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After Brexit, Britain will be a rule-taker

Brexit

After Brexit, Britain will be a rule-taker

The salutary parable of the noisy lawnmower and the chlorine-washed chicken

My favourite story of Brussels barminess is the one about the noisy lawnmower. During the 1980s, the EU took it upon itself to impose a decibel limit on motorised grass-cutters. What better proof for suspicious Brits of European megalomania than this intrusion into the very garden sheds of our green and pleasant land? Never mind. Britain, we are told, is taking back control. After decades as a rule-taker, it will rise again as a rulemaker. Such are the delusions of Brexiters.

Through a British lens, things European are rarely as they first appear. Taunted by what was then a small band of Tory Eurosceptics, the foreign secretary Douglas Hurd ordered an investigation into the origins of the directive. The news was not good. The episode was not after all a Brussels power grab. Ministers had backed the European Commission’s initiative. Worse, they had proposed it. They had then expended considerable political capital to force the measure through against German opposition. We are talking, by the way, about Margaret Thatcher’s government.

The rationale, it turned out, was hard-headed self-interest. Germany, a nation renowned for its tidiness and thus a lucrative market for lawnmowers, had blocked imports. German machines were quieter than most, so the Bonn government had set a national noise restriction to lock out the competition. Only an EU directive (permitting a higher decibel level) would allow British companies a foothold in the market. Thatcher’s government had deployed the same strategy to open up EU markets to the roar of British motorcycles.

Free-enterprise Brexiters railing against supposedly excessive EU red tape have never understood the relationship between common rules and open markets. Liberalising trade across national frontiers requires shared standards to ensure a level playing field. The single market has had great success in promoting trade because the EU has been able to harmonise the rules.

Once a small sect, the Tory party’s English nationalists have now stormed the ramparts of government. These Brexiters are intent on making the same mistake about the rules under which Brexit Britain will trade as they once did about lawnmowers. Rule-taking, they intone, is for sissies. Unshackled from the EU, Britain will create its own standards and norms.

They are wrong. The simple fact is that in today’s global economy, rulemaking is the property of the most powerful players. If you are one of the world’s biggest importers you can insist others meet your standards. Likewise, if you have a serious grip on a particular industry you can set sector-wide norms. The EU, the US, and, to varying degrees, China, Japan and India all fit this bill.

Britain is not big enough. Within the EU it has been at once a rulemaker and a rule-taker. Outside, its only real choice will be between whether it should accept rules from Brussels or elsewhere.

Brexit will make trading with the EU more expensive and troublesome. But the bloc will remain Britain’s most valuable export market. Manufacturers that want to sell their products into the single market — and that means most companies of significant size — will be obliged to continue to abide by Brussels’ rules even as they lose friction-free access. Small companies can do as they please — unless they want to join any supply chains crossing EU borders.

Britain will be able, it is true, to make its lawnmowers even noisier if it so chooses. No one in the union will buy them. The same will apply to products falling within the tens of thousands of regulations covering just about everything from food hygiene, environmental protection and vehicle safety standards to data transfer requirements and consumer protection. Service businesses likewise. Unless they want to give up on the European market, the suited professional classes will be obliged to keep up with EU benchmarks. The only thing that will change is that British ministers will no longer take part in setting them.

Ah, I hear nostalgists for the Anglosphere say. We can sign up instead for American rules. True enough. In some cases this might even make sense. Brexit is an opportunity to dismantle the panoply of taxpayer-funded protections and subsidies paid to farmers. There is cheaper produce available on world markets. Washington has already said a bilateral trade deal will depend on better access to the British market for America’s industrialised agriculture.

The government could swap European for US standards. Personally, I have no quarrel with rules permitting chlorine-washed chicken and hormone-fed beef. It would be barmy to leave the EU and keeping paying out to farmers. The switch, though, would kill exports to Europe. And even the most ardent Brexiter may struggle to portray as taking back control the appearance in supermarkets of chlorinated chicken.

The Bank of England seems to think there are one or two areas of financial services where Britain has sufficient clout to be an international rulemaker. Maybe. But financial institutions are already voting with their feet by heading to Dublin, Paris and Frankfurt.

The lesson here is that national sovereignty is illusory when separated from the power to act. This extends beyond trade. Britain can take back control of its borders only with the willing collaboration of the French authorities at Calais. Lawnmowers or chicken, the one certainty is that post-Brexit Britain will play by someone else’s rules.

philip.stephens@ft.com

Letter in response to this column:

Welcome to the realities of playing by others’ rules / From T R Murphy, Bethesda, MD, US

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