UK’s loss of EU rights and obligations has wide consequences

It is impossible to see any reason why the UK would be able to negotiate new arrangements with the European Union that were more favourable than those it has at present, according to a leading Irish expert on the EU and the law.

"EU membership is designed as a balanced package of rights and obligations, and no state would be allowed to obtain the rights without reciprocal obligations," according to John Temple Lang, a lawyer and a former senior official with the competition directorate of the European Commission. If the UK leaves, the EU will make it "much more difficult for Ireland to resist moves towards tax harmonisation," he says.

In a paper delivered to a conference organised by the Irish Centre for European Law earlier this year, he said if the UK leaves the EU, it will be negotiating from a position of weakness.

It would have to be agreed whether UK companies would have the right to bid for public contracts in the EU and vice versa. It would have to agree to keep procedures on public contracts in line with EU standards, as otherwise there would not be reciprocity, but would have no influence on changes to EU standards.

EU subsidiaries

UK companies presumably would be able to set up subsidiaries in the EU, he said, which would then have the usual rights of EU-based companies.

“EU negotiators would be well aware of this and would want to insist that EU companies would be free to establish themselves in the UK on similar conditions.”

The UK leaving the EU will make for duplication in relation to certain processes, such as mergers, approvals for drugs and medicines, and for products subject to safety standards, with the extent of the duplication depending on the extent to which the UK adopted technical regulatory requirements that were different to those of the EU, as well as on the extent to which mutual recognition of approval decisions could be arranged.

A customs and VAT border between the Republic and Northern Ireland will be introduced. Rules of origin will need to be applied, and this will be particularly important with agricultural products, as the UK will have to introduce its own agricultural policy to compensate its farmers for the loss of the EU farm policy.

Ireland, he said, will no longer have any reason to stay out of the Schengen Area.

The economic harm to the economies on both sides of the Border will include the end of eligibility for EU funds designed to promote co-operation across intra-EU borders.

On fisheries, the UK would have to negotiate with the EU to obtain access to much of the eastern Atlantic.

A mechanism will have to be put in place to ensure there are constraints on state aid by the UK if it is to reach an agreement on free trade in industrial products within the EU. Those who campaigned for Brexit were against non-UK courts having jurisdiction in the UK.

Mr Temple Lang said it is not clear whether Northern Ireland or Scotland will be able to afford to reduce their corporation tax rates, as has been mooted, given the economic uncertainty that will result from Brexit.

EEA law

If the UK ends up being part of the European Economic Area, this would be convenient for Ireland, given that EEA law often corresponds with EU law.

However, the UK would have to agree to comply with the judgments of the EEA courts, and would have to copy EU law without being able to influence it. He said the UK will not be allowed make a series of bilateral agreements with the EU, as Switzerland has.

And, a customs union, such as the EU has with Turkey, does not seem likely to be attractive to the UK.