Brexit: an overview

Brexit dominates the current political landscape, and was at the core of the general election. But hopes, fears, rumours and opinions have often been more prominent than facts. Although there are a number of unknowns (such as whether notice to withdraw can be revoked) there is more clarity about the process of leaving the EU, the initial negotiating positions, and what ‘no deal’ would mean for the UK.

The Article 50 process

Article 50 allows an EU Member State to leave the EU. It has never been used before and its interpretation has not been straightforward. But it is accepted that the two sides now have two years – until 29 March 2019 – to negotiate a withdrawal agreement, or to unanimously agree an extension. The UK can leave without an agreement, but an ‘orderly withdrawal’ is the desired outcome for all parties.

Where are we now?

The exit process was triggered on 29 March 2017, when Theresa May delivered a letter of notice to the European Council setting out the UK’s priorities. The Council then adopted political guidelines which form the EU’s framework for the withdrawal negotiations. A Council Decision authorises the European Commission to open negotiations with the UK and issues detailed negotiating directives.

The first formal meeting took place on 19 June. The agreed Terms of Reference for the negotiations set out the timetable, agenda and items for discussion in the first place. The negotiators will meet every month, and initial negotiating groups have been established on three priority areas: citizens’ rights, the financial settlement and other separation issues. There is a special procedure for the Ireland/Northern Ireland discussion, and additional working groups or subgroups may be established.

Throughout the negotiations, right up until Brexit day, the UK will remain a Member State, so EU rights and obligations will continue to apply.

The negotiations
Who are the negotiators?

Michel Barnier is the EU’s chief negotiator, at the head of the Commission’s ‘Task Force 50’. He is assisted by the Council, the Committee of Permanent Representatives, a representative of the rotating Council Presidency (Malta followed by Estonia), and the Council Working Party on Article 50 headed by Didier Seeuws.

The UK negotiators include David Davis, the Secretary of State for Exiting the EU, officials in his Department (Oliver Robbins and colleagues), and Tim Barrow, the UK’s top diplomat in Brussels.

Priorities

Both sides have said that they want to prioritise citizens’ rights and resolve the complex impacts of Brexit on the Ireland-Northern Ireland border. But beyond that there has already been some significant disagreement.

What does the UK want?

The Government’s strategy – published before the election – calls for:

  • negotiation of the withdrawal agreement alongside the UK’s future relationship with the EU;
  • a “deep and special partnership”, including economic and security cooperation;
  • a “fair settlement of the UK’s rights and obligations as a departing member state”; and
  • a period of adjustment to allow businesses to adapt to the new situation.

Speaking after the first day of negotiations, David Davis confirmed that the UK will not seek membership of the Single Market or customs union.

Theresa May’s negotiating strategy was set out in a speech to the Conservative Party conference in October 2016, a speech at Lancaster House in January 2017, and the Brexit White Paper in February.

EU ‘red lines’

The EU negotiating guidelines stipulate: no “cherry picking”, no settlement that is more favourable than EU membership, and a “single package” – nothing is agreed until everything is agreed.

They prescribe a phased approach to the negotiations, first establishing “clarity and legal certainty” for citizens, businesses and international partners on the immediate effects of Brexit, and determining a “single financial settlement” – the so-called ‘divorce bill’. A second phase would begin only if “sufficient progress” had been made. Then there would be new negotiating directives on transitional arrangements (how to move from the present relationship to a future relations agreement).

The EU has also published detailed ‘position papers’ on citizens’ rights and the financial settlement.

The European Parliament (EP) has passed a non-binding Resolution on the negotiations, making clear it will not vote for any agreement giving the UK similar benefits to EU membership.

Scrutiny of negotiations

Unlike the EP the UK Parliament will not have a formal role or final say in the negotiations. The Government has promised a vote in both Houses on the final version of the agreement before the EP vote, but said it would not try renegotiating if Parliament votes no.

Parliament will, however, want to scrutinise the Brexit process. Backbench Business and the petitions system are likely to initiate debates. Select Committees, once they are established, will carry out inquiries into aspects of Brexit.

Both the EU and the UK have made a commitment to transparency in the negotiations. The Commission published its transparency policy for the negotiations on 22 May. Within the limits of EU law on protecting information, the Commission’s negotiating documents will be shared with EU Member States, the EP and the public, and published on the Europa site, Negotiating documents on Article 50 negotiations with the United Kingdom. These documents will include:

  • Agendas for negotiating rounds
  • EU position papers
  • ‘Non-papers’ (usually informal internal EU documents)
  • EU text proposals.

The UK also has a website for documents on the Article 50 negotiations:

  • Policy papers and correspondence
  • Speeches and statements
  • Negotiating team
  • Meeting agendas

The Government  intends to involve the Devolved Administrations; they have been discussing their Brexit requirements in a Joint Ministerial Committee on EU Negotiations but there have been calls to strengthen this process.

Could the UK revoke its withdrawal notice?

Theresa May’s Government said it did not intend to revoke the withdrawal notice, regardless of the legal position.

But if Parliament rejects a withdrawal agreement, or there is a new UK Government, or an unexpected global crisis, could the UK Government unilaterally halt Brexit?

Nobody knows the answer. Article 50 doesn’t say. The Supreme Court didn’t decide either way in the Miller case. And the CJEU has not ruled on this (although it may yet be asked to).

There is considerable opinion in academia and in the EU that notification could be revoked up to 29 March 2019, on the grounds that (for instance) Article 50 is a mechanism for voluntary withdrawal, not expulsion from
the EU.

Concluding a withdrawal agreement

An Article 50 withdrawal agreement needs the approval of:

  • the UK Government (but not the devolved administrations)
  • the European Parliament (including UK MEPs; simple majority of
    votes cast)
  • the European Council (super-qualified majority, i.e. 20 of the 27 remaining EU Member States)

If the withdrawal agreement included provisions on the future relationship, it might require an additional legal basis which is likely to require unanimity in the Council. If it covered matters considered to be Member State competences, it could also become a ‘mixed agreement’ needing national ratification by all 27 remaining States (EU27).

If there is a withdrawal agreement, the EU Treaties will cease to apply to the UK on the date the agreement enters into force. This could in theory be after 30 March 2019, but the EU negotiating mandate says it should enter into force no later than then.

A separate ‘future relations’ agreement?

Although the UK Government argued for concluding a future relations agreement alongside the withdrawal agreement, the EU considers that a future relations agreement cannot be concluded until the UK has left the EU. Article 50 does not require a future relations agreement to be concluded in the two-year period, but it does say the withdrawal agreement should take account of the framework for the future relationship.

A future relations agreement would probably require unanimity in the Council, and possibly national ratification by each of the EU27 (though a recent CJEU judgment stated that most aspects of another broad trade agreement, EU-Singapore Free Trade Agreement, did not require national ratification).


What would ‘no deal’ mean?

If there is no withdrawal agreement by 29 March 2019, and no unanimous agreement to extend the two-year period, the EU Treaties will automatically cease to apply to the UK. Both sides have said they want to avoid this, but it is still a real possibility.

‘No deal’ would result in UK-EU trade being subject to general WTO rules, meaning increased barriers to trade in goods, and possibly preventing some trade in services. It would also mean significant uncertainty about all the other issues in the negotiations, such as citizens’ rights.

However, leaving with no withdrawal agreement would not necessarily prevent the two sides from reaching future bilateral agreements on any or all of these matters.

This article is part of Key Issues 2017 – a series of briefings on the topics that will take centre stage in UK and international politics in the new Parliament. More Key Issues posts will be published on this blog throughout June, subscribe via the homepage to get instant alerts. You can read more Commons Library Brexit research and analysis at www.parliament.uk/brexit

 

 

 

The financial settlement

The EU expects the UK to make a ‘financial settlement’ when it leaves, with estimates ranging from €15 billion to €100 billion, possibly payable over several years.

There are no rules on what a departing country should pay, and conflicting views over whether there is a legally enforceable obligation to pay. But failure to agree a payment could damage prospects for agreement on other important issues.

The EU says the payment should be based on the principle that the UK honours its share of all its obligations as a Member State, e.g. spending it agreed to and other commitments and liabilities, such as EU staff pensions or outstanding loans.

UK negotiators are likely to argue that if the UK shares these costs, it should also receive a share of EU assets, lowering the payment.

 

What topics will be covered where?

It’s not clear exactly what subjects would need to be in a withdrawal agreement, and what might be in a future relations agreement.

As well as citizens’ rights, the Northern Ireland border and the financial settlement, some of the main issues for agreement include:

• trade and economic relations

• the role of the Court of Justice
of the EU (CJEU)

• customs and immigration arrangements

• EU programmes and funding
in the UK

• relocating UK-based EU agencies

• arrangements for UK Sovereign
Base Areas in Cyprus

• EU international agreements

• police and judicial cooperation

• foreign policy, security and defence

• ‘passporting’ rights for financial services

• air traffic arrangements

• energy, environment, climate change, agriculture and fisheries

• data transfer rights

• higher education and research

• Gibraltar

 

Gibraltar

Gibraltar, a British Overseas Territory, voted overwhelmingly to stay in the EU, but will have to leave with the UK. Gibraltar’s particular requirements are being discussed at the Joint Ministerial Council (Gibraltar).

The European guidelines state that a future agreement between the EU and the UK cannot apply to Gibraltar unless Spain agrees. This was widely reported as potentially giving Spain a right of veto over an agreement.

The Gibraltar Government called it unfair and discriminatory, but Gibraltar’s Chief Minister thinks it will “change little”.