Unless the Prime Minister has a ‘eureka’ moment in the bathtub and finally recognises frictionless trade requires full regulatory harmonisation, the Brexit process is going nowhere, says Leave HQ editor Pete North.
For all the noise made about the so-called Chequers plan, there isn’t much point in poring over the details of it.
It is essentially a tacit admission by Mrs May that the UK does need the single market, but she refuses to remain a member of it thus seeks to reinvent it, omitting the bits that will land her in political hot water.
It turned out to be a complete waste of time since it enrages her back-benchers who have once again shifted the goalposts – and there is nothing the EU could agree to in any instance. It’s cherry-picking.
Politics being what it is though, the Government has to go along with the pretence that it’s a viable proposal until the EU explicitly rules it out.
The problem is that the EU is not going to do that. Michel Barnier has made robust observations in the form of questions to be resolved by Mrs May. The subtext, though, is less than subtle. It’s a no from them. He’s just not going to come out and say it.
To rule it out would trigger another round of hopeless bickering in Downing Street, further weakening Theresa May and risking a walkout.
Instead, the EU will play it safe, having concluded that they simply aren’t going to get a workable proposal from the UK and the time is best used preparing for a no deal outcome.
The problem is that the proposal seeks to carve out a goods only single market, which doesn’t really solve the problem for the UK.
The sale of goods and services often go hand-in-hand and the single market is an interwoven system relying on a number of mechanisms from mutual recognition of conformity assessment to recognition of qualifications. It’s more than just a waiver on border inspections.
This is something Number 10 has never really grasped. There is a near total incomprehension of how the system works, which is why they don’t understand the EU’s apparent intransigence.
They can bend the rules and fudge a few things but they will not break the rules for the sole benefit of the UK or do anything that would weaken system integrity.
What Number 10 has attempted to do is to leverage the Northern Ireland backstop as a whole UK solution – a Trojan horse which the EU has already declined. It is already having to bend a few principles just to make the backstop work.
The short of it is that if the UK Government wishes to enjoy the benefits of the single market, then there are obligations and costs that go with it.
Frictionless trade is not possible without full regulatory harmonisation. Unless Mrs May has a eureka moment in the bathtub this process is going nowhere.
It would take a fundamental shift of philosophy for the EU to accept the proposal, especially when such a proposal would require a unique body of law and new institutions to govern it. When it already has the European Economic Areas (EEA) why would it commit such resources?
Meanwhile we are unlikely to see a shift in Mrs May’s philosophy either. She painted herself into a corner with her Lancaster House speech, ruling out the single market, and in so doing made it almost impossible to row back on her words. She has doubled down on leaving the EEA every time she’s been asked.
Being that neither side is politically capable of shifting, and without a change of administration here in the UK, there is a vanishingly small chance of concluding a withdrawal agreement.
Since there is a high probability of an ultra-Brexiter taking Mrs May’s place were there a leadership contest, and with the ultra-Brexit propaganda machine running round the clock, there doesn’t seem to be much hope.
It now looks very much like we will reach a crisis point where everything depends on the realpolitik in the final hours.
Somebody has to blink – and it won’t be the EU. Should we then crash out we will be back here again, with the EU insisting on the original financial settlement and the Northern Ireland backstop just to reopen talks.
There really is only one way out of this mess and that is to rejoin EFTA and retain the EEA Area agreement.
The UK will see a major cliff edge without a comprehensive framework for trade and a bog standard free trade agreement just won’t cut it.
Eventually that reality will dawn on the Government – but we may have to learn the hard way and crash out before it does. It will be an expensive education.
Pete can be found tweeting at @PeteNorth303