Parliamentary scrutiny of the Brexit negotiations

Christopher Muttukumaru CB writes: in circumstances where the successful “Leave” campaign provided little by way of a collective vision of a post-Brexit world, it is essential that the UK Parliament is provided with sufficient information about the Government’s negotiating strategy to enable Parliament to hold the UK executive to account.

This post is principally concerned with parliamentary scrutiny. One of the key responsibilities of the UK Parliament is that it should perform an in-depth  role in scrutinising the way in which the Government performs its functions. The Brexit negotiations and their emerging  outcome are no exception. The House of Lords EU Committee is currently conducting an inquiry into the role of Parliament in scrutinising the Brexit negotiations.

In that regard, the Prime Minister’s recent comments are highly instructive.  There is considerable force  in her assertion that the Government should neither give away its negotiating strategy nor provide a running commentary on the negotiations. But, sometimes, parliamentary select committees might need to test aspects of sweeping statements such as hers.

First, the starting point for any proposals for parliamentary scrutiny should be rooted in the reality of the referendum campaign. The successful Leave campaign failed to articulate a coherent, collective vision of a post-Brexit world for the United Kingdom. As a consequence, there was no in-depth scrutiny, as one would normally expect, say, at a General Election, of the differing policy arguments. Anneli Howard’s post on 12 July (“Brexit- not too late for proper impact assessment”) is also relevant in this connection.  The failure to provide such a vision  lends considerable weight to the need for effective parliamentary scrutiny of both the negotiations and the emerging outcome. The Brexit negotiations will be the single most important set of international  negotiations for the UK  in a lifetime.

Secondly, most commentators  would not suggest that the Government should disclose the detail of its negotiating strategy, such as its “bottom line” on any given subject. Equally, it would be in the national interest for the Government to disclose meaningful information about its aims , both in respect of vertical issues (sector by sector) and horizontal issues (cross-cutting issues).

By the same token, it is essential  that  the Government should keep parliament and the public properly informed of where the negotiations have got to. The Government needs to avoid tokenism. Specifically, a distinction ought to be drawn between (a) areas where there is  objective and persuasive evidence that advance disclosure would harm the national interest and (b) the cases where disclosure would not harm the national interest although it might conceivably be administratively inconvenient to provide disclosure. In the sectoral areas of policy making, for example, the outcome of the Balance of Competences Reviews might already provide the EU with a shrewd idea of what the UK might seek to achieve in negotiations in each sector.

In determining how the balance should be struck between the countervailing national interests, the Government should seek to avoid the traditional Whitehall power game where Ministers and officials hold all the cards and thus Parliament is at risk of being emasculated save where a select committee has the appetite doggedly to pursue an inquiry.  A failure to provide adequate information to Parliament and the public may even damage the interests of companies and individuals since they might otherwise be driven to make major decisions without any inkling of what the Government’s preferred outcomes might look like. To blindfold Parliament and the public could be very unfair.

The Coalition Government made a virtue of its commitment to genuine transparency. Surely  the present Government would want to do no less in relation to a subject of such significance?

Article 50 litigation: Interested Parties’ skeleton argument published

Today, the People’s Challenge Interested Parties have publicly released their skeleton argument for the Article 50 TEU litigation to be heard in the Divisional Court on 13 and 17 October 2016. The People’s Challenge Interested Parties are the first to publish their arguments so that the general public can see the arguments in this historic and important piece of litigation.

The skeleton argument for the substantive hearing can be read here.

In summary, the People’s Challenge Interested Parties argue that an Act of Parliament is necessary before Article 50 TEU can be triggered because any use of executive prerogative power to trigger Article 50: (1) has been removed by constitutional statutes; (2) does not extend to removing fundamental citizenship rights; or (3) would, in any event, be abusive if it were exercised to trigger the UK’s withdrawal from the EU (assuming it subsists and extends to removing fundamental rights).

The skeleton argument has had to be redacted as the Government has not agreed to publication of the content of the Secretary of State’s detailed grounds.

The People’s Challenge Interested Parties have additionally applied to the Divisional Court for clarification of its Order made in July as they believe that the Government could (and should) make its case available so that the general public can understand its position. The details of that application can be read here.

The People’s Challenge Interested Parties are a number of ordinary UK and EU citizens living in England, Gibraltar, Northern Ireland, Scotland and Wales, as well as British expats located in France. They are supported by funding raised through the crowdfunding platform, Crowdjustice.

Gerry Facenna QC and Jack Williams are instructed by Bindmans LLP on behalf of the People’s Challenge Interested Parties.

 

International trade treaties before Brexit

Since the June referendum, the question of the trade relations between the UK and third countries has been raised in different contexts. These have included the status of the existing trade agreements that bind the EU as a matter of EU law (see my analysis here) and the legal issues regarding the application of WTO rules post-Brexit (see my analysis here).

The question that has been raised recently is whether the UK would be free to negotiate trade agreements with third countries before Brexit. The International Trade Secretary, Liam Fox, has stated that ‘we want to have discussions and to scope out any possible deals that we might want to do’. How much freedom does the UK have pre-Brexit, as a matter of EU law, in the area of international trade negotiations?

Trade policy falls within the EU’s exclusive competence. This is an area where the Member States have given the EU the power to act and are prevented from adopting any measure unless specifically authorized to do so under EU law. Even in policy  areas where the EU has non-exclusive competence (and which it shares with the Member States), the latter are still bound by a duty of co-operation. This duty has been interpreted by the European Court of Justice in broad terms. For instance, a Member State may not depart from a position agreed by the EU in international negotiations.

The UK is, therefore, prevented under EU law from negotiating trade agreements with third countries whilst still a Member State. A violation of the UK’s obligations may lead to infringement proceedings before the European Court of Justice by the European Commission under Article 258 TFEU (or by another Member State under Article 259 TFEU – such actions are, however, rare).

There is also a practical consideration: the post-Brexit relationship between the UK and the EU would be directly relevant to the content of trade negotiations between the UK and third countries. As long as the former has not been settled, the latter are difficult to envisage.

The post-Brexit trade relations with third countries add yet another layer of complexity to the already complex process of the UK’s disengagement from the EU. In fact, they may even feature in the negotiations between the UK and the EU under Article 50 TEU. For instance, the position of the UK under existing agreements with third countries in which it participates along with the EU could be addressed. In this context, the spirit in which the Article 50 TEU negotiations will be carried out would be crucial.

AFTER BREXIT: State Aid under WTO disciplines

Blog post written by David Unterhalter SC and Thomas Sebastian.

Amidst the speculation as to what legal regime is likely to govern the UK’s trading relationships with its major trading partners after Brexit, the safest view is that it is far too soon to tell. But one outcome is tolerably clear. The UK’s membership of the World Trade Organization (“WTO“) will provide the floor of rights and obligations that will govern the UK‘s relationship with other WTO members, including the EU post-Brexit. In a worst case, if the two year period under Article 50 runs out without agreement on key areas of trade, the WTO Agreements are likely to be determining until some future agreement is reached. And the same is true of the UK’s relationship with other trading partners: until bilateral agreements are concluded, the WTO Agreements are likely to prevail. However, the UK’s position as a member of the WTO, once it leaves the EU, is not without some legal complexity (and we will return to this topic separately).

To view the blog post please click here.

Cases before the CJEU at the time of Brexit: could the interests of justice be timed out?

Christopher Muttukumaru CB argues that, in cases where a reference has been made to the Court of Justice under Article 267 of the TFEU, the UK and the EU should reach agreement on transitional cases in order to ensure legal certainty. Otherwise, could the interests of justice be timed out?

Some proponents of Brexit have argued that the UK should “take back control” of lawmaking and that the domestic courts alone should determine the legal rights and obligations that arise under the laws of the United Kingdom, including those that are derived from EU Law.

This post will cover the issues that could arise in cases under Article 267 of the TFEU (requests for preliminary rulings by the CJEU). It will cover neither direct actions which, while they might indirectly have effects in respect of private citizens and legal entities, are essentially disputes between the EU institutions or between Member States and the EU institutions, nor Competition Law cases. That said, some general observations that are made might also be applicable in other cases.

Where the domestic courts are asked to determine a dispute between private parties or between private parties and the State, the courts will generally apply the law as it is presumed to have applied at the time at which legal relations were entered into. In so far as EU Law is relevant and applicable to the determination of a dispute, it will at least continue to apply until the effective date of withdrawal by the UK from the EU. In practical terms, what would that mean ? In parenthesis, one commentator (Lord O’Donnell) has floated a fresh idea that the rules of EU Law , as implemented into UK domestic law, could outlast Brexit until such time as, sector by sector, the Government decides which laws should survive and which should be revoked or amended. This post does not address that possibility.

CJEU jurisdiction under Article 267/TFEU The CJEU has jurisdiction to give preliminary rulings upon the interpretation of the Treaties and/or the validity of acts of EU institutions, bodies, offices or agencies. National courts are entitled to request a preliminary ruling in any such case if they consider that a decision of the CJEU is necessary to enable it to give judgement. For present purposes, the question of mandatory references from national courts from which there is no further judicial remedy does not require separate consideration.

The potential problems for practitioners. Once Article 50 is triggered, parties to litigation involving points of EU Law that might be apt for reference to the CJEU are going to have to address the consequences of different scenarios pending the outcome of Brexit negotiations. Here are a few illustrations. Given the long lead times for references, what happens if, by the time that a preliminary ruling has been given by the CJEU, the effective date of withdrawal by the UK pursuant to Article 50/TEU has already passed? Absent any specific provision in the agreement made between the UK and the 27 remaining Member States pursuant to Article 50/TEU, is the CJEU likely to discontinue the proceedings ? What happens if a preliminary ruling has been made by the CJEU before the effective date of withdrawal , but the national court has not yet applied the ruling by that date ? If the UK has been found to be in breach of its EU Law obligations, what might happen to consequential claims, such as actions for damages, for breach of EU Law?

The withdrawal agreement under Article 50 ought to make provision for transitional cases. While the outcome of the negotiations under Article 50 cannot be predicted with any certainty, there are some general pointers that might be useful to consider. The most obvious proposition is that the withdrawal agreement should make clear what should happen in respect of transitional cases under Article 267/TFEU:

  • On one hypothesis, if it is agreed that the UK should continue to have access to the Single Market, is it conceivable that it could realistically hope to abandon adherence to the rulings of the CJEU. After all, the very rationale for the supremacy of EU Law is that it ensures that the law applies uniformly across the EU, taking account (as only the CJEU can) “…of [its] panoramic view of the Community and its institutions, a detailed knowledge of the Treaties and of much subordinate legislation made under them , and an intimate familiarity with the functioning of the Community market which no national judge denied the collective experience of the Court of Justice could hope to achieve…” (Commissioners of Customs and Excise v Samex: Bingham J).
  • On another hypothesis, the UK might seek a clean break without access to the Single Market. If so, the withdrawal agreement might provide for a cesser of jurisdiction for the CJEU to determine requests for preliminary rulings, including those on which it had yet to rule at the time of the effective date of withdrawal. In that eventuality, the UK courts would be faced with a conundrum. Ex hypothesi , the courts would have asked for a preliminary ruling on a question of EU Law which was relevant and necessary to the determination of a dispute on which the answer was not clear.

Procedural issues If the withdrawal agreement expressly provides for a cesser of CJEU jurisdiction and no further CJEU involvement, the withdrawal agreement ought itself to provide for withdrawal of existing references . Failing that, the CJEU could, on a request from the referring court, send back the reference on the basis that there was no longer any point in the reference.

But this post presupposes that a dispute did still exist. So long as a reference had not been designed to obtain a tactical advantage and had not been an indirect way of seeking an advisory opinion of a general or hypothetical nature, could the Council , having consulted the CJEU and the other institutions, provide for the CJEU to give a ruling on a preliminary question referred to it prior to the effective date of withdrawal? There is more than one plausible view on this possibility.

Substantive issues That said, what substantive approach might be adopted by the domestic courts in such cases ?

  • If left to develop the jurisprudence themselves in cases involving the interpretation of EU Law, the domestic courts are likely to want to protect the rights of parties as if the rules of EU Law developed prior to the effective date of withdrawal still applied. That could be the only fair approach, since to do otherwise could defeat the expectations of both parties, subject only to legitimate (non-Brexit) arguments that might properly be argued, such as questions of application of national time limits.
  • Assuming that the domestic courts choose to apply the pre-existing rules of EU Law, there is a body of UK case law which, not least in the context of Strasbourg jurisprudence, suggests that the domestic courts are likely, even if rulings of a supra-national court are not binding on them, to take account of its jurisprudence as persuasive authority in support of a particular interpretation of the law.
  • But the long lead times for rulings by the CJEU will create problems for litigants. At the time when cases are being referred by the national courts, lawyers will need to address (as they now do) the competing merits of the arguments in relation to the question of interpretation at the heart of the dispute. But time does not stand still. No doubt the CJEU would, for example, continue to adopt a teleological approach to interpretation in the light of developments arising during the period after the reference but before a preliminary ruling. This approach could (possibly at the instance of the UK Government in its observations to the CJEU) include reasoning which takes account of wider political realities, such as the UK’s imminent withdrawal. That could threaten the interests of legal certainty.
  • A separate (but significant) question is whether, even if a litigant were to succeed, the same remedies, such as actions for damages for breach of EU Law, would avail them in a post Brexit environment. This in turn raises a different fundamental question. Where the CJEU has itself developed a line of jurisprudence to ensure that EU Law rights are afforded effective and non-discriminatory protection, should such protection be available to litigants in transitional cases involving a breach of EU Law that meets the criteria for liability under (say) the Francovich doctrine ? There would of course be powerful arguments in support of continuing liability under the Francovich doctrine (as subsequently extended in Factortame III and Brasserie du Pecheur) since, otherwise, the UK might be in a position to evade the consequences of a failure to comply with its Treaty obligations.
  • Yet that could mean that actions for damages for breach of EU Law rights arising pre-Brexit could continue to be litigated for many years to come. In that event, what would happen if a point of interpretation of EU Law in respect of effectiveness of remedies were to be raised which itself required (in the domestic court’s view) a preliminary ruling by the CJEU?
  • This could give rise to tactical decisions to argue for, or against, a reference irrespective of the legal criteria applicable to the use of Article 267.

There are complex issues that lie ahead for lawyers and litigants. It behoves the UK Government and the EU to provide clarity.

Aspects of environmental regulation as they apply to the delivery of major infrastructure projects

Christopher Muttukumaru CB argues that, in a post Brexit UK, the environmental protection rules that apply to the delivery of major infrastructure projects would be difficult to abandon, either as a matter of policy or because the legal issues go far deeper than merely abandoning EU rules.

  1. It is difficult to predict the course of events which will unfold in the exit negotiations between the UK and the EU. In order to gain access to the EU Single Market, the UK might seek to negotiate membership of the European Economic Area or might wish to negotiate bilateral agreements, as Switzerland has been doing for some years. To the extent that environmental protection rules which affect the delivery of major infrastructure projects are considered by the negotiators to form part of the Single Market acquis,  the UK would be required to continue to comply with them. Even if not, the probability is that the EU would demand that the UK should comply with them.
  2. It is also possible that the UK might choose not to seek access to the Single Market on either basis set out above. In the context of delivery of major infrastructure projects, the purist Brexit thinker may argue that the UK should be free to abandon environmental (over-) regulation stemming from EU Law and instead to implement domestic regulation which better suits the UK . Significantly, however, even if the UK Government were to decide to abandon EU-derived environmental protection rules, it seems probable that the Government would decide to maintain some aspects of regulation as a matter of domestic policy rather than leave some sectors unregulated. But even if the UK were to decide to abandon its EU environmental obligations , what would happen to cases where, in that field, the UK is already under a duty to comply with pre-existing public international law obligations?
  3. With decisions in prospect on major infrastructure projects such as Heathrow or Gatwick expansion or the building of High Speed Two Phase 2 , what might happen in respect of the applicability of the EU rules on (a) strategic environmental assessment under the Strategic Environmental Assessment Directive)(“SEAD”) , (b) environmental impact assessment under the amended Environmental Assessment Directive (“EAD”) and (c) air quality under the Ambient Air Quality Directive (“AQD”)?
  4. First, the answer to the question requires consideration of the policy reality of abandonment of rules that are intended to strike a balance between two national interests – on the one hand, the delivery of major infrastructure projects to drive economic growth and, on the other, the protection of the environment.
  5. Given the UK’s high profile stance as a global leader in encouraging/taking action on combating climate change and protecting the environment , is it realistic to think that the Government would sweep away adherence to strategic environmental assessments and environmental impact assessments ? Is it credible to think that, at a time when there is an increasing domestic focus on the transparency of public authorities, the Environmental Information Regulations (derived from the EIAD) would be dispensed with? Finally, given the evidence that a failure to reduce air pollutants contributes to significant (and costly) health risks, is it conceivable that the UK could sensibly abandon the content of the rules under the AQD, designed to mitigate against harmful ambient air quality risks?
  6. Secondly, the Government would , if it wished to abandon, wholly or in part, the requirements of the SEA and EIAD , have to address the extant obligations which would still arise under public international law:
  • The SEA Protocol. The obligations under the SEAD are broadly paralleled in the SEA Protocol, a UN/ECE Convention signed by the UK on 21 May 2003. By Decision dated 20 October 2008, the Council decided that the SEA Protocol was thereby approved by the European Community. The President of the Council was authorised to deposit the instrument of approval with the United Nations. The European Commission , which had competence in the matters covered by the Protocol, notified the then EC’s compliance measures on behalf of the Member States. It follows that, even if the UK were to cease to be bound by the SEAD as part of its Brexit negotiations and even if it sought to revoke the domestic regulations implementing the Directive, it would also have to take steps to comply with its obligations under , or withdraw from, the SEA Protocol.
  • The Aarhus Convention. Most obligations arising under the amended EIA Directive also derive from an antecedent international convention, the Aarhus Convention. The Convention was opened for signature in 1998 and ratified by the UK in February 2005. The Commission, in its declaration on the Convention , affirmed that the EC had adopted several legal instruments , binding on the Member States, implementing the Convention. By way of illustration, the First Pillar of the Aarhus Convention gives citizens the right to access environmental information held by public authorities, by private companies providing public services and by the EU institutions. The First Pillar of the EIAD is implemented in the UK through the Environmental Information Regulations. If the UK, as part of its exit negotiations, were to cease to be bound by the EIAD, it would also have to take steps to comply with, or withdraw from, the Aarhus Convention too.
  • Ambient Air Quality Directive. The UK is already in breach, as are a number of other Member States, of the AQD. In the event of exit from the EU, might the Government take the opportunity to abandon compliance with the directive? The applicable policy factors would be finely balanced. But ultimately the Government would have to weigh the costs of the AQD’s restrictions on delivery of major infrastructure projects against the human costs of serious ill health if adequate action against poor air quality concentrations were not taken. The fate of extant legal proceedings in respect of breaches of the AQD would also need to be addressed.

The subject matter of this article is covered more fully in the text of Christopher Muttukumaru’s talk to the Society of Construction Law in April 2016 [read here]

A further post by Peter Oliver on the subject matter of this post is likely to follow in the autumn.

Britain’s new EU Commissioner receives security portfolio

Jean-Claude Juncker has created a new portfolio for the new UK-appointed Commissioner, Sir Julian King, as “Commissioner for the Security Union”. The UK’s last Commissioner, Lord Hill, resigned in the immediate aftermath of the referendum vote on 23 June, having held the financial services portfolio.

Mr Juncker’s Mission Letter gives an interesting insight into the Commission’s view of Brexit and the present role of the UK. The letter begins by acknowledging that this is “a particularly challenging time for the European Union” and expresses a wish for the new UK Commissioner “to fully play your part in this team”. It also closes by stating that this is “one of the most testing periods” in the Union’s history. He places most emphasis on the effects of the economic and financial crisis and the position of the unemployed, but goes on to say that “[i]n addition, we have to cope with the refugee crisis, with the aftermath of the UK referendum and with the increased threat of terrorism”.

The newly created Security Union portfolio covers measures in respect of terrorism and returning foreign terrorist fighters; improving information and intelligence sharing; the security response to radicalisation; reinforcing the capacity to protect critical infrastructure and soft targets; fighting cybercrime; and working in relation to EU-financed security research.

Supreme Court refers questions on free movement to the EU Court of Justice

The Supreme Court today made its first reference to the Court of Justice since the EU referendum on one of the central issues in the referendum debate: the free movement of EU citizens who have committed crimes in the UK.

The case concerned a deportation order made by the Home Secretary against an Italian national living in the UK, following his conviction for manslaughter in 2002. Mr Vomero (FV) had challenged the deportation order and had succeeded before both the Upper Tribunal and the Court of Appeal. On the Home Secretary’s appeal to the Supreme Court, the central issue was whether FV was, as he argued, entitled to the highest level of protection against deportation provided to EU citizens under the Citizens’ Free Movement Directive (Directive 2004/38/EC). Such protection, which is provided to EU citizens who have resided in the UK for the previous ten years, precludes deportation unless it is justified by “imperative grounds of public security”.

The Supreme Court was split on whether this highest level of protection was available to persons who did not have a right of permanent residence in the UK under the Directive. The Court had accepted the Home Secretary’s submission that, because of his lengthy imprisonment for manslaughter, FV did not enjoy such a right, even though he had lived in the UK for over 20 years. Whilst the majority of the Court favoured the view that a right of permanent residence was not needed in order to enjoy the highest level of protection, a minority regarded the position as at least unclear. Accordingly, the Court referred several questions to the EU Court of Justice on the correct interpretation of the Citizens’ Free Movement Directive. The implications of the EU Court’s ruling on these questions for the UK’s ability to restrict the free movement of EU citizens is just one of the many issues that will need to be worked out as part of the Brexit negotiations.

Robert Palmer and Ben Lask acted for the Home Secretary.

To read the judgment, please click here here.

 

House of Lords Committee says Parliament must scrutinise Brexit

The European Union Committee of the House of Lords has today published a report on the role of Parliament in scrutinising Brexit. The report also comments interestingly on the shape and timing of Article 50 negotiations on Britain’s exit from the EU and negotiations on Britain’s future relationship with Europe. Most importantly it gives some insight into how those negotiations could play out domestically.

As regards Parliamentary scrutiny, the Committee considers that Parliament’s role in the forthcoming negotiations on withdrawal from the EU will be critical to their success: ratification of any treaties arising out of the negotiations will require parliamentary approval, while national legislation giving effect to the withdrawal and new relationship will need to be enacted by both Houses. It also emphasises Parliament’s duty to carry out such scrutiny any to leave an “audit trail” for future generations. The Committee believes that such scrutiny is necessary at all stages of the process, including during any informal discussions which precede the Article 50 notification, as well as during the Article 50 process and during any subsequent negotiations on a new trading relationship.

The Committee does not comment on the legal challenges that have been brought concerning Parliament’s role in Brexit (as to which see here) and does not state whether a Parliamentary vote is necessary to trigger Article 50. However, it does state that Parliament will have to approve the ratification of the treaties that emerge from the negotiations under Part 2 of the Constitutional Reform and Governance Act 2010.

The report’s comments on the form of the scrutiny are interesting, as they throw into sharp relief the fact that the UK Government will not simply be conducting Article 50 negotiations with the Commission on the basis of its own agenda: rather the agenda itself may be the subject of vigorous domestic debate. The report insists that there should be regular formal debates, ministerial statements (oral and written), as well as ministerial answers to questions and a vital role for committee oversight in both the House of Lords and the House of Commons. The Committee is also authorising a programme of cross-cutting inquiry work, intended to inform the forthcoming negotiations. It identifies some 29 areas which may be relevant to negotiations, which gives a glimpse of the range of interests involved, including financial services, police and security cooperation, employment and non-discrimination law, agriculture, transport, energy security, UK-Irish relations and “Intra-UK relations”.

One obvious question is how such  public debate of a negotiating strategy can be conducted: as any lawyer who has conducted negotiations knows, you do not want to reveal your bottom line to the negotiating partner at the start and may well wish to be careful in revealing your priorities. On this, however, the Committee simply comments that it would be necessary to “strike an appropriate balance between transparency and confidentiality, while achieving the overarching objective of holding the Government effectively to account”.

The Committee’s comments on the shape of the negotiations are also worth noting. It rather dismisses the suggestion that negotiations on a future trading relationship could not start until the Article 50 process has ended, stating that  “The wording in Article 50(2) places a legal obligation on those negotiating the withdrawal agreement to take account of the framework of the new relationship. In other words, the withdrawal negotiations should take place in the knowledge, at the very least, of the likely shape of the UK’s future relationship with the EU”. It also comments that the negotiating parties could, if they wished negotiate a new relationship in considerable detail. If you’re interested in more detail on this, my colleague Peter Oliver has recently written on what may fall within the Article 50 negotiation process.

For the Committee’s full report please click here.

What will the Withdrawal Agreement under Article 50(2) contain?

It is generally agreed that the UK’s departure from the EU will involve the conclusion of not one but of at least two agreements between the UK on the one hand and the EU alone or together with the Member States on the other. First, there is the Withdrawal Agreement based on Article 50(2) TEU (see here), which by definition will concern the conditions of the UK’s exit from the EU. Second, there will be the treaty or treaties relating to the future relations between the parties. For ease of reference, I will call this the Trade Agreement, even though it is unlikely to cover trade alone, and it may take the form of several agreements.

Considerable mystery surrounds the dividing line between the two.

What is clear is that the Withdrawal Agreement will contain transitional provisions relating inter alia to transactions and operations under way on the date of departure.   For instance, what will happen to unfinished infrastructure projects financed by the Structural Funds? What about budgetary contributions? And what about cases pending before the Court of Justice of the EU? In addition, the acquired rights of British nationals residents in other Member States and vice versa should be laid down in the Withdrawal Agreement (not just as regards rights of residence and employment, but also social security and health coverage and the recognition of diplomas), as should the conditions of departure of the senior British members of the EU institutions and bodies and the relocation of the EU bodies currently established in the UK.

What else might the Withdrawal Agreement lawfully contain? It will be tempting – at least for the UK – to squeeze some other matters into that agreement, because according to Article 50(2) it will be concluded by the Council acting by a qualified majority and it should enter into force well before the Trade Agreement.

In any case, it would make no sense to conclude the Withdrawal Agreement without having a clear idea of the content of the Trade Agreement, or at least its general outlines. That is why Article 50(2) specifically provides that the Withdrawal Agreement shall “take account of the framework” of the “future relationship” between the departing State and the EU.

In April of this year, the House of Lords Select Committee on the European Union published a report entitled “The Process of Withdrawing from the European Union”, which was based on expert evidence given by Sir David Edward, a former British judge of the Court of Justice of the EU, and Emeritus Professor Derrick Wyatt of Oxford University.

Sir David took the view that “the German language version of Article 50 made plain that ‘the structure of future relations will have already have been established at the point when withdrawal takes place’”. Professor Wyatt agreed, adding that the two agreements would have to be negotiated in parallel (see here).

Leaving aside the question as to whether there is a discrepancy between the German and English versions on this point (and not everyone would necessarily agree that there is one), it seems clear that the broad thrust (“structure”) of the Trade Agreement will have to be clear before the Withdrawal Agreement can be finalised. Key points will no doubt include such issues as whether the Trade Agreement will cover the free movement of persons and passporting of British financial services, and whether it will include flanking policies such as consumer and environmental protection.

Does that mean that the last details of the Trade Agreement will have to be worked out before the Withdrawal Agreement can even be signed? If so, it would almost certainly follow that the latter treaty would have to be delayed for some years, as the Trade Agreement would no doubt take longer to negotiate.

In any case, a radically different view was expressed by Commissioner Cecilia Malmström in a recent interview with the BBC. She claimed that the UK would first have to leave the UK before it could negotiate a Trade Agreement (see here).  On this interpretation of the Treaties, there would be no question of negotiating the two agreements simultaneously. The inevitable consequence would be that for several years trade in goods and services between the UK and the EU would not be covered by any treaty other than the WTO.

However, the legal basis for the Commissioner’s position is not clear, and it may be hard to square with the wording of Article 50(2). Her position appears to be derived from the statement made after the informal meeting of the 27 Heads of State and Government held on 29 June 2016 (see here).   According to paragraph 4 of that statement, the Trade Agreement “will be concluded with the UK as a third country”. In other words, the agreement cannot be concluded until the UK has left the EU – but that does not in itself preclude the parties from negotiating it, or at least commencing the negotiations, prior to the UK’s departure.

In any case, it seems very much as though there is likely to be a gap between the UK’s exit from the EU and the entry into force of the Trade Agreement.