Saturday, 2 January 2021

The draft Trade & Co-Operation Agreement of 24Dec2020

The draft Trade and Co-Operation Agreement (“TCA”) between the European Union and the UK Government landed on Christmas Eve 24Dec2020.


After many months of false promises of sky falling on heads, a year-long scamdemic hysteria around a novel coroavirus that failed to become the new bubonic plague (but, about which, governments around the world are still openly lying to keep the scam going), the second wave of the banking crisis having re-surfaced in Sep2019 (from 2008), the Brexit sub-saga has now excreted another odorous document to sniff.


The draft TCA is 1,246 pages long, comprising:

  • 409 pages of the heads of terms agreed;

  • 652 pages of annexes;

  • 185 pages of protocols.


In this blog post are brief initial reactions to two sections:

  • provisions regarding aviation;

  • provisions regarding data


Part Two, Heading Two, Title I: Air transport


One of the biggest hurdles for a “no-deal” Brexit was the prospect of UK aviation airspace becoming an island in a sky-locked sea of European Common Aviation Airspace. With no lawful means of over-flying ECAA, flights to and from the UK would be totally prohibited.


It seems that the penny/pfennig/centime/Euro-cent/etc has dropped.


Articles AIRTRN.2 and .3 provide that each party shall grant the other party's air carriers the right to operate as air transporters on what appear to be normal flight routes. Each party grants the other party rights to overfly (i.e. without landing) and to land for “non-traffic” purposes (i.e. for emergencies, fuelling, anything unrelated to passengers, baggage, cargo or mail, etc). The agreement explicitly states that neither party has the unilateral right to grant its air carriers the right to take on board passengers, baggage, cargo or mail from the territory of the other party.


AIRTRN.4 deals with code-sharing and blocked space arrangements. Broadly, air carriers of one party may cross-market with air carriers of the other party, such activities to include the sale of tickets.


AIRTRN.5 provides for freedom of flexibility of air operations, within the limits defined by .2 and .3.


AIRTRN.6 covers authorisations and permissions. Neither party intends to recognise unilaterally the authorisations of the other party. Instead, each party shall recognise the other party's authorisations of an air carrier to expedite its own authorisation of the same air carrier “with minimum procedural delay”, subject to a series of qualifications. The qualifications include safety and security (AIRTRN.18 and .19). The really illuminating qualification is set out in 1.d: “the air carrier meets the conditions prescribed under the laws and regulations normally applied to the operation of international air transport by the Party considering the application or applications.” (my emphasis). The importance of this subtlety needs highlighting: this is both parties agreeing to international regulations, from time-to-time varying.


However, AIRTRN.6.2 muddies the water substantially. .2 limits the authorisation of UK air carriers to those controlled by interests based in contracting states of the European Economic Area and Switzerland. Moreover, .2 does not limit its applicability to only the EU's regulators. So, on the face of it, the TCA aims to prohibit the UK's regulators from granting authorisations to UK air carriers unless they are controlled by interests based in the EEA+CH. For existing carriers, this is probably no problem.


But for new future carriers, perhaps based exclusively in the UK and controlled only by UK interests, it seems to make it impossible for them to obtain any authorisations from either EU or UK regulators. The net effect of this intention is that any EEA+CH air carrier may obtain authorisation from the UK regulators swiftly, but any future UK-only air carrier shall not obtain authorisation from either UK or EEA+CH regulators (AIRTRN.6.2(b)). This is probably intentional. The EU doesn't want the UK to succeed in any way shape or form. Nor does the EU want the UK to become a Trojan horse for, say, US-controlled interests to enter EECA without restriction. Fortunately, for the EU, the UK has a precedent of centuries of self-loathing to make its new-found enthusiasm for self-destruction via its Net Zero 2050 meme a credible excuse to accept a protectionist door being slammed in its face. At least in the short-term, for the sheer theatre of it.


Obvs, that's not the end of the story about the control of air carriers. AIRTRN.9 commits both parties to future negotiations, to commence within 12 months, to determine whether to liberalise the ownership and control rules to which AIRTRN.6 refer. Yet, AIRTRN.12 has both parties agreeing that they want to remove obstacles to air carriers' business. Given the UK's habit of self-destruction – its issue-illiterate use of lockdowns during 2020 are clear examples of “any self-harm justified by any idiotic excuse” – it seems that .9 and .12 are both fig leaves to cover continuing EU hegemony over UK regulatory governance.


In other respects, Part Two, Heading Two, Title I aspires for the status quo, with explicit reciprocity, with reliance on basic existing international rules. The outcome is substantially that of the UK never having been part of the ECAA at any time in the UK's history. AIRTRN.13 (commercial operations) covers ground handling operations, capital movements, leasing and intermodal transport (where an air carrier might use, say, road transport as part of its business) on basic international rules pari passu, and AIRTRN.14 handles fiscal matters similarly. AIRTRN.18 (aviation safety) and .19 (aviation security) both centre around international standards, effectively being a protocol between the two parties about how collaboratively to implement international standards between them (as if the protocol embedded within existing international standards are somehow insufficient: again, this smells like EU hegemony being imposed on a willingly subservient UK).


AIRTRN.23 (relationship to other agreements) maps the plumbing of regulation flows underpinning all of Title I:

  • First up, the TCA states that the TCA replaces all prior agreements, unless subsequent EU law replaces bits of the TCA (which, as a timeline, doesn't really make sense – why embed obsolete EU law in this TCA?).

  • Second up, neither the UK nor any EU member state can deviate from the TCA. This is bizarre clause in the TCA. In theory, EU members states can't deviate anyway, because they are signatories to the TOFU, and therefore cannot strike out independently of any matter reserved for the EU (including aviation airspace, regulated under the ECAA). How could an EU member state deviate from AIRTRN.23.2?

  • Third up, if the International Civil Aviation Organization thinks of a new rule, or if either UK or EU sign up to a multi-lateral agreement, then the two parties shall consult to update the TCA accordingly. This is another reference to the two parties committing to follow international regulations, irrespective of how implausible any alternative might be. Talk about covering bases!


AIRTRN.26 registers the TCA with the International Civil Aviation Organization, in accordance with Article 83 of the Convention on Intentional Civil Aviation, Chicago, 07Dec1944 plus annexes.


Comment:


Overall, the air transport title looks like an astonishing political climb-down by both parties. It seems that both parties have been forced to admit the hubris of their own rhetoric.


In substance, the parties are opting to revert to the same international rules that non-EU countries already adopt. The parties are also agreeing to follow international rules in the present and in the future. It's not as if they have much of a choice, if they still want their respective airspaces to be wired into foreign airspaces. There isn't much scope for re-inventing triangular wheels in the aviation regulation space.


Yet, the TCA reads like a heads-of-terms political agreement. The TCA says nothing about how it will achieve any of its lofty back-to-the-real-world objectives.


The devils in details have yet to come out to play. Ergo, the TCA is a very, very draft “agreement”. While the UK needs to erect its regulatory authorities to comply with the TCA, the EU will need to amend the ECAA to implement the TCA.




Part Two, Heading One, Title III, chapter 2: data flows and personal data protection


Chapter two comprises only two articles. The net effect of these two articles is vacuous, doing nothing more than kicking the can down the road for another three years.


The context of Title III (Digital Trade) is far wider than data protection, having the lofty objective of removing electronic barriers to trade, encompassing customs duties on e-supplies, e-signatories to execute lawfully-enforceable contracts, authentication and trust services, access to source code, consumer trust (possibly the closest to GDPR that Title III gets, at a stratospheric level only), open government data, regulatory co-operation and a broad definition of computer services.


Comment


The TCA has had little choice but to ignore the elephant in the room: the interruption of data flows caused by the GDPR border moving to sit in between the UK and the EU, GDPR's non-EU equivalents around the world, and the hole smashed into the EU-US Privacy Shield by Schrems II.


The Schrems II case destroyed the EU-US Privacy Shield, by revealing that the EU-US Privacy Shield could not replicate the enforceability of GDPR under American law. This implies that standard contractual clauses (“SCCs”) had no useful enforceability under American law. The root complaint of Schrems II is that American law prohibits the American data processor (or host) to tell the data subject that the data subject's personal data is being slurped by the US stasi state. This would be illegal under GDPR. So the EU-US Privacy Shield – including all contractual documents that rely upon the EU-US Privacy Shield – is insufficient to comply with EU-GDPR.


Yet, in spite of this huge hole blasted in the fabric of data protection regulation, countries are implementing their own GDPR equivalents. Brazil and California have both re-invented their particularly triangular GDPR wheels. The UK opted to photocopy the EU-GDPR and pretend that it is enforceable under UK law, to such an extent that the EU would accept its as some sort of mutual recognition or conformity assessment by proxy. Erm... nope.


Amidst such chaos, it is no surprise that part two, heading one, title III, chapter 2 is so vacuous. Kick that can.


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