Brexit: A Game Of Two Halves
By Benjamin Thom, former MA student at the College of Europe.
When Theresa May took to the stage at the Conservative party conference, the great hope was that she would finally move beyond the soundbite that Brexit means Brexit, and would provide the world with a glimpse of what Brexit actually means for her. She predictably referred to controlling immigration, to preserving economic growth, and to formulating a new relationship with the EU. However, what she did not say is how she intends to secure these goals, as any new relationship requires both sides to sit down and agree.
This article therefore focuses on the negotiations that will have to take place before grand rhetorical promises at party conferences are revealed to be achievable political realities or simply pipe dreams. For surely we can better predict the outcome, if we better understand the process.
The challenge for commentators is that there is no precedent for Brexit, and therefore no clearly identified path that the UK can follow in order to extricate itself from the EU. Some may choose to point in the direction of Greenland, which left the European Economic Community (EEC) in 1985 when it seceded from Denmark. Greenland is a nation with 50,000 inhabitants, but its negotiated settlement with the EEC still took three years to conclude. If a small country with one major export product, fish, nonetheless took three years to arrive at an agreement with the EEC then the UK negotiations could be predicted to last even longer and be manifestly more complex.
The UK may argue that its position as the EU’s biggest trading partner and its relative size should mean that it will be able to wrap up an exit deal comparatively quickly. However, previous large-scale EU negotiations have dragged on and on. Consider the seven years required to agree on the yet-to-be ratified EU-Canada trade deal (CETA), and the seemingly never-ending negotiations on an EU-US deal (TTIP).
Importantly, article 50, the formal process of leaving the EU, was only inserted into the Lisbon Treaty at the last minute, and was widely considered to be an addition that would never be invoked. However, this weekend, Theresa May publicly confirmed that article 50 will be triggered by the end of March 2017, and as a result we can soon expect to witness ground-breaking negotiations.
There are only 262 words in article 50, and therefore it cannot comprehensively describe the complex and lengthy nature of the process that awaits negotiators in London and Brussels, but it does make a start.
Firstly, a Member State must notify the European Council of its intention. This notification marks the beginning of the two-year period in which the Member State can negotiate its terms of separation from the EU.
Having obtained the consent of the European Parliament, the withdrawal agreement requires a qualified majority vote in the European Council. On the date of the entry into force of this agreement, the EU treaties cease to apply to the departing Member State and the nation has thus officially left the EU. If no settlement is reached within the two-year period, the treaties automatically cease to apply to the departing nation. This two-year time limit can in fact be extended, but only with the unanimous support of the European Council.
Furthermore, for the duration of this process, the departing Member State is excluded from any Council discussions on its exit agreement, and thus the UK would clearly be considered as an outsider looking in once article 50 is invoked and the real negotiations begin. Therefore, the UK will not only be excluded from the internal EU discussions on negotiations, but will have to take into account the positions of the European Parliament and the European Council as it seeks to conclude the most complex negotiations in living memory- all within a brief time frame of two years.
Article 50 does not place a time limit on a Member State notifying the European Council of its confirmed wish to leave the EU. This is significant, as whilst the UK voted to leave the EU in its referendum on 23 June, in official terms it has yet to confirm its will to leave. This has led to frustration developing across the EU. However, May’s declaration at the weekend that the UK will invoke article 50 by March 2017 does provide some clarity, and more importantly it perhaps ensures that the UK will have left the EU before EU elections occur and the next legislative cycle begins in 2019.
However, with all the discussion focusing on article 50, it is important to remember that at only 262 words, the article’s brevity and simplicity will be in stark contrast to the specificity, complexity and length of the eventual Brexit negotiations. It is after all surprising that the actual negotiations that will constitute the biggest political, social and economic change in a generation for the UK have been so little debated.
Let’s imagine that it is March 2017, and Theresa May has just walked out of No. 10 Downing Street and has proclaimed to the world that she will travel to Brussels the next morning in order to formally announce to the European Council that she has decided to trigger article 50 and withdraw the UK from the EU.
Fortunately, we already have some idea who will be waiting for her in Brussels. Article 50 references ART 218(3) of the Treaty on the Functioning of the European Union (TFEU), which states that the European Council is the lead actor, authorises any negotiations, and appoints the negotiator. Even though the European Commission has always negotiated on trade and enlargement matters, it is unlikely that the Council will pass over the responsibility on this occasion.
In fact, all three EU institutions have appointed their Brexit representative: the Commission has Michel Barnier as their Chief Negotiator, the Council has Didier Seeuws at the head of their Brexit taskforce, and Guy Verhofstadt MEP has been appointed as the European Parliament’s lead negotiator. The appointments have been made, but as things stand the EU negotiating team has in fact not been settled, there being an ongoing institutional dispute between the Council and the Commission over who should take the lead on Brexit.
Things are hardly clearer on the UK side, but David Davis has been appointed as the Minister for Brexit, alongside important roles for other leading eurosceptics, as Boris Johnson is the Foreign Secretary, and Liam Fox is the Minister for International Trade. Whilst the roles have been assigned, the balance of power still seems to be in flux. The state of play in Westminster points to Davis’s Department for Exiting the European Union (DExEU) taking on an ever more important role, as the fledgling department moves from operating out of a Starbucks, to becoming an influential actor. Nevertheless, it seems certain that Prime Minister May and Phillip Hammond, the Chancellor, will be pulling the strings for much of the negotiations. However, how those at Nos. 10 and 11 Downing Street will interact with the trio of Brexit ministers remains to be seen.
The negotiations between the various actors on both sides represent the one truly grey area. After all who will be in the negotiations, where will they take place, and what form will they take?
We can broadly predict that the preliminary technical discussions will occur with national experts from the UK working alongside those from the Council with the support of the Commission. However, when matters become more political and therefore more awkward we can surely expect Theresa May and a small negotiating team to play a more active role on the UK side.
On the opposite side of the table, it is harder to predict. Will special negotiations occur in the European Council between heads of state, or will the teams of Didier Seeuws and Michel Barnier together vie to provide a single contact point for the EU27 Member States in the negotiations? Whilst politics will surely trump technicalities -with this implying leading roles for the French and German leaders whoever they may be- the Commission’s expertise and its role as the guardian of the treaties will also be relevant when it comes to finding an agreement that does not violate the EU’s legal foundations.
Similarly, we should also expect the European Parliament to play an indirect role as its assent is required to ratify any deal. Whilst Guy Verhofstadt can realistically only hope to influence negotiations from outside the room through passionate rhetoric, it is important to remember that the opinions of MEPs must not be forgotten as negotiations progress, if ratification is to be achieved.
Another point to consider is whether the negotiations will occur in Brussels as expected, and whether or not they will take the form of negotiating rounds à la TTIP. Both these factors could shape the nature of discussions, and therefore the eventual outcome, and the total lack of substance on these questions within article 50 means that each side could try to push for an outcome that suits them best.
For the UK this might imply technical meetings then culminating in an intense and highly political summit with European leaders. The UK could hope that Member States would offer the UK a reasonably positive deal at the last moment, with a summit allowing Theresa May to pressurise and isolate individual leaders in an effort to divide the European position on Brexit and thus secure concessions from European leaders without the restraining influence of the EU institutions.
On the other hand, the EU might seek for a TTIP style of negotiations with various rounds of discussions occurring in a periodic fashion with meetings remaining technically focused on particular areas. This approach would allow the EU to keep things technical, and to give the Council and the Commission staff an opportunity to play a role in ensuring that the Member States stay united in their negotiating position, and that all sides have time to cool off between negotiating rounds in order to avoid the risk of potentially rash decisions being made under intense pressure.
Moreover, the actual agreement that occurs within the article 50 process is importantly only the divorce settlement. In fact, article 50 does state that the withdrawal agreement should “take into account” the framework for the future EU and ex-Member State relationship. Therefore, the EU may argue that within the formal two-year period the UK can only discuss the framework for negotiations on a future relationship, whereas the UK may want a broader scope and a more definitive deal that also encompasses the future trading relationship. Here is another example of how the Brexit negotiations could be defined by the manner in which article 50 is interpreted.
Finally, it is of the utmost importance to emphasise that there is no guarantee that the UK and the EU will actually find an acceptable settlement that the UK, a qualified majority in the European Council, and the European Parliament can all agree upon. In short, the negotiations could fail, and after two years -if the negotiating period is not extended- the UK could depart from the EU with the automatic resumption of World Trade Organisation (WTO) tariffs and regulations governing the new economic relationship between the two sides.
From all of this we can clearly see that there is a need to first have negotiations about the negotiations. The UK will push for one thing, and the EU may push for another. Evidently the paucity of detail found within article 50 will not help matters, but it does perhaps provide each side with an opportunity to shape the negotiations in the way that they see fit.
There is no doubt however that some form of deal will be struck; it is simply too important for all concerned to countenance a return to WTO rules. After a period of long and gruelling negotiations both sides will probably highlight that a clear settlement has been achieved, but the reality will be that the nitty gritty talks could continue for months if not years. We can therefore expect some sort of transition deal that minimises economic disruption for both the UK and the EU over a period of many years. The lack of perceptible changes in the relationship may well mean that talk shifts over this period from the debate over a hard Brexit or a soft Brexit, to people wondering if a more apt term would simply be Brexif, given the slow pace of negotiations, and the time required for any real alterations to be implemented and then noticed by the general public.
To conclude, it seems that the best analogy to describe Brexit so far is that of a game between two opposing sides. The analysis has so far focused on when the match will start, meaning the triggering of article 50, and what the result of the match will be, in short, what deal will the UK get? However, we have thus far utterly avoided the nature of the match itself, this being the negotiations.
It is evident that far more clarity on the nature of the negotiations themselves is required, and that this would help us predict their conclusions. After all, who will play in the match, where will they play, and what will the game even be for?
The analogy with games stops there, as in reality this will be long, hard, complex work, and the fact that both the UK and the EU are now entering uncharted waters with little more than 262 words to guide them does not provide the stability and certainty upon which straightforward negotiations are normally launched. So let’s get used to the uncertainty because the Brexit game is only just beginning.