A few thoughts on the current debate between hard and soft Brexit, and why I prefer soft Brexit:

“Hard” and “soft” Brexit are not clearly-defined positions. They are usually thought of as being the UK getting no deal with the EU at all, and relying on WTO rules to trade with the EU (“hard Brexit”) and the UK staying as a member of the Single Market, like Norway (“soft Brexit”). But the eventual outcome may be somewhere in the middle, and a “hard” Brexit could mean the UK getting a rather limited trade deal with Europe, such as one that abolishes tariffs for goods but does not safeguard services firms, while a “soft” Brexit could mean Single Market-like rules governing certain sectors (such as finance) but not others. It’s probably best to think of them as referring to how extensive the free trade deal we have with Europe is. A lot of what’s going on right now is posturing. This can’t be emphasised enough. It’s tempting to try to read a lot into what different ministers say about the relative attractiveness of membership of, or access to, the Single Market, or the ease with which we could adopt WTO rules and go it alone ourselves. On the other side are European politicians like Francois Hollande who have been quite gung-ho about how quickly the UK should leave the EU, or like the European Parliament’s chief negotiator Guy Verhofstadt who has been quite hardline about the supposed all-or-nothing nature of the Single Market. In my opinion, all of these people are playing to their respective galleries and posturing before negotiations begin, and their statements are best taken with a pinch of salt. Hard vs Soft are not simple proxies for Leave vs Remain. A lot of Remainers prefer the hard Brexit option – Nick Boles MP, for example, kindly cited our case for the EEA Option (a soft option) in a recent post but decided that he preferred a hard Brexit option – while a lot of Leavers are leaning towards a softer exit option, as with long-time Brexiteer Roland Smith’s case for the EEA Option or Daniel Hannan MEP, who has emphasised the need for a close economic relationship with the EU (but is opposed to full Single Market membership). Free trade is not just about tariffs. It’s easy to assume that tariff-free access to an economic bloc is all you need for firms to be able to trade freely, but regulations matter a lot too. Countries can obstruct trade with regulations intentionally – one example is France’s requirement that services like Netflix carry at least 40% French-made content – or unintentionally – different safety standards, for example, might mean that a medical device made in the UK to British safety standards cannot be sold in the US without going through a very costly testing process in the US as well. Since tariffs are already very low between developed nations, modern free trade agreements are about mutually accepting other countries’ regulations (if it’s made in Britain and passes British rules, you can sell it in America too – and vice-versa) or agreeing on a shared set of rules for firms in both countries to adhere to. The Single Market is not all-or-nothing. It’s a mistake to believe EU rhetoric about the Single Market being a single, monolithic thing. We are very far from having a true Single Market in services – according to a 2013 government report “the Services Directive only covers half of the services sector, and is only partially implemented”, and other regulations overlap causing inadvertent barriers to services trade. With this in mind we can begin to see the bluster behind the EU’s supposed ‘red line’ on Freedom of Movement. I think it’s quite possible that we may end up with a deal that gets us free movement of workers (people employed by or with a job offer from a UK firm) but not free movement of all people, as well as things like an emergency brake.

And why I support a “soft Brexit” (though some at the ASI disagree):