Britain's Prime Minister Theresa May leaves Downing Street in London, Britain January 11, 2017.Stefan Wermuth/Reuters
Sphinx-like and condescending, like a teacher speaking to a child, British Prime Minister Theresa May has finally revealed to us her plans for Britain's exit from the EU and its Single Market.
She didn't quite spell it out and her cryptic remarks in a recent Sky News interview still left reporters scrambling for answers: "Did she really mean that she would sacrifice access to the Single Market in order to control immigration?"
Of course, the answer is: yes. The currency markets, which don't suffer from a political view, got it immediately. Forex traders dumped sterling, just as they have sold the pound almost every time the British Prime Minister has hinted at her intentions regarding Brexit. Britain is now 17 per cent poorer (in global purchasing power terms) than it was before the referendum. Yet, the country is only just beginning to come to grips with a so-called "hard Brexit," meaning a complete severance from both the EU's internal market and its customs union.
It means leaving both the tariff-free zone and the EU's internal market of harmonized trading rules. Many in the pro-EU half of the country hoped that Ms. May's tight lips concealed a plan to claw back some of the good bits of Europe, and their hopes are now truly dashed.
When asked by Sky News whether she would sacrifice the Single Market in order to get control of immigration, she castigated people who "still want to kind of keep bits of membership of the EU." She said: "We are leaving. We are coming out. We are not going to be a member of the EU any longer. … We will be able to have control of our borders, control of our laws. That is what people voted for on June 23."
For Ms. May, the vote was about immigration. We forget that as Home Secretary in David Cameron's government, borders were her bailiwick. She endured in silent rage the taunts of fellow Tory MPs for her failure to deliver cuts in immigration. If control of borders means a country is poorer, too bad, she reckons – it is the people's will. Those who thought that the EU was more than just a migration problem are foolish internationalists, not proper Britons. If you believe you are a citizen of the world, you don't know what citizenship means, she famously told the Tory party conference.
Those dreaded Brexit negotiations with EU Commissioner Michel Barnier may be a lot simpler than had previously been expected. It won't be a bad-tempered battle, trading the employment rights of migrant Poles and Romanians for free-market access for Jaguar cars and Scotch whisky. It will be a guillotine. This week, Angela Merkel, the German Chancellor, said she would not trade bits of EU membership; the Single Market means all the four freedoms (goods, services, capital and people) or you are out of the club.
So, what is there left to negotiate if Ms. May and Frau Merkel are in such loud agreement that Brexit means Brexit? Britain, somehow, cobbles together tariff deals on a few key export sectors. The aforesaid Jaguar Land Rover will be keen to ensure it doesn't suffer: Europe is its biggest market, accounting for a quarter of its sales. But tariff-free access is a small part of the story; most mature economies are more than happy to waive border taxes. It's the other stuff, the regulations on health, safety, the environment. These rules are in constant evolution and are often used by governments to erect ad hoc trade barriers to protect domestic industry from competition. Outside of the Single Market means outside of rule creation but still subject to EU rule implementation.
If Britain must adopt EU rules in order to survive outside the EU, you might wonder what the point of Brexit is. But, the government says, you are ignoring the great freedom of doing deals in the wider world. Unfortunately, Britain's traditional ally across the Atlantic has also gone nativist, and Donald Trump is unlikely to have free-trade deals at the top of his agenda. In a recent visit to India, Ms. May's offer of a trade agreement was cold-shouldered. Prime Minister Narendra Modi demanded more access to Britain for Indians, especially those on student visas, a much-used loophole for migrant workers that Ms. May was desperate to curb during her tenure at the Home Office.
Still, it is what the people want, Ms. May says, harking back to the referendum. The problem is that there are a lot of other people out there who want something too, and they are players in this game, even if they could not vote last June.
Carl Mortished is a Canadian financial journalist based in London.