UPDATE: Over the weekend, several other writers have analysed the options for post-Brexit Britain and come to very similar conclusions. All worth a read: the Independent’s political correspondent, Mark Leonard in the Guardian, and Catherine Bearder MEP.
The venom with which various ‘Out’ campaigners (Nigel Farage, Nigel Lawson, Arron Banks) have attacked each other over the last few days tells you a lot about what sort of politicians they are — more interested in how the referendum campaign can enhance (or shore up) their profiles than anything else.
But there is an equally important division among them that undermines their credibility. What is the alternative they are offering to EU membership?
Some advocate following Norway, and negotiating — as best we can, after walking out slamming the door — access to the European Union’s single market. Such access is indeed vital, as the EU is far and away our biggest export market. But, as Norway itself has discovered, access to the market can be negotiated (for most, if not all, your exports) provided you agree to follow the market’s rules. The trouble is, as a non-member, you have no say on those rules. You become a powerless, non voting member. So, far from “reclaiming” sovereignty and democracy by quitting the EU, what actually happens is that you lose sovereignty and lessen democracy. No wonder Norway itself has advised us that we should only leave if we “want to be run by Europe”!
Faced with this completely unpalatable scenario, other eurosceptics have advocated the Swiss model of negotiating case-by-case deals with the EU. The problem is that, although it has taken many years of painstaking negotiations from Switzerland, they have not managed to secure access to the EU market for their main economic sector, financial services. Meanwhile, it has meant that Switzerland has joined the Schengen area with no border controls at its frontiers. And Switzerland actually has to implement a larger proportion of EU law than does Britain, with our various opt-outs and exceptions. This is hardly what most British people would see as a desirable model!
Beating a hasty retreat from Switzerland, some eurosceptics have looked at Turkey’s relationship with the EU — being inside its customs union but otherwise outside. Yet, here too, there are real problems. Turkey cannot conclude separate trade deals, one of the biggest supposed advantages claimed by the ‘Out’ campaign.
So, finally, many eurosceptics fall back on a more distant relationship with our neighbours, rather than pretending that there is some cosy comfort zone where we can have all the advantages but none of the costs. This, at least, is more honest. But here they argue that we can rely on WTO rules (suddenly, supranational rules become a virtue!) to have the vital access we need to the European market. Yet those rules would leave British car manufacturers facing a 9.8% tariff barrier on exports of cars (the supply chain of car manufaturerrs in Britain is around a million jobs) — not to mention the other industries that would lose out.
A few eurosceptics glibly say that we could negotiate all this away, as the rest of the EU has a trade surplus with Britain and would not wish to give up this export market. This is to ignore the fact that their exports to Britain account for a mere 2.5% of their GDP, while our exports to them account for no less than 14% of our GDP. Who would have the upper hand in such negotiations?
Even if you ignore the other benefits of the EU as a venue for cooperating with our neighbours on all manner of things, and focus just on the hard-headed national economic interests, the Brexit options all throw up major disadvantages. No wonder the eurosceptics are squabbling!
