Originally Posted by Eurostar:
“All of this explains why May is so evasive and keeps repeating her "We will be seeking the best possible deal for the UK" mantra. Start answering questions in detail and the whole thing would be at risk of being exposed.”
Theresa May's Conservative party leadership speech gives us some policy insights. She wants immigration control and the supremacy of UK courts. She can achieve both of these objectives by confirming that the UK is leaving the Single Market. A UK government policy of leaving the Single Market will please voters and her own backbenchers, but it will unsettle UK business and spook the financial markets (yet again).
Liam Fox's suggestion of partial EU Customs Union membership is either tricky or unworkable. It falls foul of the World Trade Organisation's 'Most Favoured Nation' rules. The Turkish membership of the EU Customs Union serves as a poor blueprint, because it doesn't cover agriculture (see more below). To voters, Tory backbenchers and some of the press, staying in the EU Customs Union sounds like staying in the EU. Staying in the Customs Union may make economic sense, but it's politically risky.
Mrs May could commit the UK to leaving both the Customs Union and the Single Market. This could lead to UK business panic and, in turn, voter anxiety. And she will have to be sure that Dr Fox's UK trade schedules are ready and agreed for WTO membership. This brings us to the messy business of UK's extraction of agricultural quotas from the EU.
So Mrs May is left with a UK/EU free trade deal. Two years is not enough time to negotiate, agree and ratify a free trade deal with other 27 EU member states. Agriculture will be a stumbling block. And you can expect the Australian and New Zealand agricultural ministers to sense and exploit an opportunity. An FTA deal will need to be ratified by all 27 EU member states and some regional parliaments. And Mrs May will struggle to keep this Free Trade Deal agreement away from an awkward UK parliamentary vote. Nevertheless, a Free Trade Deal sounds nice and Mrs May will be able to sell that to her toughest audience: 'leave' voters and Tory backbenchers. If she wants an UK/EU FTA, she might be able to cut & paste a temporary deal from the current EFTA/EU arrangements.
EFTA membership is out. They have a supranational court which would trump the supremacy of UK courts. So you can forget that.
I reckon Mrs May is looking at a temporary FTA with the EU or the more difficult sell of continued (temporary) EU customs union membership. This explains why Dr Fox has been throwing cocktail parties for his new friends at the WTO Geneva HQ. I think she's also going to take the UK out of the Single Market. But at least she can waive the EU divorce papers at voters before the May 2020 general election.
The sooner Mrs May confirms that the UK is leaving the Single Market, the sooner we can all start preparing.
There's three domestic decisions which she cannot avoid. They're nothing to do with EU membership and decision for her and and her government alone. Those are: the residency rights of EU citizens living in the UK, post-EU immigration policy and a parliamentary vote on the Article 50 Brexit deal. Painful choices are unavoidable and she will have to deal with the consequences.
Fear of voters and her own backbenchers drives her current indecision. But she cannot put the entire UK economy and population on hold much longer.