The government has published its long-awaited Brexit White Paper. The document is 104 pages long and follows last week’s Chequers agreement which set out the sort of relationship the UK wants with the EU after Brexit.
The White Paper is split into four chapters: economic partnership, security, cooperation and institutional arrangements. Most of the debate surrounds the first section, the future economic relationship.
So here are the key excerpts from the chapter on “economic partnership” and what they mean.
This is a line that emerged in the Chequers statement last Friday, and it is one of the most important in this White Paper.
It is the UK government’s answer to the concerns expressed by businesses that rely on “just-in-time” manufacturing supply chains (such as car manufacturers), and to the need to avoid the reimposition of a hard border in Ireland.
The White Paper proposes a free trade area for goods – but it is very close to single market membership for goods in all but name.
The suggestion of a common rulebook sounds very collaborative, but it does – in effect – mean the UK agreeing to take on the EU’s rules and regulations in all these areas.
If the UK parliament chose not to sign up to any of those rules, the idea of frictionless trade would begin to fall apart. The other big sensitivity in this section will be the role of the European Court of Justice (ECJ).
The White Paper says the role of the ECJ in the UK will come to an end, and it sets out detailed proposals for joint institutional arrangements to police future economic ties.
But the ECJ is the ultimate legal authority on EU rules with which the UK proposes to harmonise.
There’s more detail here about how the UK proposes to combine bits of its two previous customs proposals, to create an entirely new customs relationship with the EU.
It would take advantage of new technologies to make trade as frictionless as possible, but it would still involve the UK collecting EU tariffs (taxes on imports) at UK borders on the EU’s behalf – something which isn’t done anywhere else in the world on any significant scale.
The White Paper says the UK would also apply its own tariffs, and an independent trade policy, for goods intended for consumption in the UK. In other words, it would still seek to strike its own trade deals around the world, even though it would be bound by EU rules and regulations.
For once, Brexiteers and the EU appear united – neither thinks the proposal has much chance of working because of its sheer complexity.
Unsurprisingly the UK government disputes that, and says it wants to be at the cutting edge of global customs policy.
But it’s also worth noting that the White Paper says the Facilitated Customs Arrangement (FCA) would have to be phased in – which is code for saying that it wouldn’t be ready by the end of the proposed transition period in December 2020.
The White Paper confirms that the UK will seek active participation in (if not full membership of) the European Aviation Safety Agency, the European Chemicals Agency and the European Medicines Agency.
The government is keen to address business demands that they only need to go through one approval mechanism to access both markets, in highly regulated parts of the economy.
The EU has previously ruled out full UK membership of these agencies, and noted that it would have to accept the jurisdiction of the European Court of Justice if it were to sign up to their rules and regulations.
The White Paper accepts that the UK would not have any voting rights in the way the agencies go about their business, and that it would have to make appropriate financial contributions to them.
This is part of the pragmatic Brexit the government is now advocating, but it is not the resumption of full UK sovereignty that some leading leave campaigners had promised.
The section on services confirms that the UK is seeking a looser relationship with the EU for roughly 80% of the UK economy.
Financial and other services will no longer be able to take advantage of passporting, which gives them automatic access to other EU markets (the UK’s Financial Conduct Authority says about 5,500 UK financial firms currently have EU passporting rights).
The government has abandoned plans for a new relationship based on the concept of mutual recognition of financial regulations, partly because it had been so comprehensively rejected by the EU.
But it is still seeking something more ambitious than the “equivalence’ regime” that the EU has with most other third countries (part of the problem with that is that it can be withdrawn, by either side, with just 30 days notice). So, the UK argues that the importance of the City of London to the EU’s entire financial system means a more ambitious solution needs to be found.
The trouble with a lot of these proposals though is that the EU will see them as cherry-picking from the four freedoms that underpin the single market. It has already said that the UK cannot have full access to the single market for goods and not services, especially if it is determined to end the free movement of people.
Freedom of movement
The White Paper emphasises repeatedly that free movement of people will come to an end.
Full details of a new immigration policy are due to be published in a separate White Paper, which has already been delayed several times.
But there are hints in this document of what could be to come – it sets out proposals for a mobility framework, which is pretty standard in trade agreements.
It could – among other things – “allow citizens to travel freely, without a visa, for tourism and temporary business activity.”
But some Brexiteers fear that what will eventually emerge will be free movement under another name, and they are already suspicious that this is just an opening bid from the government.
The EU will certainly push for further concessions if the UK is to get anything close to the economic relationship it wants.
Part of the problem for the UK is that it is asking the EU to be a little bit more flexible in the way it interprets its rules-based system.
But that request is being made at a time when the EU thinks its rules are under threat from external sources like President Trump, and internal sources like governments in Italy, Hungary and Poland.