The EU has either exclusive competency to conclude international agreements on behalf of EU member states or that competency is shared with the member states. Where competency is shared the agreements are known as “mixed agreements”. In a mixed agreement it is often difficult to determine which parts of the agreement are those where competency is shared and which parts are the subject of exclusive EU competence. Indeed the competency of the EU to take action on behalf of member states has extended over time.
It is generally accepted that where the EU has concluded an international agreement on the basis of exclusive competency then the UK will cease to benefit from that agreement when it ceases to be an EU member state. The status of mixed agreements is less clear. Although the UK may technically remain a party to the relevant agreement after Brexit (at least with regards to the parts of the agreement where the EU did not have exclusive competency), the interpretation of that agreement may preclude the UK from continuing to benefit from it – for example where the text of the agreement confers benefits on “EU member states” or includes territorial restrictions which are determined by reference to the EU.
Pursuant to the draft Withdrawal Agreement, the UK will be obliged to fulfil any obligations stemming from international agreements concluded by the EU on behalf of its member states. A footnote to the draft Withdrawal Agreement contains an agreement by the EU to notify the international counterparties to those agreements to treat the UK as if it were an EU member state during the transition period. However ultimately whether or not the UK continues to benefit from the relevant agreement on the same terms after March 29, 2019 is up to the international counterparty. The Withdrawal Agreement cannot compel international counterparties to continue to apply the benefit of those agreements to the UK.
The Withdrawal Agreement also provides that the UK will not be able to participate in the work of any international bodies set up by international agreements concluded by the EU (whether under exclusive or mixed competency) unless the UK participates in its own right or is invited to do so as part of the EU delegation.
Over 750 international agreements entered into by the EU on behalf of member states have been identified, which may need to be replicated upon Brexit. These include some important agreements for the aviation industry. In terms of flying rights for example the US/EU Open Skies Agreement is a mixed agreement. Its benefits apply to “Community airlines” defined as “airlines of the European Community and its Member States”. Upon the UK ceasing to be a member of the European Union, the UK will cease to benefit from the US/EU Open Skies Agreement unless the EU and the US agree otherwise.
For aviation manufacturing, repair and safety standards, the agreement between the US and the EU on cooperation in the regulation of civil aviation safety (also known as a bilateral aviation safety agreement or BASA) is key. In general terms this agreement facilitates recognition as between EASA and the FAA of each other’s certification and approval processes, therefore negating a requirement for relevant products and processes to undergo dual certification or inspection. The loss of the benefit of the EU/US BASA would mean for example that the FAA would not be able to rely on UK CAA conducted inspections of FAA licensed repair stations in the UK. As such FAA inspectors would need to have direct oversight of these facilities and then subsequent CAA approval would be required to permit such activities.
Some commentators have indicated that the mutual recognition afforded by the EU/USA BASA could be preserved if the UK maintains membership of EASA. The UK will cease to be a member of EASA when it leaves the EU as full membership is only open to EU member states. However during the transition period and pursuant to the provisions of the draft Withdrawal Agreement it is likely to be treated from an EU perspective as if it were a member but without the ability to participate in any decision making process. In theory the UK could apply for some kind of associate membership status once it ceases to be an EU member state. Indeed the Prime Minister announced that the UK would be seeking some kind of associate membership of EASA in her speech of March 2, 2018. Participation in EASA is open to European third countries (i.e. countries which are not members of the EU) pursuant to Article 66 of the Basic Regulation. The UK fulfils one of the criteria for third country participation in EASA in that it is a party to the Chicago Convention. However Article 66 of the Basic Regulation would also require the UK to apply relevant EU aviation law which may be more problematic politically given that such a commitment would need to extend beyond the end of the transition period.
Yet deemed or actual associate membership of EASA during transition will not, of itself, allow the UK to retain the benefit of the UK/US BASA. The BASA is between the EU and the USA. It refers in a number of places to things being done in EU territory which will cease to include the UK on March 29, 2019. To preserve the status quo during transition, the USA will need to agree that it will treat the UK as if it were still an EU member state. Ultimately the USA and the UK will need to conclude a separate BASA or to update the old bilateral US/UK aviation safety agreement in order to preserve the existing regime during the transition period and beyond. Continued UK participation in EASA will help to facilitate this but does not obviate the need for such a separate agreement between the US and the UK to be concluded.
Clearly there will be a need for the UK to negotiate agreements with international counterparties to replace those from which it currently benefits as an EU member state. However pursuant to the Withdrawal Agreement, although the UK would be able to negotiate, sign and ratify its own international agreements during transition, in areas where the EU would have exclusive competence the international agreement could not become effective during the transition period without EU consent. The negotiation of international agreements in the field of transport is generally understood to be an area of mixed competency as it is expressly excluded from the common commercial policy by virtue of Article 207(5) of the Treaty on European Union. However in the recent decision of the Court of Justice of the European Union (CJEU) on the EU/Singapore free trade agreement, a distinction was drawn by the CJEU between agreements which are “inherently linked to the physical act of moving persons or goods from one place to another” and those which relate to other services such as maintenance and repair. The CJEU found that international agreements relating to the latter would fall under the common commercial policy and therefore would fall within the exclusive competence of the EU. It would seem that a replacement for BASA would therefore require EU consent if it were to come into effect during transition. Given the desire for a smooth and orderly exit, it is to be hoped that obtaining such consent would not be problematic.
In the recent “no deal” notices on aviation issued by the UK Government, some comfort has been given to industry on the status of international agreements post Brexit. In the notice entitled “Aviation safety if there’s no Brexit deal”, the UK government indicated that it is working closely with the US, Brazil and Canada to agree replacement bilateral aviation safety agreements, to come into effect as soon as the EU-negotiated agreements cease to apply to the UK. Although the notice concerns a “no deal” Brexit, the point at which current arrangements would cease to apply would be March 29, 2019 rather than the end of any agreed transition period. The notice does not provide any further detail as to the terms of those replacement arrangements. However there would be obvious difficulties in attempting to finalise such a replacement bilateral aviation safety agreement in the absence of an overall agreement between the EU and the UK as to aviation safety and in particular, the nature of any future participation by the UK in EASA.
With respect to air services agreements entered into by the EU on behalf of its member states, the “no deal” notice entitled “Flights to and from the UK if there is no Brexit deal” confirms that the UK government is in negotiations to agree bilateral arrangements designed to come into force as soon as the EU-negotiated agreements cease to apply to the UK. It goes on to say that a number of these agreements have already been agreed and that it is confident that the remaining agreements will be put into place well in advance of the UK leaving the EU. Again this would mean by March 29, 2019 rather than by the end of any transition period. The notice does not provide further detail as to the terms of the replacement agreements.