How progress in UK/EU talks has hit an impasse over the ECJ

This weekend’s Telegraph wasn’t a vintage edition but you always learn something. Supposedly serious papers are still devoting more space to the posthumous soap opera about Princess Diana – Monday night’s ITV interview with her sons was their excuse this time – than to Brexit, the aftershock from which may be sufficiently profound to topple a shaky monarchy (and much else).

The Sunday Tel is also gunning for Theresa May, as the Daily Mail (still fixated on Corbyn-bashing) is not. ‘Tory faithful urge May to leave No 10 by Christmas,’ said the Telegraph’s page one headline, based on interviews with ‘more than a dozen’ local bigwigs. The Bigwig Dozen were extremely vague about what is supposed to happen next. If anyone knows of a ‘safe pair of hands’ they’d love to hear from you. No, not from you, Boris.

In any case, Ken Clarke and Michael Heseltine, are saying it will suit everyone if May stays until 2019 at least. That sounds more likely. A proper survey of 1,000 activists by the Economic and Social Research Council found that 71% agree.

More relevant to The New European’s agenda is this month’s demotion of the Sunday Telegraph’s veteran columnist, founding editor of Private Eye and all-purpose troublemaker, Christopher Booker. Loyal readers must now track him down on the back page of the non-news lifestyle section. Booker is nearly 80 and may have opted for a quieter life. But I suspect the thought police at Telegraph Towers may have tasered the incorrigible old Brexiteer for writing – week after week – that he didn’t mean Britain to leave the single market or customs union (just the EU, you fools!). Booker has been replaced in the main news section by a gaggle of young columnists who may be 80 between them.

Where were we? Ah yes. Canada. The Sunday Tel’s man in Brussels (the tabloids are too well informed on EU matters to need staff there) had picked up the line that David Davis’s DExEU team had suggested; namely setting up a panel, chaired by a judge from an ‘impartial third country’ such as Canada, as a means of arbitrating such disputes as may arise from the future EU-UK Brexit agreement.

Alas, so British negotiators whispered sorrowfully in the paper’s ear, Michel Barnier’s negotiating hands are so tightly tied by the EU27’s ministerial instructions that he cannot show enough flexibility even to explore the idea. Despite which, progress was reported to have been made on voting rights and posted workers in the two sessions before everyone went to the beach. And optimistic noises – not much more – were made on the Irish border issue and the financial terms of the divorce.

‘But on the substantive question of legal enforcement of the agreement the impasse was overwhelming,’ Peter Foster, reported. We can well believe it, can’t we? What remains a central puzzle of the May government’s Brexit negotiating strategy since the Prime Minister’s Lancaster House speech in January – long before that, actually – is why she chose to make one of her red lines the total repudiation of any vestigial European Court of Justice jurisdiction over British courts.

By chance I happened to attend a discussion on this very topic at the high-minded, proudly expert Institute for Government (IfG) on the northern edge of Whitehall this week. I already knew the ECJ issue was complicated. But I was wrong. It is far worse than that.

The good news is that May is finally demonstrating signs of flexibility herself. She is listening to big business – small business too, more affected by Brexit than admitted – on what deals they’re all going to need. Last week she promised them there will be no Lawson Cliff. For this shift we can perhaps thank ex-MP, Gavin Barwell, a more emollient chief of No 10 staff than the ‘Gruesome Twosome’ – Fiona Hill and Nick Timothy – who is trying harder to be nice to the kind of people the boss may need one day. MPs for example, captains of industry, City movers to Frankfurt and shakers to Dublin.

Even Liam (‘Chlorinated Chicken’) Fox, the international trade secretary, now talks of the need for a post-Brexit transition agreement – an ‘implementation period’ in revisionist Leaver jargon – at least until 2021 in his case. Self-marginalised Boris (‘most trusted’) Johnson seems to be as on board as he capable of being. Slippery Michael Gove told an environmental conference that agriculture is among the industries that will need one – by which he seems to mean some freedom of movement for seasonal labour to pick the crops in eastern England where resentful locals voted Leave in droves. But Gove’s ‘shared pragmatic judgment’ does not, it seems, extend to a continuing supervisory role for the ECJ once Brexit occurs in March 2019. In his shy way he’s flagging up disquiet: flagging to the gallery, so to speak.

Four experts were asked at the IfG session this week, ‘what is it about the ECJ which gets otherwise normal Brits as excited as Govey in ways that do not most inflame citizens of the EU27?’ Michael-James Clifton, chief of staff to the President of the Court of Justice to the European Free Trade Area – the Efta Court – Dr Holger Hestermeyer, a German international disputes specialist at King’s College, London, Catherine Barnard, professor of EU law at Cambridge and the IfG’s own Raphael Hogarth provided some of the complex answers to this and much more. You can read some of their findings on the IfG site.

But first, the tricky stuff. If I understood my IfG experts correctly – apologies to them if I didn’t – everyone, including the UK’s Brexit white paper, understands the need for dispute resolution in international affairs, especially in humdrum but economically important matters of trade disputes. Rules and regulations, treaties, standards, contracts, must all be enforceable. That’s why David Davis offered an arbitration arrangement, the one where the Canadian judge was wheeled on. But the devil is in the detail. For example, did Mr Davis’s sherpas explicitly specify an Anglophone Canadian judge? Would a Quebecois be acceptable? Ah, I see. Thought not.

The Brits are determined to protect what they see as UK sovereignty and the supremacy of UK courts over the ECJ. The EU27 is just as determined to protect the integrity and autonomy of the ECJ and its power to enforce its rulings – which override national courts, a process known as ‘direct effect’ – by fines and other penalties if necessary – as Google and other global corporations can now testify. If Britain refuses to accept the ECJ having any post-Brexit role (that position is softening for the transition phase) it must either create its own such court in a manner acceptable to the EU27 – not easy and not cheap – or resort either to political arbitration of disputes by diplomats or politicians – highly risky – or create ad hoc panels of lawyers, not sitting as a court, to fix problems that arise one by one.

We’ll come back to the machinery. There are also the categories of cases that will need to be resolved. These include cases in the pipeline already or between now and Brexit day 2019 – the thought alarms Gove – plus issues arising from the EU/UK Brexit agreement under Article 50, and those that are bound to emerge over time, perhaps over the chlorinated chickens we will soon have to produce to compete with Fox’s imported chickens from America, which finds it cheaper to wash dead meat than rear the birds nicely.

There’s a whole sideshow about the 40 or so EU agencies, plant varieties, medicines etc, and of course Euratom which is woven deeply into the Treaty on the Functioning of the European Union (TFEU). But let’s shudder at the sheer complexity of unpicking it all and park them for now. The model we should be most interested in is the aforementioned EFTA court. Back in the 1980s, so Catherine Barnard reminded us, when the then-EEC cut a free trade deal with three of the four surviving members of EFTA (once a British-backed alternative to the EEC) there was going to be a European Economic Area (EEA) court to resolve such disputes. It would have had five EEC (ie EU) judges and one each from Norway, Iceland and Liechtenstein the EFTA trio.

Though an EFTA member Switzerland opted – via a referendum, wouldn’t you know – to stay out of the EEA. It has a series of bilateral free trade agreement to access the single market. We won’t come back to that either, except to say that efforts to create a better EU/Swiss adjudication system have repeatedly failed since 2008. The Swiss foreign minister has just resigned over it.

But the EEA court never took off, as the – quite separate – European Court of Human Rights (ECHR) might not have done for the same reason, had it not been established decades earlier. Even back in the 1980s the ECJ was sensitive to its own autonomy and its commitment to economic integration and closer political union. There might be conflicts of interest and loyalty within such a hybrid court. Within the rules set out in ‘Opinion 1/91’ it kyboshed the project.

So the EFTA court was created instead, modelled on the ECJ and working closely with it (the ECJ cites its rulings) committed to sovereignty, liberalism and free trade. It works in English. An EU/EFTA trade dispute arising in an EFTA country is resolved in the EFTA court, an EU case in the ECJ. But the EFTA court has no ‘direct effect’ power to override national courts.

There are a whole raft of lesser issues wrapped up inside the larger ones, including costs, transparency, composition of the court/panel and who appoints members, remedies (ie punishment for non-compliance), reference (who can take a case to court: only states, or companies and individuals?), oversight and surveillance, plus that revered legal chestnut, precedent. The ECJ works on precedent, as ad hoc panels do not (why should they, they’re ad hoc?), which makes its rulings more consistent and of greater use to EU citizens and their national courts which must – of course – follow them.

How will Britain resolve its conundrum, refusing to accept more than a transitional role for the ECJ, but doing so in ways acceptable to the EU27 and its court of justice, mission creep and all? Are there enough Canadian volunteers?

Remember this is not just about trade, but many things, most conspicuously at this stage of the Barnier-Davis negotiations about protecting most of the current rights of three million EU citizens living in Britain and one million Brits in the EU27. Discrimination over rights to benefits is always a tabloid tinder box. And how can both sides ensure that their citizens – small firms and individuals as well as fat cat corporations and states – can access justice without great expense and with hope of an outcome that can be enforced within another state, not cynically ignored?

Dr Hestermeyer used the imaginary example of the British crumpet exporter, using a brilliant new Brazilian yeast, who is unfairly excluded from the Hungarian market over spurious health worries about the yeast. Mr Crumpet is probably too small to have enough clout or cash to do what US agriculture may do after the Trump-Fox trade deal (pub quiz: which of those two is the fox in the henhouse?) when we start citing health concerns to exclude chlorinated chicken or GM grains. Even if an imaginary court imposed equivalent sanctions on Budapest, Mr Crumpet stands to lose in ways Google and the big banks can fight.

Britain could, in theory, set up its own court, to protect trade agreements and the rights of EU citizens, as enshrined in the Article 50 agreement with the status of international law. The white paper has conceded it will respect such ECJ rulings as already exist on Brexit Day. Naturally the EU27 fear that a future parliament might change the law and that British judges would have to accept it. The Brits fear that the ECJ will make more integrationist rulings over time, rulings it wants to stay well clear of.

Why not use World Trade Organisation (WTO) dispute mechanisms, as more gung ho Brexiteers are happy to do if the Barnier talks collapse? Or even the International Court of Justice in the Hague? All involve compromises on judicial sovereignty, but that is the real world we all live in most of the time and most of history too. Even the mighty US engages in a disputes mechanism inside Nafta, though the Trump administration is unhappy about it – as it is about many awkward realities outside the Manhattan real estate market.

But these are state-to-state mechanisms. Firms and individuals can go direct to the ECJ and stand to lose by its loss. If I got the IfG panel’s drift correctly the experts seemed to be saying that, with time so short before the transition phase is due to start, it might be sensible to buy a disputes procedure off the shelf. I think that means the EFTA model or actually EFTA membership – if they’d have us. We’d get a fourth judge, possibly two to prevent a 2-2 deadlock.

But of course – here we go again – the EFTA trio (not Switzerland) who belong to the wider European Economic Area (EEA) alongside the EU 27 have to accept the EU’s ‘four freedoms’ of movement – goods, capital, services (sort of) and people. And curbing immigration was the key reason why millions voted for Brexit, blaming the EU (wrongly) for the record level it has just reached (under the May government).

On top of which they have to chip into the social and economic cohesion funds, plus enact assorted compatible legislation across a host of issues. But they do get back control of fishing and agriculture which both matter a lot to Iceland (which screwed UK fishing harder than the EU did) and Norway, as well as to born-again environmentalist, Gove.

If it all sounds a bit ‘back to square one’ that’s because it is. Is it all worth it, you must be asking. Don’t ask, because unless Vince Cable is elected Dictator for Life with Tony Blair as his draconian Home Secretary, and Nigel Farage goes off to become White House spokesman, it isn’t going to happen. We will have to hack our way through to some mechanism while other urgent problems facing the country stay in the queue.

So why do Brits who can’t normally tell a World Trade Organisation ruling from a Match of the Day discussion get so upset about those European courts? Our experts made the familiar point that many people confuse the ECJ with the ECHR, which emerged from a post-war Council of Europe determined to stop mass murder and the persecution of millions on our continent. Nothing to do with the EU, but the EU shares the blame when ECHR judges decide to block the deportation of a cynical brute of a terrorist who entered the country illegally and got a woman pregnant as a ‘right to family life’ insurance policy.

Oh yes, and the prisoners’ right to vote issue, pioneered by Irish prisoners with time of their hands, with ECHR help. In the 2007 election 451 voted (out of 3,359 in the Republic’s jails), but by 2011 the novelty had worn off and the figure dropped to 200. Fleet Street tabloids got excited when the row crossed the Irish Sea and so did many MPs including David (who he?) Cameron. As a UK Supreme Court judge once said in my hearing ‘it’s not very important, is it?’ Not to Irish prisoners, it seems, but it’s none of the ECHR’s business in my irritated opinion. It should stick to stopping Nazis hanging victims on piano wire and other more heinous breaches of human rights. I’m with the tabloids and against mission creep on this one.

But it’s nothing to do with the EU. And when people complain about EU court rulings on Twitter and I ask them to cite just one, they rarely reply. The experts agreed that the ECJ is listening more carefully to national sensitivities – the so-called ‘margin of appreciation’ – and that the UK has won decisions from it crucial to the City. But change has been too little, too late. Growing influence of England’s more pragmatic common law approach will presumably also now shrink back.

The experts’ more telling point is that Britain is the only EU state without a written constitution so that it is routine for them – but not for us – to have higher courts tell governments and legislators that the law they enacted is unconstitutional. Even Chlorinated Fox’s American buddies have a similar arrangement, though many want Supreme Court judges to rule as their 18th Century predecessors would have done and allow young George Washington to carry a TEC-22 with two 40 round magazines and .22 dum-dum bullets for his personal protection at school.

But here these issues are seen through the prism of the sovereignty of parliament and the amorphous desire of many voters – jobless voters in Skegness and Jacob Rees-Mogg – to ‘take back control’. How much control they or the Mail’s Paul Dacre really want parliament to have remains to be seen. Either way, if they want the ‘deep and special’ trading relationship they say they want with Europe – and the Trump in Dr Fox’s Henhouse says he wants with our chickens – then some form of supranational body will be needed to ensure fair play. Isn’t that right, Donald?