UK departure from EU set in motion with activation of exit clause

29 March 2017 14:42 Source:ICIS News

Theresa May Article 50 day (Source: Mark Thomas/REX/Shutterstock)LONDON (ICIS)--The process for the UK’s withdrawal from the EU has begun with Prime Minister Theresa May formally notifying European Council President Donald Tusk on Wednesday that the country has activated Article 50, the step necessary for exit talks to begin.

Nine months after the June referendum that saw a majority of UK voters opt to break away from the EU, May notified Tusk of the country’s intention to withdraw from the EU and the European Atomic Energy Community, after the referendum result was ratified by Parliament and received Royal Assent in March.

In a letter to Tusk notifying the Commission President of the activation of Article 50, the UK Prime Minister stated that the country is seeking a “deep and special partnership” between the country and the remaining 27 members of the EU.

Earlier this year, May ruled out remaining in the union’s single market, hinting that the final model for the UK’s departure from the EU may hew closer to a “hard Brexit” than the less extensive fractures predicted earlier in the exit process.

May pointed to the current international political turbulence as grounds for the EU to avoid taking a punitive stance in exit talks.

“At a time when the growth of global trade is slowing and there are signs that protectionist instincts are on the rise in many parts of the world, Europe has a responsibility to stand up for free trade in the interest of all of our citizens,” May said.

"Europe’s security is more fragile today than at any time since the end of the Cold War. Weakening our cooperation for the prosperity and protection of our citizens would be a costly mistake,” she added.

If exit talks collapse during the two-year negotiation process, the default course would be for the UK to trade with the EU on World Trade Organisation terms, leading to substantially higher export and import tariffs. However, May argued that this outcome would be negative for both sides, and that EU and UK negotiators should work to avoid it.

With Scottish parliament backing calls for another referendum on the country’s place in the UK, and concerns over the place of Northern Ireland in the union due to the prospect of increased tougher trading barriers with EU member state Ireland, May claimed that Brexit would lead to increased devolution of power from Westminster.

“It is the expectation of the government that the outcome of this process will be a significant increase in the decision-making power of each devolved administration [in the UK],” she said.

Tusk confirmed receipt of May’s letter and the onset of the Article 50 process in a statement on Wednesday

“In these negotiations the Union will act as one and preserve its interests. Our first priority will be to minimise the uncertainty caused by the decision of the United Kingdom for our citizens, businesses and Member States,” Tusk said.

“Therefore, we will start by focusing on all key arrangements for an orderly withdrawal,” he added.

The European Council is expected to hold a Brexit summit on 29 April to adopt guidelines for the upcoming talks.

The UK chemicals industry has been downbeat so far on the potential impact of Brexit, particularly of a hard Brexit – the scenario closest to May’s plans as set out so far – seen as a worst-case scenario.

peaking at the International Petrochemical Conference (IPC) in Texas this week, a UK-based distributor said that maintaining the status quo on chemical regulations should be a key goal for policymakers looking to safeguard chemicals production in the country.

The formal activation of Article 50 comes on the same day as European Commission regulators moved to block the planned merger of UK and German stock markets the London Stock Exchange and Deutsche Borse.

(Picture source: Mark Thomas/REX/Shutterstock)

By Tom Brown