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Henry Newman is Director of Open Europe.
At Chequers this Friday, Theresa May is hoping to get her Cabinet to agree to a new Brexit policy. It seems possible that this proposal will have a close resemblance to Open Europe’s compromise plan which my colleague Stephen Booth detailed on this site a month ago. Yet in making a new offer to Brussels, ministers must be careful not to concede too much.
Open Europe’s plan would mean leaving the Single Market and Customs Union, with the UK and EU diverging on services, but staying aligned on goods. Inevitably, the devil will be in the detail. But our intention was to offer up a model that was negotiable with the EU, and which would be acceptable to the majority of pragmatic leavers and remainers.
At last week’s European Council meeting, Theresa May offered EU leaders a taste of the forthcoming White Paper. EU figures including Michel Barnier quickly moved to resist UK goods-only participation in the Single Market, claiming that would divide the so-called “four freedoms”. This behaviour fits into a classic EU negotiating pattern of rejecting a concession as “insufficient” before it has even been formally tabled.
So inevitably the Government will be under pressure to concede further, including by softening the Prime Minister’s red lines on immigration and the role of the European Court. But ministers should proceed very cautiously, and Brussels should recognise that in committing broadly to follow goods regulations the UK would already be making a very substantial concession.
Open Europe’s view remains that the offer we laid out of aligning on goods was close to the maximum the UK could accept. If Brussels is not interested in discussing that sort of arrangement, then the UK will reluctantly have to seek a looser relationship, modelled on a more traditional free trade agreement.
In yesterday’s Times there were reports that the UK’s Brexit sherpa, Olly Robbins, has warned Cabinet that the EU will likely reject a UK partial Single Market relationship. Perhaps this briefing was intended to press ministers into further concessions. It also however reflects the current EU position.
Of course, the UK can point to multiple examples of partial Single Market relationships which the EU has agreed from Switzerland, to the association agreement with Ukraine. Defenders of Brussels claim the EU doesn’t “like” the Swiss deal (as if that was a principled objection) and that the Ukraine agreements was granted for unique reasons (neglecting the fact that Moldova and Georgia have similar deals, and that Brexit is a unique circumstance in of itself).
Brussels is willing to allow Northern Ireland goods-only access to the Single Market, in its version of the Irish backstop. The Commission accepts this is “cherry picking”, but defends it because of Northern Ireland’s special circumstances and small size. (Yet Northern Ireland has a population bigger than Cyprus, Malta, Luxembourg and Estonia; and an economy larger than a handful of member states).
Even Norway doesn’t sign up to the full EU internal Market but, whatever the facts, it’s possible that Brussels will refuse to move. Ultimately the EU may not allow the UK free movement of goods without demanding the free movement of people and a major role for the European Court.
The UK can point to all the precedents it likes, but if Brussels stubbornly refuses then there’s not much that can be done. As the BBC’s Europe Editor Katya Adler suggests, the EU doesn’t want to give the UK what it wants because it “does not want to run the risk” of other countries asking for a perfect deal.
Ahead of the Chequers summit, some in Westminster are keen to press the Government to offer the EU privileged arrangements on migration. One senior Tory even put it more starkly to me – the aim of some in Cabinet is to continue free movement in all but name.
In our Beyond the Westminster Bubble report, Open Europe found strong support for a balanced and open migration regime post-Brexit. We revealed overwhelming backing for a system allowing those with job offers to come to the UK. But we also found strong concerns including about pressure on public services and benefits. So any future migration policy must be something other than the continuation of the status quo ante with different terminology. Brexit must mean the UK taking back control of immigration policy.
Some are also suggesting that the UK will have to soften it’s red lines around the European Court. Aligning with EU goods regulation would mean accepting relevant new European law and indirectly the court’s interpretation of it.
But after Brexit the Luxembourg court must not be able to exercise its jurisdiction directly over the UK. Either a new dispute resolution mechanism will be required, perhaps similar to that which the EU has with Canada, or the UK could dock into part of the EFTA court to resolve disputes over goods.
Imagine that by some fluke of platetectonics the world’s fifth biggest economy floated across the globe and landed on the edge of the Euroasian plate. Imagine then that the Government of this country turned round and offered broadly to follow EU rules on goods, in return for allowing goods to trade freely. Even better, imagine that this country would buy more EU goods than it would trade the other way, ensuring a substantial market for Continental products. Logically, this would not be a bad deal for the EU to then agree. The problem is not logic but history, politics, and emotion.
If Theresa May succeeds in getting her polarised Cabinet to agree a compromise plan it deserves to be taken seriously by Brussels. They should recognise that the UK would not be attempting to “have its cake and eat it” as the trite expression has it. In fact the UK would be explicitly accepting that it would lose rights including on services trade and capital movement.
It’s possible that Brussels and EU capitals will ultimately engage with the detail of a new offer from London. They should. Otherwise the chances of a no deal or a Brexit on unsustainable terms will rise sharply. Because the two options on the table now are not just unpalatable, but unacceptable and unfair: either a trade deal with the UK relinquishing control of part of its territory; or the UK as a broad-spectrum rule taker with Brussels running trade policy and wide-ranging elements of our domestic economy.