ANDREW FARRAN. Brexit – Putting off the inevitable

Dec 20, 2018

The British Government is in total disarray, thrashing about for a way to minimise public outrage when the country crashes out of the EU without a deal on 29 March, which now appears inevitable. Its energies are now being devoted to planning for that catastrophe. 

What is remarkable is how little understanding its Ministers and their MPs have shown of international trade law and practice, and options otherwise available to them in their predicament were they to open their minds to them.

Prime Minister May has secured her leadership but is no closer to getting a meaningful vote passed for her Withdrawal Agreement, while the EU remains adamant against any renegotiation of the ‘backstop’.

Meanwhile the 29th of March 2019 approaches, leaving no time for an alternative ‘deal’ to be agreed or a second referendum to be conducted beforehand. Unless some modus vivendi can be agreed with the EU, the UK will crash out on that date. It could revoke the Article 50 trigger and cancel Brexit, to the outrage of most Brexiteers. Or, at the least, extend the negotiating period for another 6 months.

A way around the worst outcomes would be to grasp a strategy that has at its core sovereign power to sovereign power, avoiding the appearance of mendicancy,  under-pinned by a recognition of mutual dependence as between itself and the EU.

Since World War 2 sovereignty has been the tool by which nations have achieved cooperation for the common good. Its exercise was not seen as a loss to be clawed back for retention. Inter-dependence was the driver that brought down barriers which led to affordable goods and services for all. While globalisation left sections of society behind, the process of remedying that imbalance is moving forward.

The objective over Brexit is for both the UK and the EU to achieve a win/win outcome regardless of formal structures. In present circumstances the UK must be prepared to take a gamble trusting that EU members would respond likewise for their own good. Thus, if the UK were to abolish all tariffs and align its product standards and regulations with those of the EU, it should challenge the EU to maintain theirs on a similar, mutually agreed basis.

This could be achieved through a joint trade and standards Commission – the point being that any unilateral action by either would be disadvantageous for both. Trade per se is not at the centre of Brexit. With such accommodations the Irish border issue need not arise.

Each party (the UK and the EU) could respectively negotiate free trade agreements with third countries on a m.f.n. basis. Given their common and complementary supply chains, this would in most cases be compatible for both.

For the UK there would be no on-going commitment to freedom of movement, which is a core issue of Brexit. Other more specific areas of a functional nature could be negotiated ad hoc. Overall, such a Compact would essentially meet the expectations of both Leavers and Remainers.

Underlying this would be a mutual reliance on GATT/WTO rules. In the UK’s case it would first have to apply for membership in its own right and negotiate an original (interim) trade schedule with the wider membership. As it would be offering existing EU trade terms and standard concessions this should not be difficult. It would also be in keeping with free trade principles within a broad economic grouping.

In short, what is required is that both parties, recognising they have an unresolved problem of substantial proportions, should rise above the ordinary and display standards of statesmanship of an order not witnessed for generations.

The Compact should be secured before 29 March by a legally binding and certified Memorandum of Intention, lodged with the WTO.

Andrew Farran is a former Australian diplomat, law academic and international trade policy adviser.




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