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EU Referendum: Financial Times in denial

2016-04-30 05:53:51

A senior Financial Times journalist, who claims to have spent 40 years of his life "thinking and writing about the international economic order and particularly trade and finance" is denying that the EU is obliged to adopt standards from international bodies into its own legislation.

This is despite the journalist being shown Article 2.4 of the WTO Agreement on Technical Barriers to Trade, which states that: "Where technical regulations are required and relevant international standards exist or their completion is imminent, Members shall use them, or the relevant parts of them, as a basis for their technical regulations ".

Even though the EU is a party to this Agreement and thereby bound by it, the journalist who cannot be named for legal reasons claimed in an e-mail seen by this blog, "I really do know quite a bit about this. And I am telling you, you are just wrong. These international agreements are not delivered by God to Moses on Mount Sinai", he says.

Earlier, the same journalist, who claims to specialise in economics, had been given details of the WTO's Sanitary and Phytosanitary (SPS) Agreement, which contains similar provisions (Article 3.1). It requires members to "base their sanitary or phytosanitary measures on international standards, guidelines or recommendations, where they exist".

Neither of these provisions is voluntary or discretionary. Both use in their phrasing the word "shall", which clearly indicates that their requirements are mandatory. Despite this, the journalist remarked: "You seem to be arguing that somehow these international legal arrangements are dictated to the EU". He then insisted: "Nothing could be further from the truth".

As part of a package of additional material, the journalist had also been told of the 1991 Vienna and Dresden Agreements, made between the International Standards Organisation (ISO) and the European general standards organisation CEN, and the electrical standards-maker CENELEC and the International Electrotechnical Commission (IEC).

These afford primacy to the international organisations so that, where the produce technical standards, the European bodies which produce many standards for adoption into EU law are obliged to accept the international standards as their own.

These issues emerged in the first instance after the journalist had challenged the chart (illustrated above), taken from the Efta Bulletin of 2012, alongside the assertion made in Flexcit (p.198) that 80 percent of the EU's single market legislation falls with the ambit of international organisations.

The data used in the chart, which refer to the 2010 period, have since been updated. According to the EEA Lex website, the current total for the laws comprising the Single Market acquis now stands at 5,048.

Of these, the largest single category comprises: "Technical Regulations, Standards, Testing and Certification", with 1,681 legal acts, or 33.3 percent of the acquis. At an international levels, these will mostly be generated by the ISO or IEC, or standards-setting bodies such as Codex, the OIE and IPPC. They may even originate from the UNECE or one of the many bodies involved in financial services regulation.

Then there is the specific category of: "Veterinary and Phytosanitary Matters". This comprises 1,409 legal acts, or 27.9 percent of the acquis. At international level, such standards will often be generated by the "three sisters" at FAO level - Codex, the OIE and the IPPC.

"Transport" is another category. It weighs in at 491 legal acts, accounting for 9.7 percent of the acquis. Here is implemented a variety of regional and global instruments, including those promulgated by the International Civil Aviation Organisation (IACO), the International Maritime Organisation (IMO), and agreements under the aegis of UNECE. These include rules for the transport of dangerous goods and the construction and safety of motor vehicles.

A smaller but still substantial category is "Environment", which accounts for 275 legal acts, or 5.4 percent of the total. At global level, standards are driven by UN bodies such as UNEP, UNECE, by the UNFCCC and a number of stand-alone conventions, including Ramsar, Aarhus, the Berne Convention and many others.

There is also a category under the lengthy title of: "Electronic Communication, Audiovisual Services and Information Society". It adopts measures promulgated by the International Telecommunication Union (ITU), the World Administrative Telegraph and Telephone Conference (WATTC) and the International Telegraph and Telephone Consultative Committee (CCITT).

The category itself accounts for only a relatively modest 140 measures, or 2.8 percent of the acquis. Yet this is substantially more than "Financial Services", implementing such provisions as the Basel III package developed by the Basel Committee on the Supervision of Banking, and many other important measures from international bodies. With the allied category of "Free Movement of Capital", this accounts for 100 measures, or 2.0 percent of the acquis.

This brings us to 81.1 percent of the total Single Market acquis, taking us over the 80 percent level which we suggested lay within the ambit of international organisations. But to this, though, we can also bring the category of "Procurement".

Although it only adds 31 measures, or another 0.6 percent, it is an interesting area for inclusion. In it, we see elements from the United Nations Commission on International Trade Law and its model law on public procurement and the WTO Agreement on Public Procurement. These "inform" the EU's Public Procurement Strategy which in turn feeds though to the Single Market acquis and the EEA.

All of this does not mean, and nor have we ever suggested, that 80 percent-plus of the Single Market acquis derives from regional or global international organisations. Simply, as labelled on the tin, the legislative categories identified (and more) fall within the ambit of international organisations. Those categories cover the larger proportion of the acquis

From this, the direction of travel is clear. As the march of globalisation continues, the acquis itself will become more fully globalised. The European Union is on its way to becoming a law-taker, the middleman rather than the primary producer, ceding most of its originating functions to global bodies. 

Whether Financial Times journalists can deal with that reality is neither here nor there. They can howl it down but globalisation is a fact. Furthermore, it's writing the EU's redundancy notice. There is a global Single Market in the making, and we need to be part of it.