29 March 2017

The Prime Minister, Theresa May, today triggered Article 50 of the Treaty of the European Union, formally notifying European Council President Donald Tusk of the UK’s intention to leave the EU. In the end, the UK’s negotiating letter was a concise six-page endeavour, and not the previously mooted hundred-page essay, nor a short two-line ‘see you.’ While the broad principles it outlines were far from unexpected, the letter does offer some new insights into the UK’s position going in to exit negotiations.

Above all, it struck a positive, pro-European tone. Not only does the UK seek “a new deep and special partnership with a strong European Union,” but it also fervently supports and identifies with European values. Her letter refers to “our continent,” and argues, “We should continue to work together to advance and protect our shared European values…the world needs the liberal, democratic values of Europe.” Going further than her Lancaster House speech earlier this year, which affirmed Britain’s aspiration for a thriving European Union, Theresa May’s letter said, “We want to play our part in making sure that Europe remains strong and prosperous and able to lead the world, projecting its values and defending itself from security threats.”

The notification letter also recognises the consequences and challenges Brexit poses for the UK. The Prime Minister writes, “We understand […] there can be no “cherry-picking, […] we know that we will lose influence over the rules that affect the European economy. We also know that UK companies will, as they trade with the EU, have to align with rules agreed by institutions of which we are no longer part.” This clear echo of key EU messages sends a signal that the UK is willing to compromise, which will likely be welcomed by the European institutions and member states. This is equally the case when she acknowledges the debate surrounding a Brexit ‘divorce bill’ – although she understandably does not discuss a definite sum. She says, “We will need to discuss how we determine a fair settlement of the UK’s rights and obligations as a departing member state.” For those who felt there was little evidence of give-and-take from the UK, this appears to demonstrate the opposite.

However, the message that has received pointed attention from media and commentators has been her explanation of a ‘no deal’ scenario: “If, however, we leave the European Union without an agreement the default position is that we would have to trade on World Trade Organisation terms. In security terms a failure to reach agreement would mean our cooperation in the fight against crime and terrorism would be weakened.”

In particular, the reference to weakened security cooperation, seemingly juxtaposed with trade, has caused concern that the government is seeking to antagonise the EU or double-down on its warning that “no deal is better than a bad deal.” I don’t think this is the case. Indeed, the Prime Minister is right to point out that in the event of ‘no deal’, the effect on the UK-EU relations would by no means by limited to trade disruption. The legal framework of EU membership means that the UK currently participates in the EU’s law enforcement agency Europol, is party to the EU Passenger Name Record (PNR) data-sharing directive, and applies the European Arrest Warrant (EAW), to name just a few initiatives. If the UK leaves the EU without agreeing any arrangements for participation in these activities, it is clear that both sides will suffer diminished capability in security.

But the larger point requires recognition that both parties have a strong interest in establishing a comprehensive agreement. Given this, if talks result in no agreement, this would be a stark signal that the UK and EU lack sufficient trust to establish a special partnership. Indeed, it would symbolise the extent to which relations had deteriorated. Is it not self-evident that such an atmosphere of no confidence is not conducive to strong cooperation and collaboration on security and crime prevention?

Interestingly, the future Free Trade Agreement (FTA) with the EU only gets one mention in the letter. May essentially acknowledges that the UK is asking for something that has never been done before – a trade deal that covers crucial sectors such as financial services, where the level of interconnection with the continent is particularly high. Conversely, the UK’s request to negotiate the divorce and the future FTA in parallel features several times in the letter. Here, it is important to stress how the letter refers to an agreement on “the terms” of the future UK-EU relationship, and suggests “implementation periods” would be helpful for citizens and businesses on both sides to adjust to the post-Brexit reality. In other words, the UK wants to discuss and agree the broad outline of the long-term settlement with the EU within the Article 50 negotiating period, but recognises the challenge of nailing all these details down in two years – which explains the mention of transitional arrangements.

Elsewhere, her message on the devolved administrations went further than both her Lancaster House speech and the Brexit white paper in saying, “It is the expectation of the Government that the outcome of this process will be a significant increase in the decision-making power of each devolved administrations.” In that white paper, the government outlined that some powers repatriated from the EU would be transferred to the devolved administrations following the UK’s departure, but made no reference to a “significant increase.” But much has changed within the Union since its publication. Recent assembly elections in Northern Ireland have seen Unionist parties lose their majority, power-sharing talks to establish an Northern Irish executive have failed, and there is a new commitment for a second Scottish independence referendum. All of this has created some turbulence in the UK. As such, there may be more urgency to find ways to solidify the strength and unity of the United Kingdom at the start – and throughout – the negotiations.

On this point, the European Commission has shown particular recognition on the sensitivity of the Northern Irish situation. Michel Barnier, the European Commission’s lead Brexit negotiator, said in a speech last week, “I understand the [European] Union’s role in strengthening dialogue in Northern Ireland and supporting the Good Friday Agreement, of which the UK is one of the guarantors. That is why we will be – and I will be – particularly attentive, in these negotiations, to the consequences of the UK’s decision to leave the Customs Union, and to anything that may, in one way or another, weaken dialogue and peace.” These remarks are particularly helpful. If the EU is willing to seek compromise on the particularly sensitive issue of the UK-Irish border and the peace process, there is reason to be optimistic that concessions and flexibility can be sought on a number of issues through negotiations.

The issue of devolving powers is likely to be discussed further in tomorrow’s white paper on the proposed Great Repeal Bill. For now, the UK has fired the starting gun on Brexit negotiations – time will tell how they play out.