Cutting the Gordian Knot
On June 23, 2016, the people of Great Britain decided to leave the European Union (EU).While the result of the vote plunged the United Kingdom into uncharted waters, it is accepted that there is no turning back and that the UK’s government must navigate a course out of the EU. It will need to devise a concrete plan to conclude the Brexit process. This will require three main legal actions.
First, the British government will need to invoke Article 50 of the Treaty of European Union and commence negotiations on the terms of UK withdrawal. This must happen fast, in order to avoid problems with Britain being a signatory to the Vienna Convention on the Law of Treaties, because Article 60 of the Vienna Convention allows for immediate sanctions against a party unilaterally breaching a treaty. While it is plausible that informal negotiations could take place before Article 50 is invoked, that will depend on goodwill on the other side of the table.
Second, the Prime Minister will need to present a bill to Parliament, repealing the various laws that have established the UK’s membership of the EU and enabled the incorporation of EU law into UK domestic law.
Third, Parliament should review the body of EU law already incorporated into domestic law to ascertain what can be safely repealed and what should be retained. For this process to go smoothly, the streamlined procedures outlined below should be followed. The second and third actions can be combined into single repeal bill that establishes a Royal Commission on Regulatory Reduction with special powers to present packages of reforms before Parliament to be considered, using streamlined procedures discussed below.
This paper also examines the most important question relating to the invocation of Article 50 and the start of negotiations: whether the UK should attempt to enter into a relationship with the EU like that of Norway (the “Norway option”) within the European Economic Area or like that of Switzerland, a looser version of that relationship (“EEA-lite”), or reject those options and pursue an entirely new arrangement. Considering one of the major reasons many people voted Leave was a desire to regain control over immigration policy, and that following the paths of Norway or Switzerland would restrict the UK’s freedom of action in that regard, an entirely new arrangement, whereby the UK remains open to the world, not just the EU, seems like the best option going forward.
This paper outlines various policy issue areas where special measures will be needed, either in the Article 50 negotiations or via separate legislation. Carried out properly, withdrawal from the EU will enable the UK to pursue a new course of action that will provide significant benefits for its people. The United Kingdom’s government faces some tough choices ahead. It needs to be responsive to its voters, acknowledging their decision to leave the EU and their reasons for doing so, while remaining respectful of those who voted to stay. It also needs to ensure that any negative potential economic consequences of leaving an established economic union are mitigated as soon as possible.
Realistically, the UK cannot remain in the EEA. To do so would be to ignore the reasons why people voted to leave, and could leave to significant domestic strife. Nor would remaining in the EEA provide the liberty to make choices that would really benefit the British economy.
But the consequences of leaving the EEA should not be downplayed. The wrong turn, into an isolationist stance that shuts out the rest of the world, would be disastrous.
That is why Britain must declare it is open for business, with unilateral declarations where appropriate, and trade agreements to be concluded as quickly as practicable with those nations who indicate a willingness to do so. At the time of writing, these include Australia, Brazil, Canada, China, Ghana, India, Mexico, New Zealand, South Korea, and Switzerland. Similarly, it must regain control over immigration while not turning its back on the benefits immigration and travel bring to a nation. A market-based immigration system may prove to be the best solution to this problem in the long run.
The suite of policies recommended in this essay share this vision of an open Britain, dedicated to the principle that markets make better use of information than planners.
Overall, the UK will benefit substantially from a reduction in regulation, a better fisheries management system, a market-based immigration system, a free market in agriculture, a globally focused free trade policy, and a shale gas-based energy policy.
By following this road map after leaving the EU, the UK will have set itself on the road to becoming once again a global economic powerhouse.