UK should commit to Canada-US model in Brexit talks

It is imperative PM May seeks as little rupture as possible and uses Britain’s clear political, diplomatic, economic and military advantages to ensure it remains important to the EU.

THE overarching objective for Theresa May’s patchwork government of Remainers, Leavers and Northern Irish Unionists is reaching the best possible terms for the UK’s upcoming withdrawal from the European Union. With increasingly defined parameters from No. 10, it is clear the UK will not budge on ending the free movement of people and will continue to seek to secure trade deals with dynamic emerging markets, whilst aiming for a degree of regulatory convergence with the EU. Detractors in Brussels continue to groan over the prospect of Brexit whilst the UK makes clear policy overtures to the union; how their negotiating positions converge will be a subject of great scrutiny.

Upon becoming Prime Minister, May made a strong case of reiterating the role the UK currently plays and indeed should continue to play in keeping Europe safe. At the recent Munich Security Conference, she expanded her proposal, calling for a post-Brexit treaty between the EU and UK focusing on security. She further communicated that such a treaty could be ratified before the terms of Brexit were agreed. In suggesting that the UK would be prepared to accept the continued oversight of the European Court of Justice concerning the UK’s use of the European Arrest Warrant and Europol, May was alluding to the two sides remaining close on issues of security. True to form, JeanClaude Juncker, the European Commission President, warned Britain not to try using security cooperation as a bargaining chip. In a reality where Britain has the best-equipped armed forces on the continent and the world’s leading intelligence agency, it will remain central to European security — a fact that EU leaders would do well to heed.

A great deal of skepticism surrounds the UK’s negotiating position. Increasingly clear in its suggestion that it remain close to the EU, there is concern in Brussels that, long-term, the UK may be better off. Decision-makers on the continent are well aware of how the UK managed to obtain exceptional terms on joining the EU. During the UK’s long relationship with the bloc, it has secured key opt-outs whilst also shaping the union’s future to some degree. It is for this reason that the EU is adamant the UK can only have one of two possible exit scenarios: Remaining bound by single market rules but with no voting rights (known as the Norway option); or indeed having a basic deal such as that which exists with Canada, imposing significant restrictions on trade. Voices within the EU differ, however, with President Donald Tusk saying last week that the EU does “not want to build a wall” with Britain and that a free trade deal should be sought.

Conscious of its impending withdrawal, the UK is keen to cooperate. May has acknowledged that leaving the EU will come at a price, but she is keen to pledge that the UK will match EU rules on goods, competition, trade and state aid, and has proposed that it remains part of EU agencies covering medicine, chemicals and aviation. In her readiness to reach a workable arrangement with the bloc, she has been keen to note to French President Emmanuel Macron and others that Britain is not seeking preferential treatment, but rather all free trade deals involve bespoke arrangements.

The government’s intention to leave the customs union and negotiate a free trade agreement is central to negotiations. Since 1968, the absence of customs controls and tariffs have allowed for free trade in goods crossing the shared borders of the EU. The tariffs on goods from outside the bloc are particularly high — 10 percent on vehicles and 54 percent on dairy produce — which are intended to protect EU producers.

By proposing to negotiate a free trade agreement with the EU, the UK hopes to agree to zero or near zero tariffs on goods moving between it and the continent. This will allow it to continue trading with the EU but also to negotiate independent deals with other countries. The key test of this theory is Ireland. According to the December UK-EU agreement, unless arrangements are made to ensure that no hard border is imposed between Northern Ireland and the Republic of Ireland, the former will remain fully aligned with the customs union and single market. This is despite government promises that Northern Ireland will not be subject to rules different to the rest of the UK.

As so often before in British history, the Irish question will now also play an important role in negotiations with the EU. This is more acute as May’s majority is dependent on the support of Northern Irish Unionists. Should the EU insist on a hard border between north and south, they will have weaponized the uneasy peace that exists and be in a position to strong-arm the UK in withdrawal negotiations. It is imperative therefore that the UK seeks as little rupture as possible and uses its clear political, diplomatic, economic and military advantages to ensure it remains important to the EU.

For the UK to remain outside of a free trade area would be disastrous, so it must therefore commit itself to the Canadian-US model, whereby Canada has ensured it is in line with US regulations so as to allow the free movement of goods with its large economic neighbor.

Zaid M. Belbagi is a political commentator, and an adviser to private clients between London and the Gulf Cooperation Council (GCC). Twitter: @Moulay_Zaid