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The Brexit negotiations cover the negotiations between the United Kingdom and the European Union leading up to "Brexit, being the United Kingdom's exit from the "European Union, following the "United Kingdom European Union membership referendum in June 2016.
The Brexit negotiating period began on 29 March 2017 when the United Kingdom "served the withdrawal notice under Article 50 of the "Treaty on European Union. The period for negotiation stated in Article 50 is two years from notification, unless an extension is agreed.
According to the European parliament, "For the moment, it appears that the two sides have different views on the sequencing and scope of the negotiations, and notably the cross-over between the withdrawal agreement and the structure of future relations, and this divergence itself may be one of the first major challenges to overcome."
The "Department for Exiting the European Union is responsible for overseeing the negotiations to leave the EU and for establishing the future relationship between the UK and EU.
The proposed principles were set out in the Article 50 notification:
The Prime Minister's formal letter of notification was delivered in Brussels on 29 March 2017. It included withdrawal from the "European Atomic Energy Community. The letter recognized that consequences for the UK of leaving the EU included loss of influence over the rules that affect the European economy, and UK companies trading within the EU aligning with rules agreed by institutions of which the UK would no longer be part. It proposed agreeing to seven principles for the conduct of the withdrawal negotiation. These are for:
The constitutional lawyer and retired German Supreme Court judge "Udo Di Fabio has stated that separate negotiations of the EU institutions with London, Scotland or Northern Ireland would constitute a violation of the Lisbon Treaty, according to which the integrity of a member country is explicitly put under protection.
Negotiations are likely to be slowed slightly until after the "United Kingdom general election, 2017, which will take place on 8 June 2017. "Antonio Tajani, speaking on 20 April said that the early election should bring stability to the UK, which is good for negotiations. "Michel Barnier, has indicated that 19 June 2017 will be the first formal day of talks.
Following the United Kingdom's notification under Article 50, draft guidelines for the negotiations were sent to EU delegations of the 27 other member states (the EU27). The draft, prepared by the "President of the European Council, states that the guidelines define the framework for negotiations under Article 50 and set out the overall positions and principles that the Union will pursue throughout the negotiation. It states that in the negotiations the Union's overall objective will be to preserve its interests, those of its Member States, its citizens and its businesses, and that, in the best interest of both sides, the Union will be constructive throughout and strive to find an agreement. The draft sets out two Core Principles:
According to the European Parliament, the withdrawal agreement and any possible transitional arrangement(s) should enter into force "well before the elections to the European Parliament of May 2019", and the negotiations should focus on:
On 18 April 2017, a spokesman for "Donald Tusk said "We expect to have the Brexit guidelines adopted by the European Council on 29 April and, following that, the Brexit negotiating directives ready on 22 May". On 29 April the EU27 unanimously endorsed the draft guidelines with no debate.
EU27 guidelines require:
within the withdrawal phase.
In a speech to a plenary session of the European Committee of the Regions in Brussels on 22 March 2017, Barnier, as EU Chief Negotiator for the Preparation and Conduct of the Negotiations, said that the EU wanted to succeed by reaching a deal with the British, not against them.
Some effects of the UK withdrawal could emerge before the UK and the EU27 conclude the Article 50 negotiation, as a result of policies existing when the negotiation begins, or some change of policy later. At the outset policy provisions binding on the EU include principles, aspirations and objectives set out in the TEU ("Treaty on European Union) Preamble and Articles, of which
Policies mentioned in the Preamble include:
– Achieve the strengthening and convergence of Member States' economies and establish an economic and monetary union including a single and stable currency,
– Promote economic and social progress for their peoples, taking into account the principle of sustainable development and within the context of the accomplishment of the internal market and of reinforced cohesion and environmental protection, and implement policies ensuring that advances in economic integration are accompanied by parallel progress in other fields,
– Establish a citizenship common to nationals of their countries,
– Implement a common foreign and security policy including the progressive framing of a common defence policy, thereby reinforcing the European identity and its independence in order to promote peace, security and progress in Europe and in the world,
– Facilitate the "free movement of persons, while ensuring the safety and security of their peoples, by establishing an area of freedom, security and justice.
– Continue the process of creating an ever-closer union among the peoples of Europe, in which decisions are taken as closely as possible to the citizen in accordance with the principle of subsidiarity.
UK policy was stated in a "white paper published in February 2017: The United Kingdom’s exit from and new partnership with the European Union. In the white paper, UK negotiating policy was set out as twelve guiding principles:
A meeting at "10 Downing Street took place on 6 April 2017 between "Theresa May and "Donald Tusk to discuss "the way ahead on Brexit". Another meeting took place in London on 20 April 2017, this time between Theresa May and "Antonio Tajani to discuss the rights of EU citizens. After the 20 April meeting, Antonio Tajani said that the UK and EU27 timetables fitted well together, with a two-year exit deal negotiation followed by a three-year transition phase. A 10 Downing Street meeting between Theresa May, "Michel Barnier and "Jean-Claude Juncker took place on 26 April to discuss the withdrawal process. May reiterated the UK's aim for a "deep and special partnership" after Brexit.
At a meeting on 29 April 2017 the EU27 unanimously endorsed the draft guidelines with no debate. A meeting took place between Michel Barnier and both houses of the Irish parliament on 11 May, where Barnier assured members of "Dáil Éireann and "Seanad Éireann that Europe would "work with you to avoid a hard border". Barnier went on to say that "the Irish border issue would be one of his three priorities in the negotiations," and that "there is always an answer".
The UK retains its full EU rights until Brexit and the EU is seeking to increase their budget leading to the possibility that Britain may veto EU budget increases, which for example in the immediate term amount to 4 billion euros. A continued British veto would have far-reaching consequences and "will hurt us" according to German MEP Jens Geier.
The issue of payments by the UK to the EU as part of the exit agreement is subject to much conjecture and has been divided into two broad questions. Firstly, whether a leaving state is legally obligated to contribute to the EU budget beyond its membership period or compensate for any financial losses that EU may suffer on account of withdrawal, given that Article 50 does not concern itself with financial ramifications of a withdrawal; and secondly – if the United Kingdom is legally obligated to pay – what should be the due amount.
The leaders of France and Germany have both stated that the UK would need to agree terms regarding the departure before discussing future relationships. This has been reinforced by EU27 guidelines issued to the remaining 27 countries. The UK has signalled that it may consider paying the EU to attain preferential access to the economic Single Market and may offer to pay liabilities, even if not legally obligated, on a moral and co-operative basis to secure a preferential working relationship with the EU.
The highest reported claim by the EU is around €60 billion (£50 billion["when?]). In March 2017 the "Bruegel think tank estimated that the UK would need to pay at least €25.4 billion, but the method of calculation is debatable and their calculations using seven different methods produced estimates between €30 and €45 billion. However this £50 billion bill includes the United Kingdom's annual EU contribution (approximately £13 billion annually) for the two years from 2020 and 2021 as agreed in the "Multiannual Financial Framework (MFF).["citation needed] The United Kingdom, in accordance with Article 50 and unless otherwise extended, will cease to be a member of the EU from 29 March 2019 and the MFF does have a provision for "unforeseen circumstances".
EU27 is expected to ask the UK pays its liabilities in euros, including the relocation costs associated with the two EU bodies currently based in London.
Speaking on 20 April, Antonio Tajani said that it was too early to quantify the amount the UK would need to pay and that it was not a bill to leave the EU, it was money needed for farmers and small businesses.
A March 2017 House of Lords report acknowledges that the EU may claim for (1) part of the current budget (which runs from 2014 to 2020) post March 2019, because it was approved by the UK (2) part of the EU future commitments which amount to €200 billion and (3) a contribution if the UK is to continue with access to some EU programmes. The report concluded that the UK had no legal obligation to make "exit" payments to the EU if there was no post Brexit deal.
Discussing financial and legal complexities involved in negotiating withdrawal, including settlement of outstanding financial liabilities and division of assets, the report mentions (paragraph 15) that the EU budget is funded by revenue drawn from various sources, governed by the EU’s Own Resources Decision (ORD), which was made part of UK law by the "European Union (Finance) Act 2015. The revenue includes contributions from import duties and "VAT collected by member states. The report also mentions the EU "Multiannual Financial Framework for controlling the annual expenditure.
The EU has considerable assets including buildings, equipment and financial instruments, and there is a potential claim by the UK for a proportion of these assets. "Boris Johnson, the UK's "Foreign Secretary, commenting on the Brexit "divorce bill" in May 2017 stated that the valuable EU assets the UK has paid for over the years should be properly valued, and that there were good arguments for including them in the negotiations.
The "Bank of England (BoE) has invested in the "European Central Bank (ECB) amounting to 13.6743%, representing paid up capital of €55.5million. The BoE does not participate in any profits (or losses) of the ECB. The BoE has also made loans to the ECB. The ECB set up the "European Financial Stability Facility in 2010, which has a borrowing facility of €440bn and in addition used a guarantee from the "European Commission and the "Budget of the European Union as collateral to borrow a further €60bn. The UK withdrawal will affect the ECB.
The EU has a pension liability of €64 billion.
The UK benefits from a "rebate which reduces its contribution to the "EU budget. The rebate is paid a year in arrears, accordingly the 2019 rebate would be payable in 2020.
Concerns have been raised by UK citizens who live in other EU countries, and by citizens from those countries who live in the UK. In May 2017, "Michel Barnier stated: "Currently around 3.2 million EU citizens work and live in the UK, and 1.2 million British citizens work and live in the EU."
Issues include rights of movement, citizenship, abode, education, social support and medical treatment, and the payment of pensions; and the extent to which these rights apply to family members. Beyond the 27 EU countries, workers have certain "freedom of movement rights to/from Norway, Iceland, Liechtenstein and Switzerland.
'Associate citizenship', suggested by EU27 negotiator Guy Verhofstadt, would allow UK nationals to volunteer individually for EU citizenship, enabling them to continue to work and live on the continent. Jean-Claude Juncker, president of the European Commission, is not opposed to the idea. The "European Parliament will debate on 5 April the idea originally raised by Luxembourg MEP "Charles Goerens of 'Associate citizenship'.
Antonio Tajani spoke after a meeting with Theresa May on 20 April saying "the issue of reciprocal EU citizen rights should be negotiated "immediately" with a view to getting an agreement by the end of the year."
The general rule for losing EU citizenship is that European citizenship is lost if member state nationality is lost. but the automatic loss of EU citizenship as a result of a member state withdrawing from the EU is the subject of debate. The situation of a person acquiring EU citizenship when the EU joined the EU in 1973 compared to a person born in the UK after 1973 and was therefore born into EU citizenship may differ. It may be necessary for the "European Court of Justice to rule on these issues.
A 2017 decision of the "European Court of Human Rights has ruled that where a child is born in the EU, the parent/s, even if they are both non EU citizens, are entitled to rights of residence. This could have consequential effects for UK residents who have young children and wish to live in the EU27 territory post Brexit.
Until the UK effectively withdraws from the EU in 2019 or at another agreed date, the current system of free movement of labour between the EU27 and the UK remains in place.
The report of the House of Commons "Exiting the European Union Committee on The Government's negotiating objectives, published in April 2017, proposed (paragraphs 20 and 123) that the future system for EU migration should meet the needs of different sectors of the UK economy, including those employing scientists, bankers, vets, care workers, health service professionals and seasonal agriculture workers.
"Theresa May, answering press questions on 5 April 2017, commented that the free movement of labour would not end in March 2019; an implementation period of possibly five years would give business and government time to adjust.
The UK currently charges an annual levy of up to £1,000 for each non-EU citizen employed within the UK. Proposals are under consideration to increase this 'immigration skills charge' to £2,000 p.a. and to implement a similar levy on EU citizens employed in the UK.
The concept of "European Court of Justice competence creates complications. Some pro-Brexiteers believe the Court of Justice might be completely removed from the UK landscape. Various other opinions consider that the Court of Justice or some equivalent should be able to rule on remaining issues after Brexit (for instance between a European and a British stakeholder), at least in respect of the TEU ("Treaty on European Union), "European Union citizens, or access to the "European Single Market.
Brexit might have impact in various sectors.
Without a trade agreement in place, the "World Trade Organization rules will apply to trade between the UK and the EU. This would lead to the UK having no access to the "European Single Market. However, it would have an opportunity to control immigration as well as develop its own trade regulations.
The UK is not permitted to hold trade talks until after Brexit is concluded, however the UK can do preparatory work with other countries regarding the UK's future trading relationships; this is not to the liking of some EU27 countries.
Only the EU can act in areas where it has exclusive competence, such as the customs union and common commercial policy. In those areas Member States may not act independently.
The UK can still negotiate its own bilateral investment protection treaties subject to Commission authorization.
Strategic controls on military goods are primarily a Member State competence. As a result, Member States themselves negotiate multilateral or bilateral agreements on the strategic aspects of trade in defense goods.
EU27 wish to exclude the UK from sitting in on trade negotiations held by the EU during the period ending March 2019, seeing the UK as a competitor. Theresa May rejected this idea saying “While we’re members of the European Union we would expect our obligations but also our rights to be honored in full.”
The "Geographical indications and traditional specialties in the European Union, known as protected designation of origin (PDO) is applied internationally via bilateral agreements. Without an agreement with the EU27, UK producers of products such as the "Cornish pasty, "Scotch whisky and "Jersey Royal potatoes are at risk of being copied.
The EU27 have stated that UK fish supplies could lose tariff-free access to the continent unless EU countries have continued access to UK waters after Brexit.
Investment banks may want to have new or expanded offices up and running inside the EU27 bloc before the UK's departure in March 2019, with "Frankfurt and "Dublin the possible favourites.
"Lloyd's of London have confirmed that they will open a subsidiary in Brussels, hoping to ensure continuation of their continental business which generates 11% of its premiums.
The situation may be different when it comes to the "fund management industry, as British asset owners, notably UK "pension funds, often constitute an incommensurate share of total turnover for German, French, Dutch and other "Continental European asset managers.
This imbalance could potentially give Britain some negotiating leverage e.g. power of "retorsion in case the EU attempts to impose an abrupt cancellation of the mutually-binding obligations and advantages pertaining to the "Markets in Financial Instruments Directive 2004 ("fund passporting"). Research conducted by the "World Pensions Council (WPC) shows that
“Assets owned by UK pension funds are more than 11 times bigger than those of all German and French pension funds put together […] If need be, at the first hint of threat to the City of London, Her Majesty’s Government should be in a position to respond very forcefully.”
The letter of 29 March 2017 giving the UK's "notice of intention to withdraw from the EU stated "In security terms a failure to reach agreement would mean our cooperation in the fight against crime and terrorism would be weakened." This was seen by some as a threat. On 31 March, "Boris Johnson, the UK Foreign Secretary, confirmed that the "UK commitment to EU security is unconditional".
The call by the United States to other members of "NATO to increase their defence expenditure to the 2% of GDP level coincides in timing with Brexit. The UK is the second largest contributor to NATO defence, one of only five to meet the 2% level and one of only two EU members who have nuclear weapons. The possibility of a new Franco-German partnership to fill the vacuum left by Britain has been raised as a possibility and post Brexit an EU military headquarters, previously vetoed by the UK, may be created. The UK is fully committed to NATO.
The UK government's negotiating policy when the negotiating period started on 29 March 2017 included remaining at the vanguard of science and innovation, and seeking continued close collaboration with the UK's European partners.
In the "Great Repeal Bill "white paper published on 30 March 2017, the UK government stated "The Government is committed to engaging with the Crown Dependencies, Gibraltar and the other Overseas Territories as we leave the EU.":ch.5
Brexit raised issues around "sovereignty for "Gibraltar, the only "British Overseas Territory in the EU. Gibraltarians voted to stay in the European Union by 96%. Spain claims sovereignty over Gibraltar however in 2002 "Gibraltarians voted 99% to keep British sovereignty.
The EU27 draft guidelines allow Spain a veto over any effect that the Brexit agreement has as regards "Gibraltar. The guidelines state: "After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom."
The "Crown dependencies are neither part of the EU nor of the UK. They have a unique constitutional relationship both with the UK and, as encapsulated in Protocol 3 to the UK’s "Treaty of Accession, with the EU. They have no voting rights in EU or UK referenda or elections and no international voice, the UK government having the responsibility to act for the dependencies on foreign matters. "Oliver Heald "QC "MP is responsible for managing the relationship between the Islands and Parliament in their discussion with the EU27.
If no withdrawal agreement is in place by the end of the two year period under Article 50, the EU Treaties will cease to apply to the UK. This has been described as "falling over the cliff-edge".
A Parliamentary inquiry has concluded that "the possibility of 'no deal' is real enough to justify planning for it. The Government has produced no evidence, either to this inquiry or in its White Paper, to indicate that it is giving the possibility of 'no deal' the level of consideration that it deserves, or is contemplating any serious contingency planning. This is all the more urgent if the Government is serious in its assertion that it will walk away from a 'bad' deal."
The UK government has consistently said that it will aim for the "best possible deal" but that "no deal is better than a bad deal". This position is restated in the Conservative Party manifesto for the 2017 general election.