Are we better off on our own in international trade deals with Canada and the US, or better off in the EU?
Now is the time to talk about trade deals. They take up much of the airtime in our great referendum.
The views of Leavers are pleasing: we are the fifth largest economy in the world and every country will be queuing up to conclude trade deals at least as favourable as those we have concluded within the EU framework, including the trade deal that will have to be worked out with the EU itself.
To read the views of Remainers, however, you have to be over 18 and declare that you are not taking medication for a weak heart. They are part of Project Fear, causing people to hide under their beds. The Remainers point to the obvious uncertainties facing us on departure, never mind the amount of time and resources to be consumed in renegotiating what we already have.
Most importantly, the Remainers note that at least the EU (and maybe the US) may not wish to reward us for our behaviour by giving us terms exactly as good as those we had, because then what is to stop others following our lead and breaking up the EU.
Let us look as an example at the biggest trade deal of them all, the Transatlantic Trade and Investment Partnership (or TTIP), which continues to be negotiated between the EU and US. I have written about it before, and its impact on lawyers. If concluded, it should eventually lead to freer trade in legal services between the EU and US.
As we know, English solicitors are world leaders in the export of legal services, but they still face (as do other European lawyers) significant barriers in the US relating to what they can do and how they can do it. US regulators - principally, the Conference of Chief Justices of the states’ supreme courts - have been positive about lowering the barriers, but TTIP will likely lead to the formalisation of new arrangements.
Then there is the question of the new investor court which the EU wishes to introduce into TTIP, to replace what it sees as the discredited current lawyer arbitration system for settling disputes between investors and states.
It is on this second point that there has been recent astounding progress. The early soundings from the US were that they would reject the EU’s investor court proposal out of hand (and they still may). But it was reported a few days ago that the EU proposal has been adopted in another significant trade deal. Negotiations began in 2009 between Canada and the EU on a bilateral deal, called the Comprehensive Economic and Trade Agreement (CETA).
Although the negotiations were officially concluded in September 2014 - that’s five years of negotiations, Leavers! - formal closure has been held up ever since over the form of the investor-state dispute settlement mechanism. Now the Canadians have accepted the EU request for a permanent structure for an investor court, along with more transparency, stricter procedures for selecting arbitrators, and an appeal tribunal.
In the long term, the EU wants to turn this court into a multilateral court for all its trade agreements (Vietnam has already agreed to it). Which brings us back to the US: it seems that the US is still considering the proposal and has not rejected it out of hand. The 12th round of TTIP talks concluded a few days ago. This was the first occasion on which the investor court proposal was formally discussed.
Apparently, some principles were mutually agreed - protection for investors while respecting the right to regulate, and increasing the transparency of procedures - but other proposals, like the make-up of the future court, were more problematic. But the US negotiator remains optimistic that TTIP (and not just TTIP-lite) can be wound up by the end of the year.
Most significantly, the US negotiator said that TTIP would be important for both sides to ‘shape the global rules for trade and investment’ and ‘to be the standard-setters rather than the standard-takers’. Arbitration lawyers, beware changes ahead… .
And that brings us back to the referendum. Are we better off on our own in international trade deals with Canada and the US, or better off in the EU? The government estimated at the outset that, in the long run, UK national income could rise by between £4bn and £10bn annually if TTIP is concluded. The government has been an enthusiastic TTIP supporter, including of an investor-state dispute mechanism being included in the final deal.
With apologies to Leavers who are easily frightened, I find it difficult to believe that, if the UK wanted an investor court, it would be able to persuade Canada and the US on its own to accept the proposal. Yet the EU is at least halfway there.
Jonathan Goldsmith is a consultant and former secretary-general at the Council of Bars and Law Societies of Europe, which represents around a million European lawyers through its member bars and law societies. He blogs weekly for the Gazette on European affairs