EU Matters: BREXIT Negotiation Focus

Issue 01/2017

ARTICLE 50: WHAT NEXT?

On 29 March 2017 UK Prime Minister Theresa May formally wrote to European Council President Donald Tusk to notify the United Kingdom’s intention to withdraw from the European Union, in accordance with Article 50(2) of the Treaty on European Union. This short paper highlights the architecture and potential timetable for negotiations, and compares the starting negotiating positions of the three main actors – the UK Government, the European Council and the European Parliament.

ARCHITECTURE

The Institute for Government has outlined which EU institutions will be involved in the negotiations:

Which EU institutions will be involved in negotiations?

Four EU institutions will play a significant role in the Brexit negotiations:

  • The European Council defines the general political direction and priorities of the EU. It consists of the heads of state or government of the member states, together with its President and the President of the European Commission. It does not negotiate or adopt EU laws.
  • The Council of the EU represents member states' governments. It is where ministers below the head of state from each EU country meet to adopt laws and co-ordinate policies. Along with the European Parliament, the Council plays a key role in negotiating and approving EU legislation and international agreements.
  • The European Commission is the EU’s executive body. It is the only institution with the authority to initiate legislation in most areas, though it draws on input from a variety of other bodies.
  • The European Parliament is a directly elected legislature, comprising 751 Members of the European Parliament (MEP) elected by citizens of the 28 member states. Its role in the legislative process is to scrutinise, amend and vote on legislation.

Article 50 sets a two-year deadline for withdrawal, whether or not an agreement on withdrawal has been made, unless the European Council unanimously decides to extend this period. It also states that withdrawal arrangements should take account of the framework for a future relationship with the EU, but there is no obligation to have agreement on the future relationship at the point of withdrawal.

The European Council has met regularly since the UK referendum, without the participation of the UK, to draw up its negotiating mandate. This will be finalised at a meeting of the European Council scheduled for 29 April. Once agreed the European Commission, led by Chief Brexit Negotiator Michel Barnier, will begin discussions with the UK on behalf of the European Council.

Michel Barnier has repeatedly made it clear that he expects this part of the process to last around 18 months to allow time at the end for the ratification process.

The Institute for Government outlines the role of the European Parliament as follows:

“In theory, the European Parliament’s role in the negotiations process is fairly limited. Article 218 states that the Parliament must be kept ‘immediately and fully informed at all stages of the [negotiations] procedure’, but it does not give the Parliament a role in deciding the substance of the negotiations. However, the Parliament must pass the final agreement by a simple majority vote. This ability to reject the withdrawal agreement means that, in reality, the Parliament is likely to wield significant power over the content of the agreement and the negotiations itself. No majority in the European Parliament = no withdrawal agreement.

“Given the importance of securing the Parliament’s approval, it is likely that the Parliament will be closely involved in the negotiations process. Guy Verhofstadt, the Parliament’s lead negotiator on Brexit, will feed its position into the negotiations and report back to the political group leaders in the Parliament.”

KEY PERSONNEL

Both the European Council and the European Parliament have made it clear that there will be no room for the UK to make separate bilateral agreements with members of the EU during the period of the negotiations. Similarly, the UK has stated that it will negotiate as one, indicating to EU Member States that they should not seek to make separate deals for any specific nation or region. The key personnel for each institution represented in the negotiation process are listed below.
Figure 1: Key Brexit Personnel

VOTING REQUIREMENTS

Article 50 (TEU) states that the withdrawal agreement “shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament”. The meaning of “qualified majority” in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union is at least 72% of the Council representing Member States comprising at least 65% of the population of these states. In practice this means that at least 20 countries must be in favour of the withdrawal agreement. The European Council vote will take place following the ratification of the European Parliament, which will vote on the basis of simple majority.

The UK Government has made a commitment to give Parliament a vote on the final Brexit deal. While this will provide an opportunity for the withdrawal agreement to be debated in Parliament, the vote will not be legally binding.

POTENTIAL TIMETABLE

Figure 2: Potential negotiating timetable

This BBC News graphic from illustrates the key steps to the UK leaving the EU.

Figure 3: Steps to UK leaving European Union (Source: BBC News)

Comparison of opening negotiating positions

The table below compares the opening negotiating positions of the:

  1. UK Government as set out in Prime Minister Theresa May’s letter to European Council President Donald Tusk on 29 March;
  2. European Council draft resolution presented by Donald Tusk on 31 March, to be agreed on 29 April;
  3. European Parliament resolution for debate and adopted on 5 April. 

Table 1: Comparison of draft negotiating positions

Topic
UK Government
 
European Council
 
European Parliament
 
Principles

Deliver objectives in a fair and orderly manner

Will negotiate as one UK

Engage with one another constructively and respectfully in a spirit of sincere cooperation

We should always put our citizens first

We should work towards securing a comprehensive agreement

We should work together to minimise disruption and give as much certainty as possible

We must pay attention to the UK’s unique relationship with the Republic of Ireland and the importance of the peace process in Northern Ireland

We should begin technical talks on detailed policy areas as soon as possible, but we should prioritise the biggest challenges.

We should continue to work together to advance and protect our shared European values

The European Union will act as one.

Any agreement with the UK will have to be based on a balance of rights and obligations, and ensure a level-playing field.

Nothing is agreed until everything is agreed, and individual items cannot be settled separately.  

Good faith & full transparency

Mandate and negotiation directives given throughout negotiation process must full reflect the positions and interests of the EU-27, including Ireland.

Timetable

Believe it is necessary to agree the terms of our future partnership alongside those of our withdrawal from the EU.

We must proceed according to a phased approach giving priority to an orderly withdrawal

Once, and only once we have achieved sufficient progress on the withdrawal can we discuss the framework for our future relationship. Starting parallel talks at the same time will not happen

Negotiations under Article 50 TEU will be conducted as a single package

Two year timeframe set out in Article 50 TEU ends on 29 March 2019

Withdrawal agreement and transitional arrangements should be in force before EP elections in May 2019

Substantial progress be made towards a withdrawal agreement before talks could start on possible transitional arrangements

Agreement

We should work towards a securing a comprehensive agreement – both in economic and security cooperation

We should prioritise the biggest challenges

Nothing is agreed until everything is agreed, and individual items cannot be settled separately

 

Withdrawal agreement only concluded with the consent of EP, as is also the case for any possible future agreement on relations between the EU and the UK, as well as any possible transitional arrangements

Single market & customs union

UK does not seek membership of the single market.

We know that UK companies will as they trade within the EU have to align with rules agreed by institutions of which we are no longer part – just as UK companies do in other overseas markets.

Propose a bold and ambitious Free Trade Agreement between the UK and the EU. We should prioritise how we manage the evolution of our regulatory frameworks to maintain a fair and open trading environment and how we resolve disputes.

Preserving the integrity of the Single Market excludes participation based on a sector-by-sector approach

European Council welcomes the recognition by the British Government that the 4 freedoms of the Single Market at indivisible and that there can be no ‘cherry picking’

The European Council stands ready to initiate work towards an ambitious free trade agreement – to be finalised and concluded once the UK is no longer a Member State

Any free trade agreement should be balanced, ambitious and wide ranging but cannot amount to participation in the Single Market or parts thereof. It must ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through, inter alia, fiscal, social and environmental dumping

Membership of internal market and customs union comprises acceptance of 4 freedoms, ECJ, general budgetary contributions and adherence to EU’s common commercial policy

Legal & financial obligations

We will of course continue to fulfil our responsibilities as a member state while we remain a member of the EU

We will need to discuss how we determine a fair settlement of the UK’s rights and obligations as a departing member state, in accordance with the law and in the spirit of the UK’s continuing partnership with the EU.

We will need to make sure the UK honours all financial commitments and liabilities it has taken as a Member State

A single financial settlement should ensure that the European Union and the UK both respect the obligations undertaken before the date of withdrawal. The settlement should cover all legal and budgetary commitments as well as liabilities, including contingent liabilities

Principle of sincere cooperation

UK must honour all its legal, financial and budgetary obligations

Financial obligations should be settled in the withdrawal agreement

Financial settlement on basis of EU’s annual accounts as audited by Court of Auditors must include all legal liabilities

Future EU-UK relationship

Hope to enjoy a deep and special partnership – taking in both economic and security cooperation

We share the UK’s desire to establish a close partnership between us. Strong ties, reaching beyond the economy and including security co-operation, remain in our common interest

An agreement on a future relationship between the European Union and the UK as such can only be concluded once the UK has become a third country. But Article 50 TEU requires to take account of the framework for its future relationship with the Union in the arrangements for withdrawal – an overall understanding on the framework for the future relationship could be identified during a second phase of negotiations

The European Council welcomes and shared the UK’s desire to establish a close partnership between the EU and the UK after its departure… strong and constructive ties will remain in both sides’ interest and should encompass more than just trade

After the UK leaves the EU, no agreement between the EU and the UK may apply to the territory of Gibraltar without the agreement between…Spain and the UK

Future relationship between the EU and UK as a third country can only be concluded once the UK has withdrawn from the EU

Article 8 TEU and Article 217 TFEU which provides for ‘establishing an association involving reciprocal rights and obligations, common action and special procedures’ could provide framework for future relationship

Future agreement is conditional on the UK’s continued adherence to the standards provided by the European Union’s legislation and policies

Opposes agreement that is piecemeal or contains sectorial provisions, including with respect to financial services

EU citizens in UK & UK citizens in EU

We should always put our citizens first – we should aim to strike an early agreement about their rights

Agreeing reciprocal guarantees to settle the status and situations at the date of withdrawal of EU and UK citizens, and their families, affected by the UK’s withdrawal from the European Union will be a matter of priority for the negotiations

Should be part of withdrawal agreement

Requires the fair treatment of EU-27 citizens living or having lived in the United Kingdom and the United Kingdom citizens living or having lived in the EU-27 and is of the opinion that their respective interests must be given full priority in the negotiations.

Any degradation of rights linked to freedom of movement etc. before date of withdrawal contrary to EU law

Border between Republic of Ireland and Northern Ireland

In particular, we must pay attention to the UK’s unique relationship with the Republic of Ireland and the importance of the peace process in Northern Ireland. We want to avoid a return to a hard border, to be able to maintain the CTA. We also have important responsibility to make sure that nothing is done to jeopardise the peace process in NI, and to continue to uphold the Belfast Agreement

We will seek flexible and creative solutions aiming at avoiding a hard border between Northern Ireland and Ireland. It is of crucial importance to support the peace process in Northern Ireland

The EU should recognise existing bilateral agreements and arrangements between the UK and Ireland which are compatible with EU law

Recognises unique and special circumstances confronting the island of Ireland must be addressed in the withdrawal agreement – absolute need to ensure continuity and stability of NI peace process and avoid re-establishment of a hard border.

Security

We want to play our part to ensure that Europe remains strong and prosperous and able to lead in the world, projecting its values and defending itself from security threats

Beyond trade, the EU stands ready to consider establishing a partnership in other areas, in particular the fight against terrorism and international crime as well as security and defence

No trade-off between internal and external security including defence cooperation on the one hand, and the future economic relationship on the other

Transitional arrangements

We should work together to minimise disruption and give as much certainty as possible. In order to avoid any cliff edge as we move from our current relationship to our future partnership, people and businesses in both the UK and the EU would benefit from implementation periods to adjust in a smooth and orderly way to new arrangements.

The negotiations may seek to determine transitional arrangements which are in the interest of the EU to provide for bridges towards the foreseeable framework for future relationship. Any such… transitional arrangements must be clearly defined, limited in time, and subject to effective enforcement mechanisms.

must contain the right balance of rights and obligations for both parties, with ECJ as arbitrator; must be time limited – 3 years

Companies and business

Bring forward legislation to convert the body of existing EU law into UK law.

We should work together to minimise disruption and give as much certainty as possible.

Must prevent a legal vacuum for our companies that stems from the fact that after Brexit the EU laws will no longer apply to the UK

Legal certainty for legal entities, including companies

No deal

If we leave the EU without an agreement the default position is that we would have to trade on WTO terms. In security terms a failure to reach agreement would mean our cooperation in the fight against crime and terrorism would be weakened.

The Union will work hard to achieve that outcome, but it will prepare itself to be able to handle the situation also if the negotiations were to fail

 

UK international commitments & third countries

 

The UK will no longer be covered by international agreements concluded by the EU or by Member States acting on its behalf or by both acting jointly. The European Council expects the UK to honour its share of international commitments contracted in the context of its EU membership. In such instances a constructive dialogue with the UK on a possible common approach towards third country partners and international organisations concerned should be engaged

Matters relating to international agreements should be clarified in withdrawal agreement.

Contrary to EU law for UK to begin negotiations on trade or other policies with third party states before withdrawal

Role of CJEU/Dispute settlement

 

The Court of Justice of the EU should remain competent to adjudicate in procedures pending before the Court up on the date of withdrawal that involve the UK or natural or legal persons in the UK

The withdrawal agreement should include appropriate dispute settlement mechanisms regarding the application and interpretation of the withdrawal agreement. This should be done… bearing in mind the role of the Court of Justice of the EU

The future partnership must include appropriate enforcement and dispute settlement mechanisms that do not affect the EU’s autonomy, in particular its decision-making procedures

Designation of the Court of Justice of the EU as the competent authority for the interpretation and enforcement of the withdrawal agreement

EU external border (other than between RoI and NI)

 

 

Should be settled in withdrawal agreement

UK citizens

 

 

Explore ways of mitigating UK citizens loss of Article 20 TFEU rights (rights of European citizenship)

Gibraltar

 

After the UK leaves the EU, no agreement between the EU and the UK may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the UK

 

Prepared by Karen Jardine,
Acting EU Affairs Manager,
Northern Ireland Assembly,
Parliament Buildings,
Belfast
BT4 3XX
E-mail: Karen.jardine@niassembly.gov.uk

Find MLAs

tools-map.png

Locate MLAs

Search

News and Media Centre

tools-media.png

Read press releases, watch live and archived video

Find out more

Follow the Assembly

tools-social.png

Keep up-to-date with the Assembly

Find out more