The UK will likely stay out of major decisions in trade policy before it even formally leaves the EU. This will affect major files including the hot China market economy status issue.
The UK is still a member of the EU and will formally have the right to participate in the legislative process in the EU. British envoys in Brussels will “still be attending” Trade Policy Committee and other meetings in which decisions on trade policy are made, an official told Borderlex today. “That is all I can say for now”, the official added.
Some believe London could be obliged to take the backseat in decisions that could no longer affect it. A lot still needs to be worked out for the planned transition period between the UK’s notification of departure from the EU (expected in the autumn 2016) and its actual departure two years later.
The issue is interesting in the light of the ongoing political process surrounding the recognition of China’s market economy status and the related issue of antidumping (trade defence instruments) measures, and their planned reform package.
The Commission has been trying to ensure that it can have the member states and EU Parliament accept the currently very unpopular idea of granting China market economy treatment in its antidumping law by the end of 2016 to comply with WTO obligations in return for getting through a reform of its trade defence legislation much-cherished by France, Italy and many other member states as well as of the Parliament, but opposed by Britain, the Netherlands, and Nordic countries.
UK excluded from China MES decision?
In a briefing note to clients, lawyers from the firm Gide argue that before the UK formally leaves the EU (two years after it has submitted its Article 50 notification that it is leaving), current EU regulations continue to apply to the UK. “But a distinction should be made between the maintenance of existing TDI measures, the adoption of new measures (including the modification of existing measures), the modification of the basic regulations (the “modernisation” exercise), and the decision regarding China’s (market economy) status”, the note reads.
On actual TDI measures, “the UK could … reasonably insist on the inclusion of a provision nullifying the application of such measures to its territory as of the date of its formal departure from the EU. As to the voting rules, since the UK would be affected by such new measures, it will insist on its right to participate in the voting procedure. Will other Member States accept such a request? From the legal perspective alone, it will be difficult for them to object. From the political perspective, “it depends”.
On the modernisation exercise, “the UK has been the leader of the anti-TDI Member States … As indicated in the introduction, the Council will soon decide of the modalities of UK participation in its legislative activities, but the outcome is a foregone conclusion: there would be no reason to accept UK participation in votes on legislation which will not apply to that country after its departure. This therefore implies a significant shift in the political balance of the TDI reform issue, starting now”, the lawyers reckon.
Furthermore, Gide lawyers believe “the question of China’s status will be subject to the same shift in the power balance, between Member States, the “Northern” Member States including the UK having been its most enthusiastic supporters”.
