May, 29 March: We leave the EU! Tusk’s response, 31 March

09 / 05 / 2017

Tusk the man/Tusk the Album: Mr Tusk, like the Fleetwood Mac album that bears his name, may have been born for a particular time and place – following “rumours” of a separation, we had the referendum that led to the Article 50 trigger being pulled and thus, potentially, the falling apart of the EU. Again, like the album, Mr Tusk, in his response to Mrs May, recognises that the UK and EU will “Walk A Thin Line” (Lindsey Buckingham, song 18, on “Tusk” by Fleetwood Mac).

What does Mr Tusk’s response say?

Like Mrs May, Mr Tusk’s response puts matters in context, namely that European integration has “brought peace and prosperity to Europe“; accordingly, the “Union’s overall objective in these negotiations will be to preserve its interests, those of its member states, its citizens and its businesses“. He goes on to stress that the Union will “act as one” in the negotiations (it has to as the EU is a customs union), will be “constructive throughout and will strive to find an agreement“, but it will also “prepare itself to be able to handle the situation… if the negotiations were to fail“. Like Mrs May, Mr Tusk sets out “guidelines” that, subject to review during the course of the negotiations, “define the framework for negotiations under Article 50… and set out the overall positions and principles that the Union will pursue throughout the negotiations“, as follows:

Core principles

1. The European Counsel reiterates its wish to have the UK as a close partner, but preserving the integrity of the Single Market precludes a sector by sector approach and a non-member “cannot have the same rights and enjoy the same benefits as a member“.

2. The negotiations will be conducted as a single package – i.e.: “nothing is agreed until everything is agreed, individual items cannot be settled separately“; there can be no separate negotiations between individual member states and the UK.

3. On withdrawal, the treaty will cease to apply to the UK, its overseas countries and territories currently associated to the EU, and to territories for whose external relations the UK is responsible. The main purpose of the negotiations is to ensure the UK’s orderly withdrawal, so as to reduce uncertainty and, as far as possible, minimise disruption caused by this “abrupt change“.

4. Article 50 requires the parties to take account of the framework for the future relationship, but agreement on such a relationship can only be concluded once the UK has left the EU and become a third country.

5. To the extent “necessary and legally possible“, the negotiations may seek to determine transitional arrangements which are in the interests of the Union, but they must be: clearly defined, time limited and subject to effective enforcement.

6. The core principles set out above should apply to all the negotiations, namely: for the withdrawal, the framework for the future and any transitional arrangements.

7. The two year time period set out in Article 50, ends on 29 March 2019.

Agreement on arrangements for orderly withdrawal

8. The agreement of reciprocal guarantees to settle the status and situation of EU and UK citizens will be a matter of priority; such guarantees must be enforceable and non-discriminatory.

9. The negotiations should seek to avoid a legal vacuum for EU business trading with the UK and vice versa; also, for third parties who may have entered into contracts based on the UK’s membership or which take part in EU funded programs.

10. A single financial settlement has to cover all “legal and budgetary commitments as well as liabilities, including contingent liabilities“.

11. The EU has consistently supported the goal of peace and reconciliation enshrined in the Good Friday Agreement and in view of the “unique circumstances on the island of Ireland flexible and imaginative solutions will be required, including with the aim of avoiding a hard border…“.

12. The EU should reach agreement with the UK on arrangements as regards to the Sovereign Base Areas in Cyprus and recognise by lateral agreements and arrangements between Cyprus and the UK “which are compatible with EU law, in particular as regards the situation of those EU citizens resident or working in” Sovereign Base Areas.

13. The UK will no longer be covered by agreements concluded by the EU or by member states acting on its behalf or by both acting jointly. The European Council expects the UK to honour its share of international commitments contracted in the context of its EU membership.

14. Arrangements should be made to facilitate the transfer of EU agencies and facilities located in the UK.

15. Arrangements need to be made to ensure legal certainty and equal treatment for all court procedures and administrative procedures pending before the European Court of Justice and the European Commission. The Court of Justice of the European Union should remain competent to adjudicate in such court procedures. Furthermore, arrangements should be made in relation to any administrative or court proceedings that have been initiated post BREXIT in relation to facts that have occurred prior to the withdrawal date.

16. The withdrawal agreement should include appropriate dispute settlement mechanisms in relation to conflicts arising from the withdrawal agreement, as well as duly circumscribed arrangements allowing for the adoption of measures necessary to deal with situations not foreseen in the withdrawal agreement. Such arrangements should protect the Union’s autonomy and its legal order, including a role for the Court of Justice of the European Union.

Preliminary discussions on a framework for the EU/UK future relationship

17. The European Council welcomes and shares the UK’s desire to establish a close partnership. The relationship between the EU and a non-member state cannot offer the same benefits as a member, but strong and constructive ties will remain in both sides’ interests.

18. The European Council stands ready to initiate work towards the British Government’s wish to pursue an ambitious free trade agreement with the EU. This can only be finalised and concluded once the UK is no longer a member state.

19. Any free trade agreement cannot amount to participation in the Single Market or parts thereof, as this would undermine its integrity and proper functioning.

20. Beyond trade, the EU stands ready to consider establishing a partnership in other areas, in particular the fight against terrorism and international crime.

21. The future partnership must include appropriate enforcement and dispute settlement mechanisms that do not affect the EU’s autonomy, in particular its decision making procedures.

22. After the UK leaves the EU, no agreement between the EU and the UK may “apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the UK“.

23. The European Council expects the UK to fulfil all its obligations under the treaties and under EU law, including “the principle of sincere cooperation” whilst the UK remains a full member of the EU.

Procedural arrangements for negotiations under Article 50

24. The European Council endorses the arrangements set out in the statement of 27 Heads of State or Government on 15 December 2016.

Reactions to Mr Tusk’s reply to Mrs May’s “trigger” seem to be quite well balanced – some concerned to note that there will be no bilateral deals (eg: UK with Germany for cars), but senior members of the Government are apparently saying that there were “no surprises really“. So Mr Tusk appears to have managed to “Walk A Thin Line”, whilst making it abundantly clear that the UK will have to toe the EU line right up until we formally cease to be a Member State.

For further information please contact Richard Isham at risham@wedlakebell.com