IEA urges Theresa May to ditch Chequers for its alternative ‘Brexit prize’
Free-market thinktank the Institute of Economic Affairs (IEA) has unveiled its alternative Brexit plan in a move that will pile pressure on the Prime Minister following her failure to secure support for her Chequers plan at an EU summit in Salzburg last week.
The IEA said the government had approached Brexit in the “wrong way” as it unveiled its own proposal, called “Plan A+: Creating a prosperous post-Brexit UK”. It has won the backing of leading Brexiters David Davis and Boris Johnson.
The report said May’s Chequers plan, in which the UK would have a common rulebook for goods and regulation but not services, would make an independent trade policy “all but impossible”.
“Keen to avoid potential disruption in our trading relationship with the EU, the prime minister is now set to throw away the potential gains of Brexit. Given that the latter are greater than the former, this is a profound mistake,” it said.
Written by the IEA’s director of international trade and competition, Shanker Singham, and others, it argues that the UK should push for an advanced free trade agreement with maximum regulatory recognition and says technology can be used to prevent a hard border in Ireland.
It says the UK should stick to the elements laid out in the withdrawal agreement, including the £39bn divorce bill, citizens’ rights and a transition period until December 2021.
The IEA’s proposed FTA would include full market access and national treatment – where citizens from both sides are treated equally – maximum regulatory recognition for both goods and services, and a mechanism to manage differences in the event of divergence; intellectual property protection and government procurement and investment rules.
The IEA said tariffs should be lowered to zero for intermediate goods as well as for agricultural products the UK does not produce, such as bananas, oranges, rice, avocados.
Singham said: “Brexit has been too narrowly thought of as the role of the UK in the EU, whereas the reality is Brexit is a major global event. A G7 country is embracing independent trade and regulatory policy for the first time in 40 years – an unprecedented situation. This is where the Brexit Prize lies.
“Moving forward on the unilateral, bilateral, plurilateral and multilateral pillars at the same time, will maximise the UK’s gains, and also maximise it chances of a good agreement with the EU.
“We have looked at Brexit in the wrong way, and in so doing we have hampered our ability to get a good deal with the EU. We must execute an independent trade and regulatory policy in order to capture gains from this process, and also to ensure that we have a better framework for negotiations with the EU. This plan offers comprehensive approach which shouldn’t be considered a ‘Plan B’, but rather a ‘Plan A+’ for Brexit.”
Read more: Brexiters set to reveal an alternative to Chequers