Brexit and Beyond

The case for a WTO Brexit has never been stronger

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  • Well argued: 72%
  • Interesting points: 79%
  • Agree with arguments: 55%
The case for a WTO Brexit has never been stronger

Dinendra Haria/SOPA Images/LightRocket via Getty Images

Two truths about Brexit were rammed home again this week.

First, the majority of people in this country knew what they were voting for in 2016 – and they have not changed their minds. A YouGov poll at the weekend found that 58 per cent do not think the PM’s deal honours the referendum vote. 41 per cent believe that leaving without a deal would honour the referendum result, compared to 33 per cent who do not. These voters recognise that no deal would allow the UK to follow and to trade under international (WTO), not EU, law. Though leave voters were in the majority both in 2016 and today, the leave mandate has been ignored by most in parliament and government.

Second, the UK government and parliament remain intent on a different course. Most MPs, except for some Conservatives and a handful of Labour,  want the UK to stay under the EU economic and trade orbit via some form of customs union. The proposed Withdrawal Agreement, the object of Mrs May’s second historic defeat, is one version of such an arrangement, since it would keep the UK half ‘in’ the EU by a back door EU customs union, and subject it to EU tariffs and regulations. What’s more, a large part of the country, Northern Ireland, would remain in the EU’s Single Market indefinitely with no clear right of exit.

The EU wants the UK to stay half in, or, even better, to reconsider Brexit. No wonder. The UK is the world’s fifth richest economy. Its tradition has been one of free markets and competition under the rule of law. By contrast, the EU model, under its Franco-German leadership, is centrally run and directed – in fact ring-fenced. If the PM’s deal, or any version of the Customs Union or ‘Norway’ style trade goes through, even with a proposed exit mechanism, large swathes of the UK economy and law will be bound by the EU’s tariff and regulatory structure, with the country unable to play to its strengths as a competitive economy, or to pursue an independent trade policy and capitalise on the growth of global markets. The EU will control the way the UK uses public funds to regenerate regions and rebuild industries.

By contrast, the no deal option would not only honour the referendum decision, but provide a successful basis for future trade in goods and services. Though opposed by a majority of pro-remain MPs, their vote is not binding. Indeed the UK, ready to resume its membership of the WTO, will under the no deal option, be free to trade with the EU, and globally under WTO international law. The image conjured up of chaos or lorries stacked up at Dover is fanciful – as international trade lawyer, David Collins makes clear. If the EU obstructed UK trade, it would be in breach of international law because the UK will be starting Brexit with identical laws to achieve similar regulatory outcomes. Moreover, much of the ground work for international trade has already been prepared for an independent trade policy – to reach trade agreements on the basis of mutual recognition, to prepare tariff schedules, and to set up the framework for resolving international disputes. There are also welcome signals from the US and the Trans Pacific Partnership they they are open for trade with the UK. And, important, though hardly headline news, the UK has been accepted as a party to the WTO’s Agreement on Government procurement. Moving ahead with no deal would mean cancelling the £40bn EU payment, and that could boost the economy by up to 1.5 per cent, according to a former city economist, David B. Smith.

For financial services, the UK’s most successful and largest industry, the government’s proposal is for free trade with the EU on the basis of enhanced equivalence, under which each pathe rty would recognise that the other’s laws make for similar outcomes. Barnabas Reynolds, who proposed the legal framework, has made clear that the UK government must ensure that the independent jurisdiction of each party to determine the laws for their respective jurisdictions is legally ensured, and that normal independent dispute resolution mechanisms are put in place. Such a basis is used for US-EU trade for commercial law and legal services, and there is every reason to believe London will remain the pre-eminent commercial litigation centre in Europe. Commercial Law Post Brexit.

The case to support a ‘no deal’ WTO Brexit is strong. It takes the UK out of EU control. It would honour the referendum decision and restore the sovereignty of the country, the independence of its courts, and the right under UK law, to pursue an independent economic and trade policy – for which people voted. Besides, it is understood by the voters.They want exit on 29 March, something it alone can bring. The prime minister should therefore honour the law of the land and leave a WTO backed Brexit on the table where it belongs. It would strengthen the UK’s negotiating hand when the time comes, as undoubtedly it will, for the UK, free from the EU’s laws and fetters, to strike a Free Trade Agreement with the bloc.

Sheila Lawlor is Director of Politeia and the author of Deal, No Deal? The Battle for Britain’s Democracy

Member ratings
  • Well argued: 72%
  • Interesting points: 79%
  • Agree with arguments: 55%

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