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Table of ContentsWelcome note from the Executive Board 3Executive Board Biographies 4Selected terms and abbreviations 5Introduction and Mandate of the Committee 5Renegotiation of British-European Trade Relations 7Major Stakeholders and Bloc positions 15Position Paper Requirements 19Concluding remarks 20References 21

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Welcome note from the Executive BoardDear delegates,

Welcome to the European Union (EU) committee of NTUMUN 2017! We applaud your audacity in choosing to enter this committee, which will grapple with an evolving problem to which it seems no government has an adequate answer to.

For better or worse, you will be representing your respective stakeholders in this committee, which will do its best to come up with a preliminary deal that will ‘pave the way’ for Brexit.

In the event that Brexit does happen, it promises to be momentous - it could mark a possible division of the world’s largest single economic market, besides the most extensive supranational entity. Its eventual impact on the United Kingdom and Europe also remains to be seen. Yet already it has been seen to have inspired the election of Trump in the United States, and galvanised the cause of right-wing, Eurosceptic, anti-immigrant movements across Europe.

Most governments however are currently working on the assumption that Brexit is bound to be carried out. The popular will cannot be defied. While national leaders across the EU - the French, Dutch and German leaders especially - fight in national elections in 2017, their governments will also seek their own ends in negotiations with Britain - whether to ensure the rights of their legions of citizens working in the UK, or to protect their trade with Britain.

A complete deal is actually expected to take many more years than the measly two stipulated by the Lisbon Treaty; an estimate suggested ten years. We would suggest to delegates that they should stick to a few core issues, to be discussed hereafter, and attempt to come to an agreement on the outline of a deal, and a list of mutually agreed principles to be followed by all parties in the event of Brexit. Even this should fill up a decent number of pages.

Also, do not be overly confident or diffident because of the country you are allocated. The EU’s unique voting systems ensure that even small countries have much leverage, and the powerhouses cannot get away with just anything they want. If you have convincing arguments or have a flair for the ‘art of the deal’, you should have an advantage, no matter what state you represent.

We hope you would digest this study guide as well as all the readings (pace yourself, read one a day), and perform your own research. The readings are certain to aid your understanding and grasp of the matters involved in the debate, and we expect you to read them, as this study guide can only cover so little. The readings serve to fill in the gaps that this study guide has left behind. We also expect you to keep up with the news, because Brexit is an evolving issue and so are the conditions in Europe, especially given that national elections will happen in France, Germany and the Netherlands in 2017, which may redefine their negotiating position vis-a-vis the UK.

We hope to meet you at the conference and look forward to guiding all of you through many hours of fruitful debate!

The Dais of the EU CommitteeNTUMUN 2017

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Executive Board BiographiesHead Chairperson

Soon Hao Jing is a sophomore majoring in Chemical Engineering and minoring in Economics at the National University of Singapore. He has chaired at MUN conferences in four ASEAN countries and attended MUN conferences farther afield, including Harvard WorldMUN 2016 in Rome, Italy. In all, he has participated in twenty Model UN/EU/ASEAN/Parliament conferences since 2009, and his first awards, including a Diplomacy Award from Singapore MUN 2012, lie languishing in his dusty folders. He devours plenty of news and essays each day while keeping track of world events. He currently represents students of the University Scholars Programme on board the 38th NUS Students' Union Council. A few times a year, he indulges in karaoke or fighting campaigns on Civilization V.

He may be contacted at redpolaris774@gmail.com.

Assistant Chairperson

Satria Muhammad is currently a third year student majoring in International Relations at Padjadjaran University in Bandung, Indonesia. He started his MUN career at the beginning of his university life and since then has grown fond of it, attending eight conferences as a chairperson and delegate, in Indonesia and abroad. Other than MUN, he usually fills his spare time by teaching English to primary school children, reading articles online, playing his guitar and also playing video games. It is an honour for him to direct this year’s European Union Council. He will be looking forward to listening to all of your ideas and also be expecting a fruitful discussion on the topic.

He may be contacted at muhammadsatria96@gmail.com.

Assistant Chairperson

Lai Shueh Chien is as of NTUMUN a conscript fresh out of National Service; in other words, unemployed. He hopes to study International Relations/Politics/Law, in order to, in his own words, ‘travel a lot and hopefully live it up’. He insists that he has a strong academic interest in these subjects, however. He is a fairly experienced Model United Nations participant (read: lacks better things to do) and this conference will be his first time chairing in a large-scale one. A long time ago, Shueh Chien was a competitive debater, going up against national teams in competitions around the world. Now in his spare time, he likes playing with stray cats, and abusing Civilization V mechanics. He assures all delegates that he is friendly, does not bite, and can be reasoned with most of the time. He also sincerely wishes all delegates in this committee the very best in grappling with this admittedly difficult topic, and hopes beyond all this, that the experiences at NTUMUN 2017 will be dearly cherished in the hearts of all present.

He may be contacted at laixueqian@gmail.com.

NOTE: The chair and main author, Soon Hao Jing, has obtained in writing the permission of Chong Yingxuan, with whom he collaborated in writing a research report for another European Union committee debate dealing with the European Refugee Crisis and the UK’s Brexit referendum at MCKLMUN 2016, to adapt elements and concepts from the research report for use in this study guide. All such adapted elements were originally written by Soon Hao Jing.

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Selected terms and abbreviationsEEA European Economic Area, in which EEA Agreement is effective

EFTA European Free Trade Association, with some European but non-EU states

GATT General Agreement on Tariffs and Trade (1947)

Treaty of Lisbon One of the founding Treaties of the EU

NAFTA North American Free Trade Agreement

Schengen Zone Area without customs checks when crossing political borders in Europe

WTO World Trade Organisation; replaced GATT

Customs Union States which agree to charge the same import duties as each other

Free trade International trade conducted without quotas, tariffs, restrictions

Tariff A duty, or tax, payable on imported or exported goodsCommittee introduction and voting system

Introduction and Mandate of the CommitteeThis committee of NTUMUN 2017 is modelled after the European Council. This is a

gathering of EU heads of government. There are two other similarly named bodies, the Council of the European Union (a gathering of ministers from different EU states, whose ministry depends on the topic being discussed) and the Council of Europe, which is not an EU organ at all (it contains Russia and other non-EU states). The Dais expects the committee to draw up and pass a neatly typed, binding document laying out clearly the agreement between the UK and the EU-27 states governing Brexit. All delegates should put their signatures to it for it to be adopted.

Voting

Several voting requirements are employed in the EU for different purposes: 1. a simple majority of states present, for a procedural motion to pass; 2. qualified majority voting (QMV) for most substantive proposals to pass; 3. reinforced QMV for certain substantive proposals;4. unanimity (meaning no objections), which is usually employed by the European

Council when it makes decisions.

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QMV replaced the older weighted voting system established under the Treaty of Nice. Under QMV, 55% of the participating states (72% if reinforced), representing 65% of the total population of the participating states, must vote yes to the proposal in order for it to pass. Abstentions are treated like ‘no’ votes, except that if a motion to divide the house is entertained, abstaining delegates would be compelled to vote yes or no. An important detail to note is that if a blocking minority is deemed not to exist in a vote on any EU proposal, the proposal will still pass, even if it meets only the ‘55% of states requirement’ and not the ‘65% of total population requirement’.

A blocking minority is defined as a coalition of at least four EU states with at least 35% of the population of countries participating in the vote. This rule was devised to counter the overweening power of the four most populous EU states, France, Germany, Italy and the UK, and to stop a triumvirate from blocking a proposal which the EU favours. (Most of the time, EU states manage to pass things by consensus. However, even when there is significant opposition to any proposal, it is seldom the case that all four major countries would oppose it, hence the blocking minority rule usually protects other EU states from the tyranny of the four major countries.)

Reinforced QMV applies to all proposals not originally from the EU Commission. 72% of states participating must consent, representing 65% of the total population, for a proposal to pass under reinforced QMV.

Delegates should use the vote calculator provided by the EU on http://www.consilium.europa.eu/en/council-eu/voting-system/voting-calculator/ in order to gauge the level of support their proposal(s) would likely command if it were put to a vote. The chairs will be using this voting calculator to process all substantive votes.

Proxy voting

According to EU Consilium rules, a member state may exercise the voting rights of one other member state if the latter has authorised the former to do so. By Chairs’ discretion, we may grant selected delegates of this committee, representing smaller EU states with limited voting power, the right to exercise the voting rights of another small EU member state which is their neighbour, besides their own vote. This proxy voting will only apply to substantive votes. For instance, if country A, with 1.05% of the total EU population, is granted the right to exercise country B’s vote (where country B has 0.75% of the EU population), then A’s vote would count as two countries’ worth according to the first QMV requirement, and 1.80% of the EU population according to the second QMV requirement.

Note on the conduct of the debate

Article 50 of the Lisbon Treaty stipulates that consultations among the EU states shall be done in the absence of the representative of the leaving state. This means that the UK would only negotiate with a united team comprising the representatives of the rest of the EU, which would have to decide among themselves what terms to propose to the UK.

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Renegotiation of British-European Trade RelationsStatement of problem

On 23 June 2016, over 33 million voters across the United Kingdom made their way to voting booths to vote in a referendum on the UK’s membership of the European Union. As the national broadcaster BBC provided a live news feed on the vote count, a small margin in favour of Leave grew to the astonishment of many, until it reached an eventual count of about 1.3 million. The final results declared in the morning of 24 June stunned much of the country, and even the Leave campaign leaders including Michael Gove, Boris Johnson and Nigel Farage did not seem to have believed that they might win. Confusion reigned in the coming days and weeks as political parties and leaders scrambled to act in light of the shock result.

The British prime minister, David Cameron, resigned shortly, initiating a brief leadership contest in the ruling Conservative Party which culminated in Theresa May, Cameron’s erstwhile Home Secretary, emerging as the new PM in July 2016.

Having been a silent member of the Remain campaign, her cryptic slogan that ‘Brexit is Brexit’ eventually gave way to an declaration in October that her government would seek to trigger Article 50 of the Lisbon Treaty, governing the departure of EU member states, by March 2017.

The May administration suffered a setback on 3 November in a judgement delivered by Lord Thomas of Cwmgiedd, the Lord Chief Justice of England and Wales, who ruled that government could not exercise ‘royal prerogative’ as it claimed it could, by triggering Article 50 without Parliament’s approval. Members of her Cabinet nonetheless insisted that the government would appeal the decision, and remained committed to the timetable for invoking Article 50.

In early December 2016, the Supreme Court of the UK heard the arguments from both pro-Remain and the Government’s barristers in the appeal hearing with regard to Lord Thomas of Cwmgiedd’s previous ruling that the Government could not exercise royal prerogative by triggering Article 50 without Parliamentary approval. While there are various predictions as to the eventual Supreme Court vote on the appeal, but most believe that the appeal by the Government is likely to be lost, and the Lords Justices will rule that Government must seek Parliament’s consent before triggering Article 50. However, the judgement is not expected to be issued before Christmas.

Around the same time, the House of Commons passed by a large margin a motion submitted by Sir Keir Starmer, Labour’s key Brexit spokesman, which called on the Government to present its negotiating strategy before Article 50 is formally triggered. However, 10 Downing Street claimed a significant compromise, as it amended the motion to reflect the Government’s commitment to begin exit procedures formally by no later than 31 March 2017.

The May Government is unlikely to see the end of court challenges, however. The Sunday Times reported that a High Court case may be filed to call for a judicial review to decide whether the Government has no mandate to leave the European Economic Area (EEA) - while triggering Article 50 would withdraw the UK from the EU, the EEA is governed by the EEA Treaty, distinct from the Lisbon Treaty, and Article 127 of the latter may need to be triggered by the UK as well. However, the persons filing the case are expected to argue that the question put at the 23 Jun referendum does not mention the EEA and as such, there is no mandate for leaving the EEA.

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Moreover, another separate case in the Irish courts seeks to establish whether triggering Article 50 is reversible, i.e. if the British government can revoke its declaration of intention to leave the Union.

Once the UK government officially delivers notice to its EU counterparts of its intention to exit the union, an irreversible two-year negotiation process will begin, at the end of which the UK would cease to be part of the EU, whether or not the country reaches a deal with the 27 remaining EU states, according to Article 50.

This committee will carry out debate on the assumption that the UK government has triggered Article 50 and called for negotiations with the EU member states. (EU leaders had previously made clear that there would be no preliminary negotiations until and unless the UK government formally declared its intention to bring the UK out of the Union.) The Dais expects delegates to act on their stakeholders’ behalves and negotiate a deal governing the Brexit process and the EU’s future relationship with the UK.

Failure to negotiate a deal could spell disaster not only for the UK, but for all EU member states. Trade might nosedive. Mutual investments and cooperation might be compromised. EU citizens living in the UK might suffer, and so might British subjects working and living in the rest of the EU. Brexit is likely to be the biggest and most serious rupture in the world’s largest combined market and economy, not to mention an event with potentially terrifying geopolitical consequences, and should be dealt with carefully. Even now, Brexit already has an impact on the UK’s economy, finances, investment inflows, and an impact on the European continent as well. How Brexit turns out will depend on the nature of the separation deal agreed between the UK and the EU, and so delegates will have to assume a weighty, if hypothetical, responsibility, in conducting the negotiations here at NTUMUN 2017.

History and Discussion of problem

Many salient factors led to the dramatic Brexit referendum results in June 2016. While historians and political pundits will no doubt continue to analyse and debate the topic for decades to come, we will discuss some pertinent historical points in this section. To put it briefly, the UK had never envisaged itself as part of a political union with the greater European continent sitting on the other side of the English Channel. As such, when the UK entered what later evolved into the present European Union, a Eurosceptic current arose in a section of the UK public and political spheres, which has now gained significant political clout.

When the UK acceded to the European Community (EC) in 1973 and thereby left the European Free Trade Agreement (a small collection of states presently including Liechtenstein, Norway, Switzerland and Iceland), it did so with the understanding that this was for mainly economic reasons. The UK was, and continues to be, a trade-dependent island nation, and sought to do trade more freely with other states in the common market, unencumbered by tariffs, taxes and other barriers to trade.

Although the UK decisively voted in 1975 to stay in the EC during the ‘Common Market Referendum’ of that year, the Eurosceptic influence lurking in Britain was never truly dispelled, and progressively grew stronger in the coming decades.

In the incident of the ‘Maastricht Rebels,’ dozens of ruling party MPs voted against the attempt of PM John Major (1992-1997) to integrate the Treaty of Maastricht, one of the EU’s founding documents, into UK law. The movement eventually led to the development of an anti-EU party years later, the United Kingdom Independence Party (UKIP). The Eurosceptic wing of the Conservative Party found an opening again years later.

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The 2010 UK general elections resulted in a coalition government led by David Cameron, who had to rely on the Liberal Democrats’ and his party’s Eurosceptic MPs’ votes in Parliament in order to stay in power.

Of the numerous rebellions that damaged Cameron’s authority in Parliament, the most serious one arguably occurred in October 2011, when 79 of his backbenchers defied the party whip and voted to pass a motion calling for a referendum on the UK’s membership of the EU to be held. Cameron had to ensure the loyalty of his Eurosceptic backbenchers to prevent a fatal split in his party, and thus promised to make the referendum a reality when he campaigned for reelection in 2015. The subsequent campaigns by Remain and Leave took place over a brief yearlong period, and brought up several key sticking points which decided the outcome of the referendum, including immigration and the UK contribution to the EU budget.

On the part of the EU, various developments over the decades led to growing dissatisfaction within the UK, such as the inclusion of many less-developed Eastern European states during the 2000s, which eventually sent more than a million immigrants to the UK to work in various industries. 2004 was the year which saw the largest increase in the number of EU states - ten, including the Baltic states, Poland and Hungary, were added. In 2007, Bulgaria and Romania were also included.

The UK has seen much exchanges of peoples with other EU states, with London described as the sixth biggest French city by French authorities. Immigration turned out to be the main issue in the pre-referendum campaign period that clinched the vote for Leave, thanks to the effort of Nigel Farage and UKIP. It has been posited that ex-British PM Tony Blair’s failure to prevent the accession of so many new EU member states or the resulting influx into the UK under the Union’s free-movement rules, eventually led to today’s backlash against foreign immigration and the EU in Britain. We will see how this ‘freedom of movement of people’ across EU political borders is a key issue in this debate in the next part.

The UK has also been the second largest net payee to the EU’s coffers, after Germany, and the fourth largest gross contributor in 2013. However, the UK does not pay as much as it otherwise would have had to, under a deal negotiated by Margaret Thatcher with the EU, and moreover, the UK has received substantial funding from the EU in return, through agricultural subsidies and so on. In contrast, many other smaller EU states have been net recipients from the EU coffers, and hence in some sense they benefit from the UK’s payments to the Union.

At a deeper level, a certain level of distrust may have always existed in Britain towards the European Union. The UK did not join the EC until 1973 (although this was also partly attributable to Charles de Gaulle’s repeated vetoes against UK membership during his lifetime), and the UK negotiated for itself many opt-outs from EU requirements, such as the adoption of the euro, a rebate on its fees to the EU’s coffers each year, and an exemption from the ‘ever closer union’ espoused by other member states. The EU bureaucracy in Brussels and the common rules of the single market have bound the UK, compelling it to abide by rules not made in Westminster. Taking back the UK’s Parliamentary sovereignty was one of the aims of the Leave campaign before the referendum.

In the event that Brexit occurs, the UK would be certain to regain full Parliamentary control of national legislation, but what is much less clear would be the nature of the UK’s future relationship with the EU, especially in terms of trade and immigration. We will briefly outline issues regarding these two aspects in the subsequent section.

Key issues

Under the European Economic Area Agreement (EEA Agreement), which all EEA and EU members have agreed to, countries have to ensure four ‘freedoms’ - the freedom of movement of

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labour, capital, goods and services respectively. This would imply that the EU member states will press the UK government to uphold these rights even as it leaves the EU, as long as the UK wants to retain access to the common market. Various EU leaders have expressed that they hold the four freedoms to be non-negotiable conditions which the UK must agree to if it is to remain part of the common market.

Freedom of movement of labourThe right of citizens to move around freely within the union to live and work falls is

protected as part of the first freedom.

Yet, a key tenet of the Leave campaign was to ‘regain’ control of British borders and restrict the right of migrants from other EU states to enter and work in the UK.

Moreover, the UK has pursued rather restrictive immigration policies in the past, refusing to take in children from the Calais refugee camp, taking in comparatively few refugees in the European Refugee Crisis, and even then Home Secretary Theresa May’s policy of compelling foreign students to leave the UK after graduation instead of staying behind to seek employment.

This time however, it appears unlikely that the UK would be able to fully enforce its will in case it does not consent to EU citizens having the right to continue living, studying and working in the UK indefinitely.

For one, the UK does not have a definite list of such EU citizens resident in Britain, and estimates vary as to how many there are. An estimate quoted by The Guardian put the number at 2.9 million. The same Guardian report stated that a parliamentary committee warned the government that it would likely fall afoul of human rights laws if it attempted to deport that many EU nationals residing in the UK without necessary approval. Needless to say, such an operation would also be a huge logistical nightmare too.

The UK also faces a serious problem in the fact that millions of its own citizens are likewise residing, working and studying across the EU. Many of them, such as the British retiree population in Spain, rely on their access to state-funded pensions, EU subsidized healthcare to sustain their lifestyles, while other Britons also rely on cheap air travel and data roaming rates in order to remain connected on the Continent. The UK needs to tread carefully with its foreign population lest its subjects abroad suffer tit-for-tat retaliation at the hands of EU governments, and end up stranded on the Continent.

Freedom of movement of goods and services

Before the referendum result, the EU had offered the UK much freedom in terms of economic trade with its member states and access to a free trade market. However, seeing that it has decided to leave the Union, the UK now has to strike a balance between economic interests and its political autonomy.

The UK will now have to negotiate trade agreements both with the EU and non-EU trading partners, with special regard to two aspects: tariffs and the free movement of goods and services. A tariff is a government imposed tax on imports used to protect local products from competition posed by otherwise cheaper and more numerous foreign imports. The EU has a free market system in which all tariffs are eradicated. It is a deep economic integration in which it seeks to eliminate all trade impediments. On the other hand, free movement of goods and services is affiliated with the EU’s single market policy. It allows the freedom of movement of labour between countries without having any visa restrictions. This creates efficient movement for labourers and also creates more diverse jobs in which labourers in the EU can apply for jobs from different EU member countries. Other than the freedom of movement for labourers, the freedom of movement of goods and services also has an effect in creating investments for the UK and members of the EU. These are the two important points that the UK and the EU should negotiate after Brexit.

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The EU provides the United Kingdom with a single market. The UK benefits from this single market as it provides low tariff impediment towards their trade activities. Within the EU customs union, the UK benefits from the elimination of all internal tariffs between the UK and the EU while, an external tariff is needed from products coming from non-members of the customs union. However, being in this single market also means that the UK does not have the freedom to negotiate its own trade deals with other countries, because all countries of the single market would have to agree to it.

Brexit may have negative consequences for EU-27 countries exporting to the UK. It has been reported that EU countries might need to pay higher tariffs than the UK. If the UK conducts trade with the EU solely on the basis of being a World Trade Organisation (WTO) member, UK exporters might have to pay a tariff rate of £5.2 billion if it still decides to trade with the EU whilst EU exporters would face £12.9 billion in tariffs if they wish to trade with the UK. One such case in which the UK decides to negotiate with the EU regarding trade tariffs is by the UK to rejoin the European Free Trade Association (EFTA). This follows the Norwegian or Swiss models in which the UK is guaranteed free tariff access to the EU in exchange for the UK not imposing any tariffs on EU products. However, this model does not provide free movement of labour between the EU and the UK.

There has been a heated debate regarding whether or not UK can afford to ignore the freedom of movement of goods and services demanded by the EU. The EU has made it clear that the UK must agree to the four freedoms if it wants to trade without paying tariffs, a tough pill to swallow, considering the popular backlash that resulted in Brexit because of a widespread perception of uncontrolled influxes of EU migrants into the UK.

Freedom of movement of capital

Capital controls are residency-based measures utilised by governments to regulate the flow of capital in and out of an economy. Typical measures to manage the flow of capital include taxes on transactions, or exchange-rate controls, which may cap or prohibit the buying and selling of a national currency. Capital controls therefore limit the scope for economic activities between countries, and was a major impediment to the conducting of trade and investment between the many states of the European Union.

As part of a move towards a single market and a single currency, the free movement of capital through the European Union was codified in a directive passed in 1988 [Directive 88/361 and EEA Agreement]. Under this Directive, all restrictions on capital movements between persons (natural or legal) resident in Member States were removed in the beginning of the nineties. Monetary and quasi-monetary operations (financial loans and credits, operations in current and deposit accounts and operations in securities and other instruments normally dealt in on the money market) in particular were liberalised.

The UK currently benefits from the standardisation of markets by serving as a ‘passport’ into mainland Europe for both her own and overseas financial firms. Under current EU regulations, as long as a firm has a subsidiary based in a country within the agreement, it may access the EU market without any constraints. The ability to access one of the world’s most regulated markets is a prime reason for London’s attractiveness as a global financial center.

With the impending exit of the UK from the EU, the UK must consider how it will continue to preserve the economic benefits it previously enjoyed. An option would be to opt to join the European Economic Area. However, in order to join this framework, the UK would have to meet the EU requirements and be subjected to internal EU legislation. In addition, without an EU membership, the UK has no means to directly redress the said internal legislation.

Impacts of Brexit on the financial and services sector�11

Finance remains London’s largest industry, and the largest financial exporter in the world, thanks to it being home to some of the oldest and most well-established banks in the world, relatively liberal regulation, and the UK’s close economic links to the EU. In addition, London is also a leading center providing professional services. The UK has a surplus of around £10 billion in services trade with the EU, which is due in large part to the £20 billion surplus in trade in financial services and insurance.

For nearly forty years, the financial sector has been regulated by EU rules, and the exit of the UK from the EU would pose a regulatory challenge if the UK should decide to legislate entirely new regulatory frameworks. Given the tightly-interwoven nature of finance, the sector may opt to continue using existing frameworks. It is of critical importance to the sector that the agreements under the EU are kept intact as it benefits disproportionately under existing agreements which allow it to conduct business freely and attract talented individuals. Should the UK government fail to secure continued access to EU for this sector, the finance industry as a whole is likely to become less attractive as opposed to ones on the European mainland.

Recent Developments

In light of Brexit, UK is looking to negotiate new trade deals with major trading partners that previously traded with the UK through the larger EU framework. As the UK has not formally left the EU however, it may not sign new trade deals yet. However, UK officials are now conducting informal talks for which the basis of new deals can be established. So far, there have been talks with China, India, Switzerland and Turkey

Joining NAFTA

The possibility of the UK joining NAFTA (North American Free Trade Agreement), an economic bloc made up of Canada, the USA and Mexico. The possibility was first raised by then Speaker of the US House of Representatives, Newt Gingrich in 1998, and was supported by British ex-Prime Minister Margaret Thatcher. However British membership within the EU at that time prevented it from independently making any sort of deal with NAFTA, and The Economist pointed out it would require the UK to leave the EU in order to join the NAFTA trading bloc. It also noted that NAFTA did not impose any political restrictions on its member states or compel them to negotiate deals as a single entity, leaving countries like Mexico free to strike other trade deals. NAFTA would thus protect Britain’s political autonomy and freedom to negotiate new trade agreements elsewhere.

Interest in joining NAFTA has been rekindled in the UK following the Brexit referendum. In addition, the USA is now poised to establish closer ties across the Atlantic. Following Donald Trump’s victory in the US presidential elections, the president-elect has claimed that the UK was ‘a very, very special place for me and for our country’. He has consistently supported the Brexit campaign, and there is considerable interest in both countries for a closer trading relationship.

Trade deals with Asia

India is one of the countries which the UK is actively seeking to court after its exit from the EU. Currently, the UK is the third largest foreign investor in India, as is India in the UK. However, the largest obstacle to an agreement to boost the levels of trade remain the issue of immigration.India has adopted a tough stance on the matter, demanding that any deal must be accompanied by an allowance for Indian students in the UK to stay on after graduation, which many in the UK balk at. Currently, UK student policy, as shaped by Theresa May during her stint as Home Secretary, mandates that foreign students must leave the UK immediately after the completion of their studies, which India seeks to overturn as a considerable number of Indian nationals seek to study and work within the UK.

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With the exit of the UK from the EU, officials in both the UK and China speak of the beginning of a new ‘golden age’ for UK-China relations. British and Chinese officials are in the midst of holding talks on trade, investment and finance. The vice Premier of China Ma Kai attended a dialogue hosted by Chancellor of the Exchequer Philip Hammond. The Chinese ambassador to the UK has claimed that ‘We should seize the opportunities when they come along,’ pointing to signs that China is keen to reach a settlement with the UK. Trading with Turkey

Turkey and the UK are highly enthusiastic about signing a new trade deal. In September, Boris Johnson, the foreign secretary of the UK travelled to Ankara to discuss a ‘jumbo deal’. In turn, the economic minister of Turkey Nihat Zeybekci has promised a ‘wide ranging’ deal with the UK, with Turkey ready to ‘bring online a wide-ranging trade deal’ with the UK.In 2014 Britain imported £7.9bn of goods and services from Turkey and exported £4.9bn to the country, making it a top 20 trading partner in goods imports. In addition, Turkey is in a customs union with the EU which means many of the country’s goods can circulate freely around the trading bloc. EU Leaders on Brexit

Most of EU’s leaders have been overwhelmingly negative about the British exit from the economic bloc. The UK was one of the bloc’s major economic powers, as well as one of the highest contributors to the EU budget. In addition, the UK was a highly-prized destination for internal migrants, especially those hailing from Eastern Europe.

Major figures in the EU warn Britain that it cannot leave the EU and hope to retain its previous privileges. François Hollande, President of France, said Britain must suffer the consequences of its decision. “The UK has decided to do a Brexit. I believe even a hard Brexit,” He warned that “Other countries would want to leave the EU to get the supposed advantages without the obligations … There must be a threat, there must be a risk, there must be a price.”

The sentiment was echoed by Angela Merkel, the Chancellor of Germany “If we don’t insist that full access to the single market is tied to complete acceptance of the four basic freedoms, then a process will spread across Europe whereby everyone does and is allowed what they want,” in a pointed statement referring to UK seeking to restrict the freedom of labour into its borders, but retain the freedom of goods and services.

Jean-Claude Juncker, president of the European Commission concurred, adding that “You (the UK) can’t have one foot in and one foot out,” and that the EU “must be unyielding on this point.”

Joseph Muscat, the prime minister of Malta, next in line to hold the EU’s rotating presidency when Britain triggers article 50 early next year, said the four freedoms – the movement of goods, capital, services and people – could not be decoupled. “That cannot be negotiated … These principles are the basis for everything the EU does,” he said.

It is highly likely that the EU would move to restrict some, if not most of the privileges that the UK enjoyed while being part of the EU in retaliation for its decision to leave the bloc.

Case Studies

Greenland’s exit agreement with the European Union

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The only (other) time when a territory or state has left the European Union was in the 1980s, when Greenland, then a part of the Kingdom of Denmark (but now autonomous), left the European Community.

Contrary to popular belief, Britain is not the only country that has left the European Union. In 1982, Greenland voted to leave the EU with 52 per cent of the people in favour of leaving. The reason why Greenland wanted to leave the EU was the fact that Greenland itself was dragged into the EC after Denmark, which Greenland was formerly directly ruled by, elected to join in 1973. By joining the EC, Greenland did not have full jurisdiction of its maritime resources, a serious problem for the territory which relies on exports of fish among other maritime resources for its livelihood. It took three years to finalize the deal between Greenland and the EU in which the Greenland Treaty was conceived. The treaty concluded that Greenland is allowed to conduct free trade with the EU, and still maintain full sovereignty over its maritime resources. It is now one of the 25 overseas countries and territories that have special ties with the EU whilst not a being a part of it.

Even though both Greenland and Britain voted to leave the EU, their cases are starkly different. The major difference between Greenland’s case and Britain’s case lies in their size in terms of population and economy. Greenland is a part of Denmark that has a population of 56,000 people which heavily relies on their fishing industry. On the other hand, Britain has over 64 million people and many industries closely intertwined with the continent, especially the banking industry which accounts to almost 10 per cent of their Gross Domestic Product. Seeing that Britain has more ties with the European Union in terms of economics, the negotiation process between Britain and the EU will be more complicated than Greenland’s case seeing that both parties heavily rely on each other, especially in the banking industry.

Alternative trade relationship models that the UK is considering pursuing in talks

Beyond merely attempting to seek future trade arrangements between Britain and the EU, the nature of the arrangements has to be considered. In the months after Brexit, numerous different models have been thrown up, including Switzerland and Norway. Both are members of the European Free Trade Association (EFTA).Both have been criticised as likely to make the UK worse off than before, or to hand it the short end of the stick.

Switzerland has had to negotiate about 120 separate bilateral agreements with the EU, and thus far has also been compelled to accept large influxes of EU migrants in order to retain access to the EU’s market. Worse, Switzerland does not have an agreement with the EU regarding its banking sector (perhaps related to the opaque nature of Swiss banking favouring tax dodgers), and therefore much of its banking transactions have to be routed through London. The UK certainly cannot afford to lose access to the EU’s banking system due to Brexit.

Norway has to pay a hefty sum to retain access to the same market, and moreover has no say in EU regulations, but must adopt them in order to comply with the EU single market’s standards in order to continue trading within it.

Norway is not in the EU but belongs in the European Economic Area (EEA) by virtue of the agreement between the signatories of the European Free Trade Agreement (EFTA) comprising Norway, Switzerland, Iceland and Liechtenstein. Norway is inside the Schengen Zone, meaning there is free movement of people between Norway and other EU states - something the UK arguably voted against in the first place. In theory, it is up to the Norwegian legislature whether it wishes to adopt any and all EU laws, but practically speaking they have little choice but to adopt them where it relates to the economy, trade or industry. Norway sells more to the EU in terms of euros than the EU sells to it.

The UK could sign up to the EFTA, which it left in 1972, once again (although this would be subject to the agreement of the EFTA states). Membership in the EFTA would give it immediate

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membership in the various free trade agreements with scores of other countries or markets that the EFTA currently is part of. The EFTA and EU member states concluded an agreement with the effect of promoting free movement of labour, goods, services and capital within the larger European zone, and today, the EFTA countries enjoy significant levels of integration with EU states in terms of freedom of movement. EFTA countries also to differing extents comply with EU regulations so that they can remain eligible to trade within the EU market. If the UK indeed wishes to emulate these two countries or to join the EFTA, it would have to give up closing its borders or preventing free movement of people, and also face the prospect of paying into the EU’s treasury without having a say in how the money will be spent or the EU’s decision-making process.

The UK could settle for a less intimate trading relationship with the EU by emulating Turkey. Turkey and the EU have been in a customs union since 1996, but Turkish citizens still have to pass through border controls when travelling to the EU or Schengen Zone. In the UK’s case, if it adopted such a model, it would be able to clamp down on the free movement of labour. However, it still has to comply with relevant regulations concerning trade tariffs, among other matters.

The UK could also end up trading with the EU like any third-party country, under World Trade Organisation (WTO) rules, which would likewise not require the UK to accept freedom of movement of labour.

Major Stakeholders and Bloc positionsAlmost 100 days since a referendum signalled the end of Britain’s four decades of EU

membership, a Bloomberg News analysis has identified a hardening of positions with even the U.K.’s traditional allies such as Ireland insisting it cannot “cherry pick” in the looming divorce talks.

Among the other demands listed is that Britain must have “inferior” terms to what it currently enjoys as an EU member for fear that too many concessions will fan calls to leave from elsewhere in the region. Some want the U.K. to keep contributing to the EU budget in return for what benefits it does secure.

France has been the other half of the core of the European Union since the beginnings of the EU project. President Francois Hollande (a Socialist) has strongly insisted that Britain cannot be allowed to ‘cherry pick’ the terms of its new relationship with the EU, suggesting that the terms the EU will eventually reach with the UK will be tough. Nearly all major candidates from the Republican Party have called for a tough stance against the UK in Brexit talks.

The presidential race is evolving, but it seems likely that Francois Fillon of the Republican Party and Marine Le Pen of the National Front (FN) will make it to the runoff stage (where the top two candidates are voted on again, and the winner is elected president). Fillon has likewise expressed support for an ‘uncompromising’ Brexit, while Marine Le Pen has embraced the cause of both Farage and Trump, and if elected, seems certain to call for a French referendum on continued membership of the EU.

France is well-poised to exploit Brexit - it appears to be planning to attract foreign firms and even banks away from London and the UK to its own shores, and so would have an interest in ensuring the UK is left with little advantage at Brexit talks.

Germany is arguably the most influential country in the EU, being its most populous nation and an economic powerhouse. As one of the founding members of the European Coal and Steel Community with France, the predecessor of the current EU, it is the EU’s single largest economic power, and even as it tries to distance itself from the subject given its past; one of EU’s greatest military powers. Successive German administrations have been unabashedly pro-EU, viewing European integration as key to the prosperity and security of the region.

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Germany has been sorely disappointed with the result of the Brexit referendum, and thus favours a hard-line stance on the terms of the UK leaving the EU; the denial of the UK the ability to maintain the benefits of free trade with the bloc without the continuation of the free movement of labour.

In remarks likely to be seen as increasing the chance of a “hard Brexit” excluding Britain from the EU single market, Markus Kerber, head of the BDI, Germany’s largest business group, has said that they would not push for a free trade deal between the EU and Britain, citing the need to maintain relations with the rest of the union.

He said the level of “political ill-will” against Britain on the continent was “much, much bigger than economic rationality” – in part because the bloc’s single market and eastward expansion had been “core UK strategies” and it was now “exactly those countries whose migrants are causing headaches in Great Britain”.

Poland is a relatively new member to the EU, having joined in 2004. In addition, Poland has a keen stake in the issue, as Poles have benefited heavily from the EU’s free-movement policies to find jobs in the UK. Close to a million Poles are living and working in the UK, making them the largest foreign group in the UK.

Deputy PM Mateusz Morawiecki has expressed Poland’s desire to become an ‘intermediary’ between the EU and the UK. While remaining committed to the EU’s fundamental ‘Four Freedoms’, Poland has reservations about the integrationist tendencies of France and Germany, becoming a natural ally of the British. Poland thus wishes to ease the UK into a new agreement that will be constructive for both sides, and minimise the level of ‘pain’ for the UK.

Poland appears to be advocating for the entry of the UK into a European Economic Area style agreement with the EU, which would be a compromise on the interests on both sides. This would of course, come at the price of the UK giving some concessions on the issue of freedom of movement between the two parties.

Denmark has been one of the staunchest supporters of the UK’s demand for renegotiation of the British terms of membership. The current Danish government which was elected in June 2015 has been supportive of the substance of the British demands and, in a more fundamental sense, the UK’s basic approach strikes a chord with the Danish government. The reason for this has historical roots as expressed by the Danish foreign minister, Kristian Jensen, in the Folketing on 29 March 2016:

“Denmark and the UK have a close historical relationship … we entered the EU at the same time… we have been accompanying each other and we have had joint priorities on the way in the struggle to ensure that the EU was … efficiently managed … with a focus on competitiveness [and] job creation, and we often see eye to eye….from a Danish point of view an EU without the UK will be a different EU, a weaker EU…without the same cultural plurality… and …political impact.”

On the same a day a significant majority in the Folketing gave its support to continued UK membership of the UK in a resolution supported by the government. The EU-critical Danish People’s Party abstained (because they wanted a more EU-critical resolution) but made clear that they also wanted the UK to stay in the EU where the UK would continue to fight for reform.

Given the significant overlaps in views on the value of free trade, Denmark would presumably seek UK’s close involvement in the internal market. It would also argue for close cooperation between the EU and the UK on international trade issues. A European Economic Area (EEA) style arrangement may be an aim. Although less likely to be possible, Copenhagen would also support a say for the UK on issues relating to the implications of Euro-zone legislation for non-Euro countries.

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Italy: In a UK-EU exit negotiation, Italy might well adopt a pragmatic attitude and pursue its national interests, leaving aside other political considerations. The Italian government will want to avoid any deal that limits British access to the single market and which could negatively affect economic relations between the two. Indeed, Italy is the UK’s seventh largest supplier and trade relations between the two have been extremely positive, with Italian exports increasing by 7.6% in 2015.

Yet, Italy will not overlook how the UK is also interested in maintaining positive economic relations with the single market. In this situation, Italy might ask to trade British access to the single market with concessions from the UK in the fields of security and migration.

The major political risk that the Italian government envisages is a domino effect, which would see other countries follow the UK by asking for a renegotiation or withdrawing from the EU. There might be some internal political repercussions as well. Indeed, if the EU agrees to a generous exit-deal, it could make Brexit a valuable choice in the eyes of Italian citizens, whose hopes for a brighter future as a member of the EU have been declining. Moreover, Italian Eurosceptic parties could exploit any such deal to acquire political legitimacy at a national level, by criticizing the government’s incapacity to pursue, like the UK, more flexibility in managing national economic and security policies.

Benelux countries

According to the Netherlands Bureau for Economic Policy Analysis, the countries that might have a profound impact because of UK’s referendum is the Benelux countries (Belgium, the Netherlands, and Luxembourg). These three countries have strong economic ties with the UK. With the UK leaving the EU, trade restrictions between UK and these three countries will follow. The report calculated that the GDP of the Netherlands could fall 0.9 to almost 2 percent. A new trade agreement between the UK and these three countries are needed after UK’s exit to insure that innovation and productivity are not compromised. The Netherlands is concerned about the implications of Brexit for economic and political reasons. The UK has a trade deficit with the Netherlands and Brexit could lead to new trade barriers with the single market. So Dutch exports could suffer following a vote to Leave. An additional negative effect is that much of Britain’s trade with the EU transits through the Netherlands (en route to Germany or beyond, and vice versa). The UK is also the third largest source of FDI in the Netherlands. Taken together this suggests that The Hague would be interested in offering the UK access to the single market.

But this would not be a blank cheque. The Dutch government would likely demand Britain pay into the EU budget in return for market access. Furthermore, the Netherlands would welcome Britain’s trade in goods, but services might be viewed differently. Changes to the European services landscape post-Brexit could benefit the Dutch: Brexit could push business services from the UK to the continent, including to the Netherlands. It could also lead to UK-based firms deciding to relocate (part of their operations) to Amsterdam or Rotterdam, cities that compete with the UK’s professional services trade.

In a withdrawal negotiation, the Netherlands would push for guarantees that Dutch workers in London and elsewhere would not be disadvantaged. But the Dutch government might be more lenient than other member-states and allow for some British restrictions on the freedom of movement of workers. It is a concern The Hague shares with Westminster.

Baltic states

The Baltic countries (Estonia, Latvia, and Lithuania) are among the highest supporters of EU solidarity. These three countries regret the decision made by the UK to leave the European Union. However, seeing that the UK has decided to leave the EU, the Baltic countries are now primarily concerned with two issues, which are security and the economic impact because of Brexit.

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The UK has played a key role in stabilizing the region from Russian deterrence. Baltic countries sees UK as an ally in supporting its struggle to uphold sanctions against Russia. Though, with the UK leaving the EU, it will weaken the EU’s interest in actively upholding policies to counter the threat coming from Russia. UK has strong economic ties with the Baltic countries. Even though the UK is not a major trading partner of the Baltic states, the UK is playing a key role in providing jobs for the people of the Baltic countries. Because of the freedom of movement provided by the EU, there has been a rise in emigration between the Baltic countries and the UK. With the UK pulling out of the EU, negotiations between the Baltic countries and the UK should address the fate of the migrant workers that are working in the UK.

Central European countries

Visegrad Group countries besides Poland

Brexit will necessarily impact relations between Britain and Central European Countries (Czech Republic, Hungary and Slovakia). The UK has provided the Central European countries with strong economic growth because of its active involvement in trading with the EU. Other than contributing to their economic growth, the UK has also provided shelter and deterrence for the Central European countries from Russia’s growing presence. Even though there are no immediate effects with the UK leaving the EU for the central European countries, it affects their relations in the long run. Post Brexit debate between the UK and central European countries should be centered among the issues of security and trade.

Ireland shares a currently open land border with Northern Ireland, which is under UK jurisdiction, and furthermore conducts much trade with the UK daily. Brexit would not only threaten that trade, but also possibly shut down the open land border between the divided halves of Ireland and remove one of the foundation pillars supporting the Good Friday Agreement, which put an end to the many years of terrorism and violence plaguing Northern Ireland and the UK due to the Irish Republican Army’s (IRA) struggle to remove the UK from Northern Ireland. Ireland is certain to push for a lenient deal for the UK so that UK-Irish trade and ties will not be adversely impacted.

Questions a Resolution Must Answer

This is a non-exhaustive list of questions which delegates ought to consider when preparing for the conference, and when carrying out negotiations.

• What will be the future UK-EU trade relationship? What rights will the UK have with respect to the EEA and the EU, and what commitments or duties would the UK have with respect to the EU? (e.g. would the UK need to pay a fee to the EU to access its market?)

• How can UK and EU citizens continue to freely travel to, work, live and study in each other’s territory after Brexit?

• Will banks and firms based in the UK be able to access European financial markets as before?

Required Readings

1. HM Government, ‘Rights and obligations of European Union Membership’. April 2016. Read Sections 3, 10-12, 15, 17.3, 18 and 20 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/516501/Rights_and_obligations_of_European_Union_membership_web_version.pdf

2. Patel, Oliver and Alan Renwick, ‘Brexit: The Consequences for Other EU Member States’ https://www.ucl.ac.uk/constitution-unit/research/europe/briefing-papers/Briefing-paper-4

3. EFTA and EEA -

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4. The Vaduz Convention is the updated text establishing the EFTA between its member states. Chapter VIII is on the freedom of movement of labour. http://www.efta.int/sites/default/files/documents/legal-texts/efta-convention/Vaduz%20Convention%20Agreement.pdf

5. The agreement between EFTA and EU states to set up the EEA should be consulted, especially the provisions on ‘freedom of movement of labour’. http://www.efta.int/media/documents/legal-texts/eea/the-eea-agreement/Main%20Text%20of%20the%20Agreement/EEAagreement.pdf

6. ‘What is EU’s trade policy’ by Publications Office, Directorate-General for Trade - this is a short brochure briefly introducing the EU’s emphases when it comes to trade. http://avrupa.info.tr/fileadmin/Content/Downloads/DOC/EU_Trade_and_Economy_docs/en/What_s_Trade_Policy.pdf

7. Look at the different trade agreements between the EU and non-EU states, such as Switzerland, Canada and so on, or news articles or essays concerning these, and understand what were the key issues or obstacles faced during negotiations, as well as the terms of the free trade/customs union agreements.

8. World Trade Organisation, ‘Principles of the trading system’ https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm

Position Paper Requirements All delegates are required to submit a position paper detailing their background research,

country’s stance as well proposed solutions. This background research is to be additional to the study guide content, so as to avoid repeating information.

Only a single document is required for the delegate, which should content research, stances as well as solutions for the, with a maximum of 1.5 pages. Please submit this document in .word or .pdf format.

All position papers should state their country’s position in relation to the topic to be discussed in the council, to be supported by any additional background information they have researched. If your country does not have a specific stance, your position paper may be written from a neutral perspective. The background information ought to be useful for your stance as well as proposed solutions in the later part of the paper. Solutions should be reasonable and feasible for the council, as well as from your country’s stance.

Position papers should be in Arial (font size 12), single spaced and justified. All references must be cited in either the MLA or Chicago style. Your committee, country, and name should be included in the position paper as well. Please avoid using images unless necessary, even state symbols and flags, so as not to clutter up the paper. Your country’s stance and proposed solutions ought to be the main focus.

No plagiarism is tolerated, and any delegate found to be plagiarising will automatically be disqualified from any and all awards. Please avoid submitting late without a valid reason, as this may also lead to award disqualification. Any extensions with valid reasons are to be requested by contacting your chairpersons.

The Position Paper is due 7th February, 2017.

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Concluding remarksDear delegates,

Before concluding this study guide, we would like to make or restate the following points:It is important to bear in mind the focus of the debate. The two days of the conference will lend us just about enough time to deal with a small part of Brexit. We would thus focus on the core issue, which ultimately boils down to the four freedoms. The most obvious example of these four freedoms would be that of the movement of people, which is a very important corollary to the debate - whether Britons can carry on living and working in the EU, and EU citizens can do likewise in Britain.

There are countless other details surrounding the UK-EU relationship, dating from before the fateful referendum, including such obscure details as the fact that EU fishing boats have been free to sail into British waters and catch fish, something which Britain’s fishermen may not exactly appreciate. These little details can form ‘spare change’ in your transactions with each other, and between the UK delegation and the other delegations.

It is extremely important to keep up with the news from Europe each week, if not day. The winds of change are reaching gale force on the continent and political leaders have been forced to rethink their policies as a result. France and Germany are not likely to have the political capital to appease Britain or let it get away with a golden handshake of a divorce deal. Also, political leaders may exit the stage between the writing of this guide, and NTUMUN taking place - already, Matteo Renzi, PM of Italy, has left office following a defeat at a referendum in Italy. Things change fast nowadays, a fact which has also compelled the authors of this guide to revise our writing time and again.

You need to be familiar with your country, its relationship with the EU, other EU states, and with Britain. How much trade does it do with the UK? How about the population exchanges? Also, you need to be aware of the position of your country in the EU, and how it relates to Britain as a result. It is often remarked that Germany is the de facto leader of the EU, which some people call the ‘Fourth Reich’. Britain once acted as an influential counterweight, slowing down the trend towards ‘ever closer union’, something which no doubt other governments in the EU were happy with, especially when their relations with Brussels (or Berlin) were not great. While some smaller EU states might not wish too much harm on the UK, some others are only too happy to profit from Brexit, and steal whatever investment, firms and banks that migrate from the UK to the Continent. Every country has a different calculus when it comes to Brexit.

Further details on the rules of procedure governing this committee will be released in due time.

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