The missions possible and improbable on the table
On the eve of the first full week of Brexit talks, there has never been more uncertainty about what Britain wants from the process. As a former cabinet secretary, Gus O’Donnell, pointed out at the weekend: “Cabinet members haven’t yet finished negotiating with each other, never mind the EU.” Officially, the government remains wedded to a “hard” strategy of leaving the single market, customs union and European court of justice, while threatening to abandon talks if full trade access is not guaranteed. But even UK officials doubt this is possible and everyone is looking for a plan B. What are the options for a softer Brexit? Perhaps the most radical but obvious solution would be to seek membership of the European Free Trade Associa-
tion, which we were in between 1960 and 1972. Designed as a stepping stone toward EU membership, this prosperous club of Norway, Iceland, Switzerland and Liechtenstein could now serve the same role in reverse. It would give us access to an internal market of four nearby economies, and a host of existing global trade deals. Joining just Efta would require freedom of movement, but only among its four members.
“It could provide an elegant and relatively swift solution to some of the challenges facing the UK in securing postBrexit trade agreements with non-EU partners,” concludes new LSE research. “The combination of continuity and flexibility could prove very valuable.”
More contentious would be using Efta to access the European Economic Area (EEA) and the wider single market of the EU, as Norway does. This option involves accepting EU rules on freedom of movement, regulation and payments, with little influence. But if these are the price of single market access either way, Efta at least provides a framework.
A customs union
A less onerous alternative to the EEA might be to seek more limited access to European goods markets by striking a new customs deal with the EU, as Turkey has done. Not to be confused with the EU’s own internal customs union, which is reserved for members, this would guarantee the tariff-free frictionless trade sought by both Tories and Labour, but (possibly) without all the burdens of full single market participation. A customs union would come with a cost, especially in terms of Britain’s freedom to strike new international trade deals. However, Treasury research suggests the benefits of continued access for manufacturing supply chains far outweigh the unproven allure of far-flung new export markets. Proponents point out the Department for International Trade might be able to seek new deals in the service sector instead.
Some Tories would like to see Britain seek associate membership of key regulatory agencies, such Euratom and the European Medicines Agency, to soften the blow of leaving the EU sector-bysector. At the very least this is likely to involve abandoning Theresa May’s opposition to the jurisdiction of the European court of justice. Associate membership would also only swell the size of Britain’s divorce bill. But replicating decades of bureaucracy from scratch without any international co-operation may cost more.
Vince Cable and Tony Blair have both recently predicted that Brexit may yet be abandoned entirely. If Britain chooses the softer Brexit routes above, it would have to accept most of the political compromises of EU membership anyway. A few years of pressing our face to the glass like Norway may be just what it takes to change Britain’s mind.
Vince Cable (below) and Tony Blair have both recently predicted that Brexit may be abandoned entirely