Saturday, 4 February 2017

The Brexit White Paper

The government has now published its 77 page white paper on Brexit, setting out its plans in slightly greater detail by elaborating on the points made in Theresa May’s recent Lancaster House speech. The headline of that speech was the announcement that the government would seek a hard Brexit in the sense of leaving the single market.

The white paper re-affirms that, but also makes it clear that the UK will seek, via a new trade agreement, to take in elements of the single market in certain (unspecified) areas and to maintain a great deal of regulatory harmonization with the EU across a very wide range of areas. This opens up significant questions about the extent to which the UK will have to comply with future changes to EU regulations over which it has no say. The plan makes it clear that the UK will leave CJEU jurisdiction, but posits some form of dispute resolution system with the EU and there is also brief reference to some form of ‘civil judicial cooperation’.

On the inter-related issue of the customs union, the white paper indicates that it wants a modified, or new, agreement which exempts the UK from commercial policy (so as to be able to make its own trade deals) and the common external tariff (this also means that the UK will definitely have the fiendishly complex task of negotiating new tariff schedules with the WTO), but continues to allow tariff-free trade and retains point of origin rules so as to avoid border checks.

What all this seems to amount to is the recreation of almost all of the features of single market membership but avoiding, at least in name, CJEU jurisdiction and, of course, free movement of people rules. There would also be no formal contribution to the EU budget but ‘appropriate payments’ would be made to programmes the UK wished to participate in. There is no indication of what the scale of these payments might be (so much for the £350M week for the NHS promise of the leave campaign) nor any mention of the exit charges bill estimated by the EU to be £50 billion. Nor is there any assessment at all of the costs of enacting Brexit, or how this compares with the costs of other Brexit models.

The big unknown in all this, clearly, is whether the EU would be likely to agree to such a deal which is indeed in essence a ‘have cake and eat it’ strategy. The white paper implies several times that the EU will see this as in their best interests, in part on the basis of the familiar Brexiter trope that the UK has a trade deficit with the EU as a whole. In many places the document indicates areas for detailed negotiation, the clearest non-negotiable being free movement of people. There must be serious doubts about whether the EU will agree to any of this given that their guiding principle will be that any terms for non-members must be worse than those enjoyed by members, and that political as much as economic interests will shape what were this week described as ‘humungously complex’ negotiations.

Almost all of the contents of the white paper are unsurprising (in the light of the Lancaster House speech) and of course destroy any residual hope of soft Brexit. But on my reading, at least, it is not clear that the additional detail provided should give much joy to hard Brexiters either. Even if the UK gets all that it wants all that will really have been achieved is to recreate at great cost and complexity a great deal of what already existed before. Of course, for some, an end to free movement of people is worth paying any price for, but it should not be assumed that a future UK immigration policy would necessarily reduce immigration numbers, it would just make the process more complex and costly (and, of course, will also make it more complex and costly for British people to go to the EU).

The other thing that will please Brexiters is the plan to be able to do our own trade deals. But that, too, now looks less distinctive from being in the EU than might be thought. Liam Fox has recently indicated (£) that on exiting the third party trade deals that the EU has, the UK will seek to re-instate them as UK-only deals on identical terms. It’s far from clear that this will be possible, but suppose that it is: what has been gained? At most, the possibility that on unknown terms at an unknown point in the future there will be new deals with additional countries (as is also the case for the EU).

Brexiters will no doubt be delighted about the idea of ‘taking back control’ but as I have indicated it looks to me as if much of what they mean by that will simply go to back door routes. That’s not surprising because all international trade entails trans-national institutional structures. In fact, the most remarkable sentence in the white paper reads thus: “Whilst Parliament has remained sovereign throughout our membership of the EU, it has not always felt like that.” (para 2.1) This is a truly astonishing statement because it confirms that the central plank of the leave argument – that the UK had lost its sovereignty – was completely untrue. It was just ‘a feeling’. So, to assuage that, we are to turn our economy and polity upside down to create, it would seem, a situation where it ‘feels’ that a sovereignty never lost has been regained!

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