Brexit: serious and dangerous

Saturday 21 April 2018  

It says something of the nation that BBC TV chose to run as its lead item on the main evening news yesterday the resignation of a football manager. And while such news might be of very great interest to some individuals, it was not the most important thing happening in the world, or the nation – not by a long chalk.

High on that list must be the failure of the talks in Brussels, once again on the vexed issue of Irish border – now being picked up by diverse newspapers, but mostly down page. Whatever their "take" however, there can be no dispute that the developments over the last few days have been very serious and we are headed for dangerous waters.

In a marginally more intelligent report than it managed yesterday, the Telegraph offers the headline: "Britain risks 'disorderly' Brexit, Michel Barnier warns after EU rejects Theresa May's Irish border solution" – thus indicating the nature of our peril.

The headline comes from Michel Barnier's statement on the talks, where he confirmed on French television that "substantial parts" of the Withdrawal Agreement – and especially the Irish border issue, remain to be agreed.

He then declared, in his role as the Union's negotiator: "there are still difficulties, still a risk of failure. On 25 percent of the text, we don't have agreement. If there is no agreement, there is no orderly withdrawal, there is a disorderly withdrawal and there is no transition".

Then asked if the UK could obtain a "single market a la carte" deal, he replied: that the EU had repeatedly said that Britain will not be able to do what the British call "cherry picking", adding "no way".

Nothing here warns us that we are going then to be locked into the customs unions, as the Telegraph idiots are insisting, leaving the Guardian to put it more directly with the headline: "Leaving EU rejects Irish border proposals and says Brexit talks could still fail".

However, according to the hired help, Stefaan De Rynck, reports that talks have ended for the moment are not correct. The EU and UK, he says, have before the June European Council planned four rounds of talks, with the next round in the first week in May. The talks will cover the Irish issue, plus other withdrawal issues, including the future relationship.

Yet, not a great deal more clarity comes from other newspaper reports, although we do have a more ruminative piece in the Irish Times. This reminds us, in terms, that the view at EU level on the border question is that the UK has been trying to serve a "reheated casserole of ideas" that London has persistently dished up – and Brussels has consistently sent back – since last August.

But, even here we see the customs union "infection" which is blighting any discussion of the issue – a fantasy non-solution that has swamped the discourse and is now blocking any possibility of sensible developments being explored.

The only thing consistent is the EU's refusal to accept ideas that have already been presented and explored, an action which embodies a rejection of the so-called "technological solution" upon which the UK government seems so keen to rely. Nor will the EU accept the so-called "customs partnership" that would see Britain collect tariffs for the EU on European-bound goods and apply tariffs to imported goods. Tariffs are the least of the issues here.

As always though, what is being lost in the torrent of noise is the basic principle involved here – the unalterable fact that, once the UK leaves the EU, what was once an internal border between EU Member States becomes part of the EU's external border.

In that context, the current levels of traffic across the border – and the nature of the traffic – are largely irrelevant. What matters, as the EU has pointed out so often – is that the integrity of Single Market is maintained, which means that the same rules which apply elsewhere between Member States and third countries must also apply to the Irish border.

There is absolutely no point in arguing, therefore, that traffic levels from the North to the Republic are so slight that they are insignificant in the grander scheme of things. Once there is an unguarded "back door", goods from Northern Ireland can enter into the Republic and, once there, they must be allowed free access to other Member States, with no checks at the internal borders.

Thus, should a low-profile "technological" border be established, the way would then be free for exporters, not only in the UK but also right across the world, to use Northern Ireland (via mainland Britain if necessary) as a portal into the EU, evading most or all of the checks that would normally apply to third country goods.

We are not, therefore, dealing with what is, but what could be once Brexit is place. And once the rules have been agreed, it is very hard for the EU to go back and demand that they should be tightened up. The net effect could be that the EU would have to reintroduce customs controls between Ireland and all the other Member States – something that would put it in breach of its own treaties.

This prospect coincides with the formal naming (the Irish Times calls it a "christening") of the MV Celine in Dublin Port, to which we introduced readers last October.

This is the ship that can carry more than 600 lorries and is almost twice the size of any ferry currently operating out of Dublin Port. If all the parking lanes on the 235metre vessel are laid end to end, they would stretch to almost five miles, making it the world's largest short sea roll-on roll-off vessel.

The hopes for this vessel are high, with plans for hundreds of thousands of additional tons of freight go to and from the Continent each year, bypassing Britain and any border controls and paperwork that may be inevitable if a hard Brexit becomes a reality.

Should there be, contrary to expectations, minimal controls on the Irish border, the starting point for those "hundreds of thousands of additional tons of freight" may be outside the Union. And there would be nothing to stop them - something the Muppets simply haven't worked out yet. Knowing some of the characters involved, it is unlikely they ever will.

On the other hand, if it's sense you are after, go to Ivan Rogers in The Times, who advises us that Britain's preferred solution the Irish border after Brexit has been dismissed as a "fantasy island unicorn model" by European leaders.

Solving the issue with a free trade agreement is not considered a "runner" by EU nations and neither Brussels nor the Irish government believed using technology to manage the frontier was realistic. Rogers thus suggests that the "backstop" is the only viable model – the very option the UK has rejected.

Thus, to put it succinctly, the EU has rejected everything the UK has to offer and the only thing acceptable to the EU has been rejected by the UK. There is no middle way.

That brings us right back to square one and, unless this can be sorted, we have to confront Michel Barnier's warning that the Brexit talks could fail. In fact, there's no "could" about it. We have been told often enough, if there is no settlement of the Irish question, then the talks will fail.

This is a reality which the UK government doesn't seem to understand. There is going to be no last-minute change of heart from the EU and no movement from its insistence on the backstop, where North and the Republic maintain regulatory alignment.

But if the backstop creates a "wet" border between the mainland and Ireland, there is a whole new world of grief awaiting HMG. Not only can ports such as Holyhead not handle the burdens of managing this border, the creation of a whole new infrastructure will cost hundreds of millions and take years to implement.

With no plans in place, and a transition period that is scarcely long enough, the UK, even if it agreed to it, could not deliver on the "backstop". And whether it "can't" or "won't", the effect is the same. Mrs May has driven us up a one-way street to a dead end, in a car with no reverse gear.

And yet, all the Guardian can suggest is that we stay in a customs union. Is this the end of intelligent life as we know it?

Richard North 21/04/2018 link

Brexit: on a "no deal" trajectory

Friday 20 April 2018  

An (issue-)illiterate report from the Telegraph's "Europe editor", Peter Foster (paywall), tells us that "the EU has comprehensively rejected British proposals for avoiding a hard border in Northern Ireland".

That much is straightforward, and only to be expected, but Foster then adds that this is a "move" which will "cast serious doubt on the UK's ability to leave the customs union". The addition is drivel, of course, and exactly the sort of low-grade confusion that makes the Telegraph a completely unreliable source of information about Brexit.

Foster says that "senior EU diplomatic sources" have said that Mrs May's plan for avoiding a hard border in Northern Ireland was subjected to a "systematic and forensic annihilation" this week at a meeting between senior EU officials and Olly Robbins, the UK's lead Brexit negotiator.

"It was a detailed and forensic rebuttal", the source is reported to have said – and apparently with some authority, as the person has been "directly briefed" on the meeting in Brussels on Wednesday. "It was made clear that none of the UK's customs options will work. None of them".

This is the review that we were expecting to hear from, and the fact that all we were getting was silence did not augur well for a positive outcome. But, with its comprehensive rejection (which was only what we expected), the fool Foster writes that it "now sends the Cabinet and Whitehall back to the drawing board and raises the serious prospect that Mrs May will have no choice but to remain in the EU customs union if she wants to avoid a hard border in Northern Ireland".

Foster, together with a sizable proportion of the Lords, and many equally clueless MPs, has obviously guzzled the Kool Aid on the customs union, but even then he is way off beam. As late as yesterday, Tusk was saying that, if there was no deal on Ireland, there would be no Withdrawal Agreement and no transition.

It follows that, according to Article 50, we drop out of the treaties on 29 March 2019. The customs union is not a fallback position – and neither is it a solution which will allow us to avoid a hard border.

It seems, though, that there is no end to the stupidity perpetrated by the members of our legislature (or our media), with the Irish Times reporting that the House of Commons liaison committee (made up of the ten chairs of the main select committees) is to call on Theresa May's government to seek to remain in a customs union with the European Union "in order to avoid a hard border in Ireland".

This is to be the subject of a debate next Thursday where the assembled cretins will consider a motion which notes the importance of frictionless trade with the EU for British manufactures and "further notes that the free circulation of goods on the island of Ireland is a consequence of the UK and Republic of Ireland's membership of the EU customs union".

Not one of them, it seems, is capable of reading the consolidated treaties, but if any of them had the wit to do so, Article 28 would tell them that:
The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.
On the other hand, Article 26(2) gives them the definition of the "internal market" (aka Single Market), which "shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties".

From this, it could not be clearer that the free movement of goods which depends on the absence of "internal frontiers" stems from the internal market, and not the customs union.

When we are caught up in this epidemic stupidity, though, all normal rules of politics are suspended. These people are no longer engaging their brains and while most of them on a good day would struggle to think rationally, this sad crew isn't even trying.

As the time of my writing this post, however, the legacy media was only just beginning to report what is self-evidently a disaster for the Brexit talks, as it puts us on a trajectory for a "no deal" with all that that entails. was on the case, and it is adding that EU negotiators "have made clear that they are willing to discuss terms by which Britain remains inside the bloc's customs union, or to negotiate a separate customs union like the EU's deal with Turkey, which would entail agreed-upon, common tariffs on imported goods".

Bluntly, this looks confused. A customs union on the style of Turkey clearly doesn't address the issue of a frictionless border and, unless people have suddenly taken to living in a parallel universe, there can't be anyone with a claim to sentience who believes this is a solution – or even getting close to one.

As to remaining inside the EU's customs union, this simply is not legally possible within the terms of the treaty. The European Union itself is the customs union – as per Article 28. The two are inseparable, which means you cannot be inside the customs union and outside the European Union.

Where this puts us now with the June European Council is anybody's guess, but it now looks extremely unlikely that the negotiators will have come up with a solution by then. Failure, however, would mean that the Council could not sign off on the Withdrawal Agreement text, allowing it to focus on the political declaration for the future EU-UK relationship.

From the look of it, though, the UK government has already given up on any attempt at seeking a June resolution. An official spokesman, responding to the current failure to agree, said: "We have put two sensible and practical solutions on the table and are working constructively towards getting this solved by October. We're just waiting for the Commission to engage with the same spirit of cooperation".

Strip away the extruded verbal material and one is left with the factual kernel – that the UK is going to push these talks right to the wire. This is indeed what David Davis intimated some time back, even though Stefaan De Rynck, senior advisor to Michel Barnier, has ruled out a last-minute settlement.

On the face of it, this puts us on a trajectory to a "no deal" outcome. The Commission has made it abundantly clear that it is not going to concede any points on the NI border, and will preserve the "integrity of the Single Market" at all costs. Waiting until the last minute and re-presenting the same proposals in the hope that the commission will cave in, is not a strategy that is going to work for the UK government.

The worst of it is though that, gripped by the epidemic of stupidity that is afflicting our politico-media nexus, there is no one close to the seats of power who seem to understand the peril we face, or even the seriousness of the consequences.

We are headed for an "accidental Brexit" by default, the worst of all possible outcomes, because our "establishment" has lost its ability (tenuous at best) to think rationally.

For those who think (or hope) that, eventually, someone must see sense, that is a brave expectation but not one which is born of fact. So far, getting close to two years from the referendum, MPs are showing no signs of understanding even the basics. If anything, they are regressing.

Similarly, the legacy media (and not just the Telegraph) seems completely to have lost the plot and ceased even to offer any pretence that it is adequately (or at all) scrutinising government or the legislature.

With all these bodies taking a rain-check on sanity, we can now only expect the worst. Until this psychic epidemic runs its course, it is no longer sensible to expect anything else.

Richard North 20/04/2018 link

Brexit: a psychic epidemic

Thursday 19 April 2018  

I wrote yesterday that the bulk of MPs we encounter seem to be the most ignorant people on the planet, unable even to master the basics and prey to just about every myth and falsehood on Brexit that it is possible to imagine.

To these, we must now add the Lords, many of whom seem unable to understand what a customs union is, 348 of whom have voted to call on the Government to "explore" the possibility of remaining in (or joining) one – with 225 against. And the reason why many voted for the proposition was the mistaken belief that a customs union will remove customs checks - even to the extent that this will resolve the Irish border question.

Supposedly this is one of largest votes in history of the Lords and is being styled as a "crushing defeat" for the government. It is, of course, no such thing. The anodyne wording of the amendment to the European Union (Withdrawal) Bill simply calls upon the Government to consider the prospect of staying in a union. It does not actually require any executive action. The government, therefore, can (and will) go through the motions and then, having done precisely nothing, will move on.

This makes the whole charade a crass distraction from the business of government – signalling an epidemic of cretinism in our legislature, the like of which we have rarely if ever seen. It's almost as if an evil alien power has descended on Westminster and sucked the IQs out of their Lordships, leaving them with the deductive powers of five-year-olds.

Leader in the nursery stakes in the Lord's debate was Lord Kerr of Kinlochard, imbued with the stupidity which has infected the place.

Amazingly, after all this time, the man is clueless, arguing that it is not possible to "maintain an open border with no checks and no infrastructure if the UK leaves the Customs Union". And thus, he asserts, he workable solution to the Irish border conundrum is a customs union. The man thus blathers:
Even if cross-border trade is tariff free, as I hope and believe it will be, rules of origin, phytosanitary and other checks will require a hard border. They will make that inevitable unless we have a customs union. A customs union is not in itself a sufficient condition for an open or soft border - there will still have to be a degree of regulatory alignment, particularly in the agricultural sector - but it is a necessary condition for an open border.
This is madness beyond peradventure. The simplest of reality checks calls out the errors. A customs union does not in any way eliminate border, as we see with the borders between Turkey and EU Member States.

On the other hand, the nearest thing we have to frictionless borders between member and non-member states is on the crossings between Sweden and Norway – both participants in the Single Market, but with Norway firmly outside the customs union.

Affecting the brains of these hapless people is the simplest of flaws – the naïve belief that because it is called a "customs union", such an agreement deals with border checks – and will eliminate most of them. They are unable to distinguish between this concept and the entirely separate idea of "customs cooperation", and then the further concept of the Single Market.

All a customs union does is remove tariffs and quantitative restrictions (quotas) between members, and superimpose a common external tariff so that all members levy the same tariffs on goods from outside imported into the customs area.

Just supposing you wanted to maintain tariffs between members (and quantitative restrictions), these could be managed administratively, without border checks. The processes for tariffs are quite simple.

The consigner of goods must fill in a customs declaration, which can be posted into the system electronically before the goods even start moving. On receipt of the goods (i.e., once they have arrived at their destination), the consignee must pay whatever tariff is due – either directly to the carrier or via an electronic account, which is settled periodically.

Fraud and evasion can be policed "beyond the border" and only in exceptional circumstances is there any need for checks on the border.

On the other hand, you do not need a customs union to secure tariff-free trade. As with the EEA Agreement and any number of free trade agreements, there exist arrangements were no tariffs are charged, in either direction. The only thing missing is the common external tariff, the absence of which means that rules of origin may apply (if there are significant external tariffs). But again, these can be sorted administratively, without the need for border checks.

In short, policing tariffs does not require border checks and you do not need a customs union to remove tariffs.

Crucially though, even the most comprehensive of customs unions – with absolutely no tariffs - does not remove border checks, as indeed the European Union experience adequately demonstrates.

Beyond tariffs, there is a galaxy of border controls, all devised to deal with "non-tariff barriers", which have nothing to do with a customs union. To eliminate checks, you need cooperation on customs procedures and a Single Market (the former being part of the latter).

Thus, if you want frictionless trade (i.e., the absence of border checks), forget about a customs union. It is, as we have written so often, a red herring - a complete irrelevance. If you want more detail, you can find it here.

When it comes to Brexit, only in the event of a catastrophic breakdown in relations is it anticipated that tariffs will be re-imposed on trade between the UK and the EU. And while Rules of Origin might cause minor administrative difficulties, the problems are vastly overstated – and can be eliminated completely if the UK voluntarily harmonises its external tariffs with those of the EU (which will happen anyway when we adopt the EU's tariff schedules).

Thus, the only mechanism that we need concern ourselves with, in order to ensure frictionless trade, is the Single Market. And, outside EU membership, there is only one way of securing participation – through the Efta/EEA route.

As to the workings if the EEA in respect of Efta states, the land border between Norway and Sweden is not entirely frictionless. But many of the border checks currently carried out are a matter of choice – arising from the policing of alcohol and tobacco duties, for instance.

I have pointed out many times that the EEA Agreement is infinitely flexible. The structure readily allows for country-specific sub-agreements to suit local circumstances. A modified EEA Agreement, entirely within the scope of the treaty, with enhanced cross-border cooperation, could deliver free movement of goods across the Irish border – or so close that the no one would notice the difference.

And such principles have been known for years. There is no case whatsoever for staying in the EU's Customs Union (not that we can), and none for negotiating a new agreement. This will not give us frictionless trade. Participation in a modified EEA agreement, through Efta, will give us what we need.

Yet, the ennobled cretins yesterday obsessed about a customs union, mentioning it in their facile debate 125 times – against a mere fifteen mentions of the single market. The obsession has the hallmarks of mental illness – a psychic epidemic. Their lordships are not well.

The trouble is that this psychic epidemic has spread to the Commons. Indeed, it may even have started there. And the fourth estate is thoroughly infected, trotting out the annals of stupidity without not the slightest engagement of brain cells.

Meanwhile, distant from the noise and fury of the imbeciles in Westminster, the negotiations in Brussels go on. Donald Tusk reiterated yesterday that there would be no withdrawal agreement without settlement of the Irish question, but of any developments in the talks, there has been no news.

Yet events in Brussels have far greater importance than anything the baying hounds of Westminster can deliver. Nothing they did yesterday brings us any closer to a resolution of a problem that has the potential to collapse the talks. How interesting it is, therefore, that the legacy media should concentrate on the noise and fury. And so the epidemic spreads.

Richard North 19/04/2018 link

Brexit: nobody is listening

Wednesday 18 April 2018  

There was a seminar organised by the Efta secretariat in Geneva yesterday on the European Economic Area (EEA). Opening the proceedings was Deputy Secretary-General Dag Wernø Holter (pictured) who informed his audience (repeated on Twitter) that: "The objective of the EEA agreement is to extend the internal market to the participating EFTA states".

It is good to see this sort of information getting a wider currency and it is the sort of thing that should be spread to all those involved in the Brexit debate. However, it is of some concern that this sort of thing should even need saying. Such information is readily accessible to anyone with the wits to find it – I included it in Monograph 9, published in August 2016 – and it should already be widely known.

At the same seminar, there was also Brit Helle, Director of the Goods Division of the Efta Secretariat. She tackled another basic fact – one often misrepresented: "Efta is not a fax democracy", she said. "The Efta/EEA states are not waiting for the latest legislation to be faxed from the Commission. Efta/EEA experts have the right to participate in EU expert groups. This is our most important channel for influence".

This, of course, is by no means the only channel of influence, and later in the seminar the "two pillar structure" was explained, which gives further opportunities for consultation and decision shaping.

The procedures involved are so well-known and well-established that Efta even published an explanatory document about it, way back in 2009. And that is enough to destroy the canard that Efta/EEA membership places the Efta states in a wholly subordinate position, where they are obliged to accept all (relevant) EU law automatically, and have no influence in its making.

Yet in the Guardian in December 2012, we had a piece by Roland Rudd, then chairman of the Europhile lobby group, Business for New Europe. The topic was Norway's relationship with the EU, the piece bearing the headline: "No power, no influence and we would still have to pay the bill".

The claim, and especially (but not exclusively) that part relating to "influence", was a lie - a direct, obvious and easily verifiable lie. And while Remainers to this day (rightly) complain about Vote Leave's £350 million lie on the side of the big red bus, less is said about this lie – one repeated uncritically by a newspaper which is now in the forefront of exposing the machinations of the Leave campaign.

This same newspaper was quite content to give David Cameron a platform when, in October 2015, a Downing Street spokesman said that Norway was "the 10th largest contributor to the EU budget and is bound by the rules of the single market without any say in the decision-making process".

Both these lies went unchallenged, while others – including the Independent, repeated the canard in early 2016 that Norway had "to effectively implement all EU rules, has no say in how they are made, and still contributes a significant amount of money to the EU budget".

But then, David Cameron was quite at ease with lying on his own account, which he did during his notorious Bloomberg speech in January 2013 when he stretched the lie beyond breaking point. "Norway is part of the single market - and pays for the principle - it has no say at all in setting its rules: it just has to implement its directives", he declared.

If Mr Cameron didn't know that was a lie, he could easily have found out. As prime minister, it was his responsibility to find out, and tell the truth. But these days, and especially in relation to the Brexit debate, lies have become part of the normal currency of politics, delivered routinely and repeated often, with rarely even a hint of an apology when the lie is found out.

Perversely, the lies on Efta/EEA have been repeated by both sides, but perhaps none more egregiously than by Peter Lilley who described the EAA as an organisation "devised for countries whose governments wanted to join the EU but whose people were reluctant", adding: "It is an ante-room, not a departure lounge".

Imagine then how the current situation might be different had the truth been told, primarily that the EEA was devised as a mechanism for European countries to participate in the Single Market without having to commit to the political integration involved in full membership of the EU.

How different would it have been if there have been an honest, open discussion about influence, and decision-shaping? Not only would there have been the two-pillar structure to explore, but the more informal political mechanisms and the role of global bodies and the ability to shape the rules before they even reached the EU.

Less frequently discussed has been the ability of nations such as Norway to initiate or sponsor global conventions such as the Convention on the Conservation of Antarctic Marine Living Resources (CCAMLR) where it has been able, through this means, to protect a vital economic interest in the form of the Antarctic krill resource.

We saw a similar dynamic with Norway's involvement in the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, where it helped shape the regulations and the regulatory system which were subsequently adopted by the EU.

For too long, though, people have been content with the lies and, of a single group beyond the media, the most common transgressors seem to be Members of Parliament. These are people who, in terms of information resource, are fabulously wealthy.

Not only are they paid to employ their own research staff, they have access to a world-class library and research facility that any university would kill for. They have, though the medium of parliamentary questions, oral and written, access to ministers and though them the civil service, and they can write personally to any minister and expect answers.

Collectively, they have their select committees, their cross-party interest groups and, in the wider world, MPs (or their researchers) only have to pick up a phone to arrange a visit to virtually any commercial facility in the country – and many more – where endless numbers of people are only too pleased to explain how things work.

Yet, for all that, the bulk of the MPs who we encounter seem to be the most ignorant people on the planet, unable even to master the basics and prey to just about every myth and falsehood on Brexit that it is possible to imagine.

And so we have corrective seminars in a far-off city, delivered by anonymous bureaucrats from an organisation that is scarcely known outside its specialist field. There, the truth is spoken, to a gathering attended by not a single MP and probably none of their staff either.

Thus, in the wider world, the lies and misunderstandings remain unchecked and the distortions which poison the Brexit debate continue to exert their malignant influence. The truth will out, they say. But nobody is listening any more. The liars have inherited the earth.

Richard North 18/04/2018 link

Brexit: displacement activity

Tuesday 17 April 2018  

Having described the (as yet unverified) chemical attack in Douma as "utterly haunting", prime minister May went on to say yesterday that: "The fact that the atrocity can take place in the world today is a stain on humanity".

She cited intelligence showing a "wider operation to conceal the facts of the attack" was under way "supported by the Russians" and said it was morally and legally right to strike and "degrade Syria’s chemical weapons activity".

I am not going to say that the prime minister has deliberately sought out this alleged attack as a way of distracting attention from her domestic policy woes, but it is clearly the case that she is highly selective in her concerns, while her claim the UK's air strike on Syrian assets is hotly disputed.

And even to this day, with none of the inspectors from the Organisation for the Prohibition of Chemical Weapons having yet visited the scene of the original incident, and the events being called into question, there can be no certainty that there ever was a gas attack.

The idea of staged attacks, of course, is nothing new, pace the Gleiwitz incident in 1939, when a faked attack on a German radio station was used as a pretext for war. And then, in 2006, we investigated the Qana incident, which had all the hallmarks of being staged in order to invoke western sympathy.

Nevertheless, it is unarguably the case that, coinciding with the ramping up of the temperature on Syria, media coverage on Brexit – and with it public debate – has subsided. And it would not be untoward to suggest that Mrs May might be content that this is the case, or that weak leaders often seek out foreign adventures to divert attention from domestic woes.

Whether by accident or design, though, we cannot afford this interruption in the "great debate" that has barely got started and most certainly is not yet addressing the substantive issues. Nor is there any benefit in the self-indulgent posturing of the "People's Vote" campaign, which provides yet another distraction from the reality of Brexit – as if we did not have enough already – and a thinly disguised attempt to reverse Brexit.

There is no utility whatsoever in calling for a popular vote on the Article 50 settlement. One it is finalised and agreed by the European Council and the Parliament, there is no question of re-opening the books. For the UK, it is "take it or leave it" and if we leave it we drop out of the EU without an agreement.

In any event, the subsequent trade deal and the associated side-deals will have a far greater long-term effect. Since these will comprise a fully-fledged treaty, Parliament will have every opportunity to debate the issues and vote on the outcome.

Yet, even with all that, reality is able to poke its face through the cracks occasionally, whence we find that things are not progressing very well at all.

Here, the latest glimmer comes the shape of Irish foreign minister Simon Coveney who has just put down a marker of behalf of his government on the need for progress in the Irish border question.

Speaking in Luxembourg, Coveney reminded us – although no one should need that reminder – that unless substantial progress was made by June with the British government in enshrining the Border "backstop" arrangement in law, then the efforts to agree a withdrawal treaty to govern the UK's exit from the EU "will be in jeopardy".

This is seen as a "noticeable hardening of the Irish position" and comes after last Thursday's meeting between Coveney and Germany's new foreign minister, Heiko Maas.

Referring to the prospect of a "hard" border between Northern Ireland and the Republic, Mr Maas is reported to have said that Germans understood the emotional sensitivities around the border, given his country's own experience of division. "I do understand the need that we do whatever we can in order to avoid a flaring up of a historic conflict", he said.

Coveney came away from the meeting claiming that Ireland had got "unambiguous solidarity" from the largest country in the EU. "I think the Germans do understand actually the significance of borders and barriers and the emotions that get stirred up by that type of imagery", he said, then adding: "The idea that anybody could be talking about the re-emergence of physical border infrastructure on the island of Ireland is something that we simply can't allow to go unchallenged or unchecked".

Coming back to yesterday's statement, Coveney warns that without significant progress towards trying to find a wording that puts in place an operational backstop in the withdrawal treaty, "we'll have to ask some very serious questions as to whether it’s possible to do it by October".

The point here, as set out in the Guardian, is that the border question is the subject of six weeks of side talks between officials from London and Brussels. They are three weeks into the talks and a formal review due tomorrow, between Britain’s lead negotiator, Olly Robbins, and the EU’s deputy chief negotiator, Sabine Weyand. Coveney is concerned that the UK is no closer to agreeing wording that would be satisfactory to all parties.

From Luxembourg, Coveney was due in London where he had a number of meetings with British ministers scheduled. But he took time out to say that a lack of significant progress would mean "difficulties in June", at the next European Council due on 28-29 June.

If there was no agreement by then, Coveney says, it would put the transition period at risk. "It puts everything at risk", he says. Michel Barnier, he adds, has been "very clear": there will be no withdrawal agreement if there isn't a backstop relating to the Irish Border … and the political commitments in December.

Putting it the other way around, the UK Government has committed to a resolution of the Irish question. "If that isn't in the withdrawal agreement then there will be no withdrawal agreement, and if there is no withdrawal agreement there will be no transition deal either, says Coveney.

For all that, the "technological solutions" on offer have been comprehensively rejected by the Commission while the Mrs May has been unyielding on the only solution that might settle the border issue – continued participation in the EEA (aka Single Market).

That leaves us exactly where we have been since the Lancaster House speech, locked in an impasse that is going nowhere. And nor can it go anywhere unless or until Mrs May pulls back from the edge or accepts the "backstop" – something which remains, for the time being, politically untenable.

For how much longer this can continue is anyone's guess but, currently, we are on our way to a "no deal" scenario with nothing standing in its way. No amount of distraction will change that and neither are our chances improved if the media and politicians continue to ignore this pressing issue.

It should by no be apparent even to the UK Government that there are no acceptable technological fixes and, with the latest German intervention, there is going to be no weakening in the EU's resolve. Mrs May must either make the necessary concessions or risk economic catastrophe.

Here though, we need also to be looking at the failure of the opposition to focus. To say that Labour's Brexit policy has been incoherent would be overly generous. Time and again, the Party has let Mrs May off the hook and it is no closer to pinning down the prime minister on this make-or-break issue.

Sometimes, though, where there is no obvious solution to a problem, the temptation is to fall back on displacement activity and let things find their own level. Either the problems solve themselves or the build to a crisis where the circumstances more or less dictate the solution.

In this case, this is very far from being a wise option. Brexit imposes a series of technical demands and administrative challenges which cannot be settled by default. Failure to prepare in good time, devoting sufficient resources to new systems is to surrender to the forces of chaos. And that seems to be the journey on which both the government and the main opposition have embarked.

And while the events which so preoccupy both media and politicians at the moment are transitory, there can be no dispute that Brexit is forever. Failure to engage on this is set to extract the most savage of penalties.

Richard North 17/04/2018 link

Brexit: a question of options

Monday 16 April 2018  

I like grapefruit for breakfast – not the tinned variety but the whole fruit, cut in half and served in a bowl, chilled with its own crisp sugar topping. I also enjoy the evening ritual of preparing it, the special curved, serrated knife which takes delicate skill to get the cut just right.

But no more. I've had Mrs EU Referendum touring every supermarket within a five mile radius and there is not a single grapefruit to be had. We are at the epicentre of a grapefruit famine.

Under normal circumstances, you might think that this would merit a mention in the legacy media. For sure, it's not front page news, but the disappearance of a popular fruit from the shops is of some significance. But such is the incontinence of the media that seems able only to handle one subject at a time.

Mrs May's vainglorious adventure in Syria, playing with Tonkas and million-pound bombs over the Mediterranean, has consumed all available space. There is no room for mere details such as the fate of part of the nation's food supply. I can find nothing in the popular media to explain why our grapefruits have disappeared.

As it happens, though, there is an interesting – and worrying – story here. The proximate cause is the failure of the Florida harvest, recounted in detail by the Fort Lauderdale Daily. In the late 1990s, Florida was shipping ten million cartons of grapefruit a year to Japan, nine-million cartons to Europe. But this season, the amount is down to 700,000 cartons for each of those markets – the lowest level since 1918.

This catastrophic fall stems from the emergence of a disease known as "greening", caused by the bacterium Candidatus Liberibacter asiaticus introduced by the Asian citrus psyllid, a sap-sucking insect the size of a grain of rice.

Like the citrus trees they feed on, psyllids are not Florida natives. They are thought to have landed in the US around the year 2000 as stowaways on plants shipped through the Port of Miami. When psyllids then fed on citrus shoots and leaves, they inadvertently infected trees with the disease, which has spread to the current epidemic levels.

This has some relevance to Brexit. Ostensibly, the invasion signifies a failure of US border controls, the very phytosanitary controls which are also part of the EU system for preventing the introduction of plant diseases into EU Member States. Whether this disease can be stopped is questionable but, so far, the disease has not become established in mainland Europe.

The principle legislative control for plants and plant products in the EU is Council Directive 2000/29/EC which we lose on Brexit, leaving us to set up a replacement. At the very least, we will have to match the Union system. Without that, there is not the slightest chance of the EU accepting plants and plant products from us, especially if they have been re-exported from third countries, without stringent border checks.

And there we confront core issues which should be dominating the Brexit debate but are scarcely being heard – exactly the same issues that we have with aviation. In essence, we have to ask what sort of regulatory system we want, what system we need, and what are we prepared to pay for it.

In the case of aviation, one can definitely see the CAA's point, one which goes to one of the justifications for the European Union. With 27 countries in the Union (after Brexit), there seems little sense in all of them, separately, carrying our all the regulatory functions associated with aviation.

There is no obvious advantage, for instance, in all these countries having their own airworthiness certification. It is far more efficient for them to group under the one (European) umbrella and subscribe to a common system, then negotiating with third countries for mutual recognition.

Now the UK is able to stand aside from this system and exercise its own "sovereignty", it can go to all the expense of duplicating the various systems. But it will find that, if we are to gain mutual recognition, all the essentials must be the same as those of every other country. Thus we end up separate, but identical regulation. We get to change the label, but the contents stay the same.

Before taking this route, we need to ask ourselves whether there is anything to be gained from so magnificent an enterprise. Yet, clearly, the CAA has already made that decision. But it has yet to work out how it will then relate to the EU if it decides to throw in its lot with EASA regulators. More to the point, the EU has yet to decide whether it wants the UK to remain on board and, if so, on what terms. In turn, we would have to decide whether those terms would be acceptable to us.

One alternative, of course, is that we could move closer to the United States, working as an adjunct to the FAA – if they would allow it. But then, that might be seen as the UK moving towards the status of the 51st State – not something that would be universally popular.

Whichever way we care to go, there is a debate to be had. We could hardly, for instance, accept a permanent, subordinate status in EASA, where we become a law-taker and never again have any consultative or voting power. That would negate the whole point of Brexit. And if our "sovereignty" is so special to us – or the EU's terms are so unacceptable that we feel impelled to go it alone – how many hundreds of millions of pounds a year are we prepared to pay for the privilege of giving our regulatory systems a UK badge?

Then multiply those costs through all of the twenty regulatory chapters covered by EU law, potentially bringing our annual bill into the billions. See how many beat police, nurses, doctors and even street sweepers the public is prepared to forego in order to afford the new phalanx of UK officials dedicated to duplicating the systems we abandoned on Brexit.

But if we decide to go down the path to deregulation, we have a different set of problems. Grapefruit provides a good illustration. We don't produce them in this country, so we might decide that we don't need to protect ourselves against invasive pests which might affect the crop.

But Spain and Cyprus are significant producers. Neither country is going to take kindly to importing any agricultural produce from a deregulated UK – including those all-important re-exports. And what concerns these two countries will concern the whole of the EU (and EEA). If our exports to them are restricted, it will affect access to the whole bloc.

So, we find ourselves in an awkward situation. If we are going to make any sense of Brexit, we have to decide how we are going to be regulated, or how we are going to regulate ourselves.

There is no point, as Mrs May is doing, trusting to relationships that don't or can't exist - such as mythical memberships of agencies which simply cannot be permitted under EU law. We have to settle working arrangements which are practical, acceptable to the European Union and other states, and affordable.

On that basis, we can decide our regulatory systems first and then define our broader relationships. In this, the overall structure has to be compatible with our regulatory system, not the other way around. If we try to define the structures first, we close down our regulatory options. They will have to be made to fit with whatever we have decided.

On the other hand, if we define our relationships first, they define our regulation. Staying with the EEA, for instance, requires that we conform with the EEA's acquis. We have no discretion – the one is dependent on the other.

And there's the rub. We need to stop playing games and start making those fundamental decisions. Initially, we have to make the choice as to whether we optimise on relationships or regulatory structures.

What we can't do – or continue to do – is mix and match incompatibles. We can't elect for relationships which require certain regulatory structures and then insist on a regulatory free-for-all. That simply can't work. Likewise, we can't set up an elaborate regulatory structure and then find that it is incompatible with the requirements of the bodies with which we seek to associate.

And this, is seems to me, is what we're failing to do. This is more than the government wanting its cake and eating it. It's a question of avoiding the inherent incompatibilities that any new relationship throws up. But it also says that we have very few options. We have to stop thinking we can make it up as we go along and work within realistic frameworks.

Whatever else, though, if all that is ensuring that there is a continued supply of grapefruit is phytosanitary regulation, when supplies come available again, then we need to think very hard about what we do next. A chap can only go without his grapefruit for so long.

Richard North 16/04/2018 link

Brexit: choose your planet

Sunday 15 April 2018  

Thick and fast, writes Booker in this Sunday's column, come ever more examples of how the real problem with our faltering Brexit negotiations is how little people on our side of the Channel really understand how those incredibly complex EU rules work.

Three times in one interview, Booker tells us, the BBC Today programme's Nick Robinson spoke of how the EU seems to want to "put up trade barriers" against us. This is classic Robinson – the man has no fundamental understanding of how the Single Market works and is prone to making the same errors again and again.

I met the man recently at a conference, when he made a particularly facile comment and then laughed off my attempt to correct him. Such people are far too grand to admit their errors – which is why they keep making them, the embodiment of the Dunning-Kruger effect.

The point that the man so wilfully evaded in Booker's hearing was that those trade barriers to which he refers already exist. They will have an impact not because they have suddenly been "raised" but because we have chosen to step outside them.

This distinction should not be so difficult to understand. It is one I made on the blog in February last year when I likened the Single Market to a walled medieval city with a market inside the walls. The UK, having chosen to pitch its "stall" outside walls, cannot then complain that it has difficulty trading with those who are still inside the city.

By leaving not just the Single Market but also the wider European Economic Area, which would have allowed us to continue trading much as we do now, it is Mrs May, not the EU, who has ensured that we are in this unfavourable position.

And only now, getting on for two years from the EU referendum, are industries in ever increasing numbers beginning to recognise some of the immense problems this situation is creating. Nevertheless, the full impact of our predicament still does not seem to have sunk in.

Picking up from this blog, Booker notes that the CBI and Airbus, echoing Theresa May, are suggesting that we could compensate for leaving the Single Market by relying on continued membership of the EU's regulatory agencies, such as those controlling medicines, chemicals and aviation.

Yet, this is completely unwarranted optimism that has no basis in fact. Nor is there any possible reason why there should be any confusion: the situation on agencies is really quite clear. These are Union institutions, established to service the Union and its Member States. There is no possible way that the UK can be allowed to take a full part in any of them after it has ceased to be a Member State.

Even the four Efta states have a limited relationship with the agencies, with no voting rights. Outside Efta, which does have something of a special relationship, the best the UK can hope for are limited "working arrangements", confining us to subordinate positions in individual agencies, with no influence over the rules and no rights of consultation.

The reason for this is that, on withdrawal, the UK automatically becomes a third country. And despite the seeming difficulty people have taking that on board, that is an unchangeable matter of fact. As a non-EU country, we are by definition a third country. And, as Booker notes, the default position is "really serious". We lose many the authorisations, approvals and licences that enable us to trade with the EU and many other parts of the world.

It is true,nevertheless that, with some creative thinking and serious diplomacy – which the Government shows no signs of providing – the UK can mitigate the worst effects in some sectors, but not necessarily all. In aviation, particularly, there is a tradition of mutual recognition based on global adoption of US FAA standards, which gives the UK a possible opening.

For the UK to benefit from this, though, it would require our Government to re-establish the Civil Aviation Authority (CAA) which must then take responsibility for all the functions at present carried out by the European Aviation Safety Agency (EASA).

However, in September last year, CAA chief executive Andrew Haines was "uncompromising" in rejecting the idea of planning for a new independent aviation safety system (and thereby seeking mutual recognition with the EU). The CAA had, he said, "consciously decided not to do that work as it would be misleading to suggest that's a viable option".

With some estimates that it would take between five and ten years to absorb all the EASA functions, Haines repeated this as recently as 22 March, reiterating the "collective preference" of the Government and the CAA is to remain a member of EASA.

"If continued membership of EASA is unachievable", he said, "we should adopt the existing EASA regulatory system, rather than developing a new framework from scratch. This option is available to any third-party country, and is one that, I believe, would provide clarity and certainty for the aviation industry".

This, at least, points to a possible way forward in the short-term but, as I indicated yesterday, that doesn't give any guarantees that we can avoid disruption. And, ironically, if we fail to get things working rapidly, the FAA has contingency plans to take over the surveillance of its 180 approved repair stations in the UK. This does not auger well for a UK that has ambitions to take back control.

Even then, what may pertain to aviation will not apply to pharmaceutical and chemicals exports, and many other areas such as type approvals for motor cars. In these areas, there are no systems based on mutual recognition. Full conformity with EU regulatory systems is required for those nations wishing to trade with the EU. Most often, authorisations and equivalent approvals require direct administration by EU officials and their agencies.

Here, it will be very hard for many industries to operate effectively from their existing UK locations – which is the very reason why so many foreign companies have set up shop in the UK, benefiting from our EU membership and the market access that goes with it. Once we leave, we can expect a steady stream of businesses to relocate some or all of their operations, so that their sites remain physically within the European Union.

Meanwhile, says Booker, others EU Member States are making their own dispositions, With an Irish "hard border" looking ever more likely, two giant ferries originally intended for UK trade across the North Sea, have now been switched, with funding available only to EU members, to link Dublin directly with the continent, by-passing the UK.

Contrary to media reports, this is not just some dastardly EU plot to "punish us for leaving", but part of a longstanding EU strategy called "Motorways of the Sea", intended to switch heavily CO2-emitting road transport to ships, to aid the EU's fight against "climate change". Now, it seems, even for imports from the US needing access to the EU market, British ports such as Holyhead, Dover, Felixstowe and Southampton will be the losers.

And, with that in mind, Taoiseach Leo Varadkar is saying that Ireland can, and is, willing to act as a bridge between the US and the EU, usurping the traditional role of the UK. Ireland, he suggested, is "an island at the centre of the world that believes in free trade and free enterprise".

That has the potential to leave the UK stranded – an increasingly isolated backwater detached from its former trading partners, with declining employment opportunities and a shrinking economy.

Yet, for all that, the situation seems to be completely beyond the comprehension of the legacy media. Of the very latest developments – the publication of the Commission's Notice to Stakeholders on Aviation – only the Express seems to have reported it and then only in most lurid of terms as it declares: "Brussels set to strip UK airlines of safety certificates in no deal Brexit".

Here again, with weary predictability, we see the Nick Robinson error repeated as the newspaper fails to understand that what it reports is the inevitable consequence of the UK leaving the EU. If, after all, the EU is responsible for licensing and approvals in relation to aviation, on behalf of its member states, it stands to reason that it will not perform those functions for the UK when it is no longer a member.

Turning it round the other way, since the UK's objective is to take back control, why indeed should we even want the EU to perform these functions for us?

Sadly though, Mrs May's government doesn't seem to have the first idea of what it really wants, and is havering between wanting to remain fully integrated into the EU's regulatory system and seeking independence, without beginning to realise that it cannot have both.

It would seem, therefore, that we've never really left the "have your cake and eat it" territory, with the Government still pushing for things it can't have while seemingly failing to plan for reality. As time marches on though, one wonders how long it can be before it makes up its mind which planet it wants to be on.

Richard North 15/04/2018 link

Brexit: aviation hurdles

Saturday 14 April 2018  

When Tom Enders wrote for the Financial Times a few days ago, saying that a hard Brexit would cause his [Airbus] business to "grind to a halt", he did get some publicity in the legacy media.

But now, when the Commission produces a Notice to Stakeholders spelling out the detail - which makes it certain that virtually every aspect of commercial aviation is going to take a massive hit – the media is silent. So far, I've not seen any media source which has reported the Notice.

The reason, I suspect, is that the media are wedded to personalities, around which they frame their "news". Thus, when information is presented to them in documentary form with no recognisable (or any) name attached, they simply have no way of coping with it. Unless, as in the case of Tom Enders, someone with relevant prestige actually says it (or writes it), the mere written word can't be used.

When the information also needs technical interpretation, there is a double handicap. There seem to be very few journalists who can competently dissect a Commission legal notice (and that's what this is), and report accurately on it. They simply lack the capabilities, most of them preferring a never-ending diet of trivia.

Thus, even though this Notice to Stakeholders - the sixty-second in the series - entitled "Withdrawal of the United Kingdom and EU Aviation Safety Rules" is a harbinger of catastrophe, it goes begging for attention. The media are not interested.

For those who can get past the media's human interest obsession, there is an important point to take on board. Although the commission is keen to point out that the notice applies in the absence of a withdrawal agreement with the UK, its scope goes far wider.

The crucial issue here is the it spells out what happens to aviation when the UK becomes a "third country" – i.e., a country that is not a member of the EU. And when we leave, even if we agree a comprehensive free trade agreement we still become a third country. Come what may, the provisions of the Notice will apply – most probably from 1 January 2021 after the transition period has ended.

Looking at the detail in a remarkably short notice running for a mere four pages, it deals first with holders of certificates for design organisations and for the production of parts and appliances used in civil aviation. Currently responsibility for issuing certificates is shared between the European Aviation Safety Agency (EASA) and the Civil Aviation Authority (CAA), implementing EU law.

We explored most of these issues in this blogpost in November 2017 (as regard production – design certification follows the same procedure). And, in short – brutally short, one might think - certificates issued to persons and organisations located in the United Kingdom will no longer be valid in the EU as of the withdrawal date. Products, parts and appliances concerned will no longer be considered as certified.

In addition, the Notice lists certificates and approvals in relation to a whole raft of activities and circumstances. These include certificates of airworthiness, restricted certificates of airworthiness, permits to fly, approvals of organisations responsible for the maintenance of products, parts and appliances, approvals for organisations responsible for the manufacture of products, parts and appliances, approvals for maintenance training organisations, and certificates for personnel responsible for the release of a product, part or appliance after maintenance.

They also include pilot licences, pilot medical certificates, certificates for pilot training organisations, certificates for aero-medical centres, certificates for flight simulation training devices, certificates for persons responsible for providing flight training, flight simulation training or assessing pilots' skill, and certificates for aero medical examiners.

They extend to certificates for air operators and attestations for cabin crew, certificates for aerodromes, certificates for air traffic management and navigation services providers, licences and medical certificates for air traffic controllers, certificates for air traffic controller training organisations, certificates for aero medical centres and aero medical examiners responsible for air traffic controllers, and certificates for persons responsible for providing practical training or assessing the skills of air traffic managers.

None of these certificates, licenses or approvals issued before, on or after the withdrawal date by the competent authorities will remain valid in the EU.

Then, because the UK becomes a third country after withdrawal, any UK registered airlines will require, de novo, Third Country Operators' Certificates, an issue I dealt with in depth here and here (again in November last year). Additionally, operators of aircraft registered in the UK (even if they are EU operators) will have to demonstrate that safety standards equivalent to those imposed by Union or national law are met.

Furthermore, as we indicated here, the loss of validity does not just apply to the EU. For instance, the UK is allowed to operate in the US under the cover of reciprocal agreements between the EU and the US. Once our approvals, etc., cease to be valid in the EU, they will no longer be valid in the US. This will apply to many other countries in the world.

Post-Brexit, therefore, the UK aviation sector – in all its multiplicity of different forms – will have to go through the often lengthy and complex procedures required to regain all the necessary approvals for operations in the EU. Outside the EU, this will have to be repeated in respect of all the other third countries in which we wish to operate, where reciprocal agreements will have to be negotiated and concluded.

Acquiring all the necessary certification and approvals, should not be overly difficult for the concerns affected, as they already satisfy the necessary requirements that gained them the approvals in the first place (apart from the Third Country Operator certificates).

This notwithstanding, UK operators cannot assume that approvals, etc., will be automatic. They will most certainly take time and there will be considerable expense and personnel resource implications. It follows that, since most applications cannot be processed until we formally become a third country, there will be some gaps in coverage when some (or even all) operations will not be able to function outside the UK.

Thus, the prospect of UK airlines and aircraft being grounded in the immediate aftermath of Brexit is by no means academic. Similarly, pilots, instructors, aviation medics, air traffic managers and many others may find that their activities are restricted for some time. Manufacturers may no longer be able to sell their products overseas. Aircraft maintained or repaired by UK certificated personnel may no longer operate outside the UK.

Obviously, one can expect the UK government to invest considerable political capital in negotiating agreements which minimise any disruption, although there is limited scope for manoeuvre. The EU will not offer any concessions which place the UK in a more favourable position than other third countries, and certainly not do anything which puts the UK in a better position than EU Member States.

Furthermore, since it is also possible (probable?) that the UK will also be having to negotiate special deals for the chemical, medicines, medical devices, and car industries, plus many more, the administrative burdens on both sides will be high. It might not be possible to guarantee that arrangements will be in place in sufficient time for them to be applied in the immediate aftermath of Brexit.

Even where things have settled down, the UK will have lost its privileged relationship with the regulator, EASA, and its own domestic regulator – the CAA – will have dramatically limited functions. Inevitably, this will lead to reduced flexibility, increases in costs and a loss of any ability to influence any EU rules and standards on aviation safety.

And, as we indicated on Thursday, there is not the slightest chance that the UK can continue its membership of EASA. Limited participation is permitted under the basic law, but that will put the UK in a subordinate position which requires full conformity with EU law, no voting rights, and the requirement to make substantial financial contributions.

Altogether, this is an unwelcome development for the UK. It would be partly mitigated, although not entirely, by continued membership of the EEA, but it was always going to be the case that Brexit would have a disruptive effect on all aspects of UK aviation.

What was not immediately apparent during the referendum campaign was the extent to which UK standards and operations are so tied up with EU approvals that we depend on them in to operate elsewhere in the world, and especially in the US.

Nevertheless, it was always our recommendation (in Flexcit) that the UK should proceed cautiously before invoking Article 50, so that it would know precisely what it was dealing with before entering into formal negotiations. Now, without adequate preparation, we are confronting issues of which – even to this date – our government seems to be unaware.

With such high stakes, there is no room for such amateurism. To remove uncertainty – as far as is possible - the government should make clear its intentions towards the aviation sector, and set out a plan and timetable for dealing with the different hurdles.

Much will depend on the good will of the EU, but if we are unable to settle plans for such an important sector, then Brexit may prove even more damaging than many pundits have predicted.

But then, when the media don't even recognise that there is a problem, it doesn't seem likely that the politicians will engage – unless industry interests start shouting very loudly indeed. That means more than just Tom Enders writing in the Financial Times.

Richard North 14/04/2018 link

Brexit: things can only get worse

Friday 13 April 2018  

Martin Kettle writes in the Guardian about the need to revise our views about Theresa May and her imminent political demise. One of the reasons he offers is her "relative successes" on Brexit. The deal with Brussels on the price of departure, he says, has now been followed by a deal on the transition. Almost all Tory MPs have accepted the compromises.

"None of this", Kettle adds, "was certain a few months ago" and, he says, "It could all come apart in the autumn". There again, he asserts, "it begins to look more possible than before that May's Brexit strategy could make it over the line". And, if it does, "she will be able to say she got it right".

This is not, of course, an informed view. The Brexit talks started with three Phase One issues: the money; the fate of the expats and the Irish border question. Of those three, only the first two have been resolved. The third, and the most intractable, hasn't even been dented.

As regards the transition, this represents a craven surrender on the part of the prime minister who, having rejected the Efta/EEA option on diverse grounds, has accepted something which is inestimably worse, with no end point in which we can have any confidence.

Either or both of these should have been enough to destroy the May premiership. But Mrs May has been fortunate on two counts. Firstly, although she has lost virtually the confidence of her party (and the entire nation), there is no sign of a credible replacement and none of the pretenders, in a terminally split party, can muster enough support to depose her.

Then, when it comes to the second count, that refers to the whole of the Brexit process. This has been sullied by the inability of the legacy media accurately (or at all) to analyse and report on Mrs May's Brexit failures. And because the media doesn't understand quite how badly she is performing and the peril of our current situation, she is getting a far easier ride than she deserves.

On Tuesday, for instance, we had Mrs May wrongly suggest that she could entertain bilateral negotiations with Denmark and come to a reciprocal agreement over fishing rights – despite the Commission's Notice to Stakeholders pointing out that the UK can only negotiate with the Commission.

Then, yesterday, we covered another May delusion. Having closed down any options we might have for influencing EU law through the mechanisms of the EEA, she is floating that canard that we can somehow compensate for that by negotiating continued membership of a number of EU agencies where the UK has major economic interests.

Despite the Commission having rapidly declared that this is a non-starter, we are joined by the CBI and then Tom Enders of Airbus, perpetrating the myth that this provides a solution to the UK's loss of influence. And the legacy media, having lost any ability to distinguish fact from fiction, laps it all up and reports the stupidity with not a hint of criticism.

Elsewhere yesterday, we had a turgid script from the BBC, as the lame Jorn Madslien, rejoicing under the title "business reporter", tried to hang a story on the premise that: "Carmakers fear rising trade barriers after Brexit".

For sure, he manages to work in the "escalating trade dispute between the US and its main trading partners, the EU and China", which Madslien says "looms large, after US President Donald Trump's recent threat to tax cars imported into the world's largest market".

But, as to the far more important problem of non-tariff barriers, all Madslien can manage is a quote from the European Automobile Manufacturers Association (ACEA), which has it that: "Any changes to the deep economic and regulatory integration between the EU and the UK will have an adverse impact on automobile manufacturers with operations in the EU and/or the UK, as well as on the European economy in general".

Yet, in November 2017 I was writing about the consequences of leaving the Single Market. "When this happens", I wrote, "the type approvals issued by the VCA, the UK Vehicle Certification Authority, will either no longer hold validity or not be able to be extended".

We are not, therefore, addressing in abstract terms, "any changes to the deep economic and regulatory integration", but the certainty of adverse effects brought about directly by Mrs May's precipitous and unthinking decision to withdraw from the single market.

When they might have been minimal, to the point of being barely noticeable, she has turned Brexit into a major crisis for carmakers. Yet, from the BBC, the prime minister gets a free pass. The real problems building for the car industry go unrecognised, with no possibility of any blame being attached to something that has not been discussed.

Thus, while some pundits are quick to invoke "project fear", the reality is that we are seeing endless examples of the media understating they case, at times working with fleckless trade associations and at other time just uncritically reporting their mindless effluvia.

But while the media have managed to hold the line so far, it isn't the first time that I've felt impelled to remark that reality is on hold. But, as I have also observed, while it can be deferred, it cannot be denied. You can only kick those cans so far down the road, before you stumble upon an immovable pile.

The point is that there is no easy (or any) way of circumventing Mrs May's decision to leave the Single Market, with or without a strategy. The Irish border impasse is a direct consequence of that decision, and many of the problems confronting industry also stem from it.

Thus, contrary to Martin Kettle's assertion, there is no possibility that her strategy "could make it over the line". But the great lacuna here is the idea that Mrs May even has a strategy. She doesn't. Through the period since her Lancaster House speech, she has been reacting to – but not solving – the problems that she herself has created. And her main response has been to kick the cans down the road.

However, I have also pointed out that the transition period is set to make Brexit day a non-event. A form of words will be found to ensure that the UK stays within the remit of all existing external deals concluded by the EU, which means that we have a further 21 month (at the very least) of the status quo.

Since this "vassal state" scenario has been accepted by the Tories – and not challenged by the opposition parties – the focus now returns to the Irish question and, even here, we expect some form of fudge that gets us through to 29 March 2019. The debate now moves on to the inter-regnum, from then until 1 January 2021, when a free trade agreement is supposed to take effect.

It is only then that the wreckage of Mrs May's endeavours will become so obvious that even our venal legacy media will be forced to notice it. There will be no hiding the fact that a free trade agreement is very little different from a "no deal" scenario. Industry will still be crucified, even if it takes a little longer, causing economic damage that simply cannot be concealed.

With that, the Tories seem to have a problem. They can either depose Mrs May soon after Brexit day – disguised as an honourable retirement after "successfully" piloting us through Brexit – or they can suffer the consequences of her mistakes, and lose the 2022 general election.

People then won't be thinking rationally (any more than they are now). They will be in a mood to punish the Tories, not only for botching Brexit, but for attempting to conceal what they have done. In that case, Corbyn's unsuitability for office could be his greatest asset. Voters will be sending a message, the effect of which is to say that, however bad Corbyn might be, "you're worse".

The only hope the Tories have is that, after deposing Mrs May in 2019, the new leader changes tack and goes for the Efta/EEA option – and has the sense to get advice on how best to approach Efta and then to manage the EEA negotiations. From this side of Brexit, though, that looks extremely improbable. We seem locked into the antithesis of the Blair slogan, where things can only get worse.

Richard North 13/04/2018 link

Brexit: leading in the amateur stakes

Thursday 12 April 2018  

On Tuesday, we saw the CBI arguing that, post Brexit, we could compensate for the loss of influence over the making of EU legislation "by continued membership of the many EU agencies - such as the ones governing aerospace and chemicals - in which other non-EU nations like Turkey currently participate".

This is so far from a realistic solution that, normally, one would dismiss it outright without even bothering to comment. The problem is that it comes from the UK's premier business organisation, offered as part of a report endorsed by CBI Director General Carolyn Fairbairn.

I've actually seen Fairbain in the flesh, speaking to a high level audience in the city, and have to say that I was singularly unimpressed. But when her organisation seriously suggests that, for instance, we can adopt a stance with the European Aviation Safety Agency (EASA) which will compensate for Brexit, you wonder if there's any hope for us.

It's not even that this stance is hopelessly optimistic. The CBI have actually got it wrong. EASA lists its members on a public website from which it can be deduced, very easily, that Turkey is not a member.

Further exploration indicated that the country does not even have formal, bilateral relations with EASA, and has to settle for limited relationships known as Working Arrangements. One covers the collection and exchange of information on the safety of aircraft and another deals with the relationships between EASA and the Turkish Directorate General of Civil Aviation.

This latter arrangement is as formal as it gets between the two organisations, which amounts to EASA notifying the Turks of changes to relevant standards and assisting them in understanding the applicable rules, "so as to facilitate their transposition and implementation.

In return for this largesse, the Turks "accept" that EASA will carry out standardisation visits and will rate the facilities inspected as "fully compliant" or in various degrees, "not compliant", whence the Directorate of Civil Aviation undertakes to act on the reports "in order to redress the identified findings". And, for such "services", the Civil Aviation Authority will be invoiced by EASA.

As to more general relations in the field of aviation, these apparently are governed by a civil aviation agreement, initialled in Brussels on 25 March 2010. For unexplained reasons, this agreement does not appear on the EU's treaty database.

Establishing the precise relationship between the EU and Turkey does, in fact, prove untypically difficult. Key documents do not show up during normal searches. What did show up, though, is a paper from the University of Turkish Aeronautical Association offering a critical analysis of the European aviation safety regulatory framework and Turkey.

Of particular interest to anyone seeking an adequate post-Brexit relationship with the EU is the passage in the abstract where it suggests that the current situation "is unfair for non-EU European countries since their participation to EASA does not give them the same rights as EU member states". Hence, it says, the pan-European system currently in place "is now defective", later adding that it is "unable to enhance flight safety in the entire Europe".

Reflecting the Turkish origins of the paper, the English is slightly clumsy, but it goes on to say that:
… the EU's traditional non-negotiated rulemaking style, make the situation unfair for non-EU European countries. In particular, Turkey is now outside the regulatory work and will not be fully in even though it participates to EASA. It had a desire to have a seat in EASA but it was discouraged to see that it will never have the same rights as EU members.
As far as this "participation" goes, EASA membership is limited to EU countries. Other European countries enter into agreements with the EU and adopt the Union's civil aviation rules. But they do not have voting rights and any specific areas of cooperation have to be specifically negotiated. Third countries, therefore, "have raised the question of why they should implement decisions over which they have had no influence".

It is not known quite what the CBI were thinking about when they cited Turkey's "participation" in EASA as an example which the UK could follow, but if they are serious in proposing this arrangement as a model, then we have serious problems.

Yet, it does not stop there. Yesterday, we had Airbus attracting some publicity over its warning that a "hard Brexit will cause business to 'grind to a halt'".

Airbus chief executive Tom Enders called the lack of clarity on Brexit a situation that is "damaging and hard to bear" and while he acknowledged that the transition arrangement was "a positive step, once it is signed" it was only a temporary solution that did not solve "all the issues that need to be addressed".

By way of a remedy, we then find Enders in CBI territory, with him writing in the Financial Time that the interests of Airbus would be best served through the UK's "continued participation" in EASA.

"The European Council", writes Enders, "apparently foresees an 'air transport agreement combined with aviation and security agreements' that are somewhat aligned with current conditions". He thus opines that this "combined with UK prime minister Theresa May’s comments, gives me hope the UK will remain a member of EASA and other regulatory agencies".

This, however, is delusional. There is simply no way that the EU could – even if it wanted to – create an exception that would allow the UK, as a third country, membership of EASA, without all other associated nations, such as Turkey, demanding similar treatment.

The best that the UK can hope for is the subordinate position afforded to the likes of Turkey, where we have absolutely no say in the making of legislation or the management of the Agency – whilst fully conforming with EU regulation, over which it has no control.

That Enders should even suggest membership – when there is absolutely no chance of it happening – is deeply worrying. Yet Enders shares that delusion with Mrs May who asserted n her Mansion House speech that she would seek "associate membership" of bodies such as EASA (as well as the European Medicines Agency (EMA), the European Chemicals Agency).

The fact that the Commission turned down the idea almost immediately seems to have had no impact on the prime minister. Then, more recently, we saw her committing to a reciprocal deal with Denmark on fishing, which is something she cannot do – again demonstrating a level of delusion that indicates that she has lost her grip.

One has long since ceased to expect anything of our politicians, whose ignorance of the EU and its workings is profound – and apparently beyond remedy. But we do expect our "captains of industry", and their representative organisations such as the CBI, to be better informed.

Yet, despite their smart offices, seven-figure "compensation", their lawyers and expensive consultants, these people seem to have no better grasp of the basics than the politicians who so egregiously and frequently get it wrong.

One hopes that, when it comes to building aeroplanes, Mr Enders and his company is slightly more professional than is apparent from their attempts to keep abreast of Brexit. On the other hand. if their aeronautical skills are on a par, one should seriously worry about travelling in anything made by Airbus which is more complex than a kiddies' go-kart.

As for the CBI, their advocacy of EU membership always was an amateur affair and thus it is not entirely surprising that they are deficient when it comes to charting a safe course through Brexit. But one yearns for a tiny corner of expertise in British industry, where there are people who really do know what they are doing.

Sadly, the only repository we have found to date seems to lie in the Commission buildings in Brussels. With the UK's industry leading in the amateur stakes, aided and abetted by an incompetent media and cretinous politicians, it is no wonder we're getting creamed.

Richard North 12/04/2018 link

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