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Triangulating Brexit

BRUSSELS – More than 100 days after the United Kingdom voted narrowly to leave the European Union, it remains far from clear what arrangement will regulate cross-Channel trade after Brexit. Political discussions tend to revolve around three key issues: immigration controls, access to the single market, and passporting rights for financial services. Which balance should European leaders strike?

Many in Britain know exactly what they want: to impose controls on the movement of workers from the rest of the EU, thereby protecting the domestic labor market, but without losing access to the single market or passporting rights, which allow British firms to sell their financial services on the continent. That was, after all, the kind of deal many leaders of the “Leave” campaign promised before the June referendum.

But the Brexiteers’ promise remains wishful thinking. As German Finance Minister Wolfgang Schäuble has pointed out, access to the single market is inextricably linked to the free movement of people. Indeed, he has even offered to send Boris Johnson, the UK’s foreign secretary, a copy of the Treaty of Lisbon, where that link is established.

This may sound legalistic, and it certainly reflects political motivations. But basic economic principles imply that free movement is, indeed, at least as important as free trade.