I. Introduction: An Uncertain Future? A Fresh Start?
On March 29, 2017, the United Kingdom began leaving the European Union by giving formal notice under Article 50 of the Treaty on European Union (the so-called Brexit).1 This has immersed the U.K. government and E.U. Institutions in negotiations to disentangle the United Kingdom from E.U. law by the end of March 2019 — barring any extension — and to devise a new legal framework for U.K.-E.U. trade.2 The United Kingdom will also need to adjust its trading arrangements with the rest of the world. In this context, public procurement regulation is broadly seen as an area where, “unshackle[d]” from E.U. law, the United Kingdom would be able to turn to a lighter-touch and more commercially oriented regulatory regime.3 This poses a unique set of questions and difficulties from an international trade law perspective. The United Kingdom is the first member state to leave the European Union’s single market and the ever-thicker network of international trade deals the European Union has entered into on behalf of its member states — which, crucially, includes the World Trade Organization (WTO) Agreement on Government Procurement (GPA). Therefore, Brexit raises significant challenges not only in the European dimension but also on a global scale.
Moreover, there are indications that the United Kingdom would use the opportunity of Brexit to attempt to create a particularly close trade relationship with the United States.4 Although recent changes in U.S. international trade policy may pose some questions on that trade strategy,5 this seems likely to remain in the negotiating agenda in the medium and long term. Regardless of timing, entering a U.S.-U.K. trade deal that covers procurement would also impact the U.K. regulation of these markets. Given the close relationships between the European Union and the United States, this creates a sort of tri- lemma. Any changes the United Kingdom may want to introduce to its procurement regulatory and enforcement architecture will need to comply with the likely demands of both the European Union and the United States. In that regard, it seems both timely and necessary to assess the extent to which Brexit actually creates an opportunity for significant regulatory reform.
The extent to which a real possibility for procurement reform in the United Kingdom exists crucially depends on the framework of the future E.U.-U.K. trading relationship.6 A closely knit E.U.-U.K. trade agreement covering procurement would likely result in the United Kingdom’s continued full compliance with E.U. rules. Nonetheless, this is not necessarily guaranteed, and barring specific requirements in future free trade agreements between the United Kingdom and the European Union or third countries, including the United States, the GPA seems to be the only regulatory constraint with which future U.K. public procurement reform needs to follow.7 However, the U.K. status and standing under the GPA is far from clear, and GPA members may see Brexit as an opportunity to obtain new concessions from both the United Kingdom and the European Union — both in terms of scope of coverage or regulatory conformity. Further, given the current trend of creating GPA plus procurement chapters in free trade agreements, such as the U.S.-Korea Free Trade Agreement (FTA), the GPA regulatory baseline will gain even more importance as a benchmark for any future reform of U.K. public procurement regulation, even beyond the strict scope of the GPA’s coverage.8 Given the diversity of GPA-compliant procurement systems, such as those used in the European Union and the United States,9 the extent to which the GPA imposes significant restrictions on U.K. public procurement reform is unclear.
In this context, this paper attempts to disentangle the multi-layered complexities of Brexit and to explore the issues that Brexit created in international public procurement regulation — both from the perspective of internal E.U. law-related issues and broader external issues of international trade regulation. It also aims to assess the GPA baseline regulatory requirements and to reflect on the impact these may have on post-Brexit U.K. public procurement reform. This paper considers the process of untangling U.K. procurement regulation from E.U. law as the first step in freeing the system from the constraints derived from the current E.U. regulatory baseline. It then assesses the possible opportunities and constraints derived from the U.K.
participation in the GPA — first assessing the U.K. current and post-Brexit position as a GPA party and then establishing a comparison between the European Union and the GPA regulatory baselines to identify the actual space for substantive regulatory reform of U.K. procurement law post-Brexit in a manner remaining compatible with international trade commitments. That section also identifies areas of U.K. procurement regulation and practice that could benefit from policy developments within both the E.U. and the GPA regulatory baselines, which we submit would be more productive than wasting policy-making and legislative efforts in any other areas. This paper concludes with some reflections on the limited scope for significant reform of the U.K. public procurement regime post-Brexit.