Mark Burrows is a solicitor in a law firm in London. He is a member of the group EFTA4UK.
The Cambridge English Dictionary defines a mirage as “an image produced by very hot air of something that seems to be far away but does not really exist” or also “a hope or wish that has no chance of being achieved.” By looking for a bespoke deal on Brexit, or even considering a no-deal Brexit, the word “mirage” perfectly describes current UK objectives.
The difficulty with the bespoke approach is that it ignores the reality of the UK’s current position. Around 44 per cent of the UK’s economy is dependent upon trade with the EU. Much of that is predicated upon the current regulatory systems. Mutual recognition and common standards and systems are what enable the free flow of freight across the Channel, for example.
By leaving the EU, we are moving outside those current regulatory systems. While it will still be possible to trade with the EU 27, both they and the Commission will want to ensure that inward trade continues to meet those standards. That means more checks, more delays and more, not less, red tape. Trade with the EU will be on their terms, not ours.
A bespoke trade deal could conceivably solve those problems, but the UK faces a problem with timescale and complexity. To convey a sense of how much needs to be agreed in a bespoke trade deal, consider the South Korea-EU treaty. It contains over 300 technical subheadings. It took over seven years to negotiate. On that basis, from where we are now, the UK and EU will need to agree near to one item per day in order for a bespoke deal to be ready on 29 March 2019. That seems unlikely.
To complexity and timing can be added the delays and potential issues arising as the new treaty is ratified. Each country in the EU-27 will need to ratify whatever is eventually agreed. That alone could be problematic. It took only the regional Walloon Parliament in Belgium to nearly derail CETA, the trade deal with Canada.
These are the problems that are driving the UK into a “transition” period which is likely to be both lengthy and ultimately expensive. It may also prove to be destructive, since a UK in limbo is not likely to be an attractive place to invest and do business. Certainly, no long-term planning can take place while the outcome is uncertain.
Of course some believe that no deal is necessary, and that the UK can and should just walk away. If a bespoke option seems very far away, then this approach can almost certainly be said to not exist. No major country trades with the EU on WTO rules alone.
The irony is that a less complicated and much more realistic approach already exists, and the UK helped to create it.
The EEA (European Economic Area) is an agreement created by the participating states of EFTA (the European Free Trade Area) and the states of the EU. It creates a single trade area with compliance standards enforced internally, mutual recognition and with additional close customs cooperation. It enables significantly frictionless trade between the participating countries. The Sweden-Norway border is a case in point. (Switzerland is in EFTA but is not an EEA member, instead relying on nearly 200 bilateral treaties with the EU, most of which predate the EEA agreement.)
If the UK were to decide to stay within the EEA then, at a stroke, a number of problems would be overcome. The UK would retain compliance and regulatory systems, so business can continue and can plan for the future. Further, the technical areas to agree by virtue of leaving the EU reduce dramatically, ending the prospect of a prolonged transition period.
As the EEA is an agreement between EU states and EFTA states, then the UK would need to rejoin EFTA – but that of itself would be a positive step. EFTA is the most successful free trade group in the world. Its members are regularly at the top of the global list for GDP, and indeed the world “happiness” rankings. Approached positively, and with the intention of helping EFTA to achieve its potential, there is every reason to believe that this is possible.
Staying in the EEA by rejoining EFTA would also probably solve the ratification problem the UK faces. The UK is already a signatory to the EEA. If EFTA membership dovetailed with leaving the EU, then we would move from one side of the EEA to the other, so to speak. Austria did this when it moved from EFTA to EU membership in 1995. It was already an EEA member, and simply remained so. There is no reason to believe that this “door” cannot swing both ways.
This approach fully honours the referendum result, and is a sound first step to take as an independent country. The UK would leave the EU, and do so in a manner that minimises disruption. Powers repatriated from the EU provide the opportunity to forge new policies on trade, tax, agriculture and fisheries, amd it will also be possible to create new alliances on global standards bodies free from the EU common position.
It is time to stop chasing a mirage and to be practical. A deal is there to be done. We should take it.