Europe after Brexit: Should the UK be allowed to access the European single market if it does not accept the free movement of people from the European Union
Since negotiations for a post-Brexit world begun, the European Union (EU) has been rejecting the United Kingdom (UK) access to the European single market. To satisfy Brexit supporters and prevent UK from incurring huge exporting costs, the Prime Minister, Theresa May, and her government aims to strike an agreement where trade without tariffs between the UK and EU would continue while still denying free movement of the people (Godden 2017). This would beg the question of whether Europe should continue to allow UK to have access to the single market if the immigration of its people is restricted or to treat the UK as they were any other country outside the EU. Therefore, this paper would take the position that UK’s access to the single market should not be allowed by the EU based on the reasons that it violates the concept and agreement of the single market, it is not mutually beneficial to both parties and granting access to the UK would set precedent to violate the EU agreements in the future.
One of the main reasons the EU should deny the UK those privileges is because it violates the concept and agreement of the single market which is that goods, capital, services and people are allowed to move freely. Accepting the terms fully would create a fair internal market within the EU so that no one country has a competitive advantage over the other, thus countries in the EU have to accept all the 4 freedoms without exception (Cadman & Tetlow 2017). As Germany’s Finance Officer, Wolfgang Schäuble, quoted : “There is no a la carte menu, there is only the whole menu or none”, signifying to the UK that their notion to partially accept the single market’s terms is an infringement of the agreement and would put the EU at an economic disadvantage from the UK (Sky News 2016). In this case, the economic disadvantage the EU would be facing is the lack of job opportunities as free movement of labour would be prohibited due to EU labourers losing their jobs in the UK, causing unemployment rates in the EU to rise which would lead to slower growth in economy. According to Eurostat (2017), the unemployment rate in the EU is 9.1% in June 2017 which is an increase from 8.6% in June 2016. Conversely, some argued that the EU could have a special deal to maintain free trade with the UK as it is still one of the world's largest economies and may have a greater influence on the future economy of the EU (The Economist 2015). That was stated in the Economist (2015) because maintaining good relations would better impact the European market as the UK exports more goods and services to the EU than the other way around. However, that would not only dwindle the concept of the 4 freedoms which is EU’s advocated idea of globalisation, but also diminishes what the single market’s intentions and what it's trying to achieve, which is growth through co-operation and as a single economic bloc through the 4 freedoms (De Grauwe 2016, p.249). Therefore, UK should not be allowed access into the European single market without accepting the free movement of the people of the EU in order to maintain the integrity of the single market.
In addition, permitting UK access into the single market without allowing the free movement of the people would not be mutually beneficial to both parties hence the agreement should not be considered by the EU. This was stated as it is reported that the UK sends about half its exports to the EU, hence the UK desperately requires this agreement to pass in order to maintain benefits of free trade (Bounds & Tighe 2017). Chapman (2017) stated that 44% of their exports go to the EU which the Office of National Statistics estimates to be £220bn out of £510bn. UK’s exports would be subjected to not just tariffs, which would be at least £4.5 billion per year, but also extra administrative cost if they were not in the single market. Consequently, these forecasts made it critical for the UK to strike this deal as they also need to regain the confidence of investors who pulled out due to the volatility of investing in the UK after the referendum. The investors falling confidence levels can be noted through UK’s Gross Domestic Product growth (GDP) which was 2.2% a year before Brexit but has now dropped to only 1.8% a year (Hay 2017). On the other hand, it was countered that Brexit may lead to the EU facing a slight recession if the politics and economics were not handled properly as the North West of Europe, which includes countries such as Ireland, Belgium and the Netherlands, would be the most vulnerable to bad arrangements with the UK due to the trade ties those countries have with the UK (Brinded 2017). This is due to the high amounts of trade of goods and services that go in between the UK and those respective countries. However, the European Economic and Financial Affairs Commissioner Pierre Moscovici predicted that the EU’s economy would continue to fare well as it is expected to expand by 1.7% this year and 1.8% in 2018 and that the unemployment rate should fall to 8.9% in 2018 as well (Guarascio 2017). With this data, it can be concluded that the EU would still have reasonable economic footing without the UK and thus they should be treated like any other country that is not part of the EU. Hence UK should not be allowed to access the European single market without accepting all of its terms as the EU would be able to handle the issues of post-Brexit better than the UK.
Furthermore, the EU cannot afford to allow this to be a precedent to other countries in the future, thus the UK should be denied the right to access the single market if it refuses to accept all facets of the 4 freedoms. The EU would have to use this opportunity to show the world that the European single market is something that should not be taken lightly and that it is in place for the better of all the nations that are involved (Racolta-Paina 2016). By using the UK as an example to the rest of the EU nations about the consequences of leaving the bloc, Europe would not face such lengthy arrangements that may lead to the downfall of the remaining EU countries in the foreseeable future. Germany’s Finance Officer, Wolfgang Schäuble also stated that the exiting country, such as the UK, should adhere to the terms of the club that it currently wants to excuse itself from. Schäuble’s quote “In is in. Out is out.” (Oltermann 2016), enjoined UK and the world to understand that there is no middle ground when it comes to the single market. The EU further demonstrates this understanding by continually rejecting the access of the UK into the single market and should continue to, leading the UK to settle for a hard Brexit which is a separation by cutting all formal ties with the EU (Grant 2017). Contrariwise, some may argue that urging Prime Minister Theresa May to opt for a hard Brexit would be counterintuitive to the well being of the EU as it may lead to possible recession for some nations in the EU that have high percentage of labourers working in the UK (Brinded 2017). On top of that, Klekner (2017) shows that chances of a slight recession may still be possible as Brexit has slowed down the EU’s economic growth. Even though it was predicted by the European Economic and Financial Affairs Commissioner Pierre Moscovici that the unemployment rate of the EU would be fine after the split, the condition is not unvarying throughout the bloc as it still poses as a major issue at the southern parts of Europe (Klekner 2017). One possible option that the EU has presented to the UK is the idea of a soft Brexit in which they pay a fee to be part of the single market and accept all four of its freedoms (De Grauwe 2016, p.250). Walker (2016) reported that this has been achieved by Norway and something similar could be achieved again unless the UK still insists on a hard Brexit. Thus the EU should not grant the UK access to the single market or insists for a win-win agreement to be used as a precedent for the future.
To conclude, the European Union should not allow access of the single market to the UK unless they are willing to accept the free movement of the EU people. This stance can be argued as allowing access on UK’s terms would violate the concept and agreement of the single market. It would also not be mutually beneficial to both parties due to EU having the ability of co-operation between the nations to work through the setbacks of Brexit and the UK does not, leading them to incur large amounts of cost if the deal does not swing in their favour. Finally, granting access to the UK would set precedent for other nations to violate the EU agreements in the future. Hence, the two parties should find a middle ground to compromise on such as the implementation of a soft Brexit to negate the effects of bad politics and the suffering of the people.
(1500 words)
References
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