Brexit must happen in the wake of the referendum on June 23rd, but now there is every possibility that Brexit will happen at this rate.
Theresa May has insisted that Article 50 will not be triggered until next year. This is welcome news, given that there are currently rumours circulating that the newly-created Brexit department are not yet ready to begin formulating plans to leave the EU.
For those of us in the Conservative Party who were hesitant about supporting May due to her decision to back the Remain camp this year, it is clear that she is serious about Brexit. May has ordered Fox and Boris to end their ‘turf war’ and deliver Brexit. After all, this is the lady who assured us that ‘Brexit means Brexit.’
Despite this, whilst the Brexit department have been ordered to get their act together, there are talks taking place at the moment to ensure that Britain receives the best deal possible before Article 50 is triggered.
According to the Financial Times, City of London and Whitehall officials have been holding talks over the summer to draw up a plan for Britain’s exit from the EU. Even though the City has demonstrated a lack of understanding over how the Norway model works by insisting that Norway has access to the single market, but has no say over EU regulations, the Norway option is still an unpopular model for many Leave voters, as well those in the City. This is because Norway has to accept the free movement of workers as part of the EEA Agreement and the free movement of people due to its membership of Schengen.
Practically speaking, you would have thought transitioning into the EEA after being integrated into the EU for the last 43 years would have been the most ideal solution for everyone. Joining the EEA would mean having to accept the free movement of workers for now, but there is no reason why Britain would be able to achieve a quota-based immigration system over time, much like Iceland and Lichtenstein have. In a context as politically divisive as leaving the EU, any deal Britain makes is unlikely to please everyone from the Remain and Leave camps. But it is surprising the City has not pushed for a Norwegian-style agreement.
However, it is equally refreshing to hear that the City is willing to support cancelling our membership of the single market as long as we can continue to trade with the EU via a bilateral trade agreement. The Financial Times refers to this as a ‘Swiss-plus’ deal. At present, Switzerland’s trade deal with the EU gives some sectors, such as insurance, full two-way access to the single market via a passporting deal in return for keeping its regulation at an equivalent level to that of the bloc.
Considering a substantial number of Leave supporters voted to exit the EU based on the chance of being able to roll back years of EU red tape, it is doubtful that Leave voters will accept that we should have a bilateral trade agreement at the expense of mirroring EU rules. But there is a reason why we can still push for a unique ‘British’ deal with the EU that goes beyond the Swiss deal; trade.
When Nick Clegg once argued 3 million jobs are dependent upon EU membership, he was wrong. Those jobs are dependent upon trade. And trade places us in a powerful position to go beyond the arrangement the Swiss have with the EU. Lest we forget that the EU has a £61 billion trade deficit with us. It would be foolish for the EU to end their trade with Britain just because 17 million British people opted to leave the EU.
The Remain camp argued that drawing up such a trade agreement would take years, much like it has with Canada. But Merkel has insisted she wants Brexit to be a painless process. With the EU so dependent upon us for trade, there is no reason why the EU will not draw up a trade agreement with Britain within the two years Article 50 is triggered. Considering how anxious the EU is about Brexit, many European leaders will want a more than satisfactory deal with Britain before the latter leaves the EU.
Merkel has made clear that Brexit is ‘irrevocable’ and that she intends to crack on with making Brexit a reality. In fact, Merkel is embarking upon a tour of EU countries in order to coordinate a joint response to make Brexit happen.
Based on the noises British and EU politicians and the City have been making, those who voted to leave the EU should be optimistic that Brexit must will happen. Once we Brexit, we then have the freedom to implement many of the policies Vote Leave advocated. And with Merkel, the EU’s most influential politician, on our side, we can expect other European leaders to follow.