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British prime minister Theresa May signs Article 50 letter
Reuters/Christopher Furlong
“Best regards, Britain.”
COUNTDOWN

Brexit begins: The UK now has two years to untangle itself from the European Union

By Eshe Nelson

It’s official: The UK has, finally, started the process of leaving the European Union. British prime minister Theresa May signed a letter in London and sent it to the European Council in Brussels for delivery today, formally invoking Article 50 of the Lisbon Treaty.

Article what of the what? Article 50 is a passage in the constitutional documents that govern the EU, explaining the procedure for a member state to exit the bloc. It is short and vague, since the drafters never thought it would actually be used. But here we are, nine months after British voters opted for Brexit, launching negotiations for what could be a messy divorce. 

One of the few things that Article 50 is clear about is the timeline: EU rules no longer apply in the departing country “from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification.” Divorces are rarely easy, and breakups after more than 40 years—the UK joined the EU in 1973—are especially fraught. Most expect the negotiations to take the full two years (and possibly longer, if all agree to extend the deadline).

The sides are already far apart. To start with, the UK and EU can’t agree whether the two-year talks should also feature what happens after the UK is officially out. The UK wants to iron out its future trade relationship with the bloc as soon as possible, while the EU is keen to settle the ins and outs of the divorce first.

There are millions of EU citizens living in Britain and Brits living in other EU countries, two major EU agencies based in the UK, and countless EU programs that depend in part on UK funding. What happens to these people, places, and things when the UK quits the EU is up in the air. There are 28 countries involved—all with a say on the final deal—and a short timeline, in political terms. What could go wrong?

The UK has said it’s willing to walk away from the EU without a deal if it isn’t offered one it likes. That could mean leaving a big unpaid bill to Brussels, and almost certainly not agreeing to a free trade deal with the bloc. The British parliament’s foreign affairs committee has laid out the consequences of a “hard Brexit” (pdf), and it’s not pretty.

Here are the five major issues that need to be resolved to avoid an acrimonious and destructive divorce two years from now:

What does the UK owe the EU?

Like any divorce, Brexit is expensive. The EU says the UK must pay its part for accumulated liabilities, including eurocrats’ pensions and long-term commitments to programs and infrastructure projects. Some EU officials say the bill could come to €60 billion ($65 billion). This could be a cloud that hangs over all of the other negotiating points. It is unlikely any talks on future trade arrangements will happen until after this is settled. If it takes a long time to settle the exit bill—some gung-ho Brexiteers say it’s Brussels that owes Britain billions—there will be less time to address all the other issues.  

What happens to EU citizens in the UK? And Brits in the EU?

Around 3 million EU citizens call the UK home, while 1 million Brits live in other EU countries. The loss of their work, health care, and residency rights, which are based on EU citizenship, are a consequence of Brexit unless specific provisions are made. The House of Lords wanted to force the British government to secure these rights “urgently,” but the House of Commons rejected this amendment in the bill giving May the go-ahead to trigger Article 50. 

Now, the rights of millions of people hang in the balance, a bargaining chip in the divorce negotiations. This could get particularly ugly, given that the lives that people made abroad could be balanced against things like tariff schedules, farm subsidies, and other grubby financial matters.

What happens to the border in Ireland?

The border between Northern Ireland and the Republic of Ireland once featured watchtowers and militarized patrols, amid brutal violence that claimed thousands of lives on the British side of the frontier. Now, after a long and difficult peace process, few physical traces of the border remain. Before the 1998 Good Friday Agreement, there were 20 places to cross—now there are 260. Post-Brexit Britain and EU member Ireland could agree to keep free travel between Northern Ireland and the republic, but some sort of customs or identity checks may be needed, which will revive uncomfortable memories.

The practicalities of introducing these checks while keeping a “seamless and frictionless” border (as the UK government has said it wants) seem impractical. Contingency work is already underway to scope out places that would be serve as suitable customs checkpoints. While few want to see an end to an open border, and the peace it represents, these thorny legal arrangements will need to be agreed within the two-year Article 50 deadline. Further complicating matters, the devolved government in Northern Ireland is a total mess right now.    

Can a trade deal be agreed before Brexit takes effect?

If there isn’t a deal about a special trade arrangement between the UK and the EU, then at the end of the negotiations Britain will revert to “most favored nation” status under WTO rules—which is a misnomer because just about every country gets this basic-level status—and tariffs will be imposed on goods and services it exports to the EU. More than 40% of the UK’s exports go to the rest of the EU, making the bloc Britain’s largest trading partner by far.

Recently, a free-trade agreement between the US and EU ran aground, while a similar arrangement between the EU and Canada was nearly derailed by a regional Belgian assembly after seven years of negotiations. In short, it’s tricky and time-consuming to sign trade deals with the EU, although access to the world’s richest trading bloc makes it worth it. Avoiding barriers to the trade in services, which account for 80% of the UK economy, is crucial. If the talks aren’t going well, the UK will need to scramble to set up deals with lots of other countries to pick up the slack.

Legal hurdles abound. By the end of the Brexit negotiation timeline, the UK parliament needs to be able to transfer European laws—of which there are at least 80,000 scattered across treaties, regulations, and court rulings—into British law, lest businesses face wrenching rule changes overnight. Some sort of transitional arrangement may be necessary to smooth the path from full EU member to a “new, comprehensive, bold and ambitious free trade agreement” with the bloc, as May has described it.

What about shared security and defense?

Last week, the UK was reminded of the threat of terrorism it faces after an attack outside parliament. There are equally vulnerable targets elsewhere in Europe, and a key part of bolstering security in the region is the sharing of intelligence. Britain is currently a member of Europol, which polices crime across borders, and is part of the European Arrest Warrant system, which makes warrants valid in any member state. It also has access to the Schengen Information System and European Criminal Records Information System databases, which help police quickly identify suspects or vehicles via region-wide records.

Keeping access to these agencies and databases is understandably deemed a priority. However, the House of Lords has noted that there are limits to how closely the UK and EU can work together if they aren’t both subject to the EU’s Court of Justice. Something like Norway’s bilateral extradition agreement with the EU could be a good example to follow instead. Whatever the case, this is yet another weighty issue to be negotiated—the pressure will be on to ensure that Brits aren’t less safe after Brexit.

 

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