Taking Back Control: Can Brexit Deliver Regulatory Independence?

Abstract

In this paper, I examine the argument that Brexit can deliver regulatory independence. I focus on the importance of the new non-tariff barriers to trade that UK exporters would face if the UK followed through with its stated intention to leave the EU single market. This focus is in response to the tendency of pro-Brexit bodies such as the European Research Group (ERG) and Economists for Free Trade (EFT) to assume away the non-tariff barriers to trade that would be entailed by the UK’s regulatory divergence from the EU. Firstly, I examine the architecture of the EU regulatory state and the literature on the state and non-state determinants of outcomes in international regulatory convergence. Subsequently, I conduct three case studies on some of the UK sectors most exposed to new regulatory barriers to trade – financial services, automotive and agriculture. I argue that there is an inescapable trade-off between regulatory independence and the ongoing viability of these domestic industries. Finally, I examine the critical regulatory issues raised on the island of Ireland by the UK’s attempt to leave the EU single market. I argue that this will bind the UK into ongoing regulatory dependence on the EU, as a rule-taker rather than a rule-maker.