Britain stuck between a Brexit rock and a hard place

While potential disaster looms, few policymakers seem willing or able to try to turn the tide of change

Britain's Prime Minister Theresa May leaves 10 Downing Street to meet President Ilham Aliyev of Azerbaijan for bilateral talks in London, Thursday, April 26, 2018. (AP Photo/Frank Augstein)

Theresa May's government is still promising to quit Europe's customs union when Brexit happens next year.

The prime minister's position is politically understandable, yet entirely indefensible. And it perfectly captures the bind Britain has got itself into.

Staying in the European Union's customs union after Brexit, or joining some specially tailored version of it, would leave the UK with a worse deal than the one it currently enjoys as a full member of the EU. All Remainers think so, and a good many Leavers would probably agree. Proposing such an outcome comes close to admitting that the whole Brexit project has gone wrong. It has gone wrong - but, understandably, that's something Mrs May and her colleagues are unwilling to say.

For all the limitations of a customs-union arrangement, crashing out of the EU with no deal at all - a so-called hard Brexit, and the future to which the country is drifting - would be much worse. It would throw Britain's trade relations into disarray and inflict grave harm on the economy. It would also jeopardise peace in Northern Ireland by requiring a hard border between the North and the Republic of Ireland. Staying in the customs union would lessen all these risks, which is why refusing to countenance it is indefensible.

Members of a customs union apply a common external tariff on goods, and trade with each other tariff-free. This wouldn't maintain the UK's frictionless commerce with the EU - for that, full regulatory compliance and membership in the single market are needed as well. By itself, therefore, a customs union wouldn't solve the border issue. But it would help. Meanwhile, British exporters would be relieved to know that business with the EU would not come to a screeching halt.


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The problem is that a customs union stops the UK from striking new deals of its own, negating one of the main supposed benefits of Brexit. Worse, Britain would be bound by EU trade deals with third parties, despite having no vote on them, and no guarantee of sharing in the reciprocal benefits the deals would confer on EU partners. Membership in the EU is already unpopular with roughly half the country. Such a grossly asymmetrical arrangement would be even more toxic.

Brexit supporters also have reason to suspect that advocates of the customs-union approach have a hidden agenda. This compromise would tacitly acknowledge that the Brexit decision was wrong, and thus looks like the first step in a campaign to reverse it altogether. But those same Brexit supporters have no right to complain. Led by a government lacking faith in its own policy, they've failed to give any remotely plausible account of how their preferred hard Brexit can succeed.

The essential point hasn't changed. The Brexit vote was a mistake, and ought to be reversed now, not later. Britain's members of parliament are mostly opposed to Brexit, yet can't bring themselves to do their jobs and act on that conviction. The country and its legislators are therefore left squabbling over the choice between a bad result and a terrible one.

Exactly how this catastrophic failure of leadership will be resolved is hard to say. No forthright pro-EU candidate for the highest office has emerged in either party. The country seems exhausted, and calls for a second referendum to reverse the Brexit choice are falling on deaf ears. Nothing short of a major political crisis seems capable of breaking the collective paralysis.

It's come to something when such a dire and unpredictable prospect starts to look appealing.

Michael R Bloomberg, the former mayor of New York City, is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News. He is the UN secretary-general’s special envoy for cities and climate change