Theresa May has proposed that Britain and the EU should negotiate a comprehensive free trade agreement (FTA) under the terms of the two-year Article 50 process. The Prime Minister is presumed to have opted for this approach as a means to “take back control” of regulation, immigration and money sent to the EU.
I find it fascinating that the three topics I described in October 2015 as “the unholy and divided trinity of the Brexit debate”, the three topics that Tory “eurosceptics” have been “banging on about” for decades, which failed to arrest, let alone reverse even a single solitary slither of EU integration, are the same three topics that are now being presented to us as the foremost political objectives for the forthcoming exit negotiations.
In that earlier blog post, I advised people to pay attention to the fact that the featured Daily Telegraph article, which noted that “immigration, sovereignty and the EU budget are the main reasons for Britons’ hostility to the EU”, was written by an employee of the Centre for European Reform—an organisation that routinely receives operating grants from the EU.
What I foresaw, and wrote about in more detail elsewhere, was the legacy europhiles and legacy eurosceptics setting us up for a win-lose scenario, whereby, even if we won the vote, we may still lose the battle to leave the EU. In short, Vote Leave proferred a set of undeliverable objectives, which, I am told, must now shape the UK’s EU withdrawal.
That argument necessarily ignores the fact that Vote Leave refused to present referendum voters with a Brexit plan. The fact that the “leave” campaign had “no plan” was a persistent refrain throughout the referendum debate. In the absence of a plan, the now common refrain that both the “remain” and the “leave” campaigns were “clear” falls more than a little flat.
Certainly, the “remain” campaign spent much of the referendum period promoting misleading rubbish about every pre-existing alternative to EU membership. The most enduring legacy of the Vote Leave campaign, it appears, was to aid the “remain” camp in shutting down what Jonathan Lindsell described as the “safest Brexit option”, rejoining EFTA so as to participate in the Single Market via the EEA agreement.
To that end, it is worth looking in more detail at what other “alternative arrangements” the Vote Leave campaign promoted. Campaign Manager, Dominic Cummings, repeatedly sought to problematise the idea of a negotiated exit via Article 50, and, in January 2016, Daniel Hannan said that only a “vote to leave” would prompt the EU to offer “proper concessions” and “associate membership”. Why any of this should be regarded as compelling evidence for the UK government to preclude any particular exit route is frankly beyond me.
Indeed, it is worth recalling the other campaign messages which are apparently shaping Mrs May’s approach. The messages fall broadly under three main headings, the same three headings highlighted by the employee of the Centre for European Reform in his Daily Telegraph article, the same three headings I warned could lead us down a cul-de-sac from which there may be no escape; regulation, immigration and money.
Now, let us consider each of these in the context of a comprehensive FTA. In terms of money, obviously the FTA will require administration. That is not going to be free. In terms of regulation, a comprehensive FTA will require an arbitration authority and a commitment to regulatory convergence, which will require businesses that want to sell their goods and services into the Single Market to comply with the appropriate regulation. And, finally, the big one for many people, on the issue of immigration or free movement (it would be helpful if we could start to tease the two apart), any comprehensive FTA, which includes trade in services, will of necessity include provisions for free movement of workers.
It seems to me that in setting her end game as an FTA, nominally as a sop to the Tory right, Mrs May is pursuing a far more risky and uncertain negotiation than necessary in order to arrive at a position that broadly resembles Single Market membership as part of the EFTA pillar of the EEA agreement—without the advantages associated with that arrangement—the main difference being that this FTA is being presented to us as our “final settlement”.
The EEA interim would, by contrast, be a temporary staging post, a comparatively safe harbour from which the UK could rebuild its domestic administration and policy-making framework, pending further negotiation to arrive at a much more ambitious final settlement.
The process leading to the establishment of the EEA agreement started in the mid 1980s with EFTA and what was then the EEC agreeing to pursue the creation of a ‘European Economic Space’. Subsequently overtaken by events, the idea proposed by the then President of the European Commission, Jacques Delors, would have entailed new administrative and decision-making structures. To this day, the desire to “regularise” its neighbourhood policy, remains an important EU objective.
That gives us our opening. An imaginative British Prime Minister could present Britain’s EU exit as an opportunity to revive the idea of the European Economic Space (EES) as a means to put relations with our nearest neighbours and strategic partners on a solid foundation. In light of the WTO Agreement on Technical Barriers to Trade, as a result of which the EU increasingly adopts international standards as the basis for its technical regulation, and the Vienna and Dresden agreements, which are intended to bring EU and international standards into even closer alignment, the UK could set as its end game, not an FTA, but a new framework for co-operation in the areas of trade and technical regulation founded upon the “International Model” pioneered by UNECE.
This new settlement would extend economic co-operation across the whole of Europe, encompassing not only the EU27 (minus the UK) but the entire European geographical area, with each nation wielding an independent right of initiative and of opt-out. This would also give the UK government a positive objective to work towards and a path to follow as we transition from an EFTA/EEA framework to an agreement which would work longer term.
This is not as far fetched as it may sound. The UK is still an important country and adopting a constructive approach, which offers the EU the opportunity for a win-win in the exit negotiations, could engender the goodwill to work productively with our nearest neighbours and geopolitical allies throughout the withdrawal process and onwards into the future.
By contrast, Mrs May’s desire “to have reached an agreement about our future partnership by the time the two-year Article 50 process has concluded” could see the UK locked inside the EU for a God knows how long, pending completion of the “implementation phase”. To quote John Lydon, “Ever get the feeling you’ve been cheated?”