As it leaves the EU and forges new trade arrangements Britain will have to adopt rules and regulations largely set by others. The much prized sovereignty pursued by Brexit proponents increasingly appears like a contrived illusion, writes Guy de Jonquières.
Two mantras have been endlessly repeated by campaigners for Britain’s withdrawal from the European Union. One is that the EU is an undemocratic cabal intent on overruling the country’s laws and imposing Brussels’ writ on reluctant British citizens. The other is that Brexit will “let us take back control” by restoring the legislative sovereignty of Parliament.
Both claims, that the EU is an oppressive conspiracy and Brexit an invigorating dash for freedom, undoubtedly swayed opinion among the slim majority of voters who opted to leave the EU at last year’s referendum. Yet both are based on decidedly shaky foundations. They have also served to obscure some uncomfortable home truths, to which Britain is gradually starting to awaken.
The record hardly supports the idea of Britain as hapless victim, forced to bend to the dictates of a faceless bureaucratic EU regime. On the contrary, Britain has long largely got its own way in Brussels and has often powerfully shaped the EU’s broader agenda, most famously by driving through the creation of the single market and the Union’s subsequent enlargement to include new members in east and central Europe.
Recent analysis by researchers at the London School of Economics of 331 controversial EU policy initiatives and 125 pieces of legislation has found that they corresponded more closely to Britain’s national positions and preferred outcomes than to those of any other large member state. Furthermore, between 2004 and 2009, Britain aligned itself more than 97 per cent of the time with the majority of other member states in Council of Ministers’ votes.
True, in the following six years that proportion fell to 88 per cent. However, even that level hardly bears out complaints that the UK has been dragooned against its will into policies it opposed. On the contrary, it suggests that discontented Brexiteers who believe the EU has acted against Britain’s interests should point the finger of blame, not at Brussels, but at representatives of their own democratically-elected national government.
ECJ to United States and China
Another, even more vilified target of Brexiteers’ ire is the European Court of Justice, whose continued jurisdiction Theresa May’s government has declared unacceptable. Some of the anger directed at it may be explained by the fact that critics regularly mistake it for the European Court of Human Rights, an institution that is not part of the EU and was established on Britain’s initiative 58 years ago.
That confusion aside, the ECJ’s record makes it a rather implausible villain. Between 2005 and 2015 it handed down 1001 judgments in cases where the EU Commission opposed Member States. Of those, only 46 involved Britain, far fewer than the number involving Germany, France or Italy, which was the subject of 119 cases. The court upheld Britain’s position in more than a quarter of the cases brought against it, almost three times more than for other member states.
Many of those rulings involved “infractions” by member states through failure by their governments to implement laws or rules, for which they had actually voted. One of the best known in Britain’s case required it to bring health and hygiene at coastal resorts up to EU standards, without which UK holidaymakers would still be bathing off filthy beaches in toxic seawater. That scarcely looks like an intolerable curtailment of national sovereignty.
The court has not just forced Britain to respect the law. The ECJ has at least as often held other member states to account in ways that met Britain’s demands or declared national interests. It was an ECJ ruling, in the 1979 “Cassis de Dijon” case, that cleared the way for the then EC to press ahead with the single market programme, a British priority at the time.
Other ECJ rulings, also sought or favoured by Britain, have struck down illegal and anti-competitive subsidies and national barriers to intra-EU trade. Those actions have been powerfully buttressed by muscular interventions by the EU’s competition authorities – most with British government support – to keep markets open and stamp out unfair trade practices.
Outside the EU, Britain will lose its right to demand that the Commission, and where necessary, the ECJ, act to protect its economic and commercial interests from discrimination or obstructionism by member states. At most, it can look forward only to some form of mechanism, yet to be defined, that will arbitrate in disputes concerning Britain’s future long-term trade relationship with the EU. Moreover, the EU27 insist the EU be represented on any such body.
Wriggling free of the ECJ’s writ is proving difficult in other ways too, especially if Britain needs a “transition” arrangement with the EU after Brexit – something that even extremist Brexiteers grudgingly concede will be inevitable. The EU27 are insisting that the court continue to exercise jurisdiction over a wide range of provisions and, beyond that, more permanently over issues such as the rights of EU citizens living in the UK.
Nor does forging a trade deal with the US, a top priority for Brexiteers, promise to achieve the independence and policy autonomy they crave. More likely, it will simply add to one set of regulations made in Brussels others made in Washington, many of them incompatible or in conflict with those in effect in the EU. At best, that would increase the burden of red tape on UK exporters and at worst could jeopardise their access to EU markets.
Regulatory differences are at least as important as tariffs as impediments to trade, above all in services, which generate 80 per cent of UK GDP and a large share of its exports. In a growing number of sectors those regulations are set by the world’s largest and most powerful economies, the US, the EU and, increasingly, China.
As a medium-sized economy, outside the EU and with no say in its policy-making, the UK would be reduced to a passive rule taker, not a rule maker. A kind of Gulliver in reverse, it resembles a small person bound by multiple threads woven by giants.
The price of sovereignty
How far such questions trouble British voters is debatable: indeed, preoccupation with the ECJ appears limited mainly to a small though vocal group of Brexiteers.
A much bigger popular concern, and the one that appears to have done most to swing opinion in favour of Brexit, is with immigration and the belief that Britain needs to regain full control over its own borders. Because that is incompatible with the EU’s commitment to freedom of movement of people, it is also one of the biggest potential stumbling blocks to a securing a trade deal with Brussels.
That problem is, to a large extent, of Britain’s own making. It was Britain that pushed Brussels most strongly to admit Eastern European countries, source of the immigration about which the British now complain most loudly.
Britain could legally have limited that immigration for several years after those countries joined, but the then government chose not to. It could legally have imposed permanent restrictions – as other EU members have – by introducing identity cards and instituting a range of internal controls and other measures to discourage “benefit tourism”. Instead, it sat on its hands and blamed Brussels.
After Brexit Britain will be able, in principle at least, to clamp down on immigration from the EU. However, it faces a clamour of protest from employers who say that doing so will starve the country of vital labour and skills, in public services, in scientific research and in industries from fruit-picking to banking and finance.
Already, the shadow of Brexit is causing many EU citizens to pack up and return home, while banks and other businesses are starting to move operations across the channel or to Ireland. Such is the price of reclaiming “sovereignty”.
More extreme Brexiteers argue, nonetheless, that it is worth paying if it enables Britain to take charge of its own affairs and ensure democratic control over decisions by restoring Parliament’s authority over them.
Yet those same Brexiteers fought to prevent Parliament from having any say over the triggering of Article 50, which set Brexit negotiations in motion, while pro-Brexit media condemned the courts as “enemies of the people” when they ruled that Parliament must have the final say.
It was also two unelected Downing Street political advisors – since sacked – who crafted Mrs May’s approach to Brexit, overruling or sidelining Cabinet members in the process.
If that pattern of events is a foretaste of how Britain will be governed after Brexit, then it is one more reason to suspect that that a large gap may exist between the euphoric rhetoric about sovereignty and how it will be exercised in practice. Indeed, it might not be unduly cynical to conclude that the whole idea was a carefully contrived illusion.
Guy de Jonquières is a senior fellow with the European Centre for International Political Economy, an associate with LSE IDEAS and a former World Trade Editor with the Financial Times. He tweets at @guydej1
Views expressed by external contributors to Borderlex are those of their authors only.