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HDA UK MEDIA AND POLITICAL BULLETIN – 23 August 2017

MEDIA SUMMARY 

A wiggly red line
Bloomberg, Simon Kennedy, 23 August 2017

Bloomberg has reported that Theresa May’s ECJ ‘red line’ may be diluted in the next round of Brexit negotiations. In the position paper to be released Wednesday, setting out the UK-ECJ relationship, she will backtrack, conceding that EU law will have a role in Britain after Brexit. The government will instead seek an arrangement where the ECJ does not have “direct jurisdiction” over UK laws. The UK argues that it would be unprecedented for the ECJ to have full jurisdiction of a non-member state, but also realises that the ECJ has become a sticking point in the negotiations. The shift is an attempt to move the Brexit discussions onto trade, the major concern of the UK negotiators. Pro-Remain MP Chuka Umunna said the government “seemed to be hinting that total judicial sovereignty is impossible”. It is likely that May’s new stance will cause grumbles on the eurosceptic backbench.

No ‘direct jurisdiction’  for ECJ after Brexit, say ministers
BBC, 23 August 2017

The BBC further reported that ministers have said that they want a “special partnership” with the EU, but it is “neither necessary nor appropriate” for the ECJ to police it. Justice Minister Dominic Raab stated that “the likely outcome, is we’ll need a form of arbitration.” Pro-EU campaigners have said that May made an “appalling error” when making the ECJ a Brexit red line, because new courts and mechanisms will need to be set up and negotiated for a wide range of EU matters. However, the Confederation of British Industry called for “flexibility and pragmatism” when leaving the ECJ, meaning they are open to a clean break, so long as it protects the interests of British Industry. “The emphasis should be on ending its direct effect” they said.

Pharma welcomes UK’s post-Brexit trade plans
Pharmaphorum, Richard Staines, 22 August 2017

UK pharma and biotech companies have welcomed government proposals to ensure trade and services can continue after Brexit. The proposals are found in the position paper released yesterday by the UK government, which dealt with goods already in circulation in the single market. The plan also calls for consumer protections to remain in place.  The heads of the ABPI and BioIndustry Association (BIA) said “we welcome this paper’s pragmatic approach, which provides a constructive starting point for arrangements that aim to minimise disruption to vital safety and monitoring processes for medicines and avoid any negative impact to medicines supply.” The CBI also said the UK proposals “a significant improvement” over what the EU had offered. The next round of Brexit talks are due to start in October.

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A wiggly red line
Bloomberg, Simon Kennedy, 23 August 2017

Almost a year ago, U.K. Prime Minister Theresa May pledged to make Britain a “fully sovereign and independent country” free of the jurisdiction of the European Union’s highest court.

In January she promised the U.K. would “take back control of our laws” and end the sway of the European Court of Justice.

On Wednesday she will backtrack as her government concedes EU law will have a role in Britain long after Brexit and that it is now seeking only to bypass the ECJ’s “direct jurisdiction.”

The diluting of the onetime “red line” is aimed at unsticking divorce talks with the EU, whose leaders maintain their judges must have a post-Brexit role in resolving cross-border differences over citizens’ rights and trade, among other things. While May will hope voters accept her compromise, she runs the risk of sparking criticism from euroskeptics who view the court as overly activist and an instrument of European subjugation.

“Talk of the ECJ having no direct jurisdiction suggests that the government recognizes that if we are to have a close working relationship with the EU immediately after Brexit and into the future then European judges will continue to play an important role in determining the shape of the laws that could affect us,” said Andrew Hood, a trade lawyer at Dechert LLP.

The U.K. will argue in a position paper today that it would be unprecedented for the EU court to have full jurisdiction over a non-member state, while acknowledging nations outside the bloc sometimes refer disagreements to it. It will list other ways disputes with the EU could be resolved without signaling a preference.

The shift is an attempt by May to move talks onto trade and to win a transition after the U.K. leaves in March 2019. The question is whether the bloc will accept it as enough.

Opposition Labour Party lawmaker Chuka Umunna said the government seemed “to be hinting that total judicial sovereignty is impossible” and asked it to rethink its refusal to stay in the single market.

May is likely to hear grumbles from those who campaigned for Brexit. Lawmaker Bernard Jenkin told the Daily Telegraph that “the ECJ should not have any role in interpreting any agreement between the EU and U.K.” The same newspaper also reported May will still reject EU demands that its citizens residing in the U.K. remain protected by the ECJ. Still, the pro-Brexit Sun depicted May as sticking to her guns over the ECJ.

No ‘direct jurisdiction’  for ECJ after Brexit, say ministers
BBC, 23 August 2017

Prime Minister Theresa May has promised to take the UK out of the Luxembourg-based ECJ’s jurisdiction after Brexit.

At her party’s conference in October 2016, she said: “We are not leaving (the EU) only to return to the jurisdiction of the European Court of Justice. That is not going to happen.”

And in January this year, in her Lancaster House speech, she reiterated this, saying: “So we will take back control of our laws and bring an end to the jurisdiction of the European Court of Justice in Britain.”

But the question of how future agreements between the UK and the EU will be enforced is proving contentious.

The policy paper will be released later as ministers argue there are plenty of other ways of resolving disputes without the European courts.

The ECJ is in charge of ensuring member states abide by EU law.

Its rulings are binding on all member states, and it also settles disputes between countries and EU institutions.

After the UK voted to leave the EU last year, Mrs May promised to make the UK a “fully independent, sovereign country”.

But pro-EU campaigners say the government made an “appalling error” by making leaving the ECJ a “red line” in Brexit negotiations, saying new courts will now be needed in all the areas it extends to, including trade, citizens’ rights and security.

Wednesday’s publication – the latest in a series of papers setting out the UK government’s stance on key issues – will say there are a “variety of precedents for resolving disputes that may arise between the UK and the EU” without the ECJ having direct jurisdiction.

These will need to include the free trade deal the UK hopes to strike with the EU to replace its membership of the single market.

Sir Keir Starmer, the shadow Brexit secretary, said: “The prime minister’s ideological insistence that there can be no future role whatsoever for the ECJ or any similar court-like body risks preventing the deal Britain needs.”

Liberal Democrat leader Vince Cable said Mrs May’s “red lines are becoming more blurred by the day”, saying the ECJ had “served Britain’s interests well” and should not be “trashed”.

The Institute of Directors called for “flexibility and pragmatism” when leaving the ECJ’s jurisdiction.

“The emphasis here should be on ending its direct effect, not trying to throw off the influence of the court altogether,” it said.

On Monday, the president of the court of the European Free Trade Area (Efta) – which governs Iceland, Liechtenstein and Norway’s relationship with the single market – suggested his institution could be used.

But this could anger some Eurosceptic Conservative MPs, because the Efta court, also based in Luxembourg, tends to follow closely the ECJ with its rulings.

The ECJ has also emerged as the central stumbling block in reaching a deal on the rights of EU nationals after Brexit.

The EU side believes the ECJ should have a role in enforcing these rights – a proposal rejected by the UK.

The UK government said its paper on Wednesday would offer maximum certainty to businesses and individuals. It will also suggest that dispute resolution mechanisms could be tailored to the issue at stake in each agreement.

“It is in the interests of both the UK and the EU, and of our citizens and businesses, that the rights and obligations agreed between us can be relied upon and enforced in appropriate ways,” a spokeswoman said.

“It is also in everyone’s interest that, where disputes arise between the UK and the EU on the application or interpretation of these obligations, those disputes can be resolved efficiently and effectively.”

Pharma welcomes UK’s post-Brexit trade plans
Pharmaphorum, Richard Staines, 22 August 2017

The proposals were in a position paper calling for goods already on the market to be allowed to remain on sale in the UK and EU without additional restrictions – avoiding a ‘cliff edge’ scenario for trade after Brexit.

However the European Union is refusing to negotiate on these matters yet, saying the Brexit talks must follow the agreed schedule.

Published by the Department for Exiting the European Union, the plans also call for consumer protections to remain in place.

It argues that products authorised for sale in the EU, such as cars and medicines, should remain valid in both markets after exit.

Under the current EU proposals, a pack of medicine manufactured in the UK and put on the market on 29 March 2019 could still be sold in the EU the next day, as its approval would still be valid. However a pack of the same medicine which reached the market on 30 March would not be allowed for sale in the EU.

The UK government also wants to see UK consumer protection watchdogs having access to information about safety warnings over medicines and food from EU authorities after Brexit.

A second paper called for reciprocal arrangements to ensure documents shared between Britain and EU partners while it was a member state remain confidential.

The Association of the British Pharmaceutical Industry (ABPI), and the BioIndustry Association (BIA), representing pharma and biotech respectively, welcomed the papers.

Dr Virginia Acha, executive director, ABPI and Steve Bates, chief executive, BIA said: “ABPI and BIA welcome the publication by UK Government of its position paper on ‘Continuity in the availability of goods for the EU and UK’ in support of its negotiations with the EU.”

“We welcome this paper’s pragmatic approach, which provides a constructive starting point for arrangements that aim to minimise disruption to vital safety and monitoring processes for medicines and avoid any negative impact to medicines supply.”

“As soon as the negotiations resume, we urge the EU and UK to discuss this issue with Europe’s patients front of mind.”

John Foster, CBI Director of Campaigns said:

“The UK Government’s position on goods is a significant improvement upon the EU’s current proposal, whose narrow definition would create a severe cliff-edge hitting consumers on both sides of the Channel.

“However, the only way to provide companies with the reassurance they need is through the urgent agreement of interim arrangements. This would ensure that goods and services can still flow freely giving companies the certainty they need to invest. “The simplest way to achieve that is for the UK to stay in the single market and a customs union until a comprehensive new deal is in force.

“Both sides should agree to move talks on to interim arrangements as soon as possible to stem the loss of investment.”

Disagreement over sequence

Despite having agreed to the EU’s schedule for the negotiations, the UK government now wants to return to the idea of sorting out the terms of its exit and future relations in parallel.

However the European Commission says the UK government needs to first make progress on the three areas of citizens’ rights, a Brexit financial settlement, and Ireland before discussing other matters.

Brexit secretary David Davis commented on the new position papers: “These papers will help give businesses and consumers certainty and confidence in the UK’s status as an economic powerhouse after we have left the EU.

“They also show that as we enter the third round of negotiations, it is clear that our separation from the EU and future relationship are inextricably linked.

“We have already begun to set out what we would like to see from a future relationship on issues such as customs and are ready to begin a formal dialogue on this and other issues.”

EU spokesman Alexander Winterstein said in a Brussels press conference: “There is a very clear structure in place, set by the EU27, about how these talks should be sequenced and that is exactly what we think should be happening now.”

One thing is clear to both sides, however: time is running out to settle all these complex questions before the end of March 2019.

The next round of talks had been scheduled to begin in October, but could now be held up a further two months, with the German federal elections next month and disputes about the Irish border being potential delaying factors.

HDA UK MEDIA AND POLITICAL BULLETIN – 23 August 2017

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