Prime minister,
As I understand it, your objective is to bring about an end to the UK’s membership of the EU while:
retaining free access to the single market for goods and services in the EU;
retaining duty-free and quota-free access to EU markets – in other words, maintaining the advantages of being in the customs union;
restoring the UK’s power and right to negotiate trade agreements with non-EU countries on its own behalf;
ending the UK contribution to the EU budget;
restoring the UK’s right and power to regulate immigration.
Your objective might be characterised as a soft Brexit where trade and commercial relations with the EU are concerned, and a hard Brexit in other areas.
Single market
Your announcement of the “Great Repeal Bill” and of a date for the triggering of exit negotiations has been a masterly opening move. The transposition of all post-1973 European legislation into sovereign British – not European – law means that the EU will be unable logically to exclude UK exports from the single market benefits, since they will conform with all EU norms and standards unless and until and only to the extent that the UK makes a sovereign decision to depart from these standards and norms in specific cases. Such cases should arise only when the UK sees a concrete economic, trading or commercial advantage in departing from EU norms and standards.
Customs union
The next issue is the retention of the advantages of being in a customs union with the EU. I would suggest that there is a very direct way of achieving this. The UK should offer completely free, duty-free and quota-free access to its markets to the EU on condition of reciprocity. I believe that this is an offer that the EU could not logically refuse. Such a refusal would be entirely contrary to its stated ambitions to achieve greater freedom in international trade. It would be extremely difficult for the EU to reject such a proposal from an exiting state because that state did not share the remaining member states’ approach to the freedom of movement of persons of their respective nationalities. The World Trade Organisation could not possibly object to such a measure.
Trade agreements
The next issue to arise is the question of the UK's trading relationships with the rest of the world. This need not be as complex as some commentators have suggested. The effective retention by the UK of access to the EU single market and customs union would deal with the issues recently raised by prime minister Shinzo Abe of Japan. The EU currently has a number of trade and investment agreements with other countries around the world. The UK could propose that, in each such case, a new agreement with the UK of equivalent effect could be achieved by simply substituting a reference to the UK for each reference to the EU in the existing texts of the agreements. It is likely that the EU-Canada agreement will come up for parliamentary approval before the EU exit negotiations have been concluded. It would be a simple matter, post-Brexit, to ensure the continued applications of the provisions of this agreement to UK-Canada trade. President Obama recently made some unhelpful remarks to the effect that, post-exit, the UK would be at the back of the queue in regard to the negotiation of trade agreements. At the same time, both of the US presidential candidates appear lukewarm – to say the least – about the Transatlantic Trade and Investment Partnership (TTIP). Enthusiasm for TTIP is waning on this side of the Atlantic also, with German chancellor Angela Merkel and French president François Hollande bending to internal pressures. The UK might find a welcome from the next US president were it to show itself more accommodating to US interests than France or Germany. In any case, current trading arrangements with the US could be maintained in the same way as those with other non-EU countries.
In the case of trade and investment agreements currently in negotiation between the EU and other countries, the UK could adopt the same approach as that set out above in the case of existing trade agreements or, where the EU has difficulties not shared by the UK, make more rapid progress. Prime minister Tony Abbott of Australia has already expressed his willingness to sign a trade agreement with the UK immediately on its exit from the EU.
This approach to trade agreements would at least preserve the UK’s current interests while buying time to reflect on the need and appropriateness of a more distinctive approach.
Ireland
The approach set out above to the single market, customs union, trade agreements and the financial sector would pose no problems for Anglo-Irish relations. The UK would be free, for its part, to continue its observance of the Common Travel Area with Ireland in so far as Irish citizens are concerned. The Irish government would have to consider its own position as a continuing member of the EU.
New independent UK immigration provisions will require new provisions in relation to people moving between Ireland and the UK. It is unlikely that the Irish authorities would wish to (or be permitted to) operate new controls on immigration from other EU member states. That would inevitably mean that such controls as were necessary would have to be operated by the UK. The Irish authorities are unlikely to agree to operate exit controls at the Border with Northern Ireland (although air travellers are obliged to present their passports at Irish airports). That would seem, inevitably, to require checks on movement between Northern Ireland and Great Britain, for which there are precedents dating back to the 1930s and 1940s.