Most Favoured Nation: Drafting Errors
UK-Ukraine, CPTPP and the meaning of 'and/or'
Yesterday I asked the good people of twitter what I should write about in today’s MFN. It turns out I needn’t have bothered because the UK decided to commit some news this morning [see below], but anyhow, some of the suggestions were quite good. (And props to the person who suggested I write, and I quote, “the truth”.)
Anyhow, picking up on Holger Hestermeyer’s suggestion … what is going on with the UK-Ukraine rollover agreement?
The last we heard – courtesy of Anna Isaac for the Independent – the UK-Ukraine rollover deal was being reopened due to the accidental inclusion of provisions that … inadvertently bound the UK to EU rules.
Whoops.
For a while I’ve been meaning to go through the UK-Ukraine FTA text and uncover these dastardly EU-era provisions to work out what they actually are and what they do do. But I never found the time. Until now:
First, in the General Principles:
This is not the only UK FTA to reference the European Convention for the Protection of Human Rights and Fundamental Freedoms [also known as the dreaded European Convention on Human Rights –– ECHR; and yes, not strictly an EU thing, more EU-adjacent] – the EU-UK trade and co-operation agreement allows either side to terminate co-operation on law enforcement and judicial co-operation in the event either party denounces the ECHR or its protocol on the death penalty. But here it takes the form of an essential element, which means non-adherence to ECHR principles could, in theory, lead to Ukraine cancelling the deal.
In practice, probably not too big an issue. But if you really are set on the UK withdrawing from the ECHR, as a number of Conservative MPs are, then its inclusions here is perhaps another (minor) obstacle.
This next thing isn’t a problem, but I’m highlighting because I think it’s cute:
Anyway, this, deep down in the reservations on right of establishment is, I think, the big screw up:
Because it looks to me as if the UK has inadvertently bound itself to a number of EU internal market rules governing electricity and natural gas.
Anyhow, I’m pretty sure ironing this all out won’t be too difficult. It might already have been done for all I know. But interesting, nonetheless.
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CPTPP
On the UK-side some big news rolled in overnight.
No, it’s not that the UK wants to do deals with individual US states on issues such as recognition of qualifications and licensing … which isn’t a bad idea but is certainly not news given the UK announces its intention to do this every three months or so.
Rather, it is that the UK has cleared the first phase of the CPTPP accession process, and can now move to the second and final phase.
If for whatever reason you weren’t aware there were phases to CPTPP accession, you wouldn’t be alone given the CPTPP membership only came up with the accession process recently.
The first phase requires accession countries to demonstrate that their domestic regulatory regime is compatible with the CPTPP rule book, and also that they have a good history of compliance (the second bit was added even more recently to give the CPTPP membership a bit more wriggle room with China.)
The UK has managed to demonstrate its ongoing compliance with CPTPP rules … or at least demonstrate it is mostly compliant with a few questions over things such as the UK’s compatibility with CPTPP sanitary and phytosanitary (SPS) provisions and its approach to patents (CPTPP mandates grace periods; the UK’s membership of the European Patent Office (EPO) prohibits grace periods) being kicked to the final negotiations.
The second phase of negotiations will focus on the UK’s market access offer in respect of tariffs, procurement, and services. This shouldn’t pose too much of a problem – largely due to the UK already agreeing generous bilateral deals with Australia and New Zealand. But Canadian and Mexican demands on beef, poultry dairy and eggs could trigger internal disagreement between DIT and DEFRA. And yes, the Canadians will absolutely use the SPS issue to get more market access out of the UK because that’s how negotiations work.
I reckon the market access negotiations will be wrapped up by the end of the year. All very exciting. Especially if China does actually join too …
A funny meme
Mode 5 creator, Lucian Cernat, has done a funny meme.
and/or
Trade policy can be quite a lot of fun. It can also be so incredibly tedious, especially when trade lawyers get involved (sorry trade lawyers, but you know this is true).
So apropos of nothing, and with thanks to the grandaddy of trade pontification, Alan Beattie for flagging, here is a 23-page essay by former WTO appellate body (RIP) member James Bacchus on the meaning of ‘and/or’:
Enjoy!
Steeling from Japan
Those interested in the US-Japan steel deal should read this, critical, piece by Scott Lincicome. I hadn’t quite realised that the deal didn’t touch on the US’s Section 232 aluminium tariffs, for one. Although I suppose it is still better than being subject to all of the 232 steel and aluminium tariffs like another country that shall not be named here in this newsletter for fear of spoiling the Friday morning good vibes.
As ever, do let me know what you would like to see more/less of.
Best,
Sam