LEADING THE WAY OUT OF THE EU

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Friday 31 March, 2017

The big gesture of the week may have been the Prime Minister’s letter, but the evidence so far is that Berlin and Brussels are calling the shots.

The Article 50 is now triggered, on we go with the real business of leaving the EU. But, anyone who expects the next two years to unfold into an exciting drama may have to come to terms with disappointment for at least eighteen months. Two big moves have already been made in the form of the EU’s negotiating guidelines and details of the Great Repeal Bill, both are more likely to induce sleep than euphoria.

Iron Angela

Many of the EU27 are reported to be caught between a natural loyalty towards the United Kingdom and the failing economic bloc they are so firmly wedded to. No country encapsulates this more than the one calling the shots, Germany. Angela Merkel was Cameron’s go-to during his desperate attempt to reform Britain’s EU membership, but such a partnership is becoming a rapidly retreating memory as the German Chancellor issues her marching orders to the other 26 Member States to fall in line.

Shortly after Sir Tim Barrow handed Britain’s notification of withdrawal to the European Council, at a press conference Merkel stated her preference for the negotiations to solely address the divorce in the initial stages, the trade agreement will have to wait until the latter part of an already tight 18-month negotiating period. Advantage EU.

“Only when those questions have been settled, which will still hopefully be soon, can we then start to talk about our future relationship,” said Merkel

The Chancellor’s pithy wish for the more important trade talks to get underway as early as possible hints at the EU’s necessity for a trade deal with the UK, but for the time being the political – if nonsensical – priority of European unity is calling the shots.

Commission guidelines

Following Merkel’s signal, the European Commission released its proposed negotiating guidelines, a three-phased approach with some room for overlap, but not much. Phase one includes the dreaded €60 billion bill. The EU’s strategy is clear, the UK must commit to paying up (exactly what for remains unclear) before trade talks can begin. Alongside the bill, are residency rights, which Theresa May has said herself should be addressed early doors. The Northern Ireland question is also to be resolved during phase one.

Consensus on the continent is that the UK has no chance of hammering out a “deep and special” trade agreement within two years so the second and third phases are intended to set in place commitments towards a trade deal, the i dotting and t crossing of which will occur after 2019, hence the talk of Britain staying essentially inside the EU until 2022 under a transitional arrangement, requested by the Prime Minister in her withdrawal letter no less.

That said, in making a pitch to agree as much as possible inside Article 50’s two-year negotiating period and reach consensus on the terms of an expansive and “deep” future trading partnership, Theresa May is going against the grain of European thinking. The EU’s unambitious guidelines may yet get a turbo charge from London.

Brussels will be paying close attention to the Great Repeal Bill and what happens to the thousands of laws about to exchange EU for UK colours. The EU rightly fears a massive deregulatory programme to commence after the Bill’s completion along with Britain’s exit. Cutting EU red-tape will enable British businesses to become far more efficient. The EU27 worry that these now extra-EU businesses will become far more competitive when operating in the European marketplace.

The failing bloc therefore wants Britain to bury the Repeal Bill and never re-inspect any of the now former EU laws unless it is to upgrade them in line with amendments to their EU equivalents. The second phase will be about getting the UK to promise to do just this. During the third, the EU plans to come to an agreement over arbitration during the 2019-22 transition period and beyond. The EU is buying into the Great Repeal ploy, but would prefer EU courts to remain in charge of UK law. The UK meanwhile, would want a separate court to deal with cross-border disputes.

Already, the dangers of a transitional deal are becoming apparent if the Brexit negotiations are dragged out a significant length of time and come to include unnecessary courts, Britain will come to look less independent than it currently is. The Prime Minister must do everything to complete her agenda before March 29th 2019.

The Great Repeal Bill

The EU has stated that if the Great Repeal Bill is not completed before Article 50 elapses, the European Court of Justice will continue to reign supreme. “Or what?” would surely be the natural response, but Westminster appears to not be taking the threat lightly. Yet, at the same time, the white paper reveals a clear intention to adopt EU law in its entirety. The Bill, described as the biggest copy and paste job in history, is a logical measure to smoothen out the bumps lining Britain’s pathway out of the EU, but the Government seems to be less worried about continued EU dominance then the Prime Minister has suggested thus far.

Such is the significance of the European Communities Act – to be repealed post-Brexit, hence the Great ‘Repeal’ Bill – that more than 50,000 EU laws do not need to be on British statute books to apply. The ‘statute book’ is in fact a combination of EU law, Westminster law and depending on where you live, regional law. By leaving the EU, we will be leaving a large hole in the legal code. The easiest way to fill it is to simply adopt all those EU laws. But what is logical for everyone is also an opportunity for pro-Remain Westminster.

According to the white paper, the Government will be supplementing many of the EU laws with articles so that they fall in line with the spirit of the EU treaties, the most obvious example of this are laws on workers’ rights that implicitly refer to residency rights guaranteed by the Treaty on European Union. Under the GRB, those rights will need to become explicit to ensure seamlessness with the EU’s regulations. Whether those articles will later be repealed, we shall see. The case law of the European Court of Justice will also act as a reference for UK courts too.

The Government intends to go to great lengths to ensure the UK is run in exactly then same way after Brexit as it was before, and it wants to complete the task with the minimal amount of interference from the benches, much like the bill on exiting the European Union.

Remainers hanging on

Unsurprisingly, Remainers in the Lords and the Commons, have threatened to disrupt a process that many commentators have said is almost impossible to achieve in less than two years, but a more likely tactic would be for them to happily usher the passage of the Bill before doing everything to block its unpicking in the aftermath of British independence – agonisingly, calls for a sunset clause GRB have so far fallen on deaf ears. Such an outcome would be very much to Brussels’ satisfaction, especially if it accompanied a £52 billion cheque.

The overwhelming impression is that, after more than forty years of EU membership, the Government is frightened of going it alone and is happy to dance along to the tune set by Brussels over the course of the next two years and even beyond. The EU meanwhile is digging in for a fight, we should too.