May’s deal is a gift to the Spanish

There have been many issues raised about Theresa May’s withdrawal agreement, but one area has been, for the most part, overlooked: Gibraltar. While the protocol contained in the withdrawal agreement broadly respects the UK’s constitutional relationship with Gibraltar, it also carries with it the threat of complications.

There is the usual disclaimer that “this protocol is without prejudice to the respective legal positions of the UK and Spain on sovereignty and jurisdiction” (note the omission of control – something that Gibraltar’s chief minister, Fabian Picardo, also seems to have put on the backburner).

Gibraltar, for EU purposes, has always been included in the profile of the United Kingdom as a member state, so it is the responsibility of the UK government to sanction the type of relationship that Gibraltar has with the EU.

This part of the withdrawal agreement ensures that the terms of the divorce deal apply to Gibraltar and that the Rock is included in the transitional arrangements after 29 March 2019. And while Britain could pay the heavy price of £39bn for the privilege of having this transition period and the looming backstop arrangement, Gibraltar seems to have handed over its biggest negotiating card – the movement of cross-frontier workers from Spain entering Gibraltar – for the degradation of the control it has over its own affairs.

And this is just the first step in the Brexit process. Gibraltar could lose much more in the next phase of negotiations concerning the “future relationship”. These negotiations almost certainly will involve Madrid asking for more concessions from the British government.

Memoranda of understanding (MOU) accompany the Gibraltar protocol mentioned in the original 585-page long EU Withdrawal Agreement. These revolve around citizens’ rights, environmental matters, police and customs cooperation, and tobacco. With the exception of provisions on citizens’ rights, the protocol is limited to the duration of the implementation period.

There is also meant to be a tax agreement which mentions the much overdue admittance of the Madrid government that Gibraltar is a fully compliant tax jurisdiction and not a tax haven. But, the tax MOU has, so far, not been published.

The issue here isn’t the MOU, but rather how they will be implemented or the structures that will be put in place to make sure both parties fulfil their respective commitments.

To effectively address these issues, the protocol creates three Spanish-British committees which would report to a separate higher committee made up of UK and EU representatives. In this way, the EU would still oversee the cooperation between Spain and the UK.

Even though there will be both Gibraltarian representatives and authorities on some of the local and lower level committees, each committee will have “focal points” and those are very seldom Gibraltarian. The very presence of Spanish politicians or even Spanish authorities on committees that will discuss internal issues relating to Gibraltar’s borders, environment and tobacco industry seems unwarranted. It seems as farcical as having Argentinian politicians on committees discussing what the Falklands can or cannot do.

A case can be made if powers in this committee were equally split and no individual party cornered, but with this legally binding text, the UK will be obliged to follow the letter of the law as far as the European Union and Spain wish to push it. This means, even if local Gibraltarians wish to pursue a different course of action in future, for example deciding not to maintain the 32 per cent price differential in tobacco products, not only will they not be able to do so, but the UK government would be in a position in which it would have to impose these tobacco price mechanisms on Gibraltar.

As the agreement says: “the United Kingdom is ultimately responsible in international law for compliance with the Protocol, in the same way as the United Kingdom has always been ultimately responsible for Gibraltar’s compliance with European Union law.”

It is also noted in the agreement that “the United Kingdom shall ensure that a system of traceability and security measures relating to tobacco products that is equivalent to the requirements and standards of Union law is in force in Gibraltar by 30 June 2020.” This is perhaps conflating the issues of regulatory alignment with control (either way it’s a fine line), but surely it is up to the Gibraltarians to decide whether they’d like to implement the requirements and standards of the European Union post Brexit.

The EU, over the UK’s 46-year membership, has more often than not taken Spain’s side when it comes to a Gibraltar-Spain dispute. With the UK being a third-party country that sits on a committee, that trend is not likely to end – in fact, it could become even more frequent.

Fabian Picardo, meanwhile, has even gone to the extent of appearing on mainland UK TV stations and writing an article for the Telegraph to show his support of Theresa May’s deal. But, as already shown by the members of the opposition party on the Rock, that isn’t necessarily the view of the majority of Gibraltarians. Indeed, whatever both leaders say, this deal doesn’t work for the United Kingdom nor Gibraltar.

Throughout the years, some of the more notable Gibraltarian politicians and commentators have frequently said: “we will not even give an inch to Spain.” It’s a pity that, soon, this protocol may well do just that.

Written by Jonathan Jurado

Jonathan Jurado is a Master's student studying Business Analytics at ESADE Business School in Barcelona.