Victoria Hewson is Senior Council for the IEA’s International Trade and Competition Unit. The IEA’s latest Brexit research paper, Plan A+: Creating a Prosperous Post-Brexit UK, is published today.
Last week’s summit in Salzburg – and the Prime Minister’s combative speech in response – have demonstrated that a reset is needed in the government’s approach to leaving the EU. In a new paper published by the IEA today, Plan A+: Creating a Prosperous Post-Brexit UK, my colleagues Shanker Singham and Dr Radomir Tylecote argue that, to break through the impasse, the Government needs to bring a new vision to the negotiations; one that puts them in context of the national and global opportunities available.
In accepting the EU’s sequencing, and an interpretation of the duty of sincere cooperation that has prevented the UK from actively pursuing its interests, the Government has not been able to progress and leverage relationships with other countries and in the World Trade Organisation. The UK should be playing chess on multiple chess boards, with a strategy to advance the priorities in each. Progress in one arena reinforces the others.
Although progress has been made on a number of withdrawal matters, and it is said that the withdrawal agreement is 80 per cent complete, the outstanding issues are of course the most difficult: the future relationship and the Irish border.
Plan A+ puts forward a new approach to a backstop for Northern Ireland that would allow the Withdrawal Agreement to be concluded on the basis of a framework for a free trade agreement for the whole of the UK and the EU. In effect, the parties would agree an optimal framework of a comprehensive free trade agreement (FTA), including advanced customs cooperation, service provisions and regulatory coherence, to be set out in principle in the Withdrawal Agreement and finalised during the transition period.
The backstop that would come into effect if such agreement were not be concluded by the end of the transition period would be a basic FTA, focused on goods and customs cooperation, and a commitment by the UK and the EU to deploy best practice and the necessary resources to provide for all customs clearance activity to take place away from the border.
Unlike the model in the Chequers proposal, the kind of FTA envisaged in Plan A+ would enable the UK to move away from increasingly prescriptive, anti-innovation EU regulation and take a direction that favours competition, free trade and consumer welfare. Some raise fears that this kind of approach means abandoning regulations that protect the safety of consumers.
In reality, our democratically accountable Parliament will be better able to ensure that product standards and regulations do their job than EU institutions and member states have been, as evidenced by the regulatory capture and industry influence that brought us the diesel emissions regulations that have led to dangerous levels of toxins in the air we breathe. Basing regulatory standards on sound science and the objective of maintaining competition in the market place will allow the UK to unleash growth at home, and be open to transformative trade deals internationally.
The fall out from Salzburg leaves negotiations delicately balanced. It should now go without saying that preparations for leaving on 29 March next year without a withdrawal agreement, and therefore without a transition period or an Irish backstop are vitally important and should be prioritised.
Ultimately though, the UK running its own economy will not render a deal with the EU impossible. It will bring back real growth, let the UK do other trade deals, and create leverage to get positive results from EU negotiations. Political, trade, and regulatory independence is not just an ideological position, but what makes the gains from Brexit possible.