OK, no sensible person who understood Brexit ever really wanted it. And there are enough potential legal and institutional obstacles—including most importantly the need for British Parliamentary action—to make it possible that actual Brexit never happens, as thoughtful commentators like Gideon Rachman and Andrew Moravcsik have said. So the real issue is what will be negotiated. The rest of the EU has decided to begin the informal negotiations like some jilted lovers or spouses: “get out and I never want to see you again.” Some in the UK, on the other hand, are saying the UK would still like to be friends, and maybe even friends with benefits. But the EU cannot be too easy on the UK, or else other exit fans in other states may be emboldened.
So, what are the negotiating options? First, there can be variable geometry within the EU. Easiest is actually what some of the leading Brexiters wanted in the first place: a negotiation to relax some of the more irksome aspects of EU membership: free immigration to citizens of other EU states, and some of the human rights jurisprudence. While it is easy for me to say that neither of these is much or a problem for the UK, and that as with all marriages, you take the “bad” with the good, the UK needs to save face and so will need to bring home some relaxation. If that does not sufficiently appeal to the rest of the EU, which would have to decide unanimously to amend the treaties, the second variety of variable geometry would have the UK outside the EU, but replicate some of the EU arrangements, including free trade in goods. Now this agreement could entail a customs union, and that would make a great deal of sense: the UK would be like Turkey in the East, subject to the common external tariff of the EU, and having zero-tariff treatment on its own goods going to the EU. Furthermore, the UK would not have to renegotiate its tariffs. Other than disincentivizing further exits, what reason could the EU have for refusing to enter into a CU with the UK? This customs union could be approved by qualified majority vote, unless it constitutes a mixed agreement under EU law. But if the UK wanted to maintain its own commercial policy, or if the EU were spiteful, a simpler free trade agreement could be negotiated, along the lines of the EU’s many free trade agreements with other states. In fact, the recent EU-Canada CETA, or even the proposed TTIP, could be a model. Indeed, a TTIP that includes the UK might be just the ticket. And while before the Brexit vote, President Obama suggested the UK would have to get to the back of the line for a trade deal with the US, perhaps associating with TTIP would soften his heart, or that of his successor.
While I am on the topic of President Obama's possible successor, note that although Trump applauds Brexit, there is no doubt that the Brexiters would like to have a deal with Europe just like TTIP or TPP. So the Brexiters' position does not support Trump's.
