You really couldn’t make it up. The Government has wasted more than two years since the Brexit vote getting nowhere. I suggested in this column many weeks ago that, although we could not rely on the British government wanting a sensible deal, we could probably rely on the EU Commission rejecting whatever madcap scheme the Government came up with. They have. Chequers is dead.
Happily, tomorrow sees the launch at a meeting in the House of Commons of a research document by Economists for Free Trade (EFT), of which I am a member, that charts the way forward, arguing the merits of trading with the EU on World Trade Organisation (WTO) terms. The fightback is about to begin.
We are where we are because of a chronic misjudgment by Mrs May. She staked everything upon achieving her “deep and special” partnership with the EU. She was warned from the start that the EU would play hardball against the timetable. The right thing to have done was to have planned to leave the EU without a trade deal while saying that the door remained open if they wanted to approach us.
Might there still be the option of trying to delay Brexit or even reversing it (if that were legally possible)? Quite apart from the problems that both these courses would encounter, either would surely result in Mrs May quickly becoming toast. More importantly, the Conservative Party itself would be lined up next to the toaster, soon to endure a similar fate at the hands of the electorate.
Another option, I guess, would be to go back to Mr Barnier and offer him more concessions. He may have said no to Chequers in its current form but, as we have seen, Mrs May is quite capable of offering more Danegeld. Yet if that’s the course she takes, then surely the toaster again beckons.
Next in line comes the option of European Economic Area (EEA) membership. This is the so-called Norway option. EEA members are within the single market but outside the customs union. They are able to negotiate their own global trade policy but have to accept free movement of labour with the EU and nearly all EU rules and regulations. This would surely be an ersatz Brexit. I cannot believe that more than 17 million British people voted to leave the EU for Britain to become like Norway. Wonderful though it is, Norway is not the world’s sixth largest economy and a significant global player. Despite Mrs May’s efforts, we still are.
Of course, it is possible to argue that EEA membership could be seen as an interim measure, pending the successful negotiation of a proper trade deal with the EU. But income tax was supposed to be temporary when it was first introduced in 1799. EEA membership would be both a trap and a betrayal. So we are left with two options – a so-called Canada-plus deal and trading with the EU on WTO terms.
Remarkably, something like the Canada deal was offered by the EU Commission but it was turned down by Mrs May, supposedly because it wasn’t ambitious enough and would fail to deal with the Northern Ireland “problem”. A Canada style deal still has some major attractions. It is eminently practical because there is already a template. Moreover, there is the scope to add some valuable things, particularly with regard to services. Hence “Canada-plus”. The Irish “problem” is eminently soluble.
This may well be Mrs May’s fallback position once she realises that Chequers is dead and paying yet more Danegeld will bring on the toaster. The trouble, however, is that this strategy risks landing us in exactly the same position as we are in now, that is to say, behaving as a supplicant to the EU, while the clock ticks. What happens if Mr Barnier offers only Canada-minus?
So we come to the last option. The irony is that the last should have been first. What the Government should surely now do is actively prepare for a no-deal departure. Paradoxically, we would then be more likely to secure a favourable Canada-style deal.
Of course, the Remainerish establishment has spent much time and treasure trying to rubbish this option. And they have deployed the English language to aid their efforts. Apparently, we are unable to “leave” the EU. Instead, we supposedly “crash out”. Moreover, having crashed out, we then career over a “cliff edge”.
Where to start? Leaving without a trade deal does not mean leaving without a deal on anything. There are umpteen nitty gritty issues including aircraft flying and landing rights, membership of joint bodies and many other matters on which it is possible to have an agreement without having an over-arching trade deal.
Second, there is a woeful conflation of short-term disruption with long-term effects. There may well be a few glitches running up to, and immediately after, our departure from the EU but to pretend that these will continue over the ensuing years is idiotic. Our EFT study argues that trading on WTO terms with the EU can deliver significant gains for the UK. Moreover, once we have left, we can try to negotiate a trade deal without the pressure of the ticking clock.
Third, there are quite a few countries that we would join outside the “crash site, over the cliff edge”. They are doing extremely well. Funny that. To name but a few, the United States, China, Australia and Singapore trade successfully with the EU without belonging to it or having “a deal”. They do so under WTO rules. Nor, take note, do they seek to join or form an organisation like the EU. They have noticed what Mrs May and her acolytes apparently haven’t, namely that the EU doesn’t work. If we weren’t members, we would surely not want to join. And if the EU didn’t exist, would anyone feel compelled to invent it?
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