Chapter 8: Application of the deal (CEPA Chapter 1)
Territorial application
95.The Government’s objectives included ensuring “application … to all four constituent nations”, “taking into account the effects of the Northern Ireland Protocol”, and provisions for the “further application of the agreement to the Crown Dependencies and Overseas Territories [(CDOTs)] as appropriate”.120 Article 1.3 of CEPA sets out its territorial application, and these stated objectives have apparently been achieved.
96.While application to the CDOTs has not been explicitly negotiated, Article 1.3.4 of CEPA envisages the possibility of such an extension, and the Parliamentary Report indicates that the Government is working to understand what extension might be possible and how.121
97.We welcome the fact that CEPA includes provisions to extend its territorial application to cover the Crown Dependencies and Overseas Territories. Should they wish to be included and CEPA prove of benefit to them, the agreement should be extended to these areas as soon as practicable.
Compliance with the Protocol on Ireland/Northern Ireland
98.CEPA also includes a provision (Article 1.9.5) intended to ensure “legal coherence” with the Protocol on Ireland/Northern Ireland.122 The EU Select Committee, in its June 2020 report on the Protocol, questioned how future trade deals would apply to Northern Ireland.123 CEPA provides some initial indications.
99.The unusually worded provision in CEPA provides that, in the event of an inconsistency between it and the Protocol, CEPA “shall not prevent a party from taking a particular measure not consistent with the obligations under this Agreement”, provided that such a measure is not applied in “a manner that would constitute a means of arbitrary or unjustified discrimination against the other Party or a disguised restriction on trade”. In such an event, the parties would “hold consultations, on request of either Party, in relation to the effects of the measure on this Agreement, and seek a mutually acceptable solution”.
100.Such a provision has not featured in other rollover agreements that we have scrutinised. We asked Lord Grimstone to clarify why it had been included here, which party had sought its inclusion, and whether such provisions would be needed in existing, or future, rollover agreements. He told us that “at the time of negotiations, not all decisions regarding the implementation of the Protocol … had been made”, and that the provision in CEPA reflects one of “various approaches through which [the UK] can reach” a “shared understanding with partner countries” about how continuity agreements will be implemented alongside the Protocol.124
101.We have concerns about how CEPA’s new provision relating to the Protocol on Ireland/Northern Ireland will work in practice, as well as how modified rollover trade agreements, such as CEPA, will interact with that Protocol, and might affect access to goods in Northern Ireland. Without clarity on the UK-EU relationship, it is impossible to comment further, but we note the uncertainty this has caused for Northern Ireland citizens and businesses.
120 Strategic approach, p 12
121 para 30
122 Parliamentary report, para 41
123 European Union Committee, The Protocol on Ireland and Northern Ireland (9th Report, Session 2019–21, HL Paper 66), pp 17–19
124 See letter of 10 November, set out in Appendix 4.