As Brexit Preparations Continue, May Highlights UK's Trade Future and Europe Ties

23 February 2017

The UK’s House of Lords is discussing this week legislation that, if approved, will give Prime Minister Theresa May the formal sign-off to invoke Article 50 of the Lisbon Treaty, allowing the official launch of Brexit negotiations for the island nation to leave the European Union.

May has pushed for swift passage of the bill domestically to meet her self-imposed 31 March deadline for beginning talks with the European Council to disentangle the UK from the bloc.

Those negotiations, once underway, are expected to be technically complex as the parties involved hash out the details governing a future trading relationship between the UK and the EU single market, among various other topics. (See Bridges Weekly, 6 October 2016 and 30 June 2016)

Brexit bill

The European Union (Notification of Withdrawal) Bill, or the Brexit Bill, was drawn up following a UK Supreme Court ruling requiring parliamentary consent before launching negotiations. (See Bridges Weekly, 12 December 2016)

The bill cleared the House of Commons by 494 votes to 122 earlier this month, with all proposed amendments eventually rejected, resulting in a “clean” bill advancing to the upper chamber.

At the time of this writing, 12 amendments to the bill had been tabled by parliamentarians in the House of Lords, where there is no government majority, with many of these giving a potential sense of where some concerns lie ahead of the actual Brexit negotiations.

Several of these amendments are aimed at ensuring greater parliamentary involvement at various stages of negotiations, stipulating a high level of transparency and parliamentary oversight in negotiations; allowing lawmakers a “meaningful vote” to approve the final UK exit package before it is sent for ratification by the European Parliament; or requiring assessments on the projected impact on the UK economy to be supplied to each House of Parliament.

Another amendment seeks to guarantee a continued strong trade relationship whether through retaining membership in the European Single Market, or access to it through participation in the European Economic Area or membership in the European Free Trade Association.

An additional amendment aims to protecting the rights of EU nationals in the UK, though a similar amendment to grant permanent residency to EU citizens living in the UK was earlier rejected in the Commons by 332 votes to 290.

If any amendments are passed, the bill would return to the House of Commons for renewed debate and a second voting round, which could affect the government’s timetable for notifying under Article 50. However, commentators have noted that since the House of Lords represents an unelected body, they can only delay the decision, and will be unlikely to block the vote out of pressure to respect the democratic will of the people.

In the House of Lords, peers are gearing up to speak on the subject, with 191 members of Parliament in line for second reading. In a rare move, May attended the debate herself on Monday.

Plans in Brussels

Meanwhile, Michel Barnier, the EU’s chief negotiator, is said to have outlined his own timeline for the talks, suggesting a delay of negotiations until there is progress on determining an exit fee for the UK to pay and on safeguarding the rights of EU citizens residing in the UK, according to the Financial Times. Barnier reportedly expects this process to continue until December.

While neither the final figure nor the sequencing of when payment is due have been decided on, the total sum could potentially amount to €60 billion (US$64 billion).

Jean-Claude Juncker, President of the European Commission, affirmed in a speech to the Belgian Parliament that the UK would be charged with a “hefty” exit bill.

“This will be a difficult negotiation…To agree on both the terms of exit and the future architecture of the relationship between the UK and the EU, we will need years,” he said.

“The British need to know – and they know it already – that it will not be cut-price or zero cost. The British must respect commitments they were involved in making” at the outset, he said.

May: UK to continue as free trade “champion”

Amid a backdrop of rising “Euroscepticism” as several European countries gear up to go to the polls this year, the populist pressures are expected to continue to across the EU over the coming months. (See Bridges Weekly, 9 February 2017)

May, in a 17 February article for Le Figaro, acknowledged the current climate, referring specifically to the upcoming French elections and the discussions over ensuring that the benefits of economic growth are more widely spread.

“We are having a similar debate in Britain, where we have embarked on an ambitious programme of economic and social reform to spread wealth and opportunity more fairly across our country,” she said. “I hope that we can continue to work together with our international partners to shape a global economy that truly works for everyone.”

She also made the case for further integration and reaffirmed her earlier proposal of creating a UK-EU free trade agreement, maintaining that the Brexit referendum was not a vote to “step back from the world,” but instead to “restore our parliamentary democracy and to become even more global and internationalist in action and in spirit.”

“Through this and other free trade agreements we will forge with partners around the world, I am determined that Britain will continue to be a great champion of free trade,” May said.

ICTSD reporting; “U.K. Said to Plan Brexit Trigger Close to EU Summit in Early March,” BLOOMBERG, 16 February 2017; “Brussels focuses on UK’s €60bn exit bill before trade talks,” FINANCIAL TIMES, 19 February 2017; “Jean-Claude Juncker: UK faces hefty Brexit bill,” BBC, 22 February 2017; “U.K.’s Brexit Bill Will Be ‘Hefty,’ EU Commission President Says,” BLOOMBERG, 21 February 2017; “Respect Brexit decision, peers urged,” BBC, 21 February 2017; “UK’s House of Lords thrashes out Brexit bill,” CNN, 21 February 2017; “Everything you need to know about whether the House of Lords will block Brexit,” BUSINESS INSIDER UK, 20 February 2017; “Brexit bill: MPs reject amendment to protect EU citizens in UK,” THE GUARDIAN, 9 February 2017.

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