U.K. Said to Seek EFTA Inspiration for Brexit Dispute Mechanism

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Prime Minister Theresa May’s government will pitch a new mechanism this week to resolve post-Brexit disputes between the U.K. and the European Union, drawing inspiration from the court which oversees the European Free Trade Association.

Britain will make the proposal as the two sides struggle to find common ground over what role the European Court of Justice should have in British law after the divorce. Ending its jurisdiction is a red line for May, yet the EU wants it to continue to have some say in policing citizens’ rights and trade.

The topic is among the most controversial sticking points at the negotiating table ahead of a fresh round of Brexit talks next week. May is caught in a bind because conceding on the ECJ would mark a U-turn and draw complaints from those who campaigned to leave, while failing to find a solution would prompt the EU to delay the start of talks on a new trade deal.

A position paper to be published by the U.K. on Wednesday will look at the judicial body that presides over the the EU’s dealings with Iceland, Liechtenstein and Norway, albeit not as a model to replicate, according to two government officials familiar with the document.

One official said that May herself is keen on the idea of an alternative court even as it’s becoming increasingly clear that ECJ rulings will be binding for years to come. That is a problem since the notion that European judges will still hold sway over Britain is anathema to many who voted for Brexit last year.

Brexit Secretary David Davis wrote in the Sunday Times that “a new and unique solution” was required and that “our paper will examine a number of precedents. He also said that “we’re not being dogmatic in our approach.”

May’s election gamble stripped her of parliamentary majority so it remains to be seen how much wiggle room she has on the topic. The U.K. left EFTA to join the EU’s single market, which is policed by the ECJ and which Britain intends to quit.

Unlike the ECJ, the EFTA court’s decisions are not binding on member states in cases referred to it by national courts and only advisory. In an interview with The Times published on Monday, Carl Baudenbacher, president of the court, said there was a compelling case for Britain agreeing to “dock” with his body and allowing it to oversee its relationship with the EU.

Some Brexit supporters are unimpressed with the notion. Lawmaker Jacob Rees-Mogg told the newspaper that “the big difficulty is that the EFTA court takes its lead from the ECJ and while its rulings are technically advisory, in practice they take direct effect in the countries concerned. That would be unacceptable.”

The spat threatens to prevent EU governments from declaring “sufficient progress” has been made on the terms of separation, the trigger for talks to turn to a trade pact. Both sides had hoped to reach that milestone in October, but that timeframe is now in doubt.

Slovenian Prime Minister Miro Cerar told Monday’s Guardian newspaper that “the process will definitely take more time than we expected.” Alexander Winterstein, spokesman for the European Commission, said a “clear structure” is in place for negotiations and and “we have no time to lose.”

May’s spokeswoman Alison Donnelly said on Monday that “both sides need to demonstrate a dynamic and flexible approach,” a day after Davis again said talks over the split and future relationship should run in tandem.

While much has been made of the batch of position papers coming out, one official said that many of these are devoid of much substance, with most of the preparatory work being done behind the scenes. Two papers out Monday reiterated that Britain wanted the “freest and most frictionless trade possible” and sought to preserve existing rules on confidentiality.

The paper concerning “goods on the market” drew praise from British businesses concerned products will lose regulatory approval the day after Brexit even if they run off the same production line as those shipped on the day the U.K. departs.

“The U.K. government’s position on goods is a significant improvement upon the EU’s current proposal, whose narrow definition would create a severe cliff-edge hitting consumers on both sides of the Channel,” said John Foster, director of campaigns at the Confederation for British Industry.