THERESA MAY, Britain’s prime minister, promised the Conservative
party conference this week that she would invoke Article 50 of the
European Union treaty, the only legal route to leave the EU, by the end
of March 2017. She also said that, after Brexit, she wanted a deal that
gave British companies the maximum freedom to trade with and operate in
the EU’s single market. But at the same time she insisted that after
Brexit Britain would become a fully independent, sovereign country that
was able to make its own decisions on issues ranging from how to label
its food to the way it chose to control immigration. And she said that
Britain could not leave the EU only to find itself still subject to the
European Court of Justice.
The problem with this is that these
goals seem to be incompatible with each other. If Britain wants to
benefit fully from the single market, which eliminates all tariff and
most non-tariff barriers as well as customs controls, it will have to
abide by most European laws, including the free movement of people from
other EU countries and a huge clutch of single-market regulations that
are ultimately enforced by the European Court. That is what countries
like Norway and Switzerland, which are outside the EU but largely inside
the single market, have to do; they also pay into the EU budget. Were
Britain to choose a similar path, this would amount to a “soft” Brexit
that kept many of the advantages of EU membership but at the price of
some significant constraints on its independent policy freedom.
The
alternative “hard Brexit” would put Britain in a position more like
third countries such as America. The Americans are not subject to free
movement of people from other EU countries or to all the EU’s
single-market regulations, and nor do they make any payments into its
budget. But that means they are also not part of the single market,
which makes their exports into it subject to both tariffs and non-tariff
barriers. Because the EU accounts for 44% of Britain’s exports,
including its crucially important financial-services exports, any such
barriers would substantially raise the costs that Brexit will impose on
the British economy.
Brexiteers say they are looking for a
beneficial compromise that would let Britain retain unfettered access to
the single market, while at the same time controlling its own borders,
laws and money. But the other 27 countries have said they will not agree
to this. They insist that Britain cannot be allowed to have all the
benefits of the single market without accepting any of its obligations,
not least because if it is, a few other EU countries might try to follow
the British example. In the end it is for Britain to make the choice:
between the tougher migration controls and untrammelled sovereignty that
would accompany a hard Brexit, and the economic advantages of the
single market that go with a soft one.
It is not yet clear which way Mrs
May will jump, but her speeches to the Tory conference seem to most
observers to be leaning towards hard Brexit.
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