Reaction To May’s Speech: Clear for the 27. Less so for Britain.
Well, at least the uncertainty is over. Some commentators had labeled the British government’s six months of dithering about its plans for Brexit as “constructive ambiguity”, a phrase used by Henry Kissinger 40 years ago. Muddle was the better term, but now there is clarity: Britain, Prime Minister Theresa May has announced that the UK will be leaving the EU single market and the EU customs union.
It is a gamble, but a logical one. Even last summer, Mrs May had indicated that her priorities were to put limits on EU freedom of movement into Britain and to end all jurisdiction of the European Court of Justice in the UK. That requires Britain to leave the single market, since European laws govern that market and free movement is a core principle. So it is logical to stick to that plan.
One can easily dispute whether these are the right priorities, even on political grounds, let alone economic ones. Mrs May clearly thinks that it would be too politically risky for her to agree to retain freedom of movement. She is thus saying that she is willing to risk economic damage to Britain by leaving the world’s largest single market in order to avoid that political risk to her Conservative Party.
During the six months of muddle and ambiguity over Britain’s Brexit plans, the prime minister allowed her ministers and her party to engage in an open public debate about whether this was the right choice. Her own position on the issue has been consistent. But by letting the debate happen, and waiting to see what other EU governments’ attitude would be, she allowed uncertainty to prevail.
The end now to that uncertainty is good for the other 27 EU members. They no longer have to worry that Britain is going to try to persuade them to give up the core principles of the European Union. Britain would not have succeeded in that effort, though some British politicians and intellectuals clearly believed that some other countries might be eager to limit immigration and that keeping Britain, the world’s fifth largest economy, inside the single market could be so valuable that a deal could be done.
A lot of time could have been wasted proving that this was a delusion. The process of doing so would also have risked creating even greater divisions between EU countries and a even more bitter relationship with Britain.
So achieving clarity on that issue is of benefit to Europe. The celebration of the 60th anniversary of the signing of the Treaty of Rome, in March, need not be overshadowed by this issue. The EU can get on with trying to develop its own policies on the much more important issues of refugees, economic policy and relations with Russia.
For Britain, however, even Prime Minister May’s speech does not bring full clarity about the country’s future. The UK knows it will in future negotiate a free-trade agreement with the EU, just as it will also seek to do so with the United States and other countries. What it doesn’t yet know is how far the British government is willing to go in fulfilling Prime Minister May’s vague promises of creating a “Global Britain” that will be a leading advocate of open trade.
We know, for sure, that Britain is not going to follow Donald Trump down a route of isolation and protectionism. The Brexit vote was more a vote of nationalist arrogance than on the sort of anger about globalization that Trump tapped into. But what this means for the British economy we still do not know.
Mrs May says her objective is free trade with the EU. Does she include agriculture in that ambition? Is she going to abolish all subsidies and other trade protection for British farmers when we leave the EU and give tariff and quota-free access for EU farm produce?
Or, to take another example, we know that by leaving the EU it will be possible for the UK to lower its tariffs on imports of cars to zero if it wishes to do so. The EU’s current tariff is 10%. That is what Mrs May implies when she argues that by being “free” of the EU we will be able to become bigger advocates of free trade. But do the Japanese, Indian and American carmakers producing in the UK agree with this excellent idea?
All this is still unknown. So the net result of the British prime minister’s clarifying speech has been to produce much greater clarity for the other 27 EU members but not much more clarity for Britain itself.
By Bill Emmott | 17/01/17
This article first appeared in La Stampa Jan 17 2017