Friday 22 November 2019

May's mistake is a train-wreck and Ireland is stuck on the tracks

Britain must climb down from customs union policy if Brexit talks are to have a happy outcome for everyone

British Prime Minister Theresa May Photo: PA
British Prime Minister Theresa May Photo: PA
Colm McCarthy

Colm McCarthy

David Cameron drafted alternative speeches as he awaited the result of last year's fateful and too-close-to-call referendum. Outside 10 Downing Street on the morning following the narrow rejection of EU membership, he chose Document No 2. It said, more or less, "Oops, sorry, I'm out of here".

There followed an extraordinary Tory party leadership contest in which the various candidates shot one another, or themselves, on live TV, with the exception of Theresa May, who prevailed either on merit or because her gun jammed.

Mrs May campaigned on the Remain side and has presided over a government which has chosen the most damaging possible interpretation of the referendum's thin Leave majority, risking a comprehensive rupture with Britain's natural trading partners and political allies in Europe.

The UK electorate did not vote for departure from the single market and customs union: they were never asked. It was open to the incoming Conservative administration to comply with the electorate's verdict while minimising the economic and diplomatic damage in Britain and Europe.

Instead, Mrs May has populated her cabinet with Brexiteers and has chosen an idiosyncratic interpretation of the referendum result. It is understandable that she decided to implement the electorate's verdict, however foolhardy David Cameron's resort to the very un-British device of democracy by plebiscite. Her persistence with the extreme and divisive version of Brexit has turned a mistake into a train-wreck and it is Ireland's misfortune to be stuck on the track.

Michel Barnier's remarks in Brussels last Thursday need to be seen in the context of the May government's chosen Brexit policy. It is not, as the tabloid press portray it, a petulant response to the electorate's decision in June 2016 ("EU insults the British people yet again" according to the London edition of the Daily Mail). The EU treaty's Article 50 provides explicitly for countries to depart and the remaining 27 member states cannot dispute, and have not disputed, the UK's entitlement to make its own decision in its own way.

But there is no legal requirement, nor is there any constitutional imperative, that they should do so in the disruptive fashion that May and her colleagues have chosen.

There is no requirement in any EU treaty that departing members should quit the single market - non-members can participate on the Norway model - nor is there any need to sever all connection to the customs union: the arrangement with Turkey provides a template. British policy contains three distinct strands: quit the European Union, quit the single market, and quit the customs union. The first, departing the EU, was the choice of the electorate in June of 2016. The other two are choices of Mrs May's government, which was quite free to implement the electorate's decision in a less disruptive manner.

Michel Barnier's insistence that the integrity of the EU's internal market be defended is not a scrap with the British electorate, it is a predictable reaction to the course which has been selected by the British government over the 15 months which have elapsed since the referendum.

Barnier cannot go along with the fairy story that the European Union can deconstruct its internal market in order to minimise the consequences for Britain of British government choices.

There is a political motive for leaving the single market and it is based on an interpretation of the 52-48 Leave majority at the referendum last year. Free movement within the EU means no controls on immigration, and free movement is a core single market principle which the member states are unwilling to abandon.

The May government has chosen to exit the single market essentially in order to "take back control" over immigration from other EU countries. Immigration from outside the EU is perceived as having created social frictions in Britain for two generations but it will be not be any more controllable because of Brexit.

Politicians around Europe are understandably mystified that such a major rupture in Britain's relations with its neighbours and allies could be motivated by a newly-discovered aversion to an influx of workers from Poland and Latvia, people whose arrival in Ireland in (relatively) greater numbers has created no frictions whatsoever.

The government's capitulation to this strand of Brexiteerism looks, as seen from Brussels, like a choice of xenophobia over economic common sense.

The planned departure from the customs union is different. The customs union is about tariffs, and membership requires that participants charge zero tariffs to one another and common tariffs to non-members.

British ministers extol constantly the merits of worldwide free trade while seeking to extract the United Kingdom from the largest free-trading bloc ever likely to be available to it.

The motive is the chimerical attraction of unilateral British free trade deals outside Europe, not possible inside the customs union which negotiates collectively.

There is even a dedicated cabinet minister, Liam Fox, intrepid master of the good ship Global Britain, who rides the trade winds across the great oceans to exploit the wonderful opportunities allegedly denied by customs union membership.

Fox is legally precluded from negotiating any trade deals with anybody until Brexit Nirvana has been achieved and was politely informed in Japan recently that his canny hosts are more interested in a trade deal with, surprise, surprise, the European Union.

His tireless cabinet colleague and wannabe trade-booster Boris Johnson made it as far as New Zealand last month, a country which does less trade with the United Kingdom than the county of Cork.

This pointless globetrotting looks rather demeaning for a large European country. There is, appearances aside, something faintly ridiculous about the Brexiteer attachment to exiting the customs union.

It is not as if detailed studies of the costs and benefits have not been undertaken. They have, and all of the studies conducted by international trade experts have concluded that there is no realistic prospect of unilateral trade deals outside Europe which would compensate for the losses in Europe. Happily there are some non-experts who take a different view and the Brexiteer precaution, enunciated by Michael Gove before the referendum, dismissing the views of economic experts, has come in handy here.

That the good ship Global Britain will eventually make distant landfall and trade successfully with the grateful natives is an article of faith, and accordingly not vulnerable to counter-argument based on tiresome evidence.

There is a perceived political reason for quitting the single market, namely the White European menace, but the case for quitting the customs union is just a mistake; in the language of the football pundits, an unforced error.

There will be no happy outcome for Britain or Europe without a climb down by the British government. A climb down on the customs union would help minimise the damage in Ireland and may prove possible not least because Britain really is going to leave the customs union on March 29, 2019.

Only EU members are in the customs union and Article 50 has been triggered. A successor arrangement tantamount to continuing membership is conceivable, with zero-tariff access in Europe and the benefit of future EU trade deals extended to Britain on condition that it negotiate jointly with its ex-partners.

There could even be gainful employment for Liam Fox in Brussels.

Sunday Independent

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