Comments
 

Comments on the Govt policy paper "The process for withdrawing from the European Union"

29 Feb 2016

2.1 The result of the referendum on the UK’s membership of the European Union will be final. The Government would have a democratic duty to give effect to the electorate’s decision. The Prime Minister made clear to the House of Commons that “if the British people vote to leave, there is only one way to bring that about, namely to trigger Article 50 of the Treaties and begin the process of exit, and the British people would rightly expect that to start straight away".

There are two assumptions built into this. Firstly, that David Cameron will still be Prime Minister after the referendum. This is not obvious, and a different PM would have different priorities; and secondly that we would make our formal application immediately after the vote.

1) If the Brexit side wins the referendum it would be very hard for Cameron to remain as Leader of the Conservative Party. Even if the Government wins, there are already rumblings about a leadership challenge regardless of the outcome; and reports that he is planning a cull of local Conservative Associations could make his position very difficult. It is hard to see how he could remain as PM if he were to be replaced as Leader of the Conservative party - especially if his replacement was someone as colourful as Boris Johnson.

2) It would be rational to make our application when it is advantageous to Britain to do so, and this is not necessarily straight away. There is absolutely no reason why Britain should formally announce, under Article 50 of the Treaty on European Union, that it wishes to withdraw the moment that a vote for Brexit becomes known. The referendum is has no standing in the EU, it is merely an expression of the wishes of the British people about future policy that the Government has accepted should be binding. No timescale is entailed by the vote, and a government could give notice of withdrawal after it has at least outline trade deals with various countries, and part of these negotiations would be about the timing of exit. Also, there is no reason why, as the Government seems to assume, we should have to negotiate on all EU issues in one single agreement. Issues could be resolved separately, over time. An exit would legally happen on a specific date, but the divergence, in practice, of the two systems could be gradual.

Article 50
1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
...
5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.


2.3 But the process is unprecedented. No country has ever used Article 50 – it is untested. There is a great deal of uncertainty about how it would work. It would be a complex negotiation requiring the involvement of all 27 remaining EU Member States and the European Commission. Before negotiations could even begin, the European Commission would need to seek a mandate from the European Council (without the UK present). The withdrawal agreement would also require the consent of the European Parliament. Uncertainty during the negotiating period could have an impact on financial markets, investment and the value of the pound, and as a consequence on the wider economy and jobs.

This paragraph implies a level of complexity that might not exist. Britain would apply to the European Council. The Union would negotiate a common approach internally. Britain would not be negotiating separately with 27 states. Until an agreement is concluded, and takes effect, the current arrangements would apply. Obviously, as with any situation in life, until things become certain there is some uncertainty, but the mealy mouthed "could have an impact on" seems designed both to be undeniable and to feed into the strategy of generating fear about the consequences of choosing to exit. Of course there will be an impact, but no one knows how great it will be, nor whether it will be negative or positive.

Equally, no one knows the consequences of staying in the EU. The future policies of the EU are just as uncertain. We do not know, for example, how much, if anything, we may have to contribute to an EU policy on the migrant/refugee problem, or what the consequences of a collapse of the Euro might be. It is true that if we stay in we will be able to 'have a say' on EU policies, but our record on prevailing in votes where we disagree with a Commission proposal is not good. The future is always uncertain.

2.4 The UK’s withdrawal from the EU would mean unravelling all the rights and obligations – from access to the Single Market, to structural funds for poorer regions, to joint action on sanctions – that the UK has acquired both during our accession to the EU and over our 40 year membership. As well as negotiating its withdrawal, the UK would also want to negotiate its post-exit arrangements with the EU.

This paragraph again overstates the complexity of the issue. Certainly we would need to negotiate access to the markets of the countries remaining in the EU. But this need not be overly complex. David Cameron sometimes refers to trade agreements such as the Canadian agreement taking a long time to negotiate, but this is because much more is being negotiated than just tariffs. Non-tariff issues that won't apply to us, or that we might not want to negotiate on, are also part of the deal and these take time to negotiate. Clearly, if you sell anything to any other country you have to abide by whatever regulations they wish to impose. This is not an EU principle, it's just part of normal trading. However, since we are already in compliance with EU regulations there won't be so much to disagree about. Also, given the high percentage of their products that many European companies sell in the UK, it is not in the interest of the EU to impose tariffs as we would simply respond in kind - to the detriment of major companies and the national economies in which they are based. For example, Bosch, which established its first office in the UK in 1898, had UK sales revenues in 2014 of £1.9 billion, and in recent years has made annual after-tax profits of around £1 to £2 million in the UK. Similar considerations apply to many other companies. They, and companies like them, would not want their access to our market to be restricted. On sanctions, we surely can just decide for ourselves whether to continue what has been agreed jointly in the past. On access to structural funds, of course we would no longer have this, but equally, we would no longer contribute to such funds to be spent in other countries. We would look after our own poorer regions ourselves.

2.5 The complexity of the negotiations, and the need for the UK to negotiate adequate access to the Single Market after it leaves the EU, would make it difficult to complete a successful negotiation before the two year deadline expired. Any extension to the two year period set out in the Treaty would require the agreement of all 27 remaining EU Member States.

The two year deadline only applies when we have formally communicated our wish to leave. It is in the interest of EU countries to negotiate access to our market (see above) and therefore not to complicate the proceedings in the manner suggested. There is no reason why outline agreements cannot be agreed before we submit our formal request under Article 50. David Cameron's policy seems to be that we would flounce out immediately the result of the vote is announced, and then scramble to pick up the pieces within the two year deadline. Life does not have to be like that.

2.6 If the UK was to reach the end of the two year period specified by Article 50 without having reached an agreement, and if any of the 27 other Member States vetoed an extension of this period, this would lead to the UK leaving the EU with no immediate replacement agreed, without any protection under EU law for the rights of UK business to trade on a preferential basis with Europe or the EU’s free trade agreement partners, UK citizens to live and work in Europe, or UK travellers to move about freely in Europe.

If this happened EU businesses would equally lose the right to trade on a preferential basis with the UK, those EU citizens working in the UK would be equally penalised, and their travellers restricted in their ability to move freely to and from the UK. It is not in the interest of the EU to arrive at the two year deadline without an agreement. The sensible approach would be for the exit arrangement, negotiated within the two year period, to offer a general framework for negotiations on specific issues, rather than being a final agreement on life the universe and everything.

2.7 Regular EU decision-making would continue while we negotiated to leave. Our vote to leave, and the withdrawal negotiations themselves, would have an impact on our ability to affect the EU’s decision-making. But we would be bound by new EU legislation up to the moment we left.

This is scraping the barrel for arguments against leaving. Of course we would be bound by EU regulations until we left. We would have our normal input to decision-making, which is not often decisive. It's not clear why it is thought that this is much of an argument.

2.8 While these negotiations continued, we would be constrained in our ability to negotiate and conclude new trade agreements with countries outside the EU. The countries with which we currently have preferential trade agreements through the EU are likely to want to see the terms of our future relationship with the EU before negotiating any new trade agreements with the UK. In addition, many of our trading partners, including the United States, are already negotiating with the EU. Before they start negotiations with the UK they are likely to want those deals to conclude.

2.9 It is therefore probable that it would take an extended period to negotiate first our exit from the EU, secondly our future arrangements with the EU, and thirdly our trade deals with countries outside of the EU, on any terms that would be acceptable to the UK. In short, a vote to leave the EU would be the start, not the end, of a process. It could lead to up to a decade or more of uncertainty.

It is not clear why we would be constrained in negotiating arrangements with other countries that would not take effect until after we leave the EU. It's just an assertion. Any negotiations could proceed in parallel, they don't have to take place one after the other. The government is presenting a dishonestly simplistic view of international relations and negotiations. Also, the agreement on leaving the EU itself is presented in a very simplistic way. As mentioned above, it might well be possible to negotiate a framework for a gradual withdrawal that minimises the possibilities of chaos and uncertainty that David Cameron claims would exist after a Brexit vote in the referendum.

Chapter 3 repeats the misleading claim that once there is a vote to leave, Britain would immediately submit a formal application to leave, thus triggering the two year provision in the treaty:-

3.1 As the Prime Minister has said, if the vote is to leave the EU, the British people would expect that process to start straight away. We would want to open a constructive negotiation with the rest of the EU in order to agree positive terms for the UK’s exit and the future relationship.

This feeds the strategy of fear that involves, inter alia, claiming that we would have to complete all our negotiations within two years (see above). The rest of the chapter argues that it is unclear how the negotiations would proceed, but makes the case for the occurrence of the 'worst case scenario' of the agreement being blocked by, perhaps, the Walloon regional parliament. The document does not mention that its own proposals, when embodied in a treaty, would be open to the same obstacles. The approach overlooks the desire for EU countries to have access to the British market, and assumes that the process is entirely one-sided, with a weak Britain petitioning for a new agreement with a wholly antipathetic Europe. It also overlooks the possibility that a British vote to leave might trigger other changes within the EU, with other countries agreeing that the EU in its present form is untenable. There are already significant sections of public opinion in most countries that are unhappy with the EU. There is an argument to say that it has already become too large and unwieldy, embracing the majority of European states, with others seeking to enter. As the theorist William Riker observed in The Theory of Political Coalitions, coalitions of the whole do not last.

3.10 The UK would want to start negotiations as soon as possible with non-EU trade partners in particular, in order to preserve any existing level of preferential access UK companies currently get to their markets. But many of our non-EU trading partners are already negotiating with the EU, and before they started negotiations with the UK they would be likely to want those deals to conclude. Even the countries which already have a deal in place with the EU are likely to want to see the terms of our future relationship before negotiating any new trade agreements with the UK. This would make it hard to negotiate our post-withdrawal arrangement with the EU in parallel with negotiating a new set of trade deals with countries outside of the EU. And it means that lengthening the Article 50 process to secure a good outcome with the EU could delay new trade deals with countries outside of the EU.

This is just supposition. It assumes that parallel negotiations won't happen, and that Britain's exit has no bearing on any current trade negotiations with the EU - the deals non-EU countries may be in the process of negotiating are deals that include access to the British market. Access to Britain will be, for many countries, just as important as access to the markets of other countries. For deals already concluded, those countries that trade in Britain will be anxious to continue this trade. It is in their interest to negotiate with us.

3.12 A considerably larger proportion of the UK economy is dependent on the EU than vice versa. This would have an impact on the dynamic of the negotiations. The EU is by a wide margin the UK’s biggest trading partner. Some 44 per cent of our exports go to the EU. The UK is more reliant on exports to the EU than the rest of the EU is reliant on exports to the UK. Taken as a share of the economy, only 3.1 per cent of GDP among the other 27 Member States is linked to exports to the UK, while 12.6 per cent of UK GDP is linked to exports to the EU.

The problem with statistics like these is that they are for the whole EU, rather than for those countries within it that are our main economic partners, and so they don't represent the reality of our economic position.

3.13 Just as the Government would be driven by our wish to secure the best possible outcome for the UK, we should expect the remaining 27 Member States to be driven by their own national political and economic interests, and would fight for them as hard as we would for the UK’s position.

There is not this complete discontinuity between our interests and theirs. We have common interests as well a some divergent ones.

Chapter 4 discusses the "implications of withdrawal".

4.1 The withdrawal negotiation would need to address a wide range of difficult issues related to withdrawal itself, and also to our future relationship with the EU. Article 50 does not set out explicitly what issues would need to be resolved and there is no precedent to draw on. The UK’s relationship with the EU has built up over 40 years of membership and affects many aspects of life in the UK, and of UK citizens living across the EU; the terms of exit would have to cover the full extent of that relationship.

There is no reason why the exit agreement "would have to cover the full extent" of the future form of our relationship with the EU. This would evolve over time.

4.2 This would include the status and entitlements of the approximately 2 million UK citizens living, working and travelling in the other 27 Member States of the EU. They all currently enjoy a range of specific rights to live, to work and access to pensions, health care and public services that are only guaranteed because of EU law. There would be no requirement under EU law for these rights to be maintained if the UK left the EU. Should an agreement be reached to maintain these rights, the expectation must be that this would have to be reciprocated for EU citizens in the UK.

Of course, there is no requirement for all the present arrangements with the EU to be swept away. There are some that we would want to keep. Indeed, all our current commitments, enshrined in UK laws, statutory instruments, etc., could be kept in the first instance. Over time we might want to negotiate different arrangements. None of this needs to be completed in the two year period. By starting out with the current arrangements, any transition could be gradual and not chaotic. The same applies to our access to the single market (4.3), the financial services sector, and other areas.

4.5 The UK’s withdrawal from the EU would have a serious impact on UK farmers. In addition to the impact of withdrawing from the EU’s Common Agricultural Policy and associated subsidy schemes, they would also lose their preferential access to the European market if the UK left the EU without a successor arrangement in place. The EU imposes an average tariff of 14 per cent agricultural imports from non-EU countries (including countries that have their own special trading deals with the EU, like Norway and Switzerland), with higher rates on individual items, such as dairy products (average of 36 per cent). UK farmers would also no longer be able to benefit from preferential access to non-EU countries secured by the EU under trade agreements.

The EU’s Common Agricultural Policy should have been swept away years ago. It was designed to protect small inefficient French and German farmers. Exit would be an opportunity for us to reform our own agricultural sector, and enable our own dairy farmers, for example, to make a decent living once more.

The concluding Chapter 5 mostly regurgitates the points from the previous chapters, including:

5.4 As the Prime Minister has said, if the vote is to leave the EU, the British people would expect the UK Government to notify the European Council straight away that it wished to leave under the terms of Article 50.

This assumption underlies much of the government's argument: how difficult it all is, and it all has to be completed in two years. This is nonsense. Of course there will be difficulties, but there will be more time to sort them out than the government implies.

5.6 The second issue at stake is the nature of the negotiations that would follow an exit vote. The UK would, at the moment Article 50 is triggered, be excluded from EU discussions on the nature of the exit negotiations. These would be settled by the remaining EU Member States.

This does not mean that we would be excluded from negotiations with the Commission on the nature of the exit deal, it simply means we would be excluded from the discussion of, and decision-making on, whatever package we negotiate with the Commission. This is normal practice when a political entity discusses issues that affect one of its members.

5.10 The terms of exit would be significant for the people of Northern Ireland, and citizens of Ireland who live in, visit or work in the UK. There could be implications for the border and for cross-border trade and co-operation, which has helped strengthen relations between Northern Ireland and Ireland in recent years.

Assuming Ireland stays in the EU, it can monitor the border as it sees fit. It is unlikely we would want to be significantly more restrictive than we are at present.

The document ends with a list of items indicating how UK citizens might be affected:

UK citizens get a range of rights from our membership of the EU. If the UK were to leave the EU, all of these rights would have to be covered in a successor arrangement. If we left the EU without agreeing what would happen to these rights, it would at the least bring them into serious question, creating difficulty for UK citizens who relied on them. A selection of these rights includes:

Of course some people will be affected: there may well be a small number whose burning ambition is to vote in local elections, say for the Pétange Council in Luxembourg; but for the most part, for most people, being deprived of these rights is no big deal. Of course, new arrangements covering these matters could be negotiated.

Richard Kimber, 5th March 2016

 

Comments on the Government's policy paper "The process for withdrawing from the European Union"
Political Science Resources
© Richard Kimber
Last Modified: 13 Apr 16

This page contains comments that are relevant to the forthcoming United Kingdom in - out referendum on EU membership following the conclusion of negotiations on reforming the European Union or changing Britain's terms of EU membership to be held in the UK some time before the end of 2017.