16 November 2017

Jean-Claude Piris: Britain is deluding itself over single market access

after Brexit, the British government hopes to retain partial access to the EU’s internal market under the same conditions as a member state, provided that the UK promises to follow relevant EU laws, under the control of an ad hoc tribunal. But that is based on a fundamental misunderstanding of what the single market is. In fact, it is not possible for a third state to have total or partial access to the internal market under the same conditions as EU member states and other members of the EEA. This is not because of ill will on the EU’s part. It has no choice but to protect the homogeneity, credibility and legal security of its single market.

First, the single market is based on the free movement of goods, services, capital and people, and choosing among these freedoms is not permitted. Second, the single market is much more than an area in which customs tariffs and quotas disappear. It aims to abolish all regulatory obstacles to exchange and binds participating states to a set of strict conditions. These include the norms and standards for goods, the primacy of EU law over national laws and the exclusive final power of interpretation by the EU court. Individuals and economic actors may control the correct implementation of that law through their national courts.

There can be no compromise on these conditions — the credibility of the single market depends on it. This is why no third state has ever achieved partial or full membership of the EU single market, with the exception of the three members of the European Free Trade Association that are also members of the EEA. These countries have formally accepted the four freedoms and have agreed to be bound by the judgments of the Efta court. In case of divergence with the EU court on internal market law, the EU court would prevail. Although EEA membership would be the best option economically for the UK, it has rejected it for political reasons.

The only other plausible option is a free-trade agreement. The best such deal would look similar to Ceta. The UK would not be bound by EU laws and by the free movement of people, and it would be outside the customs union and free to sign trade agreements with other countries. And most (if not all) of its goods and products would have tariff-free access to the EU market.

On financial services, the UK, like Canada, will not get substantive provisions. Although it will not be bound by EU norms and standards, British companies will have to follow them, in conformity with the principles of the World Trade Organisation, in order to export their products to the bloc.

Finally, a free-trade agreement between Britain and the EU will permit a transition period of two or three years, and will be accompanied by a range of additional agreements: co-operation on external and internal security; continued participation in many EU programmes and in some EU agencies, and the European Atomic Energy Community; acceptance of the jurisdiction of the EU court where necessary, and to pay a normal participation fee, as other third countries do. [...]

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