A short legal guide to leaving the EU
While in the UK a dwindling band of those un-reconciled to the inevitability of Brexit marched on Parliament and were promptly lost amongst tourist crowds, in Brussels there is still a strong belief that the UK will never actually leave the EU. This is a dangerous belief as it may lead to the conclusion that a refusal to negotiate will lead to a change of heart in the UK, a Parliamentary vote, a second referendum and ultimately Bremain.
This would be a costly misjudgement, Brexit would still go ahead, but without negotiation it could lead to a needless disruption of UK/EU trade and good will. That is why the Prime Minister is right to reiterate that “Brexit means Brexit”. The message is beginning to get through in the EU capitals.
So, accepting the inevitability of the end point, how do we get there?
Our way or the Article 50 way?
Legally there are a number of ways to leave the EU. The UK is bound to the EU in international law by way of Treaty. The most obvious route to leave the Treaty is the one prescribed in the Treaty itself – Article 50 of the Treaty on European Union. This prescribes a two year period between notification and leaving. The advantage is certainty, but it may take time. There are however other ways to leave.
The second way to leave is by using the Vienna Convention on the Law of Treaties to withdraw immediately and without negotiation. The Vienna Convention (Article 62) allows a state to withdraw from a Treaty if there has been a ‘fundamental change of circumstances. In this case the Brexit vote and the issues that arise from it could well allow the UK to argue it can unilaterally end its participation, so avoiding the Article 50 route.
The third way to leave the EU is by Parliamentary vote. The UK, unlike some other states, is a dualist country where international treaties do not form part of the domestic law. Parliamentary sovereignty would allow MPs to repeal the 1972 Act without going through and external procedure.
The Article 50 route will be the first method to be used.
Does the UK Parliament get a vote on Article 50? (No)
Article 50 sets out that the withdrawing state “shall notify the European Council” in line with its “constitutional requirements”. In the UK the power to make (and unmake) Treaties has long been a Royal Prerogative exercised by the Prime Minister. It is true that treaties that require domestic law changes need domestic legislation and thus parliamentary approval, but activating Article 50 does not.
There is an ongoing legal challenge by the law firm Mishcon de Reya that seeks to claim that Article 50 would cut across Parliament’s right to repeal legislation (i.e the 1972 EC Act) and so could not be exercised by the Prime Minister alone – it is highly likely to fail (see Article 50 note). There will not be a parliamentary vote before Article 50 is triggered and no UK or EU Court could injunct the Prime Minister from notifying the Council.
Will Parliament get any other votes on Brexit?
While Parliament will not vote on triggering Article 50 it will have to vote on a number of other issues. Prior to Brexit, the Government may wish to place existing EU laws into UK law, or at least have the legislation passed and ready if not in force and EU citizens already within the UK will need legislation to secure their rights. Additionally Parliament may wish to institute emergency or preparatory legislation in areas such as migration in contravention of EU law prior to leaving.
The Government may ultimately also wish to repeal the 1972 European Communities Act, although in case of opposition even that may not be strictly necessary as after a legal Brexit the Treaties to which the Act gives force will not bind the UK, making the Act as relevant in the UK as say placing the US/Mexican border treaty into UK law.
What Parliament will certainly vote on will be on any new UK/EU free trade agreement, but by then voting it down will not derail Brexit, just UK/EU trade. Given how little actual legislation is required, the chances of unreconciled EUphiles rebels mounting Parliamentary rebellions in the Commons or Lords are dramatically reduced.
How long will the Article 50 exit process take?
Article 50 specifies a period of two years for negotiations. Agreement could be reached before that, it could also be extended (with the EU27’s agreement) but if there is no agreement then the UK leaves at the end of the two year period. The length of time the process will take will depend on what the two sides are willing to negotiate and agree.
If the UK is seeking a complex, all-encompassing UK/EU agreement then two years could be a short time frame. Although, to reverse Parkinson’s law, the length of time needed for trade negotiations are capable of contraction as well as expansion to fit the time available. (Interestingly, in an emergency the EU took less than two months from conception to implementation to agree a tariff waiver for Ukraine.)
If the UK decides to seek an agreement more akin to those the EU has negotiated with Canada and South Korea, then given the UK already has implemented 100 per cent of EU law, the time needed to agree should be easily able to fit the two year window.
However, there are those within the EU that state they do not wish to a negotiate trade with the UK at all until it has left the EU and certainly not before the Article 50 process has started. If such an inflexible attitude is taken the UK may conclude there is little point in waiting for the full two years under Article 50 to fail to agree comparatively minor matters such as final budgetary issues, EU staff pensions and agencies etc. At that point the UK may seek to speed up the process by legislating domestically or resorting to the Vienna Convention to speed up the process and move onto the trade negotiations, but there is no sign that will be necessary.
Is Article 50 reversible?
There is a legal view, expressed by former EU legal adviser Jean-Claude Piris, that once the UK has embarked upon Article 50 it could at any point withdraw its “intention” and stop the clock running. Whether all the EU27 would accept the legality of a UK U-turn is debatable, but even the possibility of a reversal could create a danger for the UK’s negotiations. If the EU27 believe that the UK will at some point change its mind or hold a second referendum on the outcome of the negotiations then there would be no incentive for them to conclude a mutually beneficial agreement.
Who is in charge of the process: the FCO, the Brexit Department, the Prime Minister, or the Department for International Trade?
It is the Prime Minister who initiates the Article 50 process but there will be a whole range of UK departments and parliamentary procedures involved. We will have a Brexit department and select committee, an International Trade Department and committee and the FCO. In addition all existing departments will have to develop policy and identify UK interests for the EU and non-EU trade negotiations. Many of the policies are interlocking so co-ordination will be vital. On the EU side responsibility is again split: the member states have the lead role in negotiations but the Commission and European Parliament will also get a say.
Does Scotland have to give consent to Brexit?
Although the SNP administration is seeking to make political capital out of Brexit there is little they can do beyond sounding indignant. It is true legislative consent motions are required in some circumstances, but not for Brexit for the simple reason there will be no relevant legislation on Article 50. Although s.29 of the Scotland Act binds Scotland to obey EU law, it does not guarantee EU law’s existence – Brexit will if anything give more power to Holyrood, not less.
Will the Northern Irish border be affected?
At present there are no Customs or Passport requirements on the Northern Irish border. The reason for the passport free zone is that on independence in 1921 it was agreed to create a Common Travel Area, in effect a mini Schengen, between Ireland the UK.
The Norther Irish border lost its final customs function not on entry to the EEC but in 1992 with the Single European Act. Whether customs will need to be reapplied will depend on the future EU/UK agreement, but it is noted that the Swedish/Norwegian border is a customs border but in practice is well organized with a bilateral agreement allowing both states to do reciprocal customs eliminating the need for two sets of officials.
How many sets of negotiations will there be?
There are a number of separate negotiations which the UK will have to undertake during the process of leaving the EU. Here are the main ones:
- The formal exit from the EU. This would involve minor issues such as final EU budgetary contributions and shares of EU assets, unwinding UK membership of EU agencies, pensions for UK EU civil servants. The expectation is that this negotiation would have to be done under Article 50 (if that route is taken), and if no agreement is reached within the two years then there will be no agreement. In fact if the EU is insisting on a large final budgetary contribution no agreement may not be a bad outcome, making this part of the negotiation relatively simple.
- A new UK/EU agreement. This is the most important negotiation and complicated negotiation as it will govern the UK’s trade and with the EU going forward. This could be agreed as one package or as a series of individual chapters over a period of time. The nature of this agreement will be the main topic of discussion during the Brexit process.
It is probable the formal exit and trade agreements will be negotiated together.
The wording of Article 50 is ambiguous, it states that in the exit negotiations should take into account the “future relationship” between the EU and the departing state. It is also the case that the EU is bound by other articles to conclude agreements with its neighbours. That should be interpreted as allowing trade negotiations if the partners wished to and as we know the ECJ is a political court. However some within the EU machine are keen to argue that Article 50 can only settle the legalities of EU exit and that only once the UK has left can a trade negotiation be started. This seems unlikely to happen for strong political and economic reasons.
The UK would have little interest to agree an exit deal that does not include at least a basic trade agreement and agreements on pressing issues such as aviation and data protection. If the EU does not wish to engage in trade negotiations then there would be a gap which would cause economic dislocation for both sides. It seems highly probable both sides would wish to avoid this circumstance and that negotiations will lead to an agreement in place ready to go once the UK has left.
- Additional UK/EU agreements on other areas?It is quite possible that the main UK/EU trade agreement on issues such as tariffs and mutual recognition of regulations will not cover other sensitive areas such as Crime and Policing cooperation and potentially Defence and other Foreign policy cooperation. These could well be agreed in a series of separate bilateral agreements negotiated concurrently with the main agreement but may need to be done under Article 50 in as far as they relate to existing EU agencies.
- Full membership of the WTO. In order to strike WTO-compliant trade agreements the UK will have to become a fully functioning member. The UK is a member of the WTO, but as a member of the EU it does not have its own ‘certified’ schedule of tariffs registered at the organisation. Other WTO states would have to agree to certification, but there is nothing to prevent the UK trading on an uncertified schedule.
This would be helped if the UK seeks to continue with the existing EU schedule of tariffs. The UK could always decide to reduce them later; increasing them is more problematic.
While setting a Schedule may not be difficult, agreeing a an anti-dumping mechanism may incite opposition and the UK and EU will have to agree to carve up existing WTO approved import and export quotas.
- A further EEA renegotiation? It would seem unlikely that the UK would wish to remain in the EEA. As David Cameron explained in the referendum campaign, it has many of the disadvantages of the EU without any influence. It also appears that the Prime Minister has ruled out this option, intimating a “unique” bespoke deal. However, were the UK minded to join the EEA it seems unlikely we would accept it as it is, designed as an EU anteroom for Norway and Switzerland. If we did seek to adapt aspects of this agreement, it would involve negotiations with the EU and the other EEA states.
- New non-EU free trade agreements. The EU has a number of its own non-EU free trade agreements and some that are in process or concluded awaiting ratification (i.e Canada). The UK will want to strike its own deals with these states, to avoid gaps, and conclude new agreements with others (Australia seems to be the first out of the traps). While a member of the EU, the UK cannot sign or implement new agreements but there is nothing to prevent all the preliminary work being done. This would also help ensure actors within the EU conclude that Brexit is inevitable.
One politically sensitive trade agreement that would need to be done would be to replicate the EU’s agreements for preferential access for developing states. While the UK could (and probably should) reduce its external tariff on sugar, if this is done within the context of the WTO’s MFN schedule it would preclude the UK giving a separate deal to the Caribbean. It would have to give the same terms to say Brazil.
Some action points:
- Capacity: The Department of International trade will need a new UK investigating authority to establish trade remedies, it will also need amongst others experts in WTO dispute settlement, negotiators and analysts, statisticians, and intellectual property specialists etc.
- Identify UK interests. The UK will need to identify what tariffs various industries require on imported goods. From the UK can identify its own offensive and defensive interests, taking into account potential changes in supply chains.
- Non EU FTAs. Identify whether non-EU states are willing to carry over the EU 3rd party trade agreements. If they are an adaption by the EU may be required to be agreed under Article 50.
- Create schedules for the WTO. These will be needed for tariffs and the Generalised Agreement on the Trade in Services (GATS).
- Become a signatory on current EU trade agreements. The UK should try and ensure the UK is a signatory on the WTO Trade In Services Agreement, (TISA) soon to be agreed. If the EU is the only signatory it would make it more difficult to join on Brexit. The same will go for other EU agreements currently under negotiation.
- Ensure as much as possible of the negotiations are done between the UK and the member states on the European Council. The Treaties specify that the Council sets the parameters of the agreement and at that point the Commission and eventually the Parliament have a say. As Mr Juncker, Barnier, Schultz and now the arch federalist Liberal Mr Verhofstadt – the Parliament’s new “negotiator” – are likely to be less helpful and more legalistic it is better to present them with a near complete