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Brexit, cognitive biases and why a Norway deal is the only option left on the table.

For the past several years, the Brexit debate has suffered wildly by a collective form of a well known bias in cognitive psychology, the focusing effect, according to which people are found to make decisions on the basis of the most pronounced and distinct information they have available in their working memory, excluding other useful or even crucial information. For a couple of years, the most compelling example of focusing effect in the Brexit discourse has been the disappearance of the Northern Ireland border from the debate. Hardly anything has been said about the border and about the Good Friday Agreement before the referendum and even during the first phases of the negotiation. The border-issue was left as the very last argument to be addressed by Theresa May when it was clearly the biggest obstacle to both the EU and UK red lines. Theresa May should have followed Mark Twain’s wise advice.

“If you have to swallow a frog, don’t stare at it too long.”

― Mark Twain

For those who have given Ireland the appropriate attention, the shamble around the backstop in the withdrawal agreement did not arrive as a surprise.

Now, there are at least other two examples of focusing effects that are poisoning the current debate and I will try to gather some attention on those.

The actual time frame.

The first argument to be discussed is the actual time frame of the process, or at least what is left of it. The argument is particularly relevant for remainers. Most people seem to give for granted that the defeat of May’s deal in the common will inevitably lead to an extension of Art 50. Corbyn wants to extend and go to elections; the Lib-Dems and greens want to extend and go to a second referendum; Tories don’t know what they want (as usual). I think a non-trivial extension of article 50 is going to be very unlikely. The extension process is not unidirectional, as all other 27 EU countries must agree and most importantly an extension has very important consequences with regards to the upcoming elections for the European Parliament. Elections are scheduled for the 23rd of May and a new parliament will form at the very beginning of July. The UK is currently entitled to 73 seats and after their departure, 40 or so will just plain disappear and the remaining 30 or so will be redistributed among some but not all of the remaining countries (with France and Spain getting the largest slice). Populists are growing enough to get a considerable amount of votes in the parliament and if the UK remains part of the next election, their 73 MEP could really be a huge boost to the populist coalition. The EU has no appetite for that. The crucial point is that the UK must decide very soon if they have changed their mind and want to stay in the EU because if they do, then the EU will have to take into account their presence at the next elections. If they will not take part to next elections, then the next available entry point for the UK to rejoin will be in 2024. The EU will, therefore, be very reluctant in granting an extension if the only scope of the extension is to have more time to negotiate a deal that, as they have made very clear, they have no interest in renegotiating. The other possible option that is been discussed is for the UK to simply withdraw Article 50. While this is a unilateral decision, it is not meant to be a possibility to just buy more time.

The decision to withdraw has to

“be unequivocal and unconditional, that is to say that the purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end.”

What all this means is that the UK cannot wait until the end of March to make up their mind. They will not have this luxury. An extension to Article 50 will probably be granted to try and postpone the cold shock but it will certainly not exceed July 2nd when the new parliament will take seats. That means that at this point, “cancel everything and remain” is no longer an option, not even if a referendum will rule so. At the very least, the UK must go through at least a 5 years period of EFTA adhesion during which they will still be in the customs union and common market but will lose any seat in the European Parliament. This has become the best-case scenario for remainers.

The cost of access to the free market.

The other aspect that is known to everyone but is not part of the public debate is that access to the free market will not be possible unless the UK will take all four freedoms with it, including freedom of movement for people. Surprisingly, this aspect was ignored even by actors and commentators discussing the consequences of the withdrawal agreement, with notable focus going to the backstop but no consideration of what the future actual deal would look like. Many are now ready to accept that the only solution to the Irish border is for the UK to remain in the customs union. However, they still appear to believe access to the free market will be negotiated on other more favourable terms. It won’t. The only way for the UK to retain access to the common market is to adhere as EFTA member, in a Norway++ deal (and, frankly, this is something that was clear from day 1).

Given that Remain is no longer an option for reasons of timing, and given that no-deal is not an option for obvious reasons of costs and practicalities, we can conclude that Norway++ is the only real option left, at least until 2024 or, more likely, 2029.

One final caveat: is the no-deal scenario truly off the table? The answer is “kind of”. A long term no-deal is simply impossible. It would literally destroy the country driving it to a recession never seen before in modern history. A very short no-deal, on the other hand, is actually quite possible and in a certain sense almost desirable because it would help settle the matter once and for all and prepare the path to the next decision making process, either through a new referendum or new general elections.

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