In the 21st century, sovereignty belongs to those with the agenda-setting power of a large market.
PARIS — The British are learning the hard way what sovereignty means in the 21st century, and the painful lesson has just begun.
Leaving the European Union was meant to be about “taking back control.” That was the catchy slogan that united nostalgic patriots and xenophobic bigots, just-about-managing Britons and globe-trotting billionaires, losers of globalization and non-domiciled tabloid barons with media empires on which the sun never sets.
“We want to control our own borders.” “We want to make our own laws.” “We want only British judges to enforce them.” “We want to set our own trade rules.” “We want to be masters of our own budget.” Independence from a foreign bureaucracy sounded plausible to a proud nation that was the only big European country not to have endured totalitarianism or occupation in the 20th century.
And yet, the lesson of the Brexit negotiations so far is that the United Kingdom is likely to end up with less — rather than more — control once it leaves the EU.
The government is acknowledging little-by-little that it will have to go on applying EU product regulations, EU rules of origin for goods and components, and EU food, environment, health and safety standards in order to keep trading with the single market. The only change is that London will no longer have any say in setting those rules and standards.
Unless you are Kim Jong Un’s North Korea, there is no such thing as absolute sovereignty.
Britain will have regained the power, in theory, to tear up EU regulations — but only if it chooses not to sell its goods and services into the EU market, which buys some 40 percent of its exports. In other words, it will have “taken back control” of the right to commit economic suicide.
That’s why much of the British negotiating effort appears focused on how to create a facade of sovereignty to appease the flag-wavers, while seeking pragmatic arrangements to stick as close as possible to the EU’s single market and customs union.
Here comes the cliff
The official line is that sticking with EU rules will just be a temporary inconvenience in a transitional period of a few years to avoid a “cliff edge” rupture in economic relations that would devastate British business. But who seriously believes that a permanent trade deal will give the U.K. substantially more scope to depart from European norms if it wants to preserve “frictionless trade” with the Continent?
Furthermore, the Department for Exiting the EU no longer denies that Britain will have to go on accepting the jurisprudence of the European Court of Justice over its implementation of EU law, at least during the interim period. To save face, London would prefer this to happen indirectly, through some intermediary such as a panel of British and EU judges or the court of justice of the European Free Trade Association (EFTA).
When it comes to trade with third countries, Theresa May’s ministers are now admitting what has been obvious from the outset. Britain’s agreements with key partners such as Japan or South Korea will at best copy and paste their existing EU terms — if the Asian nations consent to treating the 65-million-person U.K. market on an equal footing with the 450-million-strong EU.
This is partly because Britain has neither the time nor the administrative capacity to start from scratch. But it is above all because those deals reflect the bargaining power of the biggest market in the world. Size matters.
On immigration, notwithstanding a leaked draft Home Office plan proposing to severely restrict work permits for EU citizens after Brexit, Britain will have to go on allowing freedom of movement for workers from the Continent at least for a multi-year “implementation phase” if it wants to keep access to the single market. This may be the hardest broken red line for Brexiteers to stomach, given the strength of public feeling about migrants. But it reflects both the needs of business and the balance of power between the U.K. and the Continent.
And finally, the British government is slowly acknowledging that it will have to go on making payments into the EU budget to retain market access, fund multi-year programs and benefit from European scientific research grants. Brexit Secretary David Davis might be disputing the legal basis of EU demands for Britain to make a sizable exit payment, but he has also acknowledged there are “moral” obligations for making some contribution.
Unless you are Kim Jong Un’s North Korea, there is no such thing as absolute sovereignty. Other European countries such as Norway and Switzerland that chose not to join the EU because they had other sources of wealth in oil or banking still have to implement vast swaths of its rules and pay into its budget in order to trade with the giant market on their doorstep.
Britain is slowly coming to realize that it’s a small nation, and because of that it will have to live by others’ rules.
No country can unilaterally control the climate, the air it breathes or the water that washes its shores. The internet, global supply chains and financial flows are diminishing the relevance of national borders. If licit or ill-gotten fortunes can be moved around the world with a couple of clicks, if messages of hate and incitement to murder can be beamed from some Middle Eastern shack or Sahel encampment into teenagers’ bedrooms in Brussels or Birmingham, what “control” is there to take back?
Tackling these cross-border challenges requires cooperation, first and foremost with neighbors. And if those partners have a bigger market, they will tend to determine the terms. The European Union was built to manage such inter-dependence to the benefit of all, instead of leaving it to the law of the jungle.
The days when the British Empire spanned the world and British imperial weights and measures were the leading global standard are long gone. By the end of the 20th century, even most of its former colonies had adopted the metric system, itself the child of the French Revolution.
European Commission President
Jean-Claude Juncker and British Prime Minister Theresa May in Brussels | Olivier Hoslet/EPA
Nowadays, the EU has similar norm-setting power. In the 1990s, it used its giant market to gain first-mover advantage and set the standard for digital mobile phones worldwide, now used by 90 percent of the global market in 219 countries and territories.
Even the United States under Donald Trump, which has turned its back on the Paris agreement on climate change, is finding that its companies have to comply with the pact’s goals in order to sell their products into the EU and other developed country markets.
Britain may noisily declare independence, but in practice it’s slowly coming to realize that it’s a small nation, and because of that it will have to live by others’ rules.