Brexit - the process
In the first part of our detailed guide on Brexit and how it will
work, we explain the process and timetable of withdrawal and the Treaty
governs it all.
Article 50 of the Treaty on European Union
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
The next paragraphs go on to explain the mechanics and timetable of the
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.
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
the EU and the departing Member State.
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.
The timetable under Article 50
This procedure does not guarantee that the terms offered will
acceptable although it will be surprising at the end of the day if the
states wish to damage their own industries and jobs in their own
countries for reasons of political spite. But the bottom line
is that even if an agreement can not be reached, the UK will cease
be subject to the EU treaties and will become a free and independent
State at the end of the 2 year period from the day when the UK gave its
notice under Article 50(2). That day will be 30 March 2019.
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,
once having given notice and started the timetable. International
negotiations are often only concluded just before a deadline and
because of the pressure of that deadline. By contemplating any
extension of the deadline, the UK would put itself in a position where
it could be filibustered by dragged-out negotiations. During the
extended time it would have to
carry on 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.
The deadline would serve to focus minds on reaching an agreement.
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
for EU exporters in remaining EU states than for UK exporters, were it
Given the strong incentive this will provide 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 (which is the UK),
cannot see that there will be difficulty in reaching acceptable terms
on a mutually beneficial trade deal within the 2-year timetable,
huffing and puffing EU politicians may get up to in an attempt to
influence the referendum campaign. We shall explain what the UK
should ask for, and the likely terms of such a deal, at the end of our
series of posts on the different strands of activity which the UK would
undertake in preparation for exit.
Our next post on this topic is Brexit
and International Trade Treaties.