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Britain's goals may end in EEA

Britain's goals may end in EEA

Method not muddle in May's meandering

by David Marsh in London

Mon 9 Jan 2017

Margaret Thatcher, British prime minister in the 1980s, marvelling at the baroque but blurred European negotiating style of Italian diplomats, used to ask whether their consummate obfuscation was ‘guile or incompetence’.

Similar inquiries might be made about Theresa May, the present incumbent. To the frustration of some observers, she has refused to state categorically Britain’s ultimate aim in a future trade relationship with the European Union once the UK leaves, probably in 2019.

There may however be method in May’s maddening (to some) refusal to get to the point. May is playing for time. She is aiming for a deal under which the UK will agree some form of two-way trade access to the single market, but will not have to accept European rules on free movement of people.

And she is bargaining that the prospects for this kind of compromise will grow stronger as Europe’s year of key elections progresses – even though everyone knows that the final contours of the arrangement will not be clear until some time after the UK departs.

May’s statements leave open that Britain could in future be part of a bigger and more politically muscular European Economic Area. At present this is no more than an underdeveloped parallel organisation with access to the EU single market but with ability to impose safeguards in areas like migration. Crucially EEA members are not subject to the European Court of Justice, but to the European Free Trade Association court, much less of a Brexiteer bugbear.

May’s meandering has come under fire from critics. Sir Ivan Rogers, Britain’s former EU ambassador, who has resigned from his post and (at the weekend) from the UK civil service, took aim at what he called, in a valedictory message to staff, ‘ill-founded arguments and muddled thinking.’ However, May’s calculation (if that is what it is) may turn out to be right, as distaste grows on the continent for untrammelled migration and Europe retreats from the unsound precept that workers have to be totally free to cross borders to make an integrated market function.

Experts like Rogers are worried that Britain may be underestimating the time needed for a final settlement. Further, the UK has not yet mustered a negotiating team that matches the combined skills of the crack European squad under Michael Barnier, the European Commission’s chief Brexit negotiator. Yet such Brussels-centric opinions may not give sufficient weight to political unevenness and fragmentation in the rest of the EU. The governments in Paris and Berlin are likely to move to the right and left respectively in this year’s votes, with strong parliamentary gains by anti-European parties.

Sigmar Gabriel, the deputy German chancellor, said over the weekend that EU break-up was no longer inconceivable. Efforts to patch it up are not likely to include full-scale efforts towards further integration, rather the opposite.

May’s Sunday statement that she was not interested in trying to ‘keep bits of membership’ hardly adds up to significant clarification. It doesn’t go beyond the message of her speech at the Conservative party conference in October when she said Britain would become a ‘fully independent sovereign country’ once it leaves the EU. 

Within the ‘Brexit means Brexit’ rhetoric there is plenty of room for nuance. Back in September, May distanced herself from David Davis, the secretary of state for dealing with the EU exit, when he said it was ‘very improbable’ that Britain would remain in the single market. Davis himself seems to have modified his own stance. He stated in December that Britain might have to make payments into the EU budget in exchange for remaining inside the common market, an arrangement similar to Norway and Switzerland.

May said yesterday she’s aiming for ‘the best possible deal for UK companies to trade in and operate in the single market’. This implicitly recognises the difference between full market membership (which the UK will no longer have) and maintaining access to it, in the manner of many thriving countries around the world. That sounds like common sense. There is still room for hope that it will prevail.

David Marsh is Managing Director at OMFIF. 

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