorek, Holmes and Rollo (n 120), 4. 
263  European Union Committee (n 209), 4-5. 

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Understood in this way, the rules concerning the internal market in services are part of public 
law. The connecting factor for determining the applicable procedural law is therefore ‘territo-
riality’. This means that, after a Brexit materialises, UK courts will apply UK law to services 
that are provided on the UK market and to service suppliers located in the UK. Hence the 
change of the legal regime would result into a change of applicable law.  

Furthermore, principles of intertemporal law will not lead to a continuous application of EU 
law  to  goods  that  seek  to  enter  the  UK  market.  Article  50  TEU  will  preclude,  in  principle, 
legitimate expectations for the expectation that services that are in conformity with EU rules 
could be provided on the UK market without any further restrictions. One issue may, how-
ever, raiser intertemporal problems. Current EU primary law and secondary law provides for 
a  certain  degree  of  recognition  of  professional  qualifications  for  the  access  to  and/or  the 
pursuit of regulated professions.264 Non-UK service providers that have been granted access 
to the UK market on the basis of these rules and that established a stable business relation-
ship in the UK might rely on acquired rights. Precluding the further practice of e.g. lawyers 
that  established  themselves  in  the  UK  in  accordance  with  EU  rules  and  that  provide  legal 
services in the UK may not lose their access to the regulated profession of lawyers simply 
because of a change of the applicable law. The recognition of their professional qualifications 
under EU rules allowed them to build up their professional existence and the recognition of 
their diplomas as equivalent to the domestic ones is a public fact. Hence, this situation can 
be  equated  with  property  rights  in  terms  of  the  acquired  rights  doctrine.  These  acquired 
rights can, however, not be extended to the acquisition of a professional qualification, which 
would be protected under the EU legal regime. EU law does not establish a free movement 
of professional qualifications but diminishes access restrictions to services and establishment 
insofar as they relate to non-domestic professional qualifications. Hence, the application of 
the ‘acquired rights’ doctrine in the context of professional qualifications requires the actual 
and stable provision of services based on these qualifications. 

Against this background, the law concerning the internal market in services is one where the 
impact of Brexit could be significant. Yet, the actual significance will depend on how much 
UK domestic rules would deviate from the current EU standards. If the UK lowered the stand-
ards, EU services being compliant with higher standards would still be able to enter the UK 
market whereas UK services could be prevented from entering the EU internal market. If the 
UK  raised  standards,  UK  services  would  not  meet  any  problems  entering  the  EU  internal 
market, whereas EU services would face difficulties to be provided on the UK market.  

5.3.2. 

Hard Brexit: WTO rules 

As  regards  the  substance  of  WTO  law,  Kainer  (2017)  argues  that  the  UK  would  remain  a 
member of GATS (though the details are ‘controversial’).265 Trading under WTO rules would, 
in this case, ‘provide limited commitments on services’. It would not provide the UK with any 
preferential access to the single market.266 More specifically, Articles XVI and XVII provide 
for limited market access and national treatment rules. As regards mutual recognition, there 
is a framework for further negotiation. There are no common standards akin to Articles 114 
TFEU, 62 TFEU and 53 TFEU. In terms of its scope, there is a positive list, and commitments 
can be fixed unilaterally. Crucially for services, there would be no ‘passporting’.267 

264  Cf. Directive 2005/36/EC on the recognition of professional qualifications; Directive 77/249/EEC to facilitate the 
effective exercise by lawyers of freedom to provide services; Directive 98/5/EC to facilitate practice of the pro-
fession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained. 
265  Friedemann Kainer, ‘The Consequences of Brexit on Services and Establishment: Different Scenarios for Exit and 

Future Cooperation’ (Workshop on the consequences of Brexit, Brussels, 28 February 2017). 

266  European Union Committee (106), 58 para 197. 
267  Kainer (n 265). 

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Kainer (2017) highlights the problems facing service providers and established persons from 
the  UK  in  a  ‘hard  Brexit’  scenario.  If  (hard)  Brexit  became  a  reality,  UK  natural  and  legal 
persons would lose their rights under Articles 56 and 49 TFEU. They would further lose their 
rights  under  Article  15(2)  of  the  EU  Charter  (establishment).  For  example,  UK  companies 
(Private Ltd.) having their main economic activities in Germany would fall outside the scope 
of Article 49 TFEU. 

As regards the scope of WTO commitments, ‘[t]he extent of market access in services pro-
vided by WTO agreements varies sector by sector’.268 It is noted, for example, by the HL EU 
Committee that aviation ‘is hardly touched upon by WTO commitments’.269 ‘There [are] no 
commitments regarding the right to fly between WTO members, whereas in “huge contrast”, 
in the Single Market “you have a full single market in aviation” where “any EU airline … can 
perform freely any flights across the European internal market”.’270 

Further, as regards the EU’s digital single market, it is noted by Harcourt (2016) that it is 
‘unique in providing extensive liberalisation in services markets.’271 ‘By contrast, few com-
mitments have been made under telecommunications, broadcasting and digital services in 
bilateral  treaty  arrangements  with  third  countries  and  on  the  World  Trade  Organisation 
(WTO) table.’272 

5.3.3. 

European Economic Area Agreement 

It is argued by Gasiorek, Holmes and Rollo (2016) that ‘the EEA covers services in the same 
way as does the EU’s single market’.273 As regards the substance of EEA law, Kainer (2017) 
notes  that  it  is  ‘largely  aligned  to  the  EU  single  market  law’.274  Negative  integration  is 
achieved through the application of the TFEU’s fundamental freedoms. In terms of positive 
integration, the EEA Agreement incorporates EU single market law into EEA law. The scope 
of the agreement is, as noted above, ‘comprehensive’, and there are ‘only few exceptions in 
the treaty’.275 

Kainer further argues that joining the EEA would be ‘the easiest solution’, as the EEA Agree-
ment provides for a ‘comprehensive integration of service markets’. There is also a central-
ised court mechanism (EFTA Court) and ‘passporting’.276  

5.3.4. 

Tailor-made arrangements 

The consequences of Brexit would very much depend in this case on the model to be followed 
by  the  negotiating  parties.  Under  the  EU-South Korea  FTA,  there  is  limited  market  access 
and national treatment rules (Articles 7.5f and 7.9f). There is a mechanism for the negotiation 
of mutual recognition agreements (MRA), no common standards, and a positive list in terms 
of scope. CETA provides for limited market access and national treatment (Articles 9.6 and 
9.3). It further provides for limited market access for investment (Articles 8.1 et seq.). There 
is  a  framework  to  develop  MRA  (Article  11),  no  common  standards,  and  a  negative  list  in 

268  European Union Committee (n 106), 59 para 204. 
269  ibid 60 para 204. 
270  ibid 60 para 204. 
271  Alison Harcourt, ‘The EU’s Digital Single Market’ <http://ukandeu.ac.uk/explainers/the-eus-digital-single-mar-

ket/> accessed 12 January 2017. 

272  ibid. 
273  Gasiorek, Holmes and Rollo (n 120), 3. 
274  Kainer (n 265). 
275  ibid. 
276  ibid. 

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terms of scope. For both agreements, there is no direct effect and judicial review is restricted. 
There is also investment arbitration in the case of CETA.277 

The House of Lords’ EU Committee argues that non-tariff barriers for services could create 
problems when trade consists of goods and services bundled together, even if tariff barriers 
for goods were eliminated.278 Some services might also be ‘easier to include [in an FTA] than 
others’, such as telecommunications and e-commerce.279 It is noted by Gasiorek, Holmes and 
Rollo  (2016)  that  recent  EU  FTAs  have  included  some  services,  especially  the  EU-Korea 
agreement (see also chapter 3.6.).280 However, as the House of Lords EU Committee itself 
admits, ‘there is no precedent for third-country access to the Single Market in financial ser-
vices and other services.’281 Witnesses noted that the CETA model was ‘far short … of provid-
ing a passport and being able to provide a service from your home base in the UK.’282 

5.4. 

Consumer Protection 

5.4.1. 

Application of the analytical framework 

The law on consumer protection is considered to be private law. The international procedural 
law is hence regulated by the Brussels Ibis Regulation and the conflict rules can be found in 
the Rome I-Regulation. According to Article 18 of the Brussels Ibis-Regulation, a consumer 
may bring proceedings against the other party of contract either in the courts of the Member 
State where this party is domiciled or where the consumer is domiciled. Proceedings against 
the consumer may brought only in courts of the Member State where the consumer is dom-
iciled. Except for when the consumer choses differently, the competent court for consumer 
cases is the one located in the Member State where the consumer is domiciled. This means 
that in cases where the consumer in domiciled in the EU the Brussels Ibis-Regulation is ap-
plicable and the applicable conflict rule is the Rome I-Regulation. According to Article 6(1) of 
the Rome I-Regulation, ‘a contract concluded by a natural person for a purpose which can be 
regarded as being outside his trade or profession (the consumer) with another person acting 
in the exercise of his trade or profession (the professional) shall be governed by the law of 
the country where the consumer has his habitual residence, provided that the professional 
(a) pursues his commercial or professional activities in the country where the consumer has 
his  habitual  residence,  or  (b)  by  any  means,  directs  such  activities  to  that  country  or  to 
several countries including that country.’ In a situation in which an EU consumer purchases 
products on a UK website in Euro (which is sufficient to consider that an activity from the UK 
is directed to the EU) the law applicable to the EU consumer remains EU consumer protection 
law. The change of the legal regime does not result into a change of the applicable law. 

If a UK professional then initiates  proceedings against an EU consumer in a UK court, the 
latter would have to apply the 1968 Brussels Convention (see chapter 4.2.2) once the with-
drawal has become a reality. Article 13, in essence, repeats Article 18 of the Brussels Ibis-
Regulation so that a UK court would have to declare itself as not competent. Even if UK courts 
would consider themselves competent, they would have to apply the 1980 Rome Convention 
as the applicable conflict rule (see as well chapter 4.2.2). Article 5 of this Convention also 

277  ibid. 
278  European Union Committee (n 106), 32 para 103. 
279  ibid 42 para 137. 
280  Gasiorek, Holmes and Rollo (n 120), 4. 
281  European Union Committee (n 106), 43 para 138. 
282  ibid 43 para 138. See further Chapter 13 of CETA; John Armour, ‘Brexit to the EEA: What Would It Mean?’ in 
Pavlos Eleftheriadis (ed) and others, ‘Legal Aspects of Withdrawal from the EU: A Briefing Note’ (14 July 2016) 
<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2809285>  accessed  3  August  2016;  John  Armour, 
‘Brexit and Financial Services’ (2017) 33 (suppl_1) Oxford Review of Economic Policy S54-S69. 

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designates the law of the country where the consumer has his habitual residence as applica-
ble. Hence, even if the proceedings were initiated in the UK, the EU consumer would remain 
protected under the standards of EU consumer protection law.  

Therefore, even after Brexit, the EU consumer protection law would have to be respected by 
UK professionals selling goods and services to EU consumers. In this situation the change of 
legal regime would not entail a change of the applicable law.283 

It should, however, be noted that the Brussels Convention in Article 13 and the Rome Con-
vention in Article 5 require for their application that the consumer contract ‘was preceded by 
a specific invitation addressed to [the consumer] or by advertising’. The EU instruments refer 
to  ‘commercial  or  professional  activities  directed  to’  the  Member  State  of  residence  of  the 
consumer (Article 17(1)(c) of the Brussel Ibis-Regulation and Article 6(1)(b) of the Rome I-
Regulation). This means that consumer contracts concluded via websites that do not aim at 
commercial activities in the Member State of residence of the consumer (passive sales) will 
be covered by the general rules of designating the competent court and the applicable law, 
which could lead to the application of another law that the one of the habitual residence of 
the consumer.  

Hence, in these situations as in case the professional is an EU resident contracting with a UK 
consumer, the legal situation is different. In the situation of a passive sale with a UK based 
professional the EU consumer and in the other cases the EU professional would have to com-
ply with UK consumer protection rules. Here, the application of the principles of intertemporal 
law  would  not  lead  to  a  continuous  application  of  EU  consumer  protection  law  to  the  EU-
based professional. Legitimate expectations cannot arise because of Article 50 TEU from the 
moment of the notification of the UK government of 29 March 2017 and, furthermore, con-
sumer protection law is not considered as comparable to property rights so that the ‘acquired 
rights’ doctrine could be applied. 

In sum, the impact of Brexit on consumer protection law may be relatively limited, at least 
insofar as EU consumers are concerned. 

5.4.2. 

Hard Brexit 

In the ‘hard Brexit’ scenario, consumer protection law would be affected by the principles of 
non-discrimination under WTO law. Although consumer protection standards are considered 
as non-tariff barriers to free trade in goods and services under WTO law, they are in line with 
WTO law since they either do not discriminate directly or indirectly against foreign products 
or they can be justified as the realisation of aims in the general interest. 

The most relevant impact will arise from the fact that UK and EU consumer protection laws 
will  evolve  in  different  directions  after  a  Brexit.  Yet,  as  explained  above,  this  change  of  a 
legal regime does not imply a change of the applicable law in contractual relations in which 
an EU consumer is involved.  

Examining the future evolution of consumer protection law in case of a withdrawal by the UK 
from the EU without any agreement on the Business-to-Consumer relationship linked to con-
sumer law, Jeloschek (2016) differentiates between the future interpretation of existing con-
sumer law in the UK and that of any future EU harmonisation measures.284 According to this 
author, no major changes are to be expected as far as the interpretation of existing British 

283  See  also  Guillaume  Croisant,  ‘Fog  in  the  Channel  –  Continent  Cut  Off.  Les  conséquences  juridiques  du  Brexit 

pour le droit international privé et l’arbitrage international’ (2017) 2 Journal des Tribunaux 24-33. 

284  Christoph Jeloschek, ‘Brexit en consumentenrecht: much ado about nothing?’, Bb 2016/72, 251. 

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consumer law, such as the Sales of Goods Act that is based on European Directives, is con-
cerned. Concerning the  question of  a possible  revision  of  such  acts following  a  Brexit,  the 
author speculates that this instrument may be modified in order to increase the UK’s com-
petitive position on the market by deviating from the high EU (product) standards, such as 
in the area of product liability or unfair commercial practices. Regarding future harmonisation 
measures,  Jeloschek  argues  that  the  deviations  following  a  Brexit  may  be  larger.  The  UK 
would then no longer be under any obligation to implement plans to a comprehensive ap-
proach to cross-border e-Commerce, nor would it be under an obligation to follow through 
new  legislative  initiatives,  such  as  regarding  certain  aspects  concerning  contracts  for  the 
online and other distance sales of goods.285  

Pelkmans (2017) concurs that there would be pressure to change consumer law in the UK 
after Brexit. He argues, however, that EU consumer law is unlikely to change due to Brexit 
alone.286 Kramme (2017), too, argues that in the long term, the UK and EU consumer pro-
tection legislation are likely to drift apart (due to changes of EU or UK law or due to different 
interpretations). Consequently, conflict of law rules and jurisdiction would gain importance.287 

It is noted by the House of Commons Library in its briefing paper (2016) that ‘[i]t is impos-
sible to calculate the impact of withdrawal in any meaningful way without knowing the basis 
on  which  the  UK  would  continue  to  interact  with  the  EU’.288  The  briefing  paper  inquires: 
‘Clearly, the crucial question is whether the UK retains any sort of access to the European 
Single  Market,  and  if  so,  how  much  and  in  return  for  what?’289  It  is  further  noted  in  the 
briefing paper that the Consumer Rights Act 2015 (CRA 2015) ‘will not be directly affected 
by Brexit’. ‘However, an important question is whether a non-EU UK would keep all or some 
of the rules and procedures of EU consumer protection legislation. Existing consumer legis-
lation could be unpicked and changed, but in practice this might be difficult to achieve.’290 

As regards consumers of digital content, it is noted below that the UK Consumer Rights Act 
2015 (CRA 2015) contains extensive rules on consumer protection in relation to contracts for 
the supply of digital content.291 As also noted below, the CRA goes in part even beyond the 
proposed Digital Content Directive.292 This text is, it should be noted, of EEA relevance as 
well. Mánko and Tereszkiewicz (2016) draw a comparison between the CRA 2015 and the 
proposed Digital Content Directive.293 They argue that in some areas consumers would be 
better  off  under  the  proposed  Directive  (e.g.,  with  regard  to  digital  services),  whereas  in 
other areas the CRA 2015 is more favourable (e.g., with regard to the purchase of digital 
content on a tangible medium). 

285  See proposal for a Directive of the European Parliament and of the Council on certain aspects concerning con-

tracts for the supply of digital content, 2015/0287 (COD). 

286  Pelkmans (n 241). 
287  Malte Kramme, ‘Consequences of Brexit in the Area of Consumer Protection’ (Workshop on the consequences of 

Brexit, Brussels, 28 February 2017). 

288  House of Commons Library, ‘Brexit: Impact across policy areas’, Briefing paper No 07213, 26 August 2016, 153. 
289  ibid 153. 
290  ibid 153. 
291  See also Annex II. 
292  See Proposal for a Directive of the European Parliament and of the Council on certain aspects concerning con-

tracts for the supply of digital content, COM/2015/0634 final - 2015/0287 (COD). 

293  Piotr  Tereszkiewicz  and  Rafal  Mánko,  ’Digitale  Inhalte  nach  britischem  Consumer  Rights  Act  2015  unter  dem 
Eindruck des Brexit’, in Malte Kramme, Christian Baldus and Martin Schmidt-Kessel (eds.), Brexit und die juris-
tischen Folgen, 2016, pp. 279-296. 

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5.4.3. 

European Economic Area Agreement 

Kramme (2017) notes that consumer protection under the EEA Agreement is ‘comparable’ to 
the EU consumer protection level.294 Under the EEA Agreement, there is a mechanism for the 
dynamic adoption of new EU secondary law.295 As explained hereafter,296 the EEA Agreement 
covers  almost  the  entire EU  consumer  protection acquis  as  well  as  transport  and  financial 
services. This point is not lost on the other side of the channel, and it is noted that ‘in return 
for  access  to  the  internal  market,  EEA/EFTA  states  are  required  to  adopt  all  EU  consumer 
protection  provisions  without  access  to  the  EU’s  decision-making  institutions’.297  However, 
Regulations in the field of judicial cooperation in civil matters are not covered (Brussels Ibis 
Regulation; Uncontested Claims Regulation No (EC) 805/2004; Order for Payment Procedure 
Regulation No (EC) 1896/2006/EU; Small Claims Regulation No (EC) 861/2007; Legal Aid for 
Cross-Border Disputes Directive (2003/8/EC); Rome I, Rome II). The Lugano Convention on 
jurisdiction and the recognition and enforcement of judgments in civil and commercial mat-
ters is applicable, and it overrules Brussels Ibis for courts in EFTA and EU Member States if 
disputes concern EFTA Member States.298 

Joining  the  EEA  Agreement  would  also  mean  that  the  UK  would  remain  participant  in  the 
Consumer Programme 2014-2020.299 The Programme funds actions across the EU28 and the 
EEA EFTA States. It aims to help consumers enjoy their rights and actively participate in the 
single market, thereby supporting growth, innovation and meeting the objectives of Europe 
2020.300 The main challenges to be addressed by the Consumer Programme are safety; con-
sumer information and education; consumer rights and effective redress; and strengthening 
enforcement cross-border.  

5.4.4. 

Tailor-made Arrangements 

The other models are not discussed in the relevant literature, and it is briefly noted that the 
level of consumer protection would depend on the outcome of the negotiations.301 The prin-
cipal  default  line  is,  however,  again  between purely  ‘international’  agreements  with no  EU 
market acquis and those trade agreements which include the EU market acquis. A key aspect 
in both cases would be the coverage of the trade agreement (or of the EU acquis incorporated 
therein) in terms of consumer protection, as the EU and UK consumer protection rules on the 
issues not covered by the agreement could be different in the future. In which case, conflict 
of law rules would apply in cross-border situations, as explained above (section 5.4.1). 

5.5. 

Public Procurement 

5.5.1. 

Application of the analytical framework 

Public procurement law is part of public law. The connecting factor for determining the appli-
cable procedural law is therefore ‘territoriality’. This means that, after a Brexit materialises, 
UK  courts  will  apply  UK  law  to  public  procurement  procedures  and  decisions.  Hence  the 
change of the legal regime would result into a change of applicable law.  

294  Kramme (n 287). 
295  Article 98 of the EEA Agreement. 
296  See Annex I and II. 
297  House of Commons Library, ‘Brexit: Impact across policy areas’, Briefing paper No 07213, 26 August 2016, 153. 
298  Kramme (n 287). 
299  Regulation (EU) No 254/2014 of the European Parliament and of the Council of 26 February 2014 on a multian-
nual consumer programme for the years 2014-20 and repealing Decision No 1926/2006/EC [2014] OJ L84/42. 
300  See  European  Commission,  ‘Europe  2020  Strategy’  <https://ec.europa.eu/info/strategy/european-semes-

ter/framework/europe-2020-strategy_en> accessed 21 March 2017. 

301  Kramme (n 287). 

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Regarding  intertemporal  law,  a  distinction  has  to  be  drawn.  Awards  and  concessions  that 
were granted by UK contracting authorities in the past on the basis of EU public procurement 
rules  cannot  be  put  in  question  by  the  mere  fact  that  the  applicable  law  changes.  These 
awards and concessions must be considered ‘acquired rights’. This derives already from the 
principle of ‘pacta sunt servanda’. This concerns all awards that were granted under the EU 
public procurement rules even after the formal notification of the UK government under Ar-
ticle 50 TEU of 29 March 2017. Concerning the contract performance, EU public procurement 
rules remain applicable to legal relationships that entered into effect under these rules. This 
concerns e.g. subcontracting but also modifications of public contracts during their term pro-
vided that modifications would otherwise require new procurement procedures. The acquired 
right in relation to the award also includes the protection of this award against subsequent 
modifications. 

The situation with a view to intertemporal rules is different when procurement procedures 
will be initiated after the change of the applicable law. EU tenderers will then be subject to 
the newly applicable rules.  

More difficult to assess is the situation for procurement procedures that are pending at the 
moment of the change of the applicable law. Without a formal award, there is no acquired 
right and tenderers will not be able to invoke legitimate expectations at least from the mo-
ment the notification of the UK under Article 50 TEU was sent to the European Council on-
wards. From a legal perspective, intertemporal law would not require the continuous appli-
cation of EU public procurement law. Legal certainty would therefore speak in favour of tran-
sitory rules to be adopted by the EU and the UK in order to clarify the status of these proce-
dures. 

Against this background, the law concerning the public procurement is one where the impact 
of Brexit will be significant, although limited to cases of future awards. Past awards are pro-
tected  as  ‘acquired  rights’.  The  actual  significance  will  depend  on  how  much  UK  domestic 
rules  would  deviate  from  the  current  EU  standards  and  whether  the  UK  would  shut  down 
market access for EU tenderers. The latter depends on the framework rules for public pro-
curement in the various Brexit scenarios. 

5.5.2. 

Hard Brexit: WTO rules 

In the event of a ‘hard Brexit’, the UK would potentially have to negotiate its entry into the 
Agreement on Government Procurement (GPA).302 In contrast to the WTO itself and its most 
important agreements, the GPA was a facultative agreement that was signed and ratified by 
the EU on behalf of the UK (and all other Member States for that matter). The UK itself is not 
a Contracting Party of the GPA. The GPA covers 47 WTO members (counting all EU-28 as one 
member) and aims to open up the government procurement markets among its parties. The 
signatories to the agreement have opened up procurement activities estimated to be worth 
$1.7 trillion.303 If the UK were to sign up to this agreement, its terms would govern access 
to procurement markets between the EU and the UK.   

and 

on  Brexit 

302  For  a  different  view  (not  endorsed  by  the  author  of  the  blog  post)  see  Albert  Sánchez-Graells,  ‘Additional 
Thoughts 
2016)  <http://www.howtoc-
rackanut.com/blog/2016/11/30/brexit-and-public-procurement-some-thoughts-after-kcl-seminar> accessed 30 
November 2016: ‘There was interesting discussion of the WTO GPA, UNCAC and UNCITRAL model law require-
ments and the possibilities they bring after Brexit, including a rather subtle argument why the UK may retain its 
condition of party to the WTO GPA on the basis of its final provisions in its Article XXII--which I either did not 
fully understand, or really do not see working out.’ 
303  European Union Committee (n 106), 60 para 206. 

(30  November 

Procurement’ 

Public 

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It is argued by Sánchez-Graells (2016) that the UK would indeed need to become party to 
the GPA after ‘Brexit’.304 The GPA is a plurilateral agreement that was signed and ratified by 
the EU on behalf of the UK (and all other Member States for that matter) so that the UK itself 
is not a Contracting Party of the GPA. The GPA covers 47 WTO members (counting all EU-28 
as one member) and aims to open up the government procurement markets among its par-
ties. The signatories to the agreement have opened up procurement activities estimated to 
be worth $1.7 trillion.305 If the UK were to sign up to this agreement, its terms would govern 
access to procurement markets between the EU and the UK.   

Consequently,  the  impact  of  the  ‘fall-back  option’  (‘hard  Brexit’)  on  public  procurement  is 
highly contingent upon the future decision of the UK about whether to ratify the GPA or not, 
as well as the approval of the other Contacting Parties and the subsequent negotiations by 
the UK regarding the coverage of the GPA. 

Arrowsmith (2017) describes the WTO option (Government Procurement Agreement – GPA) 
as a ‘very robust’ agreement, with standards just as good as the EU.306 She, too, argues that 
the UK would ‘probably’ have to apply to be party to the GPA.307 

The  coverage  of  the  GPA  would  be  negotiated  bilaterally  between  the  EU  and  the  UK  and 
would not have to be extended to others. The EU and the UK could also maintain the current 
GPA coverage.308 

Arrowsmith highlights the differences between the GPA and EU Directives on public procure-
ment in terms of coverage. The GPA does not cover lower-value procurement. Moreover, it 
does not cover private utilities, as well as some utility sectors (postal services, gas and heat, 
oil and gas extraction, solid fuels extraction/exploration). One big sector which is not covered 
is water. Further, the GPA does not cover hard defence, and it does not cover some services 
(e.g.  health  and  social  services;  legal  services).  It  is  not  clear  whether  the  GPA  does  not 
cover most concessions.309 

As  regards  award  procedures,  Arrowsmith  argues  that  switching  from  EU  law  to  the  GPA 
would have ‘almost no impact’. The GPA has a similar structure to the (old) Utilities Directive. 
There  is  under  the  GPA  a  single  set  of  procedures  for  all  covered  contracts.  The  GPA  is, 
however, ‘less explicit’ on framework agreements.310 As regards remedies, there would be 
‘not very significant’ differences.311 

5.5.3. 

European Economic Area Agreement 

The  EEA  Agreement  provides  for  the  application  of  EU  rules  for  all  key  elements  of  public 
procurement (prohibition of discrimination; transparent award procedures; and remedies for 
suppliers). In sharp contrast to the GPA model, it covers both major and lower-value con-
tracts.  Important  related  legislation  also  applies  (e.g.  on  standardisation:  Regulation 

304  Sánchez-Graells  (n  302):  ‘There  was  interesting  discussion  of  the WTO  GPA, UNCAC and UNCITRAL  model 
law requirements and the possibilities they bring after Brexit, including a rather subtle argument why the UK 
may retain its condition of party to the WTO GPA on the basis of its final provisions in its Article XXII--which I 
either did not fully understand, or really do not see working out.’ 

305  European Union Committee (n 106), 60 para 206. 
306  Sue Arrowsmith, ‘The Consequences of Brexit for Public Procurement Legal Standards’ (Workshop on the conse-

quences of Brexit, Brussels, 28 February 2017). 

307  ibid. 
308  ibid. 
309  ibid. 
310  ibid. 
311  ibid. 

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1025/2012).312 Furthermore, a very useful practical point is that there is a system in the EEA 
for advertising contracts.313 

5.5.4. 

Tailor-made arrangements 

Arrowsmith (2017) notes that most other trade agreements are modelled on the GPA and 
are concerned with how to expand GPA coverage. Some (non-accession) trade agreements 
aim  at  wider  coverage  and/or  deeper  standards  than  the  GPA  and  are  inspired  by  the  EU 
Directives.  For  example,  the  DCFTA  aims  at  a  gradual  assimilation  to  the  internal  market 
acquis in terms of award procedures. However, some provisions in these trade agreements 
are described by Arrowsmith as ‘sub-GPA’ standards (e.g., some entities under CETA).314 

Arrowsmith highlights three key transition issues which would need to be dealt with, in her 
opinion, in the withdrawal agreement: ongoing award procedures and arrangements already 
concluded under EU rules (modifications; call-offs under framework agreements and dynamic 
purchasing systems, qualification systems; remedies relating to procedures where the con-
tract is concluded, including the ineffectiveness remedy; and invoicing); and whether the UK 
should retain access to the OJEU.315 Further, as regards EU measures whose adoption is still 
pending, Arrowsmith draws attention to the proposed Regulation on access for third country 
goods and services, which could be applied to the UK where the coverage is less than the 
Directives; and the Accessibility Act (COM/2015/0615 final) and its accessibility obligations 
in public procurement specifications (see also the tables in the annex).316 

5.6. 

Summarising overview 

On the basis of the analysis of the implication of the various ‘Brexit’ scenarios to the policy 
areas covered by the IMCO Committee, it is possible to establish a table showing the legis-
lative files within the competence of the IMCO Committee that are affected by ‘Brexit’. These 
tables can be found in the Annex. It should be noted that the impact of tailor-made solutions 
is, as explained in chapter 3, highly dependent on policy choices that are still to be made by 
the UK and the EU and their implementation during the negotiations.  

312  Regulation (EU) No 1025/2012 of the European Parliament and of the Council of 25 October 2012 on European 
standardisation,  amending  Council  Directives  89/686/EEC  and  93/15/EEC  and  Directives  94/9/EC,  94/25/EC, 
95/16/EC, 97/23/EC, 98/34/EC, 2004/22/EC, 2007/23/EC, 2009/23/EC and 2009/105/EC of the European Par-
liament  and  of  the  Council  and  repealing  Council  Decision  87/95/EEC  and  Decision  No 1673/2006/EC  of  the 
European Parliament and of the Council (Text with EEA relevance) [2012] OJ L316/12. 

313  Arrowsmith (n 306). 
314  ibid. 
315  ibid. 
316  ibid. 

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6.  CONCLUSIONS 

The  present  in-depth  study  confirms  that  the  withdrawal  of  a  Member  State  from  the  EU 
ventures into uncharted legal territory. Article 50 TEU serves thereby as a legal base for an 
agreement dealing with legacy issues and organising the transition from EU membership to 
the future relationship as it is to be defined by the future partners. These future arrangements 
can, however, not be based on Article 50 TEU. Whilst a ‘hard Brexit’ and EEA membership 
would not require, in theory, additional agreements between the EU and the UK,317 tailor-
made solutions would have to be based on the Article 207 TFEU empowering the EU to pursue 
an  common  commercial  policy.  Since  a  comprehensive  free  trade  agreement  is  a  mixed 
agreement, a close involvement of Parliaments (the European one as the national ones) in 
the entire negotiation procedure appears recommendable. 

When it comes to a discussion of, from the perspective of the EU27, the more or less advan-
tageous  Brexit  scenarios,  one  has to  identify, first,  the  interests  of the  EU  before  turning, 
second to the scenarios. The EU’s interests in the way of how the relationship with the UK 
should be shaped can be summarised as follows: Rights of Union citizens lawfully acquired 
under EU law before the entry into force of a withdrawal of the UK from the EU should be 
upheld on the territory of the UK. The free movement of goods, services, capital and persons 
between  the  EU27  and  the  UK  should  remain  free  from  unnecessary  barriers.  UK  imports 
should not undermine and ideally continue to comply with the existing and future protection 
standards  under  EU  legislation.  The  more  a  withdrawal  agreement  (if  any)  and  the  future 
legal relationship contribute to the achievement of these interest, the more such a ‘Brexit’ 
scenario can be considered to be advantageous for the EU27. 

6.1. 

Scenarios for a withdrawal of the UK from the EU 

Article 50(3) TEU provides for two scenarios with regard to the withdrawal of a Member State 
from the EU: Either on the basis of a withdrawal agreement or without any agreement two 
years after the formal notification provided that there is no prolongation of the negotiation 
period. 

6.1.1. 

No withdrawal agreement 

Without any withdrawal agreement, the protection of rights lawfully acquired under EU law 
is to be ensured within UK territory by UK domestic law or international public law. This refers 
in particular to all those rights that might be covered by the ‘theory of acquired rights’ as 
explained  in  section  4.3.3.  These  rights  include,  within  the  ambit  of  the  IMCO  committee, 
concessions  or  licences  issued  under  the  customs  union  that  are  valid  at  the  time  of  the 
withdrawal (section 5.1.1), foreign professional qualifications and practice recognised under 
EU law at the time of withdrawal that gave access to regulated professions and to the UK 
domestic market (section 5.3.1) and awards and concessions that were granted under the 
EU public procurement rules before the withdrawal (section 5.5.1). The main weaknesses of 
the ‘theory of acquired rights’ are the fact that their scope is far from settled and that their 
enforcement  depends  on  the  willingness  of  UK  domestic  judges  to  apply  international  law 
(including  the  ECHR).  The  lengthiness  of  potential  judicial  proceedings  undermine  already 
the effectiveness of the protection of acquired rights without any formal agreement. Although 
rights lawfully acquired under EU law are not rendered inexistent in the event of a withdrawal 

317  It should, however, be noted that also under a ‘hard Brexit’ scenario, the separation of schedules and commti-
ments currently held by the EU on behalf of the UK could be achieved easier if an agreement between the EU 
and the UK could be found. 

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without agreement, defining their scope (which might go beyond what is discussed in inter-
national law) and their enforcement via an explicit withdrawal agreement is certainly more 
advantageous for the EU27 than relying on general international law and the application of 
the ECHR within the UK territory. 

At  least  with  regard  to  the territory  of the Member  States  of the EU27,  in  order  to  create 
legal  certainty  on  the  continent,  the  Union  could  unilaterally  adopt  a  secondary  legal  act 
dealing with acquired rights. This would, within the ambit of the IMCO Committee, concern 
in particular the following situations: 

  The  recognition  of  awards  and  concessions  granted  to  UK  tenderers  by  EU  contracting 

authorities under the application of EU public procurement law; 

  The continuous application of rules on contract performance under EU public procurement 
law for such awards and concessions so that modifications won’t require new public pro-
curement procedure; 

  Rules on how to deal with procurement procedures pending at the time of the withdrawal 
of the UK from the EU (it is recommended to include a rule that such procedures shall be 
finished considering UK tenderers as being covered by EU public procurement law); 

  The  continuous  recognition  of  UK  professional  qualifications  for  services  providers  that 
exercise at the time of the withdrawal of the UK from the EU a regulated profession in 
the EU; 

  The recognition of the further existence of incorporations lawfully established under the 

law of the UK after the withdrawal of the UK from the EU. 

6.1.2. 

Withdrawal agreement 

Against this background, it appears preferable and more advantageous for the EU27 to con-
clude an explicit withdrawal agreement that should define the scope and the enforcement of 
rights lawfully acquired under EU law after a withdrawal. Within the ambit of the IMCO com-
mittee, this concerns in particular the following legal situations: 

  The  recognition  of  awards  and  concessions  granted  to  EU  tenderers  by  UK  contracting 

authorities under the application of EU public procurement law and vice versa; 

  The continuous application of rules on contract performance under EU public procurement 
law for such awards and concessions so that modifications won’t require new public pro-
curement procedure; 

  Rules on how to deal with procurement procedures pending at the time of the withdrawal 
of the UK from the EU (it is recommended to include a rule that such procedures shall be 
finished under application of EU public procurement law); 

  The  continuous  recognition  of  EU  professional  qualifications  for  service  providers  that 
exercise at the time of the withdrawal of the UK from the EU a regulated profession in 
the UK and vice versa; 

  Rules  on  how  to  deal  with  consumer  procedures  under  ADR  and  ODR  pending  at  the 
moment of the withdrawal of the UK from the EU (it is recommended to include a rule 
that such procedures shall be finished under application of EU law); 

  The recognition of the further existence of incorporations lawfully established under the 

law of the UK and/or the EU after the withdrawal of the UK from the EU. 

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Parliaments (the European one as the national ones) should be in some shape engaged in 
the process leading up to the conclusion of a withdrawal agreement, such as through a reg-
ular exchange of information on the state of affairs of the negotiations (see section 2.3).  

6.2. 

Scenarios for the future relationship between the UK and the EU27 

It was explained in chapter 3 that the future relationship between the UK and the EU27 may 
take different legal shapes depending on the policy choices by the EU and the UK in relation 
to the intensity of trade cooperation (ranging from mere information obligations to full har-
monisation), the legal means to implement trade cooperation (ranging from non-discrimina-
tion  principles  to  setting  common  standards)  and  compliance  mechanisms  (ranging  from 
mere consultation obligations to direct effect with a centralised Treaty-based court). Moreo-
ver, it has to be decided whether these parameters are to be the same within the scope of 
the trade cooperation or vary for the different economic sectors. The following conclusions 
on advantages and disadvantages of selected scenarios build on the preliminary conclusions 
in section 3.7.2. 

As explained above, the EU’s interest can be described as upholding the free movement of 
goods, services, capital and persons without unnecessary barriers and ensuring the level of 
protection defined by EU secondary law as it stands at the time of the withdrawal and as it 
further evolves afterwards. In relation to the intensity of trade cooperation (section 3.1.1) 
this implies at least an information exchange, the mutual recognition of conformity decisions 
and mechanisms to recognise the equivalence of standards set by the UK with the EU stand-
ards. This minimum degree of trade intensity in relation to those economic sectors that fall 
within the ambit of the IMCO committee (trade in goods and services) can be found in all 
current free trade agreements involving the EU.318 This minimum degree of trade intensity 
guarantees that EU standards will not be undermined by UK imports. At the same time free 
movement between both trading partners is more restrictive than under the conditions of the 
internal market. There is clearly a trade-off between lowering the barriers to future free trade 
between the UK and the EU27 and the ability to prevent the undermining of EU standards of 
future UK imports. From the perspective of protecting the EU standards, this minimum degree 
of trade cooperation appears to be the most advantageous choice regarding the intensity of 
trade cooperation. 

Any arrangements that lower the barriers to free movement of goods and services approach 
an intensity of trade cooperation that is characterised by a mutual recognition of standards 
even if they are not equivalent to each other. The costs for this increase in free trade can be 
found in the possibility for UK imports that comply with lower domestic standards to compete 
against EU products which have to comply with higher and hence more costly standards. In 
order to avoid harmful competition arrangements lowering the barriers to the free movement 
of goods and services should be accompanied by the possibility to set common standards for 
the UK and the EU. Only then, from the perspective of protecting the EU standards, a lowering 
of trade barriers still appears advantageous. Comparable intensity of trade cooperation can 
be found in the EU itself, the EEA and to some extent in the DCFTA. The two latter provide 
for a legal obligation of the other trading partner to implement parts of the acquis commu-
nautaire  into  domestic  law.  Against  this  background  a  mutual  recognition  of  standards  in-
cluding a legal obligation to implement the acquis into domestic law as in EEA/DCFTA appears 
to be the most advantageous scenario for the EU27 within the ambit of the IMCO committee 
regarding the intensity of the trade cooperation. 

318  It should be noted that the scope of the existing free trade arrangements is, however, limited when it comes to 

the free movement of persons. 

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Regarding the means, negative integration is to be used in order to achieve free movement 
of goods, services, capital and persons, whereas positive integration is the means to be em-
ployed in order to achieve high protection standards. The most advantageous scenario would 
make use of both negative and positive integration. Looking at previous free trade arrange-
ments, in which the EU was involved, only EEA and DCFTA contain such a mix. This is not 
surprising seeing that both instruments intend to implement an intensity of trade cooperation 
that includes mutual recognition of standards. The abovementioned trade-off is also reflected 
by the means. A future trade cooperation between the UK and the EU that relies only upon 
negative integration appears to be a less advantageous solution for the EU as, under negative 
integration,  the  existing  and  future  acquis  communautaire is  considered  to  be  a  non-tariff 
(technical) barrier to free trade for goods and services coming from the UK, provided that it 
cannot be justified by grounds of general interest. Hence, in case a possible agreement on 
the future relationship between the EU and the UK includes only elements of negative inte-
gration such an agreement should provide for clauses allowing to justify non-tariff barriers 
for grounds of public interest. 

Finally, regarding the compliance mechanisms, the effectiveness of the future trade cooper-
ation increases the more its provisions have direct effect and are secured by a Treaty-based 
Court which renders legally binding judgments. None of the current trade arrangements, in 
which the EU is involved, comprise provisions with direct effect. Standard FTAs such as KO-
REU  and  the  general  terms  of  WTO  provide  for  mere  consultation  obligation  and  a  panel 
mechanism excluding direct effect in the domestic legal order of the trading partners. Only 
CETA (and the free trade agreement with Singapore) include a Treaty-based court that pro-
tects individual rights of a part of trade in goods and services, which are investments, and 
which is accessible for investors. Yet, these Treaty-based courts only enforce compliance with 
provisions of negative integration since the trading partners cannot initiate proceedings in 
front  of  these  courts  to  enforce  protection  standards  against  investors.  Against  this  back-
ground  it  appears  advantageous  for  the  EU  if  the  future  trade  cooperation  includes  direct 
effect  of  both  provisions  of  negative  and  of  positive  integration.  A  Treaty-based  court  in-
creases the effectiveness of the trade cooperation provided it enforces not only negative but 
also  positive  integration.319  Yet,  a national  court  system  that  follows  the  case  of the CJEU 
autonomously (as it is done within the context of the EU-Swiss trade cooperation) could still 
be considered sufficient in order to deem such a trade cooperation advantageous for the EU. 

In sum, a ‘hard Brexit’ without any arrangements is less advantageous than a formal trade 
cooperation,  even  from  the  perspective  of  the  EU27.  The  more  this  trade  cooperation  ap-
proximates EU membership, the more this trade cooperation becomes advantageous for the 
EU27. This conclusion must be understood against the background of the scope of the present 
in-depth study, which examines the legal implications of ‘Brexit’ and thus not its economic 
or political implications. It can therefore not be excluded that when taking these additional 
factors into account the assessment of advantages and disadvantages may change.  

319  It should be noted that such a court may not undermine the exclusive powers of the CJEU under Article 19 TEU. 

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Annexes: Implications of ‘Brexit’ on IMCO legislative files 

Annex I: Impact of Brexit on the existing acquis communautaire  

The following table lists the currently existing acquis communautaire in the policy areas cov-
ered  by  the  IMCO  committee  and  shows  the  general  impact  of  the  EEA  model,  the  tailor-
made model(s) and the WTO model on the content of these acts. At this stage of the exam-
ination, the impact of tailor-made models is, as explained in chapter 3, highly dependent on 
policy choices that are still to be made by the UK and the EU and their implementation during 
the negotiations. Important questions covered by some of these acts are already highlighted 
in order to mark that these elements should be covered by a tailor-made solution.  

This table is to be understood as a living instrument that can be more specified and 
adapted  once  policy  choices  are  made  and  their  implementation  is  settled.  As  it 
stands, the table can only address overarching and crosscutting issues such as the one of 
the  ‘acquired  rights’  that  will  affect  EU  legal  acts  irrespective  of  the  actual  policy  choices. 
Where necessary, short remarks aim at issues embodied in the respective legal instrument 
that will become relevant in the upcoming negations. 

The legal acts in the following table are, first, sorted according to policy areas, second, ac-
cording to the year of its publication (provided that they are not closely linked to later/earlier 
published legal acts), third, according to the kind of measure (regulation, directive, decision) 
and, finally, according to the reference number in ascending order.  

Explanation of the abbreviations and symbols used in this table: 

EEA = The UK joins the European Economic Area 

FTA = The UK negotiates a tailor-made free trade agreement with the EU;  

WTO = Fall-back option, according to which in the absence of any kind of agreement the relationship between the 
UK and the EU is governed by WTO law 

 = Application of the legal act as if the UK remained an EU Member State 

 = Content of the tailor-made free trade agreement is highly dependent on the policy choices to be made by the 
UK and the EU before the negotiation starts; a serious analysis of the impact of these policy choices on the existing 
EU legal framework is only possible after these choices were made. 

 = The relationship with the remaining EU Member States is governed by the prohibition of discriminations and 
the most-favoured-nation rule under WTO law 

Legal act 

EEA 

FTA 

WTO 

Internal Market in Goods and Services 

Public Procurement 

Concessions Directive 
Directive 2014/23/EU 

 

/ A320 

GPA321/ A1 

320  The  issue  of  ‘acquired  rights’  occurs:  Can  those  that  acquired  rights  under  the  existing  EU  law  rely  on  these 

rights after Brexit? 

321  Reference  to  ‘GPA’  means  that  the  United  Kingdom  must  first  become  a  Contracting  Party  to  this  Agreement 
before its rules would apply to the UK. Upon ratification, the UK will have to negotiate its coverage under the 
GPA.  After  a  Brexit  will  have  taken  place,  the  EU  is  under  a  legal  obligation  to  notify  to  the  GPA  contracting 
parties that the UK won’t be part of the EU’s coverage schedules, which will enter into force 45 days after the 
notification if no party objects. 

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Public Procurement Directive 
Directive 2014/24/EU 

Public Procurement Directive 
‘Utilities’ 
Directive 2014/25/EU 

Directive on e-Invoicing in Public 
Procurement 
Directive 2014/55/EU 

Directive on defence and sensitive 
security procurement 
Directive 2009/81/EC 

Directive on intra-EU transfers of 
defence related products 
Directive 2009/43/EC 

Improving the effectiveness of 
review procedures concerning the 
award of public contracts 
Directive 2007/66/EC 

Directive on Remedies for the 
utilities sector 
Directive 92/13/EEC 

Directive on Remedies for the public 
sector 
Directive 89/665/EEC 

 

 

 

 

 

 

 

 

/ A1 

GPA2/A1 

  Award criteria 
  Award procedures 

 

 

 

 

 

 

GPA2 
(limited 
coverage) 

GPA2 

GPA2 
(limited 
coverage) 

GPA2 

GPA2 

GPA2 
(limited 
coverage) 

GPA2 
(limited 
coverage) 

Recognition of Professional Qualifications and Access to Service Markets 

Services Directive 
Directive 2006/123/EC 

Recognition of Professional 
Qualifications Directive 
Directive 2005/36/EC 

 

  Establishment of 

providers  

  Providing services 

without prior 
notification 
  eGovernment 
  administrative 
cooperation 

  rights of 

recipients 

/A1322 

/ A1 

 

/A1 

/A1 

1 The issue of ‘acquired rights’ occurs: Can those that acquired rights under the existing EU law rely on these rights 

after Brexit? 

2 Reference to ‘GPA’ means that the United Kingdom must first become a Contracting Party to this Agreement before 
its rules would apply to the UK. Upon ratification, the UK will have to negotiate its coverage under the GPA. After 
a Brexit will have taken place, the EU is under a legal obligation to notify to the GPA contracting parties that the 
UK won’t be part of the EU’s coverage schedules, which will enter into force 45 days after the notification if no 
party objects. 

82   

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
_________________________________________________________________ 

Lawyers’ Establishment Directive 
Directive 98/5/EC 

Lawyers’ Services Directive  
Directive 77/249/EEC 

Trade in Goods 

Medical Devices 
Regulation (EU) No 2017/745 

Active implantable medical devices 
Directive 
Council Directive 90/385/EEC 

Medical devices Directive 
Council Directive 93/42/EEC 

In vitro diagnostic medical devices 
Directive 98/79/EC 

 

 

 

 

 

 

Appliances burning gaseous fuels 
and repealing Directive 
2009/142/EC 
Regulation (EU) 2016/426 

Adopted act 
under scrutiny 
by EEA EFTA 

Appliances burning gaseous fuels  
Directive 2009/142/EC 

Regulation on Personal Protective 
Equipment 
Regulation (EU) No 2016/425 

Cableway Installations Regulation 
Regulation (EU) No 2016/424 

eCall Regulation 
Regulation (EU) No 2015/758 

Decision on the deployment of the 
interoperable EU-wide eCall service 
Decision No 585/2014/EU 

 

 

 

 

 

Reducing the consumption of 
lightweight plastic carrier bags 
Directive (EU) 2015/720 

Adopted act 
under scrutiny 
by EEA EFTA 

Pressure Equipment Directive 
Directive 2014/68/EU 

Radio Equipment Directive 
Directive 2014/53/EU 

 

 

 /A1323 

/A1 

/A1 

/A1 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(–) 

 

 

 

1   The  issue  of  ‘acquired  rights’  occurs:  Can  those  that  acquired  rights  under  the  existing  EU  law  rely  on  these 

rights after Brexit? 

PE 607.328 

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Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

Low Voltage Directive 
Directive 2014/35/EU 

Potential Explosive Atmosphere 
Directive 
Directive 2014/34/EU 

Lifts Directive 
Directive 2014/33/EU 

Measuring Instruments 
Directive 2014/32/EU 

Non-Automatic Weighting Directive 
Directive 2014/31/EU 

Electromagnetic Compatibility 
Directive 
Directive 2014/30/EU 

Simple Pressure Vessels Directive 
Directive 2014/29/EU 

Explosives for Civil Uses Directive 
Directive 2014/28/EU 

Type-approval Regulation of two or 
three wheel vehicles and 
quadricycles 
Regulation (EU) No 168/2013 

Approval and market surveillance of 
agricultural and forestry vehicles 
Regulation (EU) No 167/2013 

Recreational Crafts Directive 
Directive 2013/53/EU 

Pyrotechnic Articles Directive 
Directive 2013/29/EU 

Textile fibre names and related 
labelling and marking of the fibre 
composition of textile products 
Regulation (EU) No 1007/2011 

Construction Products Regulation 
Regulation (EU) No 305/2011 

Directive on the restriction of the 
use of certain hazardous substances 
in electrical and electronic 
equipment 
Directive 2011/65/EU 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

84   

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
_________________________________________________________________ 

Regulation on cosmetic products 
Regulation (EC) No 1223/2009 

Common rules for access to the 
international road haulage market 
Regulation (EC) No 1072/2009 

 

 

Trade in seal products 
Regulation (EC) No 1007/2009  

(–)3324 

Type-approval of motor vehicles, 
their trailers and systems, 
components and separate technical 
units intended therefor 
Regulation (EC) No 661/2009 

Type-approval of hydrogen-powered 
motor vehicles 
Regulation (EC) No 79/2009 

Toys Directive 
Directive 2009/48/EC 

Machinery for pesticide application 
Directive 2009/127/EC 

Mutual Recognition Regulation 
Regulation (EC) No 764/2008 

Accreditation and market 
surveillance relating to the 
marketing of products 
Regulation (EC) No 765/2008 

Common framework for the 
marketing of products 
Decision No 768/2008/EC 

Electro-medical equipment used in 
veterinary medicine 
Directive 2008/13/EC 

Cat and dog fur, and products 
containing such fur 
Regulation (EC) No 1523/2007 

Motor Vehicles Framework Directive 
Directive 2007/46/EC 

 

 

 

 

 

 

 

 

(–)3 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3   Adopted EU legal act considered by the EU and the EEA EFTA States not to be relevant for incorporation into the 

EEA Agreement. 

PE 607.328 

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Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

Nominal quantities on prepacked 
products 
Directive 2007/45/EC 

Registration, Evaluation, 
Authorisation and Restriction of 
Chemicals (REACH) 
Regulation (EC) No 1907/2006 

Electrical equipment designed for 
use within certain voltage limits 
Directive 2006/95/EC 

Machinery Directive 
Directive 2006/42/EC 

Fertilisers 
Regulation (EC) No 2003/2003 

Marketing of beet seed 
Council Directive 2002/54/EC 

Marketing of vegetable seeds 
Council Directive 2002/55/EC 

General Product Safety Directive 
Directive 2001/95/EC 

Veterinary medicinal products 
Directive 2001/82/EC 

Regulation on the functioning of the 
internal market in relation to the 
free movement of goods 
Regulation (EC) No 2679/98 

Information Directive 
Directive 98/34/EC 

Intellectual Property 

 

 

 

 

 

 

 

 

 

 

 

 

 

/ 
A1 
insofar as 
authorisations are 
concerned 

/ 
A1 
insofar as 
authorisations 
are concerned 

 

 

 

 

 

 

 

 

 

 

 

 

Convention 
on Biological 
Diversity/ 
International 
Seed Treaty 

Convention 
on Biological 
Diversity/ 
International 
Seed Treaty 

  4325 

 

 

 

Collective management of copyright 
and related rights and multi-
territorial licensing of rights in 

Draft JCD 
under 
consideration 

 

(–) 

1   The  issue  of  ‘acquired  rights’  occurs:  Can  those  that  acquired  rights  under  the  existing  EU  law  rely  on  these 

rights after Brexit? 

4   There is a possibility for the UK to apply as a third country for cooperation under the RAPEX alert system irre-

spective of any tailor-made solution. 

86   

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
_________________________________________________________________ 

musical works for online use in the 
internal market 
Directive 2014/26/EU 

Certain permitted uses of orphan 
works 
Directive 2012/28/EU 

Regulation on the community trade 
mark 
Council Regulation (EC) No 207/2009 

Enforcement of intellectual property 
rights 
Directive 2004/48/EC 

 

(–)3 

(–)3 

 

 

 

Regulation on community designs 
Council Regulation (EC) No 6/2002 

(–)3326 

/A1 

Medicinal products for human use 
Directive 2001/83/EC 

Harmonisation of certain aspects of 
copyright and related rights in the 
information society 
Directive 2001/29/EC 

Trade in Services 

 

 

TRIPS/ WIPO 
agreements 

TRIPS/ WIPO 
Agreements 

TRIPS/ WIPO 
Agreements 

TRIPS/ WIPO 
Agreements 

WHO law/ 
TRIPS 

 

/A1 

TRIPS/WIPO 
Agreements 

Directive on the accessibility of 
public sector bodies’ websites 
Directive (EU) 2016/2102 

Adopted act 
under scrutiny 
by EEA EFTA  

  Continuous use of 

existing EU 
standard 

Directive on networks and 
information security (NIS) 
Directive (EU) 2016/1148 

 

  Information 
obligation 

  Minimum set of 

security/ 
notification 
requirements 

Open internet access  
Regulation (EU) 2015/2120 

Entry into 
force of JCD 
pending 

Electronic identification and trust 
services for electronic transactions 
in the internal market 
Regulation (EU) No 910/2014 

Adopted act 
under scrutiny 
by EEA EFTA 

 

 

(–) 

 

 

(–) 

1   The  issue  of  ‘acquired  rights’  occurs:  Can  those  that  acquired  rights  under  the  existing  EU  law  rely  on  these 

rights after Brexit? 

3   Adopted EU legal act considered by the EU and the EEA EFTA States not to be relevant for incorporation into the 

EEA Agreement. 

PE 607.328 

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Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

Roaming on public mobile 
communications networks within the 
Union 
Regulation (EU) 531/2012 

 

Single European railway area 
(recast) 
Directive 2012/34/EU 

Draft JCD 
under 
consideration 

Multiannual radio spectrum policy 
programme 
Decision No 243/2012/EU 

Common rules for access to the 
international market for coach and 
bus services 
Regulation (EC) No 1073/2009 

Common rules for the operation of 
air services in the Community 
Regulation (EC) No 1008/2008 

Framework for the creation of the 
single European sky (the framework 
Regulation) 
Regulation (EC) No 549/2004 

Universal Services Directive 
Directive 2002/22/EC 

 

 

 

 

 

Directive 2009/136/EC amending 
Directives 2002/22/EC, 2002/58/EC 
and Regulation (EC) No 2006/2004  

Draft JCD 
under 
consideration 

Framework Directive 
Directive 2002/21/EC 

Authorisation Directive 
Directive 2002/20/EC 

Access Directive 
Directive 2002/19/EC 

E-commerce Directive 
Directive 2000/31/EC 

Cableway installations designed to 
carry persons 
Directive 2000/9/EC 

 

 

 

 

 

 

 

 

 

 

 

  Interoperability 

requirements for 
consumer digital 
TV 

 

 

 

 

  Freedom to 
provide e-
commerce 
services 

  Mutual assistance 

obligations 

 

(–) 

(–) 

(–) 

 

 

 

 

 

 

 

 

 

 

88   

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
_________________________________________________________________ 

Community framework for electronic 
signatures 
Directive 1999/93/EC 

Common rules for the development 
of Community postal services and 
the improvement of quality service 
European Parliament and Council 
Directive 97/67/EC 

Common rules applicable to the 
transport of goods or passengers by 
inland waterway between Member 
States with a view to establishing 
freedom to provide such transport 
services 
Council Regulation (EC) No 1356/96 

Applying the principle of freedom to 
provide services to maritime 
transport within Member States 
(maritime cabotage) 
Council Regulation (EEC) No 3577/92 

Conditions under which nonresident 
carriers may transport goods or 
passengers by inland waterway 
within a Member State 
Council Regulation (EEC) No 3921/91 

Applying the principle of freedom to 
provide services to maritime 
transport between Member States 
and between Member States and 
third countries 
Council Regulation (EEC) No 4055/86 

Cross-sector Subject-Matter 

European Standardisation Regulation 
Regulation (EU) No 1025/2012 

IMI Regulation 
Regulation (EU) No 1024/2012 

Combating late payment in 
commercial transactions (Recast) 
Directive 2011/7/EU 

Regulation establishing a new 
statistical classification of products 
by activity (CPA) 
Regulation (EC) No 451/2008 

PE 607.328 

89   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

Misleading and comparative 
advertising 
Directive 2006/114/EC 

Advertising and sponsorship of 
tobacco products 
Directive 2003/33/EC 

Units of measurement 
Directive 80/181/EEC 

Consumer Protection 

 

 

 

Directive on insurance distribution 
(recast) 
Directive (EU) 2016/97 

Adopted act 
under scrutiny 
by EEA EFTA 

Interchange fees for card-based 
payment transactions 
Regulation (EU) 2015/751 

Adopted act 
under scrutiny 
by EEA EFTA 

Package Travel Directive 
Directive 2015/2302/EU 
[full harmonisation] 

 

Payment services in the internal 
market 
Directive 2015/2366/EU 

Adopted act 
under scrutiny 
by EEA EFTA 

Key information documents for 
packaged retail and insurance-based 
investment products (PRIIPs)  
Regulation (EU) No 1286/2014 

Adopted act 
under scrutiny 
by EEA EFTA 

Consumer Programme 2014-2020 
Regulation 
Regulation (EU) No 254/2014 

 

Credit agreements for consumers 
relating to residential immovable 
property 
Directive 2014/17/EU 

Adopted act 
under scrutiny 
by EEA EFTA 

Comparability of fees related to 
payment accounts, payment account 
switching and access to payment 
accounts with basic features 
Directive 2014/92/EU 

Adopted act 
under scrutiny 
by EEA EFTA 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(–) 

 

 

 

Regulation on Consumer ODR 
Regulation (EU) No 524/2013 

 

/P5327 

/P5 

5   The issue of pending procedures at the time of Brexit will have to be addressed. 

90   

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
_________________________________________________________________ 

Directive on Consumer ADR 
Directive 2013/11/EU 

Consumer Rights Directive (CRD) 
Directive 2011/83/EU 
[full harmonisation] 

Liability of carriers of passengers by 
sea in the event of accidents 
Regulation (EC) No 392/2009 

Cross-border payments in the 
Community 
Regulation (EC) No 924/2009 

Injunctions for the protection of 
consumers’ interests 
Directive 2009/22/EC 

Timeshare Directive 
Directive 2008/122/EC 

Certain aspects of mediation in civil 
and commercial matters 
Directive 2008/52/EC 

Credit agreements for consumers 
Directive 2008/48/EC 

Rail passengers’ rights and 
obligations 
Regulation (EC) No 1371/2007 

European Small Claims Procedure 
Regulation (EC) No 861/2007 

Order for Payment Procedure 
Regulation 
Regulation (EC) No 1896/2006 

Rights of disabled persons and 
persons with reduced mobility when 
travelling by air 
Regulation (EC) No 1107/2006 

Consumer Protection Cooperation 
(CPC) Regulation 
Regulation (EC) No 2006/2004 

Misleading and Comparative 
Advertisement Directive 
Directive 2006/114/EEC 

 

 

 

 

 

 

(–) 

 

 

(–) 

(–) 

 

 

 

 /P5328 

/P5 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/P5 

/P5 

/P5 

/P5 

 

 

 

 

 

 

5   The issue of pending procedures at the time of Brexit will have to be addressed. 

PE 607.328 

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Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

[full harmonisation] 

Unfair Commercial Practices 
Directive 
Directive 2005/29/EC 
[full harmonisation] 

Uncontested Claims Regulation 
Regulation (EC) No 805/2004 

Common rules on compensation and 
assistance to passengers in the 
event of denied boarding and of 
cancellation or long delay of flights 
Regulation (EC) No 261/2004 

Insurance mediation 
Directive 2002/92/EC 

Distance marketing of consumer 
financial services 
Directive 2002/65/EC 

Consumer Sales and Guarantees 
Directive 
Directive 1999/44/EC 
[minimum harmonisation] 

Price Indication Directive 
Directive 98/6/EC 
[minimum harmonisation] 

Air carrier liability in the event of 
accidents 
Council Regulation (EC) No 2027/97 

Community list of air carriers subject 
to an operating ban within the 
Community and on informing air 
transport passengers of the identity 
of the operating air carrier 
Regulation (EC) No 2111/2005 

Distance Selling Directive 
(for contracts concluded before 13 June 
2014) 
Directive 97/7/EC 

Unfair Contract Terms Directive 
Directive 93/13/EEC 
[minimum harmonisation] 

 

 

 

(–) 

 /P5 

  /P5329 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Use of 

kilogramme, litre 
and metre for the 
indication of unit 
prices 

 

 

 

 

 

 

 

 

 

 

 

 

 

5   The issue of pending procedures at the time of Brexit will have to be addressed. 

92   

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Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
_________________________________________________________________ 

Doorstep Selling Directive 
(for contracts concluded before 13 June 
2014) 
Council Directive 85/577/EEC 

Customs Union 

Union Customs Code: goods that 
have temporarily left the customs 
territory by sea or air 
Regulation (EU) 2016/2339 

Customs enforcement of intellectual 
property rights 
Regulation (EU) No 608/2013 

Forms provided for in Regulation 
(EU) No 608/2013  
Commission Implementing Regulation 
(EU) No 1352/2013 

Union Customs Code 
Regulation (EU) No 952/2013 

CUSTOMS 2020 Programme 
Regulation 
Regulation (EU) No 1294/2013 

Community system of reliefs from 
customs duty 
Council Regulation (EC) No 1186/2009 

Elimination of controls performed at 
the frontiers of Member States in the 
field of road and inland waterway 
transport 
Regulation (EC) No 1100/2008 

 

 

 

(–) 

(–) 

(–) 

(–) 

(–) 

(–) 

(–) 

 

 

 

 

WTO6 

(–) 

(–) 

   WTO6330 

(–) 

(–) 

 

 

(–) 

(–) 

6   UK will have to negotiate new schedules under WTO. 

PE 607.328 

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Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

Annex II: Impact of Brexit on other arrangements, currently not part of the EU 
acquis 

The following table shows the legislative files that are currently pending. It outlines, where 
necessary, the main policy choices made in these legislative files, which could be taken into 
account when negotiating tailor-made solutions. This table does not list own-initiative report 
procedures, consultation procedures, and legislative proposals on which the IMCO Committee 
decided not to deliver an opinion. It is sorted in accordance with the year of the initiation of 
the legislative procedure. 

Legislative file 

Policy Remarks 

Internal Market in Goods and Services 

Public procurement: access of third-country goods 
and services to the Union’s internal market and 
procedures supporting negotiations on access of 
Union goods and services to the markets of third 
countries 
COM(2012)0124 - 2012/0060(COD) 

Simplifying the transfer of motor vehicles 
registered in another MS within the Single Market 
COM(2012)0164 - 2012/0082 (COD) 

Consumer product safety (Council Directive 
87/357/EC and Directive 2001/95/EC) 
COM(2013)0078 - 2013/0049 (COD) 

The proposal introduces an obligation 
to mark all consumer products with the 
country of origin.  

Reduction of pollutant emissions from road 
vehicles 
COM(2014)0028 - 2014/0012(COD) 

Single-member private limited liability companies 
COM(2014)0212 - 2014/0120(COD) 

Prospectus to be published when securities are 
offered to the public or admitted to trading 
COM(2015)0583 - 2015/0268(COD) 

Control of the acquisition and possession of 
weapons (Firearms Directive) 
COM(2015)0750 - 2015/0269 (COD) 

European Accessibility Act 
COM(2015)0615 - 2015/0278 (COD) 

Approval and market surveillance of motor 
vehicles and their trailers 
COM(2016)0031 - 2016/0014(COD) 

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_________________________________________________________________ 

Posting of workers in the framework of the 
provision of services 
COM(2016)0128 - 2016/0070(COD) 

Making available on the Market of CE marked 
fertilising products and amending Regulations 
COM(2016)157 - 2016/0084(COD) 

Cross-border parcel delivery services 
COM(2016)0285 - 2016/0149(COD) 

Audiovisual media services: changing market 
realities 
COM(2016)0287 - 2016/0151(COD) 

The proposal is drafted on the basis of 
the concept of optional harmonization: 
Manufacturers may opt out of the Reg-
ulation requirements by simply not 
making use of the CE-mark and keep 
trading on their respective national 
market only. Market access is then 
governed by the principle of mutual 
recognition. 

Geo-blocking and other forms of discrimination 
based on customers' nationality, place of residence 
or place of establishment within the internal 
market 
COM(2016)0289 - 2016/0152(COD) 

The proposal seeks to remove discrimi-
nation based, directly or indirectly, on 
the nationality, the place of residence 
or the place of establishment of cus-
tomers in e-commerce (geo-blocking).  

Union programme to support specific activities 
enhancing the involvement of consumers and 
other financial services end-users in Union policy 
making in the field of financial services (2017-
2020) 
COM(2016)0388 - 2016/0182(COD) 

European venture capital funds and European 
social entrepreneurship funds 
COM(2016)0461 - 2016/0221(COD) 

Union certification system for aviation security 
screening equipment 
COM(2016)0491 - 2016/0236(COD) 

European statistical programme 2013-2017: 
extension to 2018-2020 
COM(2016)0557 - 2016/0265(COD) 

Copyright in the digital single market 
COM(2016)0593 – 2016/0280(COD) 

Copyright and related rights applicable to certain 
online transmissions of broadcasting organisations 
and retransmissions of television and radio 
programmes 
COM(2016)0594 – 2016/0284(COD) 

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Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

Body of European Regulators for Electronic 
Communications 
COM(2016)0591 - 2016/0286(COD) 

Promotion of Internet connectivity in local 
communities 
COM(2016)0589 - 2016/0287(COD) 

European Electronic Communications Code. Recast 
COM(2016)0590 - 2016/0288(COD) 

Consumer Protection 

Contracts for the supply of digital content 
COM(2015)0634- 2015/0287 (COD) 

Contracts for the online and other distance sales of 
goods 
COM(2015)0635 - 2015/0288 (COD) 

Cooperation between national authorities 
responsible for the enforcement of consumer 
protection laws 
COM(2016)0283 - 2016/0148(COD) 

Customs Union 

It should be noted that the UK Con-
sumer Rights Act 2015 (CRA) contains 
extensive rules on consumer protection 
in relation to contracts for the supply of 
digital content. The CRA goes in part 
even beyond the COM proposal.331 

The proposal is based on the principle 
of full harmonisation, which might re-
quire from some Member States to 
lower their level of consumer protec-
tion. 

Union legal framework for customs infringements 
and sanctions 
2013/0432(COD) - COM(2013)0884 

It should be noted that the UK govern-
ment is amongst those states that call 
the Commission to withdraw the pro-
posal.332 

331  See  for  details:  Mánko/Tereszkiewicz,  Digitale  Inhalte  nach  britischem  Consumer  Rights  Act  2015  unter  dem 
Eindruck des Brexit, in: Kramme/Baldus/Schmidt-Kessel (eds.), Brexit und die juristischen Folgen, 2016, p. 279-
296. 

332  Letter from Nicky Morgan MP to the Chairman, 12 May 2014, in: House of Lords, European Union Committee, 

Economic and Financial Affairs, correspondance from 1 December 2013 and 4 June 2014, p. 10.  

96   

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_________________________________________________________________ 

LIST OF RELEVANT ACADEMIC LITERATURE AND OTHER 
SOURCES RELATED TO BREXIT 

Ahrens  S,  ‘Mögliche  Konsequenzen  der  Krise  der  Europäischen  Union  für  die  einheitlichen 
europäischen Schutzrechte des geistigen Eigentums am Beispiel des Brexit-Szenarios’, GRUR 
Int. 2016, p. 548. 

Alexandre-Collier A, ‘L’euroscepticisme au sein des partis politiques britanniques: une obses-
sion national(ist)e’, Revue de l’Union Européenne No 602 Octobre-Novembre 2016, p. 527. 

Ahmed, M, ‘BREXIT and English Jurisdiction Agreements : The Post-Referendum Legal Land-
scape’, (2016) EBLR 989. 

Amtenbrink  F,  Karatzia  A  and  Repasi  R,  ‘What  Happens  Next?  Legal  Consequences  of  the 
Brexit  Vote’  (24  June  2016)    http://www.euro-cefg.eu/news/brexit>  accessed  4  August 
2016. 

Amtenbrink, F, Vedder, H.H.B., Recht van de Europese Unie, 6th edition (BJu 2017). 

Armour J, ‘Brexit to the EEA: What Would It Mean?’ in Pavlos Eleftheriadis (ed) and others, 
‘Legal  Aspects  of  Withdrawal  from  the  EU:  A  Briefing  Note’  (14  July  2016)  http://pa-
pers.ssrn.com/sol3/papers.cfm?abstract_id=2809285  accessed 3 August 2016. 

Armour  J,  ‘Brexit  and  Financial  Services’  (2017)  33  (suppl_1)  Oxford  Review  of  Economic 
Policy S54-S69. 

Arnull A, ‘Broken Bats’ (2016) 41 European Law Review 473. 

Arrowsmith S, ‘The Consequences of Brexit for Public Procurement Legal Standards’ (Work-
shop on the consequences of Brexit, Brussels, 28 February 2017). 

Asch R, ‘"This realm of England is an empire": Die Krise der EU, das Brexit-Referendum und 
die europäische Rechtsgemeinschaft’, Zeitschrift für Staats- und Europawissenschaften (ZSE) 
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Auer A, ‘The People Have Spoken: Abide? A Critical View of the EU’s Dramatic Referendum 
(In)Experience’ (2016) 12 European Constitutional Law Review 397. 

Barber N, Hickman T and King J, ‘Pulling the Article 50 “Trigger”: Parliament’s Indispensable 
Role’ (U.K. Const. L. Blog, 27 June 2016)  https://ukconstitutionallaw.org/2016/06/27/nick-
barber-tom-hickman-and-jeff-king-pulling-the-article-50-trigger-parliaments-indispensable-
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Barber  N  and  King  J,  ‘Responding  to  Miller’  (U.K.  Const.  L.  Blog,  7  November  2016)  
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(U.K.  Const. 

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50’ 
  https://ukconstitutional-
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court-of-justice-on-article-50/  accessed 30 November 2016. 

L.  Blog,  11  November  2016) 

Barnard C, ‘The Practicalities of Leaving the EU’ (2016) 41 European Law Review 484. 

PE 607.328 

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Policy Department A: Economic and Scientific Policy 
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Barnard C, ‘The Customs Union’  http://ukandeu.ac.uk/explainers/the-customs-union/  ac-
cessed 11 January 2017. 

Barrett G, ‘How Article 127 of the EEA Agreement Could Keep the UK in the Single Market’ 
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Bartels  L,  ‘The  UK’s  Status  in  the  WTO  after  Brexit’,    https://papers.ssrn.com/sol3/pa-
pers.cfm?abstract_id=2841747. 

Basedow J, ‘Brexit und das Privat- und Wirtschaftsrecht’, Zeitschrift für Europäisches Privat-
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Basedow,  J,  ‘BREXIT  and  business  law’,  China-EU  Law  J  2017,  online  available  at    
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Bertoncini  Y,  «Le  Brexit  entre  europhobie  britannique  et  euroscepticismes  continentaux», 
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Bjorge  E, 
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Campbell G, ‘Article 50 Author Lord Kerr Says Brexit Not Inevitable’ (BBC News, 3 November 
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CBI,  ‘Aerospace:  An  International  Success  Story’    http://www.cbi.org.uk/global-fu-
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2013) 

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Craig P, ‘Brexit: A Drama in Six Acts’ (2016) 41 European Law Review 447.  

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_________________________________________________________________ 

Craig P, ‘Brexit: Foundational Constitutional and Interpretive Principles: I’ (OxHRH Blog, 27 
October 2016)  http://ohrh.law.ox.ac.uk/brexit-foundational-constitutional-and-interpretive-
principles-i/  accessed 12 December 2016. 

Craig P, ‘Brexit: Foundational Constitutional and Interpretive Principles: II’ (OxHRH Blog, 28 
October 2016)  http://ohrh.law.ox.ac.uk/brexit-foundational-constitutional-and-interpretive-
principles-ii/  accessed 12 December 2016. 

Craig  P,  ‘Miller:  Winning  Battles  and  Losing  Wars’  (OxHRH  Blog,  4  November  2016)  
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(OxHRH  Blog,  23  November  2016)  

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law.org/2016/12/06/robert-craig-report-of-proceedings-miller-supreme-court-day-1/    ac-
cessed 15 December 2016. 

Craig R, ‘Report of Proceedings: Miller v Secretary of State for Exiting the European Union, 
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law.org/2016/12/07/robert-craig-report-of-proceedings-miller-v-secretary-of-state-for-
exiting-the-european-union-supreme-court-day-2/  accessed 15 December 2016. 

Craig R, ‘Report of Proceedings: Miller v Secretary of State for Exiting the European Union, 
Supreme Court, Day 3’ (U.K. Const. L. Blog, 12 December 2016)  https://ukconstitutional-
law.org/2016/12/12/robert-craig-report-of-proceedings-miller-v-secretary-of-state-for-
exiting-the-european-union-supreme-court-day-3/  accessed 15 December 2016. 

Craig R, ‘Report of Proceedings: Miller v Secretary of State for Exiting the European Union, 
Supreme Court, Day 4’ (U.K. Const. L. Blog, 14 December 2016)  https://ukconstitutional-
law.org/2016/12/14/robert-craig-report-of-proceedings-miller-v-secretary-of-state-for-
exiting-the-european-union-supreme-court-day-4/  accessed 15 December 2016. 

Croisant G, ‘Fog in the Channel – Continent Cut Off. Les conséquences juridiques du Brexit 
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Cuyvers A, ‘Artikel 50 VEU en Brexit: de juridische contouren voor een politiek drama’, NtEr 
september 2016, nr. 7, 221. 

Dashwood A, ‘After the Deluge’ (2016) 41 European Law Review 469.  

Davies G, ‘Brexit and the Free Movement of Workers: A Plea for National Legal Assertiveness’ 
(2016) 41 European Law Review 925. 

De Witte B, ‘Near-Membership, Partial-Membership and the EU Constitution’ (2016) 41 Eu-
ropean Law Review 471. 

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Douglas-Scott S, ‘Miller: Why the Government Should Still Lose in the Supreme Court (Even 
with  New  Arguments)’  (U.K.  Const.  L.  Blog,  15  November  2016)  https://ukconstitutional-
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Douglas-Scott S, ‘Am Rande der Verfassungskrise? Die rechtliche Grundlage des Brexit’, Aus 
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the Brexit Vote for Scotland’ (2016) 41 European Law Review 481. 

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Acquis’ (Workshop on the consequences of Brexit, Brussels, 28 February 2017). 

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Elliott  M  and  Hooper  H,  ‘Critical  Reflections  on  the  High  Court’s  judgment  in  R  (Miller)  v 
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Endicott  T,  ‘This  Ancient,  Secretive  Royal  Prerogative’  (U.K.  Const.  L.  Blog,  11  November 
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European  Parliamentary  Research  Service,  ‘Article  50  TEU:  Withdrawal  of  a  Member  State 
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Feldman  D,  ‘Brexit,  the  Royal  Prerogative,  and  Parliamentary  Sovereignty’  (U.K.  Const.  L. 
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Gasiorek M, Holmes P and Rollo J, ‘UK-EU Trade Relations Post Brexit: Too Many Red Lines?’ 
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House of Commons Library, ‘Brexit: impact across policy areas’ (26 August 2016) Briefing 
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House  of  Lords  Select  Committee  on  the  European  Union,  External  Affairs  Sub-Committee 
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Koster, H, ’Brexit : enkele ondernemensrechtelijke aspecten’, Bb 2016/78, 268. 

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Nijenhof-Wolters M and Ruygvoorn M, ‘Brexit: aanpassing van overeenkomsten vereist?’, Bb 
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fact.org/law/brexit-supreme-court/  accessed 30 November 2016. 

Roukema A, ‘Arbeidsrechtelijke consequenties van de Brexit’, Bb 2016/71, 248.  

Ruparel R, ‘Post Brexit, Leaving the Customs Union is a No-Brainer’ (Open Europe, 28 July 
2016)  http://openeurope.org.uk/today/blog/post-brexit-leaving-customs-union-no-brainer/  
accessed 14 December 2016. 

Rylatt J, ‘The Irrevocability of an Article 50 Notification: Lex Specialis and the Irrelevance of 
the Purported Customary Right to Unilaterally Revoke’ (U.K. Const. L. Blog, 27 July 2016)  
https://ukconstitutionallaw.org/2016/07/27/jake-rylatt-the-irrevocability-of-an-article-50-
notification-lex-specialis-and-the-irrelevance-of-the-purported-customary-right-to-unilater-
ally-revoke/  accessed 14 September 2016. 

Samothrakis Y, ‘Brexit: a legal analysis of the impact on European insurers' operations’, ERA-
Forum 2016, P. 161. 

Sánchez-Graells A, ‘Why an Appeal of the High Court Parliamentary Approval Brexit Judgment 
Will  Bring  the  Litigation  to  the  CJEU?’  (How  to  Crack  a  Nut  Blog,  3  November  2016)  
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mentary-brexit  accessed 12 December 2016. 

104   

PE 607.328 

 
Legal Implications of Brexit – Customs Union, Internal Market and Consumer Protections 
_________________________________________________________________ 

Sánchez-Graells  A,  ‘Additional  Thoughts  on  Brexit  and  Public  Procurement’  (30  November 
2016)    http://www.howtocrackanut.com/blog/2016/11/30/brexit-and-public-procurement-
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Sarmiento,  R,  ‘Miller,  Brexit  and  the  (maybe  not  to  so  evil)  Court  of  Justice’,  VerfBlog, 
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PE 607.328 

105   

 
 
Policy Department A: Economic and Scientific Policy 
_________________________________________________________________ 

de Wale H‚ ‘Het Britse referendum, het Brexit-preventiepakket, en de gevolgen voor het recht 
van de Europese Unie’, NJB 2016/1128. 

Weller M-P, Thomale C and Benz N, ‘Englische Gesellschaften und Unternehmensinsolvenzen 
in der Post-Brexit-EU’, Neue Juristische Wochenschrift (NJW) 2016, p. 2378. 

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in Pavlos Eleftheriadis (ed) and others, ‘Legal Aspects of Withdrawal from the EU: A Briefing 
Note’  (14  July  2016)    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2809285    ac-
cessed 3 August 2016, 20-24. 

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(Admin): Constitutional Adjudication – Reality over Legality?’ (U.K. Const. L. Blog, 9 Novem-
ber  2016)  https://ukconstitutionallaw.org/2016/11/09/alison-young-r-miller-v-the-secre-
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Q.B. 552. 

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1 WLR 324. 

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EWHC 2768 (Admin); [2016] A.C.D. 134. 

Opinion procedure 2/15, Opinion of AG Sharpston, ECLI:EU:C:2016:992. 

106   

PE 607.328 

 
 
DIRECTORATE-GENERAL FOR INTERNAL POLICIES

POLICY DEPARTMENT
ECONOMIC AND SCIENTIFIC POLICY

A 

Role

Policy departments are research units that provide specialised advice 
to committees, inter-parliamentary delegations and other parliamentary bodies. 

Policy Areas

Economic and Monetary Affairs 
Employment and Social Affairs 
Environment, Public Health and Food Safety
Industry, Research and Energy
Internal Market and Consumer Protection 

Documents

Visit the European Parliament website:  
http://www.europarl.europa.eu/supporting-analyses

PHOTO CREDIT:
iStockphoto.com; Shutterstock/beboy

ISBN
ISBN

978-92-846-1484-4 
978-92-846-1483-7

(paper) 
(pdf)

doi: 
doi:

10.2861/93396 
10.2861/802467

(paper) 
(pdf)

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