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Brexit: Article 50 and beyond

On 29 March 2017, UK Prime Minister Theresa May wrote to the President of the European Council, Donald Tusk, invoking Article 50 of the Lisbon Treaty: the provision that deals with the process of a member state’s withdrawal from the European Union. The dispatch of the letter marks the formal beginning of the UK’s departure from the EU and, perhaps most significantly, the formal timeframes that apply to the negotiations.

This short post explores the background to this and looks at how the Article 50 process may continue.

The Treaty of Lisbon, which entered into force in 2009, was the first EU treaty to include provision for a country leaving the Union. The key clauses of the now-famous Article 50 say:

2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.

3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

Theresa May’s letter was a consequence of the referendum held in the UK on 23 June 2016, in which 51.9% of voters opted to leave the EU (72.2% of registered voters turned out, voting not being compulsory in the UK). This letter sets the clock ticking—the terms of the UK’s departure from, and its future relationship with, the EU need to be agreed within two years. Clause 3 quoted above allows for the discussions to go on longer than this if all the remaining 27 member states agree, but it would be unwise to assume that this unanimity would be reached. For practical purposes, the negotiations must be concluded in two years.

May’s letter indicated the main priorities which she would like the negotiations to pursue. These include ensuring:

  • negotiations take place ‘constructively and respectfully, in a spirit of sincere cooperation’
  • citizens will be put first, meaning that the question of the rights of the three million EU citizens in the UK and the one million Britons in other member states should be addressed early (it is significant that the letter does not include a ‘cut-off date’ for people arriving in the UK to have their future rights respected, so people arriving at any point in the next two years can expect to be covered by any deal)
  • a comprehensive trade agreement is developed in parallel with negotiations about the terms of the UK’s departure
  • minimal disruption and
  • the common travel area between Northern Ireland and the Republic of Ireland is maintained (this is the UK’s only land border).

On 31 March Donald Tusk circulated to the remaining 27 EU member states a set of draft negotiating guidelines responding to May’s letter. There are some key points where these differ with May’s position. Notably, the EU guidelines say that negotiations on a future EU-UK trade agreement should only start once there has been ‘sufficient progress’ on the terms of the UK’s departure, whereas the UK wants the talks to be in parallel.

One issue that will be discussed early is the amount which the EU will claim the UK owes it as part of the departure agreement. This is not a ‘Brexit bill’ but a reflection of agreements into which the UK has already entered. This amount comprises several elements, including the future pensions of EU staff and projects and other expenditures which have been committed to be spent in the EU’s current budget cycle and will continue past the likely date of the UK’s departure. Sums of up to A$100 billion have been suggested in the press, but it would be politically difficult for the British Government to agree to making such a payment.

Another thorny issue that is likely to occupy the minds of both the EU and the UK negotiators is the management of the Irish border.

Although the clock is ticking, for now there is no apparent urgency over the next few weeks. Tusk’s guidelines will be discussed by the 27 remaining member states at a summit on 29 April. The outcome of this discussion will be passed to the EU’s chief Brexit negotiator, Michel Barnier (a former French Prime Minister). Barnier’s team will then convert these guidelines into a detailed negotiating text, which will be presented to European Affairs Ministers in mid-May. Only then can negotiations commence, in late May or early June.

Detailed negotiations will take place in the second half of 2017 (although, with French and German elections taking place in the background they might not gain as much attention as the UK might like). Barnier is likely to aim for a summit in December as the opportunity to present the agreement on the UK’s departure from the EU.

If the talks go well in 2017, by 2018 the focus will be on the future relationship between the EU and the UK, notably in the realm of trade. But there are many other difficult issues (such as air services agreements, environmental regulation, and border management), any one of which could present a hurdle which would need time to address. The aim is for a deal to be agreed by October 2018, which would leave time for the European Parliament and the 27 member states to vet and ratify the deal.

The complexity of the negotiations should not be underestimated. At this early stage, it is clear that both sides are going into them with goodwill, but there is a lot of detail to be covered, and this will happen under a glare of publicity. Attaining a deal on time is possible, and perhaps likely, but not certain.

The announcement on 19 April by Prime Minister May of a general election adds another variable to this already complex picture.