Heads We Lose, Tails They Win: a Short Guide to Leaving The European Union

According to the old music-hall song, ‘everybody wants to go to heaven, but nobody wants to die’. Much the same is true of the British government that has now found itself accidentally (because it happened without any of the usual policy-making preliminaries that are supposed to serve as a check on plausible but impractical policies) committed to leaving the European Union. Essentially, the time-inconsistencies in the process of leaving means that Britain will be seriously disadvantaged for years to come.

As we all know the process of leaving the European Union is governed by Article 50 of the Treaty of Rome, which would give two years for member governments to agree new arrangements, after which the country leaves the European Union. As has become apparent from the first responses in Brussels and the other European capitals, the best negotiating strategy for our fellow-members of the European Union is to have the UK invoke Article 50 as soon as possible, and then for them to sit on their hands for two years. After that the UK loses all the European cards in its hand, the quid pro quo deals that oil agreements between European partners with diverse interests, and is reduced to the status of an outsider seeking a free-trade agreement with Europe.

For Britain, therefore, the best negotiating strategy, is to postpone invoking Article 50 for as long as possible, to allow our Secretary for International Trade Liam Fox to negotiate a network of free trade agreements with the rest of the world. These cannot be signed, of course, because while we are in the European Union trade agreements are negotiated and agreed in Brussels. But, in the ideal Brexit scenario, the agreements would be ready for signing the day after we leave the European Union.

THERESA MAY AND HER THREE BREXITEERS CANNOT WIN

The wrinkle in this strategy is that the strength of Liam Fox’s hand in negotiating free trade agreements with the rest of the world depends on our membership of the European Union. Our attraction to Commonwealth countries may be a matter of sentiment. But even for them, as for the rest of the world, the attractions of a free trade deal with the UK are much greater if that deal gives those non-European countries unrestricted access to the European Union through a free trade agreement between the UK and the EU27. So good terms, or at least expeditious agreements with the rest of the world, depend on that free trade agreement with remaining European Union whose serious negotiation is likely to postponed until after Britain leaves the European Union

So Liam Fox will not be able to negotiate free trade agreements with a copy of his free trade agreement with Europe to encourage non-European governments to take him seriously. Meanwhile, Britain’s position in Europe will be deteriorating, heralded by our government’s abdication of the Presidency of the European Council. And all this before we even consider the slow-down in the UK economy, and the constitutional disputes over who actually invokes Article 50 and how it is to be done.

In short then, Theresa May and her Three Brexiteers cannot win. The nemesis of politicians that confound all opposition is their obligation to deliver on the impossible promises that they made to get into power.

Jan Toporowski is Professor of Economics and Finance at the School of Oriental and African Studies, University of London.

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