The Least Painful Path to Brexit
Patience will produce the best results.
Britain will begin talking to the European Union about its impending divorce when Prime Minister Theresa May formally starts the process -- by the end of next March, she says. And while the substance of those negotiations is unclear, their length is not: two years, which is not nearly enough time.
Britain and the EU need a transitional deal -- a temporary agreement that can stand for as long as it takes to work out a comprehensive new pact. Many supporters of Brexit hate the idea. They’re wrong, and May needs to say so.
It took Canada and the EU seven years to negotiate their relatively simple Comprehensive Economic and Trade Agreement. A deal with Britain should be both broader and deeper, and agreeing to terms will take time. If nothing is signed by March 2019, Britain will lose its EU trading preferences at a stroke. This would be hugely disruptive not just for Britain but for the rest of the EU.
A smoother transition ought to be possible. Least disruptive would be something like the Norway model. Norway’s a member of the EU’s single market but not the EU, and it makes budget contributions and accepts freedom of movement. It has no say in EU policy-making and, in effect, adheres to the rulings of the European Court of Justice. A temporary deal of this kind for Britain would all but eliminate the economic disruption.
The idea horrifies many Brexit advocates. They’d see it as a barely disguised attempt to reverse the referendum decision and accuse May of breaking her word that “Brexit means Brexit.” And they’d be absolutely right -- if the arrangement were intended to be permanent.
To be clear, the Norway model or something like it is worse than ordinary EU membership from a Brexit advocate’s point of view -- combining the main political drawbacks (free movement, budget outlays, and the ECJ’s writ) without the benefit of a say in policy-making. Yet that’s precisely why nobody would see it as the final outcome. The defects are so glaring they all but guarantee the deal would be temporary -- not a draft of the final settlement, but merely a way to negotiate without the pressure of an unduly tight deadline.
For that very reason, many in the EU will join Brexit advocates in resisting a transitional deal. They think it would make Brexit too easy. A suggestion for those who want it to hurt: Dwell on the benefits of an orderly separation for the rest of the EU, and take note of the displeasure of many in the Brexit camp. Accept their squeals as proof that a price has been paid.
A transitional deal asks a lot of May. The idea won’t sell itself, either at home or with the EU. Yet it ought to be an acceptable outcome all around -- and without doubt, it’s better than the alternative.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at email@example.com.