Guidelines for a soft Brexit
Article 50 has been triggered and Britain will leave the European Union, but a soft Brexit is still within reach
In the whole Brexit saga, the predicament of British political parties has been a sorry one at best hesitant and defensive and at worst hostile and divided. While nationalism has consumed the Conservatives, the left has lost its way. Labour, the Liberal Democrats and the Greens all supported without demur the holding of David Cameron’s referendum in the first place. None of them mounted effective referendum campaigns to remain in the European Union. After 23 June 2016, the opposition parties accepted the negative verdict of the people, and then supported Theresa May’s decision to trigger Article 50 before the end of March this year. The left may now argue for a ‘soft Brexit’, but there is no escaping the fact that it is wholly complicit in the United Kingdom decision to abandon its membership of the EU.
The official Labour opposition seems to be neutered by the idea that this right wing Conservative government has only a small Commons majority and that salvation will come when the Conservative cabinet implodes on the question of Europe. Labour’s tactics rely on Mrs May’s eventual loss of control of her own troops. It has been impossible to discern any Brexit strategy in Jeremy Corbyn’s leadership. The latest position of the shadow cabinet as defined by its spokesman Keir Starmer consists of scoring points off Brexit secretary David Davis, notably by promising to vote against the Article 50 withdrawal agreement if the outcome is deemed to worsen Britain’s economic relationship with Europe. Scoring points off Mr Davis is not very difficult; nor, to those of us who dislike blood sports, is it very edifying. It is certainly no substitute for advancing a serious alternative prospectus for the UK once it has left the EU.
The Lib Dems have chosen the high risk path of campaigning for a second referendum once the outcome of the deal is known. They, rather like Labour, want somehow to stay in the European single market while leaving the EU. They do not spell out how this trick could be achieved. Nor have they worked out how another referendum could be won on such a proposition and from such a narrow base of support.
The SNP, who for their own reasons were alone in opposing the Cameron referendum bill, have sought refuge in some ingenious formulae in which post-Brexit Scotland would emerge somehow more integrated with the EU’s single market than England. The truth is, however, as Nicola Sturgeon well knows, that no form of differentiated disintegration is possible under EU law. The EU consists of member states, and the whole of the British state is seceding. The most the devolved administrations can hope for post-Brexit is to pick up some of the powers divested in the European Commission to run more of their own policies such as agriculture and fisheries, the environment and industry.
In truth, the most effective opposition to Brexit has come from those few eminent relics of the old Tory party. Kenneth Clarke and Michael Heseltine are asking the right questions about the prime minister’s chosen path as laid down in her letter to Donald Tusk of 29 March. Rebel Conservatives have more chance of shaping a soft Brexit than that of any progressive centre-left ‘movement’ dreamed up by Tony Blair and Paddy Ashdown. It is quite extraordinary that in the midst of Britain’s acute constitutional crisis, faced with economic calamity and diplomatic chaos, governed by ministers of little calibre, the incapacity of the left simply serves to compound the nation’s difficulties.
Now that Article 50 is triggered and the first official texts have been exchanged between London and Brussels, Britain’s opposition parties need to find their voice. It is high time for a serious articulation of the concept of soft Brexit. A useful first step would be for remainers to put aside speculation about rescinding Article 50.
The improbability of stopping Brexit
That there is no unity among remainers about what should happen next renders futile the continuing hypothetical speculation about a possible revocation of Article 50. John Kerr is right to assert that it is in theory possible for the UK to rescind its notification to withdraw from the EU before the two year deadline is up. He is wrong to argue that there would be no consequences in so doing and that things would simply return to the status quo ante. The rest of the EU has already reconciled itself to losing the British and is anxious to move on to other matters as soon as possible. A British volte-face would be hugely problematic for the rest of the EU. Remainers should know that there are many in the EU who believe that concessions were too easily made in the past to the UK (and to Denmark) in the way of opt-outs and cop-outs. The British budget rebate is universally resented. Mr Cameron’s laborious ‘new settlement’ for the UK of 2016, which would have badly damaged the European project, was the last straw.
A sudden demand in 2019 by prodigal British for yet another renegotiation of the UK’s terms of EU membership would not be met well. There would undoubtedly be costs falling to the UK associated with a unilateral revocation of Article 50, to be followed by another painful round of institutional and budgetary adjustment. Likewise, a move late in the day by a new left-wing British government to seek a somehow ‘better’ version of the Article 50 treaty than the one on offer to Mrs May is not considered in Brussels to be a realistic hypothesis. Article 50 provides for only one shot at reaching a withdrawal agreement. Although the EU 27 is making contingency plans for a failure of the Article 50 talks, nobody contemplates a second Brexit negotiation. That much is made clear in the draft guidelines of the European Council which were shared with the press on 31 March.
Reading the guidelines
The guidelines will be finalised by the European Council at a special meeting on 29 April. The formal mandate for the Commission to start the negotiations will be delivered thereafter as soon as there is a new French government in place. Even in their draft form, however, the guidelines are useful because they show the way towards a soft Brexit. The clarity of the guidelines provides a blessed relief from the ambiguities and platitudes that pepper most of the UK government’s own Brexit pronouncements.
Forlorn British pro-Europeans should exploit the EU guidelines as providing a roadmap for their own route to recovery after Brexit. They might also credit the prime minister with the generally more constructive approach which she adopted in her Article 50 letter of 29 March. A “deep and special partnership” between Britain and Europe is not in the circumstances she finds herself a bad concept, and her promise of making in due course “detailed proposals for deep, broad and dynamic cooperation” does not really presage a ‘hard Brexit’. Moreover, Mrs May has at last dropped the idiotic cliché that “no deal is better than a bad deal” (it is not).
What do Donald Tusk’s guidelines say? Three basic principles are reiterated: that the unity of the EU is paramount, that the EU will negotiate in its own interests, and that the UK must accept obligations if it wishes to have a privileged special relationship with the EU. The four ‘free movement’ principles of the single market are indivisible, and Britain cannot expect to have a partial sectorial membership of the market. The EU 27 will negotiate the secession treaty as a bloc. There will be three phases to the overall negotiation: first, to “settle the disentanglement” of the UK from its rights and obligations to the EU; second, to identify an “overall understanding on the framework for the future relationship”; third, to “determine transitional arrangements which are in the interests of the Union and, as appropriate, to provide for bridges towards the foreseeable framework for the future relationship”. The European Council will decide if and when to move to the second phase “as soon as sufficient progress has been made in the first phase towards reaching a satisfactory agreement on the arrangements for an orderly withdrawal”.
As to the transition, it must be “clearly defined, limited in time, and subject to effective enforcement mechanisms”. Any temporary extension of the EU acquis to the UK would “require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply”.
What goes into the secession treaty
Both sides put proper emphasis on decent treatment for their citizens living across Europe and left adrift by Brexit. EU citizenship consists of a number of rights which, after Brexit, will not be automatically ‘acquired’ by those brave souls who stay on. Instead, in order to ensure at least some measure of continuity, a bundle of measures should be designed around the concept of legacy citizenship. The former rights of people deprived of their EU citizenship can be turned into guaranteed privileges. The European Council is looking to agree citizenship guarantees that are reciprocal, enforceable and non-discriminatory.
The secession treaty will also cater for the needs of business and other agencies, such as universities, which have made trading and contractual arrangements across the internal borders of the EU and with the EU institutions.
Money is a priority for the EU 27, Commission and European Parliament — not least because the UK contributes some 15% of the EU’s annual budget revenue. The European Council says that a single financial settlement should cover “all legal and budgetary commitments as well as liabilities, including contingent liabilities”. One of the first things to be decided is whether or not the UK should remain within the terms of the current multi-annual financial framework until the end of 2020: a decision to hang on in there would minimise disruption and cost to all concerned. There will be other costs the UK may be ready to absorb in order to smooth its transition out of the EU, as well as new costs it should be willing to pay by way of a deposit on the new partnership. The EU wants Britain to pay what it owes and not a centime more. How much extra Britain agrees to contribute will depend on the quality and closeness of the future special relationship it seeks.
In the end there will be an agreement on a global figure to be settled over a period of several years. Ample justification exists for almost any sum, but the justification must be tailored to satisfy the national parliaments of the 27 states that they are not being fleeced by the departing Brits. Pro-Europeans in Britain will be able to help Prime Minister May and Chancellor Philip Hammond stand up to the inevitable attacks from hard line nationalists in parliament and the press who feel no moral or political obligation to pay any exit fee to the European Union.
The Article 50 talks will address the problematic border of Northern Ireland. Here the guidelines envisage “flexible and imaginative solutions … avoiding a hard border, while respecting the integrity of the Union legal order”. There will be an adjustment of the status of the UK’s sovereign bases on Cyprus. Arrangements will be made for the relocation out of the UK of the European Medicines Agency and European Banking Authority.
As the EU 27 takes on the international treaty obligations of the EU 28, Britain will be expected to honour its share of those commitments, for example in matters of climate change. The European Council hopes for a “possible common approach” to third country partners and international organisations.
Arrangements will be needed to deal with ongoing cases at the European Court of Justice in which the UK government or British citizens or corporate entities are involved at the time of Brexit, as well as for possible future litigation referring to pre-Brexit issues. The transfer of administrative measures from the European Commission and EU agencies to home grown British authorities will have to be assured. Knowing how sensitive Theresa May is to the liberation of Britain from the Court of Justice, the guidelines insist that the secession treaty should set up appropriate dispute settlement mechanisms for the implementation of the withdrawal agreement itself as well as to cater for any unforeseen difficulties. “This should be done bearing in mind the Union’s interest to effectively protect its autonomy and its legal order, including the role of the Court of Justice of the European Union.”
The future ‘close partnership’
The second phase of the talks will attempt to define Britain’s final landing zone. “[S]trong and constructive ties will remain in both sides’ interest and should encompass more than just trade.” The European Council stands ready to initiate the negotiation of “an ambitious free trade agreement” once the UK has exited. Although this deal will stop short of the single market, it can be “wide-ranging”. The FTA must “ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through, inter alia, fiscal, social and environmental dumping”.
The EU will also agree to continue political cooperation with the UK in other areas, particularly concerning crime, terrorism, security and defence. I have argued elsewhere that the recent association agreement with Ukraine provides a useful template, as well as the political precedent, upon which the EU could craft the special relationship with its erstwhile partner.Mr Tusk’s guidelines add that such a partnership must include dispute procedures and institutional machinery that do not compromise the EU’s autonomy.
The reference to Gibraltar has provoked a huge reaction in the British media. The relevant paragraph refers not to the Article 50 secession treaty but only to the future association agreement which, it says, will not apply to Gibraltar unless both Spain and the UK agree that it should do so. As the future agreement in any case needs the unanimous agreement of all 27 member states of the EU as well as of the EU institutions, this caveat may not add up to very much. But the inclusion of the Gibraltar clause in the European Council’s guidelines may serve usefully to remind the British that they are not the only European state to have special national interests. It is clear, therefore, that jingoistic statements from Fabian Picardo, the chief minister of Gibraltar, and Foreign Secretary Boris Johnson would make an unhelpful contribution to the accomplishment of the delicate Brexit exercise.
The UK is transforming itself from a member state into a third country. Its participation in ongoing EU legislative and judicial matters during the two-year period is therefore highly sensitive. The guidelines remind the UK of the need to maintain a spirit of sincere cooperation, as they are bound to do by the EU Treaty (Article 4 TEU).
To return the compliment of good behaviour, the EU 27 should be moved to respect in full the spirit of Article 8 TEU which enjoins the Union to ‘develop a special relationship’ with post-Brexit Britain ‘aiming to establish an area of prosperity and good neighbourliness’. The finalised European Council guidelines would do well to refer to this.
In the meantime, the UK needs to progress its work on the Great Repeal Bill. The white paper of 30 March clarifies some of the issues of legal hierarchy leading up to and following on from Britain’s departure from the EU. It sketches out the vast work that the Westminster parliament will have to undertake to sift the 12,000 EU laws and rules now in place, and to retain, amend or ditch them. It suggests very clearly how although the UK can escape the direct jurisdiction of the EU’s Court of Justice, it cannot evade its jurisprudence either now or in the future.
It is obvious that the risk of legal uncertainty, even a vacuum, is very real. The case grows for the creation of a new special body, answerable to both parties, to oversee the full completion of the Brexit process. A Joint Transition Authority (JTA) would be charged with the job of managing the phasing out of the UK’s rights and obligations to the EU, and vice versa. The JTA would aim to settle the disputes that will inevitably arise during the period in which the Brexit deal is being implemented. Acting pragmatically, it could deal with unexpected difficulties and avoid a rush to costly and lengthy litigation in both the British and European courts. With a joint governing board and a light secretariat, the JTA would also advise, warn and report. The existence of the JTA would ensure that relations with Britain will not fall off the agenda of the EU 27 once the UK has left. This is a very real likelihood otherwise.
The JTA should aim to coordinate the phasing out of EU law applicable to the UK with its gradual replacement by home grown British law, courtesy of the Great Repeal Act. It would monitor the substitution of the role of the Commission and the functions of EU agencies by the newly rebuilt executive apparatus of the British state and its devolved administrations.
As and when a future EU-UK treaty takes shape based on a free trade agreement, the JTA could be tasked with preparing its operation, including the phasing-in of the necessary institutional and regulatory features. In other words, the JTA could become the embryonic secretariat of a new EU-UK joint council, minimising regulatory divergence and unblocking obstacles to trade, as well as servicing political cooperation in the fields of internal and external security policy.
Preparing to decide
On 5 April, in Strasbourg, the European Parliament will contribute its own Brexit resolution that will determine its priorities for the Article 50 talks and shape the nature of its decisive final vote on the secession treaty.
Attention will then turn back to London to watch for reactions to the European Council’s draft guidelines. The upshot of the Miller case at the UK Supreme Court is that the House of Commons and House of Lords face an indicative vote on the draft treaty before the European Parliament has its say. That moment, in late autumn 2018, will require a studied assessment of the national interest and a concerted cross-party approach. One cannot know if Mrs May will be able at that stage to coral her cabinet and backbenches in support of the deal. It would be a pity if opposition parties had nothing intelligent to add from the beginning to the debate now firmly set in train about Britain’s future as a European country.
 Britain and Europe: A new entente, Policy Network/European Policy Centre, 23 February 2017.
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