The Heathrow Stopover

Economic
Friday, July 8, 2016
Dr. Jon Stanley

 

The UK should host a Heathrow Stopover for other countries leaving the EU

 

The unthinkable has happened so it’s time to think the unthinkable. The Republic of Ireland, Denmark and Sweden all have strong grounds for leaving the EU. For Ireland, the Euro has been a disaster and the Republic faces a choice between austerity or bankruptcy. For Denmark and Sweden, the Euro and Schengen crises have tipped the cost-benefit analysis of EU membership towards leaving.

 

All three countries have one thing in common. They are too small to strike trade deals of meaningful value with the rest of the world, and are too small to really affect the EU’s regulatory framework which is dominated by the big three members: Germany, France and Italy.

 

The UK referendum hammered home a powerful argument that we could not thrive outside the EU, that in a sense, our ability to remain independent had already vanished. Our trade still heavily involves the single market and leaving it will be a big ask. So far, no Conservative leadership contender has laid out anything close to a clear framework.

 

If the UK struggles to leave, it will be argued no other member can even consider it. The EU then becomes an antidemocratic Hotel California where members can check out anytime but can never leave. This is creating a constitutional crisis in member states if they only admitted so as it robs their citizens of a sense of self-determination.

 

The UK and Republic of Ireland have had an open border for nearly a century and a Common Travel Area (CTA) agreed since the early 1950s. These are written into the Amsterdam Treaty, so it goes without saying that the only power threatening the Irish internal border is the EU as freedom of movement could be handed back to both governments to maintain this agreement, even if Ireland remains in the EU.

 

The next Prime Minister should consider a joint enterprise with Dublin to repatriate this power quickly. The Anglo-Irish agreement, Downing Street Declaration and the Good Friday Agreement show the two countries can work out their difficulties and develop powerful cross-border institutions.

 

We should now think the unthinkable and go further. Early in the then Free State’s history, a move was made to open a new airport to cater for trans-Atlantic travel. The Free State mandated any flight from America entering the Republic had to first stop at Shannon airport, called the 'Shannon Stopover'.

 

Ireland enjoys pre-entry clearance to the United States, which means a speedier entry for passengers from the UK via the CTA and this is a profitable business for the Republic.  The UK could develop a bespoke process that reverses this principle by allowing a “Heathrow Stopover” for goods, capital and services for Denmark or Sweden, and freedom of movement for Ireland too, if they leave the EU. Such a deal would mean unconditional access to the UK’s own single market inside a customs union with the UK alone regulating the agreement.

 

Full access for no involvement in the rules seems at first unfair but it has many benefits to small countries. It would be the only off-the-shelf package that could be assembled rapidly within the Article 50 timeframe. The member states mentioned have very little influence now on the EU given their size, Ireland’s near insolvency and Denmark and Sweden being outside the Eurozone.

 

All three countries could negotiate free trade deals, post-dated to come into effect once they leave the Stopover. The UK, on the other hand, could offer a formal consultative role for these countries when negotiating its own trade deals.


The EU has a Customs Union with Turkey for goods only and in 20 years this has led to an economic boom in Turkey which has taken the decision to forego independent trade policy for full access to its major market.

 

Unlike the EU Customs Union, the Heathrow Stopover would have no binding treaties and instead have bilateral agreements, with termination clauses, between the UK and those countries. It would not in any way be a satisfactory final settlement but instead, like the real Shannon airport, be an airside departure lounge that could be used for as long as the newly independent country wished it to be.

 

In essence, beyond formally ending political union, the Heathrow Stopover extends the economic aspects of Article 50 indefinitely for other member states should the UK stay within the EEA and if we don’t, then it creates an off-the-shelf solution that requires no accession process or period to join. It would protect access to what is these countries’ largest trading partner and remove all customs checks and non tariff barriers while a more satisfactory solution is negotiated.

 

A temporary peg to the trade policy of an outward looking, free trading nation with countries queuing up to trade with her would give Ireland, Denmark and Sweden real independence by restoring the right to choose their economic future with certainty.

 

Dr. Jon Stanley is a Junior Doctor and a Fellow of the Royal College of Surgeons