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The Common Travel Area and GATS Art. V

The Common Travel Area and GATS Art. V

Charlotte Sieber-Gasser (DCU Brexit Institute)

The Common Travel Area and Movement across Borders between Ireland and UK

As all of Europe is taking precautionary measures for the scenario of a No-Deal Brexit, let’s take a look at the Common Travel Area (CTA) and its ability to protect free movement of British and Irish citizens in the UK and in Ireland. On 8 May 2019, the governments of Ireland and UK signed a Memorandum of Understanding regarding the Common Travel Area and associated reciprocal rights and privileges. Among others, the two governments confirm the following in para. 8:

The CTA affords Irish citizens in the UK and British citizens in Ireland the right to work, including on a self-employed basis, without any requirement to obtain permission. The Participants are to continue to ensure that their national laws provide for such a right to work. It is acknowledged that the recognition of qualifications, including professional qualifications, is an essential facilitator of the right to work associated with the CTA. The Participants are committed to ensuring that within their respective jurisdictions, comprehensive measures continue to be in place to allow for the recognition of such qualifications, covering all relevant professions, in accordance with their national laws.

Until Brexit, what the CTA provides is covered already by the EU’s «free movement of persons» rights, privileges and obligations. After Brexit, changes to free movement within the territories of Ireland and UK would then, according to the Memorandum of Understanding, only apply to non-Irish and non-British EU-nationals (although, a recent report by BrexitLawNI raises the question whether the rights and privileges of the CTA would not need to be properly codified first).

The CTA, in consequence, has been referred to also as a way of ensuring frictionless cross-border movement of persons across the intra-island border between Ireland and Northern Ireland. For example, in the final Report of the Alternative Arrangements Commission, the CTA is portrayed as one possible avenue to ensure that people’s daily lives on both sides of the intra-island border will not be interrupted by Brexit (pp. 61-66).

The Common Travel Area and the General Agreement on Trade in Services (GATS)

This may, however, not be entirely true: When the UK leaves the EU – particularly in a No-Deal scenario – WTO terms apply at the border between Ireland and the UK. While this does not affect the movement of persons across the border for recreational purposes, it does affect movement across the border for business-purposes, due to – among others – GATS mode 4 supply of services, the temporary movement of service providers across borders. Reference to this can be found, for example, in the Guidance to providing services in Ireland after Brexit by the UK Government, where it says that UK service providers will be required to comply with GATS rules after Brexit (despite maintaining the CTA).

GATS is limited to the regulation of trade in services and therewith both permanent employment, and access to the employment market are excluded from the scope of GATS (see e.g. Johanna Jacobsson, 2015, GATS Mode 4 and Labour Mobility: The Significance of Employment Market Access). Thus, people living on one side of the border, but working on the basis of a permanent contract on the other side of the border, will not be affected by GATS rules. There indeed, the CTA may provide the legal basis for the protection of status quo.

GATS does, however, cover the temporary supply of services through presence of natural persons in the territory of another country, other than their home country. The presence of natural persons is often required for cross-border trade in business services, telecom and computer services, personal and cultural services, maintenance and repair services, and in construction services. According to relatively recent statistics published by the European Commission, among all members of the EU, Ireland exports the most «mode 4» services (25% of all Irish services exports). Unfortunately, the share of Irish «mode 4» services exports to the UK is not currently known (and vice versa).

In a No-Deal scenario GATS will trump the CTA, meaning that GATS rules will apply to all activities of persons in the territories of UK and Ireland qualifying as «mode 4 supply of services» (temporary movement of natural persons). According to the schedule of commitments of the EU, this may mean, for example, that administrative hurdles (special visa requirements, economic needs tests or quotas) apply to:

An Irish legal adviser living in Ireland meeting with a client in the UK/NI and discuss a case, particularly if: 1) he/she is self-employed, 2) he/she is working for his/her Irish employer for less than a year, 3) he/she has less than three years of professional experience in the sector.

A British veterinary living in Northern Ireland offering his/her services to farmers in Ireland, unless he/she qualifies as intra-corporate transferee, has been employed for at least one year and possesses “uncommon knowledge essential to the establishment’s service”.

An Irish hairdresser living in Ireland, travelling to UK/NI and attending to a customer there.

Of course domestic laws will further specify market access of service providers, but any market access provided in domestic laws applies unilaterally to the rest of the world. Were the UK, for instance, to grant access to hairdressers flying in and out of the UK for the provision of their services, such market access would apply to all countries, not just to Ireland. For more on this, see also Sam Lowe, 2018, Brexit and Services.

Exempting the Common Travel Area from GATS

But could movement of persons across borders between Ireland and the UK be exempted from GATS? For this, the CTA would need to qualify for one of the possible GATS exemptions. These are limited to listed exemptions, trade agreements (GATS Art. V), labour market agreements (GATS Art. Vbis), general exceptions (GATS Art. XIV), and security exceptions (GATS Art. XIV bis).

First of all, while the UK has waived the requirement of a work permit in all services sectors for citizens of Commonwealth countries with a grandparent born in the UK, neither Ireland nor UK have listed an exemption under the GATS for the CTA.

Second, with respect to cross-border movement of natural persons for the temporary provision of services, the CTA may currently constitute a form of Free Trade Agreement limited to services and a single mode of supply. However, such an agreement does not qualify for the Most-Favoured Nation exemption as provided in GATS Art. V, of the very simple reason that GATS Art. V:1 footnote 1 requires no a priori exclusion of any mode of supply (more about GATS Art. V, see Charlotte Sieber-Gasser, 2016, Developing Countries and Preferential Services Trade, Part II “Legal Regime for Preferential Services Trade”).

Third, the CTA may, however, indeed constitute a labour markets integration agreement in line with GATS Art. V bis. In order to qualify for the exemption from GATS, the CTA needs to:

  • establish full labour markets integration (right to free entry to the employment markets, measures concerning conditions of pay, employment and social benefits);
  • exempt citizens from requirements concerning residency and work permits, and;
  • be notified to the Council for Trade in Services of the WTO.

The CTA would only be the second agreement to be notified to the WTO pursuant to GATS Art. V bis, the first being the Common Nordic Labour Market Agreement in 1996. While in terms of scope, purpose and structure, the CTA appears to fulfill requirements set out in Art. V bis GATS, it may, however, indeed need to be codified first in order to be notified to the WTO. Particularly given that it is often referred to as an “administrative arrangement between the UK, Ireland and the Crown Dependencies”. It has to be taken into account in this context that such a labour markets integration agreement partially falls within the exclusive competence of the EU (Art. 207 TFEU).

The current status of British and Irish citizens under the CTA could also be protected in a future agreement with the EU which covers all modes of supply, has substantial sectoral coverage and provides for the elimination or absence of substantially all discrimination in trade in services. In a potential EU-UK schedule of commitments in services, the horizontal commitments in mode 4 supply of services (applying to all services sectors included in the schedule) could make reference to the status quo under the CTA and grant full market access and national treatment to Irish and British citizens in the territories of Ireland and the UK. Theoretically, the CTA status could even be extended to EU-residents, therewith preventing less-favourable treatment of EU-residents vis-à-vis Irish or British citizens in the territories of Ireland and of the UK.

Whether the EU would agree, however, to such differential treatment remains an entirely different question.

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