Pat Cox, former President, European Parliament, president of the Jean Monnet Foundation for Europe

 

Some of the answers to the question of certainties, uncertainties and the unknown surrounding Brexit can be found in the framework through which the negotiations will take place. That forms the basis for this intervention.

THE COUNTDOWN HAS BEGUN
The EU is facing an unprecedented and regrettable first act of disintegration whose countdown has begun. In twenty months’ time the United Kingdom, most likely, will stand on the threshold of a transition period marking its passage from European Union membership to third country status. Alternatively, by unanimous agreement of the EU 27, it could extend the period of 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.

The Article 50 notification officially marking the United Kingdom’s intention to withdraw from the EU was lodged on March 29 2017, nine months after the UK referendum. Seventy days after the notification, in an unnecessary election to secure a strong and stable majority to back her hard Brexit policy, the Prime Minister, Teresa May, lost her majority and authority.

The clock is ticking and, barring a unanimous agreement between the European Council and the UK to extend this period, the exit negotiations must be concluded by March 29 2019.

This includes the time necessary to obtain the consent of the European Parliament and a vote by a qualified majority of the European Council, suggesting that the negotiations will need to have concluded in sixteen or seventeen months’ time in order prudently to conclude the necessary procedures.

If, for whatever reasons, the European Parliament refused its consent and/or the European Council failed to find a qualified majority, or if the negotiations failed to reach a mutually satisfactory conclusion, the Treaties shall cease to apply to the UK with effect from midnight March 29 2019.

A deadline extension, though legally possible, is politically unlikely. If the UK does not leave the EU in the timescale foreseen the absurd prospect of having to hold European Parliament elections in the UK in the summer of 2019 for a state that insists on leaving the Union and of it being drawn into questions about the future financing of the EU through the negotiations on the next Multi Annual Financial Framework for the EU’s post 2020 budgets would arise.

If there were no agreement the UK would trip over a cliff edge and would need to adopt a WTO tariff schedule for the conduct of its international trade, the worst of all possible future options for all parties involved and the most serious in their implications for Ireland.

NOTHING IS AGREED UNTIL EVERYTHING IS AGREED
The European Parliament adopted its resolution on Article 50 by an overwhelming majority on April 5 2017. Later in the month the European Council unanimously adopted guidelines for negotiations on April 29 2017. These reveal a high level of inter institutional coordination. The core principles express the wish to have the UK ‘as a close partner’, that any deal needs to be based on a balance of rights and obligations and ensure a level playing field, that the integrity of the single market must be preserved which means the four freedoms are indivisible and excludes cherry picking and that a non-member state cannot enjoy the same rights and benefits as a member.

This is not a Boris Johnson style ‘have your cake and eat it’ negotiating mandate.

The negotiations will be treated as a single package and ‘nothing is agreed until everything is agreed’.

The negotiations will be phased to provide as much clarity and legal certainty as possible and to settle the disentanglement of the UK from the EU.

The phrase disentanglement covers a multitude, such as:

– The key sensitivity of the reciprocal rights of citizens of the 27 EU member states living in the UK and conversely of UK citizens in the EU 27

– The honouring by the UK of its outstanding EU 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 among others the European Parliament, Commission, Council, Court of Justice, Court of Auditors, the European Investment Bank and the European External Action Service

– The relocation of the European Banking Authority and the European Medicines Agency

– The treatment of the paid up capital of the UK in the EIB

– The orderly disengagement of the UK from international treaties signed by the EU

– The Euratom Treaty

– Agreement on privileges and immunities for each other institutions and assets in the others jurisdiction post Brexit. This is especially sensitive for the European Investment Bank.

– Fisheries policy and territorial waters

– Dispute settlement mechanisms regarding the application and interpretation of the withdrawal agreement.

– Even, pets’ passports covering the 250,000 pooches and pussycats that vacation with their UK owners each year on the continent.

This list is illustrative but far from exhaustive in a process that will be unprecedented in scale.

Safeguarding citizens’ rights, agreeing a single financial settlement to ensure that the UK respects its obligations and the Irish question (support for the Good Friday Agreement and the peace process in Northern Ireland and the need for flexible and imaginative solutions aimed at avoiding a hard border on the island of Ireland while respecting the integrity of the Union legal order) are specified as the first priorities of the EU.

Talks on the future framework for relations between the EU and the UK, also part of the Article 50 negotiations, will only take place when sufficient progress has been made on the priorities referred to above.

The General Affairs Council (the EU Foreign Ministers) on May 22 2017 authorised the opening of negotiations, nominated the Commission as the EU negotiator and adopted the negotiating mandate. The GAC will continue to monitor and assess progress.

A SERIES OF WORKING DOCUMENTS TO INFORM PUBLIC OPINION
Though initially contested by the British side, the idea of phasing the talks based on a judgment of ‘sufficient progress’ was accepted at the opening round of negotiations on June 19 2017. Terms of reference were agreed. Negotiating groups have been established for citizens’ rights, the financial settlement, other separation issues and in addition a dialogue on Ireland/Northern Ireland has been launched under the authority of the Coordinators. Negotiations will take place every four weeks unless decided otherwise by mutual consent. The second round of negotiations takes place today (July 17th) in Brussels. Both sides have published a series of working documents and will continue to do so to inform public opinion.

The EU and the UK have published several position papers including on citizens’ rights marking both progress and divergence, prompting the European Parliament’s Brexit steering group last week to publish an article in several newspapers suggesting that it ‘will reserve its right to reject any agreement that treats EU citizens, regardless of their nationality, less favorably than they are at present’. They added ‘we will not support any extension to this deadline (of end March 2019), because it would require the UK to hold European elections in May 2019. That is simply unthinkable’.

On the financial settlement question while the Foreign Secretary, Boris Johnson, told the House of Commons that the EU can ‘go whistle’ if it insists on demanding ‘extortionate sums’, a more conciliatory tone was struck by a Brexit Minister, Joyce Anelay, in a written statement to Parliament which explicitly acknowledged for the first time ‘that the UK has obligations to the EU . . . that will survive the UK’s withdrawal — and that these need to be resolved.’ To date the British side has not submitted a position paper on financial issues.

Assuming that the political and administrative capacity, especially on the British side, can be mobilised to secure the necessary settlement by March 29 2019, this would mark the end of the beginning of the process, the prelude to a second act.


IT IS NOT CLEAR WHAT BRITAIN VOTED FOR
Act two will be grounded in Article 218 of the Treaty on the Functioning of the EU. A future comprehensive free trade agreement with the UK can only be finalised when the UK exits and becomes a third country outside the EU in 2019. The Commission will negotiate on a mandate to be agreed by Council. Approval requires the consent of the European Parliament and a qualified majority vote of the Council. If the agreement covers areas of national and not exclusive EU Treaty competence, a so-called mixed agreement, then the unanimous agreement of member states would be required triggering ratification by national parliaments. This happened with the recent Comprehensive Economic and Trade Agreement with Canada.

Since the EU and UK start with full regulatory compatability, which in principle the repeal Bill tabled last week should preserve at the outset, an EU/UK trade deal should be more straightforward than other such deals. However, it will be complicated by ‘level playing field’ issues regarding 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 Court of Justice, will add to the complexity of the negotiations.

Any member state or EU institution has the right to challenge the outcome of any of these negotiations for Treaty incompatibilities before the Court of Justice of the EU.

The politics involve complex countervailing institutional powers and influences. This was recognised by Britain’s former Ambassador to the EU, Sir Ivan Rogers, who in ‘speaking truth to power’ challenged ‘ill-founded arguments and muddled thinking’. The top politicians did not want to hear what professionally he had to say. He quit at the beginning of January 2017 frustrated by those who disliked his warnings about the potential pitfalls in the Brexit process.

British political ground has not been well prepared for necessary compromises. Britain voted to leave the EU but it remains much less clear what they voted for. The Prime Minister’s Lancaster House speech and the subsequent White Paper opted for Britain to leave the Single Market and the Customs Union, to take back control of immigration policy and to do away with the role of the Court of Justice of the EU. Collectively, these have been characterised as constituting a hard Brexit.

An opportunistic general election proved to be a costly gamble. The Prime Minister has lost reputation and standing but retains a fragile hold on power, for the moment. Fear of a Tory civil war on Europe and fear of gifting power to Jeremy Corbyn in an early election maintain her tenuous hold on power. With the ten votes of the DUP she commands a majority of thirteen in the House of Commons. Seven Tory defectors voting with the combined opposition could derail any legislative proposal, not to mention the capacity of the House of Lords potentially to slow legislation down considerably.


THE REPEAL BILL: LEGISLATIVE AND POLITICAL COMPLICATIONS
The Repeal Bill published last week intends to retain and transfer existing EU law into UK law. There is no single figure on how much law this is but there are 12,000 regulations in the EUR-Lex data base, over 6,000 EU Directives and around 7,900 UK Statutory Instruments that have implemented EU law in the UK. This is not the only Bill anticipated to achieve Brexit. New national policies on immigration, international sanctions, nuclear safeguards, agriculture, and fisheries are needed and must be legislated for. The legislative and administrative scale of what needs to be done is monumental. The Queen’s speech stretches to a two-year time horizon up to and including the final operative date under Article 50. It is unlikely that the UK will have the bandwidth to cope with much else, if indeed it can cope with this challenge.

Labour has begun to mark out differences with government since the publication of the Repeal Bill. Specifically they have raised questions on six issues – workers’ rights, the European Charter on Fundamental Rights (which is to be abolished), limiting the use of ‘Henry VIII powers’ allowing government to alter legislation with minimal parliamentary scrutiny, the role of devolved governments, the Euratom Treaty and lightening up on the hard removal of the role of the CJEU. This appears to leave quitting the Single Market, leaving the Customs Union and ending the free movement of persons intact. In short, if the appropriate compromises can be found a harder rather than softer Brexit seems still to be indicated.

The Prime Minister looking to Labour for support may be forlorn. Labour has its own mixed feelings on Europe and has the sniff of power in its nostrils. Tory hard line Brexiters and their cheerleaders in the media seem determined to ‘defend our island whatever the cost may be’. For some, no deal would be their preferred outcome.

There are other straws in the wind. Voices like Tony Blair calling for leaders to ‘at least lead a proper debate about the options before us’. Or the opinion poll in the Mail on Sunday in mid June 2017 showing, for the first time since the Brexit referendum, a majority against leaving the Customs Union, a two to one majority disagreeing with the Prime Minister’s assertion that ‘no deal is better than a bad deal’ and fifty three percent agreeing that there should be a second referendum on the terms of a Brexit deal. Or the Chancellor, Philip Hammond, urging ‘a slope and not a cliff’ in exiting the EU with longer transition periods to facilitate British business and commerce. Or Ruth Davidson in Scotland, who led the Tories from one to thirteen seats and who prefers to stay in the Single Market.

Britain is a country divided. The Prime Minster is leading a cabinet divided. The Tories in government are a party divided. The clock is ticking. Time is running out. The EU negotiating mandate is agreed. Britain finally must choose and specify what it wants.

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