May 30th 2018

The Appalling Failure of Brexit

by Chris Patten

Chris Patten is a former EU Commissioner for External Relations, Chairman of the British Conservative Party, and was the last British Governor of Hong Kong. He is currently Chancellor of Oxford University and a member of the British House of Lords.


 

LONDON – It has been nearly two years since the United Kingdom narrowly voted in favor of leaving the European Union. As the march toward Brexit – formally set for the end of next March – proceeds, fundamental questions about the nature of the future UK-EU relationship remain unanswered. Instead, every time a tough decision must be made in the negotiations in Brussels, British ministers kick the can down the road, or even into the long grass.

This is somewhat surprising. Apparently, none of the politicians and newspaper editors who plotted for years to get the UK out of the EU thought much about what would happen if their machinations succeeded. They have been unable to agree even on whether the UK should pursue a “soft” Brexit, with the UK remaining closely connected to European markets, or a “hard” Brexit that severs ties without regard for the economic impact.

Some ardent Brexiteers claimed that leaving the EU would be as easy as falling off a log. Our European partners, they suggested, need us much more than we need them: Germany is desperate to sell us cars, Italy to sell us Prosecco, the French to sell us Camembert. They could not have been more wrong. In truth, the UK depends far more on selling to Europe, which accounts for about half of British exports, than Europe does on selling to the UK.

Even with a clear and realistic strategy, the two-year time period allotted for negotiating the UK’s departure – which began in March 2017, when the UK invoked Article 50 of the Treaty of Lisbon – would hardly be sufficient to cover the plethora of issues that demand attention. By launching that process without such a strategy, the UK government made the process much more difficult for everyone.

Beyond forcing British negotiators into a near-impossible timetable, Prime Minister Theresa May has tied their hands by making promises aimed at satisfying her Conservative Party’s hard-right Brexiteers. These include a pledge to end the free movement of people from Europe, even though well over half of the immigration that some Britons decry comes from outside the EU. It also includes a promise to leave the EU’s single market and customs union.

The UK ministers mainly responsible for the talks – a group better known for their dogmatism and personal ambition than their competence – have so far managed to secure agreement in one key area: following the March 2019 deadline, a two-year transition period will begin. But even that agreement is not set in stone, as it depends on whether negotiators can first agree on what to do about the border between the Republic of Ireland and Northern Ireland once the UK leaves the customs union.

You can be in a customs union without a border, or outside a customs union with a border. There is no example anywhere in the world where this is not true. Yet reintroducing a border on the island of Ireland raises serious problems, affecting not just cross-border trade, but also security and the future of the Good Friday Agreement that brought peace to Northern Ireland 20 years ago.

With furrowed brows, officials burn the midnight oil trying to devise a way to square this circle. But the laws of political geometry have torpedoed their efforts.

The benefits of leaving the customs union do not come close to outweighing the risks. Brexiteers claim that the UK would ultimately benefit from being free to make its own trade deals with the rest of the world. But to believe that the UK can do better on its own than it can as part of the world’s richest single market is nothing short of delusional.

As the UK attempts to strike new trade deals, it will be trying essentially to replicate the EU’s agreements, both existing and under negotiation, with countries like Mexico, China, South Korea, Vietnam, Singapore, and Japan. Not only will that take a lot of time; the UK is unlikely to secure terms as favorable as the EU has.

After all, it is well known that, in trade negotiations, the bigger partner tends to do better than the smaller one. And the UK’s position will be weakened further by technical issues like rules of origin. At present, the country benefits even when parts of a product are manufactured elsewhere in Europe, up to an agreed limit. The loss of that flexibility will pose a major problem to car manufacturers, among others.

So far, the march toward Brexit has brought no obvious gains. On the contrary, according to the Bank of England, average real household income in the UK is £900 ($1,200) below pre-referendum forecasts. The lofty promises that drove a relatively slim majority of voters to choose Brexit in 2016 are nowhere near being fulfilled; in most cases, they never will be.

As the stark reality of Brexit sinks in, members of Britain’s cabinet and leading Brexiteers have increasingly turned on one another and attempted to cast blame on everyone but themselves: judges, civil servants, parliamentarians – even those who voted to remain in the EU. They declare that Britain must plunge ahead, because that was “the will of the people” (though exactly what voters believed they were voting for remains opaque). Meanwhile, they prepare their excuses for the impending debacle.

As Lenin famously asked, “What is to be done?” It is hard to say. We may simply have to hope for the best, while preparing for the worst, recognizing that our children may well be the ones who have to pick up the pieces. One hopes that, if that does turn out to be the case, they do a better job governing the UK than today’s leaders.

 


Chris Patten, the last British governor of Hong Kong and a former EU commissioner for external affairs, is Chancellor of the University of Oxford.

Copyright: Project Syndicate, 2018.
www.project-syndicate.org

 


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