Brexit – The legal economy of Brexit

to the British Prime Minister, Mr. David Cameron, the United Kingdom has now
decided to leave the European Union. Yet, now is the time to ensure the process
become as constructive as possible and the outcome of negotiations to be as
constructive as possible. To take effect, the UK government needs to invoke
article 50 of TEU upon which the European Council decides on a set of
guidelines for negotiations, which is to result in a framework association
agreement within a time frame of no more than two years unless otherwise as
well decided on. As part of this
process, the acquis communautaire could
be described in terms of legal acts to remain in force in Great Britain under
three different types of association agree-ment, whose characteristics is being
summarized in seven points by the EU: (1)
The legal basis is TEU Article 217 (2)
Intention to establish close political and economic cooperation (3) Clauses for equal represention in
managerial decision-making bodies competent to make binding decisions (4)
Clauses for Free Trade or Most Favored Nation treatment (5)
Contractual relationship in terms of a partnership agreement between EU and
Third Party (6) Respect for human
rights, good governance and rule-of-law in the preamble (7) An Association Agreement often replaces prior forms of contractual
relationship towards a more intensified partnership. An association agreement
contains provisions for trade, social affairs, cooperation, security, as well
as cultural cooperation.

Table 1 – Brexit

Trade Cooperation Security


X Legal acts

Y Legal acts

Z Legal Acts






( FTA)




In terms of
Treaty of Law, the European Economic Area is a multilateral legal instrument,
exchanging access to the internal market for a contribution to the EU budget,
policed by the EEA court as controlled by ECJ, whilst an association agreement
is a bilateral legal instrument. At issue is a Swiss-like, Norwegian-type or an
FTA, the British government has told the UK parliament. What makes the exercise
unchartered waters is that the exit association agreement aims to pair down a
membership rather than strengthening existing forms of cooperation. At its most simple, the multi-bilateral
policy-mix of Brexit would comprise mem-bership of EEA + bilateral cooperation
in policy areas not covered by EEA along with provisions on cultural and social
afffairs. This has to be compared to the advantages of the EEA in terms of
ensuring continuity in application of EU’s trading regime in a transitional
period -2025. Enter also, Scottish membership of WTO under the fundamentally
changed circumstances emerging. There is the EU’s open market access strategy.

A joint
report to provide an initial technical overview in terms of legal acts apposite
to each type of association agreement could then be produced between the EU
Commission’s UK Unit and vice-versa the UK’s EU Unit, inclusive of a discussion
on the main anticipated obstacles under each type of association agreements:
the legal economy of Brexit. The joint report could also contain a note on
Treaty of Law.

European Council could then consider issuing guidance on the decision-making
apparatus to govern the future EU-EEA relationship, and its members to
pronounce themselves on the modalities of the type of association agreement to
serve the future EU-UK relationship, once the framework on which to proceed as
a basis for negotiation has been agreed on. In addition, the British government
has indicated it considers the provisions for trade, cooperation and security
the more urgent to create agreement and clarity about. To ensure coverage, it
would be best if the negotiators draft those provisions under the supervision
of the Council. The European Parliament should be informed on a quarterly basis
on the progress of negotiations by EEAS, as assisted by the UK Unit of the EU

There is the
status of Northern Ireland and Scotland vis-à-vis the UK negotiation team and
vis-à-vis EU.

–flexibility are advised, yet it is ultimately up to those territories of the
UK to make a judgement on which is the better offer at hand. Suffice to say,
there are no winners from protracted negotiations and that the principle of
territorial exemption works both ways, as policy-makers make a contribution to
the com-mon endeavor.

Christian ILCUS