Article 50 is a part of the European Union law that lists the process of the withdrawal of a member from the European Union. The Brexit referendum was held in the UK on 23rd June 2016, in which the majority voted to leave. The UK will trigger Article 50 on 29th March 2017. Why did it take a long time to be triggered? Prime Minister Theresa May announced in October 2016 that she did not want to rush the withdrawal process. After the article is triggered, there is a two-year time limit (during which the EU laws still apply to the UK) in which the UK have to complete negotiations. If negotiations do not go to plan, the UK will have to leave empty handed. The UK would continue to participate in the EU; however, the UK members would not be allowed to participate in discussions about the withdrawal of the UK.
The EU customs union is a system which allows all member states to follow a set of common rules about custom controls over goods entering the EU from the outside. This system focuses on the levying of tariffs and trade quotas, they also include other matters, such as checking food with health standards and checking that consumer goods comply with safety rules (e.g. children’s toys).
According to figures by the Office for National Statistics (ONS), the UK exported £134.3 billion worth of goods and services to countries in the EU but imported £223 billion, meaning there was £88.7 billion more imports than exports. This results in the EU exporters facing a struggle as their incomes will decline as the UK leave the EU. As a result of this, this will allow the EU to reach an agreement which avoids the imposition of tariffs on exports to its largest single export market (the UK), this is known as a ‘mixed agreement’.
However, an important question for the UK is: who decides whether the UK can have a free trade agreement? It will need to be finalised by EU leaders via a majority-wins vote, the European Parliament also by a majority-wins vote and by the remaining national parliaments across the EU. The general rules of the EU policy of free movement of goods and services have generally worked well with other countries, for example, Korea; This means there should be no difficulty in replicating these rules in an EU-UK trade agreement. And since this rule benefits the consumers of the imports, there is a strong argument for replicating these rules.
Other examples of negotiations that Article 50 will cover are discussions about unspent EU funds, access to EU agencies who have a role in the UK law (e.g. European Medicines Agency), access for UK citizens to the European Health Insurance card, the rights of UK fishermen to fish in non-UK waters (including the North Sea) and many others.
What happens next? During May/June 2017, the negotiations will commence. And in the autumn of 2017, the UK government is expected to introduce laws to leave the EU and to incorporate some of the EU laws into the UK laws, which is known as the ‘Great Repeal Bill’. The negotiations are said to be completed by October 2018 and in March 2019, the UK will formally withdraw from the EU (unless the two-year time limit is extended, but this will only happen if the other EU member states grant approval).