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A No-Deal Brexit: Probable Disaster or Potential Opportunity?

At 11 pm GMT on 29 March 2019, the United Kingdom of Great Britain and Northern Ireland is scheduled to leave the European Union. Regardless of what position people took during the 2016 Brexit referendum, this leaving could be viewed as an once-in-a-lifetime opportunity for a sovereign nation-state to engage in a major reset of its political, economic, and legal relationships.

That, however, is not how most of the British political class sees Brexit. As in the lead-up to the referendum, gloom-and-doom is being voiced from across the political spectrum at Westminster. This owes something to the fact that Prime Minister Theresa May’s tenuous hold on the House of Commonsnot to mention her own Tory partymeans that her government has to negotiate with multiple groups with wildly divergent views of what Brexit should be or if it should even occur. To say that this process has not been going well is an understatement. It’s further complicated by the fact that many government ministers and MPs from all parties, the majority of the civil service and large segments of the press opposed Brexit, have never accepted the referendum result, and resent the entire exercise.

It’s an open question whether Britain and the EU will have ratified a formal withdrawal treaty before March 29. Theoretically the EU could prolong the two-year negotiation period. That, however, requires agreement from all of the remaining 27 EU member-states. This is only likely if negotiations indicate that (1) an agreement is probable and (2) it will be affirmed by all 27 member-states and Britain’s Parliament.

Without a treaty, Britain is heading for a No-Deal Brexit. Not surprisingly, many people inside and outside the UK want to know what that would portend for Britain. Would it mean economic upheaval, even a breakdown in civil order? Or would people wonder on March 30 what the fuss was all about?

A New Economic World

Most discussion about Brexit concerns its economic implications. Should a No-Deal Brexit occur, Britain’s trade relationship with the EU will be governed by World Trade Organization (WTO) rules after March 29. These rules already determine how Britain trades with countries like Brazil, China, and America. At present, Britain anticipates adopting the same tariff schedules under which they have operated as part of the EU. The hope is to minimize disruption and uncertainty for British and foreign businesses.

This doesn’t mean that Britain would need to sit still after March 29. A No-Deal Brexit would be an occasion for Britain to reassess its trade relationship with every country with whom it has significant economic relations. Freed from the obligations associated with any pre-existing trading commitment to the EU, Britain would be at liberty to pursue new trade agreements and possibly secure more advantageous terms than either WTO rules or the tariff schedules hitherto negotiated on Britain’s behalf by the EU.

Trade deals don’t happen overnight. Some are years in the making. Nevertheless, few nations have the chance to engage in this type of systematic reassessment. We also know that many countries are very ready to do trade deals with Britain. The United States and Australia, for instance, have consistently signaled an anxiousness to negotiate more favorable trade agreements with the UK as soon as possible.

Nor should we assume that the EU would try to freeze Britain out. No doubt, some Brussels officials want to punish Britain for leaving the EU, mainly, I suspect, to send a message to other member-states tempted to exit in the near or distant future. That said, the German and French business communities wouldn’t sit idle while other nations secured advantageous trade agreements with what is, after all, the world’s fifth-largest economy in nominal GDP. It’s hard to believe that European business lobbies wouldn’t press their governments and Brussels to secure new trade arrangements with Britain. Economic self-interest has a way of trumping political resentment.

Courts, Immigration, and Borders

While future economic scenarios receive the most attention in speculating what a No-Deal Brexit might look like, the impact could be equally consequential in many other areas. Britain would, for instance, no longer be subject to rulings issued by EU legal institutions like the European Court of Human Rights (ECHR). That would require Parliament to revisit a number of matters such as the workings of human rights law in Britain post-March 29.

A No-Deal Brexit would also mean that the fundamental principles which have been central to the European unification project since the 1958 Treaty of Rome—specifically, the free movement of goods, services, capital and people between EU member-states—would no longer apply between the UK and the EU. That has major implications for the subject which animated many of the people who voted for Brexit in 2016.

There’s little question that one reason for the pro-Brexit victory in 2016 was the sense that the EU had not only lost control of its borders but that many continental European politicians simply didn’t care about porous borders. Many found this thesis confirmed by Angela Merkel’s 2015 unilateral decision to accept over a million Middle-Eastern migrants into Germany and thus, potentially, into every other EU member-state. If there was a single event which provided a decisive reason for many people to vote for Brexit, this was it.

A No-Deal Brexit would fully restore Britain’s borders vis-à-vis all EU member-states. Like any sovereign-nation, Britain would decide who does and doesn’t enter the UK. Britain would thus be better shielded from the effects of decisions about immigration policy made in Berlin, Paris or Brussels.

But many complications would also arise from a full-scale restoration of borders vis-à-vis the EU. It’s been suggested, for instance, that the greater cooperation between Northern Ireland and the Irish Republic entailed by the 1998 Good Friday Agreement relies heavily on softening the 310-mile border between the two. A hardened border between the North and the Republic after 29 March would, the Irish government claims, put the agreement in jeopardy.

Britain would, I suspect, seek to address this by negotiating a soft customs border with Ireland. A related and broader question is how a No-Deal Brexit would affect ease of travel for British nationals going to EU countries, and for EU citizens wanting to visit the UK. Again, it’s likely that Britain would enter into negotiations with each EU government to settle new visa arrangements.

A more difficult issue concerns the 3.2 million EU nationals who live in Britain, and the approximately 1.3 million British citizens resident in the EU. Britain has said that, whatever happens, it will protect EU citizens who are full-time residents in the UK on March 29. These people will be eligible to apply to settle in the UK permanently along with immediate family members. After March 29, however, citizens of EU member-states won’t have an automatic right to live and work in the UK. Like people from any other country, they won’t be able to work, reside or study in Britain for more than three months unless they receive permission to stay.

The flip-side to this is that a No-Deal Brexit would leave British nationals living in EU member-states having to navigate very different residency rules depending upon the EU country in which they are living. Moreover, the status of all sorts of reciprocal arrangements concerning matters ranging from healthcare to social security which presently exist between Britain and the EU would, at a minimum, be very unclear. Some EU governments have said that they will take emergency measures to address the situation of UK citizens living and working in their countries. Precisely how that would play out is anyone’s guess.

More positively, Britain would be free to create an entirely new migration regime after a No-Deal Brexit. Given the particular sensitivities always associated with migration, not many countries get the chance to recast migration policy. Britain, however, would have an opening to think about migration creatively. It could, for instance, opt for skills-based immigration programs similar to those of Canada or Australia. Britain could even decide to accord preferential treatment to citizens of Anglosphere nations. In short, Britain would be in a position to rethink every aspect of immigration policy in terms of what programs would best serve its national interests.

Taking Sovereignty Seriously

And that points towards what would be perhaps the most important outcome of a No-Deal Brexit. Should that occur, Britain will find itself suddenly facing up to all the realities associated with being a sovereign nation-state. In a way, sovereignty is what Brexit was ultimately about.

While the European integration project has always had a strong economic emphasis, the focus has shifted decisively over the past thirty years towards replacing national sovereignty in favor of a European supranational state. Figures such as Merkel, EU Commission President Jean-Claude Juncker and the former Belgian prime minister and current MEP Guy Verhofstadt do not disguise this ambition. A common criticism of the various schemes for implementing Brexit floated by Theresa May’s government over the past two-and-a-half years and the proposed deal rejected by Parliament in January is that they involved concessions to the EU which would have left Britain entangled in this project. What’s the point of Brexit, many ask, if Britain isn’t fully free to make its own decisions about matters ranging from trade to immigration after March 29?

No sovereign nation-state is a metaphorical island. No nation-state can literally do whatever it wants, not least because it immediately encounters the reality that other nation-states are also pursuing their own interests. Negotiations, treaties, and give-and-take between states in international affairs are inescapable.

But if anything is implied by a No-Deal Brexit, it is this: the British government would suddenly find that the prime responsibility for many policy-decisions gradually ceded to EU institutions since Britain entered the European Economic Community in 1973 unequivocally belongs to British institutions ranging from the legal systems of England and Scotland to Parliament itself.

In other words, Britain would be facing the prospect of full self-government, with all the freedom and accountability which goes along with this. A No-Deal Brexit would tell us just how many Britain’s political leaders are willing, let alone able, to fulfill this responsibility.

Reader Discussion

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.

on February 27, 2019 at 09:52:40 am

As an Austrian, I will not be unhappy about Britain leaving the EU - deal or no deal. For 4.5 decades, the British have done their very best at blocking European integration wherever they could in an attempt to divide and rule according to their own fancy.

They themselves always wanted to live in splendid isolation from "the continent" while reaping all the benefits, both monetary (viz. Thatcher's "I want my money back!" in 1986) and non-monetary. They never really wanted to assume any of the responsibilities and obligations of EU membership.

It is safe to assume that the EU can do without Britain, but not vice versa. In any case, without Britain, the EU can start working again at integrating Europe to make it stronger and less divided.

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Martin Schwarzer
on February 27, 2019 at 10:46:08 am

This depressingly ill-informed. Britain is not part of the Schengen area, so the influx of refugees in 2015 did NOT affect Britain at all, she has control of her borders. Free movement only applies to EU nationals. Celebrating the possible destruction of the biggest integrated open market in history is a curious position to take - and to argue Donald Trump, of all people, would give Britain a more generous deal than the US gives to the EU. Downplaying the disruption after a no-deal situation also assumes a lot of goodwill from the EU to minimize impact. since a no-deal Brexit will be very harmful to the EU as well, there will be no goodwill and much anger, not just by "Brussels Bureaucrats" but by the people in Europe - the voters. There will be no support for generosity. The whole article peddles the fantasies of the Brexiteers and pretends this is a moment for liberty when in fact it is a project run by xenophobes and nationalists.

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Siegfried Herzog
on February 27, 2019 at 16:45:09 pm

[…] gloom-and-doom is being voiced from across the political spectrum at Westminster,” writes Acton’s director of research, Samuel Gregg. “To say that this process has not been going well is an understatement. It’s further […]

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Image of Potential results of a no-deal Brexit – Acton Institute PowerBlog
Potential results of a no-deal Brexit – Acton Institute PowerBlog
on February 27, 2019 at 17:15:03 pm

So who is correct, Martin or Siegfried? Martin sez the EU will get by splendidly without Britain's membership, better than ever, while Siegfried sez Brexit will be very harmful to the EU and Continentals will wail and gnash their teeth and wreak their revenge on the Brits. Both propositions can't be true.

As for Gregg--after centuries of self-rule, are 12 years (Lisbon) or even 25 years (Maastricht) enough to have entirely incapacitated Britain in that respect? I'm skeptical (also sceptical).

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QET
on February 27, 2019 at 17:51:28 pm

You write as if this is an all or nothing proposition. Austria, and Britain, trade with many partners. Austrians coming to my country do business on equal terms with Britains. The EU does nothing to help or hinder business here.

However, when I want to do business in Austria I need to deal with the EU. The EU was designed to compete against my country and many rules are written to make it difficult for me to do business there. And so, I choose not to export my products to Austria even as Austrians come here and bring my products back to Austria.

I can do without the business of Austria and Britain can do without the business of Austria. What about all of the EU? Do they really wish not to do business with Britain (or the US)? Do the British never want to do business with the EU? What is the difference between an American going to the EU and a Brit?

The point of Brexit is that the British do not want the obligations of the EU and many in the EU do not want them either. France is going down the proverbial toilet because of their internal policies as well as their support of the EU. Who knows how much longer Germans will continue to put up with the policies of the EU when other countries and not nearly as well run. With the EU the good floats some boats but the bad sinks all boats.

European integration is just as bad an idea as the unification of Germany or the unification of Italy. You can't force disparate people to live together peacefully under one roof. The only One World Order is in science fiction.

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Arthur
on February 27, 2019 at 17:54:21 pm

Everyone cries when the piggy bank is short of cash. Let Germany pay for all its immigrants. Let France pay for its ridiculous worker policies. Why is this Britain's problem?

Britain has its own problems but I doubt the chunnel will close on March 30th.

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Arthur
on February 27, 2019 at 18:22:36 pm

Arthur:

Well said, Sir.

Aside from the economic issues which are somewhat complex, albeit it appears that since the Brexit vote, the UK is doing quite a bit better than is the EU, the real issue is as Mr Gregg asserts, one of sovereignty. and the UK is not alone in this. Look at Hungary and Poland. They also object to the loss of sovereignty, specifically control over their own borders and a nations ability to define what it is, and who shall constitute that nation.
Consider the statements by both the miserable Merkel and Juncker, both of whom were quite specific in asserting that the individual member states of the EU MUST BE PREPARED to give up SOVEREIGNTY.
All this to be done in pursuit of EUROPE.
I forget the Frenchman who said, that he did not know what a human was, only a man.
The same may be said of the European Project.
What is Europe? What is european.
Is it not, or was it not, made up of Frenchmen, Germans, Brits, Italians, Poles, etc? each with different histories, practices, customs and legal systems UNTIL EUROPE was created in the minds of the OneWorlders.
Calling him European does NOT make a Brit a European. he is by dint of birth, custom and practice a Brit and he ought to be allowed to continue to be so. Indeed, this is what he voted for.
Contrary to Ziegfried, there is nothing inherently xenophobic about love of one's country,
There is nothing inherently wrong with national sentiment. Perhaps Zeigfreid ought to look at the history of certain European countries after WWI, their creation as well as look to the Poles centuries long struggle for their own nation. Was it wrong for the Poles to desire to throw off the yoke of Russian communists. And now that the Poles have achieved this, Are they to be brought under the "beneficent" yoke of the EU?

I wish the Brits well. I suspect that they WILL work a deal with the US as Trump has made plain that he is desirous of such a deal and on better terms than the EU. We, in the States know precisely how lopsided are the EU deals and their constant maneuvering around WTO restrictions. Just look to Airbus, $4 billion+ in subsidies to A380 and $14 billion overall. The UK will find a welcome partner in the US.

BUT more importantly, the Brits will once again have sway over thier own legal system and borders.
One of the greatest dismays of my adult life has been to see Britain, the parent of this American Republic and the original torch of freedom, liberty and consent, reduced to a beggar at the gates of Europe and subject to the diktats of an unresponsive and uncaring EU bureaucracy.

Hey Brits - go for at full speed.

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gabe
on February 27, 2019 at 20:38:45 pm

"Britain has its own problems but I doubt the chunnel will close on March 30th."

perhaps, it should. This may keep Germany and France's immigrants on the continet. -Ha!

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gabe
on February 28, 2019 at 06:14:39 am

[M]any government ministers and MPs from all parties, the majority of the civil service and large segments of the press opposed Brexit, have never accepted the referendum result, and resent the entire exercise.

Perhaps. But it must be acknowledged that the referendum was selling a fraud. The pro-Brexit forces now acknowledge that the made promises they never intended to keep.

In effect, the British voted for a magical unicorn that would bestow a stream of riches upon the nation, and named it "Brexit." They then sent May on a quest to go find this beast. 2.5 years later, she returned to inform Britain that, well, unicorns are a myth. But she found a mangy, incontinent ferret which she had named "Brexit," so isn't that pretty much the same thing? Parliament didn't think so, anyway.

Also, this essay goes lightly over the problem with the Irish border. Roads in Ireland and Northern Ireland zig-zag all over that border. How exactly will anyone keep goods and people from crossing? Are the going to hire Trump's wall construction team?

Moreover, what's good for Britain is presumably good for the rest of the kingdoms. Scotland barely retained membership in the kingdom--in part out of a desire to retain membership in the EU. With that carrot gone, will Scotland remain? Will Wales? Will N. Ireland--when it has so much to lose?

It makes perfect sense to ask the British people if THEY think that a mangy ferret is the same as a magic unicorn. This wouldn't be a second referendum; it would be a FIRST referendum on the deal May has negotiated, or on crashing out of the EU--both options that bear little resemblance to what the pro-Brexit campaigners promised.

People often decide to buy a house subject to inspection--and then re-evaluate the purchase after the inspection report comes in. It's time for that re-evaluation.

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nobody. really
on February 28, 2019 at 08:55:16 am

You are right. Even if the UK were part of Schengen, the refugees accepted by Germany would not have the right to settle and seek employment in the UK until they acquire German citizenship. That is not automatic. The original article is an example of the dog whistle politics of the gutter.

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S.P.Chakravarty
on February 28, 2019 at 09:25:52 am

[…] thought later. But yes, this is very close to what I am hearing, almost entirely Brexiteer. Over at Law and Liberty, Samuel Gregg takes a close look at the politics involved and […]

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Image of A Stab in the Back: Brexit | nebraskaenergyobserver
A Stab in the Back: Brexit | nebraskaenergyobserver
on February 28, 2019 at 11:10:58 am

"The EU was designed to compete against my country and many rules are written to make it difficult for me to do business there."

By the same token, it can be argued that the United States is designed to compete against all other countries and regional economic groupings in the world by any means possible. The United States is just as protective, if not more, when it comes to its own economic self-interest. Just ask the USTR.

European integration is not just a good idea. It has kept the peace within Europe (the integrated part of Europe) for decades. Without it, countries like the US, Russia or China would not just try, but indeed succeed in dividing up Europe according to their own fancy with one-sided and detrimental trade deals (essentially worthless for the European countries in question) a la Trump and half-baked military cooperation deals, making individual European countries dependent on the whims of either the US, Russia or China.

Europe would eventually founder and all Europeans would suffer for it.

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Martin Schwarzer
on February 28, 2019 at 11:45:32 am

"I wish the Brits well. I suspect that they WILL work a deal with the US as Trump has made plain that he is desirous of such a deal and on better terms than the EU."

If the Brits do indeed work out a deal with the US, it will be on Trump's terms only - and these terms will be far worse than anything the EU ever had to offer.

Of course both sides will suffer in the event of a no-deal Brexit, but the Brits more so that the rest of the EU. Then again, this (as well as any lob-sided trade deal that Trump may wish to devise) will serve as a well-deserved warning to other EU countries, not to follow the siren calls of Trump, Putin or Xi Jinping.

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Martin Schwarzer
on February 28, 2019 at 11:49:59 am

Just as long as it keeps the Brits out of the continent.

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Martin Schwarzer
on February 28, 2019 at 12:32:40 pm

"...and these terms will be far worse than anything the EU ever had to offer."

Two points:

1) Not necessarily so. Trump has proposed a tariff free regime for the UK, indeed, he made the offer to the EU. Let us see what develops.

2) Whatever the specific details of any US-UK trade deal, there is one condition that will NOT be imposed on the UK, i.e. a reduction / surrender of British sovereignty. The Brits will not be subject to US Laws, nor will an un-elected distant cadre of bureaucrats dictate to the UK how they shall manage the internal affairs of their nation such as is presently the case with the EU parliament, Int'L court of Justice, etc etc etc.

I submit that Brexit was and IS more about sovereignty than about economics.

While some decry this as 'nationalism" and xenophobia, it strikes me that these critics conflate the "nationalism" of Nazi Germany with that of the UK, Italy and Poland.
The Third Reich may NOT be said to be a nationalist movement; RATHER, it was an imperial movement in that it sought to establish (or reestablish) some long fantasized Germanic empire / hegemony.

Theodore Dalrymple has an essay in today's edition of Law / Liberty in which he reviews a discussion (book) on the emptiness of life in a world dominated by material concerns. I. for one, perceive a similar dynamic operating in Brexit.

Contra Bill clinton, "It is [NOT] the economy, stupid." (not you, of course.

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gabe
on March 01, 2019 at 17:43:54 pm

Martin's claims about the British dividing and ruling according to their own fancy, and the need for European integration, have a distinguished ancestry. I read in the current edition of Standpoint magazine ( page 24) that on 25 October 1941 Austria's most famous son told Count Ciano ( Italian foreign minister and Mussolini's son in law) that

".. .. for the first time a feeling of European solidarity had developed....The feeling.....would gradually have to change....into a greater recognition of the European community....most people in Europe are already fully agreed on one thing : Britain must be kept out of Europe once and for all. Too long have the British made mischief on the continent ,playing one power off against the other....we now have the uplifting experience of seeing one European nation after another....turn away from Britain...."

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Alastair
on March 02, 2019 at 12:10:54 pm

Except that major manufacturers and bank / wealth funds are NOT turning away from Britain;

https://www.breitbart.com/europe/2019/03/02/brexit-boom-jaguar-invests-hundreds-millions-uk-manufacturing/

Also a major sovereign wealth fund from Norway has announced plans to invest further in the UK.

And how is it that you applaud the new European solidarity which appears to be nothing more than a temper tantrum by the EU and a blatant hostility directed at the UK for daring to leave the Brussels based regime.
BTW: How "solid" is that solidarity as the Brussels elite are also going after Italy, Hungary and Poland.

The best result would be a devolution of the EU into nothing more than a Common Market, one concerned with market relations and not determining social policies for its member states.

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gabe
on October 06, 2019 at 00:33:59 am

The fraud is writing that: the British voted for a magical unicorn that would bestow a stream of riches upon the nation, and named it “Brexit.” The British have always loved their sovereignty. Even when it cost them money. Not so with the Continentals. This is an American's perspective who lived for many years in Europe.

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Howard Hilliard

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