January 12, 2017
“Have you gone mad?”, is the most frequent question from mainland European friends on the sore-vexed issue of Britain’s Gadarene flight from Europe. They are of course not questioning my sanity, but that of the thirty-seven per cent of the British electorate who voted on June 23 to leave the European Union. For without a doubt, whatever deal or deals are eventually stitched up between this disunited Kingdom, the European Union and the rest of the world can only be worse than what we already have.
Economically, politically, socially, intellectually and spiritually, we as a nation will be worse off. Most importantly, the burden of this stupidity will be borne by the generations which follow us, those who have witnessed indeed been present at, most of the major steps towards European unity of the last sixty years. In the process of detaching itself from Europe politically, while at the same time attempting to retain the benefit of preferential trading arrangements, the UK would be involved in a negotiation where, to quote trade lawyer Gonzalez Garcia*, the “position of the UK in many aspects is to maintain the status quo and in other aspects to go backwards.”
In practical terms we shall truly be going backwards. What is clear from the statements of the hard Right puppeteers, currently dangling the unfortunate Theresa May in the firing line of European hostility, is that any new arrangements, including free access for EU citizens to the UK, contributions to EU funds or jurisdiction of the European Court are precluded. In addition, they want the freedom to negotiate the UK’s own trade agreements with the rest of the world. These conditions clearly exclude access to the Single Market on the present basis. Creation of a UK-EU customs union is also precluded because it would prevent the UK from negotiating new trade agreements with non-EU countries and groupings.
Effectively, it leaves only two alternatives: a bespoke UK-EU trade agreement, on the basis of existing EU association agreements or no new UK agreement with the rest of Europe and consequent subsiding into trading on the basis of WTO rules. All other alternatives, EEA or EFTA membership, or a Customs Union are excluded because they include one or other of the conditions rejected by the Brexiteers now running the UK Government. Should the UK propose an association agreement it would be likely to be rejected by the EU27 because it would require treaty changes and, more importantly, would look far too much like the ill-famed ‘have your cake and eat it’ formula suggested by the UK’s off the planet Foreign Secretary.
Most likely is a slide into the UK trading on WTO terms on the basis of what is laughingly called the ‘most favoured nation basis’ – in practical terms the least favoured nation. This would involve the burden of tariffs on UK exports to Europe – and countries in other FTAs – in excess of 40% on food, agriculture and some industrial products. Such disincentives would be ruinous for the most export orientated sectors. Not so much Brexit as Wrecksit.
- Evidence to UK House Of Lords on ‘Brexit the Options for Trade’.