EU to benefit most from Article 50 TEU uncertainty

The legal uncertainty over exactly how the UK exits the EU is most likely to benefit the remaining EU countries, according to experts in EU and international trade law.

The lack of a ‘pre-nup’ between the UK and the EU makes Brexit divorce a legal minefield, according to Professor Erika Szyszczak and Dr Emily Lydgate, in a new briefing paper for the UK Trade Policy Observatory (UKTPO).

The University of Sussex academics suggest that the withdrawal process is heavily weighted in favour of the remaining EU countries who, by law, get to write the withdrawal guidelines, can exclude the UK from certain decisions, and may ban pre-Brexit trade talks with other countries.

Some member states may use this bargaining power to push for political commitments, such as the free movement of people.

Professor Szyszczak says: “Even the authors of Article 50 have admitted that they never intended for it to be used. This was a marriage that was supposed to last forever.

“Now that the UK is preparing to leave the EU, lawyers on both sides will see the ambiguous wording in Article 50 as both a challenge and an opportunity.

“Our analysis shows that this is more likely to benefit the EU 27 than the UK.

“They will be keenly aware that the process they agree with the UK will set legal precedent for any future withdrawals from the Union, and so they’ll want to stand their ground.”

For lawyers, the issues around Brexit are not only the terms of any exit agreement, but exactly how those terms are negotiated. For example, if the rules allow for pre-Brexit trade talks between the UK and third-party nations.

The paper explores these issues and makes a number of assessments, including:

  • The referendum result pits the mandate of direct democracy against Parliamentary Sovereignty, the UK constitution’s defining principle
  • The withdrawal process is heavily weighted in favour of the EU 27, with the European Council responsible for drawing up the withdrawal guidelines
  • Article 50 (4) bars the UK from participating in Council ‘decisions concerning it’. This suggests that the UK will be excluded from the process of drawing up the negotiation mandate and the extension period
  • It is unlikely that Article 50 will be able to cover the entirety of the regulatory and trade implications of the UK’s departure from the EU as trade negotiations will undoubtedly take more than two years, probably nearer 10 in some cases
  • If EU law is strictly interpreted, the UK may be prevented from pursuing new trade deals, even informally, until it is no longer a EU Member State. However, there may be room for parallel discussions
  • Some EU Member States may make withdrawal difficult if the UK maintains its commitment to restricting freedom of movement
  • If a new trade deal is not negotiated within the timeframe of the withdrawal process, falling back on existing World Trade Organisation (WTO) tariffs will be an expensive and time-consuming option

The UKTPO was set up days after the 23 June vote to provide expert commentary and analysis of trade policy as the UK prepares to strike out on its own. It is run in partnership with Chatham House.

By: James Hakner
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Last updated: Tuesday, 11 October 2016