Critics may blast the PM’s negotiating strategy but Theresa May is playing a masterful Brexit hand, says Andrew Lilico
The end result may be unknown but Mrs May's negotiating strategy could be no more crystal clear
ACROSS the UK media, it is widely acknowledged that Theresa May is vague about her Brexit negotiating strategy.
Some admire this, saying it is important not to show all your cards before talks begin.
Others belittle it, saying the only reason she won’t tell us what she’s doing is that she doesn’t know herself.
Others still regard it as a threat or an affront, saying it’s crucial for Parliament to be involved or that she’s going to betray Leave voters.
All, however, seem to agree that her strategy isn’t clear.
Note that a strategy not being clear isn’t the same as it being wrong or executed incompetently.
Nor is it the same as the Government acting in ways inconsistent to its strategy.
What is it that isn’t clear? Theresa May is going to end free movement and end UK laws being subject to the European Court of Justice and EU decision-making processes.
She is also going to have a new trade deal that leaves UK-EU trade as close as possible to its current conditions while leaving us free to negotiate new trade deals with non-EU countries. What isn’t clear?
Ah, people say, but she isn’t being clear about whether the UK wants to stay in the Single Market.
How not clear?
She says we’re definitely going to end free movement and our laws being subject to EU law. So we’re not going to be in the Single Market, in the sense that being in the Single Market means, by definition, having free movement and being subject to EU law.
That is crystal clear.
But, on the other hand, there are actually lots of “single markets”.
There is the single market in financial services, the digital single market, the EU “internal energy market”, the single market in pharma- ceuticals and so on.
She hasn’t ruled out the possibility we might want to be in one or more of these, at least for a transitional period. And why would she?
If we could arrange involvement in some of these, such that we were not subject to EU law and did not have free movement, is it so very obvious that we would not want to be in them?
Again, people say she has not ruled out being in the EU’s Customs Union.
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But since she has said we are going to seek to negotiate new trade deals with Australia, the US, China and others, that means, by definition, we are not going to be within the EU’s Customs Union, since that would mean agreeing to common external tariff levels, which is incompatible with changing our tariff levels as part of new free trade agreements.
That is, once again, crystal clear.
On the other hand, her ministers have floated the possibility of establishing sectoral customs unions, with some unofficial chatter particularly about cars.
In principle, one could be part of a customs union with the EU concerning cars and also have free trade agreements covering other sectors with non-EU countries.
It is certainly the case that World Trade Organisation rules tend to discourage sectoral-only trade agreements.
But many of those discussing WTO rules talk as if the UK was purely a rule-taker and as if it had to obey.
We’re one of the most important members of the WTO.
If we said the rules needed to be adapted to cover a situation like ours, other WTO members would have to think carefully about whether the rules should change.
If the UK and the EU were to set up a customs union in cars, the WTO would struggle to prevent it.
Another point of vagueness on the Single Market and on WTO prohibitions on sectoral customs unions concerns whether these institutions will exist in their current form by the time Brexit occurs.
The migrant crisis in Europe could potentially lead to the end of free movement in the Single Market. That’s unlikely, but not impossible.
Or Donald Trump could withdraw the US from the WTO, destroying it. That’s unlikely, but not impossible. A
nother possibility is that in some sectors we might want to remain in a particular single market or set up a particular sectoral customs union as part of a transitional arrangement.
Is a three-year customs union in cars really so implausible? Or a five-year involvement in the single market in pharmaceuticals?
What Theresa May will get is very unclear, as yet. And one can criticise her strategy on many points (indeed I do).
But her negotiating strategy seems as clear and specific as one would want at this stage. It can be summarised as:
We are going to end free movement and subjection to EU law.
We are going to substantially cut our financial contribution.
We are going to try to stay as close to the current arrangements for trading as we can, subject to maintaining the ability to set our own regulations and taxes, and to negotiate our own trade agreements with non-EU countries.
We are willing to consider some sectoral deals. We are willing to consider transitional arrangements. We are willing to contemplate putting some cash into a pot.
What additional “clarity” do folk have in mind?
Andrew Lilico is executive director and principal of the Europe Economics consultancy. This article originally appeared on conservativehome.com.