Brexit: it can only get worse

Saturday 6 March 2021  

Yesterday was day three of "dump the protocol". Day one was supermarkets, day two parcels and now the government is modifying its guidance on plant exports, to cover moving agricultural and forestry machinery and growing media from GB to NI.

The existing text still stands, with a copy-out of Annex VII of Regulation (EU) 2019/2072, banning the export of soil, and restricting the growing media which can be used. But now a new passage has been inserted (pictured above), headed: "Temporary operational measures for movement of some goods from GB to NI".

First to report it was John Campbell, the Northern Ireland Economics and Business Editor. He later wrote a piece announcing: "Government relaxes more trade rules between GB and NI", and confirming that the move was taken " without the agreement of the EU".

What is specifically involved is permission for traders to move used agricultural and forestry machinery without the need for a phytosanitary certificate, providing they have been washed to remove excessive soil and plant debris. This, the guidelines explain, means that machinery can still be moved if small amounts of soil remain.

As to growing media, bulbs or vegetables that have been grown in soil can be sent from GB to NI even if they still have soil attached. Furthermore, plants can be moved to NI with soil and other growing media attached, provided they are from an authorised business meeting GB plant passporting requirements for soil.

Although it might not be immediately apparent to some, there is a qualitative difference between yesterday's measures and those from the previous days. The first two sets involved an extension of the "period of grace", intended to end on 1 April but now delayed until 1 October.

This set is different in that it deliberately sets aside a provision on Union law listed in Annex 2 of the Northern Ireland Protocol, which the UK government has agreed should apply to Northern Ireland, by virtue of Article 5(4). The specific instrument suspended is Regulation (EU) 2016/2031, as implemented by Regulation (EU) 2019/2072.

The UK government states that this is a "temporary operational measure", but unlike the "period of grace" extension, it does not point to an end date. Nor is there any indication of what might replace the suspension, or whether there is an intention to renegotiate the application of this provision.

As such, yesterday's measures are in a different league to the previous "period of grace" extensions, and more clearly a breach of the Protocol. I don't see the argument that it is "temporary" cutting much ice, and especially as there is no end date identified.

One might, therefore, have expected to see fairly prominent media reporting – which might have been the case in an alternate universe where the royal soap opera didn't dominate the news.

But, in terms of substantive reports, apart from the BBC website, all I can see (at the time of writing) is a self-important report in Politico, grandly proclaiming that the UK's Northern Ireland Office had "confirmed Friday to POLITICO that, with immediate effect, many products containing soil are being cleared for shipment once again from suppliers in Britain".

As with others, the site wrongly attributes the EU measures to the single market, stating, "Another day, another unilateral British move to pull away from EU single market rules involving Northern Ireland". No media reporter, as yet, has picked up the qualitative difference in the measures.

Despite what amounts to the clearest breach so far of the Protocol, Downing Street is still playing silly buggers. Of yesterday's measures, a government spokesman said: "These temporary, practical arrangements recognise the need to ensure biosecurity on the island of Ireland is not compromised whilst addressing barriers which stop goods moving into Northern Ireland".

Meanwhile, the incredible Liz Truss claims that the UK is "absolutely not" trying to provoke a row with the EU over post-Brexit border arrangements.

At least this gets close to matching the fabled insouciance of Jacques L'Escroc Chirac. This was the man of whom it was once said that he could steal a pot of jam and when challenged - with his fingers still in the jar and the booty smeared on his lips - could look you in the eyes and say, without a blush: "Moi, monsieur? But I don't eat jam." Perhaps, after all, the Conservatives have learnt something from our membership of the EU.

However, while this is disturbing enough, in some senses one is even more disturbed by the response to yesterday's news of James Barnes, chairman of the Horticultural Trades Association (HTA).

Predictably, he welcomes the news, saying that is association had been raising this issue with government for the past five months. That says so much when the EU's plant health provisions were almost certain to apply regardless of any trade deal, a likelihood that must have been obvious since Mrs May's Lancaster House speech in January 2017 – better than four years ago.

Barnes goes on to say that, while these temporary measures "will allow GB businesses to send their stock to Northern Ireland for this season", a permanent solution needs to be found on this along with changes to the restrictions on prohibited species and seed potatoes, which still remain in place.

He then adds: "This easement only applies to Northern Ireland. The UK and EU need to start coming to some firm and pragmatic decisions to change the current restrictive plant health regime on all trade between the UK and EU".

Given though, that the UK has just unilaterally abrogated a provision of the Northern Ireland Protocol, this is hardly conducive to a happy meeting of minds, where the EU will agree to lift plant health restrictions which apply to every other third country in the world including Efta/EEA countries, allowing one exception for landlocked Switzerland.

That Barnes also thinks that some sort of deal can be reached "on all trade between the UK and EU" lies in the realm of what some might consider to be wildly optimistic, even to the extent of being sustained by unicorn milk.

And yet, Barnes is not out on his own. His demeanour is common to that of many other trade body leaders who still have not come to terms with Brexit and the nature of Johnson's bodged deals. But in the case of plant health, even EEA membership would have been to little avail.

For once, just once, it would be helpful to see some realism. As an island state, the UK is in an excellent position to develop its already high disease-free status, ready to become a reservoir of healthy replacement plants, servicing areas which find it harder to exclude disease.

But this yearning for a past gone, that is never to be recovered, smacks of a morbid lack of realism which bodes no good for an industry which has yet to come to terms with Johnson's dowry. Yesterday was as good as it gets, and from hereon, it can only get worse.

Also published on Turbulent Times.

Richard North 06/03/2021 link

Brexit: picking a fight?

Friday 5 March 2021  

In any dispute, there tends to be at least two sides to the story. That the narratives often differ is generally part of the reason why there is a dispute in the first place. With the current Irish protocol situation, this is very much the case, with the two sides, predicably, telling different stories.

But, whatever the bones of the dispute, there is no question that UK is not yet ready to implement the border checks set out in the Protocol, to the timescale agreed. Thus, Wednesday saw the extension of the "period of grace" for foods sent to supermarkets in Northern Ireland to 1 October. Yesterday saw this extension broadened out to cover "the movement of goods in parcels".

The scale of the problem affecting parcel deliveries from GB to Northern Ireland is immense, set out by Seamus Leheny, Policy Manager for Logistics UK in Northern Ireland.

Some parcel operators move up to six articulated lorries daily into NI, with approximately 5,000 parcels in each. Another operator ships more than 120 articulated lorries weekly, averaging 3,000 parcels per load. Under the rules that would have taken effect on 1 April, that operator alone would have had to make over 360,000 customs declarations per week.

Due to the large volumes of parcels handled, carriers must either process any customs declarations in-house or appoint a broker. Either option is costly and time consuming, and there is no help from government. The government's temporary subsidy system, the Trader Support Service, is not geared to supporting the parcel sector.

Once the period of grace ends – which will now be on 1 October, unless extended further - all parcel declarations must be done via the government's Customs Declaration Service (CDS), which relies on untested and unproven software, with a limited choice of software providers available to integrate the official system with carriers' own IT systems.

When operational, the use of CDS is expected to be problematic. For instance, it limits a single user to transmitting a maximum of 150 messages per minute. Yet a cargo aircraft arriving at Belfast Airport typically has 8,000 consignments. To transmit the required declarations for that arrival alone would take 53 minutes.

On the horizon is the HMRC's "Super Reduced Data Set" (SRDS), to cover low value consignments. Developed as an EU system, originally intended to be operational from 1 January 2021, it will not now be available until the fourth quarter of this year. Until then, the full dataset would be required, which would be hugely time consuming, costly and require carriers to upgrade internal IT systems.

Now, the point of all this is that both the UK government and the EU were fully aware of the problems and, according to the Irish times, an extension could have been comfortably agreed as part of the ongoing discussions on implement of the Northern Ireland Protocol.

In other words, or so it is being said, because the EU would have agreed an extension of the grace period, the move to do so unilaterally by the UK without reference to either Brussels or Dublin is being interpreted as an aggressive, deliberately hostile move.

And because the unilateral action was unnecessary, the EU believes the whole point of the British action is to have a row. Predictably, the move is likely to be met with legal action.

One of the neatest summaries, therefore, comes from the German newspaper Süddeutsche Zeitung which reports under the headline, "When right becomes wrong". Effectively, it says, the British are right is seeking to extend the period of grace, but with their actions they are putting themselves in the wrong.

Then, in an extraordinarily trenchant comment for a foreign newspaper, it states that Johnson had promised that there would be no customs border between Northern Ireland and the rest of the kingdom, which it calls an "outright lie", easily uttered by those "who fight for Brexit".

At the same time, the paper says, this lie puts Johnson under a lot of pressure: controls and bureaucracy are inevitable, and yet Johnson must make it appear that he can fight and avert it. Otherwise he would disappoint his loyal Brexit supporters.

It is precisely to cultivate this image, the paper adds, that the government decided to extend unauthorised customs relief and thus break the agreement on the Northern Ireland Protocol. Johnson and his more rowdy (krawalliger) confidante Lord David Frost, can stage themselves as upright fighters against insubordinate Brussels regulations.

Offering more commentary on the London stance, the Irish Times has Downing Street defending its action, saying that it is not in breach of international law.

Boris Johnson’s official spokesman said the British government remained committed to the protocol and that it informed "at official level" the European Commission and the Irish Government, adding:
We need to make progress to address the disproportionate impact that some of the aspects of the protocol are having on the citizens of Northern Ireland, contrary to its intended purpose. That's why, following official-level notification to the commission earlier this week, we've set out the temporary technical steps, which largely continue measures already in place to provide more time for businesses such as supermarkets and parcel operators to adapt and to implement the new requirements in the protocol. These are sensible and necessary practical steps to address some of the issues that are being faced but we continue to want to work through the joint committee process.
Not everyone is convinced by these assertions and, in addition to the possibility of legal action, with The Times reporting that the EU could impose tariffs on UK goods, the European Parliament has postponed setting a date for ratifying the TCA.

It had been expected that a vote would be held on 25 March but after a meeting on Thursday it has been left off the parliamentary agenda for now. The vote, we are told, could potentially be delayed until late April to allow MEPs to follow the development of the Northern Ireland border issue.

But, while Johnson and Frost play their games, it is Ireland which is in the front line. Irish officials, alongside their EU counterparts, say that the British move has severely damaged trust. "They are bad faith actors and they will continue to be", was the bleak assessment of one Irish source, conveyed by the Irish Times. "The situation in the North is pretty febrile, and it's pretty clear that London doesn't care", he adds.

It is the situation in the North that most concerns Dublin right now. In a sense, says the IT, Ireland is caught between the EU's requirements that the protocol be implemented properly and the EU single market protected on one hand, and the need on the other hand to take account of the genuine unrest in unionism over the barriers between the North and Britain.

Then there is Wednesday night's statement from loyalists close to paramilitary organisations. that they were withdrawing their support for the Belfast Agreement as a result of the post-Brexit arrangements. This was received in Dublin as an example of how events in the North can escalate if they are not minded carefully by all sides.

Ireland is committed to its place in the EU, but no Irish government ever wants to be put in a position where its commitment to the EU and its promotion of peace in the North are in conflict. Walking that tightrope has got rather more difficult, the IT concludes.

Also published on Turbulent Times.

Richard North 05/03/2021 link

Brexit: cat amongst the pigeons

Thursday 4 March 2021  

Responding to oral questions in the Commons yesterday was Brandon Lewis, secretary of state for Northern Ireland - he of breaching international law, in a "very specific and limited" way.

Asked what recent discussions he had had "with Cabinet colleagues on the EU's approach to and future implementation of the Northern Ireland protocol", his questioners could scarcely have realised that they were in for a second dose of Brandonism, only this time without the candour.

My Cabinet colleagues and I, he said, "continue to work together closely to ensure that we meet our protocol obligations in a pragmatic and proportionate way". But, he added, "We have heard the concerns raised by people and businesses in Northern Ireland and are sensitive to the economic, societal and political realities in Northern Ireland". That is why, he continued:
…we are taking forward a series of further temporary operational steps that reflect the simple reality that more time is needed to adapt to and implement new requirements as we continue our discussions with the EU. The steps include the new operational plan for supermarkets and their suppliers, committed to at the Joint Committee. I will lay a written ministerial statement detailing the steps later today.
The written statement was not long in coming and, at least, had the merit of being mercifully short:
As part of the pragmatic and proportionate implementation of the Northern Ireland Protocol, the Government is taking several temporary operational steps to avoid disruptive cliff edges as engagement with the EU continues through the Joint Committee. These recognise that appropriate time must be provided for businesses to implement new requirements, and support the effective flow of goods between Great Britain and Northern Ireland.

For supermarkets and their suppliers, as part of the operational plan the UK committed to at the UK-EU Joint Committee on 24 February, the current Scheme for Temporary Agri-food Movements to Northern Ireland (STAMNI) will continue until 1 October. Certification requirements will then be introduced in phases alongside the roll out of the Digital Assistance Scheme.

In addition, further guidance will be provided later this week on parcel movements from Great Britain to Northern Ireland to provide necessary additional time for traders beyond 1 April. Guidance will also be set out to help address practical problems on soil attached to the movement of plants, seeds, bulbs, vegetables and agricultural machinery. And the Government will write to the Northern Ireland Executive to confirm that flexibilities within the Official Controls Regulation 2017/625 are such that no charging regime is required for agri-food goods.
The EU's response, as one might predict, was swift, coming from vice-president Maroš Šefcovic, co-chair of the EU-UK Joint Committee on the Withdrawal Agreement and of the EU-UK Partnership Council.

Equally predictably, Šefcovic expressed the EU's "strong concerns" over the UK's unilateral action, declaring that it amounted to "a violation of the relevant substantive provisions of the Protocol on Ireland/Northern Ireland and the good faith obligation under the Withdrawal Agreement". Furthermore, he noted, "This is the second time that the UK government is set to breach international law".

Warming to his theme, he complained that this also constituted "a clear departure from the constructive approach that has prevailed up until now". It was, he said, "undermining both the work of the Joint Committee and the mutual trust necessary for solution-oriented cooperation".

This left Šefcovic "disappointed" that the UK government has resorted to such unilateral action without informing him. Issues relating to the Protocol, he said, "should be dealt with through the structures provided for by the Withdrawal Agreement".

Then it was the turn of Simon Coveney, Irish minister for foreign affairs. In his statement, he railed against the unilateral announcement which, he said, was "deeply unhelpful to building the relationship of trust and partnership that is central to the implementation of the Protocol".

That all this has happened only days after David Frost has taken over from Michael Gove cannot be a coincidence. It was anticipated that he would take a hard line, and those expectations have not been disappointed.

Šefcovic has now talked to Frost and informed him that the European Commission "will respond to these developments in accordance with the legal means established by the Withdrawal Agreement and the Trade and Cooperation Agreement". That actually gives the Commission some options, so we will have to wait to see which path they choose.

In the interim, one must wonder at the timing of the original announcement. Choosing budget day, with media attention focussed elsewhere, was a sure way of keeping the story off the front pages, if that was the intention. But, if the British government is deliberately picking a fight with Brussels, one might have thought that it would want to maximise the publicity.

However, if the government has already committed the UK to breaching the Protocol, it hasn't finished yet. Embedded in Brandon Lewis's statement was a promise that there would be "further guidance" on the "soil attached to the movement of plants, seeds, bulbs, vegetables and agricultural machinery", in addition to which, inspection charges for goods entering Northern Ireland are to be waived.

Separate announcements to that effect can only inflame an already raw situation, provoking Brussels into a response. It seems inconceivable that the EU can take no action at all, not least because the refusal of the UK to perform border checks puts the integrity of the Single Market at risk.

Unsurprisingly, further responses, recorded by the Telegrapoh are not complimentary. Says one EU diplomat: "British diplomacy is very predictable these days: Chose confrontation. Because why on Earth would you want to respect an agreement you negotiated yourself? And why on Earth would you want to settle difficult issues in an amicable way if you can also take a confrontational approach?"

Another diplomat says: "Frost is acting as we expected. Under the agreement, a grace period can only be agreed by both sides. If it's not, it’s not a grace period but a violation of the treaty".

Given that the UK could have taken the legal step of invoking the Article 16 "safeguards", it certainly does seem as if confrontation is being actively sought. But, given that the EU is accused of bad faith, in failing to act with the "pragmatism" needed to make the Irish Protocol work, with its actions on shellfish are of dubious legality, perhaps London felt it had little option but to bring matters to a head.

Currently, though, the government is arguing that the move does not represent a breach of the protocol as it was "temporary" and "designed to deal with significant problems facing the province". The transparency of this argument cannot be calculated to smooth ruffled feathers in Brussels.

The odd thing about all of this, though, is that Johnson seems to be riding above the fray. Despite this being his own personal "oven-ready" deal, currently he is taking no flak for what is proving to be an unworkable shambles. For a prime minister, he is consuming industrial quantities of Teflon, but there must surely come a point when the mud starts to stick.

Also published on Turbulent Times.

Richard North 04/03/2021 link

Brexit: the lady gets it wrong

Wednesday 3 March 2021  

I wasn't going to write about shellfish today. I really wasn't, not least because I'm incurably bored by the whole subject – or the treatment of it.

But, in a sense, I'm not dealing with this issue. There is something much more serious going on - a European Commissioner who doesn't seem to understand EU law, apparently advised by a team who shares her ignorance.

The miscreant is Stella Kyriakides, a Cypriot national and now Commissioner for Health and Food Safety, a post she has held since 1 December 2019. Like most European Commissioners (not) she is eminently qualified for her task, having read for a degree in psychology at the University of Reading and a master's degree in child maladjustment at Manchester.

Her task in this case has been responding to a letter sent by George Eustice on 8 February complaining about the Commission treatment of "Trade in live bivalve molluscs from GB to EU for purification in the EU".

Kyriakides answered Eustice with a letter on 10 February but it has only recently become publicly available after its release to the Westminster parliament – and a sorry thing it is.

In that letter, she acknowledges that the trade of live bivalve molluscs from production areas classified as "Class B" between the United Kingdom (UK) and EU Member States has taken place for many years during the UK's EU membership as well as during the transition period.

She also acknowledges that the transfer of live bivalve molluscs for human consumption from a B classified production area to a depuration centre is allowed between EU Member States. But it is then that she goes wobbling violently off the rails.

Since the end of the transition period, and as provided for in the Withdrawal Agreement, she writes, the UK is no longer bound by EU law, including in particular the entire SPS legislation, and is no longer treated as a Member State.

Hence, she says, the import of live bivalve molluscs from Great Britain and from the UK Crown Dependencies into the EU is subject to the conditions applied to any other third country. "As you know", she then asserts, "this is the reason why the above trade is no longer possible".

And here, the Commissioner is completely wrong, and at several levels. Firstly, in respect of the EU's SPS legislation, the relevant law has been incorporated into the UK statute book, unchanged, and has been given the status of "retained law". That means it still applies.

Secondly, within the framework of the SPS system, before any third country can trade with the EU in live bivalve molluscs, it must be formally authorised to do so, by virtue of being listed Commission Implementing Regulation (EU) 2019/626. And, although it took some finding, we have established that the UK has been formally listed, with effect from 1 January 2021, by Commission Implementing Regulation (EU) 2020/2209.

Now, the point about this listing is that it is conditional on the third country guaranteeing that it will be bound by the relevant provisions of EU law. Specifically, as set out in 2019/625, live, chilled, frozen or processed bivalve molluscs from third countries are "authorised for the entry into the Union from a food safety perspective" when prepared in accordance with Regulation (EC) No 853/2004.

In particular, Annex II, Section VII applies, and in respect of the UK's trade, Chapter II states that food business operators may only place live bivalve molluscs collected from class A production areas on the market for direct human consumption. Those collected from class B production areas can only be placed on the market for human consumption only after treatment in a purification centre or after relaying.

What is very evident in this part of the law is that no distinction is made between member states and third countries. Both are equally bound by it. And there is no requirement, specific or implied, that requires third countries to submit molluscs collected from class B production areas to purification before entry into the Union customs area.

This, of course, is the way the system works – the way it must work in order to comply with the terms of the WTO SPS Agreement, which prohibits measures which arbitrarily or unjustifiably discriminate between Members "where identical or similar conditions prevail".

In her letter, Kyriakides asserts that the UK is no longer bound by EU law but, not only is the UK so bound, it has "provided the necessary guarantees required by Delegated Regulation (EU) 2019/625 in order … to be listed".

However, the Commissioner then goes on to claim on her letter that in the UK Border Operating Model, Defra "correctly underlined that the export of live bivalve molluscs from Class B production areas for further depuration in the EU would not be allowed".

Yet this reference, despite being picked up joyously by Yorkshire Bylines (and PoliticsHome), is more than a little disingenuous. It applies specifically to "wild" molluscs, whereas – the greater trade is with farmed molluscs. And the reason why the "wild" product was excluded gave the clue as to the whole problem: "there is no EHC suitable for them".

As to the farmed product, Defra asserts that it had been advised on 27 September 2019 that when these were exported to the EU for purification, they could be certified with the model Export Health Certificate set out in Part A of Annex IV to Commission Regulation (EC) No 1251/2008. Defra, therefore, advised the UK industry accordingly, stating that the trade could continue.

Kyriakides now claims that this certificate, as clear from its title, provides animal health guarantees only, and cannot be used to provide public health assurances, should live bivalve molluscs be intended for human consumption.

The respect of animal health requirements, she says, cannot dispense with the respect of public health obligations. She adds that, "This is why the reference to this certificate at the time, together with the fact that the UK had a thorough knowledge of the EU import requirements, led the Commission services to understand this request for clarification as relating to the export of live animals intended for further relaying and not for direct human consumption, and to reply accordingly".

As interest on the purification of live bivalve molluscs intended for human consumption grew, the Commission services wrote to the Chief Veterinary Officer on 8 February 2021 to further specify the conditions governing the export of live bivalve molluscs intended for human consumption to the EU, including on that particular aspect.

Clearly, there is some dispute about the events on 27 September 2019, but it is clear that Defra thought that the certificate set out in 1251/2008 could be used without apparently realising that it could not.

Nonetheless, when Eustice writes that his department can see "no scientific or technical justification" for what amounts to an arbitrary change to 853/2004, he has a valid point. And the Commission could easily regularise the position by issuing a model EHC for use with product gathered from class B production, intended for human consumption only after treatment in a purification centre, as permitted by 953/2004.

In material respects, therefore, the Commission is wrong, and yet Yorkshire Bylines believes, the "hapless DEFRA secretary Eustice" to have been "humiliated and schooled by the EU". This is from Anthony Robinson formerly "a sales engineer, now retired and living in North Yorkshire after a long career representing several European manufacturers in the UK".

Also rampant is The Oysterman Tom Haward. He is determined to condemn "government incompetence and negligence", relying for his "proof" on the exclusion of "wild" molluscs by Defra – something we had known about all along.

To that extent, there is something of a dividing line. There are those who, come what may, are determined to believe that there is a third country "ban" in place, and will accept any assertions from virtually any source which supports that belief.

But the inconvenient truth is that the Commission has got it wrong. It is arbitrarily excluding UK product in breach of its own law, supported by a Commissioner who clearly doesn't understand the system for which she is responsible.

And yet, since this is quite clearly an issue which is beyond the capability of the legacy media to report accurately, we are no further forward. Firms are going out of business and all they can do is lament.

Also published on Turbulent Times.

Richard North 03/03/2021 link

Brexit: chicken or egg?

Tuesday 2 March 2021  

A survey carried out by ICM for the think-tank British Future, part of the "Talk Together" consortium, has suggested that Brexit is gradually receding in the nation's consciousness.

On the basis of the results, the think-tank suggests that as an "inter-group identity conflict", Brexit is likely to gradually receive less prominence as UK society goes through a process of acceptance and reconciliation.

Only a quarter of people (25 percent), it finds, are still emotionally invested in the politics of Brexit. Just 12 percent identify as "leavers", slightly outnumbered by the 13 percent who identify as "remainers".

For 53 percent of people, we are told, their primary political identity now lies elsewhere, with traditional tribal politics reasserting themselves, pushing them mainly into the Conservative or Labour camps. Another 21 percent do not identify with any political party or cause.

What might give some insight into this process, though, is an observation the Brexit was a salient issue in the discussions held by the think-tank in November and December 2020. That, they concede, was when the UK-EU trade negotiations featured more prominently in the news.

It was also a prominent theme of the discussions held in Northern Ireland, where people were fearful about its economic impact and that the Irish border might become a flashpoint for violence.

Thus, while British Future thinks that we might be "getting over" Brexit, what the think-tank might be seeing is a reflection of the loss of media focus. It is not beyond the realms of possibility that there is a correlation between lack of media interest and receding public consciousness. The question is which came first – the chicken or the egg – the lack of public interest or the fall-off in media attention.

Possibly, where it all went wrong was the media expectation of queues stretching from Dover to Aberdeen, and empty shelves in the supermarkets. But when the lorry-watchers were frustrated, and Brexit got complicated, the journos began to lose interest. As the politicians also retreated, thus refusing to provide the essential biff-bam dynamics, it was inevitable that coverage would diminish.

Then, for all their protestations, it is fair to say that most people are easily led. Despite the substantial fall-off in their print circulation, the legacy media and broadcasters still largely set the news agenda. And in this they can rely on the responses of the politicians, as they feed off each other.

Thus, if a subject is ignored by the politicians and media, it will struggle for attention. Many an issue suffers that fate and, for the moment, it is Brexit's turn to be sidelined.

However, it is almost certain that the corollary applies. If the politicians re-engage with the subject, and the media start taking an interest again, one can expect public interest to recover, and the same old partisan passions to revive.

And here we can be certain that Brexit hasn't gone away. From the speciality magazines, the trade bodies and, to an extent, the local media, there is no shortage of tales of woe.

A casualty recently in the frame was the pet food industry, picked up by the Financial Times after a press release from the Pet Food Manufacturers’ Association (PRMA) reporting that the industry was "struggling to export to the EU".

The UK pet food industry is valued at £3 billion and in 2019 exported £285 million-worth of goods to the EU versus £45 million to the rest of the world. With exports being hugely important to the industry, businesses are being harmed.

Three things are adversely affecting the industry, articulated by Michael Bellingham, PFMA chief executive. These are the familiar litany of red tape, vet shortages and hauliers refusing to accept animal-based products in case they are stopped at the border. "Two-thirds of members are not getting their product through. It's a big issue", Bellingham says.

The "vetnary" problem has an interesting twist. Many official veterinarians are unwilling to take on the extra work of certifying animal by-product consignments because they are not confident about what is required – another graphic example of the fatuity of the EU (and other administrations) in elevating the profession to its God-like status, when so many of its practitioners are out of their depth.

On Twitter the industry woes are amplified by the Canagan Group, which illustrates the paperwork required to send one order to the EU (above). It also complains that it faces £100,000 year on veterinary inspection fees, when the previous cost was zero.

Despite the brief interest from the Financial Times though, and marginal interest on Twitter, the story hasn't taken off in the rest of the national media. It is unlikely to do so now.

Similarly, a Welsh story on the experiences of the Archwood Group - a leading manufacturer of timber products, based in Chirk, near Wrexham - is staying in Wales.

Josh Burbidge, Managing Director of the group, explains that his company's exports to Ireland "have caused the most challenges, with our goods being held up at the border between Northern Ireland and the Republic of Ireland for around three weeks".

"Initially", he says. "the issue concerned what information was required and in what format for the customs declarations. For example, the HMRC system needed to be updated because our goods had been incorrectly flagged as needing phytosanitary documentation". This resulted in products being held at the border for around three weeks until the orders were reclassified.

Nevertheless, he says, "We continue to face delays of our products reaching the Republic of Ireland because the customs paperwork is taking a long time to process, which adds to our costs".

The company is also having to bear the cost of using special heat-treated ISPM pallets to transport products over the border, with the prices for these rising significantly. And the rules of origin have complicated matters further because Archwood Group's customers now face import duty for products the company buys from outside the UK, such as plastic mouldings.

David Hopkins, chief executive at the Timber Trade Federation comments that Archwood's problems "are indicative of those faced by hundreds, if not thousands, of small to medium sized businesses across the UK".

The costs, he says, can be carried and spread more easily by larger firms delivering larger orders. But, the costs are the same for each one of the multiple smaller deliveries that companies like Archwood are making across borders. They obviously want to keep their customers in those countries so face a choice between increased costs and lower margins or losing business altogether. This is not a recipe for business growth.

For those prepared to trawl though the undergrowth, there is no shortage of material to report. But as Pete observes, our interest in the EU as an entity is on the wane, and the debates of technical substance are no longer fashionable. Brexit's self-appointed experts are scrabbling for a fading limelight.

Despite that, it really won't go away. Says Pete, when the next big kick off happens, it won't be over tariffs or food export rules. But there is a running sore that won't be put to bed until it's out in the open. With so much damage and disruption, it is only a matter of time before the issue is capturing the headlines again.

Also published on Turbulent Times.

Richard North 02/03/2021 link

Brexit: that petty and vindictive EU

Monday 1 March 2021  

I missed a couple of "Brexit" pieces in the legacy media yesterday, not least one in the Mail on Sunday. This was a classic Mail rant, with one of those long headlines which tell enough of the story without their readers having to dip into the main copy. It read:
How Brussels has launched a spiteful war on our glorious snowdrops and rhododendrons: Petty and vindictive even by EU standards, they're banning the import of plants that have touched British soil - putting jobs at risk and raising prices in garden centres.
When I first looked at this, I thought that this might be another instance where the UK was taking a "hit" from leaving the Single Market, in which case the paper would be partly author of our misfortunes.

After all, at a time when it really mattered, one of the key cheerleaders for the anti-EEA brigade has been the Mail, publishing in December 2018 an issue-illiterate diatribe from Dominic Lawson against the Norway option.

But, looking at the EU law, two things emerge. Firstly, the legislation is not part of the Single Market acquis. Two main laws apply: the 101-page Regulation (EU) 2016/2031 of 26 October 2016 on protective measures against pests of plants; and the very much longer Commission Implementing Regulation (EU) 2019/2072 of 28 November 2019, establishing uniform conditions for the implementation of Regulation (EU) 2016/2031, running to 279 pages. Neither are EEA relevant.

The second thing to emerge is how recent these laws are, both of them having taken effect on 14 December 2019 – only shortly before the UK left the EU. The timing is such that these laws, amounting to a major revision of the EU's plant health laws, would have had no formal input from the UK, which ceased to have any formal legislative role in the EU, the moment the Article 50 papers were lodged on 29 March 2017.

As to the Mail on Sunday's assertion that the EU is "banning" British soil, this is essentially true. The prohibition is set out in Annex VII of Regulation (EU) 2019/2072, which lists "plants, plant products and other objects whose introduction into the Union from certain third countries is prohibited".

Point 19 refers, where "soil as such consisting in part of solid organic substances" from "third countries other than Switzerland" is specifically prohibited. According to Point 20, the import of all organic growing media - apart from peat or coconut fibre, previously not used for growing of plants or for any agricultural purposes – is prohibited.

Nevertheless, we were warned about what would happen in the event of the transition period ending, without a covering agreement on phytosanitary issues, the latest advice published by the Commission in a revised Notice to Stakeholders on 13 March 2020 – the original having been published on 21 March 2018.

What could then have happened during the TCA negotiations was that Frost and his merry men could have sought an equivalence agreement. There is specific provision for that in of Regulation (EU) 2016/2031, Annex II, Section 2, which states:
Measures taken to manage the risk of a pest shall not be applied in such a way as to constitute either a means of arbitrary or unjustified discrimination or a disguised restriction, particularly on international trade. They shall be no more stringent for third countries than measures applied to that same pest if present within the Union territory, if third countries can demonstrate that they have the same phytosanitary status and apply identical or equivalent phytosanitary measures.
This is essentially a copy-out of the WTO SPS Agreement and could have provided the foundations on which border controls between the UK and the EU were relaxed, in respect of plant health provisions. However, when it came to the TCA text, there was no mention of equivalence, and the die was cast.

Thus is opened the way for the Mail on Sunday report, which starts off by telling us that this period should be peak season for Joe Sharman (pictured), a man known as "Mr Snowdrop" and one of the biggest growers in the country. Sharman, whose customers include the Queen, sells thousands of bulbs from his Cambridgeshire nursery to buyers in the EU and beyond. He also drives vanloads to sell at snowdrop festivals in Germany. But, says the MoS, not this year. "At a stroke, draconian EU regulations have wiped out half of his business".
The punitive new rules, which treat British growers as if they were located thousands of miles away in China or Brazil, have all but ended his export business. They have even prevented deliveries of snowdrops and other plants to homes and garden centres in Northern Ireland, which, following the Brexit agreement, remains under EU trade rules.

So extraordinary are the regulations that a plant that has so much as touched the soil of Great Britain can never be exported to the EU or any part of Ireland. No one has calculated the total cost of the regulatory assault, but what is certain is that British horticulture has seen millions of pounds wiped from its profits overnight.
Here, the paper is conflating separate issues, but the essence of what it conveys is correct. The tolerance for the presence of propagating material entrained with Snowdrop bulbs is set at zero. Joe Sharman is well and truly stymied.

But, says the MoS, to him it's an act of spite, particularly as British plants have been grown to exactly the same standards as those in the EU for many years. "I've had German customers in tears. These people have been buying from me since 1988 – they're my friends", Sharman says. "I've shed tears, too. I never thought I'd have to deal with this. I’m now hoping the EU leaders get off their high horse and let us trade".

On top of this, we are told that "the sheer weight of regulation and the stringent detail – some of it bizarre – make it all but impossible for British growers to turn a profit".

Under what the MoS insists are "new" post-Brexit rules, Britain is treated as a "third country" for horticulture, which means that for every consignment of plants – be it one bulb or one million – an expensive "phytosanitary" safety certificate is required, stating that the goods are soil- and pest-free.

These are issued by an inspector from the government's Animal and Plant Health Agency (APHA) at a cost of £127.60 per every half-hour spent on the consignment. The certificate itself then costs a further £25.52.

Species such as snowdrops are more tightly regulated. Controlled by CITES – the Convention on International Trade in Endangered Species of Wild Fauna and Flora – snowdrop bulbs require additional permits at a cost of £74 per order.

Then come the rules about soil, says the paper. Plants that have been grown in, or have ever touched, British earth can no longer be sent either to the 27 EU countries or to Northern Ireland because of the supposed potential risk of pests and disease. Even pots that have been placed on or touched the ground are deemed unsafe.

With words such as "infuriating", and references to "harsh rules" and their "sheer complexity", especially in relation to the rules applying to Northern Ireland, we are left in no doubt that this is the "spiteful" EU at its worst – although none of the growers cited actually make that charge.

However, the rules are regarded as "impossible to comply with", although it is also claimed that the UK is treating plant imports from the EU under the same rules as before. This seems to suggest that there are different rules in force, which is not the case. The EU regulations have been adopted by the UK and are part of the statute book. They are simply not being applied.

But, while one can sympathise with the growers who are caught up in this nightmare, it has to be said that these rules apply to all other third countries. If they were to be any different, Frost should have sought equivalence for the UK, and many of the problems could have been avoided.

Clearly, the rush to get a deal left little time for such considerations – another aspect of Boris's botched Brexit, that is so damaging British business. But such is that "take" from the MoS that "Boris" gets a free pass. This is a "spiteful" action by a "petty and vindictive" EU, the only Tory-approved way that Brexit can be reported.

Also published on Turbulent Times.

Richard North 01/03/2021 link

Brexit: the invisible story

Sunday 28 February 2021  

It's taken less than two months, but this weekend effectively marks the point at which the legacy media lost interest in Brexit. Trawl through the nationals and the main broadcast media websites and you will struggle to find the references to the UK's biggest political story of the century.

This in itself is an interesting, if not important phenomenon which deserves an explanation. Probably, it owes much to the refusal of the two main party leaders to engage.

The Brexit story is a difficult one for our media to cover. Elements are highly technical, demanding more of most journalists than they are capable of offering, and they get bored with the detail.

To sustain what is in essence a political story, therefore, they need that personal tension between party leaders. Without it, they lack their standard fallback biff-bam personality politics and the story struggles to survive.

As to the silence of the party leaders – we know this is deliberate policy on the part of Starmer, but it is more likely a matter of convenience for Johnson. Doubtless, he sees political salvation in the vaccination programme – currently buying him a seven percent "bounce" in the polls. By contrast, there nothing but grief for him in Brexit.

With coronavirus and plenty of other "human interest" stories to keep them entertained, it is quite evident that the media are happy to collude in downgrading Brexit, especially as Covid-19 stories offer endless opportunities for the "social workers' gazette" tendency which tends to dominate the contemporary media.

That is not to say that we have seen the end of Brexit reportage. Once the interest in Covid-19 slackens – which is likely as long as the vaccination programme succeeds – the issue may well re-emerge with a political edge. But, for the time being, there is a hiatus of indeterminate length.

Perversely, just as media interest subsides, the Sunday Times picks up an intensely political dimension to the saga, telling us that, just as Michael Gove moves on to pastures new, he finally "gets" the impact that Brexit is having on small and medium-sized business owners.

It is a mark of the topsy-turvy state of politics, the paper says, that Gove, one of the leading campaigners for Brexit, is increasingly regarded as an ally by those with concerns. According to one attendee of a final meeting between him and affected firms, the Cabinet Office minister, there was "a shift from saying there were teething problems to recognising that there are real issues here".

With him moving on, though, little is expected of his successor, David Frost, who is more likely to devote his energies to renegotiating the Irish protocol. This issue, at least, has enough political traction to give it a soap opera dimension and keep it in the headlines, albeit away from the front pages.

If Frost listens to the Brexit zealots, he will be invoking (or threatening to invoke) the Article 16 safeguards, and abandoning border checks on goods from GB destined for Norther Ireland.

According to Martin Howe in the Sunday Telegraph, this "unilateral action" would provide a firm basis for negotiating the Protocol's replacement with "sensible cooperative procedures for controlling the flow of goods across the Irish land border through away-from-the-border means".

Of course, this, away-from-the-border idea is nothing new, having been variously promoted by Peter Lilley and Shanker Singham. Yet with the EU having recently revised its Customs Code and its "official controls", it is unlikely that they will be keen on entertaining more changes just to suit the UK.

What the likes of Howe - and the others who have advocated this solution – do not seem to understand is that, if the EU makes significant concessions to ease the Irish land border problem, they will come under pressure from their other trading partners to adopt the same regimes.

A particular sticking point will be the location in Border Control Posts which, with a very few, limited exemptions, must be located "in the immediate vicinity of the point of entry into the Union", set out in Regulation (EU) 2017/625. So firm is the EU on that principle that supplementary regulations in March 2019, setting out the detail of the limited exemptions, or "derogations", giving very little scope for deviation.

The regulations were produced after the UK government and the likes of Shanker Singham had made their pitches for away-from-the-border facilities, which means that they can be taken as a definitive statement of the Commission view. It will not change its rules.

The trouble is, of course, that if the Howe line is followed, the only remedies will either be the reversion to a hard border between NI and the Republic, or checks on Irish goods when they enter other EU countries, as I suggested yesterday.

Something will certainly have to give, not least as there is a very significant cross-border movement of bulk milk, with around one billion litres of milk produced in Northern Ireland going over the border for processing every year, for processing in the Republic. This is worth €2-300 million each year.

If Whitehall is intent on a confrontation over the Protocol, there could be very rapid and harmful impacts on the Northern Ireland economy, precipitating a noisy political crisis which could keep the media entertained for as long as it lasts.

The only possible way out is a bilateral veterinary agreement, which could make special concessions for bulk fresh milk exports, which is a trade which is already highly regulated. Meat and other foods of animal origin, might be a different matter.

Meanwhile, as the media retreats from the more general coverage of Brexit, the Metro is carrying sponsored copy from the "UK government", declaring: "How British business is going from strength to strength under the new trade rules".

The piece features a number of traders (one pictured) who, miraculously, have experienced no delays at all in their shipments from European countries, the happy collective claiming that "planning is the reason for our Brexit success".

This naked propaganda hardly fits with the tales of woe we have been hearing, with the single "Brexit woes" story in the Sunday Times telling us that parcels posted to and from Europe are taking as long as two months to arrive, with delivery companies blaming Brexit.

British customers have described waiting up to eight weeks to receive items from countries such as Germany or Holland. And, once deliveries arrive, many are hit with unexpected fees to cover customs charges, additional taxes and courier costs, which can run to more than £100.

Against this, the very existence of government-funded propaganda, disguised as news stories, cannot help but raise suspicions that there is an additional reason for the current paucity of Brexit stories in the media.

Whatever the actual reasons, there is no question that Johnson is getting something of a free pass, and is not being brought to account for his failures on Brexit. If he does get away with it, this will in no small measure be due to the inadequacies of the media. But there again, we cannot argue that this is news.

Also published on Turbulent Times.

Richard North 28/02/2021 link

Brexit: stronger than we think

Saturday 27 February 2021  

In what could be a major development, RTÉ News is reporting that unnamed "senior EU figures" are contemplating a "major reset" in relations with the UK.

The trigger, apparently, is the appointment of David Frost, due to take over as the UK's relationship supremo on 1 March. Some pundits are expecting his role to be more about confrontation than co-operation, hence moves are being made to head off trouble at the pass.

RTÉ News suggests that senior EU officials fear among is that unless there is a clear reset, the relationship between the EU and the UK could become one of perpetual tension.

The idea being floated is a formal, set-piece event marking the TCA ratification, set for the end of April. This could be built round a "handshake" moment between Johnson and EU leaders, symbolising a new, more harmonious era in relations.

This would ideally coincide with both sides signing off on a package of solutions to the most contentious outstanding issues, especially the Northern Ireland Protocol and the London embassy issue.

In the interim, RTÉ News reports that both sides could work towards a package of solutions around the outstanding issues of the Irish Protocol, as well as other areas of tension, such as the status of the EU's delegation to the UK.

However, it is understood that only "very tentative discussions" have been broached, and then only between officials. Whether there is any political commitment to the idea cannot be said. But there would have to be hard negotiations in the coming weeks for anything to materialise.

From the outset, though, things do not look particularly promising. Northern Ireland's agriculture minister, Gordon Lyons, has ordered work to be halted on the construction of border control points, an end to charges levied at ports on traders bringing goods into North and a halt to further recruitment of inspection staff.

Predictably, the rival SDLP are not impressed. It is called for an emergency meeting of the Stormont Executive to address the "unilateral action" taken by the Minister.

Deputy First Minister, Michelle O’Neill, describes the move as a stunt. "The DUP cannot pick and choose which duties and obligations of Executive leadership it wants to adhere to", party leader, Colum Eastwood said. "This decision is controversial, cross cutting and cannot be put into effect without Executive agreement", Nichola Mallon, the Minister for Infrastructure, adds.

So much of this, then, seems typical Northern Irish politics, the old saw being that, if you thing you understand it, you haven't been listening. Clearly, there is no agreement as to what should be done, and no obvious way forward.

That the situation is unstable and, in the longer term, unsustainable, is highlighted by comments from Esmond Birnie, a senior economist at Ulster University's Business School.

He says that Brexit has "hamstrung" Northern Ireland, with its unfettered access to Great Britain reduced and a fix potentially months away as business waits on the UK government to supply accurate data.

"We've no official quarterly data for Northern Ireland, but we've Ulster Bank's purchasing index and case study evidence", Birnie says, on which basis he warns that costs in the province are rising "far more rapidly" than in the other three parts of the UK.

"This", Birnie adds, "is telling us that it is easier to trade with Europe, that prices for businesses in the region are increasing far more rapidly than for GB counterparts and that Brexit resulted in a reduction in our unfettered access to the UK, of which we are a part".

GB access, we are told, is pivotal for many businesses in Northern Ireland, which routinely import some £10.4 billion in goods, compared with £2.4 billion of imports through the Republic of Ireland.

Concerns are growing that Brexit will substantially reduce the quality of life in Northern Ireland, with Mr Birnie noting that food is one of the sectors worst affected by new border controls, and increased business costs will likely translate into higher consumer prices. "Margins for coping with higher grocery prices this side of the Irish Sea are much lower than for the other UK nations", he says.

And yet, confirming what we've known for some time – which seems to be the role of the BBC - there is evidence of a reorientation of trade on the island, which shows no sign of stabilising.

Nearly two months after the end of the transition period, the volume of freight being shipped across the Irish Sea from the Republic of Ireland to GB is still down significantly, with companies trying to avoid the complications and potential delays of using the landbridge.

While the number of weekly ferry crossings from Irish ports to France has risen sharply by 102 percent, with more likely to be added, in the week to 22 February, freight volumes on Stena Line ferries from the Republic of Ireland to GB were down 49 percent compared to the same week last year.

What we have yet to see, though, is the imposition of full border controls on goods from EU member states to the UK, which will not come into force until 1 July – or possibly even later. But what we might see then is a further development of the direct route from Ireland to the continent.

As horse owners are already finding, from Ireland, it is easier to travel to GB via Northern Ireland, EU exporters in future might find it easier to send goods to Ireland, using the land border into Northern Ireland as the back door into the UK. That might even see a revival of Holyhead's fortunes as shippers seek to avoid Calais-Dover and other more direct Channel routes.

It could even become the case that Northern Ireland develops into a manufacturing and distribution hub for the rest of the UK, as well as servicing operations in the Republic.

This, in itself, might explain some of the thinking behind the EU seeking its "reset", as reported by RTÉ. One alternative might be a return to the sort of political instability which gave rise to the Troubles, even if we don't see violence on the same scale.

But, as Pete points out, the UK is not entirely without leverage, should other scenarios emerge, not least of which is the possibility of us invoking the Article 16 safeguards.

With that, the UK has a stronger position than at might first appear. If London refuses to play ball, and implement rigorous checks on goods travelling from GB to Northern Ireland, the EU's options are to insist that the Republic sets up border checks on good from NI, or imposes border checks in Irish goods entering the rest of the EU.

Neither of those options would be welcomed by the EU, or the Irish Republic, with the risk of damaging its precious solidarity. If the EU is to keep Ireland on board, it actually needs to do a deal with London.

That leaves the possibility of a move towards Irish unity, but that is not going to happen any time soon – and one does wonder whether Dublin would want to take on the financial liabilities of supporting Northern Ireland.

All in all, as long as the London government holds its nerve, it might find it easier to reach a resolution than is generally thought. And, if that means transferring economic activity to Northern Ireland, that is no bad thing, It will be a happy day when one can say that Brexit has brought prosperity to the province.

Also published on Turbulent Times.

Richard North 27/02/2021 link

Brexit: not all bad news

Friday 26 February 2021  

I suppose, if we keep at it long enough, we'll end up with a complete A-Z of enterprises stuffed by Boris's botched Brexit. On Wednesday, we had the architects voicing their complaints and today we have the yachtsmen, who are complaining about the 80-day visa rule.

Sadly, it seems that superyacht crews are also caught up in this, although their problems may evoke little sympathy from Covid-struck Britain.

Nevertheless, many British crew who, until 1 January 2021, had the luxury of being able to travel freely around the EU without many immigration considerations. But Brexit now means that they fall into the same category as other non-EU crew.

With the UK having become a third country, this groups British nationals in with the rest of the world. However, captains seem to be managing. Captains are used to dealing with American, Australian and Kiwi crew coming into Europe – they can enter without a visa but are only allowed to stay in the EU for 90 days within a rolling 180-day period – and the same now applies to British crew.

Essentially British crew, as with any other British or non-EU member state nationals, will now get a stamp in their passport when they arrive in any EU member state, which will start the clock on their 90-day limit within the EU zone (not just in that particular country). When they join a boat, they may then request to get stamped out of the EU and stamped back in when they disembark, meaning the period they are on a crew list does not count towards the 90-day limit.

Despite that, we have Sir Robin Knox-Johnston and the Cruising Association campaigning for sailors to be given a 180-day cruising visa for EU countries. They believe that the future of Britain's cruising sailors is threatened.

Also problematic is a VAT and tariff issue threatening a valuable market in second-hand boats to Ireland, highlighted by the Afloat magazine.

In a somewhat caustic turn of phrase, the magazine reports that, when the greatest trade deal, either in the EU or UK, was being done, "somebody forgot about the minuscule boat market". The resulting fallout from this lack of determination, it says, means brokers and buyers navigating the now choppy waters say there is little official advice to go on, and boats are being lumped in with cars for the official tax treatment.

Thus, a rich pool of well-kept boats at attractive prices, the handy UK market for second-hand boats now has 33 percent in taxes slapped on top since 1 January. Yacht brokers say there are lots of "verbal" discussions going on but very little being put in writing as buyers, sellers along with both Her Majesty’s customs and their EU counterparts, get to grips with some complex new arrangements.

Since the end of the transition period, all boats moved between the EU and UK now require customs declarations at the border and face paying import VAT, although, for many, a ten-month window still exists in which to get boats home without facing this charge.

The rules state that UK VAT-paid yachts must return to the UK within three years of having left the UK or EU and not have changed ownership in the meanwhile to qualify for Returned Goods Relief on VAT. There is a final deadline in place of 31st December 2021 for yachts to return if they departed more than three years ago.

However, when two British owners contacted HM Customs before bringing boats back from the Mediterranean to the Solent, they were told they faced 20 percent in VAT on return. The haulier was cancelled in this instance while the boat owners work out what to do next.

After "y" for yachting, of course, comes "z", but I haven't yet found any zebra importers or exporters who are having particular problems, but there is plenty of time yet.

Back in "a" territory, though, the UK aerospace industry is complaining that it is "in limbo" over how the UK's new aviation regulations interact with those of the EU and global counterparts.

Chief executive of aerospace trade body ADS Group, Paul Everett, explains that getting to grips with the new regulatory environment would not be achieved without filling in gaps in the post-Brexit regime.

"We've identified four key problems, including issues surrounding borders and paperwork, Northern Ireland and chemicals", he says. "But with the UK now operating under a separate aviation safety regime – some of which works okay – it is vital that we get a fix on the detail surrounding how this interacts with the EU regime, as the finer details on this are missing.

"In the absence of these details, some of the key parts of the industry are unable to work and therefore are losing business". Left left unattended, Everett adds. "the additional complexities and all-round Brexit uncertainty would hit the competitiveness of the UK’s aerospace business, which presently ranks fourth in the world behind the US, France and Germany".

"There are fundamental systemic issues" bound to the terms of the TCA that need to be addressed, Everett says. And then there is the way the UK has responded to the deal and the associated requirements".

"A maintenance annex and a change in the relationship surrounding design and approvals would help", he argues, "as would making the new regime understandable both here and internationally".

Everett also thinks that the government needs to foot part of the bill for the UK's new safety regulator, which is within the Civil Aviation Authority. Unlike in Europe, where industry covers 70 percent of the cost tied to its aviation regulatory regime, the new UK rules force businesses to cover 100 percent of the cost.

When it comes to a level playing field, therefore, the UK government is going to the other extreme, burdening British industry with greater cost that their European counterparts have to bear. In "taking back control" it seems a little perverse to use that freedom to disadvantage our own industry.

And that freedom, when it comes to signing up new trade deals, also looks set to yield disappointments. We learn, for instance, that the US has "dashed" British hopes of a speedy agreement, having announced a "review" of the negotiations so far.

This comes with Joe Biden's choice of Katherine Tai as his new trade envoy, who has told a confirmation hearing that there was a need to "review the discussions and the negotiations so far", in the light of all of the "developments" since talks began in 2018.

In the last days of Trump's presidency, the UK unilaterally dropped tariffs against the US over subsidies for aerospace firms, in the hope that the US would respond favourably, but Tai is evidently unimpressed.

She notes that it is almost two-and-a-half years since the Trump administration set out its aims for a trade agreement with the UK, since when the UK has signed "two agreements" with the EU, the Brexit Withdrawal Agreement and the TCA.

"It will be important to me to review the progress in the conversations so far, to review the objectives" in light of all the changes, Tai says. In a sign of things to come,. she adds: "We have all been going through a pandemic reality for the last year – we are still in the midst of it, working to get out of it".

In a scenario full of ironies, one has to recall that Biden's home state is Delaware – one of the US's largest chicken producers. The UK opposition to "chlorinated chicken" is not exactly going to help here. Nick Clegg once insisted that the Democrats had told him "we are not going to sign anything that the chicken farmers of Delaware don’t like". Looks like there isn't going to be any Tai chicken.

However, the news isn't all bad. Johnson has called an "eat British fish campaign", to help the industry combat post-Brexit disruption. Others fear, though, that to Johnson "fish" is just another "f-word", and we all know where that takes us.

Also published on Turbulent Times.

Richard North 26/02/2021 link

Brexit: taking its turn

Thursday 25 February 2021  

You have to enjoy the irony, because there's very little else to enjoy. Here we have Johnson's "oven-ready" deal, the draft Withdrawal Agreement, on which he won the 2019 general election. And now the accompanying Irish Protocol, which has been steadily implemented since I January, is already unravelling.

Yesterday was supposed to be the big day, a meeting of the UK-EU Joint Committee, at which the UK was to propose an extension of the "grace period" due to end on 1 April when all retail agri-food products will require EU Export Health Certificates (EHCs) to move from Britain in to Northern Ireland.

Tensions, we are told, "were high", and although Northern Ireland's first minister, Arlene Foster, went into the meeting without "high expectations" – "given the attitude of the European Commission thus far" - she came out shocked by Brussels' "stubborn and inflexible response", blasting European officials as "tone deaf".

Meanwhile, a junior DUP minister, Gary Middleton, warned that the Irish Sea checking processes could become “overwhelmed” when the first grace period ends, telling a Stormont committee, "We can't have a situation where the internal market of the United Kingdom is disrupted so much to the point where it's effectively crippling our businesses".

While the Committee co-chairs, Michael Gove and the EU vice-president, Maroš Šefcovic, churned out an anodyne joint statement, reiterated their commitment to the Northern Ireland protocol, vowing to find solutions to problems, Foster declared that it was up to Johnson, whose train-wreck this Protocol is , "to step up and protect the United Kingdom internal market".

This, of course, is only one element of the creaking post-Brexit system, with the legacy media pausing briefly from their wall-to-wall coverage of Covid-19 to give an overview of the near two-months (lack of) progress since the end of the transition period.

Typical of the output is a piece by Channel 4 News which tots up some of the aggrieved sectors, "fish, fashion, fun, finance and flowers" to make up a string of F-words.

I guess architects, chemicals, cyclists, equestrians, famers, gin and whisky distillers, the meat industry, motor sport, pharmaceutical industries, and many more, simply didn't make the cut. But then, you can only expect so much of the attention span of TV reporters.

Adding to the ever-growing list is a sector I would never have thought of, the UK guitar buyers, with one prominent retailer describing the situation as "a car crash", which makes a change from the more usual train wreck.

A motorbike racing writer is also pitching in, explaining what Brexit means for British teams and riders. There are, we are told, only two major British teams competing in world championship racing, both of them in World Superbike: the factory BMW squad of Shaun Muir Racing and the factory Yamaha outfit of Crescent Racing.

SMR and Crescent are big enough to have the resources to work at addressing any issues created by Brexit, but these same issues will also affect smaller, less well-financed teams and riders who want to go racing or testing in Europe.

SMR and Crescent say costs will rise and both are considering moving their racing operations to Europe, to avoid the border complications of regularly taking staff, trucks, race bikes and equipment into and out of the EU. Crescent is already setting up a company in the Republic of Ireland to give itself an EU base.

We get some detail on carnets – nothing new to this blog's readers – with concerns about the financial impact. Basic cost of a carnet is around £300, plus a refundable deposit of 40 percent of the value of the van/truck and everything inside it, or a non-refundable insurance premium to cover the 40 percent.

Shaun Muir Racing puts the cost of an annual EU carnet for a race truck at between £4000 and £5000. Muir takes four trucks onto the Continent, Crescent takes two. And although the carnets are valid for 12 months and multiple trips, if the items listed change significantly, new carnets are needed.

"Carnet fees and agency fees are quite painful", says Paul Denning, boss of Crescent, which runs the Pata Yamaha operation with riders Toprak Razgatlioglu and Andrea Locatelli. "We are a well-established team and company so we can put time, money and human resources into doing that. Does all this make it unattractive for smaller teams running out of the UK on shoestring budgets in World Supersport 300 or 600? Yes. Does it make it impossible? Maybe. Either way it's a massive pain".

Getting people into Europe is the next issue. We are told that there is currently a lot of confusion regarding the status of UK race staff that need to make work visits in EU states, due to glaring ambiguities in official documents. No one seems quite sure of whether British riders and team staff will need work visas and permits for each EU country they visit.

"Visas are a whole other nightmare", adds Denning. "The real problem is that for every regulation there seems to be something else that contradicts that regulation. Some people say we don't need visas or work permits, others say we do. If we have to go down that road we’re told the estimate for an all-singing, all-dancing Italian work visa is anywhere between £1,500 and £3,000 per person. And that's just one country".

I'm surprised that the national media haven't picked this up yet. As so often, the details are confined to trade magazines, leaving the big titles to chunter away at generalities and the easy-picking of ready-packaged think-tank reports and industry surveys.

The latter is the fare on offer from the Guardian which has filleted a press release from Chartered Institute of Procurement & Supply (CIPS), to tell us that a survey of 350 supply chain managers found that two out of three had experienced delays of "at least two to three days" getting goods into the UK, compared with 38 percent who reported delays in a similar survey in January.

A third of this group said the delays were "significantly longer" than in January, 28 percent said "slightly longer" and 15 percent reported delays of a similar length to January. Just 18 percent of those surveyed by the said they had experienced no delays or fewer delays. The situation was only slightly better for exports, with 44 percent experiencing delays of at least two to three days getting goods into the EU.

Interestingly, the paper also notes that the UK's largest chemical producers, BASF, has revealed that it has experienced "substantial friction" from the new trade barriers caused by withdrawal from the EU, although we get no detail.

This firm we profiled last October, where the company's Neil Hollis warned that the chemical industry could suffer losses of £1 billion, through new registration costs, a loss of innovation and some chemicals no longer being available.

"There's no positive spin on this", Hollis said at the time. as the UK prepared to pull out of REACH, in favour of its own regulation. "To put it bluntly, chemicals available now will remain on the EU market, but will disappear from the UK market", he warned.

Although the Guardian can only grudgingly award one short paragraph to the company – against dozens of pieces about the thespians and wandering minstrels - the New York Times devoted a whole piece to the British chemical industry last month.

It wrote of the firm of Teal & Mackrill in Hull, which makes paints for special applications, like fishing trawlers and factory floors. In a "little-noticed consequence of the new Brexit trade deal", this paper said, "the company is facing real concerns about its future".

Owner Geoff Mackril said that growing British regulatory burdens on chemicals may mean that eventually he would not be able to obtain some of the additives that make his paints distinctive. "The worry is that some of those materials that we use", he said, "may become unavailable because of those costs".

This was a concern that is spread across Britain's £33 billion a year chemical industry, with BASF estimating that UK REACH could cost the company £70 million. "If the costs of bringing products to the UK market rise to make them uneconomic, we are not going to do it and make a loss", said Geoff Mackey, director of communications and sustainability at BASF in Britain.

Nothing of this, however, seems important enough for the British legacy media, even though plant closures are being reported. Schools, more than hospitals, are today's media fare. Brexit has to take its turn, while "inveterate liar" Johnson can blame everything on Covid.

Also published on Turbulent Times.

Richard North 25/02/2021 link

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