27 March 2017

EPC: Brexit: how to manage the talks and the transition

Andrew Duff recommends the setting-up of a special Joint Transition Authority - a unique body, answerable to both parties - in order to oversee over a longer period the full completion of the Brexit process and the preparation of the next phase of Britain’s European partnership.

Striking a dissociation agreement

While nobody has any experience of using Article 50, the EU has concluded numerous treaties on the basis of Articles 217 and 218. An obvious, but over-looked precedent is the EU's recent association agreement with Ukraine, which offers a neat template for the British. If Mrs May finds the concept of association unpalatable, let's call it dissociation. Whereas the secession treaty will be negotiated mainly by the Commission, the political agreement on the future partnership will be achieved mainly by the European Council. The words defining the 'framework for the future relationship' should not be put directly into the Article 50 treaty but should appear only in the conclusions of a meeting of the European Council (to which the secession treaty can then refer). This manoeuvre should prevent the Article 50 treaty from being treated as a 'mixed agreement' that would then require national ratification by all 27 states. The definition of the future relationship must be agreed by the European Council as soon possible – even in December 2017 after the German elections – so that transitional arrangements can be discussed as part of the Article 50 process: it will be impossible to make a transition if Britain's final destination is unclear. [...]

 A Joint Transition Authority

The transition will be complicated, and needs careful oversight. At the moment, only a short transition (say, two or three years) is being envisaged. That timetable may prove to be over-optimistic. Deserving serious consideration is the option to set up a special body, answerable to both parties, to oversee over a longer period the full completion of the Brexit process. A Joint Transition Authority (JTA) would be charged with the job of managing the phasing-out of the UK's rights and obligations to the EU, and vice versa. The JTA would aim to settle the disputes that will inevitably arise during the period in which the Brexit deal is being implemented. Acting pragmatically, it could deal with unexpected difficulties and avoid a rush to costly and lengthy litigation in both the British and European courts. With a joint governing board and a light secretariat, the Authority would also advise, warn and report. The existence of the JTA would ensure that relations with Britain will not fall off the agenda of the EU 27 once the UK has left – a very real likelihood otherwise. The British government is to introduce a Great Repeal Bill to annul the European Communities Act 1972, as well as a number of other primary and secondary laws intended to keep, change or scrap the acquis communautaire. In order to avoid a dangerous legal vacuum, the Joint Transition Authority should aim to coordinate the phasing out of EU law applicable to the UK with its gradual replacement by home-grown British law and the rebuilding of the executive apparatus of the British state and its devolved administrations. As and when a future EU-UK treaty takes shape based on a free trade agreement, the Joint Transition Authority could be tasked with preparing its operation, including the phasing-in of the necessary institutional and regulatory features. In other words, the JTA could become the embryonic secretariat of a new EU-UK joint council, minimising regulatory divergence and unblocking obstacles to trade, as well as servicing political cooperation in the fields of internal and external security policy.

Legacy citizenship

Both sides put proper emphasis on the treatment of their citizens left somewhat adrift by Brexit. EU citizenship consists of a number of rights and the principles of reciprocity and non-discrimination which, after Brexit, will not miraculously become 'acquired' by those brave souls who stay on. Instead, in order to ensure at least some measure of continuity, a bundle of measures should be designed around the concept of legacy citizenship. The former rights of British nationals resident in the EU deprived of their EU citizenship could and should be turned into privileges consistent with those EU principles. Chief among such privileges must be the ability to vote in municipal and European Parliament elections: the EU 27 would do well to continue to extend the franchise to its British residents. And the UK, of course, must reciprocate the gesture for EU citizens resident in Britain, at least in so far as local elections were concerned. These privileges should also be extended to keeping the European Health Insurance Card and to sharing consular protection in third countries.

Follow the money

The media will concentrate on the budgetary settlement. Money is also a priority for the EU 27, Commission and European Parliament – not least because the UK contributes some 15% of the EU's annual budget revenue. Speculation about numbers from zero to 60bn EUR are meaningless until it is decided whether or not the UK should remain within the terms of the current multi-annual financial framework until the end of 2020. To minimise disruption and cost, it would be sensible to do so. A specific transitional arrangement for the financial regulation would be needed to accomplish this. There will be other costs the UK will be ready to absorb in order to smooth its transition out of the EU, as well as new costs it should be willing to pay by way of a deposit on the new partnership. Who ever said Brexit would be cheap? The EU wants Britain to pay what it owes and not a penny more. How much extra Britain agrees to contribute will depend on the quality and closeness of the future special relationship it seeks. In the end there will be an agreement on a global figure to be settled over a period of several years. Ample justification exists for almost any sum, but the justification must be tailored to satisfy the national parliaments of the 27 states that they are not being fleeced by the departing Brits. (What Westminster will say on the matter is up to Mrs May.) [...]

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