Source: https://www.europeanfutures.ed.ac.uk/article-7323
Timestamp: 2019-04-23 22:13:25+00:00

Document:
“No deal for Britain is better than a bad deal for Britain”, said Theresa May in her speech on 17 January 2017. This assertion could not better fit our argument. However, we will in this contribution neither focus on a possible withdrawal agreement, nor on the future relationship deal that sooner or later will need to be struck between the United Kingdom (UK) and the European Union (EU). We shall as an alternative examine whether the UK might, in case of a Brexit without agreement (according to art. 50(3) TEU), remain legally party to the European Economic Area (EEA) agreement, and thus keep a full access to the EU internal market.
The decision to withdraw from the European Union (Brexit) was notified to the President of the European Council Donald Tusk by British Prime Minister Theresa May on March 29, 2017. Withdrawal is however not a unilateral act, and according to art. 50(2) TEU, “a Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union (TFEU). It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.” Therefore, the negotiation should in principle result in a negotiated bilateral act.
Notwithstanding, art. 50(3) TEU provides that after two years of negotiations and in the absence of any agreement between the parties (such as a prolongation of the deadline for concluding an agreement), “the Treaties shall cease to apply to the State in question”. It shall here be emphasised that the Treaties referred to in this art. 50(3) TEU are only the TEU and the TFEU. Nevertheless, international treaties concluded by the EU will be directly impacted by Brexit; according to art. 216(2) TFEU, these treaties “are binding upon the institutions of the Union and on its Member States”. Therefore, and very clearly, as not being an EU Member State anymore after the Brexit procedure is completed – either according to art. 50(2) or 50(3) TEU – the UK shall also cease to be bound by such Treaties.
While most studies on Brexit, and there are quite a lot these days, focus on the internal dimension (both for the EU and the UK) of the withdrawal agreement and on the future relationship agreement between the EU and the UK, only few contributions to the academic debate analyse the external dimension of Brexit, namely the effect on already concluded EU agreements with almost all the countries in the world. Studying such international agreements, one rapidly stumble on a more complex and intriguing category of EU international agreements, qualified by legal doctrine as “EU mixed agreements”, to which not only the EU, but also each of its Member States are parties. Member States are thus doubly bound by such mixed agreements: as EU Member States, according to the art. 216(2) TFEU rule examined above, and as States party to such Treaty under international law. Such form of agreement is quite novel under international law and the legal situation of the UK under international law after Brexit as regards its participation to such international treaties is far from clear. In our view, the dominant academic literature underestimates the outcome of a Brexit without agreement as regards the international commitments of UK and EU towards each other under the regime of mixed agreements after Brexit.
Why such complex and novel international agreements?
To make a long story short, when the EU wants to enter an international treaty that covers issues beyond its competencies – because the EU is based on the principle of conferral of competences from its Member States (art. 5 TEU) – the easy solution is that both the EU and its Member States become signatories and parties to such treaty on the one side, with any third party (one or several States outside of the EU) on the other side. Such agreements cover important fields, as recent Free Trade Agreements (FTA), association agreements or the agreement establishing the European Economic Area (EEA).
After Brexit and in the absence of any specific additional provision, UK, as a party to these treaties, shall remain bound by its legal commitments towards the other parties, as other parties will remain legally bound towards the UK. Except if the UK ceases to be a party to these agreements, which is neither foreseen by EU law (art. 50 TEU), nor by these agreements (at least none of those we investigated), nor by general international law. Naturally, the implementation of the provisions of these treaties may become awkward after Brexit, but once again, the validity of the legal commitments remains untouched after Brexit. If the situation may become complex and may end up producing unexpected results, as regards the relationship between the UK (as a State outside the EU) and third parties that concluded an agreement with the EU and its Member States, the issue of the legal relationship between the EU and the UK under the provisions of such treaties is an issue that has not been examined by the legal doctrine. Such situation needs to be analysed under EU law (but it will formally not be applicable to EU-UK relationship after a Brexit without agreement), general international law (especially international law of treaties as codified by the 1969 and 1986 Vienna Conventions on the Law of Treaties) and the specific provisions of each mixed agreement. Therefore, in the present post, we propose to concentrate our investigations on the EEA agreement, considering the importance of this agreement in case of no-deal Brexit, since EEA gives access to the internal market of the EU to third countries.
Will the UK remain party to the EEA agreement after a Brexit without agreement?
According to the art. 2(c) EEA agreement: “The term ‘Contracting Parties’ means, concerning the Community and the EC Member States, the Community and the EC Member States, or the Community, or the EC Member States. The meaning to be attributed to this expression in each case is to be deduced from the relevant provisions of this Agreement and from the respective competences of the Community and the EC Member States (…).” Every Member State of the EU is thus bound by the EEA agreement on its own as a contracting party to the EEA agreement alongside the EU and three EFTA States. We thus take note that the UK is an EEA State party, not only because of its membership to the EU, but also because of its “Contracting Party” status to the EEA agreement. That being said, we will need to investigate now how Brexit may have any effect on the UK’s membership to the EEA. In order to do so, we will look at the provisions in the EEA agreement, in the EU law, and also in the international law.
First, according to art. 127 EEA agreement: “Each Contracting Party may withdraw from this Agreement provided it gives at least 12 months’ notice in writing to the other Contracting Parties.” If the UK wants to leave the EEA agreement it should make a notification in this sense, with a one-year notice. However, the UK never expressed explicitly its desire to leave the EEA agreement. The withdrawal notification addressed to President Tusk was only about leaving the TEU and the Treaty Establishing the European Atomic Energy Community (EURATOM). Furthermore, the notification of withdrawal from the EEA should also have been notified to the three EFTA States parties to the EEA agreement, not only to the EU. In the absence of such notification, the UK will remain party to the EEA beyond the 30 March 2019 in case of a no-deal Brexit.
Is there an obligation for the UK to leave the EEA agreement in case of Brexit?
According to the wordings of the EEA agreement there is no “cross-treaty” provisions with the TEU. In other words, in case of activation of the art. 50 TEU by a Member State there is no automatic withdrawal from the EEA agreement. There is such “cross-treaty” effect for example between the art. 50 TEU and the 106(a) of the EURATOM treaty; but nothing similar with any provision of the EEA agreement.
For sure, in order to become a party to the EEA agreement, a State should be or member of the EU or party to the EFTA agreement. Art. 128(1) provides: “Any European State becoming a member of the Community shall, or becoming a member of EFTA may, apply to become a Party to this Agreement. It shall address its application to the EEA Council.” Such provision however doesn’t concern the UK, since it only concerns accession to the EEA, whereas the UK is already a contracting party to the agreement. So, unless it decides otherwise or another solution is agreed by all the contracting parties (or other contracting party contests UK’s membership, we will see it later), the UK will remain bound by the EEA agreement as a Sovereign State.
Second, according to the EU law, the status of mixed agreements in EU legal order is the same that the status of EU only agreements. The Court of Justice of the EU (ECJ) considers that it has the exclusive competence to interpret all the agreements concluded by the EU. Notwithstanding the fact that all the EU Member States are parties alongside the EU, the nature of “party” to mixed agreements was extensively analysed by EU legal scholarship; but in EU law, not under international law. An effort of classification of mixed agreements according to the distribution of competences between the EU and its Member States was made a long time ago by Allan Rosas and continues to be debated. Some authors argue that mixed agreements are of bilateral nature as the EU and its Member States side should be considered as one and indivisible… Brexit however shows the weakness of the reasoning.
A contrario, if an EU Member State withdraws from the EU, it continues to be bound by an international mixed agreement, despite the fact that it ceases to be bound as an EU Member State according to art. 216(2) TFEU for the part of the agreement concluded by the EU within its competences. This will be the case for the UK under EEA agreement. However, the competencies transferred to the EEC and then the EU by the accession agreement of 1971 will be regained by the UK, which shall then possess all the capacities and competencies to implement its commitments under the agreement. The reallocation of competences between the EU and the UK post-Brexit will thus not change its commitments as contracting party, according to the art. 2(c EEA agreement.
Does general international law provide a solution?
This situation of continued participation to a mixed agreement is so novel, that general international law does not give a clear-cut answer. It may actually require to resuscitate the issue of the federal clause for Treaties that the International Law Commission dismissed in its codification of Treaty Law in 1962. What we do however know for sure is that no rule of general international law allows the automatic termination of the UK participation to this treaty. First, we may discard any issue about succession to the treaty since the UK is already party to the treaty, and will remain a party after Brexit; not as a successor to the EU, but as a party to the original treaty, since 1993.
Of course, beyond the provision for withdrawal of art. 127 EEA agreement, the art. 54(b) of the VCLT provides that the termination of a treaty or the withdrawal of a party may take place at any time by consent of all the parties after consultation with the other contracting party. Thus, all parties to the EEA agreement, including the UK, may agree on the termination or UK’s withdrawal from the EEA agreement.
We are well aware that international law also allows for the suspension or the termination of a Treaty by other contracting parties as regards the UK; if there is a serious breach of the EEA agreement by the UK (it would be very difficult to consider Brexit as breach of the EEA agreement) the other parties may suspend or terminate the UK participation to the EEA (art. 60 VCLT). The UK itself could invoke a “fundamental change of circumstances” (lawyers do call that principle “clausula rebus sic stantibus”). This principle has been codified by the UN International Law Commission and is now to be found in the Vienna Conventions on the Law of Treaties of 1969 and 1986 (art. 62 in both cases). The members of the UN International Law Commission were however quite reluctant to include such provision in their codification project, since international law wants to limit the possibilities for a State to invoke reasons for avoiding implementing its international commitments. Therefore, the principle is formulated in negative terms and its application is subject to restrictive and cumulative criteria that would most likely not be met by Brexit. According to the art. 62(1): “(a) The existence of those circumstances [that have fundamentally changed] constituted an essential basis of the consent of the parties to be bound by the treaty; and (b) The effect of the change is radically to transform the extent of obligations still to be performed under the treaty.” Brexit is, from our analysis, unlikely to constitute a serious enough ground for the UK to suspend or terminate its participation to the EEA on the basis of a fundamental change of circumstances. Among other reasons, the obligations to be performed under EEA agreement by the UK after Brexit would be very close to statu quo (since it would mean remaining in the internal market); not really a transformation of “the extent of obligations still to be performed under the treaty.” And it certainly will not be invoked by the EU, because if the EU was to admit that the withdrawal of the UK from the EU constitutes, for the EU, a fundamental change of circumstances as regards the EEA, it would mean that any EU Member State may raise the same argument as regards TEU and TFEU. In clear terms, a Brexit without agreement would constitute a fundamental change of circumstances as regards the continued operation of these two treaties (TEU and TFEU)!
Can the UK just switch-side while remaining Contracting Party to the EEA agreement?
Without developing here all the possible legal debates about the consequences of Brexit on UK’s participation to the EEA, we are therefore pretty confident that UK will – if no alternative rule is accepted by all the concerned parties – remain party to the agreement. Does that mean that it can just “switch-side”, and keep all the benefits from a free access to the single market as a third country (this is the precise purpose of EEA for third countries)? If we have not found any legal rule that prevent the UK from remaining a party to this agreement, there are no legal rule either saying it can switch-side. When legal scholars are short of rules, they search for practice of concerned actors. Did anyone already switched-side as regards EEA? If yes, how did they do it; how did the EU and all the States parties to this agreement react?
The EEA agreement was signed by Austria, Finland and Sweden (among other States) as non-EU Member States on 2 May 1992. On the 1st of January 1995, these three States became members of the EU. Two legal options would have been possible as regards EEA. Either these new EU Member States should ratify once more the EEA agreement as EU Member States (as art. 128 EEA formally requests), or the accession agreement of these three countries to the EU should have laid down a specific legal rule settling their situation as regards this agreement. In the “act (94/C 241/08) concerning the conditions of accession of the Kingdom of Norway, the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded”, art. 5 provides that “The agreements or conventions concluded by any of the Communities, with one or more third States, with an international organization or with a national of a third State, shall, under the conditions laid down in the original Treaties and in this Act, be binding on the new Member States.” Further, the second paragraph of this article specifies that “The new Member States undertake to accede, under the conditions laid down in this Act, to the agreements or conventions concluded by the present Member States and any of the Communities, acting jointly […].” The EEA agreement does not exactly fit these rules, since it is an EEC mixed agreement, to which Austria, Finland and Sweden were already parties, albeit as third parties. Actually, art. 172 of the aforementioned act provides for the continuity of procedures engaged under the EEA implementation mechanisms as regards Austria, Finland and Sweden. Therefore, in practice, as was confirmed to us by a senior legal adviser of the Austrian Ministry of Foreign Affairs, these three countries remained party to the EEA and just switched-side. That despite some provisions of the EEA agreement being incorrectly worded due to this side-switch, it was only in 2004, with the adhesion to the EU of ten new Member States, and their subsequent accession to the EEA, that the wording of the EEA was amended to properly reflect the fact that Austria, Finland and Sweden had switched-sides, almost ten years earlier.
It thus means that there is a practice, that has been accepted by at least 15 EU Member States and the EU institutions (starting with the Commission), allowing States to switch-side in the EEA, even in the absence of any explicit provision and without formal modification of the Treaty. So, our conclusion is that without any specific new legal provision concerning the UK’s legal situation as regards the EEA agreement, the UK will remain bound by it in its relationship with the EU and with three EFTA countries. According to the art. 3 EEA agreement: “The Contracting Parties shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Agreement. They shall abstain from any measure which could jeopardize the attainment of the objectives of this Agreement. Moreover, they shall facilitate cooperation within the framework of this Agreement.” This is an explicit obligation for all the parties to the agreement to cooperate in order to find a solution for adapting the EEA agreement to the legal consequences of a Brexit without agreement.
We do not believe it can be a long-term solution – and it would probably be a legal nightmare to implement such solution. However, the proper consideration of this option would provide some leeway for the UK negotiators in their discussions with the EU. And since time seems to be running short, it may be good news.
Yuliya Kaspiarovich is a researcher at the Geneva Transformative Governance Lab, Global Studies Institute of the University of Geneva. Her research focuses on European Union law.
Nicolas Levrat is Professor of Law at the Geneva Transformative Governance Lab, Global Studies Institute of the University of Geneva. His research interests include EU institutional law, European judicial orders, minority rights, cross-border cooperation, and Swiss-EU relations.

References: art. 50
 art. 50
 art. 50
 art. 50
 art. 216
 art. 50
 art. 216
 art. 2
 art. 127
 art. 50
 art. 50
 Art. 128
 art. 216
 art. 2
 art. 127
 art. 54
 art. 62
 art. 128
 art. 5
 art. 172
 art. 3