Despite its long membership, Britain has seriously failed to grasp the way the EU works, writes N Piers Ludlow (LSE). Many of the stickiest points in the Brexit negotiations, including the Northern Ireland backstop and the decision to trigger Article 50 so early, reveal a fundamental misunderstanding of how the bloc operates.
The United Kingdom ought to have started the Brexit negotiations with the EU with one distinct advantage. As an insider of 40 years standing, the UK should have been well placed to anticipate virtually every move by the EU27. The Brexit talks should thus have resembled one of those divorce disputes where each party knows every foible of their former partner and is acutely aware of their vulnerabilities and strengths.
Bizarrely, however, this has not proven to be the case at all. Rather than making full use of their inside knowledge to pitch their case in the most skilful fashion possible, the British have instead blundered through much of the Brexit negotiation as if dealing with the EU for the very first time. This highlights how superficial has been the understanding of the system acquired by much of the UK political class during the four decades spent inside the system.
There have of course been some who have understood the EU. They include a few of the ministers, officials and diplomats who have worked in Brussels, a sprinkling of journalists, and some academic specialists. But none of those who did know how the system functioned have ever been able to make such knowledge mainstream. Instead, the highly polarised internal debate about ‘Europe’ has meant that such expert views have tended to be seen as contentious statements of ‘opinion’, to be debated and challenged rather than taken on board. The former Commissioner Arthur Cockfield, for instance, gradually saw his ability to explain the system to Margaret Thatcher and the Conservative party dwindle as he became ever more seen as ‘one of them’ rather than ‘one of us’. As a result, the British debate about Europe both before and since the 2016 vote has been characterised by a startlingly poor understanding of the EU.
The first widespread mistake has been the failure to realise that the European Single Market is much more than just a free trade area – and that therefore tariff free access to the EU will not give British exporters anything comparable to the access that they currently have. Michael Gove for instance referred in 2016 to a free trade zone stretching from Iceland to Turkey of which Britain would, he was confident, still be part. The UK, in other words, would go on enjoying tariff-free access to EU markets, irrespective of the outcome of the referendum. But this focus on tariffs was quaintly anachronistic, because ever since the 1980s the main target of European liberalisation efforts has not been intra-European tariffs but instead the various non-tariff barriers that clogged up trade across European borders. The elimination of these last lay at the heart of the Single Market programme masterminded by Cockfield and strongly backed by Thatcher. It was therefore the degree to which Britain maintained regulatory convergence with the EU that would do most to determine the country’s commercial access after Brexit rather than the question of tariff levels.
But – remarkably – hardly anyone took Gove to task for this misleading claim. Instead the vast majority of commentators seem to have regarded his statement as relevant and legitimate. And this misguided fixation on tariff reduction or elimination rather than regulatory alignment has continued through the Brexit talks themselves. The British debate about what underpins its trade with the EU – and hence about what will change as Britain leaves – has been characterised by little awareness of how the EU’s internal market operates, despite the key role that the UK played in creating this very market. We have forgotten – or unlearnt – what we once energetically championed.
A second feature of the EU that we ought to have known about but have blithely failed to think through is the importance of timetables. European integration history is studded with the use of timetables and deadlines designed to compel member states to respect their obligations and to bring about simultaneously the administrative, commercial and legal changes that they have agreed to make. Fixed dates for tariff dismantlement stood at the heart of the original 1957 Treaty of Rome; similar approaches lay behind the adoption of the CAP and Common Fisheries Policy; and the technique was famously reprised both in the 1980s and early 1990s with the building of the Single Market and in the 1990s with the establishment of the single currency. As seasoned insiders, the British ought to have taken the two-year timetable set out by Article 50 seriously. In so doing they should have realised a) that two years was a very short period of time to work out even the immediate modalities of leaving the EU, let alone deciding upon the longer term relationship between Britain and Europe; and b) that one of Britain’s strongest weapons was the fact that it alone would determine when to invoke Article 50. The sensible course would therefore have been to determine what Britain wanted to get out of the negotiations, as well as what was likely to be negotiable before allowing the countdown to begin. Instead Theresa May invoked Article 50 in March 2017 well before any clarity existed in the British debate about either point, and has been under severe timetable pressure ever since. By failing to think through the consequences of the Article 50 timetable, the UK seriously weakened its bargaining position.
Another avoidable error has been to underestimate the degree to which Brexit’s impact upon Ireland would become a central concern for the whole EU. In so doing the British have again been guilty of overlooking two further realities about the EU that as insiders they should have been recognised. The first is that the EU is always prone to support an insider in a tussle with an outsider, almost irrespective of the merits of the insider’s case. And this is all the more so, given that many of Ireland’s fears centred on the damage border controls in Ireland might do to the Good Friday Agreement, thereby undermining the EU’s own self-perception as a peace project. The EU has long liked to believe that it had played a useful role in overcoming the Northern Irish ‘Troubles’ – and had been encouraged to think this by the governments of both John Major and Tony Blair as they sought EU money for the region – and hence its dismay at any backwards step in the peace process and its readiness to back Dublin should have been easy to anticipate. Instead there has been general perplexity in much of the British debate about why the EU was seemingly putting the interests of a single small member state above the bloc’s economic and political interest in a rapid settlement with the UK.
Finally, and perhaps most fundamentally, the British debate about what was likely to prove negotiable has failed repeatedly to take into account the political nature of the entity with which it is dealing, and the fact that it is the UK and not the EU that is asking for change. The first of these realities is best illustrated by the Boris Johnson ‘prosecco’ argument – or the idea that the strength of Britain’s bargaining position in the negotiations springs from the commercial interest of many continental exporters in keeping access to the lucrative UK market. This overlooks the extent to which all of the EU27 regard a flourishing EU as even more valuable than the British market, whether economically or politically. And yet giving UK the sort of exit terms which many Brexiteers seemed to regard as likely so as to avoid the loss of sales to Britain would seriously endanger EU unity and incentivise others to follow the UK’s example. The potential negative consequences would far outweigh the loss of the British market, however prized. This helps explain why the EU27 opted immediately after the referendum for a negotiating procedure which maximised the likelihood of their staying united and minimised the scope for the British to divide and rule.
The EU27’s whole approach to the talks, in other words, underlined how the politics of staying together trumped the potential value of trade with Britain. Furthermore, the underlying dynamics of the negotiation were always going to be profoundly asymmetrical, not just because it pitted 27 against one, but more importantly because the EU could unite in the defence of a pre-agreed system whereas the British had to devise its desiderata from scratch. Mapping out what Britain desired would always have been a challenging task, not least because Leave voters hold markedly divergent views on the question; it has been even more so in a deeply polarised country, led since 2017 by a minority and profoundly split government.
Here too, though, an extraordinary number of those commenting on the negotiations totally failed to anticipate this reality. Instead there was a widespread expectation that it would be the EU27 and not the British who would be divided and weak in the negotiations. Mervyn King, for instance, told the BBC that immediately after the referendum EU leaders must have asked themselves ‘How on earth could the European Union manage to negotiate against this one decisive group on the other side of the channel?’
The EU’s strength should not have been at all surprising. Uniting around a pre-agreed position, and maximising internal coherence even at the expense of external rigidity, has been the EC/EU’s default approach to negotiation ever since it was first created. And yet once outside (or at least on their way out and treated as already having left in terms of how the Brexit talks have been organised) the British have reacted in horror at this deep-rooted – and hence entirely predictable – characteristic.
All told, therefore, the manner in which the British have allowed themselves to be taken aback by the realities of negotiating with the EU says much more about our own shallow understanding of the system than it does about European vindictiveness. A tiny minority of UK officials and politicians did correctly predict the likely course of negotiations from the outset – most famously Ivan Rogers. But the vast majority of the British political elite have gone on being ill-informed, not to say deluded, about the nature of the EU. What this means for the eventual outcome of the Brexit process remains unclear. One lesson, however, is already apparent. We have been ‘in Europe’ for over four decades, but as the whole depressing spectacle of the Brexit talks amply demonstrate, few of us have ever really understood what this means.
This post represents the views of the author and not those of the Brexit blog, nor LSE. It draws on N Piers Ludlow’s article in Diplomatica, Did we ever really understand how the EU works?, vol. 1, issue 1.
“The UK, in other words, would go on enjoying tariff-free access to EU markets, irrespective of the outcome of the referendum. But this focus on tariffs was quaintly anachronistic, because ever since the 1980s the main target of European liberalisation efforts has not been intra-European tariffs but instead the various non-tariff barriers that clogged up trade across European borders.”
The difference is that you can make an economic case for benefits of zero tariffs. There is no such economic case for regulatory alignment because it is indeterminable whether in many a given case economies of scale is a better approach than tailoring to the specific needs of multiple particular markets. The Single Market doesn’t really have economic benefits in the main; it is pursued for political reasons — the progressive meshing of national economies.
“This overlooks the extent to which all of the EU27 regard a flourishing EU as even more valuable than the British market, whether economically or politically. And yet giving UK the sort of exit terms which many Brexiteers seemed to regard as likely so as to avoid the loss of sales to Britain would seriously endanger EU unity and incentivise others to follow the UK’s example.”
Indeed, the key misunderstanding the British Establishment made is that — in the face of evidence to the contrary — EU membership has significant economic advantages. In Brussels, meanwhile, they know that EU membership has very little economic advantages and that a country like Britain would probably do well outside it. Since EU integration has always been a political project justified by economic advantages that do not exist, for Britain to do well outside the EU would jeopardise the legitimacy of the EU itself. Therefore the EU’s aim must be to make Brexit artificially bad, either by denying a smooth, managed exit, or by making it have painful political costs.
The chief problem, then, is that the British side were full of people sunnily convinced that EU membership had economic benefits, and the EU side were full of people darkly convinced that it had perilously few.
“The difference is that you can make an economic case for benefits of zero tariffs. There is no such economic case for regulatory alignment because it is indeterminable whether in many a given case economies of scale is a better approach than tailoring to the specific needs of multiple particular markets. The Single Market doesn’t really have economic benefits in the main; it is pursued for political reasons — the progressive meshing of national economies.”
M. Thatcher would have disagreed with you.
What you are describing was pretty much the EEC of the 1970s/80s.
A customs union but with different regulations in each of the member states. And therefore border controls.
And the rest?
Of course it is easier and cheaper for any business if it needs just one certificate to confirm regulatory compliance for the whole EU than one for each member state. That should be obvious.
And true for large companies like car producers as well as small and mid-size companies.A “home market” of 500 million people simply is larger than one of 66 million.
It´s the same for agricultural products.
And even incomplete the single market gives much better market access for services than any FTA.
Perhaps you can tell China and the USA that their huge home markets don´t have economic advantages?
I don’t think you understand. I am saying that the Single Market was a mistake. You seem to regard its value (and Thatcher’s?!) as self-evident.
The EU is not comparable to the US and China, because the latter are far more homogenous in tastes and standards then the dozens of EU nations. The more diverse tastes and standards are, the poorer fit any one-size-fits all must be.
You also don’t seem to see the downsize of huge home markets, in that they promote capital and talent from a particular industry to progressively pool in one, overwhelmingly dominant, spot. Hollywood, Silicon Valley, Wall Street. This necessarily creates vast spatial inequities which the US and China can counter to some extent through massive transfers of wealth from richer areas to poorer, in perpetuity. But just you try persuading the Netherlands to do that for Greece. The Single Market destroys vast swathes of its ‘huge home market’ because the EU adopts the trappings of a nation but cannot behave with the solidarity of one.
I think the article makes a lot of good points, but I think there was miscalculation on the EU side as well. I assume that when the withdrawal agreement was signed off, the EU negotiators thought it fairly likely that Theresa May would get it through the Commons. In this they miscalculated. In retrospect I think it should have been obvious that a treaty which bound the UK to the jurisdiction of the ECJ far more irrevocably than the UK’s current membership of the EU (which, of course, can be terminated with 2 years notice) was going to be a non-starter. I suspect that if the EU27 had offered the UK a sunset clause of, say, 2030 on the backstop in March, the DUP and the ERG would have grabbed it with both hands, after all everyone wants to get this wretched thing over the line. And would such a sunset clause been so bad? Wouldn’t it have been better to take some risk of extra controls on the Northern Irish border in 2030, if the technological solutions don’t work out, than the much higher risk of it happening in 2019? But the EU27 had painted themselves into a corner by then, so couldn’t do that.
Why did the EU27 miscalculate? I think it is because the amount of rebellion in the House of Commons is something very very unexpected to European eyes used to coalition government and proportional representation. In Germany the need to hold coalitions together with tiny majorities and the proportional representation system makes party discipline very strong; a member of the Bundestag who rebels can be put on a much worse list place in the next elections. In the UK, an MP who is popular locally is almost impregnable, because if the party deselects them and puts another candidate in, they lose the incumbent bonus and risk letting a rival party in.
I think Alias is right on the money there: indeed, even now I get the impression some on the EU27 side believe the proposed WA will somehow be agreed as-is eventually, despite overwhelming and repeated rejection. Some of the commentary even gives the impression they believe the backstop is somehow extant and can be “kept”.
Perhaps the wishful thinking of terming the rejected proposal a Withdrawal “Agreement” despite not actually being agreed to by the other side drives this line of thinking? Of course May exacerbated this with her misguided second and third votes on the same rejection, rather than go back to the EU27 and say “OK, this proposal is dead, what do you want to do next?” Instead, they seem to have sat back expecting it to go through eventually somehow – like a frustrated diner having their credit card declined: “run it again!” as if the outcome will be different the 4th or 5th time they try the same rejected transaction.
I agree even a long sunset would probably have shifted the vote substantially, and been a much better outcome for the EU27 (particularly Ireland of course): at the very worst, delaying the moment of reckoning by a decade they could use to prepare and adjust, instead of facing a “big bang” transition later this year. They’ve painted themselves into a corner now though, with hardline rhetoric about not being prepared to move an inch, making the pragmatic solution much more painful for themselves with no upside.
The primary strategic error made by the (English) Establishment was, apart from the other errors already mentioned, that no unified position on the outcome of brexit was reached before the referendum (would have been nigh impossible anyway). Furthermore a gross miscalculation by the UK of the positions of the other parties involved in brexit is also unforgivable from a governance point of view. So now brexit is being seen from the continental pov as just a sad English protest against the political realities of the 21st century.
The Tory strategy to defeat the Blair-Brown Labour party was to paint them as un-British cosmopolitans. Ever since then it has been impossible for the Tory leadership to understand the EU, since their jobs depend on them not understanding it. A tragedy worthy of an opera.
In due course, more will be known about the intentions of the UK political establishment in this matter and the degree to which the EU leadership and the UK establishment connived to pull the wool over the eyes of the UK electorate. The author here, like so many commentators, maintains the fiction that the UK political establishment acted in good faith towards the British people following the Brexit referendum result. Although there are diverse opinions about the strange performance of May and the subsequent difficulties of getting her WA accepted by the HoC, the entire saga cannot with any credibility be interpreted as a genuine attempt by May and her small coterie of advisers to unreservedly put into effect the referendum result.
It beggars belief that, as suggested, the UK political establishment did not and does not understand how the EU works. That, however, is beside the point anyway.
In the lead-up to the point where Cameron called the referendum, the EU leadership had already made it clear they were not going to be acting in good faith in the event that the British people were to vote Leave. Once the referendum was called, the sniping and puerile nastiness from the EU leadership increased. It never stopped. The EU leadership were and are determined to make it as difficult as possible for the UK to leave this club. This in itself should be a wake-up call for people who believe in democracy, individual rights and the right of citizens in a nation-state to determine their country’s path of sociopolitical development. In this case, the May government should have honoured the referendum result. In fact, May did not actually involve her government.
There are many unanswered questions about the manner in which May excluded her government in any planning for Brexit, if she did any planning for Brexit at all. May attempted to rule on her own, with a few close advisers, managers and trusties in Cabinet. She in fact railroaded her government all along, and tried, unsuccessfully, to railroad the HoC as well. To ignore the very trampling of the Constitution by May during her reign is not only to miss the most important aspect of this episode, but to reject the very basis of parliamentary democracy in British history, which is also UK history.