Tick-tock on the Brexit Clock
Deal or no deal, the deadline is set — 29 March 2019 Britain is leaving the EU
By Pat Cox
Former President of the European Parliament
- This article was originally published as part of the 2017 edition of Bled Strategic Times, the official gazzette of the Bled Strategic Forum (BSF) international conference. You can access the full version of this and other BSF publications by visiting our official website.
The EU is facing an unprecedented and regrettable first act of disintegration whose countdown has begun. In twenty months time the United Kingdom, most likely, will stand on the threshold of a transition period marking its passage from European Union membership to third country status. Alternatively, by unanimous agreement of the EU 27, it could extend the period of withdrawal negotiations. Or, finally, talks, having crashed and burned, the UK will trip over a cliff ’s edge into the hardest exit option of all for all, no deal.
The Article 50 notification officially marking the United Kingdom’s intention to withdraw from the EU was lodged on March 29 2017 nine months after the UK referendum. Seventy days after the notification, in an unnecessary election to secure a strong and stable majority to back her hard Brexit policy, the Prime Minister, Teresa May, lost her majority and much of her authority.
The clock is ticking and, barring a unanimous agreement between the European Council and the UK to extend this period; the exit negotiations and their formal adoption by the EU and the UK must be concluded by March 29 2019.
This includes the time necessary to obtain the consent of the European Parliament and a vote by a qualified majority of the European Council, suggesting that the negotiations will need to have concluded not later than the end of 2018 to facilitate the necessary procedures.
If a mutually satisfactory conclusion is not reached the Treaties shall cease to apply to the UK with effect from midnight March 29 2019.
A deadline extension, though legally possible, is politically unlikely. If the UK does not leave the EU in the timescale foreseen the absurd prospect of having to hold European Parliament elections in the UK in the summer of 2019 for a state that insists on leaving the Union and of it being drawn into questions about the future financing of the EU through the negotiations on the next Multi Annual Financial Framework for the EU’s post 2020 budgets would arise.
If there were no agreement the UK would trip over a cliff edge and would need to adopt a WTO tariff schedule for the conduct of its international trade, the worst of all possible future options for all parties involved.
The European Parliament adopted its resolution on Article 50 by an overwhelming majority on April 5 2017. Later in the month the European Council unanimously adopted guidelines for negotiations on April 29 2017. These reveal a high level of inter institutional coordination. The core principles express the wish to have the UK ‘as a close partner’, that any deal needs to be based on a balance of rights and obligations and ensure a level playing field, that the integrity of the single market must be preserved which means the four freedoms are indivisible and excludes cherry picking and that a non-member state cannot enjoy the same rights and benefits as a member.
This is not a Boris Johnson style ‘have your cake and eat it’ negotiating mandate.
The negotiations will be treated as a single package and ‘nothing is agreed until everything is agreed’.
The negotiations will be phased to provide as much clarity and legal certainty as possible and to settle the disentanglement of the UK from the EU.
The phrase disentanglement covers a multitude, such as:
- The key sensitivity of the reciprocal rights of citizens of the 27 EU member states living in the UK and conversely of UK citizens in the EU 27,
- The honouring by the UK of its outstanding EU financial obligations,
- The special circumstances of the island of Ireland, the Northern Ireland Peace Process and the border,
- The exit of British members from all EU institutions including among others the European Parliament, Commission, Council, Court of Justice, Court of Auditors, the European Investment Bank and the European External Action Service,
- The relocation of the European Banking Authority and the European Medicines Agency,
- The treatment of the paid up capital of the UK in the EIB,
- The orderly disengagement of the UK from international treaties signed by the EU.
- The Euratom Treaty
- Agreement on privileges and immunitiesvfor each other institutions and assets in the others jurisdiction post Brexit. This is especially sensitive for the European Investment Bank.
- Fisheries policy and territorial watersDispute settlement mechanisms regarding the application and interpretation of the withdrawal agreement.
This list is illustrative but far from exhaustive in a process that will be unprecedented in scale. Talks on the future framework for relations between the EU and the UK, also part of the Article 50 negotiations, will only take place when sufficient progress has been made on the priorities referred to above. A first decision on this could be made as early as an October 2017 European Council, although the current pace of negotiations and their substance would need to accelerate for this to be achieved.
The General Affairs Council (the EU Foreign Ministers) on May 22 2017 authorised the opening of negotiations, nominated the Commission as the EU negotiator and adopted the negotiating mandate. The GAC will continue to monitor and assess progress.
Though initially contested by the British side, the idea of phasing the talks based on a judgment of ‘sufficient progress’ was accepted at the opening round of negotiations on June 19 2017. Terms of reference were agreed. Negotiating groups have been established for citizens’ rights, the financial settlement, other separation issues and in addition a dialogue on Ireland/Northern Ireland has been launched under the authority of the Coordinators. Negotiations will take place every four weeks unless decided otherwise by mutual consent. Both sides have published a series of working documents and will continue to do so to inform public opinion.
The respective position papers on citizens’ rights prompted the European Parliament’s Brexit steering group recently to publish an article in several newspapers suggesting that it ‘will reserve its right to reject any agreement that treats EU citizens, regardless of their nationality, less favourably than they are at present’.
On the financial settlement question while the Foreign Secretary, Boris Johnson, told the House of Commons that the EU can ‘go whistle’ if it insists on demanding ‘extortionate sums’, a more conciliatory tone was struck by a Brexit Minister, Joyce Anelay, in a written statement to Parliament which explicitly acknowledged for the first time ‘that the UK has obligations to the EU…that will survive the UK’s withdrawal — and that these need to be resolved’. To date the British side has not submitted a position paper on financial issues.
Assuming that the political and administrative capacity, especially on the British side, can be mobilised to secure the necessary settlement by March 29 2019, this would mark the end of the beginning of the process, the prelude to a second act.
Act two will be grounded in Article 218 of the Treaty on the Functioning of the EU. A future comprehensive free trade agreement with the UK can only be finalised when the UK exits and becomes a third country outside the EU in 2019. The Commission will negotiate on a mandate to be agreed by Council. Approval requires the consent of the European Parliament and a qualified majority vote of the Council. Hence the necessity of a transition period whose terms still are hotly contested in domestic UK politics
If the eventual agreement covers areas of national and not exclusive EU Treaty competence, a so-called mixed agreement, then the unanimous agreement of member states would be required triggering ratification by national parliaments. This happened with the recent Comprehensive Economic and Trade Agreement with Canada.
Since the EU and UK start with full regulatory compatability, which in principle the UK’s EU Withdrawal Bill should preserve at the outset, the EU/UK trade deal should be more straightforward than other such deals. However, it will be complicated by ‘level playing field’ issues regarding competition and state aid, and safeguards against unfair competitive advantages through fiscal, social and environmental dumping. How to handle regulatory divergence over time and agreeing on dispute resolution mechanisms, if the UK insists on no role for the Court of Justice, will add to the complexity of the negotiations.
British political ground has not been well prepared for necessary compromises. Britain voted to leave the EU but it remains much less clear what they voted for. The Prime Minister’s Lancaster House speech and the subsequent White Paper opted for Britain to leave the Single Market and the Customs Union, to take back control of immigration policy and to do away with the role of the Court of Justice of the EU. Collectively, these have been characterised as constituting a hard Brexit.
Teresa May now looking to Labour for support may be forlorn. Labour has its own mixed feelings on Europe and has the sniff of power in its nostrils. The referendum self evidently has not ended the Tory civil war on Europe with hard liners suspicious of every potential compromise as a sell out. Devolved governments in Scotland, Wales and Northern Ireland intend to protect their interests.
Britain is a country divided. The Primes Minster is leading a cabinet divided. The Tories in government are a party divided. The clock is ticking. Time is running out. The EU negotiating mandate is agreed. Britain finally must choose and specify what it wants.