As anticipated, on this day, March 29th, 2017 British Prime Minister Theresa May has taken the historical step of formally notifying the European Council of the United Kingdom (UK)’s intention to withdraw from the European Union (EU), thus formally triggering the procedure set up in article 50 of the Treaty on the EU (TEU).
This notification implements the legal consequences of the results of the referendum held in the UK on 23 June 2016, where 52% of voters expressed their willingness to see the UK leave the EU. It also ends a period of uncertainty about the UK’s constitutional requirements regarding this decision.
The implementation of article 50 TEU is unprecedented, and the way ahead raises many unanswered questions. It must be noted that while this will be a process with a very high political voltage (and both parties must play politics all along), it is a process where every single step must be very solid in legal grounds. In other words: Brexit negotiations can only succed with a series of difficult political decisions on both sides, but those decisions can only be adopted within the framework and the limits of very complex legal background.
A) What’s on the negotiation table? Two agreements Article 50 TEU provides for the mechanisms regarding the exit of a Member State from the EU. However, it does not encompass the future relationship of the leaving country with the EU. Thus, in political and legal terms, it is important to bear in mind that the negotiations which are to start in the next weeks will be twofold and, if they are successful, they will result in two separate agreements with different content and different approval procedures.
In the words of Theresa May in her official letter: “The United Kingdom wants to agree with the the EU a deep special partnership that takes in both economic and security cooperation. To achieve this, we believe it is necessary to agree in the terms of our future partnership alongside those of our withdrawal from the EU”. So, there must be an agreement on withdrawal and an agreement on the future partnership. How are these to be combined? The EU has anticipated that only once the terms of the Withdrawal Agreement have been set (and in particular, its budgetary aspects) it will be ready to discuss the future relationship. The UK, as uunderlined again today, proposes the opposite strategy: all is to be discussed simultaneously.
What are these agreements about?
- The UK and the EU will seek to agree on the terms and conditions of the UK withdrawal, in accordance with article 50 TEU. Key issues that are likely to be discussed as a matter of priority include UK spending commitments,the rights of citizens, the border with Northern Ireland. A recently approved report of the Constitutional Affairs Committee of the European Parliament (AFCO Committee) provided a list of topics for the Withdrawal Agreement:
- The exit of UK representatives from the EU Institutions and bodies (Members of the European Parliament elected in the UK, representatives in the Council, the UK Commissioner, the judges appointed to the Court of Justice, Members of the Committee of the Regions and of the Economic and Social Committee etc.);
- The acquired rights of the UK citizens residing in other EU Member States, and of EU citizens residing in the UK;
- The contributions and receipts of the UK to and from the EU budget, including the winding down of EU spending programs in the UK;
- The rights of the UK staff working in the EU institutions;
- The closure of the seats of the EU agencies based in the UK (e.g. the European Medicines Agency and the European Banking Authority);
- The winding down or other interim arrangements of UK involvement in common security and defense policy missions and operations;
- The pulling out of or other interim arrangements regarding the participation of UK police in Europol and the engagement in the external borders agency (Frontex);
- The establishment of frontier control, including any possible specific solutions for UK’s land borders in Northern Ireland and Gibraltar;
- The treatment of pending cases in the Court of Justice; and
- The handling of the rights and obligations stemming from international agreements to which the both the EU and its Member States are parties.
As it is known, there is a strict two year deadline for this Withdrawal Agreement to be negotiated and approved commencing with the notification to withdraw. If there is no deal, the UK will leave the EU without any Withdrawal Agreement. Failure on thhis deal, in pure legal theory, does not preclude success in the deal on the future relationship. But in political terms a Brexit wiothout a deal about its terms would almost certainly jeopardize -in the short term- any option of success for a deal on a future relationship between the UK and the EU.
- An agreement on a new relationship with the EU: building a common futureArticle 50 specifies that “In the light of the guidelines provided by the European Council, the [EU] shall negotiate and conclude an agreement with that [Member] State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the [EU]”. Even if there is a common negotiation in political terms, legally this future relationship deal can only be set by a separate treaty. A treaty for which the legal basis, and even its negotiation procedure, will not be same as that of the Withdrawal Agreement: it will be negotiated in accordance to article 218 of the Treaty on the Functioning of the EU (TFEU), which governs negotiation of international agreements and will need to be ratified by all 27 Member States.Such a deal could include any matters not covered by the rather restrictive Withdrawal Agreement, as far as both parties want to agree upon in order to structure a better relationship. In her official letter, Theresa May proposes “a bold and ambitious Free Trade Agreement between the UK and the EU … of greater scope and ambition than any such agreement before”. Examples of possible content for such a deal are too many to list. They could include such matters as customs and other trade related matters; patents & trademarks; mutual recognition of industrial standards; circulation of workers and other people; equivalence of university titles or driving licenses; participation in student or research exchange schemes; nuclear safety collaboration; financial services; telecommunications and audio-visual services; oil and gas connectivity; air traffic and access to airports; data protection equivalence. Thus, the UK - EU structured deal on future relations would take the form of some sort of Free Trade Agreement, whatever the name it receives at the end (for example, the recently approved EU agreement with Canada is called “EU-Canada Comprehensive Economic & Trade Agreement”; the for now failed agreement with the U.S. is called “Transatlantic Trade and Investment Partnership”).According to the official letter, they should also cover the terms of the future security cooperation with the EU (which raises a series of different legal complexities, to be examined in a furher opportunity). In anu case, whatever is not included in that new treaty (or indeed, if there is no treaty at all), will then be regulated by general rules of public international law, or when applicable, by multilateral international Conventions. Technically, there could be other options instead of negotiating and signing one omni comprehensive future agreement. They have been often discussed since the referendum: joining EFTA (as Norway), or entering into a long list of sectorial conventions (as Switzerland), and a few others. They all seem to be expressly rejected by the UK Government.
B) The two year timing issue A most important countdown has started ticking once the official notification from the UK has been communicated. That’s the two year period fixed in article 50 of the TEU: if there is no deal before that (or if the period has not been unanimously extended), the UK will automatically leave the EU, without any legal clarity on the matters previously mentioned as possible content for the Withdrawal Agreement, and without a clear perspective of what comes next. The precise political, legal, social and economic impact of such scenario is still open to speculation at this moment.
It is important to bear in mind that this deadline applies to the Withdrawal Agreement, but the “common future agreement” has no fixed deadline for approval. Indeed, if there is no Withdrawal Agreement (which will include an essential settlement on current and pending financial obligations) it is possible to imagine a “common future agreement” not being agreed upon at all. However, the contrary is more than possible: to reach “Brexit B-Day” within two years with an essential agreement on the very basics of withdrawal (including all or most of the matters mentioned before) together with a broad common understanding of the kind of relationship both parties want to build for afterwards, but without time to turn that into a detailed binding instrument ready on time for a complex ratification.
Strictly speaking, even if the EU-UK negotiations reached that point of collaboration and mutual understanding, this agreement on the future relationship can only enter into force after the “Brexit B-Day”. And it is really difficult to foresee this titanic negotiating effort to be concluded within two years, for it to be ready on “B-Day + 1”. It is in this scenario (there has been a deal on withdrawal, and there is a joint political will to agree on the future relationship) that it would be possible to imagine transitional agreements: “bridge clauses” on specific matters and areas, which could cover the vacuum and provide legal certainty between the anticipated Brexit date (end of March 2019) and the date of entering into force of such a new bilateral deal on UK -EU trade and services. In other words, in this scenario, the UK would formally leave the EU at the end of March 2019, but it would still be more or less treated as an EU Member State for some specific purposes and for a certain period of time: at least until a new bilateral scheme had ben put in place and formally approved. This could even be done using sector-defined deadlines, sometimes called “sunset clauses”, to put pressure on subsequent negotiations: for example 2021 for mutual recognition of university diplomas, 2020 for cross-channel data exchanges, 2022 for financial services equivalence, and so on.
C) Starting negotiations Formally, the Brexit notification is addressed to the European Council, which gathers Heads of State or Government of the EU 27. After receiving the Brexit notice, the European Council will convene to approve the general guidelines for the negotiation on the UK withdrawal. Based on these guidelines, the European Commission will take over to draft a mandate.
Then, the Council of the EU, meeting under its “General Affairs” formation which gathers EU 27 Ministers for EU Affairs, will approve the mandate, most probably under the legal form of Council directives. Article 50 requires the mandate to be adopted by a qualified majority - 72% of the 27 EU member states, representing 65% of the population - but it is customary to look for consensus for important decisions taken in the Council of the EU. Importantly, the representatives of the UK within the European Council and the Council of the EU will not participate in the negotiations.
Once an agreement is reached, the European Parliament will need to approve it by a simple majority. British Members of the Parliament will be able to take part in the vote. The last step of the process will be for the European Council to approve it by a qualified majority, as described above (but most probably acting by consensus). Once the mandate has been approved, the European Commission will be in charge of conducting the negotiations on behalf of the EU.
The European Institutions have been anticipating the Brexit negotiations and have each established dedicated teams to prepare for the process.
Within the Council of the EU, the coordination of the negotiations will be led by Didier Seeuws, a Belgian diplomat and former deputy Permanent Representative of Belgium to the EU. He will attend negotiations on behalf of the Council, with the task of reporting back to member states.
The European Commission has been preparing for the negotiations since several months. It has set up a Task Force led by former Commissioner and former French Foreign Affairs Minister Michel Barnier, which will be at the core of the negotiations. Its internal tasks and responsibilities have already been divided among four units:
- strategy, also dealing with communication and coordination;
- single market
- budget and spending programmes and
- trade and external matters, which will also cover security.
The agreement on the future relationship of the UK and the EU will be negotiated by the same actors, but, as explained, on a different legal basis and with some formal differences. It is however expected that both negotiations on both agreements, as they are so deeply interlinked, they will de facto be conducted simultaneously.
D) The general timeline ahead Considering the different elements in place, and the already explained different deadlines for both agreements, a provisional timeline would include the key events below (or one of the several options in brackets):
- March 29, 2017: The UK notifies its intention to leave the European Union
- April 29, 2017: The European Council convenes and delivers draft guidelines to the European Commission.
- Autumn 2017: The British Government introduces the Great Repeal Bill, which will transpose all existing EU laws into British law.
- Autumn 2018: Negotiations on the Withdrawal Agreement conclude, in order to leave time for its formal adoption. (Or, there is no deal; or, most improbable, there is not only a full Withdrawal Agreement, but also a full agreement on trade and services)
- Winter 2018: the British Houses of Parliament, the European Council and the European Parliament vote on the Withdrawal Agreement (or there is no vote as there is no deal).
- March 2019: The UK formally withdraws from the EU, with its departure covered by a Withdrawal Agreement including a series of transitional agreements for specific matters (or there is no Withdrawal agreement at all; or the Withdrawal Agreement only covers basic matters, everything else in the UK -EU relationship starting to be covered by Public general international law, WTO rules, and other multilateral conventions).
- Post-March 2019: a comprehensive agreement on trade and services between the UK and the EU-27 is ratified by the 27 National Parliaments, and opens a new period of constructive and well defined relationship.