Cliff Taylor: Why Brexit-in-name-only is a likely outcome

Taoiseach Leo Varadkar was undoubtedly right when he said the quickest way for the UK to negotiate a trade deal after Brexit was for it to stay as closely aligned to the EU as possible. And as this would be in Ireland's interests, it is what the Government would like to see.

However, all the signals coming from the EU side are that they will not make this easy for the next UK prime minister. So unless the UK agrees to abide by pretty much all the EU’s rules, the irony is that it might actually be quicker and more straightforward to negotiate the kind of trade deal the EU has with Canada – and accept that some barriers are going to exist.

The real trouble will come if – as is quite likely – the UK tries to get a trade deal with the EU that is a kind of half-in, half-out arrangement. This is where all the signs are of a hardening in the view in many of the more powerful EU states. They will insist that if the UK wants to get access to EU markets on something like current terms, then it must play by the rules. Boris Johnson insists he won't do this, while Jeremy Corbyn would accept closer alignment.

But in negotiating a future relationship with the EU, either man will be choosing from a menu put forward by the EU. And while there is room for endless negotiations around the fine detail, there are really only two broad options. One is that the UK will continue to operate on a “ level playing field” , agreeing to maintain EU standards and follow most EU regulations. This would mean the UK could be granted relatively free access to EU markets, assuaging EU fears that it is going to cut costs and be a “Singapore-on-Thames”. But it would scupper UK plans for far-reaching new trade deals with countries like the US.

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Second option

The second option is that the UK chooses to diverge from EU rules and regulations – and refuses to commit to the level-playing-field provisions. Then the best the UK will get is a deal that offers their producers some kind of reasonable access to EU markets – and vice-versa – but a long way from what operates now. There could be tariffs, for example, in some areas on products moving between the UK and EU and there would certainly be checks to ensure regulations on product and food standards are met and to verify where goods are coming from.

There is no middle route. Johnson is simultaneously talking up the prospect of getting Brexit done, doing a new trade deal with the US and maintaining close links with the EU. The first goal of the EU negotiators, if he is returned to office, will be to burst this bubble. If the UK is to adjust its standards in some areas to get a new deal with the US, for example, the EU will insist on tight border controls to protect the single market.

There are severe doubts about whether Johnson's plan to diverge from EU rules is even possible

The next UK government faces real, immediate and difficult choices here between the interests of a whole range of consumers and producers. In food, for example, how does it strike the balance between affordable food and safe, sustainable production? Will it trade off the interests of its fishing sector for some wider gains? What about the needs of London and the City’s powerful financial sector.

You don't need me to tell you which kind of Brexit is the more favourable scenario for Ireland. A UK closely linked to the EU cuts the threat to Irish trade and makes the new arrangements proposed to keep the Irish Border open much more likely to work– or possibly, depending on the outcome, at least in part redundant.

Dangerous divergence

A UK diverging from the EU is dangerous, threatening a significant economic hit to Ireland and making the Border deal much trickier to operate. And of course to avoid some kind of very hard Brexit, we first have to see the withdrawal deal actually voted through the UK parliament and then an acceptance in London that the end-2020 deadline for a new trade deal to be agreed and ratified is impossible and needs to be extended. Trade deals are horrendously complicated, involving competing interests within countries as well as between them – from fishing to farming to manufacturing and services, all will be on the front foot in each country, demanding they get their way.

There are, among many expert observers, severe doubts about whether Johnson’s plan to diverge from EU rules is even possible. Can one middle-sized economy with 66 million people really set its own regulations in a world increasingly divided between the spheres of the three big players – the EU (500 million), the US (320 million) and China (1.4 billion)? Won’t the madness of the UK trying to put in place new rules in everything from pharma to food to aviation to finance quickly become evident – not to mention the economic cost of erecting barriers with its closest big marketplace, the EU?

This week former head of the World Trade Organisation Pascal Lamy forecast that the most likely outcome was for a Brexit-in-name-only outcome, where the UK leaves the EU, but continues to remain closely aligned to it and follow a lot of its regulations. This, however, is not the story being spun by the man who is the bookies' favourite to return to No 10 Downing Street. Johnson is selling a story of getting Brexit "done". If only it were that easy. A weary UK electorate may support this goal. But unlike the celebrities in the jungle, it is a bit more complicated than shouting "get us out of here".