Why Brexit is Great for the UK and the U.S.

By Owen Paterson, JEWISH POLICY CENTER

Britain’s Secretary of State for Exiting the EU David Davis at a press conference in Brussels on June 19, 2017 (Photo: Alexandros Michailidis)

The American Revolution and the 2016 Brexit vote had democratic control at their hearts; everyone is familiar with the rallying cry of “No taxation without representation.” As with the European Union today, American dissatisfaction with British rule was as a result of our overreach in the colonies. It went too far and America declared that enough was enough. You wanted to decide how to spend your own money – not be told to send it off to Great Britain.

On June 23, 2016, 17.4 million people in the United Kingdom – more than have ever voted for any issue or political party in our history – voted to leave the EU.

Article 50 was triggered on March 29, after 494 Members of Parliament voted for it in the House of Commons. The automatic legal effect of this is that on March 29, 2019, the EU treaties in their entirety will cease to apply, with no post-exit treaty obligations on the United Kingdom.

In June 2017, we had a General Election in which 85 percent of the votes cast were for parties advocating leaving the Single Market, the Customs Union and the remit of the European Court of Justice. The main “Remain” Party – the Liberal Democrats – saw its number of votes fall.

The European Union (Withdrawal) Bill will repeal the European Communities Act 1972, which gave effect to European law in the United Kingdom, and convert into UK law the entire corpus of European law. We are building on the precedent which Americans set even before independence – first adopting British law in order for it to be altered subsequently. The Reception Statute passed in the Colony of Virginia in 1776 ran:

…the common law of England, all statutes or acts of Parliament made in aid of the common law prior to the fourth year of the reign of King James the first…shall be considered as in full force, until the same shall be altered by the legislative power of this colony.

Despite these decisive steps, there are still those – President of the European Commission Monsieur Jean-Claude Juncker among them – who believe that we will back down, or that the process can be derailed. This is unsurprising from a man who, before the French were asked to ratify the proposed European Constitution in 2005, said “If it’s a Yes, we will say ‘on we go’, and if it’s a No we will say ‘we continue’.”

He was true to his word. The French failed to ratify the Constitution, so it was simply reheated as the Treaty of Lisbon and on the project went. When the Danes and the Irish had the presumption to vote against the EU consensus, they were told to go away and vote again until they produced the right answer.

However, we will leave. For the first time in EU history, a country will not be cowed into rerunning a democratic vote whose verdict went against the Commission and the long-term European Project.

And this project is not static. The Five Presidents’ Report of 2015 proposed fiscal, economic and finally full political union by 2025. Without the restraint of the British pebble in the shoe, Juncker, in his “State of the Union” address on Sept. 13, 2017 was proposing consolidation and compulsory membership of the Eurozone, and by 2025 a fully-fledged European Defense Union. He called for a single European president and the use of passerelle clauses allowing the Commission to bypass the concerns and wishes of democratic national governments.

So, I have absolutely no regrets that I was one of three founding MPs of the referendum campaign group “Vote Leave.” Our central message was that we must “take back control” – of our laws, our money, and our borders.

• To control our own laws, we must end the jurisdiction of the European Court of Justice and leave the Single Market;

• To control our money, we will cease sending $11 billion net to the EU each year;

• To control our borders, we must leave the Single Market; and

• To control our trade policy, we must leave the Customs Union.

These simple statements, which resonated with 17.4 million people, are not negative ones. They are not anti-Europe. They are positive expressions of the age-old truth that a sovereign country will be more successful when it governs its own affairs.

Single Market

Membership of the Single Market – the internal market of the EU – requires acceptance of the indivisible European principle of the Four Freedoms – the free movement of goods, services, capital and, most contentiously of all, people; it requires regulation of all aspects of our economy.

In 1999, 61 percent of UK trade was with the EU, now it is 43 percent. By 2025, it has been projected that our exports to the EU will account for under 35 percent. The European Commission itself says that 90 percent of global economic growth in the next 10 to 15 years is expected to be generated outside Europe, a third of it in China alone.

Compare that to the relationship between our two countries. The USA is the UK’s largest export partner and our second-largest import partner for trade in goods and services. In 2015, the USA accounted for 19.7 percent of the UK’s exports and 11.1 percent of imports. The USA and UK are the largest single investors in each other’s countries, at 24.5 percent and 23.6 percent respectively.

The idea that one can trade with Europe only through membership of the Single Market is nonsense. Being within the Single Market means meeting all of its regulatory standards. This sort of compliance is required on export product standards for all exporters wishing to sell in any foreign market. The difference with the European Single Market, however, is that those regulations are applied across the whole economy, even to sectors with no connection to European exports. This burdensome bureaucracy is a long way from the original vision of a group of sovereign states sharing a minimal, common level of regulation.

Customs Union

While we remain in the Customs Union, we cannot pursue our own trade deals. Its advocates like to portray it as a co-operative trading association of member states – akin to an economic version of NATO – but it is not. In setting the Common External Tariff, the Customs Union denies its members the right to set their own trade policies and forces them behind a protectionist wall separating the EU from the rest of the world. New free-trade deals may be struck only by the slow, bureaucratic union and not by member states individually. Consequently, the EU has so far not concluded a free-trade deal with the United States, Japan, China or India. Most existing EU free-trade deals are, in fact, roll-overs from the colonial days of individual EU countries.

To the UK, the economic case is clear. Analysis from Prof. Patrick Minford concludes that leaving the Single Market and Customs Union will provide a saving of $400 per household per annum on food bills, or some $10.8 billion overall. It will also bring down consumer prices more generally, by around eight percent overall; and stimulate competition across the economy, raising productivity and GDP by around four percent.

Deloitte has explored the potential effect of a “tariff war” on the German car industry, which exports 1 in 7 of its cars to the UK. It assumes a 10 percent tariff on vehicles and a 4.5 percent tariff on parts. Deloitte believes that EU carmakers will lose $10 billion a year worth of revenues, with $8 billion from German carmakers alone. In the first 12 months after the UK leaves, German car exports to the UK would collapse by 255,000 units, representing a 32 percent decline, with 18,000 jobs in the German car industry put at direct risk.

We currently have zero tariffs, and conformity of regulations and standards is already in place. There ought to be no reason that independent countries cannot trade freely, and no reason whatsoever that free trade cannot be maintained with a fully-fledged free trade pact. Reciprocal free trade is in all our best interests.

European Court of Justice

Last summer, the British government released a number of initial position papers relating to key areas of negotiating policy, to which the Brussels response has been ludicrously obstinate. In reply, the EU has made a series of outlandish demands for an arbitrary “divorce bill” of $120 billion— rejected by the UK with a forensic legal rebuttal.

We will pay what we legally owe. Edward III’s refusal to pay the Bardi and Peruzzi families in 14th century Florence was the last time the UK failed to honor its international obligations. But recent reports by the House of Lords and respected lawyer Martin Howe QC establish that there is no credible legal argument obliging the UK to continue contributing to the EU’s ongoing programs after Brexit. Our attitude echoes that of George Washington, who wrote in a letter to Alexander Hamilton in 1796, “We will not be dictated to by the Politics of any Nation under Heaven, farther than Treaties require of us.”

The European Commission has also demanded that the European Court of Justice – the highest court in the EU – continue to rule on the rights of EU citizens in the UK after Brexit. If immigration was a manifestation of Britain’s non-independence, then the continuing remit of the ECJ would surely be confirmation of it.

There is no exact legal precedent for such a bizarre suggestion, which would create a privileged class of over 3 million EU residents in the UK, whose rights would be enforced by a court beyond the influence of our government and Parliament.

The British government has, quite rightly, ruled this out. Independent sovereign nations cannot be bound by rulings of the courts of other nations.  Once again, Washington put our approach perfectly in that same letter to Hamilton, “If we are to be told by a foreign Power…what we shall do, and what we shall not do, we have Independence yet to seek, and have contended hitherto for very little.”

That is not to say that British courts should give no attention to future decisions of the ECJ. It is standard practice for the courts of countries in an international treaty to pay attention to the judgments of their partners, and to try, if possible, to apply a consistent interpretation.

As the late Justice Antonin Scalia of your Supreme Court – himself no friend of foreign judgments influencing U.S. courts – said, “We can, and should, look to decisions of other signatories when we interpret treaty provisions… Even if we disagree, we surely owe the conclusions reached by appellate courts of other signatories the courtesy of respectful consideration.”

It would be inconceivable for the United States to accept any court overruling its own Supreme Court, but it has always been accepted that account be taken of preceding legal decisions.

Take the case of Amalfitano v. Rosenberg in New York in 2009. The Court of Appeals ruled that “attempted deceit” was sufficient to sustain a cause of action under judiciary law Section 487, on the basis that it derived not from common-law fraud, but from the first Statute of Westminster – a criminal statute adopted by the Parliament of Edward I in England in 1275.

We will adopt just the same attitude toward the ECJ’s preceding decisions. But, as a simple matter of principle, we cannot accept continuing ECJ jurisdiction once we have regained independence.

Opportunities for America

Increasingly, regulation is being made at world level. As a member of the EU, we have been represented as 1/28 of a vote on the world bodies – the WTO, the World Organization for Animal Health (OIE), the Codex Alimentarius Commission and the International Plant Protection Convention.

We have been prevented from working with like-minded countries to tackle pressing policy concerns and prevented from reaching trade agreements with countries which would buy our produce. We can now retake our full seat – regaining a right to vote, a right to initiate new standards and propose amendments to existing ones – determined to cooperate with old friends in the Anglosphere and forge new alliances.

Britain has no greater ally than the United States, so it is welcome that the new administration is as pro-British as any we have seen since the Second World War. Your new ambassador to the United Kingdom, Woody Johnson, got off to a great start when he said “As far as the president is concerned, the United Kingdom, our most enduring ally, is always ahead of the line.”

The Special Relationship has been a cornerstone of our foreign policy for 70 years, whether that is procurement and development — the United Kingdom is the only Level One partner in the largest aircraft procurement program in U.S. history, the F35 Lightning II — or our comprehensive intelligence sharing schemes.

But our ties to the United States run far deeper than that. We are united by our history, our culture and, perhaps most of all, by our language. With such strong and long-standing bonds, we should all be very optimistic about a new U.S.-UK trade deal being, as President Trump put it, “very big and exciting!”

Indeed, as your new ambassador put it:

Britain’s decision to leave the European Union takes your country into new territory — but you are not heading there on your own. The United States is committed to standing with the UK through Brexit…whatever the outcome of the negotiations between the UK and the EU, Britain should know you will have a strong and reliable trade and investment partner in America.

Conclusions

In the months and years ahead, Britain must be guided above all by the decision which its people made in June 2016. The constitutional position we face is unprecedented. We have held a number of referendums over the last 50 years, but this is the first in which the people have contradicted the view of the political, judicial, financial, media, and academic establishment. Failure now to deliver what 17.4 million people voted for would do catastrophic damage to the integrity of the whole establishment.

We will leave the political and legal arrangements of the European Union. In a whole range of fields – security, academia, scientific research, cultural exchanges – we look forward to maintaining the closest possible cooperation with the EU. The United Kingdom intends to be bold and ambitious, retaking our place as a dynamic, globally-oriented nation.

For the United States, this is unequivocally good news; you are regaining an independent ally in trade and on the global bodies which determine world regulation. The Special Relationship will go from strength to strength, in George Washington’s words, to “animate and encourage each other, and show the whole world, that a Freeman contending for Liberty on his own ground is superior to any slavish mercenary on earth.”

Owen Paterson is Member of Parliament (Conservative Party) from North Shropshire and from 2012 – 2014 also served as Secretary of State for Environment, Food and Rural Affairs.