Just how wrong is the Brexiteer view of an anti-market EU? Ask Canada or Australia, write Craig Parsons and Benedikt Springer. Brexiteers have frequently characterized the EU as a regulatory nightmare that impedes Britain’s traditional commitment to global openness and free trade. Well-informed observers generally know this is implausible—the EU is built around deep “single market” liberalisation, and promotes free-trade deals worldwide—but even experts rarely realize just how much the EU stands out for cross-border openness. In many ways, the Single Market now has fewer interstate barriers than the national markets of Canada, Australia, or the United States. Canadian and Australian moves to liberalize their own markets have been directly inspired by the EU model.
One of the salient (though secondary) themes that led to Brexit presented the EU as a straitjacket on Britain’s vocation of openness. In this view, free trade is an invention of the Anglo-Saxons—practiced most purely by the British and their progeny in the United States, Canada, Australia—that the Continentals have generally obstructed. As British tabloids have reported for decades, and as the Ur-free-marketeer Margaret Thatcher came to believe in her later years, the EU is a stifling “super-state”: a bureaucratic, mostly anti-market entity bent on regulating the curvature of bananas and encouraging fraudulent over-production of olive oil. As Theresa May put it in January 2017, “the British people […] voted to leave the European Union and embrace the world.”
This image fits awkwardly with the primary theme behind Brexit: that the EU forced Britain to be open in undesirable ways. Opposition to free movement of people across European borders was the leading edge of the movement. Analyses of the Brexit vote tend to highlight what sociologist (and then-LSE Director) Craig Calhoun described as an anti-openness “mutiny against the cosmopolitan elite.” Brexit appealed especially to less educated, less skilled, and older people who felt threatened economically or culturally (or both) by cross-border flows.
Despite their contradictions, only the marriage of these themes delivered the Brexit baby. Some especially compelling support for this interpretation comes from Dominic Cummings, the maverick political prodigy who orchestrated the Brexit campaign. His frank 20,000-word account emphasizes the contingency of the outcome, and also that any chance for “Leave” depended on combining the “mutiny” with respectable, market-friendly Tory leadership. Immigration and threats to the National Health Service were the winning issues with voters, but many middle-class voters baulked at identifying with Nigel Farage. Though the “Go Global” frame itself was a “total loser” electorally, its traditional-Tory feel helped established figures like Michael Gove and Boris Johnson become the faces of the coalition—and to claim that they carried the mantle of Mrs. Thatcher in so doing. Brexit would restore British sovereignty so it could both control its borders and return to its free-trade vocation.
This blog post argues that the “Go Global” theme was extraordinarily misleading. Many observers have made similar points, both with respect to the EU and Britain’s options outside it. Certainly, the EU has some questionable regulations and subsidies, but it is built around a project of deep liberalization. It actively promotes free-trade deals around the world, with more leverage and success than Britain could possibly achieve on its own. To fully grasp just how wrong is the Brexiteers’ view of an anti-market EU, however, this post briefly compares the EU to the internal markets of Anglo-Saxon federations. Though not even many EU experts recognize it, the EU’s Single Market has surpassed the United States, Canada and Australia in removing internal barriers to exchange. What’s more, substantial recent steps in liberalizing the Canadian and Australian internal markets were unambiguously propelled by the EU model.
Take the latter point first. In 2014 Canada and the EU signed a Comprehensive Economic and Trade Agreement (CETA). Given the many barriers to interprovincial trade (of which more below), it led to business complaints that Canada-EU trade would now be freer than intra-Canadian trade. The Canadian Senate produced a major report titled “Tear Down These Walls: Dismantling Canada’s Internal Trade Barriers,” and in 2017 the provinces and federal government signed a Canadian Free Trade Agreement (CFTA) to open up trade in goods and services, recognize each other’s professional licenses where possible, and end interprovincial discrimination in public contracts and subsidies. Australia went through a similar process twenty years earlier. It was not so directly spurred by negotiating with the EU, but was explicitly and constantly presented as an effort to redress declining Australian competitiveness by imitating the EU’s “Single Market 1992” initiative.
Canadian and even the more advanced Australian efforts still leave more barriers in place than we see in the EU, however—and their legal commitments to open interstate exchange are far weaker. The US case, meanwhile, has stronger legal commitments to open interstate commerce than Canada or Australia, but still much weaker than the EU, and essentially zero political interest or legislative activity to address interstate barriers. The following tables provide a quick and crude summary of this complex terrain, looking first at legal and political principles (Table 1) and then at salient areas of regulatory rules as they stand (Table 2):
Table 1 highlights that the Anglo-Saxon federations do not require much openness from their states. They generally ban explicit or purposeful discrimination against other states’ people or firms, but have little problem with regulations that only have the effect of impeding interstate commerce while pursuing some other announced goal. The EU, meanwhile, puts a severe burden of proof on all state rules to specifically justify any impediments they raise to interstate exchange or mobility.
If Australia and Canada have now both recognized that their legal principles long permitted “far too many unnecessary regulatory and legislative differences…that prevent the free flow of people, goods, services and investments between provinces/territories” (as the Canadian Senate’s report put it), that recognition has not actually altered their legal standards for openness. Their internal liberalization has been entirely voluntary on the part of the states—using what the EU would call “intergovernmental” mechanisms—thus confirming the states’ authority to back off from openness if they wish. Indeed, the Canadian Supreme Court reconfirmed this principle in the widely-followed “Free the Beer” case decided in April 2018. It held that New Brunswick’s limit on buying beer from other provinces was acceptable despite the constitution’s provision that any province’s goods “be admitted free into each of the other provinces” (section 121). As one lawyer said after the decision, “[Internal liberalization] is going to have to be negotiated by the provinces rather than decreed by the Supreme Court.”
Why the Anglo-Saxon federations have been relatively uninterested in internal market barriers, and the EU so obsessed with them, is a big question that we’re researching now. We’ll try to elaborate in future posts—including arguing that the reasons why the most pro-market American politicians (like outgoing House Speaker Paul Ryan) ignore substantial barriers in their interstate commerce are much like the reasons why Tory free-marketeers dislike the EU. (Both concern opposition to federal authority that trumps—if you will—their desire for economic openness).
For the moment, though, the takeaway is just that Brexiteers would be well advised to consider how strange their characterizations of the EU will sound to their Anglo-Saxon brethren in the Antipodes or the Great White North. In the same time period that anti-EU Thatcherites developed the notion that the EU obstructed true economic openness, pro-market politicians in these other polities concluded that they had to imitate the EU more to reach that goal.
None of this is to say that the EU is a model of economic rationality, or that we personally endorse the EU’s strict requirements for interstate openness. But the EU’s commitment to interstate openness is unambiguously stronger than any other large polity in history, and it has encouraged similar openness elsewhere.
This post represents the views of the author(s) and neither those of the LSE Brexit blog nor of the LSE.
Dr Craig Parsons, Professor of Political Science, University of Oregon.
Dr Benedikt Springer, Policy Analyst, Oregon Bureau of Labor and Industries and Hatfield Resident Fellow, Portland State University.
A very well written piece, although let’s not forget that Brexit didn’t come about just because of EU policies and trading. The majority of voters simply just don’t want to be European, they want to be British without the EU’s fingers in their pie. There’s far more to this than the EU situation itself. The visit from President Obama trying to give advice to the British public was one of the key mistakes with that islands national thought process alone.
“Brexit appealed especially to less educated, less skilled, and older people who felt threatened economically or culturally (or both) by cross-border flows.”
How dare you?
I’m tempted to to use language attributed to that used by some ignorant and abusive remoaners on theses LSE Blogs.
But won’t lower myself.
Your one sided views are insulting and serve only to solidify my views that I was right in the first place.
Let me tell you why this undereducated old person voted leave, because you really do not have a handle upon life other than to allow yourself to be conned.
No one in this country is happy that the European courts have final say on terrorist being able to appeal deportation!
Then find that the terrorists have more rights than the victims.
That was a reason to vote out alone!!!!!
My freedom of speach was removed from me.
My business is retail, I ask suppliers why internet can undercut me.
I’m informed that if they even talk about it then they will be fined and put out of business.
How can it be that we have lost freedom of speach?
Junker was elected in secret in 2014, he was the only candidate!
How can that be democratic???
In business I wanted to obtain product from Europe because at that time the pound was strong, but found myself blockaded by suppliers.
Appealing to the courts of Europe would cost milllions.
How can that be Right?
We are only in the bits of Europe that Europe want us in, they only want our contributions.
I demand that my vote no matter how small is meaningful, the word meaningful is not the exclusive domain of parliament.
The majority who voted said out, out it should be else there will be bigger issues to deal with later.
If Europe prevent our democracy from acting, I am more determined than ever to leave.
What right do they have to interfere with our democracy, because that is exactly what they are doing!!’
Kettles restricted in wattage, to save the planet!
European idiots. One has to boil for longer there is no benefit.
Vacuume cleaners restricted in wattage to save the planet
European idiots, there is no benefit one has to keep it on longer!!
Ever closer union!
There is no secret about it, I do not wish to see our democracy eroded further.through a dictatorship.
That dictatorship is now clear from what is going on today.
If my vote is not respected along with 17 million others, then.I shall never vote again.
Can you idiotic doctors of nothing not see?
It means that the majority of voters will loose confidence that their vote has meaning.
So may never vote again.
That will lead to extremists being elected by minority inexperienced youth.
Trouble on the streets!!!!!
That is destruction of democracy for which so many have given to much.
Yes I am!!!!
We should walk away and walk away now.
The pain will be short, the future will be huge.
Blogs like this are aimed at subliminal messages sent to put negative thoughts in our heads.
You will be surprised to find it won’t work.
We have an ability to think for ourselves not follow like sheep.
For gods sake.
Who are the Eu to dictate deadline?
Who are they to split up
Who are they to dictate to us?
It’s time to show our strengths
How far will eurobus go without wings?
Where will Germany sell their cars?
French wine and cheese?
How will Europe fair without our spending?
Let’s get out, sooner the better.
There does seem to be quite a lot of confusion in your post. The European Court of Human Rights has nothing to do with the EU and has completely different members and was founded by Winston Churchill well before the EU predecessors.
But I’m not to confused
It’s still a European court and there is no obligation to tie ourselves to it.
Having said that my personal gripe and many leave voters is that terrorists appear to have more rights than the victims. But other Serious breaches of human rights should be cemented in U.K. law
If you have killed innocent people you have forgone your rights.
We’re not bad people in a bad country you know!
There is an argument about whether terrorists should be tortured and executed. Personally, I am against that but I respect that you have the opposite view.
My point is that this is nothing to do with the EU. Indeed the government have been clear that we are not leaving the ECHR.
Just because something was the word “Europe” in it doesn’t mean it’s linked to the EU.
“My business is retail, I ask suppliers why internet can undercut me.”
Can you explain what this has to do with the EU?
I am also in retail,
You should be aware that to even discuss why you are undercut is contrary to article 101 of the Eu anti competition laws.
If a supplier talks to you about it, they must submit a letter to the competition authorities ( in the U.K. ) apply for exemption for whistle blowing, and report you.
If found guilty you can be fined 10% of your global turnover.
I have studied in detail and taken legal advice from the highest possible available.
I was asked to speak on the subject at a large conference ( best not named)
I got a call from a solicitor who told me that he had a number of clients at that conference and would advise them to walk out, not attend and report the speech.
I withdrew from speaking about it.
Tip of the iceberg!!!’
There are exemptions available to me under article 101(3) that allow me to even make this post.
If anyone is in doubt regarding the dictatorship
Here is an article regarding Brussels ordering Italy to
do as the great lord and masters in Brussels say.
It’s only a matter of time before this cartel collapses and we will be careful n the best place when it does
“If Brussels doesn’t do anything about it, we will do it on our own
In a letter to the Italian government, Mr Dombrovskis and Mr Moscovici said: “We call on the Italian authorities to ensure that the budget will be in compliance with the common fiscal rules and look forward to seeing the details of the measures.”
But Italy’s coalition government, only appointed earlier this year, are refusing to cave into market pressure and backtrack on its radical new spending plans.
In response, Mr Di Maio claimed the “constant attacks” over Italy’s budget plans are only serving to unite the government more and make it stronger, defiantly adding: “We must defend Italy.”
A very little reported subject is the gradual breakdown of the UK single market. For example a business I am invoked with can no longer run cross UK advertising or freely move staff between Scotland and England due to the different alcohol laws.
No doubt we will see more of this as devolution develops.
We are not allowed under EU competition laws to promote “buy British”
But all Europeans ignore it
Other than the straight bat of the U.K.!
How good will that be for the economy and enterprise?
Er, no. There are lots of buy British schemes, some of which are even partially by the EU. Indeed my business has received EU founding specifically for marketing.
How good would it be for your business if there was a buy British promotion.
I am barred from buying product in Europe, doors are closed, but from our British distributors I’m told..
No I wish to buy from Italy
No is the answer
If I kick up a fuss I loose the product altogether.
Could you reupload the images of the tables in a higher resolution please. The low resolution makes them difficult to read.
Hi Jason — let me see if I can get higher resolution versions posted, or feel free to email me and I can send them to you.
I thInk true Europhiles should embrace Brexit. The biggest problem over all the years is that the UK has never been truly in, only one foot in the EU vision.
I don’t think this will ever change with the status quo, I don’t recall any big party campaign to join the Euro, which to me I s not about financial sense but building a stronger bond between EU citizens.
So embrace Brexit, once we have left there will no doubt be a campaign to rejoin and if we do it would be hook line and sinker.
The EU can then march on with its European superstate with no more UK veto’s holding it back.
Now, whether a EU superstate is a good or bad thing is an interesting debate, but i think that is the only way the EU can survive long term.
If seems wrong to me where we are right now.
If the prime minister goes forward she is wrong, backwards she is wrong, left or right, she is wrong.
Therefore we should replace her!
When the issues here are coming from Europe themselves who ate afraid of the. Gravy boat sinking.
We have a lot to offer Europe, not to mention certain aircraft wings for the aggressive French.
It’s time to play our trump cards.
Do you want our money or not?
If so tell us what you are going to do to get it.
Not the other way round by us begging them to take our money.
This could be sorted in a coupe of days
Just walj away and watch the colour drain from their face!!!!
Re. Dennis’ Comments. I notice that you have no alternative solution/s to the situations and problems you identify. The reason you [‘…won’t lower…’] yourself is probably because you have such ‘low’ self-esteem that there is no space for you to ‘lower ‘ yourself into. For goodness sake, ditch your semantic obsessions, realise that your opinion is as free to air as anyone else’s and set about being as objective as you can in realising that in default of any other solution, the UK must as a matter of urgency, make the best Brexit by realistic negotiation and balanced compromise. Your attitude of irascible and over-heated antipathy helps no one and nothing – not even you – as you are not ventilating your frustration … you’re in danger of prolonging it.
Oh thank you for your rhetoric!
Solutions are simply really.
Parliament should do what was promised on the £8m leaflet send out to all households.
“We will honour your decision”
Partly political squabbling for personal gains from the Labour Party should be set aside in the interest of the country.
SNP should stop attempting to use this as another excuse for another referendum.
The EU have used our disunity against us, that’s because we are an open speaking country.
Already there is legislation within Europe that prevents freedom of speach and that is the tip of the iceberg.
If we fail to carry out the will of the people we will in time be part of the federal state of Europe with all that come with it.
Including the loss of democracy.
Battles are not always fought with guns and violence.
Current issues are only about money ( which is important ) but no where near as important as democracy.