To actually “Brexit” requires, arguably, a three stage process: (1) notice to exit; (2) negotiation of the “arrangements for withdrawal”; and (3) exit itself and the terms of our future relationship with the EU, or not.

Pre Article 50 notice

It is now common knowledge that the referendum result in favour of “leave” is advisory only as far as the Government and/or Parliament are concerned.

In order to withdraw from the EU, we have to invoke Article 50 of the Lisbon Treaty which governs withdrawals. The Article has only been in force since 2009 and has not been tested before.

The Article says that a Member State can withdraw from the EU “in accordance with its own constitutional requirements”.

There is now a debate amongst “inners” and “outters”, supported by constitutional lawyers on both sides; the outters say that there will be a constitutional crisis if the PM exercises executive powers to serve Article 50 Notice (the argument being that service requires the consent of and/or an Act of Parliament because it will mean the repeal of the European Communities Act); the inners say that the constitution is clear, namely that withdrawal from treaties is an executive power vested in the PM.

However this debate is resolved, the Government, statements by both Cameron and May, has said that it will honour the wishes of the people and that, accordingly, the UK will cease to be a member of the EU. May has said in terms: “Brexit means Brexit”; however, when exactly notice will be served remains unknown.

What happens after the Article 50 Notice is served?

Following service of formal notice, Article 50(2) states that “the Union shall negotiate and conclude an agreement with [the UK], setting out the arrangements for [our] withdrawal, taking account of the framework for [our] future relationship with the Union. That agreement… shall be concluded… by the Council acting by qualified majority, after obtaining the consent of the European Parliament”.

The key questions that arise are: what should be contained in the agreement setting out the arrangements for withdrawal (the “Withdrawal Agreement”)? And how, if at all, will that agreement differ from/effect any agreement that the UK negotiates to cover our future relationship with the EU (the “Future Relationship Agreement”)?

What is likely to be covered by the Withdrawal Agreement?

The scope of the Withdrawal Agreement can be as broad or as narrow as the negotiators choose. Some argue that it should be narrow and just cover the mechanics of withdrawal and any transition period only, leaving the terms of our future relationship with the EU to be the subject of a separate agreement. Others argue that the Withdrawal Agreement could be much broader because of the words “taking account of the framework for [our] future relationship with the Union”. Note, however, that whatever the terms of the Withdrawal Agreement, it will have to be compatible with the EU Treaties so it will be subject to adjudication by the European Court of Justice.

The Government in its report “The process from withdrawing from the European Union” looked at the key issues that would need to be addressed by the Withdrawal Agreement and the list of issues includes the following:
(i) unspent EU funds due to UK regions and farmers;
(ii) cross border security arrangements including access to EU databases;
(iii) co-operation on foreign policy, including sanctions;
(iv) transfer of regulatory responsibilities;
(v) arrangements for contracts drawn up in accordance with EU law;
(vi) access to EU agencies that play a role in UK domestic law, such as the European Medicines Agency;
(vii) arrangements for the closure of EU agencies headquartered in the UK;
(viii) departure from the Single European Sky arrangement;
(ix) access for UK citizens to the European Health Insurance Card (or not);
(x) the rights of UK fisherman to fish in traditional non UK waters, including those in the North Sea;
(xi) continued access to the EU’s single energy and aviation markets; and
(xii) the status of the UK’s environmental commitments made as party to various UN environmental conventions and currently implemented through EU legislation.

Perhaps surprisingly, given the concerns expressed on behalf of the EEA nationals who are currently in the UK and the UK nationals who are currently in the EU/EEA, their fate is not on this list. Clearly, “freedom of movement” is seen as a matter that has to be dealt with as part of any Future Relationship Agreement. This would accord with the latest statements of our new Foreign Secretary, Mr Hammond who has made it clear that the rights of EU nationals who are in the UK are tied to the rights of UK nationals who are currently in the EU.

Ratification of the Withdrawal Agreement

By the EU?
It is for the Council of the EU (excluding the UK) to adopt the Withdrawal Agreement having obtained the consent of the European Parliament acting by simple majority only. The European Parliament would, therefore, have a right of veto over the Withdrawal Agreement, but not over withdrawal itself – see below.

The Council, excluding the UK, would act by an enhanced majority under article 238(3)(b) of the Treaty on the Functioning of the European Union (TFEU). This requires 72% of Council members i.e. 20 of the remaining 27 Member States, representing at least 65% of the total population of those States to vote in favour.

By the UK?
It is likely that the Withdrawal Agreement will be treated – the more so if it contains (significant) provisions that govern our ongoing relationship with the EU – as a treaty and so will be laid before Parliament, with a Government Explanatory Memorandum, for 21 sitting days and so be debated before it could be ratified – in accordance with Part 2 of the Constitutional Reform and Governance Act 2010.

Could the UK be prevented from leaving?

No. Article 50(3) of the Lisbon Treaty makes it clear that “the treaties shall cease to apply to the [withdrawing state] from the date of entry in to force of the withdrawal agreement or, failing that, 2 years after the notification [given under Article 50(1)]” unless the 2 year period is extended with the consent of the Council and the UK.

Future relations with the EU

On the basis that the Withdrawal Agreement is not intended to/cannot incorporate all the terms required in relation to the UK’s future relations with the EU, there will be a separate Future Relations Agreement. The UK’s future relationship with the EU will depend on which “model” is adopted.

On leaving the EU, we would leave the European Economic Area (EEA). However, if we followed the Norway Model, we could apply to re-join EFTA and thereby the EEA. Alternatively, we could adopt the Swiss Model whereby we would become a member of EFTA, but not the EEA. Alternatively, we could enter in to a free trade agreement with Europe along the lines adopted by Mexico and Canada. As a further alternative, we could adopt the Turkish Model, namely a customs union with the EU.

If no agreement is reached at all, it has been said that we can fall back on our membership of the World Trade Organisation (WTO). However, this route is far from straightforward. The WTO’s director general, Roberto Azevedo, has made it clear that there is no precedent for a WTO member extricating itself from the EU whilst inside the WTO. The process will not be easy and will probably take years before the UK’s WTO position is settled, not least because all other member states will have to agree.

Tactics

Some argue that we should try and get as many issues as possible set out in the Withdrawal Agreement as this is subject to qualified majority voting, whereas the terms of the Future Relationship Agreement will be subject to unanimous agreement by all the remaining EU members.

Furthermore, it has been said that we should have twin track negotiations, with the Council in relation to our exit from the EU and with the EFTA members in order to secure our EFTA membership so as to become part of the EEA, the idea being that we sign off on the Withdrawal Agreement and our EFTA/EEA membership agreement at the same time – the EU is dead, long live EFTA/EEA. How this will go down politically is very uncertain – we achieve Brexit, but join EFTA and so remain obligated to: respect the freedom of movement of EEA nationals, pay a contribution towards the costs of running Europe and remain bound by the decisions of the European Court (because the EFTA court follows/tracks what the European court decides).

As is almost always the case with legally binding relationships, the devil is in the detail.