Regulatory Autonomy after EU Membership: Alignment, Divergence and the Discipline of Law

The United Kingdom withdrew from the European Union on 31 January 2020 and immediately entered into a period of ‘transition’. With the EU acquis continuing to apply to the UK during this period, regulatory alignment with the EU is maintained until transition ends. However, this ‘shadow membership’ is not an intimation of the desire of the UK to maintain alignment following transition. Indeed, the UK has stipulated that continuing alignment is incompatible with its direction of travel out of the EU. Rather, in its desire to protect and enhance its ‘regulatory autonomy’, the UK is set to ditch the discipline on its autonomy experienced during membership – a ‘free movement’ discipline – in favour of a looser ‘free trade’ discipline. In response the EU has asserted the need to protect its own autonomy by demanding that the UK commit to ‘level playing field’ requirements aimed at preventing the EU’s balance of market liberalism and regulation and regulatory competition and neutrality from being eroded. The aim of this article is to evaluate whether the ambition to agree a comprehensive economic partnership is compatible with EU and UK attempts to protect their regulatory autonomy.

Brexit and the Future of <scp>UK</scp> Capitalism

The intrusive effects of the WTO on Members regulatory freedom have been a growing concern since the establishment of the WTO Dispute Settlement System (DSS). An assessment of the WTO case law exposes that the Appellate Body (AB) has introduced some elements within the&lt;br /&gt;necessity test under GATT (General Agreement on Tariffs and Trade) article XX which do not find support in the text of the agreement and are potentially invasive of countries regulatory autonomy. This paper examines the evolution of the WTO case law in relation to the necessity concept within GATT 1994. Finally, an adjustment in the application of the necessity test to make it more consistent with the GATT text and to achieve greater balance between free trade and WTO members’ regulatory autonomy is suggested.

Although international trade and climate change regimes are two different fields of international law, they are closely interrelated. In particular, certain domestic environmental policies adopted by States may run afoul of WTO law, thereby having adverse effects on free trade. It has been claimed by critics that non-discrimination principles and subsidies regulations of WTO law constrain its Members’ ability to take certain unilateral actions aimed at climate change mitigation. According to other commentators, despite the existence of potential conflicts between UNFCCC and WTO regime, there are still synergies which can be developed to bring a greater coherence, and WTO’s multilateral framework can serve as a vehicle to facilitate targets of the Paris Agreement. This paper argues that although sustainable development is recognized by WTO regime and it leaves some scope for climate change actions, its current legal framework does not provide sufficient space for member’s regulatory autonomy in order to take national regulatory policiesAlthough international trade and climate change regimes are two different fields of international law, they are closely interrelated. In particular, certain domestic environmental policies adopted by States may run afoul of WTO law, thereby having adverse effects on free trade. It has been claimed by critics that non-discrimination principles and subsidies regulations of WTO law constrain its Members’ ability to take certain unilateral actions aimed at climate change mitigation. According to other commentators, despite the existence of potential conflicts between UNFCCC and WTO regime, there are still synergies which can be developed to bring a greater coherence, and WTO’s multilateral framework can serve as a vehicle to facilitate targets of the Paris Agreement. This paper argues that although sustainable development is recognized by WTO regime and it leaves some scope for climate change actions, its current legal framework does not provide sufficient space for member’s regulatory autonomy in order to take national regulatory policies

At the occasion of honoring the career of prof. Laurence W. Gormley - celebrated mentor and friend - this chapter asks one simple question: what does it mean to interpret the free movement of goods, persons, services or capital under EU law reasonably? Reasonableness takes center stage – both explicitly and implicitly – in the European Court of Justice (ECJ)’s jurisprudence on the four freedoms of the EU internal market. For all doctrinal attempts to find a grand unified theory of EU internal market law, deducing ever more principles from the expanding body of case law, the ECJ has never succumbed to calls for settling these questions once and for all, stoically persisting in pragmatism and judicial minimalism. Taking a bird’s eye perspective, perhaps the case law can be roughly summarized as follows. First, reasonable measures of the Member States are compatible with EU internal market law. Second, direct and indirect discrimination is usually unreasonable. Third, truly non-discriminatory barriers to free movement are usually reasonable, but sometimes they are not. Fourth, what is ‘reasonable’ and ‘unreasonable’ is ultimately for the Court to decide. If reasonableness is central to EU internal market law, the Court’s seminal Dassonville judgment seems to contain right about everything one needs to know. However, since reasonableness is in the eye of the beholder, and it is unclear what a ‘reasonable’ approach to the legal rules entails, the guiding function of EU law would benefit from some further clarification. At the same time, the EU legal system’s relative youth entails that the substantive content of EU law is at an early stage of development, and the meaning of autonomous EU concepts is only developing as appropriate cases arise. Consequently, it is up to the ECJ to exercise good judgement in individual judgments. Four possible sources of reasonableness are identified: the notion of ‘regulatory autonomy’ (II), the definition of a trade barrier (III), the burden and standard of proof (IV) and the notion of ‘holistic interpretation’ (V).

At the occasion of honoring the career of prof. Laurence W. Gormley - celebrated mentor and friend - this chapter asks one simple question: what does it mean to interpret the free movement of goods, persons, services or capital under EU law reasonably? Reasonableness takes center stage – both explicitly and implicitly – in the European Court of Justice (ECJ)’s jurisprudence on the four freedoms of the EU internal market. For all doctrinal attempts to find a grand unified theory of EU internal market law, deducing ever more principles from the expanding body of case law, the ECJ has never succumbed to calls for settling these questions once and for all, stoically persisting in pragmatism and judicial minimalism. Taking a bird’s eye perspective, perhaps the case law can be roughly summarized as follows. First, reasonable measures of the Member States are compatible with EU internal market law. Second, direct and indirect discrimination is usually unreasonable. Third, truly non-discriminatory barriers to free movement are usually reasonable, but sometimes they are not. Fourth, what is ‘reasonable’ and ‘unreasonable’ is ultimately for the Court to decide. If reasonableness is central to EU internal market law, the Court’s seminal Dassonville judgment seems to contain right about everything one needs to know. However, since reasonableness is in the eye of the beholder, and it is unclear what a ‘reasonable’ approach to the legal rules entails, the guiding function of EU law would benefit from some further clarification. At the same time, the EU legal system’s relative youth entails that the substantive content of EU law is at an early stage of development, and the meaning of autonomous EU concepts is only developing as appropriate cases arise. Consequently, it is up to the ECJ to exercise good judgement in individual judgments. Four possible sources of reasonableness are identified: the notion of ‘regulatory autonomy’ (II), the definition of a trade barrier (III), the burden and standard of proof (IV) and the notion of ‘holistic interpretation’ (V).

Scotland is the first jurisdiction in the world to introduce a minimum price per unit of alcohol to reduce consumption. The relevant industry did not hesitate to challenge this new alcohol control policy before courts. The ensuing judgment contains a wealth of insights stemming from regulatory autonomy to proportionality review. What is the role of a national court in the review of national measures restricting free movement? In particular, how should it review the proportionality of those measures when adopted on public health grounds, and on the basis of what evidence? What is the burden of proof that the relevant Member State must discharge? Those are essentially the questions referred by a Scottish court to the Court of Justice when called upon to determine the compatibility with EU law of Minimum Unit Prices for alcohol introduced by the Scottish Government. Although rather recurrent in the Court’s free movement case law, the question of the standard of review, and corresponding burden of proof epitomises the struggle currently faced by national courts in striking the right balance between the proper functioning of the market and due recognition and protection of national regulatory autonomy. As such, this preliminary reference offered an opportunity to address “the information gap on what the Court of Justice expects defendant States to establish” in order to justify their measures under the proportionality stages of free movement analysis. But there is more. This case also raises deeper epistemic and methodological questions faced by any court of law when asked to review the proportionality, and in particular the necessity, of an individual policy intervention that belongs to a wider ‘political strategy’. Indeed, those strategies – as exemplified in the present case by the Scottish policy designed to combat the devastating effects of alcohol – generally entail the enactment of a full ‘regulatory mix’ of policy interventions. In those circumstances, how can we pinpoint the effect of a given policy option when it is part of a set of measures? How can we distinguish the effect, in terms of health gains deriving from a drop in alcohol consumption, to be ascribed to the introduction of MUP when such a measure coexists with other measures (more than 40 in Scotland) that have been introduced? And what when the contested measure has never been tested before? While this judgment confirms the gradual empirical turn made by the Court in its own review of the proportionality of national restrictive measures, it also provides some pragmatic guidance on how national courts may realistically engage in that review. Given the growing number of Member States ready to experiment with new policies aimed at tackling inter alia lifestyle risk factors, such as tobacco use, harmful consumption of alcohol and unhealthy diets, this appears as welcome development. Ultimately, the ensuing number of national restrictive measures of trade enacted on public health grounds, such as the UK standardised packaging for cigarettes, its sugar tax or the Hungarian ‘fat tax’, is set to put to test the Court’s approach towards both the qualification of those measures as restrictions and their justification under EU law.

This article examines the critical role of judicial institutions in promoting and preserving free trade, with particular emphasis on inter-state trade disputes. Through analysis of landmark cases and jurisprudential trends across diverse jurisdictions, the article demonstrates how courts function as institutional safeguards against protectionism while balancing competing values of economic integration and regulatory autonomy.[3] The judiciary's multifaceted contributions include dismantling trade barriers, harmonizing regulatory frameworks, establishing predictable legal environments, and enhancing the legitimacy of free trade regimes.[4] Drawing on comparative perspectives from federal systems, regional trade blocs, and international tribunals, the article illuminates the dynamic interplay between judicial reasoning and economic policy.[5] While acknowledging the substantive challenges facing judicial actors—including institutional capacity constraints, conceptual limitations, and political pressures—the analysis suggests that courts remain essential, if sometimes imperfect, guardians of open markets.[6] The article concludes that effective judicial engagement with trade disputes requires both principled legal reasoning and contextual sensitivity to the complex political economy within which free trade operates.[7] [1] Schoolar in LLM Corporate Law [2] Assistant Professor, ICFAI Law School, The ICFAI University, Dehradun [3] See, e.g., John H. Jackson, "The Role of the Judiciary in the WTO Legal Order," 1(1) J. Int'l Econ. L. 1 (1998). [4] Peter van den Bossche &amp; Werner Zdouc, The Law, and Policy of the World Trade Organization (4th ed., Cambridge University Press, 2017), at 101. [5] R.C. Batra, "Judicial Activism in Economic Policy: An Analysis of Trade Dispute Resolution," 12 Ind. J. Const. L. 45 (2015). [6] Alec Stone Sweet, "Judicialization and the Construction of Governance," 32 Comp. Pol. Stud. 147 (1999). [7] Ernst-Ulrich Petersmann, "Multilevel Governance and Judicial Protection of Free Trade," 24 Eur. J. Int'l L. 597 (2013).

One of the most important and difficult issues in international trade is the relationship between international trade liberalization and domestic regulatory autonomy. This issue has been addressed in a variety of ways in the goods sector, and is still being worked out according to a dynamic process of substantive and institutional change. While regulatory autonomy is needed to allow local regulation to respond to local conditions, there are times when regulatory autonomy is abused as concealed protectionism, or is not sufficiently motivated to provide efficient regulation. While transparency can help to reduce concealed protectionism, it cannot alone eliminate the more persistent and the more deeply embedded inefficiencies. In relation to this tension between trade liberalization and domestic regulatory autonomy, services trade is at least comparable to goods trade. Of course, there are significant differences between goods and services trade, and among services trade sectors, but there are sufficient similarities to make it worthwhile to study the approaches to domestic regulatory autonomy in goods in connection with discussions of intensified approaches to domestic regulatory autonomy in services. Under the SPS Agreement, the TBT Agreement, and the GATT, regulatory autonomy is constrained. This paper compares these three sources of WTO law relating to goods, and compares them to the GATS, with the purpose of advancing an array of options for services negotiators, and of suggesting how negotiators might discriminate among these options. There seem to be no general, or horizontal, reasons to treat services regulation, as a whole, differently from goods regulation. It may be that certain areas of services regulation merit special treatment of one kind or another. For example, the fact that much of financial regulation takes the form of institutional regulation accentuates the kind of jurisdictional problem associated with the product-process distinction in the goods field. That is, the institution offering cross-border banking services may be located (at least in formal terms) in Luxembourg, while it offers services in the United Kingdom. While trade may be facilitated by a regime of mutual recognition (which in fact exists in the European Communities), and while it may seem natural to allow a Luxembourg bank to be regulated by Luxembourg, there is the possibility for adverse externalization (e.g., BCCI). There are also possibilities for races to the bottom, accentuated by possibilities for externalization. Therefore, it seems worthwhile to evaluate the range of disciplines offered by the SPS Agreement, the TBT Agreement and the GATT, for horizontal adoption in the field of services. This can initially be accomplished in selective sectors, on a trial basis, as in the field of accountancy. Where standards like necessity or proportionality are to be used, it would be wise to use consistent language, unless a different meaning is desired. However, in this field, there seems little reason to use different formulations for the same concept in different sectors. This would appear to apply to areas like discrimination, necessity, proportionality, performance regulation rather than design regulation, requirements of recognition, reference to international standards and other more general disciplines. More specific rules, such as harmonization of regulation, either alone or as a prerequisite for specified types of recognition, obviously must be accomplished on a sectoral, or even an issue by issue, basis.

Tension between the pursuit of trade liberalization and the protection and exercise of national regulatory autonomy is an issue that has arisen in both the European Union (EU) and the World Trade Organization (WTO). While both legal orders provide for exceptions to the fundamental rules concerning free movement and access to markets, the interpretation and application of these exceptions represent a challenge. The fundamental question is how to distinguish between unlawful barriers to trade and legitimate national regulation. This paper presents an analysis of the approaches applied to this question by the EU and WTO, in the areas of free movement of goods and services, from a comparative perspective. It explores, in particular, the implications of the market access – non-discrimination dichotomy, and focuses upon the role of ‘proportionality’ review in each legal order.

The preliminary agreement reached by the UK with the EU in December 2017 has clarified that a “hard” Brexit will most likely be avoided. Negotiations on post-Brexit relations will start early 2018 and a transition period of two years following the UK exit form the EU at the end of March 2019 will maintain the UK in the EU Single Market and Custom Union. The nature of the ‘close partnership’ to be maintained thereafter between the two parties is however still to be elaborated since the UK has signaled that it does not intend to remain part of either, while maintaining a ‘regulatory alignment’ such as to avoid reestablishing of a border within Ireland. At the same time, the UK intends to be able to freely negotiate free trade agreements (FTAs) with other countries. Establishing a trade regime ‘as frictionless as possible’ as aimed at by the UK appears therefore problematic. The article discusses first the features of a possible EU-UK post-Brexit FTA, and of reciprocal trade relations in the light of World Trade Organization (WTO) rules. The Frontier Traffic exception of General Agreement on Tariffs and Trade (GATT) Article XXIV.3 could be a basis for avoiding reestablishing a hard border between the Republic of Ireland and Northern Ireland, as both parties aim at, by establishing a special free trade regime between the two parts of the island. As to the existing trade and economic cooperation agreements of the EU with third countries, of which the UK benefits as a member of the Union, their political and economic context and the principles of state succession to treaties speak against the possibility of the UK remaining a party, even if it so wished. The UK exit from the EU may even justify a non-EU party asking for renegotiation if a fundamental change in the trade balance would result therefrom. As to UK’s relations with other WTO members, the UK will retain its status as a full ‘original’ member of the WTO. Its schedule of concessions will be initially that of the EU in place at the date of Brexit. A delicate issue is represented however by the apportionment between the EU and the UK of EU tariff-rate quotas for agricultural products, which will imply negotiations with third countries beneficiaries. Finally, the UK will be able after Brexit to freely negotiate FTAs with any WTO member, notably with the USA. If such agreements will however contain terms not aligned with the EU custom regime and its internal market standards, the UK will face obstacles in accessing the EU market. The UK will thus be faced with difficult trade-offs, considering that the EU market absorbs about 45% of the UK’s goods export, not to speak of its importance for the UK’s financial and other services.

Withdrawal from the EU must mean regulatory autonomy for the United Kingdom – sovereignty over its regulations. This reflects the democratic mandate of the 2016 referendum and the 2017 manifesto commitments of the Conservative and Labour Parties, and will propel growth and competition in the economy. It is also necessary for the UK to be able to sign advanced trade agreements with countries around the world. The United Kingdom has a unique opportunity to use withdrawal from the EU to grow its economy and become considerably more productive. It is vital that nothing is done to take these benefits off the table. But for pro-competitive regulation, regulatory autonomy is vital. In her Lancaster House speech in 2017, the Prime Minister outlined that Brexit would mean legal independence through an end to European Court of Justice jurisdiction in the UK, and that the UK must be free to execute an independent trade policy, striking agreements with countries outside the EU, outside the Customs Union’s Common External Tariff. In her speech at the Mansion House in March 2018, she stated that this meant our regulations would ‘achieve the same outcomes’ as EU law, but need not be identical. To deliver an independent trade policy and substantially more prosperous economy, the UK must have the ability to change its regulatory system from the EU’s acquis when it seeks to do so, and when beneficial for trade agreements. A 30% reduction in regulatory distortions between key trading partners by 2034 could mean GDP up to 7.25% higher than it would otherwise have been. The UK must be able to deliver the following five points: 1) Autonomy for the UK to make its own regulation; 2) Autonomy for the UK to set its own standards; 3) Autonomy for a UK system of conformity assessment; 4) Unilateral recognition by the UK of EU regulations, standards, and its conformity assessment system; 5) Seek recognition by the EU of the UK’s regulations, standards, and its conformity assessment system

This article addresses how a once influential but now obscure jurist addressed a potential paradox in liberal thought—between democratic control over borders and transnational rights—as it arose in the mid-nineteenth-century, amid advocacy against authoritarianism and for free trade and movement, on the one hand, and the increasing calling into question of natural law theories that may have best facilitated free movement, on the other. While scholarship has increasingly shown how the boundaries between periods of natural law and positivist hegemony are difficult to distinguish, specific tensions in the mid-nineteenth-century called for an approach that preserved free movement in light of the growing appeal of empiricism and state sovereignty. In this context, August Wilhelm Heffter proposed that states were bound by higher law as a consequence of their free decision to enter international communities: these communities’ purpose, he wrote, bred customary laws facilitating interstate interaction. Heffter’s approximation of “natural” law in a more positivist context and his use of the period’s “customary” logic helps account for his influence not only in periods of free trade and movement’s ascendancy but also the survival of forms of his thought into periods of sovereigntist reaction against them. It therefore holds potential to address what scholarship has termed today’s “liberal paradox” between democracy and migration better than approaches that emphasize a more complete return to natural law.

The paper examines Ukraine’s potential accession to the European Union, particularly emphasizing the legal adjustments and institutional reforms necessary to fulfill the EU membership requirements. It comprehensively reviews the political, economic, and legal commitments stemming from the Copenhagen criteria, focusing on integrating the EU acquis communautaire into Ukraine’s domestic legal framework. The analysis underscores the critical importance of systemic reforms in the judiciary, anti-corruption measures, human rights safeguards, and economic governance as essential components for Ukraine’s successful integration into the EU. This article examines the key stages of Ukraine’s EU integration journey following the official granting of candidate status in June 2022. It evaluates the recommendations of the European Commission regarding reform priorities and assesses Ukraine’s progress in legislative approximation, judicial independence, and regulatory alignment. The article also identifies persistent challenges, such as ensuring the effective implementation of reforms, enhancing institutional capacity, and maintaining political will undergoing military aggression. Special emphasis is placed on the international dimension of Ukraine’s integration process, including the geopolitical context of russia’s invasion, the evolving attitudes of EU member states, and the critical support of international partners. Strategic directions for accelerating accession are outlined, including adopting key legal instruments and implementing EU-aligned roadmaps in the rule of law, public administration, and democratic institutions. Ultimately, the article argues that while Ukraine has made significant strides toward EU membership, the success of its integration will depend on sustained reform efforts, institutional resilience, and continued engagement with EU mechanisms. Keywords: European integration, Ukraine’s membership in the EU, legal requirements, European standards, reforms, EU acquis, rule of law, economic integration, anti-corruption policy, judicial reform, democratic institutions, prospects for EU enlargement.

PRINCIPLES OF LIBERATION AND LIBERALISATION&#160;: FROM OPENING MARKETS TO ADAPTING TO THE CONDITIONS OF GLOBAL COMPETITION. THE EXAMPLE OF THE EU The paper is concerned with the process and means of opening territorial markets to global competition, and with the effects such opening has on the internal organisation of national markets. To this effect it first discusses the principles of opening up markets, such as free trade rules, the recognition of foreign product standards (principle of the country of origin), the suppression of extra costs on imports, and the principle of mutuality of market opening as way to have foreign competition accepted internally. Finally, always taking the EU as an example, the paper stresses the need for generally accepted mechanisms of dispute settlement. In a second part the paper examines the effects of market opening on the internal organisation of national markets, in particular the problems of reverse discrimination of national products, and possible reactions&#160;: admission of limited exceptions to free trade so as to save national sovereignty, authority and interests, and harmonisation, either de facto by regulatory competition and the ensuing adaptation of national rules, or de iure by virtue of supranational legislation. By way of conclusion the author suggests some methods of containing the development of national divergences in market regulation.