Insight
Five years since the referendum: A short reflection, and some highlights of the CER’s Brexit coverage by Charles Grant, 23 June 2021 Five years have passed since the British voted 52-48 to leave the EU. Since then the CER has published 174 papers – long and short – on Brexit. Looking back at them, we have a pretty good track record of getting things right. From the start we foresaw a Canada-style free trade agreement (FTA) rather than a closer economic relationship. And we were always optimistic that deals would be done, on both the Withdrawal Agreement and the subsequent Trade and Co-operation Agreement (TCA). What we perhaps under-estimated is how speedily – after the new treaties were signed – the UK-EU relationship would turn sour. There is currently a serious lack of trust on both sides. Many of the difficulties stem from the UK government’s cavalier attitude to the treaties it has agreed with the EU. But though the UK chose a hard model of Brexit – a Canada-style FTA – the EU ensured the details of the agreement have made Brexit more uncomfortable for the British than it needed to be (for example, it has offered more generous terms to comparable partners on rules of origin, the recognition of professional qualifications and financial services). This was partly due to the understandable view, held strongly in France, that Brexit had to be seen to hurt, pour décourager les autres. But above all, the EU’s hard line was driven by the strong desire to protect the integrity of its single market against the possibility of unfair British competition. Though this stance was not unreasonable per se, the EU may have been tougher than it needed to be. A Brexit-weakened UK economy is not really such a great threat to the EU. In any case, if the UK does provide some strong competition in certain sectors, then that is all well and good. The EU should welcome a competitive neighbour on its doorstep, spurring it to improve its own performance. In the short term, the priority must be to reach an agreement on how to apply the Northern Ireland Protocol. The UK needs to show that it is serious about implementing the necessary controls on goods crossing the Irish Sea. The EU needs to interpret that document with the maximum possible flexibility. Once it is reassured on the protocol, the EU is likely to become more accommodating on a series of other issues, such as financial services and the rules governing electricity interconnectors, where the UK needs the EU’s goodwill. CER INSIGHT: Five years since the referendum: a short reflection, and some highlights of the CER’s Brexit coverage 23 June 2021
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