UK Premier Sets Deadline for Starting EU Exit Negotiations

6 October 2016

UK Prime Minister Theresa May announced on Sunday that she will formally request the start of negotiations for exiting the European Union by late March of next year, confirming again that the island nation will indeed proceed with a so-called “Brexit” despite some pending domestic legal challenges.

In a speech to the Conservative Conference, May also gave a broad outline of what the UK will be seeking as part of its exit package when it triggers “Article 50,” the provision in the Treaty of Lisbon which allows for an existing EU member to negotiate their way out of the bloc.

The news comes as leaders from the remaining “EU 27” begin work on charting their own path as a group, without the UK – a process that is due for completion in March, the same month that May has set as a deadline for submitting the Article 50 notification. (See Bridges Weekly, 15 September 2016 and 22 September 2016)

Under the Treaty of Lisbon, any EU member who wishes to exit the bloc must formally notify the European Council of its intent to do so. This then starts a two-year window for negotiations between that country and the rest of the European Union, represented by the Council. A final agreement will require a “qualified majority” on the Council side, as well as the signoff from the European Parliament.

Should a deal not be reached within two years, the UK will be forced to leave the EU, unless all parties agree to extend the negotiations.

May: “No unnecessary delays”

Any announcements about the timetable of the “Brexit” negotiations have been closely watched since the June referendum, given both the political and policy implications for the European bloc. Fellow EU leaders have repeatedly urged the UK to proceed as promptly as possible in order to limit the economic fall-out that may otherwise arise from a period of prolonged uncertainty. (See Bridges Weekly, 15 September 2016)

Speaking to the Conservative Party conference last week, May said that “there will be no unnecessary delays in invoking Article 50.” She clarified, however, that the UK will do so when it is fully ready.

Procedurally, she also sought to clarify which entities on the UK side would be responsible for submitting the Article 50 notification to the European Council, arguing that this will be a process conducted by the UK government – not either of the Houses of Parliament.

She also attempted to counter the suggestion that both the House of Lords and the House of Commons would need to agree on triggering Article 50 – as some critics have suggested.

“When it legislated to establish the referendum, Parliament put the decision to leave or remain inside the EU in the hands of the people. And the people gave their answer with emphatic clarity,” she said, pledging to fight against domestic legal challenges on the subject.

The UK premier also said that while the government will consult with “devolved administrations” in Northern Ireland, Scotland, and Wales, it will ultimately be up to the UK government itself to conduct the negotiations.

Scotland and Northern Ireland had voted in favour to stay in the EU, and a legal challenge is underway in the latter to determine whether a parliamentary vote is needed to proceed with “Brexit.”

Already the uncertainty prompted by the “Brexit” vote last June has led some international financial institutions to downgrade their growth predictions for the UK, along with having broader implications for the global economy.

The International Monetary Fund (IMF) said this week that investor confidence has taken a hit in the wake of the UK referendum, with the Washington-based institution predicting that the UK will see growth slow from 2.2 percent in 2015 to 1.8 percent in 2016 and 1.7 percent in 2017.

Soft or hard Brexit: “False dichotomy”

Whether leaving the EU will entail a “soft” or “hard” Brexit has also been the subject of much speculation over the past several months, with fears of the latter scenario already causing the pound sterling’s value to drop this week to levels not seen in over three decades.

A “hard” Brexit is one that would limit in some way the UK’s level of access to the EU single market, while a “soft” Brexit has been interpreted as one that is more similar to the country’s current relationship with the European Union.

However, casting it as a choice between the two sets up a “false dichotomy” that must be put aside, the UK premier said. Rather, striking a deal that will restore UK sovereignty while at the same time ensuring good trading terms with the 27 other EU member states should not be considered a “trade-off.”

“The process we are about to begin is not about negotiating all of our sovereignty away again. It is not going to be about any of those matters over which the country has just voted to regain control,” said the UK premier.

She also ruled out using a so-called “Norway” or “Switzerland” model in establishing a new UK-EU relationship, as some experts have suggested. May said instead that London will pursue its own approach, suitable to its own needs.

An ideal arrangement, she said, would be one featuring free trade and goods and services. “I want [the deal] to give British companies the maximum freedom to trade with and operate in the single market – and let European businesses do the same here.”

However, she pledged that the UK would not yield control of immigration in the process, nor would it subject itself to the jurisdiction of the European Court of Justice.

“As ever with international talks, it will be a negotiation… But make no mistake: this is going to be a deal that works for Britain,” she said.

From EU to British law

One of the many questions prompted by the “Brexit” vote has been how the UK will extricate itself from the vast body of EU laws and regulations that has been developed over the last several decades.

May sought to clarify how this process would work during her speech on Sunday, confirming that the repeal of the European Communities Act would also include language that would convert existing EU law into British law.

From there, she suggested, the UK’s Parliament will be able to then make changes to any laws, once these have gone through the necessary legislative reviews and debates. Current workers’ rights will remain legally protected under her administration, she added.

This ability to change those laws, however, will be “subject to international agreements and treaties with other countries and the EU on matters such as trade.”

Indeed, while the UK relationship with the EU single market has been one of the dominant questions in the overall “Brexit” debate, how the UK will navigate its relationship with the WTO as well as with those countries who have existing or planned trade deals with the European Union will also be key issues going forward.

The United Kingdom is already a member of the Geneva-based World Trade Organization in its own right. However, the European Commission currently conducts trade policy on behalf of its member states, and the UK’s commitments at the WTO are expressed as part of the EU’s overall commitments, rather than being broken down by member state.

UK Trade Minister Liam Fox has said that he aims to see his country’s WTO relationship – particularly in addressing its “schedules” on goods and services as an individual member, rather than part of the EU – resolved with as little “disruption” to global trade as possible.

“We will want to see a position on WTO schedules adopted in a way that causes minimal disruption. That is not an entirely simple process, and we would never pretend that it is, but neither is it an insoluble riddle,” he told the Huffington Post last weekend.

ICTSD reporting; “POLITICO Brexit Files: Sterling low FTSE high – EP red lines – Brexit breakfast,” POLITICO, 4 October 2016; “Theresa May is right to offer clarity on Brexit timetable,” FINANCIAL TIMES, 2 October 2016; “Theresa May sets Brexit course away from EU single market,” FINANCIAL TIMES, 2 October 2016; “May puts UK on course for sector-by-sector deals on EU trade access,” FINANCIAL TIMES, 2 October 2016; “Northern Ireland considers whether Brexit requires parliament vote,” REUTERS, 4 October 2016; “Britain’s Fox says wants new Brexit WTO terms with minimal disruption,” REUTERS, 2 October 2016.

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