ASI Senior Fellow Miles Saltiel, in his Brexit Prize Shortlisted essay, explains how the UK would go about leaving the EU if the public voted against continued membership in a referendum.
• The post-WW2 project of promoting International trade by reducing tariffs on goods has run its course; so too the EU’s approach to services, the harmonisation whose baggage so upsets UK voters.
• A referendum “No” obliges the government to go beyond the unsatisfactory templates of Norway and Switzerland. Negotiators must steer clear of other complications including ostensibly attractive policies which lead only to cul-de-sacs
• The central proposal of this essay is the Global Initiative for Free Trade – GIFT. This meets the UK’s economic objectives; animates domestic energies; recasts controversy with the EU; appeals to third countries and the international community; and would survive a failure of Article 50 negotiations
• The key issues for negotiation with the EU are goods, non-tariff measures and the UK’s financial contribution. The UK stance should reflect realities – its comparative advantage in services; and principles – trade promotes freedom and prosperity all round.
• HMG should state its intentions clearly and work to a realistic timetable. The UK’s bargaining position is strong enough to enable it to act with confidence in the conference room. Negotiators should flush out obstruction promptly and respond accordingly.
• Departure promises political benefits: repatriation of regulatory powers will be positive and popular. It also enables the UK to renew global links and promote the benefits of open trade with GIFT.
• Stability, defence, justice and regional issues pose few challenges; what matters is direction and administration.
• The ASI presents three scenarios: GIFT, FTA status, and no agreement; UK output will flourish under all scenarios – particularly under GIFT. Broader economic effects are also attractive, with consumer prices reduced and current account balances improved.
• Policy-makers should brace themselves to dismiss calls for support from partisans of specific economic sectors.