In the first part of our detailed guide on Brexit and how it works, we explain the process and timetable of withdrawal and the Treaty Article which governs it all.
Article 50 of the Treaty on European Union
This Article is sometimes (incorrectly) referred to as Article 50 of the Treaty of Lisbon. In fact, the Lisbon Treaty amended the Treaty on European Union (the Maastricht Treaty) and one of the amendments it made was to insert this new Article 50 into it. Article 50(1) of the Treaty on European Union says:
1. Any Member State may decide to withdraw from the Union in
accordance with its own constitutional requirements.
The next paragraphs go on to explain the mechanics and timetable of the withdrawal process:
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.
This dispels some myths about the exit process. Any Member State has a clear and unqualified legal right to withdraw from the EU if it chooses to do so. Article 50 lays down a procedure for the negotiation of transitional arrangements and also envisages an agreement governing the future relationship between the EU and the departing Member State.
The timetable under Article 50
This procedure does not guarantee that the terms offered will necessarily be acceptable. But the fundamental point is that even if an agreement cannot be reached, the UK will cease to be subject to the EU treaties and will become a free and independent State at the end of the 2 year period which began the day the UK gave its formal notice under Article 50(2). UK invocation of Article 50(2) occurred on 29 March 2017 meaning the UK will cease to subject to EU treaties on 29 March 2019 (at 11pm, to be precise).
It is possible under Article 50(3) (quoted above) for the 2-year period to be extended, although only by the mutual consent of both the UK itself and the remaining EU. We cannot see that it would be sensible for the UK either to ask for or agree to any such extension after giving notice and starting the timetable. International negotiations are often only concluded just before a deadline and because of the pressure of that deadline. By contemplating an extension of the deadline, the UK would become vulnerable to filibustering by endlessly dragged-out negotiations. During an extension, the UK would have to continue paying into the EU budget and be subject to the restrictions on its freedom of action imposed by EU laws. The whole point of Brexit is to escape those restraints.
Regrettably, it seems that the UK government is intent on achieving many of the damaging consequences an extension of the Article 50 period by asking for a “transition” period under which the UK would still be liable to make payments into the EU budget as if it were still a Member State, and still be liable to comply with EU laws and be subject to the jurisdiction of the ECJ. The difference between that and an extension of membership under Article 50 is that the UK will no longer have any vote on the EU laws which affect us or any representatives in the EU institutions.
This “transition” period would last (assuming it becomes formally agreed as part of a Withdrawal Treaty) until 31 December 2020.
According to the latest figures (2015, ONS “Pink Book”) the UK exported £134.3bn worth of goods to the remaining EU but imported £223.0bn, i.e. £88.7 billion more. This indicates that the imposition of tariffs on bilateral trade between the UK and the remaining EU after Brexit would be very substantially more painful for EU exporters in remaining EU states than for UK exporters, were it allowed to occur.
Given the strong incentive this provides to the remaining EU to reach an agreement which avoids the imposition of tariffs on the export of goods to its largest single export market (the UK), the UK is in an extremely strong position to reach acceptable terms on a mutually beneficial future trade deal. Regrettably, the current government seems intent on playing a very strong negotiating hand very poorly, and it seems virtually certain that any deal it manages to reach will be sub-optimal and quite likely that it will be worse than no deal at all.
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