The first time that that an EU institution has publicly and practically considered the consequences of Brexit was always going to be a popular date in the diary. The IMCO committee’s workshop, with standing room only, delved into both general considerations and detailed analysis of the consequences of Brexit, ultimately concluding what many already fear to be the case – none of the existing agreement models (WTO, EEA, DCFTA, etc) are a perfect fit so the UK will have think of its own set of rules in the next two years.
We first heard from speakers presenting the legal framework for Brexit, the roles and powers of the European Parliament and the economic effect on the EU27 after Brexit. We then heard from experts on sectoral economic consequences, the parameters to be considered when comparing different models, the legal consequences to public procurement, consumer and service protection standards. The first part of the session presented a constitutional headache and the second half showed how important it is that the UK is clearheaded to deal with the technical and practical details for moving forward.
What is clear is that it is vital for the UK to achieve a transitional agreement, as after Article 50 has been triggered, it can only be reversed by a unanimous vote of the European Council. This makes dialogue between the UK and EU parliaments is crucial, especially as the final agreement is out of the UK Parliament’s hands and will rely heavily on diplomacy. Furthermore, there are a number of studies on the potential economic effects of Brexit that all show similar results, that is that the UK will suffer a lot more than the EU27 but the committee heard that Brexit should not be considered as a minor policy adjustment but rather as the systemic shock it will be.
As the debate moved onto policy and economic consequences to individual sectors, it was apparent that a sector by sector approach has not been modelled for the EU27 as a whole. This is important to bear in mind: a study of Dutch sectors shows that certain sectors could be much more seriously affected than most models of general impacts have shown. The UK’s recent white paper certainly does not go into detail, and with so little understanding of the consequences, it clearly demonstrates that the UK and the EU needs all the guidance it can get from industry.
Finally IMCO discussed legal standards of services and establishment and public procurement methods – i.e. the framework with which the UK can trade with the EU. They did this by comparing how different models of agreement (CETA, EEA, WTO) set their standards in order to still be able to work with the EU standards. They agreed said that the EEA model was bad for Brexiteers because EFTA states have no direct influence on the legislative process – not exactly taking back control – but best in terms of consumer protection because the EEA incorporates fundamental freedoms and the EC acquis. In contrast, in a scenario similar to the WTO model, the UK would not be bound to EU consumer protection law, and the extent to which the UK set forth comparable protection standards would be at the discretion of UK legislators, however they would still have to meet EU standards to trade with them.
Whatever the next months and years will hold, the importance of intra-parliamentary cooperation could not be emphasized enough in order for the withdrawal process to be as smooth as possible – thankfully for all involved this is, for now, the message IMCO seems to be sending.
By Eva May Cunningham