What next after the UK vote to leave the EU?

ORIGINAL PUBLISHED ON EU LAW ANALYSIS

Professor Steve Peers

Many of the consequences of the UK’s vote to leave the EU will not be clear for some time. However, here’s my initial take on some of the key issues, in their broader political context.

1 Is the referendum vote binding?

Legally, no. But it is politically unthinkable that it will be ignored, in particular by MPs whose constituency voted to leave.

2 Could the UK simply renegotiate its EU membership again, and then hold a referendum on those results, rather than actually Leave the EU?

This is technically possible, and some on the Leave side hinted at this as a possibility. However, a lot of Leave voters might resent this idea, as they probably thought that they were actually voting to leave the EU – although they would of course have the chance to confirm that position in the second referendum. This option would also require the remaining EU to be willing to offer such a re-renegotiation, and it might also be difficult to put into effect, since it would probably need a Treaty amendment (limiting the free movement of people, for instance) ratified by all Member States.

3 What is the process to leave the EU?

The official process is set out in Article 50 of the Treaty of European Union. I’ve blogged about that in detail here, and there’s a shorter version of my analysis here. It would also be possible to leave the EU by amending the Treaties, although it is hard to see why that would be an attractive option to the UK, since it would require long ratification periods and unanimous voting on the EU side.

Some on the Leave side have hinted that they think there is some alternative mystery process to leave, although they have not defined why they think this or what that would entail. The likelihood is therefore that Article 50 will be used. Any alternative approach would likely face a successful legal challenge.

4 What does Article 50 say?

The UK notifies a withdrawal decision to the EU. That triggers a two-year period at the end of which the UK is no longer an EU member. That time can be shorter (if an EU/UK withdrawal treaty provides for this). It could also be longer if all Member States and the UK agree.

It is up to the UK when exactly to notify the withdrawal decision. It could delay making the notification, although a very long delay could possibly increase economic uncertainty and fuel distrust by Leave voters.

The negotiation concerns a withdrawal agreement. It is not clear if this is a technical agreement limited to the fiddly details of the UK leaving, or whether it would also govern the EU-UK future relationship. The point is relevant since otherwise the EU-UK relationship would have to be negotiated separately, and different rules would apply. While the withdrawal agreement is subject to majority voting among the remaining EU Member States, it is more likely that a separate deal would be subject to unanimous voting and national ratification.

It is also not clear if a notification to leave the EU can be withdrawn after it is made. That would be relevant if the plan were to negotiate the future UK/EU relationship, then ask the public in another referendum whether they wanted to leave on those terms or not.

5 Can the UK amend laws relating to EU membership already?

Can the UK change its law to contradict EU law – repealing the European Communities Act, restricting the entry of EU citizens – while still an EU member? As a matter of domestic law, the answer is yes: the UK courts will accept and apply any Act of Parliament as the law of the land, regardless of whether it contradicts EU or other international law.

However, this approach would indeed contradict EU and international law, as Professor Kenneth Armstrong has pointed out here. The question is whether that might prompt a retaliatory response from the rest of the EU as regards EU business, or complicate the withdrawal negotiations.

6 What will be the future relationship between the EU and the UK?

What is the best model for a future UK/EU relationship? The Vote Leave side seemed to prefer a new treaty not based on the model of previous treaties with non-EU countries. This would of course require the consent of the EU, and would likely take longer to negotiate than using an existing model.

Looking at existing models, the EU/Turkey arrangement is unsuitable since it is a customs union, meaning that the UK cannot negotiate its own trade deals with third countries. The EU/Swiss deal does not give full access to EU services, including financial markets, although this is a key UK export. Equally the EU’s various free trade agreements do not give such access either.

The most attractive option is, for at least a temporary period, for the UK to continue with the ‘Norway option’, which means continuing to remain part of the European Economic Area (EEA), the association agreement between the EU, Norway, Iceland and Liechtenstein.

There are a number of reasons to prefer this approach. It would provide legal security for exports of most goods and all services exports from the UK to the EU (and vice versa). A deal on this could be done quickly, thus reducing the damaging effects of uncertainty about the UK and EU economies, since the UK is already a part of the EEA, and so arguably does not need to go through any process to join it. (There could be a legal dispute on this point, though, since there is no express rule in the EEA treaty on what happens if the UK leaves the EEA: see the comments on this blog post). The EEA option is clearly the simplest way to leave the EU sooner, rather than later – which should appeal to opponents of the EU.

EEA membership would leave the UK free to sign its own trade deals with other countries. The UK would not be bound by the EU’s fisheries or agriculture or VAT policy, so could change its law in those areas too. The EEA doesn’t cover foreign policy or criminal law or policing issues, although the UK could seek to negotiate a separate deal with the EU on those issues (on this aspect of Brexit, see my discussion here).

The EEA does cover most EU laws on workers’ rights and the environment – so signing up to the EEA would guarantee the continued application of those laws in the UK. That’s a big advantage for those who support such laws.

There are limitations to the EEA option, although they could be addressed. First of all, staying in the EEA does entail continued free movement of people, and that is one of the key reasons for the Leave vote. However, unlike between EU members there is a special safeguard. A Member State can disapply part of the EEA ‘If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising.’

This decision is unilateral, although an arbitrator can rule on the ‘scope and duration’ of the safeguard. Also, the EEA specifies remaining EU could retaliate against any such UK decision (limiting UK car exports or financial services exports), although again an arbitrator can rule on the scope of this retaliation.

In short, the UK could invoke a safeguard clause to limit the free movement of persons under the EEA – but it would not be cost-free. Having said that the EEA option would probably only be politically viable in the UK if the government announced its immediate intention to trigger immediately the safeguard clause as regards free movement of people.

Another limitation of the EEA is that the UK would no longer have a vote on EU laws as the EU adopted them. Those laws would in principle still have to be applied in the UK despite the absence of a vote. Two points on this though. First of all, the UK would not be subject to as many EU laws as is now – since agriculture, fisheries, tax and non-EU trade are not within the scope of the EEA. Secondly, for any EU law to apply to the non-EU members of the EEA it must be approved by those non-EU members. So the UK could veto the application of that new EU law to the UK at this stage – although again, the EEA provides for possible retaliation by the EU if it does so.

Finally, the EEA provides expressly for the non-EU members to pay towards poorer EU Member States. Some claimed during the campaign that Norway provides this money wholly voluntarily, but that’s false. Article 116 of the EEA Treaty says as follows: A Financial Mechanism shall be established by the EFTA States to contribute, in the context of the EEA and in addition to the efforts already deployed by the Community in this regard, to the objectives laid down in Article 115.

The details of the sums involved are set out in separate Protocols. The UK would have to negotiate one of these with the EU.

Overall, then, there are pros and cons to the Norway option. In my view, the pros hugely outweigh the cons – considering that the EEA could be used as a purely interim measure while negotiating a longer-term arrangement, which could take the form of amendments to the EEA itself.

7 Do EU and UK migrants have ‘acquired rights’?  

In human terms, the biggest issue for Brexit is what happens to EU citizens in the UK, and to UK citizens in the EU. That issue is discussed in the linked blog posts, but there’s also the question of whether the legal position of all such persons is protected by the principle of ‘acquired rights’, as referred to in the Vienna Convention on the Law of Treaties. The Leave side argued that it was, but others (for instance, Professor Sionadh Douglas-Scott) have argued that it was not.

I won’t get into that abstract legal debate about the meaning of the Vienna Convention, because in my view it’s necessary to have complete legal certainty on this issue. I don’t believe we can simply leave it to an international legal principle, which may not always be enforceable in national courts, to protect such rights. There’s also a question of the scope of the rule: what about rights in the process of acquisition, like future permanent residence, or a teenager’s future status as regards equal treatment in tuition fees?

The better view is that the EU/UK withdrawal treaty should contain a specific clause on this, which is legally binding in itself, defines the exact scope of the rule, can be supplemented by further measures, and must be fully applied in national law. It could read something like this:

  1. Any citizens of the UK residing in the EU as of [Brexit Day], and any EU citizens residing in the UK as of that date, shall retain any rights which they acquired pursuant to EU free movement law before that date. They shall also continue to acquire rights which were in the process of acquisition as of that date.
  1. The parties shall give full effect to this principle in EU or national law, as the case may be.
  1. The EU/UK Joint Committee may adopt further measures to implement this rule.

It should be noted that his issue would be irrelevant if the UK retains its participation in the EEA, as discussed above.

Some argue that people cannot be ‘deprived’ of their EU citizenship by a Member State leaving the EU. In my view, that’s untenable. The Treaties define citizens of the Union as being nationals of Member States. If a country ceases to be a Member State of the European Union, then obviously its nationals therefore cease to be citizens of the Union.

8 Will Scotland now leave the UK and join the EU?

The question of whether Scotland might now leave the UK, and seek to retain membership of the EU, is a huge political question, which also raises domestic legal issues. I won’t comment on the national legal issues. On the EU law issues, see my earlier analysis of the possible legal complications for an independent Scotland seeking to join the EU – although some of this analysis is specifically based on the assumption that the UK, along with Scotland, would be an EU Member State.

Furthermore, the political context is possibly now different than it was in 2014, at the time of the Scottish independence referendum. It may be that the remaining EU could have more political will to welcome Scotland as an EU member than it might have had in 2014, in the interests of stemming any perception that the EU is falling apart. Indeed, it might be more willing to waive the usual criteria of single currency membership and Schengen participation. The Spanish government in office in 2014, which was a principal obstacle to Scottish EU membership, might not be in office any more: we should know after this weekend. Possibly some Member States poured cold water on Scottish EU membership in 2014 out of loyalty to the UK – but now they have the opposite motivation. The political context of the issue would now be different: unlike in 2014, facilitating Scottish EU membership would not be now seen as creating a kind of incentive for a Member State to split up, given that the UK is leaving the EU anyway.

Coming back to the EEA, it may be an attractive option for an independent Scotland – either as an interim step toward joining the EU or as a long-term arrangement. Scotland would not be covered by EU fisheries policy and would clearly not be obliged to join Schengen or the single currency. (Norway and Iceland are part of Schengen, but by means of a separate treaty from the EEA). This option may also be more palatable for those Member States worried about their own separatist movements, since it falls short of EU membership.

9 What happens to the remaining EU?

The EU is obviously a key player in what happens next, and not only in the context of negotiations with the EU. Some on the Leave side have hoped for the break-up of the EU following Brexit – although it’s hard to see how turmoil in, or the collapse of, its biggest trading partner is in the UK’s interests. Certainly there are some politicians in EU countries calling for withdrawal referendums of their own – although none of them are in government, and it would remain to be seen what the vote would be if those referenda were held. We’ll obviously have to wait and see what happens.

The countervailing possibility is that the remaining EU countries make renewed efforts to win back public support by changes to some unpopular EU policies and practices. I’ll write more soon about what such changes might be. One point though: although the UK’s position on Brexit negotiations won’t be confirmed until after the Conservative party leadership election, and then possibly not until after a general election, the EU may well formulate its negotiation position in the meantime.

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