Brexit was (and is) the right direction for Britain. But did Prime Minister Theresa May choose the wrong way to get there in her major address on January 17?
Extracting the U.K. from Brussels and the European Union is, so far as its political structures are concerned, relatively straightforward. Sorting out a new trading relationship with the EU after more than 40 years of economic integration is more complicated. Forty-four percent of British trade is with the EU, including its important financial-services sector. Simply leaving the EU (“hard Brexit”) would place the U.K. outside not only a tariff barrier but also its common regulatory system, a.k.a. the single market. Other things being equal, that would impose additional costs on British exporters. Some economic, business, and establishment voices argue that there should be some way of avoiding this rupture — some halfway house such as remaining in the wider European Economic Area (EEA) to ensure Britain’s continued membership in the single market, enable London to restrict EU migration into the U.K., and give business the stability and certainty it demands.
Mrs. May has opted for a harder road. In what has generally been treated as a powerful speech to EU ambassadors, she proposed a twelve-point plan for Brexit that would remove Britain from the single market, the legal supremacy of the EU, and in practice its customs union and common tariff barrier, too. In the forthcoming negotiations with Brussels, she will seek “the freest possible trade in goods and services between Britain and the EU’s member states” once Britain has left the Union. In this post-Brexit relationship, she wants a new “strategic partnership” between the U.K. and the EU. She emphasizes that a post-Brexit Britain will remain active in European affairs, notably as the leading European military power in NATO. She recognized prudently that there might need to be a transitional period before full Brexit is achieved (but also that it need not take four years longer than the Second World War). And she expressed the positive view that Britain and Europe could both be happier and more prosperous as good neighbors than as members of an unhappy family.
All that said, Mrs. May’s conclusion was clear and unqualified: Britain was leaving the EU. The prime minister would prefer that to be the outcome of a mutually beneficial deal on continued free trade. If such a deal proved unavailable, however, Britain would still leave because “no deal . . . is better than a bad deal.”
If this strategy proposes a harder road than business wants, at least initially, it is also the only road that leads to the recovery of the self-governing democracy that the Brits voted for when they voted to leave the EU. All the talk of “hard” and “soft” Brexits has obscured, as those who coined the terms perhaps intended, exactly what leaving the EU entails. To grasp that, consider what the EU consists of. Its three main economic pillars are the customs union, the single market, and the supremacy of EU law. Being in the single market means being subject to EU law and regulation. EU leaders, including Angela Merkel, have all insisted repeatedly that single-market membership absolutely requires the free movement of labor throughout Europe and therefore precludes a return of border control to London. And membership in the EU customs union means that a member-state cannot negotiate free-trade deals with other countries — a provision that would negate one of the UK’s most important gains from Brexit, namely, potential free-trade deals with the U.S., Australia, Canada, etc.
The Economist, which is passionately Remainer in its sympathies, makes this point clearly:
If Britain wants to benefit fully from the single market, which eliminates all tariff and most non-tariff barriers as well as customs controls, it will have to abide by most European laws, including the free movement of people from other EU countries and a huge clutch of single-market regulations that are ultimately enforced by the European Court. That is what countries like Norway and Switzerland, which are outside the EU but largely inside the single market, have to do; they also pay into the EU budget.
In other words, one cannot stay within the single market and the customs union under EU law and leave the EU. It’s logical nonsense. Under these conditions Brexit would mean Remain. And those Remainers who argue that, in voting for Brexit, Britons didn’t vote for leaving the single market quite literally don’t know what they’re talking about, just as six months ago they apparently didn’t know what they were voting about.
Nor can one square the circle by removing the word “fully” from The Economist quote above. Of course, it would be nice if Britain could strike a deal to get Britain freer trade with the EU without these other encumbrances. Both Theresa May and the “soft Brexiteers” are proposing just that. One or another might succeed or not. Paradoxically, however, it looks easier to achieve this result by her proposal of an external post-Brexit free-trade deal than by their attempt to overhaul entrenched internal EU rules and institutions one more time.
EU leaders as unimpeachably ‘European’ as Jacques Delors and Valéry Giscard d’Estaing have in the past argued that Britain and Europe would both benefit from an amicable separation.
Despite these discouraging omens, some Leavers support a version of “soft Brexit” because they see it as the first step on a gradual road to full Brexit with no disruptions. This is another nice idea, but it’s fatally politically naïve. Brexit is the great political divide of British politics for the next few decades. It will have an impact on British policy far beyond economics and business. Opposition to it from powerful interests remains strong, if divided and temporarily ineffectual. It has taken long and dedicated resistance to EU supremacy from (largely conservative) democratic patriots to get to the EU exit door. Accepting anything less than Brexit now risks taking the steam out of their campaign and sedating public opinion with the idea that a modest reform (e.g., the return of control over fisheries policy) gives us all we want. And what reason exists for doing so when Brexit is within grasp, backed by the voters, embraced by the governing party, and led by a popular prime minister who has shown unexpected determination and eloquence in making the case for it?
There are many other matters germane to the question of whether to seize or delay the opportunity of Brexit: Deciding to leave the EU is not an attack on it, as some criticisms from Brussels apparently imply, and provides no justification for “punishment” or retaliation; EU leaders as unimpeachably “European” as Jacques Delors and Valéry Giscard d’Estaing have in the past argued that Britain and Europe would both benefit from an amicable separation; the Brits would not be constantly obstructing the advance of the Franco-German express with their inveterate opposition to federalist schemes they don’t want to be part of, such as a European Army; fears expressed by British business that a tariff barrier of about 4 percent would put them at a major disadvantage sound suspiciously anti-entrepreneurial and don’t seem to be supported by small businesses or actual entrepreneurs like Sir James Dyson; leaving the single market would mean the opportunity to reduce regulations, generally agreed to be excessive, on business and so would represent a gain for most small or local UK companies; and more than 100 countries from Australia to Zambia seem to have little difficulty in leaping over the EU barriers that so alarm the UK’s business bureaucrats.
But the central choice is a very simple one:
It’s now or never.