Tortuous UK departure

Draft treaty must be ready by end-2018

The UK’s goals for the impending Article 50 negotiations with the European Union have become more clear as Theresa May, the British prime minister, has outlined her Brexit wish list. But she was studiously vague on what specific demands she will put in her Article 50 notification letter.

Once it arrives in Brussels, the notice will go to the 27 remaining EU member states. They will then decide what mandate to give Michel Barnier, the European commission’s chief Brexit negotiator, when heads of government meet at the June EU Council meeting.

Barnier is not alone. The council has its negotiator, the experienced Didier Seeuws. Guy Verhofstadt, former prime minister of Belgium, is the European parliament’s Brexit negotiator, and not shy about expressing his opinion. The UK is represented by David Davis, May’s Brexit minister.

The Article 50 negotiations will struggle to progress during the summer break or in the build-up to French and German elections, scheduled for 23 April and 24 September respectively. After this, once there is a new French president and new German government, they will have a major say on what can be negotiated.

Legally, until the UK is out of the EU, neither Brussels nor London can begin formal negotiations on a trade agreement. These negotiations must then finish by October 2018 to allow the 27 remaining states six months to examine the withdrawal treaty and agree whether to ratify it.

Consequently, only 12 months – October 2017 to October 2018 – will be dedicated to Article 50 negotiations. It must be assumed they will deal with technical arrangements on Britain’s commitments to the EU budget and on who pays UK liabilities. It is not clear, for example, who will be liable for the pensions of EU employees in the UK.

Brussels has said it expects the UK to honour its budgetary commitment for the financial period up to 2020, with figures of €60bn being mentioned. This will not be well received by May, the eurosceptics in the Conservative party, and the anti-EU press. The prime minister said in her speech last Tuesday that there were some areas – such as Europol, and perhaps the Unified Patent Court – where she expects Britain still to co-operate, though that implies paying part of the cost.

Moreover, the ultimate court of appeal for any dispute within the EU is the European Court of Justice. But May has repudiated any role for the ECJ. There will be complex arguments during the Article 50 talks about how the UK can stay linked with any EU agencies without accepting ECJ rulings.

The UK government must decide whether Britain will fully quit the customs union. Likewise, for EU citizens, the government will have to decide whether to introduce a visa or work-residence permit scheme that will discriminate against Europeans hoping to come and work in Britain freely.

These are British decisions. But, if announced before the end of the Article 50 talks, they will colour the response of the remaining 27 states. The UK government can unilaterally confirm that existing EU citizens in the UK can stay, but Brussels cannot dictate to governments what new rules they bring in to cover British expats in Spain, France or other member states with different laws on non-EU citizens coming to live and work.

Barnier’s mandate expires in October 2018, when the draft withdrawal treaty goes to the 27 member governments and parliaments to ratify. The treaty must also be ratified by the UK parliament.

Then there will be another delay while the new 2019-24 EU commission, parliament and council discuss how to start trade talks with the UK. It will be the trade commissioner after May 2019 who will dictate the course of action.
Extracting the UK from the EU will be tortuous. May’s speech on 17 January was just the beginning of the next chapter in Britain’s ever-problematic relationship with Europe.

Denis MacShane is a former UK Minister for Europe, a Senior Adviser at Avisa Partners, Brussels, and a Member of the OMFIF Advisory Board. His book, Brexit: How Britain Left Europe, is published by IB Tauris.

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