July 12, 2018 / 4:31 PM / 3 months ago

Breakingviews - Brexit is confronted with its own contradictions

LONDON (Reuters Breakingviews) - Theresa May is belatedly having to confront the contradictions of her Brexit policy. The prime minister’s long-awaited plan for leaving the European Union involves Britain sticking to the bloc’s rules for goods in return for symbolic but uncertain benefits on immigration and trade. Even if Brussels accepts the convoluted arrangement, UK parliamentarians may not.

Britain's Prime Minister Theresa May walks past the European Union flag and the Union Jack as she arrives for an EU leaders summit in Brussels, Belgium, March 22, 2018. REUTERS/Wolfgang Rattay

The 104-page document published on Thursday is the British government’s first detailed attempt to spell out how the country could leave the EU while minimising the economic damage. It is also deeply underwhelming. The central conundrum is how to withdraw without disrupting two-way trade in goods worth 427 million pounds last year – and without imposing a hard border on Northern Ireland.

May’s proposed solution is to sign up to what the government paper calls a “common rulebook” in goods, which is code for adopting EU rules. The UK would participate in European agencies which regulate chemicals, aviation and medicines, but without the votes it currently wields. To avoid border checks, Britain would collect tariffs on goods that enter the UK but are destined for the continent.

The benefits of these concessions are unclear. True, Britain would regain control of immigration policy. But it will still likely have to accept EU citizens moving to the UK. In theory, Britain could also strike its own trade deals. However, the requirement to stick to EU rules on goods will tie its hands with other potential trading partners. Meanwhile, the plan offers little for services industries - including the City of London - that produce almost 80 percent of Britain’s economic output.

The proposal is only the opening shot. Though Brussels has yet to formally respond, it is likely to push for further concessions while demanding that Britain sign up for a tough “backstop” arrangement over Northern Ireland in case the customs plan does not work.

And even if May can salvage an agreement with Brussels, she will need parliamentary approval at home. That’s a tall order: opponents of Brexit argue the plan is inferior to remaining in the union, while enthusiasts for leaving the EU say it makes Britain a “vassal state”. The resulting standoff could force May to rethink her flawed policies - or make way for someone who will.

Breakingviews

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