Pulling The UK Out Of Europe Is No Easy Task

Brexit storm approcahingBrexit storm approaching

*This article was originally published by Fair Observer.

John Bruton | Disengaging the United Kingdom from the European Union (EU) will be like undoing all the stitching of a patchwork quilt, and then re-stitching some parts together while making a new quilt with the rest.

The UK is, at the moment, stitched into thousands of regulations and international treaties, which it made as a member of the EU over the last 43 years. Each piece of stitching will have to be reviewed both on its own merits and for the effect that rearranging it might have on other parts of the quilt. This is, first and foremost, a problem for the UK itself.

Unknown UK Goals

We all think we know what British citizens voted against on June 23. But nobody, even in the Conservative government itself, has a clear idea about what the people voted for. The Brits voted to leave the EU for contradictory reasons.

Many voted to leave because they wanted more protection from global competition. On the other hand, many leaders of the Vote Leave campaign wanted to get out of the EU so they could deregulate their economy, dispense with EU social rights, and promote more global competition and lower costs (wages) in the UK economy.

The UK government must first decide which of these economic policies it wants, and only when it has done that can it decide what sort of relationship it wants with the EU.

Must the UK be out of the EU before it makes a deal ?

On June 29, the remaining 27 EU heads of government told the UK that any trade agreement concluded with it will be done “as a third country.” This could be interpreted as meaning that Britain must first become a “third country” by withdrawing from the EU before it can have a trade agreement with the union. This could mean that the UK would have to be out of the EU before it knew what terms it might get on trade. This would be a very hardline EU position.

If that is what the 27 leaders meant, it is probably contrary to Article 50 of the Lisbon Treaty, which says a withdrawal treaty must take into account the “framework” of the withdrawing country’s “future relationship” with the EU.

Or can there be two simultaneous negotiations? 

Article 50 means that there will be two negotiations: one on “withdrawal” and another on the “framework” of the future relationship. The two treaties should be negotiated simultaneously and in parallel, and the framework agreement cannot wait until the UK is already a “third country.”

The Irish cannot afford to wait until the UK is already a “third country” before border, travel and residency issues between Ireland and the United Kingdom are sorted out. These issues need to be addressed before Britain leaves.

Like a divorce settlement 

As with a divorce, the withdrawal treaty will be about dividing up the property. It may be easy enough to negotiate. The framework treaty will be about the future, and like marital disputes about access to and care for children, it will prove to be much more fraught and complex.

The question of whether there is a “hard border” or not will flow from what the UK looks for and what it gets in its framework negotiations. Nobody knows yet what the United Kingdom will look for, so this question is impossible to answer.

The 27 EU leaders rightly insisted that the four freedoms— freedom of movement of people, goods, capital and services—go together. Nobody has any idea yet how the UK will propose to get around that.

UK cannot make deals with others

If Britain were to heed the call of Minister for International Trade Liam Fox—that the UK leaves the EU Customs Union so it could negotiate trade agreements with countries outside the EU—this would mean an immediate hard border in Ireland. The Irish prime minister’s diplomacy in recent months has probably helped head off that threat. Implementing Fox’s proposal would have breached a UK treaty obligation—a very serious matter for a country that relies on 30,000 international Treaties.

The sort of border we have in Ireland will depend on the shape of the final UK-EU Framework agreement on all the four freedoms. Ireland can do no side deal with the United Kingdom. And if Ireland is to influence the EU positions in its favor, it has to present its case as beneficial to Europe as a whole. It cannot be—or be seen as—on both sides of the table at the same time, in what will prove to be a highly contentious negotiation.

Until it leaves, the UK is still a member of the EU and is bound by all EU rules. It will fully participate in all key EU decisions, except those concerning its own exit terms. This means the UK cannot do trade deals with other countries while still being an EU member.

Indeed, it would appear that Britain cannot even enter into commitments about future deals, particularly ones that might undercut EU negotiating positions.

This is because, as long as it is still an EU member, the UK must, under Article 4 of the treaty, act in “sincere cooperation” with its EU partners. The meaning of “sincere cooperation” was elaborated by the European Court in judgments it made on cases the European Commission took against Germany and Greece to overturn separate understandings that each had forged with other countries on matters that were EU responsibilities without EU involvement.

So, to ensure that he stays within the law, Liam Fox may have to take a European Commission official with him on all his trade travels around the globe—at least until the UK leaves the European Union.

The UK should not be rushed

Indeed, the more closely the UK government looks at its options, the longer it may take to decide when to trigger Article 50. The leaders of the remaining 27 EU member states should not rush the UK on this. Short-term uncertainty is a very small price to pay for avoiding a failed and ill-prepared exit negotiation. Everyone would lose from that.

The UK civil service did not, after all, expect to find itself in this position. Indeed, UK civil service studies conducted long before the EU referendum concluded that Britain’s then-existing relationship with the European Union was just about right. Furthermore, once Article 50 is triggered, the UK cannot—easily or legally—change its mind and revert to the status quo, even after a general election.

A Major distraction from other vital work

Meanwhile, Europe, with so much other work to do, has to turn inward and devote itself to unraveling 43 years of interweaving between Britain and Europe.
All this highly demanding technical work has to be done at a time when Europe should be looking outward toward the opportunities and threats of a rapidly changing and unstable world.

*This article was originally published by Fair Observer.


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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.