The Cicero Brexit Insights team is producing regular updates, comment and insight on both the broad themes and the technical detail of Brexit. We aim to give readers a clear view of the issues and challenges as they are seen in Brussels, London and Member States. This week, the UK team reflects on the triggering of Article 50 and the publication of the Great Repeal Bill White Paper, and the EU team highlights the challenges in dispute resolution and the phased approach. We have also prepared a graphic overview of both sides’ Brexit teams

 

Having fired the starting gun in the form of a hand-delivered letter by Sir Tim Barrow, Prime Minister Theresa May has set the clock ticking on the two-year negotiation period to agree the terms of the UK’s departure. Emphasised throughout the six-page letter to European Council President Donald Tusk and the subsequent statement to the House of Commons, the Prime Minister called for a “deep and special relationship” with the bloc after the UK’s departure.

The letter and the statement were, however, light on details of what a “deep and special relationship” will look like in practice. Reiterating the twelve negotiating priorities laid out in the January speech at Lancaster House, Theresa May expressed optimism about the negotiations ahead. She also restated her belief that it is necessary to agree the terms of the UK’s future partnership alongside those of its withdrawal from the EU, a suggestion that has been repeatedly rejected by those on the other side of the negotiating table. German Chancellor Angela Merkel has said the future relationship can only be discussed after both sides “clarify how we will disentangle our interlinked relationship”.

The Prime Minister’s optimism about concluding a deal within two years and commitment to seek transitional arrangements (‘an implementation period’) should offer some degree of certainty to business. Disappointingly, however, the publication of the Government’s Great Repeal Bill White Paper on Thursday contained little beyond what was expected and dramatically illustrated the scale of the technical challenge that Government and Whitehall will face in delivering a smooth and orderly exit.

The White Paper confirmed that the Great Repeal Bill will not be the vehicle for making sector-by-sector changes, but will rather be a highly technical exercise in ensuring that there is a smooth transition which leaves no “holes” in the UK statute book at the time of departure. The Great Repeal Bill will instead be followed by further sectoral Bills to ensure the UK is fully prepared for withdrawal. Financial Services were not mentioned in the paper, but a Customs Bill and an Immigration Bill were both floated as examples of expected supplementary legislation.

Following a rollercoaster of activity over the past few weeks, the coming weeks will likely be a quiet period in Westminster and Whitehall. The Commons heads off today for two weeks of Easter recess and the Great Repeal Bill White Paper marked the last obvious Brexit milestone on this side of the channel. While EU activity is ramping up with the publication of the negotiating guidelines, we should expect a lull until the Queen’s Speech when the Bills are officially introduced.

Jasmin Harper
Senior Account Executive
 

The UK and EU have now set out their starting positions for the negotiation on the UK’s withdrawal from the EU. While the Article 50 letter does not provide significantly more detail than already announced, it outlines much the EU can agree on. Seeking a constructive tone for negotiations and prioritising citizens are both welcomed throughout the EU27.

There is much more however with which the EU can draw issue as made clear in the Council’s draft guidelines published earlier today. This newsletter has highlighted on numerous previous occasions the gulf between the UK and EU on negotiation sequencing; this continues to be the case. The Article 50 letter makes clear that the UK expects to begin negotiating the future trade agreement from the outset. The Council has reiterated in kind that the negotiation will be phased and that only “preliminary and preparatory” discussions can take place in the two years. The European Parliament’s draft resolution mirrors the Council position.

What has received less immediate focus is the likely challenge in bringing together the UK and EU on joint dispute resolution. The European Court of Justice (ECJ) is not mentioned in the UK’s Article 50 notification, but the UK is clear it prioritises ending the ECJ’s jurisdiction over the UK. The EU is not so keen; the Parliament’s resolution dictates MEPs’ opinion that the ECJ should be “the competent authority for the interpretation and enforcement of the withdrawal agreement”. The Council state that if the UK remains within EU law during a transitional relationship then all EU “instruments and structures” will apply.

This raises the broader question of dispute resolution: exactly who is the arbiter for these negotiations and any withdrawal? To the EU, it clearly remains the ECJ, but it is unlikely the UK will accept this perspective. The creation of a joint dispute resolution authority might provide a handy deus ex machina, however time is short and the existing negotiation agenda looks challenging enough without adding arbitration body-creation to the list.

What remains clear is that significant challenges lie ahead for negotiators. Failing to bridge the position gap on these two specific issues will hamper negotiations significantly and endanger the likelihood of a transitional agreement. Crucially, some stakeholders are coming alive to this fact. We hope the negotiators are too.

Sebastian Damberg-Ott
Account Manager

 

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