A better deal could be unlocked if the EU accepts that the UK has significantly changed the intended destination(s) for the EU-UK trading relationship post-Brexit. This change of destination would render the existing draft Withdrawal Agreement, including the Irish Backstop, obsolete or redundant and make EU intransigence completely misplaced. Further delays to actually leaving the political structures of the EU and a no-deal situation could thereby be avoided.

Early decisions set wrong direction

Mrs May’s early decisions largely set the direction for the subsequent draft Withdrawal Agreement and made caving-in to the EU’s demands almost inevitable. She was also setting mutually incompatible goals (and ‘red lines’) and giving herself (and any successor) limited room to manoeuvre. Thus Mrs May was claiming to be negotiating frictionless trade (via a free trade agreement) whilst committing to leaving the Single Market (stated in her Lancaster House speech 17th January 2017). She was also saying no hard border on the island of Ireland or in the Irish Sea whilst making such a border somewhere inevitable to protect the Single Market.  She triggered Article 50 without a realistic plan for leaving, that took cognisance of how the EU functions, and inevitably had to accept the EU’s duplicitous and highly damaging sequencing for negotiations.  There was no answer to the EU’s uncompromising and inflexible, even punitive, attitude towards the UK.  In response to the UK’s naivety and lack of competence the EU behaved more like a hostile, bullying power and not as one long-standing, friendly neighbour.

From a legacy set up for future failure to a new beginning

The prospects for an expeditious and favourable free trade agreement with the EU do not look promising, given the history of Article 50 negotiations. The EU will be a tough negotiator, conceding little, and could again deploy its darker side against UK interests. Negotiations are likely to take several years with EU demands far exceeding the scope of free trade into other areas where it wants to lock in UK compliance. Worse, a free trade agreement doesn’t guarantee frictionless trade with the Single Market for any external ‘third’ country, including the UK. The UK then desperately needs a viable, somewhat wary strategy: (1) to make any new or revised Withdrawal Agreement widely acceptable in the UK and in the EU; (2) to leave the political control of Brussels; and (3) to form the basis of a long term, mutually beneficial working relationship.

Completely leaving the EU, as is increasingly being recognised, is a process that will probably take time (several years). Too much has been handed over to Brussels during the UK’s 40 plus years of membership to be unbundled easily or swiftly. Competent and motivated resources don’t exist and need to be built up. The UK will have to stay close to the EU’s regulatory ecosystem (for trade) whilst establishing and expanding political sovereignty, and all the while being undermined by opposition here and in the EU. However, actually re-joining the political structures of the EU will also look increasingly unattractive as the EU continues to: (1) lurch from severe crisis to crisis (of its own making); (2) pursue its raison d’être of creating an increasingly centralised and all-controlling technocratic Superstate (‘the Project’); and (3) resorts to increasing autocratic force to suppress opposition.

Any future relationship with the EU must allow for tackling the UK’s existing unsustainable socio-economic model. Whilst ideologues can ignore the facts on the ground, uncontrolled mass immigration; poor productivity growth; increasingly punitive taxation; increasing government and private debt; an ageing population without adequate pension provisions, etc. have serious negative impacts on the well-being, prosperity and quality of life for many, especially the poorest. Flexibility to unilaterally deal with such problems has already been recognised by the EU (typically within the draft Withdrawal Agreement and European Economic Area {EEA} agreement), though for member states that competence rests centrally with the unaccountable European Commission.  Consequently, the ‘Four Freedoms’ of the Single Market are not indivisible when they lead to ‘serious economic, societal or environmental difficulties’ (see EEA Agreement Article 112).

A substantially different longer or medium-term destination for EU-UK trade is to remain a member of the EEA via actual or shadow European Free Trade Association (EFTA) membership. This would give the UK the freedom to negotiate free trade agreements with other countries, leave the jurisdiction of the EU’s European Court of Justice, and stop increasingly exorbitant payments to the EU budget. The need for an Irish Backstop would disappear. Being within the EU’s regulatory ecosystem (from broad policy to enforcement, surveillance, data sharing, and standards) would maintain substantially frictionless trade across the EU (and wider EEA), as at present.

Overriding imperatives would need to be accepted by the EU to re-open negotiations against a new mandate. The intransigent alternative is inevitable, lasting damage to EU-UK relations and the EU itself. The EU would have to pragmatically recognise the UK’s special status, geographic proximity, size of market and long-standing close relationship across many fields, and give maintaining amicable relations a higher priority than has been shown so far. It should abandon its hypocrisy on the UK’s acquired or grandfather rights, recognise that the existing draft Withdrawal Agreement may not be legal and that legal workarounds exist or can be created.  Setting a different destination after a real Brexit could be a sensible start.

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