COVID-19: Guidance Tracker

Brexit

Posted on: 22 March 2017

Article 50 will now be triggered: what happens next?

Posted by: Stephen Hockman QC, Christopher Badger and Stuart Jessop.

Theresa May has indicated that she intends to trigger Article 50 on 29 March. This will be the start of the two-year timeline set out in Article 50, in the eyes of many people a ridiculously short period of time within which to negotiate, finalise and ratify a deal with the EU before the relevant treaties cease to apply to the UK.

Resolution for vote in the European Parliament
The EU have announced a summit on 29 April to discuss Brexit. This meeting will be used to agree the guidelines for the EU’s negotiating team headed by Michael Barnier. The guidelines are expected to specify the priorities for the remaining 27 EU states as well as the structure of the talks. One practical problem is the fact that this date is in between two rounds of the French election, the outcome of which has the potential to impact on the manner in which Brexit progresses – Marine Le Pen is no friend of the EU! Furthermore, following the summit, the remaining member states will develop confidential directives that give its negotiating body a more detailed mandate, over and above that set out at the summit. This mandate will then need to be approved by the 27 states and negotiations cannot take place until that happens.

Red lines
Priorities do not necessarily mean the same as red lines that cannot be compromised but it has in the past proved extremely difficult to secure sufficient consensus within the European member states to progress trade negotiations at a pace anything other than absurdly slow. In light of this, the EU may take the opportunity to identify principles that in their view cannot be relaxed during the negotiations for the purpose of developing certainty and streamlining negotiations.

Exit fee first?
Michael Barnier has already stated that he wants a “divorce-first” approach to negotiations, delaying talks on a future trade deal until the UK has agreed principles on an exit bill and the rights of EU migrants. The House of Lords has stated that it considers that there is no law or treaty that can compel the UK to pay the estimated €60 billion exit fee but that the UK should nonetheless seek a fair divorce due to the gravity of failing to reach a deal.

Transitional arrangement?
Talks on a transitional arrangement only have any practical merit if such an arrangement is concluded in sufficient time to protect the interests of those who will be directly affected by Brexit. Otherwise, those whose businesses are going to suffer in the absence of any effective trade deal will have made arrangements to mitigate those negative effects.

October 2018
Michael Barnier has stated that he wants talks to conclude by October 2018 to allow both sides time to ratify any negotiated agreement.

EU law over the next two years
Legislative uncertainty and the prospect of regulatory change can be hugely destabilising and poses a significant risk to the economic environment, in particular if its affects medium-term stability and investor confidence. The UK has indicated that it will remain bound by EU laws over the next two years, but at the same time it will be barred from EU discussions on the future regulatory framework of the EU. Its position of influence is likely to steadily diminish. The issue of whether the UK courts will continue to recognise the past and future decisions of the CJEU is as yet unresolved – particularly as it is the stated position of the Government that the CJEU will cease to have any supranational power over the UK following Brexit.

Hot legal topics for negotiations
The Great Repeal Bill is by its nature a temporary arrangement and not the appropriate mechanism for evaluating and implementing the UK’s approach to legal regulation. Almost every area of law will be affected by Brexit in some way. Key legal and regulatory topics that will shape the future of the trading relationship with the UK and the rest of the world include:

– Environmental Regulation
– Sanctions and trade agreements
– Consumer law
– Market regulation

 

Expect future blogs to address the impact of Brexit and key risks in each of these areas in due course.

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