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THE BOTTOM LINE

Brexit in danger of meaning what it says

THERE is a brand of sealants whose slogan used to be "It Does What It Says On The Tin" and, since the products work, it became quite a famous piece of advertising.

In June 2016, the UK voted to leave the EU (The question was simple: Do you want to remain in or leave the EU?). "Brexit" was coined to mean "leave the EU", which people thought meant what it said on the vote.

Formal notice of leaving was given in March 2017, and the theory was that it would happen two years later.

Since then the issue has become obscured by detail and political point-scoring. The EU had the gall to send the divorce bill of £39 billion (S$70.1 billion) upfront, before any real negotiation. An incredibly stupid thing to do, because all it did was to set an acrimonious tone.

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The UK never joined the EU, it slipped into it by accident. In 1973, it was the "Sick Man of Europe" with an economy in tatters and the EEC allowed it to join the "Common Market" after then-prime minister Ted Heath begged them (previously, France had vetoed it - then-president Charles De Gaulle's famous "Non!"). This was ratified by referendum in 1975, using the same basic question - "remain or leave". Things went generally smoothly for a few years, despite the European Economic Community (EEC) showing signs of political and fiscal union. The big shock happened in 1992, when the UK signed up to the Maastricht Treaty.

Maastricht introduced the EU, with common citizenship and therefore free movement of people, common foreign and defence policy and the foundations of the euro. This was the end of European national cooperation and the start of a United States of Europe, with loss of national sovereignty. If anything should have been put to a referendum, it was Maastricht, but both the Conservatives (headed by John Major) and Labour (Tony Blair) were led by European federalists.

Post Maastricht, successive UK governments have passed EU legislation that has emasculated Parliament and the judiciary. It has been a creeping loss of sovereignty, with only the rejection of the euro as a victory for nationalism. Dissatisfaction led to the 2016 referendum.

In a nutshell, Brexit demanded an end to the free movement of people, but to retain what it could of the original idea of free trade of goods, capital and services with the EU. Brexit envisages the establishment of independent trade agreements outside the EU and an independent trade agreement with the EU, plus a continuation of commercial agreements set up under EU membership.

Most of this seemed to be achievable, except for two huge problems. The first is unspoken - if the UK is released from EU fetters, but continues to trade with it fairly freely, other members will want to do the same and European federalism will be killed off. This is always at the back of the EU (federalist) negotiators' demands.

The second is the political nightmare of Northern Ireland. There is little trade over this border and what there is is capable of quite simple monitoring without border posts. However, the EU has chosen to put its foot down on this, because to allow continuation of any "soft" border will show the way to other EU members to leave. In their Machiavellian minds, there must be detailed rules covering this border alone, separating it from the rest of the UK. This is unacceptable to any UK politician, and the EU knows it - it is their negotiating ploy to scupper Brexit.

British Prime Minister Theresa May's "Chequers Plan" sought to solve this by establishing a common rulebook between the UK and the EU, allowing free trade of goods over UK borders with the EU and a common customs territory generally.

The EU rejected this out of hand, probably because the UK wanted to retain freedom to negotiate treaties with other nations as well as respecting EU rules for EU trade, which it sees as incompatible. Also, it ruins their ploy. Brexiteers rejected it, because it leaves EU control over certain UK legislation and customs "arrangements".

We are now in the endgame with both sides squaring off. The weasel solution is a "transition" period - to defer the hard decisions. The UK cannot agree internally but the EU is petrified of a tough stance.

Logically, the next step is for the UK to declare that Brexit means what it says on the tin - the UK leaves the EU next March and reverts to international trading rules. It leaves the Northern Irish border as it is and lets the EU decide if it wants hard borders anywhere. If that does not get some action, so be it - both sides will suffer, but at least business will know the next steps.

  • The writer is a business communications consultant in the UK