The European Union is facing an unprecedented and regrettable first act of disintegration whose countdown has begun. In two years the United Kingdom, most likely, will stand on the threshold of its transition from EU member to third country. Alternatively, by unanimous agreement of the EU 27, it could extend its 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.
Last week, nine months after the Brexit referendum, the UK officially notified the EU of its withdrawal under article 50. Since last June the EU’s mantra has been “No notification, no negotiations”, but it has not been idle. The European institutions are revealing their clearly co-ordinated hand. They want an orderly withdrawal and an agreement based on a balance of rights and obligations; they are against cherry-picking and sector-by-sector approaches; and they propose the sequencing of negotiations. The EU will act as one in its negotiations with the UK. This drama will be in two acts, the leaving part and the future-relations part, linked but separate, and based on different treaties.
Act one, grounded in article 50 of the Treaty on European Union, requires the consent of the European Parliament and a qualified-majority vote of the European Council. It will play out in three phases: the disentanglement of the UK from the rights and obligations of EU membership; the identification of a framework for the future relationship; and the agreement of transitional arrangements that are clearly defined, limited in time and subject to enforcement mechanisms.
These negotiations will be conducted as a single package, with nothing agreed until everything is agreed
Throughout all three phases EU regulatory, budgetary, supervisory and enforcement instruments and structures would apply. These negotiations will be conducted as a single package, with nothing agreed until everything is agreed. In some months, if a judgment is reached that enough progress is being made in talks, attention will turn to framing future relations. Encompassing more than just trade, these will consider a partnership in security and defence and the fight against terrorism and crime. Negotiations must be completed and ratified, by both the EU and the UK, by the end of March 2019.
This week in Strasbourg the European Parliament will adopt a motion for resolution on negotiations with the UK. The European Council will meet on April 29th to adopt the definitive negotiating guidelines. Michel Barnier, the European Commission's chief negotiator, has indicated that withdrawal negotiations will need to be completed by October 2018. This will allow the European Parliament's consent procedure to be finalised well before the 2019 European elections. The UK also will need to ratify the outcome by whichever national procedures it deems appropriate. As this must also be completed by March 2019 the time available for negotiations could be as short as 16-18 months.
The term disentanglement covers a multitude, including the key sensitivity of the reciprocal rights of EU citizens living in the UK and, conversely, of UK citizens in the EU; the UK's honouring of its outstanding financial obligations; the special circumstances of the island of Ireland, the peace process and the Border; the exit of British members from all EU institutions, including the parliament, commission, council, court of justice, court of auditors, the investment bank and the external action service; the relocation from London of the European Banking Authority and the European Medicines Agency; the treatment of the paid-up capital of the UK in the European Investment Bank; the orderly disengagement of the UK from international treaties signed by the EU; dispute-settlement mechanisms to do with the application and interpretation of the withdrawal agreement.
This illustrative list speaks to the momentous scale of the task in hand. Progress here will determine if and when consideration of the future framework for relations will begin.
The agenda is unprecedented. The details are as dense as they are numerous
Act two will be grounded in article 218 of the Treaty on the Functioning of the European Union. A comprehensive free-trade agreement with the UK can be finalised only when the UK becomes a third country, outside the EU, in 2019. The commission negotiates on a mandate agreed by council. Approval requires the consent of the European Parliament and a qualified-majority vote of the council. If the agreement also covers areas of national competence – a so-called mixed agreement – then the unanimous agreement of member states would also be required, triggering ratification by national parliaments. This happened with the recent Comprehensive Economic and Trade Agreement with Canada. Who ultimately decides likely will be as much a political as a legal issue.
As the EU and UK start with full regulatory compatibility this should be more straightforward than other such deals. But it will be complicated by level-playing-field issues to do with 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 European Court of Justice, will add to the complexity of the negotiations. Any member state or EU institution has the right to go to the court to challenge the compatibility of the outcome of any of these negotiations with EU treaties.
The agenda is unprecedented. The details are as dense as they are numerous. The politics involve complex countervailing institutional powers and influences. The treaties must be respected. The British Eurosceptics are quiescent, for the moment. The clock is ticking.
Pat Cox was president of the European Parliament from 2002 to 2004 and a member of the European Parliament from 1989 to 2004