This Discussion Paper gives an outline of what will follow after the launch of Article 50 based on what we know so far (the content of Article 50, Theresa May’s speech at Lancaster House and the Brexit white paper), and discusses the points of ambiguity and contention that will need to be resolved.
The emasculation of the Westminster Parliament
One assumes that the bill will pass through all its parliamentary stages in both Houses in time for the prime minister to inform the European Council at its meeting on 9-10 March that she is at last invoking Article 50. Several Westminster parliamentarians have talked about amending the bill so as to lay down conditions on the parliamentary process and to stipulate some red lines on the content of the Brexit negotiations; but it is unlikely that they will succeed in constraining the government's freedom of action. What becomes clearer by the day is that once Parliament had recourse to the referendum, it effectively emasculated itself. Given the chance, the British people decided to leave the EU; the government has taken them at their word; and Parliament is side-lined.
Some MPs persist in the belief that if they are soft now on the matter of the government's commencement of the Article 50 talks, they can toughen up their stance later as the Brexit process nears its conclusion. This is a dangerous error. For one thing, the Remainers have no settled view amongst themselves about what would be a superior deal to the one outlined by the government. The fact is that if there is to be an Article 50 treaty in a couple of years' time it will be a compromise acceptable to both the UK and the EU. The withdrawal treaty itself will be fairly technical, and its negotiation will have been serious. If an agreement is reached, there will be no mass rejoicing but rather a general relief that a deal has been done at all, that collateral damage is limited and that a new partnership between the UK and the EU can at that stage begin to be engaged.
No turning back
Failure to conclude an Article 50 treaty would be to cause the EU treaties simply to cease to apply to the UK. Although the House of Commons has the constitutional right to a 'negative' vote that would reject the Article 50 treaty, it cannot by doing so revert to the status quo of continuing Britain's current membership of the EU. The government has now promised MPs a 'positive' vote on the final draft package, but the same rules apply. If Westminster were to reject the draft, the European Parliament will not assent to the treaty.
[...] Europe's tolerance for British particularism is already at breaking point. The referendum was for real. Article 50 gives both sides two years to conclude their negotiations. If a withdrawal agreement can be reached within the two years, it will be implemented. If it cannot be reached – or if having been reached in Brussels it is rejected at Westminster – Europe says goodbye and Britain slides off the cliff edge.
There has been much speculation among academics and lawyers – even involving current litigation in the Irish courts – about whether Article 50 once invoked could be revoked. None of the co-authors of Article 50 believe that not to be the case: there is nothing in the EU treaties to say otherwise. But whether or not the European Council and the European Parliament would accept a reversal of Brexit is another matter altogether and would depend entirely on the legal and political circumstances prevailing at the time. A change of mind late in the day, or a frivolous meander from the path of negotiation, or an attempt to subvert the triggering of Article 50 by a method known not to be in accordance with the UK's constitutional requirements, would surely be dismissed. The Article 50 two-year timetable can be extended by a unanimous decision of the European Council, and a short extension in order to expedite a proper completion of the negotiations – perhaps to wait for a court judgment – would be manageable. But EU27 will never permit an attempt by a recalcitrant UK to procrastinate, to delay for delay's sake. Nor will they be impressed by the threat of a second referendum on the outcome of the Article 50 negotiation: rather the contrary.
Pulling the trigger
Working on the assumption that Parliament at Westminster has no more to say on the matter, the European Council on 9 March will register the receipt of Theresa May's notification of her government's intention to withdraw from the Union. [...]
Her European Council colleagues will wish to quiz the prime minister on a number of points that both her speech and the white paper have left unclear. These points of ambiguity concern:
• the timing and sequencing of the negotiation of the Article 50 withdrawal agreement, on the one hand, and a putative new treaty between the UK and EU27, on the other;
• the nature of the transitional arrangements that will kick in the day Brexit happens and prevail until any new partnership treaty enters into force;
• the kind of customs arrangements the UK seeks once it leaves the EU's current customs union;
• the question of judicial oversight of the future trade and other relationships between the UK and the EU. By way of a response to the British government's recent statements, the European Council will prepare to issue guidelines as to how it intends the proceedings to unfurl. These guidelines will take the form of a lengthy annex to the conclusions of an extra meeting of the European Council. [...] A possible date for the special meeting of the European Council (also to bid farewell to President Hollande) is 20-21 April.
The guidelines are bound to reiterate the principles first enumerated in the European Council's statement of 29 June 2016. The UK will be welcomed as a prospective "close partner" of the EU; any agreement will be "based on a balance of rights and obligations"; "access to the single market requires the acceptance of all four freedoms". Expect a reference to be made to the hitherto rather neglected Article 8 TEU [...]
As laid down in Article 218(3) TFEU, the European Council's guidelines will lead the Commission to make recommendations to the General Affairs Council (GAC), which will then take the formal decision to open the negotiations with the UK. That decision will not be taken before there is a new French minister of Europe. (We are now in June.) True to its word, the Council will establish a special committee to monitor the progress of the Article 50 talks, and a representative of a Council working party, chaired by Belgian mandarin Didier Seeuws, will be present at all the meetings between the Commission and the British. The European Council will review the progress of the negotiations at each of its meetings, issuing revised guidelines as appropriate; and the GAC can be expected to address further operational directives to the Commission from time to time. It will be up to the Commission to propose to the Council that an agreement can be concluded (Article 218(5)).
The Council does not need unanimity to decide to approve the agreement but can act, after obtaining the consent of the European Parliament, by a special qualified majority of 20 out of the 27 states. It is not to be excluded that a special body will have to be set up to monitor the application of the agreement, to smooth the operation of the divorce settlement and to settle lingering disputes – for instance, over legacy budgetary issues – for a certain, probably ill-defined transitional period.
For all their interest in the process, the European Council and Council will be right to give Michel Barnier, the Commission's chief negotiator, ample room to negotiate. They will be keen to avoid a situation in which different vested interests of the 27 states are accentuated to an extent that would allow the UK to exploit those differences. [...]
Including the European Parliament
Both Council and Commission will also be keen to manage the participation in the talks of the European Parliament's Brexit negotiator, Guy Verhofstadt. While some member states are keen to limit its involvement, and as Mr Verhofstadt will no doubt observe, the engagement of the European Parliament is essential in at least three important respects:
• the European Parliament has the right under Article 50 to grant or withhold consent to the final Brexit treaty;
• MEPs have the right to be immediately and fully informed at all stages of the procedures (Article 218(10)), as supplemented by an inter-institutional agreement between Commission and Parliament and elaborated further by the practical precedent of Parliament's inclusion in other international negotiations;
• Parliament also has the right to dispatch the final agreement to the European Court of Justice in order to verify its compatibility with the EU treaties (Article 218(11)).
In their engagement with the process, MEPs can be expected to evince special interest in the plight of EU citizens left stranded in the UK after Brexit and in the legacy rights of British nationals resident in the EU, as well as in the budgetary settlement. [...]
Mr Barnier's dilemma
There is already tension between London and Brussels on the matter of the timing and sequencing of the negotiations. As far as the EU is concerned, Mr Barnier's mandate is to disentangle the UK from its rights and obligations as an EU member state. His first job will be to get a methodology for the talks agreed: British theatrics will go down very badly. The topics he has to address are quite straightforward, if complex. They include dismantling the British end of the EU budget; relocating EU agencies out of the UK; providing new arrangements for border crossings (particularly in Ulster); dealing with British personnel in the EU institutions, including pensions; and ensuring the interests of EU citizens resident in the UK.
[...]Undoubtedly, the most difficult issue will be money. The British need to be persuaded to pay all that they owe the EU – but not a penny more. Estimates touted in the press suggest that the UK will owe between EUR 40bn and EUR 60bn. The UK is contracted for the whole of the EU's current multi-annual financial framework (MFF) which lasts for the seven years from 2014. If Britain wishes to opt out of the MFF before time, there will be a penalty to pay. It makes more sense, both financially and administratively, for it to be agreed that the UK should continue within the EU budget in terms both of revenue and expenditure until the end of 2020. [...]
At any rate, the Commission would be wise not to provoke the British with the abrupt presentation of a single long and large invoice, but to prepare to schedule the settlement of accounts over several, perhaps many years. And at the same time the Commission will need to manage the short-term impact of the departure of a large net contributor to the EU budget, a blow which is bound to open up new tensions between the remaining net contributors and net recipients in the run-up to the negotiation of the next MFF. [...]
Making the transition
It is clear that there will be two treaties: the first is the Article 50 withdrawal agreement; the second is to settle the long-term relationship, which Mrs May describes as a comprehensive free trade agreement plus political cooperation.
The UK government, however, appears to want a third treaty by way of transition towards the new situation. London prefers a separate, temporary agreement in order to bridge the gap between the actual date of Brexit – say, April Fools' Day 2019 – and the entry into force, possibly some years later, of the new permanent treaty. One problem is that such a transitional treaty would be classed under EU law as a 'mixed agreement' which, unlike the Article 50 withdrawal agreement but just like the final treaty, would require national ratification by all 27 EU states. A transitional treaty would be very difficult to negotiate because it would effectively pre-empt decisions on the final 'new partnership' before the detailed content of the future free trade agreement were known.
As far as the Commission is concerned, transitional measures will certainly be needed to wind down the UK's rights and obligations, sector by sector, according to various but existing legal bases. But in its view this exercise can best be undertaken by EU secondary legislation that will simply adjust the EU's common policies and spending programmes, including the financial regulation, to the EU's new, post-Brexit situation.
Mr Davis' 'Great Repeal Bill'
Such a phasing-out at the EU level should be crafted to coincide with the workings at Westminster of the 'Great Repeal Bill' and the abolition of the European Communities Act 1972 which gave effect to EU law within the UK. Certainly, it is in the interests of both parties to the negotiation to avoid a massive legal black hole for business and public administration at the moment of formal Brexit.
David Davis, the UK Brexit minister, is optimistic that the Great Repeal Bill will allow the UK ample time to sift and fillet what of the corpus of EU law it wishes to keep, amend or ditch. His optimism may be misplaced: the legal effect of EU regulations and directives if orphaned from the executive, legislative and judicial institutions which spawned them will be dubious at best and jeopardised at worst. Once bereft of their parentage, EU laws will lose the primacy they formerly enjoyed. Moreover, much of EU law has cross-border ramifications and is realised by reciprocal obligations in other member states: such reciprocity will no longer apply once the UK leaves the EU. [...]
'New partnership' versus 'special relationship' The European Council's guidelines are being written in full cognisance of this early divergence of view between London and Brussels about the nature and purpose of the transitional measures. The EU will have to state categorically that, while there can be informal talks about Britain's future place in Europe in parallel with the start of the Article 50 negotiations, nothing for the future will be agreed by the EU, even in general terms, until such time as the Article 50 talks have progressed to a point where the British are seen to be committed wholeheartedly to their successful conclusion.
[...]it is not enough for the UK to claim that its harmonisation with the acquis communautaire on 1 April 2019 is its passport to a future relationship with the EU: in addition it will need to put in place a new regulatory framework to ensure continued technical equivalence at official level, a ministerial and parliamentary apparatus to facilitate political collaboration, and a form of judicial tribunal to arbitrate disputes. As things stand, it is difficult to avoid the impression that the British have forgotten that it is they who have decided to leave the EU, and not the other way around. [...]
In riposte, the European Council guidelines need to be as blunt. Whatever its present frustrations with the British, the EU is obliged by treaty to develop a new 'special relationship' with the UK in a spirit of 'good neighbourliness'. For the EU, which likes to do things in tidy packages, the fact that it has recently designed an Association Agreement with Ukraine, provides a template which could be adapted to suit the British case. This is clearly a more difficult concept for Mrs May, who told her Lancaster House audience that she did not want Britain to be left "half-in, half-out" of the EU, as an associate member. "We do not seek to hold on to bits of membership as we leave", she added. (Although, of course, she does.)
Liberation from foreign jurisdiction
The British government must know that to strike a formal economic and security relationship with the EU requires any third country to respect the EU's constitutional order. Technical engagement between the UK and the EU will be necessary to ensure regulatory equivalence without which free trade is impossible. Political interaction is necessary to maintain effective cooperation in internal and external security matters. While the UK after Brexit will have escaped the jurisdiction of the European Court of Justice, it will not be able to evade its jurisprudence. This last seems to present a particular difficulty for Prime Minister May. She would be wise as soon as possible to demonstrate that she no longer suffers from what one British official calls the 'opt-out-itis' that afflicted her term as Home Secretary. She should drop her evident strongly held antipathy towards the European Court. [...]
Fond farewell
We have already argued that the Article 50 negotiations will not and cannot succeed unless the framework of Britain's future relationship becomes more clearly articulated. It is part of the job of Michel Barnier to 6 nudge the British towards gradually defining the exact location of their country's future landing zone. If the UK makes concessions on the institutional side, an Association Agreement would do the trick. An Association Agreement is not associate membership of the EU. Nor does an Association Agreement presage future re-entry to the Union as a full member state.
The British government's white paper adds very little of substance to the prime minister's earlier speech. It barely conceals the deep uncertainty which lies at the heart of the government's high-risk Brexit strategy. [...]
In contrast to the amateurishness of the British, the EU side looks highly professional. The imminent guidelines of the European Council must work hard to install some semblance of dignity into the business of Brexit. The goal must be to expedite the departure of the British without wrecking the rest of Europe.
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