Last Modified: Fri, Mar 09 2018. 05 02 AM IST

The UK is finally facing the reality of Brexit

The British PM has begun a dialogue based on the necessity for a compromise. The onus is on the EU politicians to demonstrate pragmatism too

The alternative consequences of a Brexit no-deal scenario will be far worse for everyone involved. Photo: Reuters
Rishabh Bhandari

Abig chill recently descended upon Britain with high risk warnings, blustery winds and anxiety for commuters. Some might also divine the stormy weather to be an apt metaphor for the ongoing uncertainty surrounding Britain’s Brexit negotiations. In this regard, after months of delay, Prime Minister Theresa May finally delivered a keynote address setting out a blueprint for the UK government’s approach. Her speech marks an important shift in Britain’s stance, both in tone as well as substance. With free trade under siege from a rising tide of global protectionism, there is a broader context to the negotiations.

May’s speech was important because for the first time there was an acknowledgment that the UK needed “to face up to some hard facts”. She noted that in certain ways, access to each other’s markets will be less than it is now. May accepted that the European Union’s (EU’s) structure of rights and obligations could not be sustained, if the UK—or any country—were allowed to enjoy all the benefits without all of the obligations. In other words, there was a candid sense that a political strategy of “having your cake and eating it” was not going to succeed.

The second hard fact called out was that even after the UK has left the jurisdiction of the European Court of Justice (ECJ), EU law and the decisions of the ECJ will continue to indirectly affect the UK. But, where appropriate, the PM was sensitive to the point that the UK courts will continue to look at the ECJ’s judgements, as they do for the appropriate jurisprudence of other countries’ courts. Further if, as part of the UK’s future partnership, parliament passes an identical law to an EU law, it may make sense for the UK courts to look at the appropriate ECJ judgements too. Given the importance placed by pro-Brexiteers on unshackling from ECJ jurisprudence, this was a notable statement that departed from a core ideological position.

The other fundamental call-out was that good access to each other’s markets had to be on fair terms. The prime minister noted that as with any trade agreement, the UK must accept the need for binding commitments. For example, it may choose to commit some areas of domestic regulations like state aid and competition to remaining in step with the EU’s. It was illuminating that the language of forceful departure had elided into the language of necessary convergence.

Gone was the erstwhile bravado about “Brexit means Brexit” and “no deal would be better than a bad deal”. Instead, the necessity for a comprehensive system of mutual recognition was underscored. The prime minister appreciated that the UK will need to make a strong commitment that its regulatory standards will remain as high as the EU’s with proportionate consequences for divergence. She accepted that this commitment, in practice, will mean that UK and EU regulatory standards will remain substantially similar in the future. She was also willing to countenance associate membership of certain EU agencies in chemicals, medicine and aerospace that would involve a financial contribution and acceptance of jurisdiction.

On the vexed question of avoiding a hard border between Northern Ireland and Ireland, May restated her ambition for a frictionless border through a “customs partnership” with EU. It remains to be seen how this can be worked through.

What should one make of all this? It is clear that the reality of Brexit has begun to bite the UK government. The rhetoric of a hard Brexit has given way to a softer and more conciliatory footing. In many spheres, May’s speech might well be seen as making a case for EU integration all but in name. The proposition on offer is the spectre of the UK parliament looking to substantially replicate EU laws in the future across key areas.

Through this prism, the UK’s Brexit course might therefore be distilled as coming down to the “narcissism of minor differences”.

What about immigration then? Anxiety over immigration had played a pivotal role in the success of the Leave campaign. But reconciling this with the strains of an ageing population and the demands from businesses has been far from easy. Hence, the recognition that an “appropriate labour mobility framework” will need to be developed.

As for trade deals with non-EU countries, this seemed to be the holy grail for Leavers. Currently, there is little evidence to support claims that such deals can be struck in short order. Mere expressions of goodwill from political partners have not been tested.

From a European perspective, a certain degree of schadenfreude would be understandable. Yet it would be a folly to remain intransigent. The UK remains a significant market for the EU across a range of sectors, from automobiles to services. As May pointed out, UK- located firms provided more than £1.1 trillion of cross-border lending to the rest of the EU in 2015 alone. This is a clear example of where only looking at precedent would hurt both sides.

At least, the British PM has begun a dialogue based on the necessity for a compromise. At a time where the tide of protectionism is on the rise—witness recent US calls for increasing import tariffs on steel and cars—it remains ever more important to make and preserve the case for free trade. The onus is on the EU politicians to demonstrate pragmatism too. The alternative consequences of a Brexit no-deal scenario will be far worse for everyone involved.

Rishabh Bhandari is a London-based lawyer and political commentator.

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Topics: UKBrexitBrexit negotiationsTheresa MayEU

First Published: Thu, Mar 08 2018. 11 41 PM IST

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