We’re at risk of getting washed away by the torrent of Brexit adjectives. Soft Brexit? Hard Brexit! Slow Brexit? Fast Brexit! Furtive Brexit? Bold Brexit! Introspective Brexit? Global Brexit! Flaccid Brexit? Proud Brexit!
On 23 June 2016 the British people were asked a simple referendum question:
Should the United Kingdom remain a member of the European Union or leave the European Union?
The truculent British masses voted Leave, by a respectable majority. Thus, a practical question presented itself to the UK’s political elite. What does ‘leave the European Union’ in fact mean?
This question was lost in the hullaballoo of the referendum rhetoric. The Leave tendency itself was divided on this, preferring to press the case through abstract language of freedom and opportunity. The Remain side did not want to talk about it either, lest the impression be conveyed to voters that Leaving was a real option with only the details to be worked out.
The easy answer is that the UK withdraws from the complex EU Treaty structure. You’re either listed in the treaties as one of the signatory countries, or you’re not. A year after the referendum in a letter to EU HQ in Brussels, Prime Minister May duly triggered the procedure in the treaties themselves for the UK leaving the EU:
I hereby notify the European Council in accordance with Article 50(2) of the Treaty on European Union of the United Kingdom’s intention to withdraw from the European Union.
Fine. But then what? To be precise, what relationship would the UK have with the European Union thereafter? And (just as important) what relationship might the Union have with the UK?
The British government have struggled to answer these questions, peering unhappily at two huge policy and philosophical fault-lines: the legal reach of the European Court of Justice (ECJ), and migration.
Basically, if the UK wants to keep its current access to the EU ‘single market’ as if it were an EU member, it needs to accept the jurisdiction of the ECJ and core Single Market principles including free movement of people. This (one argument goes) is no Brexit at all – how can the UK be outside the EU if the ECJ is still pronouncing on our own laws and we can’t limit migration from EU countries?
Good point. But what is the alternative? The UK might break decisively from the EU and its Single Market and opt for the sort of arms-length trading relationship of (say) China and Brazil and the USA. In that case global corporations that like being in the UK precisely because it is in the Single Market framework may find themselves incurring heavy new costs. See - for example - Airbus or BMW.
This goes to an important and little understood point about the world economy. When we mere mortals think of ‘international trade’ we take it to mean something Kenyan coffee growers selling us coffee, or Indonesian textile factories selling us shirts. What’s not to like?
In fact a significant proportion of world trade is giant multinational corporations selling goods and services to themselves across international borders, taking advantage of different taxes and incentives. For these sprawling businesses trade is a lot about cunning accounting that is more than sensitive to the confusion and uncertainty that Brexit is creating.
But it’s also about astonishingly sophisticated operations. Honda has a large factory in Swindon in England. It keeps the factory going with some 350 lorries a day arriving from elsewhere in Europe.
Hence the horrible practical issue Brexit presents. What happens to all those lorries crossing to and fro from the UK into mainland Europe on the day the UK formally leaves?
Dover on the English coast handles thousands of lorries a day in each direction. Each lorry is carrying its own load of goods and parts and represents a teeming pile of regulations from the UK and EU and beyond:
- Are the goods safely packed?
- Are they all legal?
- Are refrigeration standards for perishable goods respected?
- Are the hours driven by the drivers properly monitored?
- Is the lorry the right weight?
- Are the drivers licensed to carry loads in and out of the UK?
- Do drivers have the right passport?
- Is all the paperwork correct?
These and many more questions are what ‘world trade’ looks like to hard-pressed customs and border officials around the world.
In the UK’s case, we have spent decades adding layer upon layer of UK and EU regulations and standards and processes as part of building the EU Single Market. How if at all to tip-toe away from all that without creating queues of lorries that stretch from London to Paris? That in turn means horrendous disruption if not systemic breakdown as ‘just in time’ delivery systems for food and supplies crash on both sides of the Channel.
We are going to find out soon enough.
“Ideals? How nice to meet you! May I introduce you to Reality?”
Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect the views of 7Dnews.