Last month Sam Lowe argued that something like single market membership for goods could solve the Irish issue. In light of the crunch Chequers summit, re-read his viewby Sam Lowe / June 21, 2018 / Leave a comment
Amid all the chaos and confusion, is a possible Brexit landing point moving into view? It appears that Theresa May is inching towards pushing for a post-Brexit relationship that would see the UK remain in the European Union’s single market for goods, VAT area and customs union—while leaving the single market for services and ending the free movement of people. We at the Centre for European Reform have called this the Jersey option, as it replicates to some extent the arrangement the Channel Islands have with the EU.
Such a relationship would see the UK free to legislate and strike trade deals in the area of services (and suffer the consequence of reduced access to EU markets as a result). It would avoid the need for checks at the UK’s borders on goods going back and forth to the EU, reducing the risk of some of the feared negative impacts of Brexit such as queues of trucks backing up from Dover. And most importantly it would ensure there would be no need for physical infrastructure on the Northern Irish/Ireland land border.
Assuming the prime minister does actually want this, and can get it signed off by her cabinet (which recent reportssuggest is far from a given), will the EU agree to it?
The answer is probably not. But bear with me.
While, from a mercantilist point of view, the Jersey option has its appeal—it would protect the EU’s trade surplus in goods with the UK while reducing access to the UK’s services industry—the fear that allowing such an option would undermine the integrity of the single market reigns supreme. Arguments that (minus a customs union and VAT) the EU has already allowed the Swiss a similar relationship will hold little water; the EU doesn’t like the Swiss relationship and isn’t keen to make the same mistake again. It should also be noted that the Swiss are required to accept freedom of movement as a condition for their partial membership of the single market, something the UK is reluctant to do.
There is also a legitimate fear that the increasing interdependence of services and goods, where the value of a manufactured product may be largely derived from its services inputs, makes the carving out of goods…