Initiation of Process
On 29 June 2016, the EU heads of state/government in response to the referendum indicated that no negotiations could commence before Article 50 was triggered. In October 2016, the UK Prime Minister announced her intention to trigger Article 50 by the end of March 2017. The UK notification triggering Article 50 issued on 29th March 2017.
On 17th January 2017, the UK Prime Minister delivered a speech at Lancaster House setting out the government’s plan for the UK departure. The UK’s government white paper on Brexit was published on 2 February 2017. The UK’s objective is to make progress on discussions on the future UK-EU relatinship alongside the Article 50 withdrawal negotiations.
The UK has sought a bold and ambitious free trade agreement which should be of greater scope and ambition than any agreement before it. It believes that it can be achieved more easily, given that the regulatory frameworks and standards are already aligned. The UK is open to agreeing on a mechanism to manage the evolution of the frameworks and standards.
The EU also has expressed its desire to have a comprehensive and ambitious trade agreement if possible. A future partnership could also involve agreement on other areas such as foreign and security policy, justice and home affairs, research civil aviation development cooperation.
In the event that there is no agreement, the EU treaties cease to apply to the UK on 29 March 2019 (may also apply to new exit date on 31 December 2020). On trade matters, the relationship would immediately rever to mutual World Trade Organisation rules. This is the cliff edge effect. The UK wishes to avoid a “cliff edge” of uncertainty with an implementation and transitional period. It seeks to achieve certainty for the matters such as the mutual rights of EU and UK residents in each others’ respective territories.
The Brexit date under Article 50 (29th March 2019 (may also apply to new exit date on 31 December 2020) ) may be extended with the consent of all states or there may be transitional arrangements under a withdrawal agreement.
EU Negotiation Mandate
Article 218(3) of the Treaty on the Functioning of the European Union provides that the Commission shall submit a recommendation to the Council to adopt the decision regarding the opening of negotiations and nominating the EU negotiator or head of the negotiating team. After the adaptation of the guidelines by the EU Council, the Commission must present to the Council, a recommendation to open negotiations as well as the draft negotiating directive based on the guidelines.
The EU Council must authorise the negotiations with the withdrawing state by adopting by appointing the negotiator and adopting negotiation directives. The mandate is given by special qualified majority (72% members (20) with 65 percent of the population of the states).
On 15 December 2016, the heads of state/government of the EU 27 agreed that the responsible Council formation is the General Affairs Council. The Council appointed Michel Barnier as the chief negotiator. The UK does not participate in these council discussions or decisions.
The EU Commission appointed former vice president and French Foreign minister, Michel Barnier as chief negotiator for the task force for the preparation and conduct of the Brexit negotiations with the UK. The task force comprises UK Commission officials including two officials from Ireland. It has a leading role on behalf of the EU in the negotiations under the political guidance of the EU Council.
Role of Other Bodies
The European Parliament has a significant role in the negotiations and their approval. The European Parliament has appointed former Belgium Prime Minister leader of the Alliance Democrats group, Guy Verhofstadt as the parliament’s coordinator for negotiations. The parliament’s conference of presidents has established a steering group on Brexit to assist Mr. Verhofstadt.
The European Parliament must consent to the proposed agreement on withdrawal by a simple majority, including members of the parliament representing the withdrawing state. The council must conclude the agreement by a special qualified majority vote.
It is likely that there will be two agreements between the UK and the EU. The comprehensive trade agreement sought by the UK would deal with EU and EU member state competences so that it would be a mixed agreement. It would accordingly require the consent of the various EU states in accordance with their constitutional requirements.
EU Negotiation Guidelines
On 19th April 2017, the EU Council adopted guidelines setting out its position on the negotiations with the UK in relation to its withdrawal from the EU. The guidelines define a framework for the negotiation under Article 50 and set out the overall positions and principles which the EU will pursue through the negotiations.
The EU Council guidelines are the overarching political framework for the negotiations and establish the political direction. The guidelines are updated by the European Council as required, and as negotiations progress. The guidelines set out the core principles that shape EU’s approach to negotiations and highlight specific priority areas. They include a number of uniquely Irish issues.
The EU negotiation guidelines set out the EU’s principles and objectives in the negotiation. They propose a phased beginning with priority issues for the withdrawal agreement. If sufficient progress is made on these issues, there is a willingness to open informal discussions on the framework for the EU and UK’s future relationship. It is a matter for the heads of state to determine when sufficient progress has been made.
Article 50 provides that the withdrawal agreement should take account of the framework for the future relationship between the EU and UK. In accordance with the EU Council negotiation guidelines, once sufficient progress is made on the withdrawal negotiations, discussions will begin in parallel on the scope and shape of the arrangements for EU’s future relationship with the UK.
The guidelines provide for a transitional arrangement to bridge the period between the withdrawal agreement and agreement on a future relationship. The UK and EU share the objective of a close partnership post-Brexit. There is a shared desire to have an ambitious and comprehensive free trade agreement covering goods and services and other matters to the extent possible. The guidelines express a wish for a close and ambitious partnership with the UK after Brexit.
Withdrawal Agreement Matters
Brexit negotiations will relate to two agreements or sets of agreements, broadly a withdrawal agreement and later, a new trade agreement(s) between the EU and the United Kingdom. It is likely that the trade agreement(s) will take some considerable time to put in place.
The withdrawal agreement is to deal with financial issues arises from existing UK obligations. It must also reflect the UK’s entitlements and rights in the same manner as liabilities. The EU budget is approximately one percent of the income of EU member states. The Budget is proposed by the Commission annually and adopted by the Council and the Parliament.
The financial settlement required to be negotiated under Article 50 takes effect in the context of UK and EU’s ongoing financial relationship. The UK (with all other states) has made commitments to the EU multiannual financial framework 2014 to 2020. See the article regarding the expenditure under the multiannual financial framework and the UK’s contribution. The purpose of the framework is to allow the EU to pursue policies over a period of time sufficiently long to be effective.
Another second key issue for the withdrawal agreement is the protection of the rights of EU and UK citizens and their families who reside in the territory of the other. The withdrawal negotiations are likely to focus on the guarantee on a mutual basis of the rights of EU citizens in the UK and UK citizens in the EU.
There are a very considerable number of Irish residents in the UK and UK residents in Ireland. Their position is expected to be protected under the common travel area arrangements which are accepted by the EU to continue as well as in more general terms applicable to all EU and UK citizens living in the other’s jurisdiction under the withdrawal agreement.
The Guidelines point out that the EU has consistently supported the goal of peace and reconciliation enshrined in the Good Friday Agreement in all its parts and continuing to support and protect the achievements, benefits, and commitments of the Peace Process will remain of paramount importance.
They continue that “In view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order. In this context, the Union should also recognise existing bilateral agreements and arrangements between the United Kingdom and Ireland which are compatible with EU law”.
Other Important Issues
Issues arise regarding the transfer of the seats of the EU agencies and facilities within the EU. The European Banking Authority and European Medicines Authority are based in the UK and their headquarters are moving respectively to Paris and Amsterdam.
Issues will also arise regarding the pension entitlements of EU citizens who have worked in the UK in the past and UK citizens who have worked in the EU. Social insurance contributions made in one state are reckonable in other states under a common EU framework.
At present, qualifications of a person resident in another state are recognised in the host state under EU law. The negotiations on citizens rights in each other’s territories are likely to seek guarantees and certainty on these issues at an early date.
Ireland has indicated that a reciprocal agreement for the protection of citizens’ rights is critical. Legal certainty and clarity are essential at an early stage. This is necessary for human rights terms and in building confidence in the negotiation process.
An important issue is how the ultimate agreement is implemented monitored and enforced. This is a particularly difficult issue, as the UK has indicated it does not wish to have European Court jurisdiction in its territories. This would imply enforcement at the state level only, which may undermine the effectiveness of rights for individuals and businesses. It may be that some areas may the subject of direct enforcement by citizens whereas others apply at the state level only.