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POLITICIANS campaign in soundbites but reality deals in awkward paragraphs. For all the sloganeering (Brexit means Brexit) and the prevarication, the British government must finally decide what kind of trade-offs it is willing to accept when it leaves the European Union. The UK trade policy observatory at the University of Sussex has an excellent new paper out on the choices facing the country, which was the subject of a lunchtime seminar today.The British government seems to have four red lines. It wants to stop free movement of labour; to be allowed to pursue an independent trade policy; not to contribute to the EU Budget; and to break away from legal oversight by the European Court of Justice. (All of these can be summed up by the slogan "taking back control"). The EU's sole red line seems to be that Britain cannot benefit from "cherry picking"—for example, benefiting from membership of the single market in terms of goods trade, but not allowing free labour movement.To understand the trade-offs, we must first understand the terms. The single market is an idea that Britain originally pushed for—a trading area where the regulations are harmonised so that goods and services can be traded on an interchangeable basis. Without it, there is the danger that trade is restricted because, for …
SOURCE: Economic Issues – Read entire story here.
