EU & Brexit

Lord Owen argues the need for a Brexit Default Position.

Speaking at The Times Forum Meeting at the Cheltenham Literary Festival, Sunday 8 October 2017.

8.10.17PRESS RELEASE

It is now clear that the German and French governments have vetoed moving into discussions on the Prime Minister’s speech in Florence. We will lose at least two months of negotiating time. We are witnessing the classic Brussels rolling out of delaying tactics compounded by the UK Government’s dithering. It is all creating political uncertainty.

If there is not greater clarity by the turn of the year, it will really start to hurt: investment projects can’t be held on hold indefinitely, and there will probably be the first material cancellations in the first quarter if this continues.

Since it looks as if the EU will keep stringing things out, my own strong preference now is for a UK unilateral declaration (as quickly as possible) of how the UK intends to operate in the absence of the EU being prepared to discuss the Prime Minister’s speech in Florence. This should be our Default Position for leaving the EU under Article 20 at the end of March 2019 involving a transition period of two years prior to operating under WTO in 2021.

Firstly, the UK should stay in the EEA for two years and seek to make arrangements with Norway and others under the Non-EU governance pillar arrangements to do that. We should operate that agreement ‘as is’. The UK would not give the one year’s notice of our intention to leave the EEA agreement in March 2018 (ie. in six months’ time.)

If the EU challenge our position as a Non-EU contracting party to the EEAA, we should go to international dispute resolution using the Vienna Convention. (If the EU wish to open themselves up to legal action by any business that is adversely affected by their lack of cooperation with an established procedure for international agreement that is an EU responsibility).

The UK should start as a Non-EU contracting party to introduce, after the fullest negotiations, our own UK management measures in our own UK fishing waters and our own agricultural policies again after fullest negotiation with all 31 other Contracting parties to the EEA Agreement. Consultations will start to introduce EEAA-compliant limitations on free movement of workers in 2019.

The UK should continue to operate the common external tariff for two years and run things exactly as now. Eg. French, Spanish, Italian, Greek, Bulgarian wine, etc. can come in tariff free and on the current arrangements provided only that they reciprocate. If they don’t, the UK should follow the time honoured practice of tit-for-tat, up to WTO levels.

Within the two year period, the UK should start to negotiate international FTAs while giving a priority to the EU. If there is no readiness on behalf of the EU to negotiate a FTA seriously, other FTAs might become operative before March 2021.

The UK can collect customs duties as now, but not (as now) pay the great bulk of that revenue to the EU. Rather we will take a slice from it to cover the Financial Mechanism payments entailed by the EEAA, which are paid by the UK direct to the beneficiaries (Poland, the Baltics, Romania, etc, etc.) The beneficiaries will appreciate that since they need it. We would pay the rest of the customs duties into the general budget for the two year period, provided other EEA states reciprocate on the other aspects. If they don’t, we should keep that revenue.

The UK should settle our pension obligations soon and separately. It shouldn’t be much when assets are netted off. This is what the EU have always said they wanted.

This Default Position which would not involve the ECJ but the EFTA Court is a reasonable and fair way to proceed. Is it too much to hope that the House of Commons on a cross party basis could come together on such a basis if the EU stand-off continues after October?

 

END

NOTE TO EDITORS

The Financial Mechanism section of the Agreement provides for the only mandatory payments of non-EU states. It is basically a compulsory regional policy. The EFTA website describes it as follows.

First, the EEA EFTA States contribute towards reducing economic and social disparities in the EEA through the EEA Grants. Currently the beneficiary states include Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. In addition to the EEA Grants, Norway has funded a parallel scheme since 2004 – the Norway Grants. The funding period covering 2014-2021 has a total financial envelope of approximately EUR 400 million per year. These contributions are not managed by the EU, but by the EFTA Financial Mechanism Office in collaboration with the beneficiary countries.

Over 40% of the Norwegian payment (the Norway Grants) is voluntary, instituted when oil prices were high, so we could avoid that. A better estimate of the mandatory amount for Norway is probably around EUR 225 million per annum. Since our GDP is a little over seven times higher, the implied figure for the UK might be around £1.6 billion per year.

8.10.17PRESS RELEASE

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Lord Owen reacts to the Prime Minister’s speech In Florence, 22 September 2017.

“I believe the whole country can and should now rally to support this negotiating position.

“We are in the midst of the most difficult international negotiation we have ever faced. Disunity weakens our negotiating hand.

“Brexit is the people’s choice. If politicians play games with this issue they imperil the country.

“Brexit does not belong to the Conservative Party. We need cross-party input into refining and buttressing the all important detail of this new UK position.

“The European Commission will hopefully now start the second stage, building up towards agreement by October 2018.”

 

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“Brexit: we cannot buck the will of the people… but the Government must take more account of its own MPs and… those favourable to Brexit who want some accommodation on democratic choices.”

Lord Owen interviewed by CNN on “the Road to Brexit”

http://www.snappytv.com/tc/5745274

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British foreign policy after Brexit: An independent voice.

“I do not want a world in which there is not an independent British voice.”
Henry Kissinger

David Owen & David Ludlow
13 July 2017, £12.99, Paperback
Biteback Publishing

Buy the book here: British foreign policy after Brexit

Access documents referenced in the book here:

An Interpretation of the European Economic Area Agreement, EEAA.

Extracts from Vienna Convention on Succession of States in respect of Treaties

Publisher’s preview:

At a time of alarming global instability, amid shocking terrorist attacks in Europe and mounting tensions between the USA and North Korea, a clear and focused foreign and defence policy is ever more critical. Now that UK’s departure from the EU is underway, what happens next?

Against this unpredictable geopolitical backdrop, Britain’s position in the world needs to be recalibrated to take account of a range of new realities. Now is the time to move forward, to define a positive, outward looking, role in this post-Brexit world.

British Foreign Policy after Brexit examines what lies ahead, encompassing a diplomatic, security, development and trade agenda based on hard-headed realism. Former Foreign Secretary David Owen and former diplomat David Ludlow, who backed opposite sides in the referendum, together argue that Britain’s global role and influence can be enhanced, rather than diminished, post-Brexit.

 

Amazon preview:

British Foreign Policy after Brexit by David Owen and David Ludlow is, perhaps surprisingly, a book written by two people from different generations who voted on opposite sides in the 2016 referendum. One a politician, the other a former diplomat, they both have significant business experience in world markets.

The authors demonstrate how Britain’s global role and influence can be enhanced rather than diminished post-Brexit, with a diplomatic, security, development and trade agenda based on hard-headed realism, including a review of budgetary priorities.

As a firmly European country, they see the UK as a key player with Germany and France in the wider Europe, and a leader in security issues threatening the continent’s stability. They do not regard the relationship with Moscow as inevitably confrontational, but believe strengthening NATO is essential and a top priority to contain Russia.

In the wider world, a reinvigorated UK US relationship will be critical, but must accommodate differences in some core areas, e.g. in dealing with China. Furthermore, they see the UK’s new aircraft carrier at the heart of a UN Rapid Reaction Force drawn mainly from Commonwealth countries, including Australia, Canada, India and New Zealand, and supporting operations around the globe.

Buy the book here: British foreign policy after Brexit

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“…the existing machinery that we could most easily adopt is to remain a contracting party to the European Economic Area agreement, as a non-EU contributing member.”

Lord Owen, addressing the House of Lords Debate on the Queen’s Speech, Wednesday 28 June 2017.

Read Lord Owen’s full speech here: QueensSpeech28Jun17

Excerpts: “…Everybody accepts now – the term is ‘implementation period’ – that when we leave the EU, there will have to be a vehicle by which we continue the negotiations. It cannot be Article 50. I believe, and have made clear my view to the Government privately for many months, that the existing machinery that we could most easily adopt is to remain a contracting party to the European Economic Area agreement, as a non-EU contributing member. That is a framework which they and we know – we have been in that same framework ourselves.

….

“I hope that… that the EU negotiators will see the value of the country and the world knowing, as soon as humanly possible, where we will be for the next four to five years—first in the Article 50 process and then in the EEA. That at least provides a structure to weld together our disagreements and agreements in the interests of Article 8.

“We should remember that there is not just Article 50; there is Article 8 in the treaties, which is about good neighbourliness.”

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Courage, Mrs May: minority rule can work.

Opinion piece in the Daily Telegraph, 22 June 2017.

“Jim Callaghan guided his restless party through choppy political waters and this PM can do so too.”

“Minority government is a grind, with the Whips’ Office becoming more important that the great offices of state. From February 1974 to May 1979, I saw the inner workings of the last minority administration to survive more than a few months. Few of us Labour MPs thought it would last as long as it did. The lesson is that voters expect Parliament to live with the result they voted for.

…“In Callaghan’s case., once he had taken over from Wilson, the office of minority PM made the man. He liked negotiations. He was good at them. He held his core group of ministers together with consummate skill showing great respect to different factions. While Theresa May has not shown such diplomacy in the past, no-one should underestimate her resilience.”

“…her task is difficult. But if she can build a new spirit of cooperation it is possible that this parliament will deliver exit from the EU as the first stage. It may be the next parliament delivers the second stage – namely as a party to the European Economic Area while we negotiate the detailed implementation of an EU-UK trade agreement.”…

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Germany’s ‘soft Brexit’ suggestion is not as favourable to the UK as being a non-EU contracting partner to the European Economic Area Agreement (EEAA).

Letter to The Times, June 20 2017.

‘Soft’ Brexit plan

Sir, Further to your report “Germany offers soft Brexit amid worries about coup at No 10” (June 19), the German suggestion is well meant but is not as favourable to the UK as being a non-EU contracting partner to the European Economic Area Agreement (EEAA) as we negotiate an EU-UK trade agreement. The proposed court would be joint EU-UK, ie. it would retain a direct EU influence. In contrast, the EEA agreement’s “Efta” court is a fully independent court whose judges come only from non-EU members.

The contracting parties to the EEAA formally agreed in 2007 that the “Efta” court can differ significantly from the European Court of Justice in its interpretation of the implications of the free movement of persons directive. This highly advantageous (to the UK) agreement could easily be lost in a bespoke negotiation. Bundling the single market and customs union, as in the EU treaties, contrast unfavourably with the EEAA which rightly keeps them rigidly unbundled. Norway and Iceland do not have customs union arrangements with the EU. Lichtenstein is part of a customs union, but that is with Switzerland. The EEAA also allows the UK to run its own agriculture and fishing policy.

The primary aim of the EEAA is commercial and for open trading, whereas the primary aim of the EU customs union is protectionist.

LORD OWEN

House of Lords

 

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Lord Owen speaks out again on a different interpretation of the EEA Agreement.

Paper presented to the Global Strategy Forum and Political Economy of Financial Markets, St Antony’s College, Oxford.
Wednesday 14 June 2017.
Lord Owen speaks out again on a different interpretation of the EEA Agreement. He considers why it could be used for the implementation period, the period the Prime Minister has discussed covering the transition from EU in March 2019 to the completion of a EU-UK trade agreement, avoiding any cliff-edge or political uncertainty.
Read Lord Owen’s paper: The Brexit process UNDER EMBARGO UNTIL NOON ON 14 JUNE 2017
Read a more detailed paper on Lord Owen’s interpretation of the EEA Agreement: DOonEEAAinterpretation
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