Although some of the broad principles of the Government’s EU negotiating position are unresolved – disturbingly late in the day – other parts of them, which are among the most important, have been settled for some time. “We are going to be a fully-independent, sovereign country,” Theresa May told the Conservative Conference of 2016, “a country that is no longer part of a political union with supranational institutions that can override national parliaments and courts…it is not going to be a “Norway model”. It’s not going to be a “Switzerland model”. It is going to be an agreement between an independent, sovereign United Kingdom and the European Union. She also said that “We are not leaving the European Union only to give up control of immigration again. And we are not leaving only to return to the jurisdiction of the European Court of Justice.”
That ruled out membership of the EEA and of the Single Market. In case the point wasn’t clear enough, she spelt it out explicitly at Lancaster House the following January. “What I am proposing cannot mean membership of the Single Market”, she said: “Control of our own laws” was the second of twelve principles set out in the speech. The Prime Minister also rejected being “part of the Common Commercial Policy and being bound by the Common External Tariff” – which excludes being a Customs Union member, although she left the door open to becoming “an associate member of the Customs Union in some way” or remaining “a signatory to some elements of it” – all in the course of agreeing “a customs agreement”. The Florence speech last September saw her sketch out “an implementation period of around two years”, and three “baskets” in which divergence and realignment with the EU would be treated differently.
If there is a fully-fledged trade deal between Britain and the EU, some issues have already been settled in outline – such as money. The principles on which agreement was reached in December are unlikely to be discussed in depth at today’s Chequers meeting of May’s “War Cabinet”. Other matters were not settled at all, but will presumably not be raked over again at length – such as the Government’s technical proposals for managing the land border with Ireland.
Rather, three of the main topics to be probed will be, first, regulatory alignment and divergence; second, customs and, finally, transition. And, as we have seen, the conversation will be confined within the red lines that the Prime Minister herself has already set out. No ECJ jurisdiction. No Single Market membership. Departure from the Common Commercial Policy and the Common External Tarrif”. Or, as Boris Johnson likes to put it, “control of our money, laws and borders”. Almost anything else is possible.
On regulation, we will have to meet EU standards when exporting to it post-Brexit – just as America does, for example. But our freedom to diverge from some of the requirements we meet now will be limited in any event. EU trade rules are increasingly global trade rules. This explains why the Foreign Secretary said recently that “when it comes to EU standards for washing machines or hairdryers and vacuum cleaners or whatever, it may very well make sense for us to remain in alignment”.
It also provides the logic for those baskets – “where we and our European friends may have different goals; or where we share the same goals but want to achieve them through different means. And there will be areas where we want to achieve the same goals in the same ways, because it makes sense for our economies”, as May put it. Some want all manufactured goods to be placed in the first basket. That is too sweeping. Johnson made the point that we may want to diverge on AI, robotics, and bioscience.
The most practicable course to take is for divergence and alignment to be managed by a single body. The EU might well, of course, resist such a plan. It may, too, reject any scheme to align in at least some manufactures and diverge in services, such as that set on this site earlier this week by Stephen Booth: we shall see. It will certainly want trade-offs for any divergence: very roughly, the more there is – and the more restriction on free movement there is, too – the more trade friction there will be at the borders.
On customs, it could be that we decide voluntarily to mirror the Common External Tarriff indefinitely at least for some industrial goods. That would keep the letter of May’s pledge to leave the Customs Union and not join a customs union. But it would breach the spirit. Such a customs agreement might be consistent with the liberty to negotiate, sign and implement free trade deals with non-EU countries. But such a freedom would be useless if so much was automatically excluded from negotiation. This outcome must be avoided.
Yesterday on this site, Graham Gudgin of Policy Exchange drew on an EU policy report to support the Government’s technical proposals for avoiding a hard border with Ireland. As we have said before, British and Irish views of what such a border is differ. To us, a hard border is all the paraphenalia of the Troubles: customs posts, checkpoints, uniformed men. To many people in Ireland, it has increasingly come to mean any depature from the Single Market.
If all else fails, December’s agreement commits us, in the event of everything else being agreed, to “full alignment” on “North-South cooperation, the all island economy and the protection of the 1998 Agreement”. “Full alignment” is an ambiguous form of words that lacks the legal standing of “full regulatory alignment”. It is consistent with a mutual recognition of standards, from which any divergence can be negotiated through the single body, which would aim to resolve any difficulties. Such should be May’s aim.
Which brings us finally to transition. There is confusion today over the standing of a Government document which suggests that transition could be extended indefinitely. Downing Street is insisting that the Prime Minister sticks by her commitment of “about two years”. The EU wants it to be over earlier than that – by the end of 2020, in line with its own budgetary cycle. But this prevarication returns us to a point we have made before. The biggest danger for Britain which transition poses is not the imposition of new rules during it. Nor is it even that EU immigration will continue as now. It is, rather, that we could be stuck in it semi-permanently – as negotiations on a trade deal stretch on beyond Brexit day, thus collapsing the Prime Minister’s idea of an “implementation period”.
That peril is exacerbated by the possibility that our customs and borders systems may not be ready by the end of 2020, or of “about two years” – causing Ministers and civil servants to agree that we have no alternative but to extend transition on…and on…and on. Some senior Ministers are already putting the same case for prolonged Customs Union membership, maintaining that it should actually run for longer than the transition period. We were doubtless not the first to say, together with Charlie Elphicke and James Arnell on this site, that Britain must be “Ready on Day One” – now effectively the end of transition, assuming a deal, and presumably Brexit Day itself, if one falls through. But it is worth repeating none the less. Again and again and again.