Could the UK Remain in the Single Market While Exiting the EU?
Steve Peers
A potential legal battle questions whether the UK can remain part of the European Economic Area (EEA) even if it leaves the EU. This situation involves both international and national legal complexities. Let’s first understand the EEA itself.
Understanding the EEA
Established in 1994, the EEA treaty aimed to expand the EU’s single market to European Free Trade Area (EFTA) nations. Norway, Iceland, and Liechtenstein joined the EEA, while Sweden, Austria, and Finland eventually joined the EU. Switzerland opted for separate agreements with the EU.
It’s crucial to understand that the EEA and the EU are distinct entities. While the EEA adopts EU regulations on the free movement of goods, services, capital, and people, it does not encompass EU policies on trade, taxes, justice, home affairs, foreign relations, agriculture, currency, or fisheries. EFTA states have independent trade agreements outside the EU and contribute to EU development programs, but with greater spending autonomy. They are consulted on EU laws within the EEA’s scope but lack voting rights. The EFTA Court, not the EU Court, handles legal matters, usually mirroring EU case law.
Some suggest the UK should maintain EEA membership, at least temporarily, post-Brexit. However, remaining in the EEA wasn’t an option presented in the referendum.
Leaving the EEA: A Two-Pronged Issue
Leaving the EEA involves navigating both international and national legal processes. Internationally, Article 127 of the EEA treaty allows any member to withdraw with twelve months’ notice. It is debated whether the UK could time its EEA exit with its EU departure by providing sufficient notice.
What happens if notice isn’t given? Some legal experts believe the UK’s exit from the EU automatically triggers its EEA departure. They argue that the EEA agreement’s territorial scope primarily references EU and EFTA states, not other countries. This interpretation suggests the UK would need to rejoin the EEA through EFTA membership after leaving the EU.
The ambiguity arises because the EEA treaty doesn’t explicitly address this scenario. While a specific exit clause suggests implicit withdrawal isn’t possible, the treaty’s language emphasizes EU and EFTA states, potentially implying incompatibility with remaining in the EEA after leaving the EU without joining EFTA. This uncertainty might necessitate invoking legal principles like “fundamental change of circumstances” or “material breach” from the Vienna Convention on the Law of Treaties.
This situation also raises questions about the UK’s status in other treaties signed as an EU member, such as trade agreements with Korea and Canada. Will these agreements automatically cease to apply post-Brexit, requiring new negotiations?
Navigating UK Law
From a UK law perspective, the central question is whether Parliament must authorize leaving the EEA, regardless of whether the government gives formal notice or considers it automatic upon EU exit.
If international law mandates a separate EEA withdrawal notice, the situation mirrors the recent Miller case concerning the UK’s EU exit. The Supreme Court must determine if leaving the EEA, which impacts rights enshrined in UK law through the European Communities Act, requires Parliamentary approval beyond the government’s prerogative. If so, the political argument of adhering to the referendum’s outcome weakens, as EEA membership wasn’t on the ballot.
Conversely, if a separate EEA exit notification isn’t legally required because leaving the EU automatically ends EEA membership, a Parliamentary vote on Article 50 should cover both. This would make a legal challenge against leaving the EEA less likely to succeed.
This renewed focus on the EEA could also provide grounds to argue about the revocability of an Article 50 notice. The European Court of Justice might be asked to clarify these issues, including the termination of EEA membership under international law.
See also blog posts by:
Christian Dadomo and Noelle Quenivet
Meme: Steve Peers
Barnard & Peers: chapter 25, chapter 27