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In the early 1970s the Queen’s Messengers delivered a historic parcel from London to Brussels, stuffed with enough documents to fill a tea-chest.
Since the 15th century these diplomatic couriers have carried the affairs of state. This time the delivery included scores of treaties, all bearing Royal Arms, which stretched back decades and traced the UK’s commercial arteries around the world. The arrangements were largely to be subsumed by the European Community when Britain joined its trade bloc; this was, in paper form, part of a handover of power.
Forty-six years on, when Britain leaves the EU in 2019, the UK stands to lose far more than it brought over to Brussels that day. The treaty chest has swollen into a small archive of EU agreements, running to hundreds of thousands of pages and spanning 168 non-EU countries. Within them are covered almost every external function of a modern economy, from flying planes to America and trading sows with Iceland to fishing in far-flung seas.
On Brexit day, that will all fall away. By law Britain will overnight be excluded from those EU arrangements with “third countries”, entering the equivalent of a legal void in key parts of its external commercial relations. Some British officials are even peering into the pre-1973 chest again to see whether some seemingly obsolete treaties might gain a new lease of life from a disorderly Brexit. “It is dusty in there,” jokes one Whitehall official.
It poses a formidable and little-understood challenge for Britain’s prime minister after the June 8 election. While Brexit is often cast as an affair between Brussels and London, in practice Britain’s exit will open more than 750 separate time-pressured mini-negotiations worldwide, according to Financial Times research. And there are no obvious shortcuts: even a basic transition after 2019 requires not just EU-UK approval, but the deal-by-deal authorisation of every third country involved.
“The nearest precedent you can think of is a cessation of a country — you are almost starting from scratch,” says Andrew Hood, a former UK government lawyer now at Dechert. “It will be a very difficult, iterative process.”
Britain finds itself at the diplomatic starting line, with the status quo upended and all sides reassessing their interests.
To Brexiters this is a liberation that allows Britain to negotiate better, more ambitious deals with trading partners, shorn of the encumbrance of Brussels dogma and politics. At worst, they say, existing arrangements would be continued through drafting tweaks replacing “EU” with “UK”; at best they would be improved. Boris Johnson, foreign secretary, said nations were “already queueing up” to do deals.
Even if it were this simple, critics still fear it will open a bureaucratic vortex, sapping energy and resources. Each agreement must be reviewed, the country approached, the decision makers found, meetings arranged, trips made, negotiations started and completed — all against a ticking clock and the backdrop of Brexit, with the legal and practical constraints that brings. Most inconvenient of all, many countries want to know the outcome of EU-UK talks before making their own commitments.
“We are talking about an enormous number of complex acts that we rely on today,” says Lord Hannay, Britain’s former EU ambassador. “The challenge of replacing them falls in the same category as Alice in Wonderland running furiously to stand in the same spot.”
At its most granular level, the sheer administrative scale of the “third country” question is striking. Through analysis of the EU treaty database, the FT found 759 separate EU bilateral agreements with potential relevance to Britain, covering trade in nuclear goods, customs, fisheries, trade, transport and regulatory co-operation in areas such as antitrust or financial services.
This includes multilateral agreements based on consensus, where Britain must re-approach 132 separate parties. Around 110 separate opt-in accords at the UN and World Trade Organisation are excluded from the estimates, as are narrow agreements on the environment, health, research and science. Some additional UK bilateral deals, outside the EU framework, may also need to be revised because they make reference to EU law.
Some of the 759 are so essential that it would be unthinkable to operate without them. Air services agreements allow British aeroplanes to land in America, Canada or Israel; nuclear accords permit the trade in spare parts and fuel for Britain’s power stations. Both these sectors are excluded from trade negotiations and must be addressed separately.
Others agreements are less material, at least to the UK: swordfish conservation in Chile, or the “rules of procedure of the International Rubber Study Group”. Such interests are imperceptible compared with what is at stake with Brexit, but ultimately the housekeeping must be done.
All the agreements must be sifted, creating a huge legal tangle. With Switzerland alone there are 49 accords, while there are 44 with the US and 38 with Norway. Even in potentially consequential areas, some countries are barely aware of Brexit implications. When asked by the FT about a specific customs agreement, one sanguine Indian diplomat first denied it existed, then said it would not matter anyway: “I’m sure people have forgotten it.”
“The logistics are terrifying, even just to go through these commitments and treaties and scope them out,” says Hosuk Lee-Makiyama, a former trade official for Sweden and the EU now at the European Centre for International Political Economy. “Do you want revisions? Do they? Do you go there? How many visits to Chile will this take? That’s a massive logistical operation in itself.
The simple: horizontal aviation agreements
A 2002 European court ruling forced Britain to revise its bilateral aviation agreements with third countries such as New Zealand to ensure they treated all EU airlines equally on issues such as ownership rules. It affects around 40 UK deals, but the process is straightforward.
“There will be a lot of countries with a beef with the EU or the UK and will see this as a golden opportunity to bring up a nuisance issue. They might not get anything, but they have to try,” he adds. “There will probably be an accident in areas you cannot predict.”
Most prominent — and economically significant — are the trade deals. Liam Fox, the UK trade secretary, has promised “zero disruption” by securing transition agreements to continue old trading terms post-Brexit. Britain will in effect repurpose its EU inheritance, re-activating the existing free-trade deals, Mr Fox says. “It is hardly a picture of splendid isolation,” he told parliament this year.
For the most part there is a shared interest in continuing arrangements, since many nations will not want to lose preferential access terms to the UK. Some bigger economies see Brexit as “a window of opportunity”, in the words of one ambassador to the EU. Mr Fox has started preliminary discussions with a dozen-plus countries that want to further liberalise their existing arrangements; South Korea, Switzerland and Norway fall into this category.
“We’d like the best possible terms for our fish. There is a complex web of tariff quotas and red tape, and we’d like to reduce that,” says Oda Helen Sletnes, Norway’s ambassador to the EU. But in a nod to the difficulty of negotiating this while Brexit terms are still uncertain, she added that fisheries discussions would “be complicated by three-way discussions between EU-Norway-UK”. In other words, this is not a straightforward trade-off but a three-dimensional game.
Other countries may be less impressed by the disruption caused, especially on WTO terms. There will need to be give and take. New Zealand, for instance, wants its current quota of lamb sales to the EU to be preserved after Brexit, even though the size of the market will shrink. On top of that, it wants an additional quota for the UK so it can make up for the impact Brexit will have on its flexibility in making sales.
Absent from the FT’s calculations are agreements that the UK will not seek to replace. Among them are treaties with Canada promoting ‘mutual understanding’ of the languages, cultures and institutions of the EU and environmental deals with the US to cover energy efficiency labelling for office equipment.
The political danger for Britain is that any WTO member can veto such revisions. It may be possible for the EU and UK to collaborate on finding a smooth transition at the WTO. But it will require consensus at some point, a vulnerability open to exploitation.
“It is a hell of a task. Trade will keep them very busy,” says Vladimir Chizhov, Russia’s ambassador to the EU. “All the quotas will have to be recalculated, and I assume anti-dumping calculations should be changed at some point. There are 164 members at the WTO. And all of them will have to agree.”
Asked whether this presented Moscow with a weakness to exploit against Britain, he said with a smile: “The Russian diplomatic service has been known for its tough negotiators. We are very proud of that.”
Perhaps the hardest task will be outside of the sphere of trade. Some of Britain’s most important external agreements — nuclear, airline access, fisheries and financial services are either entirely, or in large part, handled by the EU.
To merely stand still in these areas, Britain not only needs external agreements, but the national regulators to negotiate and manage them. If Brexit talks involve a clean separation from EU regulatory agencies, for example, that requires regenerating a UK capacity to safeguard nuclear material, currently handled by Euratom, or certify and maintain airline parts or pilots licences, all at potentially breakneck speed.
The ridiculous: we need to talk about swordfish
The agreement with Chile to preserve swordfish in the southeastern Pacific came after a dispute in the early 2000s that banned EU vessels from landing any of the fish, caught in international waters, in Chilean ports. Both parties exchange data on fish stocks, and agree to co-operate on marine research to preserve swordfish numbers.
Here the US poses one of the biggest technical and political challenges. Some treaties, such as the EU-Euratom nuclear accord, require Congressional approval — usually a delicate and time-consuming process. Meanwhile other arrangements, such as the EU-US Open Skies accord for airlines, were agreed when the forces of liberalisation were at their peak. The political mood has hardened considerably since then.
John Byerly, the former US lead aviation negotiator who secured the Open Skies deal, says “talented lawyers could work it out easily” if Washington and London want to maintain current terms. “But there can be slips between lip and chalice. I’m hopeful but let’s see.”
The timing is tight. The US needs to know the UK’s arrangements with the EU before it can commit, and that may not be clear until late 2018.
“I don’t think there are many precedents for doing so many agreements so quickly. Airlines load schedules months in advance,” says Mr Byerly. “It is not as if you can wait until March 2019 to see what the regime will be. You probably need clarity by the early summer or spring of 2018.”
It puts tremendous strain on Whitehall. In the months after the Brexit vote, Britain had just three people dedicated to negotiating aviation agreements. The FT estimates they will need to renegotiate 17 existing EU agreements with third countries, as well as around 40 UK bilateral deals that include EU clauses. This may need to be done in the space of a few months, once the EU-UK terms are clear and Britain decides how much of its aviation regulation will be repatriated.
For Mr Chizhov, the potential for bureaucratic overload has echoes of another time and place — Soviet Russia. “Brexit means Brexit is a very interesting expression,” says the Russian ambassador, referring to Prime Minister Theresa May’s mantra on exit. “It reminds me of Leonid Brezhnev saying, ‘the economy should be economical’.”
Graphics by Chris Campbell
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