Don’t be taken in by EU overreach on trade

Article 3.1(e) of the Treaty on the Functioning of the European Union grants the EU “exclusive competence” in relation to “common commercial policy”. Article 207(1) unpacks this:

“The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union’s external action.”

There is thus no doubt that the EU has the exclusive competence to conduct trade negotiations and enter into trade agreements regarding tariffs, regulations, intellectual property and so on. Member States cannot conduct their own bilateral negotiations or enter into their own agreements, except insofar as the EU itself can authorise Member States to enter into bilateral agreements (as, for example, in the case of the bilateral investment agreements covered by Regulation 1219/2012).

I have previously argued that this exclusive competence with respect to the trade agreements concerning trade between EU members (e.g. between the UK and Poland in 2014) cannot be understood as a claim to competence over trade agreements between non-EU members (e.g. between Australia and Israel in 2016, or between the UK and Australia in 2025).

Here, though, I want to emphasize a different point: The EU has no ability to form trade agreements that will apply to the UK and non-EU members post-Brexit. It therefore cannot have competence over that. A claim to “competence” where one has no ability is a claim to have a power to forbid. But the Treaty makes no mentioning of granting the EU any power to forbid the UK from having FTAs after it leaves the EU.

Suppose we’re at work and someone, let’s call him Bob, says: “It’s my job to check the electrics for the whole office – you’re not allowed to check your own sockets.” But then suppose my room is in a part of the office sealed off from the rest because I work on sensitive material that requires a security clearance Bob does not have and can never qualify for. Yet Bob still insists that it’s his job to check my sockets. That isn’t a claim, on Bob’s part, to have competence over checking my sockets in the security clearance area. It’s either a claim that access to my room isn’t allowed to require security clearance or that I’m forbidden from having my sockets checked.

The EU cannot enter into trade agreements with non-EU countries that the UK would be part of post-Brexit. It cannot make a deal that would apply only to the UK and exclude the rest, and any trade agreement it entered into for the whole EU28 would cease to apply to the UK once the UK left. Its position with respect to negotiating the UK’s post-Brexit trade agreements is like Bob’s inability to enter my office to check my sockets.

So, much like Bob, the EU cannot claim to have exclusive competency to do that which it has no power to do. All it can be claiming is either that the UK cannot leave (like Bob cannot be excluded from my room) or that the UK cannot have any negotiations conducted over its post-Brexit trade agreements (like I cannot have my sockets checked).

But the forbidding of trade negotiations being done and agreements being entered into is not an “exclusive competence” over them. To repeat: I cannot claim “competence” over that which I have no power to do myself. All I claim in that case is a power to forbid the thing from being done.

But do the EU Treaties grant the EU the power to forbid there from being any negotiations conducted or agreements made in respect of trade between former EU Member States and non-EU countries? Take a look. You will find no mention of such negotiations being forbidden.

The UK has not entered into a Treaty agreement with the EU that it should have no free trade agreements with any non-EU country after it leaves the EU. That simply isn’t a provision of any Treaty and neither is it an idea anyone in Britain would have accepted implicitly.

The EU can only claim competence over negotiations it itself has the power to conduct and agreements it has the power to conclude. It has no power to make trade agreements between the UK and non-EU countries post-Brexit. It therefore cannot claim exclusive competence over that question.

Post-script: If you think the answer to the above is that the EU has the power to grant, or not to grant, the UK power to conduct bilateral negotiations with non-EU countries that would only begin to apply post-Brexit, on the model of Regulation 1219/2012, since that is the way that trade deals for the UK’s immediate post-Brexit period could be done, the challenge then would be: “So when will the EU be doing that?”