In his excellent piece, Brexit now: the ‘how to’ question, Professor George Yarrow returns to a theme he has been promoting for some time in relation to the EU Internal Market and the Brexit process, namely the increasingly urgent need to prioritise planning for interim membership of the Internal Market in advance of ‘Brexit Day’ (currently scheduled for 29 March 2019). As he puts it:
“Action is not required to specify UK aspirations concerning the country’s long-term relationships with other European States: it is required to determine prioritized objectives in relation to how those relationships should look in a little over 21 months’ time (i.e. the end of March 2019) and to set about achieving them. How things develop thereafter will be settled over a significantly longer time period and, as good advice has put it, that morrow should be left to take thought for the things of itself”.
His fundamental point, which most business leaders would surely endorse, is that the UK needs urgently to secure a deal on membership of the European Economic Area during what I would describe as the ‘Peri-Brexit’ period (i.e., between Brexit Day and the date on which an UK/EU trade deal is eventually struck). UK membership of the EEA (which applies currently to Norway, Iceland and Liechtenstein) would avoid a 'cliff edge' in March 2019 and provide much needed continuity and certainty for UK business, not only in terms of Internal Market freedoms they currently enjoy, but also in terms of the complex web of Internal Market regulation under which they currently trade.
As far as I can tell, no plausible alternatives to EEA membership for the Peri-Brexit period have been advanced by the UK Government. In his Mansion House speech yesterday, the Chancellor of the Exchequer emphasised the importance of, “negotiating mutually beneficial transitional arrangements to avoid unnecessary disruption and dangerous cliff edges”, but without identifying any way, absent EEA membership, in which those arrangements can realistically be negotiated before Brexit Day. Given the lead times required by firms for strategic planning purposes, the longer it takes for the Government to make an explicit commitment to securing EEA membership for the Peri-Brexit period, the greater the harm to business confidence and investment.
And in this context, the need for humility and resolve (as the Prime Minister now puts it) is paramount. EEA membership will come at a considerable cost to the UK – with an acceptance of the primacy of European law, overseen by European judges and administrators – but the emerging costs of the “cliff edge” are likely to be much greater.
George Yarrow is to be congratulated for his dogged efforts to advance the debate around EEA membership in the shrinking window of opportunity that remains. In doing so, he has raised a number of fundamental, practical issues which need to be seriously debated, such as the ability of the UK (within the EEA) to derogate from EU laws, to limit the freedom of movement of persons and to avoid the jurisdiction of the European Court. Addressing those issues in the time available will take resolve (and a large dose of pragmatism), but the Government needs to take the essential first step and accept the principle of membership – before it is too late.