THE LAST DITCH An Englishman returned after twenty years abroad blogs about liberty in Britain
Of Brexit and Divorce
Book review: The Shortest History of Germany by James Hawes

Legal analysis vs bluster in the Brexit negotiation

The current public discussion about the so-called "divorce bill" or "financial settlement" claimed by the European Union in relation to the UK's termination of its membership is ill-informed on a cosmic scale. I decided to flex my neglected skills as a retired international lawyer and do a bit of research.

The EU has yet to produce any legal justification for its claim. It is simply asserting, as a negotiating position, that it will discuss nothing else until a payment has been agreed. This is an oddly weak stance. If there is a legal basis for the claim, they don't need it signed off in advance. It would simply be a contractual consequence of the treaties. The European Court would rule if the principle or amount were disputed.

To someone who negotiated for a living for decades, it has the aroma of, to be polite, bravado or, to be less polite, something else beginning with a "b".

That impression is reinforced by the fact that the EU has not produced its calculations. According to press reports it is demanding between sixty and one hundred billion Euros. Nor has it offered any legal analysis. We are told that the British government has clear legal advice that no such payment is due. Of course it won't publish that advice until the EU has offered some justification. 

Lawyers for Britain (disclosure: a campaign group in support of Brexit) has however commissioned and published a counsel's opinion by Martin Howe QC entitled The withdrawal of the UK from the European Union: Analysis of potential financial liabilities. The full opinion can be downloaded here. I have also hosted a copy of it on this site and put a link in the sidebar. It is well and clearly written. I suspect many of my esteemed readers will actually enjoy reading it even if they are not accustomed to such documents. 

For now, I will cut to the chase however and quote the conclusion of pages of dense analysis: 

For the reasons set out in this paper, there is a powerful legal case that the UK will not owe the EU any monies on withdrawal, and will be entitled to a net payment representing the value of its capital in the European Investment Bank.

Those readers who, like, me, actively want a "hard Brexit" should take the following comfort. If the EU's negotiators stick to their present position, there can be no further negotiation. The UK will exit without any agreement. It might even be possible (though I doubt any possible government after the election would have the testicular fortitude to go for it) to dispense with the two year notice period and stop subsidising our Continental chums sooner.

We would then trade with the EU on World Trade Organisation (WTO) standard terms, which will allow either side to impose tariffs averaging 2.3% on imports of non-agricultural goods (agriculture is a pampered business everywhere and the WTO has failed to broker any agreement to reduce protectionist tariffs). Britain is of course free to impose no tariffs on EU goods. The WTO sets a maximum, but no minimum. In my view that is precisely what we should do. It helps our consumers not one jot or tittle to pay more for our Audis and Camembert. As a supporter of free markets, not crony capitalism, I favour the consumer over the producer every time.

One can love capitalism without loving capitalists - or at least not loving them more than ones fellow humans in general.

It is likely of course that the mercantilist, anti-free market, corrupt crony capitalist EU will impose such tariffs. It will be true to the antiquated and discredited ideology that made us want to leave. However the adjustment in the value of the pound sterling (the genius of the Free Market at work) has already more than covered the effect of WTO tariffs and the Government has (rashly and wrongly in my view) promised British farmers that they will be compensated from public funds for any negative effects.

Much as I disapprove of that, it will cost far far less than our payments to the EU's Common Agricultural Policy (CAP) which routes subsidies not just to jolly Continental peasants but to rich people such as the French, Austrian and German partners in the international law firm to which I used to belong, who owned farms and vineyards not to feed and cheer the masses, but to garner CAP subsidies from their far poorer fellow-taxpayers. 

Comments