Negotiating Brexit – The Shades of Article 50

I would say that Brexit is clearly the biggest diplomatic event of our lifetime. After all, when was there one bigger? For the UK, the end of the Cold War didn’t even come close in terms of its impact. As such, it shouldn’t be entered into lightly or half-heartedly as it is going to radically change many things.

Unfortunately, that is exactly what we have done. Rightly or wrongly, we are now set on a course of action with no agreement even on the destination, let alone how to get there. That presents many challenges and this one issue is going to eat up the resources and time of the British Government for the foreseeable future. So what’s the next step?

Destination

No one knows what this is. And we really need to set out what we want before we start trying to negotiate to achieve that. However, this isn’t a piece that is looking at what type of deal we should get – that’s another discussion – this is a piece on how to approach the negotiations. It’s up to all those who voted Leave to agree what they want and what they are prepared to accept – which are unlikely to be the same thing! For example, do we want to stay in the Single Market, do we want a complete end of all freedom of movement, do we want to be able to overrule European laws, etc? This has to be thought out as you don’t go into negotiations just hoping for the best. The goals, the priorities, the “red-lines” etc all need to be worked out now in order to give the UK team the best strategy and thus a fighting chance of getting the best deal possible.

Article 50

Once we have agreed objectives, we need to start negotiations. This is where we have the problem with Article 50 – that section of the treaty of Lisbon that deals with a member state leaving the EU. The EU Commission and member states have said that they won’t begin negotiations until the UK have given formal notification under this article. However, not wanting to make a complete leap in the dark, the UK has said it wants to negotiate and know where it is going before it leaves. So, a stalemate.

And what about the future? Whilst Article 50 refers to “…taking account of the framework for its future relationship with the Union”, this does not say that these negotiations cover all aspects of its future relationship. Given these negotiations are governed by Qualified Majority Voting and Trade Agreements require unanimity, then it implicitly recognises that things such as the future trading relationship are not covered by these negotiations. Officially, those key trade negotiations are supposed to happen after Brexit when the EU will negotiate as one body with a newly separate UK. In the meantime, we would be trading on World Trade Origination rules, which would be one hell of a shock to the economy.

To think that all of this is stacked against the leaving state would be right. Virtually all the negotiating power is with the EU. There are two years to conduct a leave agreement and, if none is agreed, the leaving state is just thrown out. Trade negotiations are separate and the EU has no need to hurry – whereas a leaving state will have no agreement of its own and will be desperate to re-establish its trading position. None of this should be a surprise, though, when you bear in mind that the man who wrote the article, wrote it as a deterrent that was never supposed to be used. All of which puts the UK in a difficult position, to say the least.

How to approach the negotiations

Assuming the UK has established its objectives and tactical approach (which it is still far form doing), the most important thing we need to do then is to keep our options open. This is essential in all negotiations – in all strategy, in fact – because if you run out of options, you are forced to take what’s available. But if you can pick and choose and ultimately don’t need to take anything, then you are in the driving seat.

Being able to walk away from the negotiating table at any time is therefore absolutely key. If the EU knows we have to accept something, what leverage will the UK have? Yes, we are still an important market for European goods but – without all the trade agreements – we could be left in the lurch as we can’t sign or even informally agree anything with others (or the EU) until we have left. So it would be a colossal leap in the dark – and we could easily get economically shafted as all other states in the world will be using this as an opportunity to advance the interests of their own industries and economies. So we must be able to keep the options open.

The way to give strength to the UK’s negotiating team is to float the possibility that we might change our mind. That way, we can threaten to walk away from the negotiating table and back to the status quo if we are getting a rough deal. In fact, a strict reading of Article 50 allows for us to change our mind because having to use Article 49 only applies If a State which has withdrawn from the Union asks to rejoin…” and that clearly doesn’t apply until you have actually left. That was certainly the conclusion of a study into the leaving process conducted by the House of Lords; but we should put it beyond doubt and make it clear to the EU that we reserve the right to walk away from the negotiations. And there is a way of doing that.

Conditional Notification

To achieve this, the UK gives the formal notification via an Act of Parliament (it’s dubious that it can be done in any other way as the current legal case is arguing). In that Act, we then state that the terms of leaving need to be approved by Parliament or by Referendum, otherwise the notification is incomplete and the UK stays. With that in place, the UK can then go into the negotiations knowing it is not going to be screwed over. This is because Article 50 says “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.”  Well,  the UK constitution is basically a collection of Acts of Parliament. If one of these says we need to give explicit consent to the specific terms being offered, then that becomes our constitution.  That may be debatable – but given the previous legal reading of Article 50, there is a strong case to make that interpretation. Fundamentally, Article 50 is a badly drawn clause that’s been untested. Therefore, any government would be failing in its duty to look after British interests if it did not interpret the Article in the most favourable way.

Some say that this gives the EU an incentive to make terms bad for us so that we would stay! Hardly. I think the EU is disappointed; but they’re not going to be falling over themselves to manipulate us into staying. They’ve got their own interests. When you ask people who say this, what should we do then? They say we should put all our cards on table as it’s in the EU’s interest to make it work – i.e. they will be nice as they want a deal too. Yes, they do; but if we don’t have the right to walk away, we’d be faced with whatever deal they offer (which would be one that maximises their advantage) or walking away into WTO rules, which would be severely damaging to the economy. Some say that would be fine; but I would venture that those who say this really don’t understand the impact that this would have on the UK economy.

More importantly, everyone who has some understanding of the complexities of trade agreements (let alone the intertwining of Single Market law in the UK body of law) knows that this is going to take years. At the very least, we will need some form or transitional period to avoid crashing out with untold damage to our economy. But if we want some form of special deal, we need to be able to control the exit – and extending our constitutional requirements to agree the deal effectively increases the options available under Article 50. Yes, that’s an untested unintended approach; but the whole process is! If we want to get the best deal for the UK, we have to be taking that assertive positive position. If we can’t even do that on the fundamentals of how we are going to negotiate, what use is the British team going to be when it actually comes to the nitty gritty?

Conclusion

So start negotiating Mr Davis– but do it with all our options open. Who knows what deal we can get; but by using a conditional notification we would get the maximum amount of control possible over the process. This could then be enshrined in a promise to hold a second referendum because none of us know what deal can be achieved.

So do the deal – and then let us have the final say when we can actually see what both options truly mean. Then, whatever happens, the people really will have spoken.

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