Article 50 triggered: Analysis

29 Mar 2017

Policy area: Commercial

And there we have it; Article 50 has been launched today in Brussels. 

The tone of the letter itself is conciliatory, and a world away from the Prime Minister's Conservative Party Conference speech, with a surprising appeal to European values and norms. Indeed, absent is the rhetoric from recent months of ’no deal is better than a bad deal’. Instead there is an appeal to an orderly and mature negotiation, and seeking a ‘deep and special partnership’ taking in both economic and security cooperation.  

On the economic front, the Article 50 letter indicates that a comprehensive free trade deal will be the objective, making the point that the UK has already adopted the acquis. The EU institutions, I imagine, will wonder how implementation problems and disputes will be resolved when they arise, given that the UK government has made it clear that it does not intend to acknowledge the role of the European Court of Justice in that regard.

On the security front, we imagine the model will proceed on an intergovernmental perspective much as has happened before.

Donald Tusk has already said that the European Council’s watchword will be that of ‘damage control’ and to reduce the cost and impact for the EU-27. A statement by the European Council makes clear that it intends to focus first on the conditions for an orderly withdrawal of the UK. It is here where the first cracks appear. The UK Article 50 letter makes clear that its preference is to conduct negotiations on the UK’s future relationship and its orderly withdrawal in parallel. Resolving this issue, as well as the issue of the UK’s future contribution to the EU budget, are likely to be early matters for consideration, before discussions can proceed to what a future deal might look like.

The UK government also seeks transitional arrangements (ie. extending beyond the two year time horizon) in order to provide investment certainty but businesses, investors and citizens. While the UK government’s letter seeks to highlight this as a matter for agreement in principle, it is likely again that the EU institutions and EU-27 will wish to focus on the contribution to the EU budget, the status of EU citizens in the UK and UK citizens in other EU member states, and the orderly withdrawal arrangements. The European Parliament has already leaked a resolution that it will vote on shortly that makes it clear that transitional arrangements should not exceed three years beyond the conclusion of negotiations. Lest we forget, the European Parliament must approve any deal.

As expected, a White Paper on the Great Repeal Bill, the deus ex machina by which the body of EU law will be given legal effect in the UK, will be published tomorrow. There will also be a number of subsidiary Brexit Bills that will gap fill for arrangements that the EU currently performs in certain areas on behalf of its member states. As expected, the legislation referred to will not take effect until the UK leaves the EU.

At the Brussels level, we expect the publication of the European Council’s draft guidelines later this week, for discussion at a European Summit on 29 April. Next week, the European Parliament will vote on its special resolution. The European Commission’s negotiating team will be engaging in stakeholder outreach, meeting civil society bodies and trade associations and interest groups in Brussels. As we signalled last week, this process is not inured to politics, and certainly isn’t on two dimensions, but multi-dimensional among a number of different actors each with their own goals and objectives.