LONDON – The Brexit issue is now calming down. After periods of near panic and almost hysterical pessimism, led by those determined to see the negotiations fail, and a handful of myopic columnists, the whole matter is beginning to fall into perspective, and the way forward into a simple and more manageable pattern.
Briefly there are two subject areas to be addressed — the immediate and the more medium term.
The three immediate issues are how to settle the status permanently of the millions of European Union citizens living and working in Britain (and the rather fewer million Brits living on the continent), how to cope with the problem of an Ireland divided between the Republic in the south (in the EU) and Ulster in the north (part of the United Kingdom shortly to be outside the EU), and how much Britain will need to pay, and probably go on paying, for various commitments made in the past, as well as for various on-going services from the EU “club” that the British will go on wishing to purchase.
All three issues are perfectly soluble with goodwill.
First, there is an argument about which higher legal authority safeguards and arbitrates on the status and rights of EU citizens in the United Kingdom. The answer of course is the same kind of authority which safeguards EU citizens in any other country, such as the United States, Japan or anywhere else. The proposition that this should be the EU in-house legal court, the European Court of Justice, is, of course, as absurd for the U.K. as it would be for the U.S. In Britain, it’s British jurisdiction, in America, it’s American jurisdiction, while every citizen lives under the protection of U.N. human rights legislation. In Europe there is also the safeguard of the European Court of Human Rights. That’s the way it has long been and can continue. End of argument.
Second, the Irish situation is also becoming more straightforward. It transpires — although it was little realized by commentators — that 90 percent of the Irish republic’s container trade with the rest of Europe goes through British ports and British infrastructure anyway. In other words, Britain is Ireland’s land bridge to the rest of the EU. Ireland, like Britain, is outside the so-called Schengen Area of open border controls that theoretically applies throughout continental Europe (although under the pressure of migrants it is rapidly disappearing). And all Ireland has long had a completely free or common travel area with Britain.
It therefore makes total sense for Britain, Northern Ireland and the Irish Republic all to have a single regime for all multiple trans-shipments across the channel to mainland Europe (hopefully with zero tariffs and rapid “frictionless” clearance systems), while leaving the north-south border in Ireland completely open as it is now. End of problem.
Third, and as to the so-called divorce payments, as soon as these are itemized it can be seen what is sensibly and reasonably involved. Obvious budget item commitments made in the past (like EU staff pensions) must be honored and Britain will want to continue subscribing to a “basket”of programs, ranging from higher education and scientific research to police cooperation. What is purchased will be paid for. Far from being a political battleground this is little more than a matter for finance officers and accountants to settle round a table. End of that issue, too.
As for the arrangements further ahead the choice is either a free trade agreement — useful and what many EU interests want — or trade under the World Trade Organization’s most favored nation rules. Ninety percent of most successful world trade takes place under these rules anyway, including, of course trade between the U.S. and the EU, between China and the EU, and, until the hoped-for Japan-EU trade agreement is actually tied up, between Japan and the EU as well. WTO arrangements have been much improved and certainly would not be the “disaster” usually painted in some quarters of the press. But clearly some kind of freer U.K.-EU trade agreement, covering all tariffs and non-tariff issues, would be the most comfortable, and is fully attainable.
Either way, there is now unity of agreement, at least on the British side, that there will need to be a temporary transition period of a few years to let trade adjust smoothly on all sides. This will resemble something not very different from the existing European Economic Area, a kind of interim customs union, which allows trading to continue as at present but permits countries some flexibility on making deals with non-EU trade partners and in instituting border controls for practical or emergency reasons, as well as keeping separate arrangements for agriculture and fisheries.
Beyond that, say British ministers, is the possibility of a streamlined customs arrangement or even an entirely new customs partnership, with trade at ports continuing to flow freely, just as it does at present.
The reality, which too many analysts with negative comments on both sides of the channel have missed, is that world trade is undergoing a revolutionary transformation. McKinsey reports that soaring flows of data and information now generate more economic value than global goods trade. Block chains are about to change the way business is done. Every region, including the whole EU, has to prepare for this.
The same relentless technological cascade of disruptive innovation is transforming agriculture and food production.
For Britain to move out from under the EU Common Agricultural Policy, which has frozen and distorted European farming for a generation, could be a major opportunity. For example, just recently a team from Tokyo was in London suggesting that British farmers should switch over to helping to meet the rising world demand for healthy Japanese diets and menus. So we could see Japanese cucumbers and shiitake mushroom crops across British pastures, sashimi from Scottish fish farms and, who knows, Kobe-type beef from British herds. Perhaps that is asking the impossible, but I, for one, would welcome the prospect greatly.
David Howell is a Conservative politician, journalist and economic consultant. He is chairman of the House of Lords International Relations.