Trade talks and the Environment


As negotiations on the UK-EU Trade Agreement have commenced, the implications for future environmental standards in the UK are coming into sharp focus and are likely to form a key flash point in negotiations.

Trade Negotiations

The UK formally left the EU on 31 January 2020, and an 11-month implementation period, expiring on 31st December, began.  During the implementation period, the UK will continue to be subject to EU law, and in particular, environmental standards.  The UK has 11 months to negotiate a free trade agreement with the EU or failing that, it will trade on so-called World Trade Terms.

The UK’s negotiating approach is set out in “The Future Relationship with the EU – The UK’s Approach to Negotiations”. It states that, as an overall principle that the UK will “not negotiate any arrangement in which [it] does not have control of its own laws” and will not accept any obligations to be aligned with EU laws or the “EU institutions, including the [European Court of Justice]”.

In respect of the environment it states that the agreement “should include reciprocal commitments not to weaken or reduce the level of protection afforded by environmental laws in order to encourage trade or investment”.  This statement indicates that the UK will pursue an outcomes focused approach to environmental protection.  Furthermore, the approach only relates to maintaining current standards of environmental protection and not a dynamic alignment where the UK would match the EU environmental standards as these change over time.

Future Environmental Regulation in the UK

A hint of the UK’s true position on the future status of EU law can be found in Section 26 of the European Union (Withdrawal Agreement) Act 2020. Section 26 creates a power to make regulations providing that any court or tribunal is no longer to be bound by retained EU case law.  The power granted is wide, allowing different regulations to be made for different courts and specifying the extent and circumstances in which existing law can be departed from and the test to be applied for doing so. For example, from the area of the Birds Directive and the Habitats Directive, it is the related EU case-law that has established that socio-economic considerations have no part in selecting sites for designation, that a strongly precautionary approach must be applied, that proposed mitigation measures cannot be used to justify avoiding a full assessment of potentially damaging projects and that destroying even a small part of a designated site must be regarded as resulting in a negative impact.

 

Furthermore, the Environment Bill is making its way through Parliament provides some further clues to future environmental regulation.  The Bill is designed to plug many of the gaps left by the UK’s exit from the EU and its associated institutions.  Many environmental commentators believe that the Environment Bill waters down UK environmental standards and the proposed watchdog lacks teeth.

 

It is difficult to reconcile a situation where the UK are publicly stating that they will maintain current levels of environmental protection, whilst at the same time taking control of its own laws and the possibility of eradicating CJEU case-law.

The EU are unlikely to accept such an approach.  The EU’s own negotiating guidelines, expressly state that there should be “a level playing field so as to uphold corresponding high levels of protection over time”, i.e., that there will be restrictions on the UK’s freedom in relation to environmental protection, at least to the extent the UK wants to retain access to the EU single market.

 

Northern Ireland /Ireland Protocol

Northern Ireland will remain part of the UK’s customs territory after the implementation period. That means that if the UK signs a free trade with another country, Northern Irish goods would be included as part of that agreement.  However, Northern Ireland will also be subject to the provisions of the Northern Ireland/ Ireland Protocol.  The purpose of the protocol is to ensure that there is no hard border on the island of Ireland.

 

Even though Northern Ireland will remain part of the UK customs territory, customs checks and controls will apply for goods moving from Great Britain to Northern Ireland.

The EU/ UK Joint Committee, which has yet to meet, will decide on detailed criteria for what goods are “at risk” of being shipped on to the EU and will therefore have to pay the EU tariff. The definition of “at risk”, which will be agreed during the implementation period as part of the trade negotiations.

The Protocol requires Northern Ireland to align with specific EU rules and it is likely that that alignment will be dynamic, i.e. Northern Ireland will be required to comply with changing EU standards and not simply maintain standards as they are at the end of the implementation period. In particular, it will have to stick to the rules of the EU’s Single Market, in areas such as technical regulation of goods, agricultural and environmental production and regulation, state aid and other areas of north–south co-operation between Northern Ireland and the Republic of Ireland.

Crucially, the detailed arrangements for the implementation of the Protocol have still to be determined, it is not therefore clear, which EU environmental provisions Northern Ireland will be required to comply with.  Much will hinge on the outcome of the wider UK-EU trade negotiations.

Given that the Protocol requires that the Good Friday Institutions and co-operation are maintained and that it is expected that a “level playing field” will be maintained in Northern Ireland, it is likely that there will be little divergence from EU Law.  Much depends on the operation of the Joint Committee which at the time of writing is yet to be formed.


Devolution and the Environment

Notwithstanding the ongoing trade negotiations, most environmental and planning matters are devolved matters.  Up until now this has not mattered because each of the devolved administrations have been bound by the same EU laws and therefore, there was broad conformity in environmental law.

Under the Protocol, Northern Ireland is likely to remain closely aligned to EU environmental standards for the foreseeable future. For the rest of the UK, it is not yet clear whether there will be a UK wide regulatory floor, below which environmental standards must not fall, or whether we will see a race to the bottom in environmental standards by devolved nations keen to give its industry a competitive advantage.

It seems likely that we will see environmental regulatory divergence across the UK nations, which in turn may lead to more of the very red tape that Brexit was designed to reduce.  If for example, Scotland were to adopt certain environmental provisions which were more closely aligned to EU provisions than England, would Scottish goods imported into Northern Ireland face less regulatory controls than a similar product produced in England or Wales?

It remains to be seen whether Northern Ireland will be materially advantaged or disadvantaged by continued close alignment with EU rules and standards.  We await the outcome of trade negotiations with bated breath.


While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.