On June 23, 2016, the United Kingdom (UK) held a referendum on whether to leave or to remain in the European Union (so-called “Brexit”), with 51.9% of the people voting in favor of leaving. The procedure for withdrawal from the European Union (EU) is governed by article 50 of the Treaty on European Union (TEU), as introduced by the Treaty of Lisbon in 2007. It states that “[a]ny Member State of the EU may decide to withdraw from the Union in accordance with its own constitutional requirements.” Before the Treaty of Lisbon, a Member State’s right to withdraw from the EU had been highly controversial.
Article 50 of the TEU has never been used and presents uncharted political and legal territory. It is only applicable to the withdrawal of Member States. The UK’s withdrawal process was officially commenced on March 29, 2017, when British Prime Minister Theresa May notified the European Council of the UK’s intention to leave the EU. The notification triggered a two-year period of negotiations. The EU intends to finish the withdrawal process (“divorce”) before it negotiates its future relationship and trade deal with the UK. There will be no parallel negotiations of the two issues.
As there is no precedent for a Member State leaving the EU, negotiations surrounding the accession of new member states or the withdrawal of countries or territories that are associated with an EU Member State might provide some guidance for trade implications and a future trade deal. This report will look at the accession of Austria to the EU as an example of a General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO) member joining the EU. Austria has been a member of GATT since October 19, 1951 and a WTO member since January 1, 1995. Its relationship with the EU slowly intensified from 1960 to 1989, when it submitted an application to become a full member. It joined the EU after its accession was approved in a referendum in 1995. The different stages of cooperation between Austria and the EU, and the evolving trade relationship as well as the negotiations to become a full member, could serve as an example of how the relationship between the EU and the UK can be disentangled or what a future trade relationship could look like.
As an example of a withdrawal, this report will examine the withdrawal of Greenland, an autonomous territory within the EU Member State Denmark, from the EU’s predecessor, the European Economic Community (EEC). Greenland was part of the EEC from 1973 until 1985. It acceded to the EEC in 1973 with Denmark, after Denmark as a whole voted in favor of joining while a substantial majority of voters in Greenland opposed. When Greenland attained greater authority over its sovereignty, it withdrew from the EEC following a referendum in 1982. It is now associated to the EU under the Overseas Association Decision. The Overseas Countries and Territories (OCTs) are twenty-five countries and territories that have special links to Member States Denmark, France, the Netherlands, or the UK. As a consequence of the withdrawal, Greenland needed to renegotiate its fisheries agreement with the EEC. Its fisheries rights now are similar to those it had while still part of the EEC, but it has the opportunity to renegotiate the agreement every six years, and tariffs and quotas are renegotiated on an annual basis.
Another example sometimes mentioned with regard to a “withdrawal” from the EU is Saint Barthélemy (St. Barths). In 2007, St. Barths, at the time an outermost region (OR) of France, separated from Guadeloupe. That decision had no influence on its position under EU law. In 2010, France submitted an initiative based on article 355, paragraph 6 of the Treaty on the Functioning of the European Union (TFEU) to the European Council to change the EC law status of St. Barths from an OR to an OCT. The status change became effective on January 1, 2012. The relationship between the EU and St. Barth is now governed by the Overseas Association Decision.
Prepared by Jenny Gesley
Foreign Law Specialist
 EU Referendum Results, The Electoral Commission, http://www.electoralcommission.org.uk/find-information-by-subject/elections-and-referendums/past-elections-and-referendums/eu-referendum/electorate-and-count-information (last visited Apr. 12, 2017), archived at http://perma.cc/NR4X-35PH.
 Treaty on European Union (TEU), 2012 O.J. (C 326) 13, http://eur-lex.europa.eu/resource.html?uri=cellar: 2bf140bf-a3f8-4ab2-b506-fd71826e6da6.0023.02/DOC_1&format=PDF, archived at http://perma.cc/D6TR-LVCF.
 Treaty of Lisbon, 2007 O.J. (C 306) 1, http://publications.europa.eu/resource/cellar/688a7a98-3110-4ffe-a6b3-8972d8445325.0007.01/DOC_19. (File too large to archive).
 Id. art. 50, para. 1.
 Article 50 Notification Letter from Theresa May, Prime Minister of the United Kingdom, to Donald Tusk, President of the European Council (Mar. 29, 2017), http://www.consilium.europa.eu/en/press/press-releases/ 2017/03/pdf/070329_UK_letter_Tusk_Art50_pdf/, archived at http://perma.cc/6FJJ-JJK8.
 Id. art. 50, para. 3.
 European Commission, Speech by Michel Barnier, Chief Negotiator for the Preparation and Conduct of the Negotiations with the United Kingdom, at the Plenary Session of the European Committee of the Regions (Mar. 22, 2017), http://europa.eu/rapid/press-release_SPEECH-17-723_en.htm, archived at http://perma.cc/9CYK-MHWL.
 Council Decision 2013/755/EU of 25 November 2013 on the Association of the Overseas Countries and Territories with the European Union (Overseas Association Decision), 2013 O.J. (L 344) 1, http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013D0755&from=EN, archived at http://perma.cc/T5E2-8Z8R.
 Consolidated Version of the Treaty on the Functioning of the European Union (TFEU) art. 198, 2012 O.J. (L 326) 47, http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12012E/TXT&from=en, archived at http://perma.cc/6ZXF-JAHS.
 Council Decision 2010/718/EU, European Council Decision of 29 October 2010 amending the Status with Regard to the European Union of the Island of Saint-Barthélemy, art. 1, 2010 O.J. (L 325) 4, http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32010D0718&qid=1492547878104&from=en, archived at http://perma.cc/ 6F7P-VRNT.
Last Updated: 05/02/2017