After Brexit, a Return to Reality

As the dust from Brexit begins to settle, it is time now to look forward at how the UK can negotiate a smooth exit from the EU, while inflicting the least possible damage on all those involved.

By Damian Chalmers

Tagged BrexitEuropean UnionlawUnited Kingdom

Debate on Fracking Ban–Democracy JournalThe challenge now confronting the United Kingdom post-referendum is that approximately a third of its laws are derived from EU law, with just under half of its trade also secured by that law. Following the referendum, this must be changed. But to what? Undoubtedly, there will have to be greater ownership by Parliament over these laws; it will have to be possible for it to both change and repeal various EU laws.

Beyond that, everything else remains unclear. There is no sense of what should be done to replace them, nor is there a clear process for identifying this, and no clue as to the eventual winners and losers of this process. There may also be  insufficient time to sort this out. Under the Article 50 process for leaving the European Union, the United Kingdom has two years to arrange with the EU what will be governed by mutual agreement, and what it will be free to do alone.

And the context for such decisions is dire. The referendum revealed within the United Kingdom a society marked by deep divisions between young and old, between those who went to university and those who didn’t, between the four nations, and between metropolitan and non-metropolitan Britain. Reaching a settlement that will not further polarise will be very difficult.

The context beyond its borders is no simpler. The United Kingdom requires an accord with the European Union before it can begin securing agreements with non-EU States, as these countries will be unwilling to offer anything significant until they know what their European competitors are being offered on the British market. Yet this first agreement can only be offered by a supermajority of EU governments, with the consent of the European Parliament. And these EU members have spent the last three months being insulted by high profile members of the British political class.

All this has induced a sort of collective breakdown amongst many British politicians and the British political class. This breakdown has taken the form of oscillating between what I call a Nirvana psychosis and a Catastrophe neurosis.

The Nirvana psychosis, put forward by the Leave campaign, fantasises that, unfettered, the United Kingdom shall bound forward to a freer, wealthier destiny marked by fewer social injustices. It assumes a freedom from the material and institutional realities of the world for the United Kingdom that other non-EU States do not have. It ignores uncomfortable truths, namely that the United Kingdom’s woeful lack of competitiveness, stark social injustices and declining share of world trade (little more than that of Belgium) cannot be blamed on Europe.

The Catastrophe Neurosis, on the other hand, clamours that much of what is substantially good about the UK has been realised because of Europe. Without the latter, there is a descent into the abyss. Yet, which British politician will want to be remembered for making Britain the dirtiest, most misogynist, anti-competitive state in Europe by undercutting relevant EU environmental, labour or competition laws? The United Kingdom’s WTO status allows its goods access to EU markets by simply aligning them to those of the EU. If it is worried about its trading status, it can do this for many of its industrial sectors, just as Switzerland has.

Perhaps, then, it is time to return to reality. And to think, instead, of what is possible.

With limited information about what much of British society wants and within a general context of such considerable uncertainty, it makes no sense to conclude a definitive settlement just yet. There is too much scope for injustice and error. Instead, any agreement reached under Article 50 should provide for the United Kingdom’s withdrawal in 2018. But, after withdrawal, this agreement should only govern a transitional period lasting until 2024.

Negotiations would continue during this period to set out a new, more settled arrangement. This would, among other things, provide the space for the British parliament to carry out hearings and better identify what different parts of British society really want.

What would be the content of this transitional regime?

There would, first, be a general commitment by the British to obey EU law during this period. This is not so radical. Anybody believing that Parliament can unwind many of the 3,000 plus EU laws (around 10,000 if one includes agriculture and fisheries) in six years in a democratic fashion needs to lie down. Furthermore, the Leave campaign committed to continue observing the substance of EU labour law, much of its agricultural law, as well as its freedom of movement law for EU citizens already residing in the United Kingdom. Access to the single European market would also require that the United Kingdom obey EU single market law.

One might then wonder, does this not sound like EU membership by the backdoor for the next eight years?

Not quite. The winning Leave campaign focused on a number of specific substantive points which, the referendum indicates, require imminent policy change.

The second part of any arrangement would address these.

Free movement of persons, in particular, will not be able to continue as before. If this means that the United Kingdom cannot maintain access to the single market, some compromise could be imagined where it agrees to the principle of free movement, without subscribing to every detail of the current law. This would entail free movement for those with an offer of full time work with families, but only if the EU citizen earns a certain income—something which applies to UK citizens wishing to bring non-EU spouses into the UK. At the moment, the principle protects those looking for work and part-time workers doing as few as twelve hours per week.

The next issue is that of the EU Budget. Although it is simpler for UK beneficiaries of EU money to continue being paid by the EU, it is also clear that the British believe that they should not be putting more into the EU Budget than they take out. Therefore, a mechanism will have to be put into place to ensure that there is no net contribution to the EU by the UK.

The final issue at play is one of future agreements between the UK and non-EU States. Realistically, these are going to take a number of years to conclude. It makes sense, however, for the UK to go ahead and start negotiating them as soon as possible, with a view of their entering into force around 2024.

The third pillar of any post-Brexit arrangement is that of self-government. Voters were clear in choosing the primacy of British law over EU law. Theoretically, it should, therefore, be possible for Parliament to pass laws repealing or amending particular EU laws. However, in the current context, this will probably be unfathomable.

It will be insufficient, first of all, in meeting the conditions of the British domestic context. The British party system has been bad at responding to popular discontent over EU law. And it will continue to respond poorly given the polarization in British society. It may, therefore, be necessary to set up a Petitions Committee to organize hearings about particular EU laws—with a possible view to their repeal or amendment—based upon petitions of a certain size.

It will also be impossible in light of the general commitment to obey EU law during this period and the continuing interconnections between the UK and the EU. It makes sense, therefore, for changes to any EU law to be preceded by an assessment of its impacts on EU citizens, and for them to take place after hearing other governments or EU institutions comment on these changes. Care should be made to minimize its impacts on EU citizens and a joint EU-UK procedure established to determine what countermeasures may be taken by the EU in addition to suspending the rights of British citizens and companies.

If this all sounds complicated, well, it is in fact simpler than any trade agreement ever negotiated by the EU. It is also much more manageable, within the two year time period.

Would the EU accept this sort of arrangement? It secures legal stability with the UK for the medium-term and a reasonably significant level of migration to the UK. The EU will also be able to set the rules of the game for the EU market with some optimism that these will be applied in the UK.

Will a British Prime Minister accept it? Well, the alternative is to sacrifice many jobs in the UK on the pillar of migration. If current candidates seem willing to do that now, it remains to be seen whether they‘ll continue to express this same eagerness after the event.

Read more about BrexitEuropean UnionlawUnited Kingdom

Damian Chalmers is Professor of European Union Law at the National University of Singapore and the London School of Economics and Political Science. He is also a UK in a Changing Europe ESRC Senior Fellow.

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