degrauwe3_Gareth FullerPA Images via Getty Images_brexit trade Gareth Fuller/PA Images via Getty Images

Brexit and the Brussels Effect

After long, ill-tempered negotiations in which the UK government has tried to secure privileges for itself that it would not extend to the European Union, it is not surprising that a trade deal remains out of reach. But if the fundamental issue is sovereignty, a deal could still be reached quite easily.

LONDON – In its negotiations with the European Union over post-Brexit trade relations, the British government has become entrenched in its demands for full sovereignty. In the future, it wants to determine all of the rules about safety, the environment, health, workers’ rights, and subsidies to British companies without any interference from the European Commission.

That is fine. Insisting on the right to diverge from the EU’s internal-market rules is fully in keeping with the meaning of sovereignty. The problem is that the British government is also trying to maintain the United Kingdom’s access to that internal market under its own rules. For example, it wants the right both to apply its own sanitation rules to the production of chicken (allowing for the use of chlorine) and then to sell those chickens in the EU, where different rules apply. Never mind that the EU also is a sovereign entity with the right to decide and enforce its own standards, and to impose tariffs on imports that violate its rules.

How can a trade deal be made to work when both parties claim full sovereignty? This claim has two overarching implications for negotiations like the one between the UK and the EU. First, it means that each party decides independently which laws will apply in its jurisdiction. Thus, all firms (including EU-based firms) selling in the UK must comply with UK laws, and all firms (including UK-based firms) selling in the EU must comply with EU law.

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