Let’s ignore the fake alternatives of HMG’s recent papers - the scare stories about the UK’s position with third countries . Let’s also ignore the threadbare character of the government’s “renegotiation” with the “reformed” EU. No-one with a ha’porth of sense pays any attention to either. We can’t however, ignore the fact that the “leavers” need to come up with a crisp account of what they expect the electorate to vote for. Let’s orient ourselves by looking at the table of alternatives below.
Chart 1: Alternative trading arrangements for the UK
Sources: ASI, Global Counsel, David Campbell Bannerman MEP, HMG
This table is largely based on material from Global Counsel, a “stay” outfit, but it succeeds in illustrating the political character of the alternatives. The top row shows the present position, ie, that of the “stayers”; the bottom row attempts to capture the objectives of those advocating leave. The colours for the “stayers” at the top more-or-less reverse those for the “leavers” at the bottom. No surprise: the “stayers” are willing to tolerate the current sacrifice of sovereignty to maximise trade access; the “leavers” want to maximise “sovereignty” and will tolerate a bit less trade access. The five rows in the middle set out alternatives, with a rainbow of colours showing their various combinations of trade and sovereignty.
In the event, the “leave” campaign is currently engaging with four alternatives, of which only two show up in the table. All have strident proponents, strengths and weaknesses and unanswered questions.
1.The “Norway option” is advocated by Christopher Booker, Richard North and Robert Oulds. They say that this is the only realistic option, as the tangled web of UK/EU/third-party relations will take years to unravel and that it violates international law and common sense to accept the view (heard from, eg, Bernard Jenkins) that UK could legislate unilaterally so that “with one bound, Jack was free”. They argue that this option takes advantage of the precedent of Norway itself and the existing institution of the European Economic Area, which gives its members greater influence over EU policy than the UK has at present. It gives rise to the following questions:
- As this option involves accepting almost all of the EU’s existing acquis, ie, its existing complement of policies (in particular, including free movement of labour and a financial contribution to EU funds), how is the leave campaign to communicate it to the electorate as more attractive than the prevailing position?
- Do these arrangements really hold out the prospect of more influence than that enjoyed by the UK at present?
- Is it realistic to accept the contention that this option alone conforms to the Article 50 timetable of 24 months?
2. The “Australia option” has been mentioned by Richard North largely as a fall-back from the “Norway option”, but possibly as a more attractive alternative. Australia and the EU have negotiated a “Mutual Recognition Arrangement” (MRA), which eases the supply of goods and services between the two without obliging either to engage in intrusive harmonisation. At first sight, this scheme looks attractive but it has been little examined and gives rise to the following questions:
- Isn’t it the case that the Ozzie MRA is limited to a small number of technical rules in restricted areas?
- Does the bargain struck between the EU and Australia (or something realistically within the compass of negotiators) address the UK's reasonable objectives?
- Is such an arrangement realistically on offer or can negotiators realistically put it on the table within an acceptable timescale?
3. “WTO-plus” is pushed by David Campbell Bannerman in several books including a new one out later this month. The scheme’s attractions are that a minimum (ie, no more than compliance with the “Most Favoured Nation “ [MFN] rules of the World Trade Organisation [WTO]), it requires no assent from the EU. The idea is that after notice has been served under Article 50, negotiations between the EU and the UK will improve trading conditions above the WTO minimum. It gives rise to the following questions:
- Would such arrangements actually give sufficient access for UK exports (including re-exports) to the EU, in particular those involved in “just-in-time” supply-chains operating on a continental scale?
- How would such arrangements address services, the largest and fastest growing part of the UK’s economy and the sector in which we have greatest comparative advantage?
4. “Vote ‘out’ to renegotiate ‘in’ ” is no longer favoured by Boris Johnson but remains the objective of Michael Howard. The idea is that this would minimise disruption by giving the UK the best of both worlds. Two questions arise:
- How is such a scheme to attract those for whom “leave” means “leave”?
- How would such a scheme avoid accusations of preparing to break trust with the electorate, as political leaders are said to have done in 1975 and since?
We can’t answer every question but here are some preliminary conclusions.
a) Every alternative is imperfect. The question before the “leave” campaign is how they compare to each other. The question before the electorate is how the “leave” campaign’s selected option compares what the “stay” campaign is defending. We address the latter in a companion note, “Five questions for ‘stayers’.“
b) The alternatives on offer are better seen as journeys rather than destinations - in the grim jargon of government, a “direction of travel”.
c) HMG should be working up its own "plan B". It may make for fine campaigning polemic not to do so, but it also feels irresponsible and disrespectful to the electorate.
d) Unilateral legislation may not be able to resolve relations with the EU or others for all time but it can certainly freeze them with third parties for renegotiation at leisure. This is also perfectly consistent with international law. In general we warm to a programme of “freeze, then reform”.
e) Finally, negotiations may proceed better for the UK from an assumption of nothing (ie, WTO/MFN arrangements) rather than an assumption of the current state. After all, psychologists tell us that our species is constitutionally risk-averse: we prefer avoiding loss to making gains. If Brexit comes, better to apply that pressure to our negotiating counterparts!
The “leavers” need to nail their colours to the mast before campaigning officially kicks in, with the Electoral Commission’s decision on “designation” in mid-April. To get there, they need to work up good answers to these ten questions.