Opinion: Latest Brexit legal challenge will not be ‘back door’ to Single Market

The think-tank British Influence is said to be contemplating a judicial review arguing that the UK remains a contracting party to the European Economic Area (EEA) agreement and so will retain membership of the Single Market even after Brexit.

British Influence suggest that only if the UK notifies its intention to withdraw from the EEA agreement in terms of Article 127 of that agreement would the UK ‘leave’ the Single Market.

“The UK’s obligations under the EEA agreement may not lapse when the UK leaves the EU. But the UK only has limited obligations arising under that agreement. For all aspects relating to customs and compliance with the Single Market rules, it is the EU, not the UK, that exercises rights and duties under the agreement,” says Kenneth Armstrong, Professor of European Law and the Director of the Centre for European Legal Studies at the University of Cambridge.   

“Although the UK is a contracting party to the EEA agreement alongside the EU, it is only a party for those aspects of the agreement that fall within the legal powers of the UK. EU membership means that the legal powers of the UK are limited, especially in respect of customs and Single Market rules which have been taken over from the Member States and are exercised on their behalf by the EU.”

If the litigants were, nonetheless, successful in persuading a court that the UK was entitled to exercise the rights of a contracting party, Professor Armstrong suggests they may not be enforceable against the EU27 but only against the three European Free Trade Association (EFTA) states:

“The agreement is between the EU and the Member States on one side, and Norway, Iceland and Liechtenstein on the other side. This means that the UK was a contracting party as a Member State and only in relation to the three EFTA states. It would be contrary to the purpose of the agreement for it to regulate relations between the UK and the EU27. It is for the EU treaties alone to regulate that relationship subject to the supervision of the European Court of Justice.”

The EEA Agreement is an “association agreement” that comprehensively deals with a wide range of issues of cooperation between the EU and EFTA, says Armstrong. It is not limited to the Single Market.

“Because they have such a wide scope, association agreements must be signed not just by the EU as a legal entity but also by its Member States for those areas of the agreement where Member States retain their own sovereign powers. But as regards customs duties and the common rulebook of the Single Market, these powers have been transferred to the EU and are exercised collectively at EU level.

“It is not enough to say that the UK is a ‘contracting party’ and then draw the inference that this gives the UK continuing access to the Single Market. It is only a contracting party for certain purposes and within the legal limits of its powers at the time the agreement was reached. At that time, the UK was an EU Member State and the EU had taken over responsibilities for customs and the Single Market rulebook,” concludes Armstrong.

“I would be very surprised if this litigation changed the political course of Brexit." 

The EEA Agreement was signed by the EU, its Member States and three EFTA states (without Switzerland) on 17 March 1993, and ratified by the UK on 15 November 1993.

Article 127 of the EEA Agreement states:

Each Contracting Party may withdraw from this Agreement provided it gives at least twelve months' notice in writing to the other Contracting Parties.

Immediately after the notification of the intended withdrawal, the other Contracting Parties shall convene a diplomatic conference in order to envisage the necessary modifications to bring to the Agreement.