Brexit: danger list

Tuesday 25 July 2017  



With Corbyn now coming out firmly to oppose the Single Market (for this week), and the Tories opposing the Single Market, the Guardian's brain is about to explode. For Labour, Barry Gardiner, the shadow trade secretary, sets out the case (or one of them). 

Labour, he says, has been right to say the government must focus on the outcomes rather than the structures. The key, in Gardiner's view, is not to try to fit these political and economic requirements into inappropriate existing bodies such as the EEA or the customs union, but to develop a bespoke agreement based on what both sides need.

Labour, he adds, must evince a positive vision for the future of our country outside the EU. One that is consistent with the leave voters' objectives, without sacrificing our rights and protections, as the Conservatives threaten to do. That vision must also reassure those who voted to remain that the friction-free access into the single market that we have enjoyed for so long can in large part be maintained.

And that is pure, unadulterated fantasy. The idea of developing a bespoke agreement in two years is not and has never been a viable proposition. And then the concept of maintaining "friction-free access to the single market" on the basis of an as-yet unspecified solution, but one which takes us out Single Market, is just absurd.

Even Andrew Rawnsley in The Observer last Sunday has managed to work out that we can’t prepare to leave the EU until we know where we're going.

The Labour stance, therefore, is akin to the very worst of the Tory "have your cake and eat it" madness. It is one that makes no concessions to the real world, and does not even begin to address the problems of Brexit. Small wonder, the Guardian is breaking ranks and arguing that there is "no immovable reason why [the] future must exclude the single market".

The good news is that Labour, for the moment, is not in charge of the Brexit process – and is unlikely to be in the foreseeable future. The bad news is that the Tories are in charge.

Forget about Mr Fox's little chickens and his chlorine washes. They are a distraction. His staff on a reconnaissance mission to the United States last week already ascertained that there is no possibility of a UK-US deal until our settlement with the EU has been defined, and then negotiations cannot start in earnest until exit day.

Fox is only going because his flights are already booked and too many questions would be asked if he cancelled. His cover is that he is attending the first meeting of the UK-US Trade and Investment Working Group "dedicated to strengthening the bilateral trade and investment relationship" between the two countries. The British can stay free of chlorine-drenched chickens for little while longer.

Meanwhile we need to be focusing on the real issues, the ones that are driving policy, even if they're not always in the headlines. In fact, if they're not in the headlines, then that is an indicator that they may be important. And one of those – far more important than has been acknowledged – is regulatory convergence, also called regulatory equivalence.

In my recent blogpost, I set out the parameters and explained why it is that it is not the "get out of jail free" card that some suggest. It is merely a "starter for ten". However, the day previously, the mice had already been nibbling at the wiring, in the form of another academic.

This one is David Collins from the City of University of London, styled as a Professor of International Economic Law. He has been writing in the "Ultra's" comic, the Brexit Central. And here, Collins glibly told his readers:
Contrary to the doom and gloom narrative seen in the mainstream media, there will be no problems with conformity assessment for UK goods entering the EU: since we already have regulatory convergence (and will keep it thanks to the Great Repeal Bill), the EU will not lawfully be able to discriminate against UK goods entering the EU on these grounds. To do so would violate the Technical Barriers to Trade Agreement of the WTO. So there will be no queues of trucks lining up at Dover being denied entry, as many have tried to suggest.
Here we have the "Ultra" orthodoxy, naked in tooth and claw. This is a doctrine which, by all indications, is sustaining Ministers in their belief that we will be able to rely on untrammelled trade with the EU after Brexit. And if you go along with that orthodoxy, you might conclude that, as long as regulatory convergence is established, the UK does not need a free trade agreement at all.

What made this different though is that one of my readers sent Collins a copy of my blogpost on regulatory convergence, inviting comment. And comment he got – which was then passed back to me.

If nothing else, Collins's style is interesting. He starts with the assertion that there is "confusion" on my part and that I make "flawed assumptions", only then address the issues raised. Where I have gone wrong, he maintains, is in thinking that EU law will govern relations between the UK and the EU. But, Collins says, they will not. They will be governed by international law.

This, one has to recall, is from a professor of international economic law. But it doesn't stop it being an absurd statement. International law (certainly in relation to the UK and the EU) does not have direct effect. And neither is this a question of one of the other – EU or international law. In the context of exporting goods to the EU, we will be subject to EU law which, in turn, must be compliant with relevant international provisions.

Interestingly, various aspects of the laws relating to the import of foodstuffs (which I describe in my blogpost) have been challenged at WTO level and have emerged largely unchanged. To that extent, therefore, we must assume that EU requirements, as they stand, are compliant with international law. Certainly, they are obeyed by the many countries which do export to the EU.

Collins nevertheless goes on to assert that "the EU cannot impose arbitrary regulatory barriers on goods in the form of conformity assessment procedures on other Members such as product testing etc". This, of course, is true. But the EU's requirements are not arbitrary. They are produced in accordance with EU, national and international rules, and are applied uniformly to all third countries except where specific derogations apply, granted according to clearly defined rules.

Nevertheless, the man then calls in aid the TBT Agreement – and wrongly so. He tells us that this Agreement specifies that Members cannot discriminate in product regulations where like conditions prevail. On that basis, he avers, "conditions, meaning the regulatory environment, will remain the same after the UK leaves the EU because the UK is not changing its own conformity assessment/testing procedures". This, he says, "is precisely the purpose of the Great Repeal Bill".

However, Collins has fundamentally misunderstood the situation. This agreement to which he refers, and the parallel Phytosanitary Agreement, requires that the EU adopts international standards in preference to its own. But, largely, the EU is compliant with that agreement. The meat inspection code, for instance, is wholly compliant with the OIE/Codex standards.

These agreements, however, do not restrict the EU's ability to set its own entry procedures, and customs rules. Primarily, in the context to which Collins refers, the provisions relating to conformity assessment must be "prepared, adopted and applied" so as to grant other suppliers in WTO members "conditions no less favourable" than domestic suppliers. Furthermore, the procedures must not create "unnecessary obstacles to international trade".

The point that Collins clearly misses here is precisely the point that I make in my blogpost, the one he has supposedly read. The controls imposed on EU and imported products are essentially the same.

The essential difference is that, because controls on Member State products are applied internally, there is no need for checks at the internal borders (between Member States). Because the same degree of control cannot be applied by the EU within third countries, the focus of control shifts to the external border, where the checks are then applied to products before they are imported. There is absolutely no conflict with any WTO provisions.

Despite this, Collins thinks that controls after Brexit, as they apply to the UK, "will remain identical to the way they currently are within the EU, at least for the time being. The only "change", he says, is that the UK will not be an EU member.

This, he adds, "is not a change in the level of scientific risk on meat or any other products, which might justify additional procedures at the border. Any additional regulatory barriers would consequently be arbitrary and unjustified. The UK would promptly complain to the WTO courts and the EU would lose".

What Collins hasn't understood, though – possibly because he is completely unaware of the nature of the controls applied – is that the difference is not in the degree of control, but where those controls are imposed. This is a distinction between internally applied controls and essentially the same controls applied at the border.

Had Collins read my piece properly and understood it, he might have realised this. Instead, he finishes off with a statement that could easily be mistaken for arrogance, telling my reader:
Much of the misinformation going around in various newspapers, especially it would seem The Guardian, results from people not fully appreciating that the EU has international legal commitments which to which EU law must conform.
On the other hand, it would seem, his brand of misinformation stems from his incomplete understanding of the way European regulation operates – and his wrong-headed belief that he knows what he's talking about.

Once again, though, it will be "prestige" rather than accuracy which will prevail with Ministers. And the readers of Brexit Central will happily rely on Professor Collins to fortify their belief systems. Only the tiniest fraction of "Ultras" will read EUReferendum.com and what they read, they will not believe. It does not tell them what they want to hear.

But again and again, we are able to offer good evidence of the academic community getting it wrong. That is not to generalise and say that all academics always get it wrong. But too many of them are making serious errors, to the extent that they are dangerous. And to that list – the danger list - we must add David Collins.



Richard North 25/07/2017 link

Brexit: how dare you be rude

Monday 24 July 2017  



In most developed societies, academics command prestige and authority. As such, they wield great power. But with power comes responsibility. If they take part in public debates, with the authority of their institutions behind them, they have a duty to get it right.

On Saturday, however, we saw one of a series of videos from "leading academic commentators from the University of Cambridge", highlighting "the issues facing the UK as it seeks to negotiate a Brexit agreement". The speaker was Dr Lorand Bartels, a Reader in International Law and a Fellow of Trinity Hall at the University of Cambridge, where he teaches international law, WTO law and EU law.

What first caught my eye, after the video had been flagged up on Twitter, was his comment on Philip Hammond who, he said, had asserted that the UK "can be outside of the customs union but we can still have entirely frictionless trade". In response, this "leading academic" had said:
I find it difficult to understand exactly what he has in mind because the whole point of being in a customs union is to have completely frictionless trade. The customs union is essentially what you do in order to get rid of customs border posts.
One shares the frustration at not knowing precisely what Hammond has in mind but the rest is nonsense. The "whole point" of a customs union being to have "completely frictionless trade" is quite evidently false. And the suggestion that anyone sets up a customs union "in order to get rid of customs border posts" is utterly bizarre.

It is difficult to convey the scale of this error. But Lost Leonardo takes up the cudgels as well. He, like most of us, know full well that internal Community borders were not finally abolished until 1992. Their abolition came not with the customs union, which was completed in 1968, but with the advent of the Single Market.

The confusion, however, is quite common, which makes it all the more important that "leading academics" such as Bartels should get it right, and not perpetuate such basic mistakes. Insofar as they have a role, it is to correct prevailing myths. That certainly seems to be how they see their role – as arbiters who set themselves above the fray.

In their self-appointed roles, these same people, I have found, are extraordinarily sensitive to perceived and actual offence. Some verge on being prissy. Their most common response to a challenge is to complain that we are being "rude", their lament, "how dare you be rude". Compared with that, nothing else is of consequence. One mustn't be "rude" to these precious little people.

What so many of them fail to do, though, is see the whole (or even a larger part of the) picture. Maybe I have a starry-eyed view of the responsibilities of academia but, where they fail in their duty, I find it offensive - deeply so. It is a betrayal of everything they supposedly stand for.

Furthermore, it has practical consequences. We, from our lowly position struggle hard to get our facts right, investing a great deal of time and effort in researching and conveying the correct information. It then takes four minutes for Bartels, standing in front of a posh bookcase, to undermine our work and perpetuate a damaging myth, which then goes straight into the Express to sustain the Muppets. 

That makes our lives incredibly difficult. We can assert something, on the basis of good evidence, only to have people tell us: "Ah, but Dr So-And-So of Oxbridge University says this. Why should we take any notice of you?" This is especially the case with the legacy media. A journalist, presented with a conflict, will invariably go for the academic comfort blanket. Such is the power of prestige.

Past experience of trying to correct academics, though, has not been good. I've tried it every which way. I've been polite and deferential. I've sent these people tactful, carefully crafted corrections, with all the cross references necessary for good scholarship. I've offered to see them, at my own expense. Those who contact me (and quite a few do) are treated courteously and, if they ask for information or sources, I do my best to help. I really have gone the extra mile.

The response, though, is generally that my views are ignored. I've seen academics, with whom I've had discussion, go on to present clearly erroneous information, in circumstances where they must know it's wrong. But still they do it. The view of the herd, it seems, must always prevail.

This, in part, explains my current attitude. I'm 69 this year. I have a PhD and decades of experience with EU issues – and I've been blogging daily for nearly 14 years. I really do not need to be deferential to idiots who are too idle to get their facts right. And past experience has shown deference to be ineffective. About the only thing that works is to be aggressively direct.

In this case, it did work – to an extent. It got a response which then became a platform to debate these issues in front of a wider audience. That is the way these things work. Not for one moment did I expect to change Bartels's views, or get him to correct his errors.

There is a mindset prevailing in some corners of academia (and especially in what I call the "Brexit claque") that not only denies error, but the possibility of error. They don't even understand that the concept of personal error can apply to them. Their egos are so highly tuned that it doesn't occur to them that they can make mistakes. Within this paradigm, anyone disagreeing has to be wrong themselves. That is their only way of resolving the paradox.

My first direct response to Bartels on Twitter, where a prolonged exchange was to take place, was to ask "what is happening in academia", then asking:
Is this man on the same planet as the rest of us? Does he know nothing of the history of the European Union. Why does he think the EEC's Customs Union was completed in 1968 yet internal border posts were only formally abolished in 1992 with the advent of the Single Market?

Has he looked at the current border situation between Turkey and EU Member States – specifically the Kapikule Border Gate? Turkey and the EU have a customs union between them. Why are there still border posts?

Is this the situation we have come to, where learned academics from prestigious British Universities are spouting utter tripe, and advertising their tawdry wares on YouTube?

Is there no one in Bartels's faculty who has sufficient knowledge to understand that he is talking rubbish, and pull the YouTube video before it does any more damage to Cambridge University's reputation?
By North standards this is fairly mild, but it provoked Bartels to reply: "Don't be silly. Customs unions are defined in Art XXIV GATT. Of course you CAN still have checks. But the point is to abolish them", he wrote.

Now there are certain things you don't say to a 69-year-old man, and certainly not one with a PhD and an enormous amount of experience in EU issues. And that is, "Don't be silly". As I was to point out to one of Bartels's academic colleagues who used the same term, "Children are 'silly'. Adults may be foolish, stupid, even, but not silly".

That aside, we then have to deal with the fatuity of Bartels's response. First, in the typically patronising way that some academics adopt, he tells us where to find a definition of a customs union, as if it was relevant, and as if we did not know. But he then goes on to tell us that: "Of course you CAN still have checks. But the point is to abolish them".

Believe it or not, though, we know that border checks can continue in a customs union. That is precisely the point we have made. We can also accept that the EU (and the EEC before it) sought to abolish checks. But this does not address Bartels's error. The customs union does not get rid of border posts. It eliminates tariffs and quantitative restrictions between members. It also sets a common external tariffs, to prevent back door entry. But to abolish customs border posts, you need – as the EC/EU found - the Single Market. But nowhere does Bartels mention the Single Market. All, he tells us is:
Now customs border posts do two things. Firstly, they check to make sure that in a free trade area, and a customs union is just one type of evolved free trade area, that in that free trade area, the goods that cross the border actually come from the country that is party to the free trade area, the customs union. So, it's a little bit difficult to see how one can have no border controls on goods in a free trade agreement because otherwise there's nothing to stop products from country x coming in to the UK and then being transhipped on to the EU…

The second thing that customs posts can look for – this is not entirely necessary but it's frequent – is to make sure that the products coming in can actually be sold in the importing country. It usually goes by the name of standards. What's important about standards it – they come in various flavours – but the harder form, safety standards usually, says that if you don't meet the standard, the product's illegal. It just can't come in. It can't be sold. That's not a matter of quality. It's a matter of whether the product actually is legal or illegal. It might as well be heroin if it fails to meet the standard. That's another thing that customs posts do. Again, not always – there are ways around it in certain circumstances, but this is the sort of thing that again is the difference between a customs union and a free trade area.

Now the third thing to say is that if all of this breaks down and we don't remain in the customs union, which of course on the current political setup – however long that lasts – looks extremely likely, erm if we don't have a free trade agreement, which is well a possibility, and some might even say a probability given the short time-frame that there is for negotiating one even if one accepts that there is a continuation of EU law or some other very similar transitional arrangement, then what we have is WTO law.

And of course WTO law is not the end of the world. Most countries trade under WTO rules. It' s just that the costs are much higher in many respects and also there are whopping great tariffs on items which are of political sensitivity in particular and to some extent economic sensitivity so cars, ah spirits and also most other agricultural products. So there are certainly huge costs to being in the WTO alone.
However, according to Bartels, as the Twitter exchange continued, this apparently covered his first points. Later, he wrote: "When I said the point of a CU is to get rid of border checks I meant CUs are necessary, not sufficient for this. You misunderstood".

So, this "leading academic" did not make an error. When he wrote: "The customs union is essentially what you do in order to get rid of customs border posts", we should have known that he actually meant: in order to get rid of them, it is necessary to have a customs union, but not sufficient.

Yet, even despite that, the reality is that the Single Market, if it was extended to all products and services, could also allow the elimination of customs border posts. Things such as rules of origin could be dealt with administratively, without the need for border inspections.

In other words, the customs union is a red herring. Bartels may be a specialist in arcane aspects of international law, but he is here displaying an extremely limited grasp of the wider issues. And that is without taking into account his comments on the WTO.

Here, there is an underlying arrogance. I cannot imagine a pilot, no matter how expert and experienced, claiming to be qualified to fly every aircraft type on the register. In fact, the law would not allow it. In academic terms, the EU and related issues cover such a huge territory that no one person (or even group) could claim to be expert in it.

But this is the implied claim of these academics - expertise across the board, even on issues in which they have no experience or qualification. And, by the same measure, they deny to anyone outside their claque any expertise at all, treating us in the patronisingly dismissive way that they so often do.

Any errors are always ours. That is how it always is. Academics such as Bartels cannot make mistakes and if we say otherwise, we are being "rude". And that is one of the reasons why we are not making any progress.



Richard North 24/07/2017 link

Brexit: a terrifying vacuum at the heart of the debate

Sunday 23 July 2017  



"How exactly do Brexit ministers plan to avert what is likely to be a wholesale catastrophe?" That's the headline which accompanies the Booker piece this week as he returns to Brexit with a vengeance.

"There is a terrifying vacuum at the heart of our weirdly trivialised debate over Brexit", he writes. "Ministers are completely failing to explain to us the immense practical implications of their decision that Britain will leave not just the single market but also the wider European Economic Area (EEA), to which we send between them £230 billion a year of our exports".

That's actually a useful way of putting things – and different. We've seen and heard an enormous amount about the downside of the Efta/EEA from every Tom Dick and Harry you can imagine. Just about everybody with a pulse and an opinion has been on the job.

But, as Booker writes, "The facts of what this faces us with are inescapable. By choosing to become what the EU calls a 'third country', we will also exclude ourselves from that complex system of 'Customs Co-operation' which enables us to move our goods unimpeded to any country in the EU or the EEA".

For some many months on this blog we've working up to this, describing what can only be the coming shit storm. Any which way we look at this, it doesn't end well.

What scares me most is that, as I review all those different sources which should be sending out distress messages, there is silence. From academia we get confusion, muddle and an extraordinary level of ignorance – staggeringly so. And what emerges from the quarter is an almost pathological insularity which keeps otherwise intelligent men and women detached from reality.

Academics are supposed to be the people who have the skills and resources to work things out for themselves and speak the truth to power. Instead, we see highly qualified people from prestigious institutions churning out derivative tosh that should have them stripped of their posts.

Where they are challenged, we find that academic integrity has degraded so substantially that the self-important figures, caught out in multiple errors, deny even the possibility that they could make mistakes.

Business representatives, on the other hand, are no better. With very few exceptions, they are delusional. There is an air of madness abroad. Those who should at this very moment be gripped by panic are strangely lethargic, untouched by the looming disaster that is about to bring their little worlds crashing down.

There is an almost naïve belief that government knows what it is doing and will bring back a deal which will safeguard business needs. Yet this believe rests on no more substance than the view that, since the consequences of a "no deal" will be devastating, the government will pull something out of the hat.

As for Government, there is not the slightest indication that Ministers are on this planet or anything closer than the next galaxy. They, like far too many people, are convinced that the EU will do a deal and, come the 29 March 2019, everything will pan out fine.

And where the media should be tearing the Government's bland assurances apart, with clinical analyses which demonstrate quite how precarious our situation is, we get trivia, utterly superficial stories and no serious attempt at anything that could approximate responsible journalism.

That leaves Booker to writes that, as Michel Barnier, the EU's chief negotiator, has repeatedly pointed out, on exit day, as with any other "third country", our goods will face strict "border controls", complete with inspections and lengthy delays. Along with much else, this will bring an abrupt end to the system whereby 12,000 trucks a day can immediately roll on to ferries at Dover and off at Calais, a crucial part of our export trade.

Before we go any further, the Government should be carrying out a serious (and honest) impact assessment. If we can work it out, then it should not take the financial geniuses in the Treasury that long to play with their calculators and bring up a bottom line of their very own.

But what the Government can't do force France and other countries, including Ireland, to build the new customs facilities, staffed by hundreds of newly recruited and trained staff, needed to handle UK export traffic and the millions of passenger checks.

And no one on this planet has the ability to turn back the clock. But, even Booker is able to tells us that putting in place the necessary infrastructure will inevitably take more than two years, at a cost of hundreds of millions of euros (for which we will inevitably be asked to pay).

Even more horrendous, he writes, will be the consequences for our £12 billion-a-year export trade in all "products of animal origin", including live animals, cheese, fish, eggs and much beside. Under the strict rules, of which Mr Barnier reminded us on 6 July, these will all have to be submitted for inspection by veterinary officials at a border control posts, involving further delays which could last days.

And even before we can export any food products into the EU at all, under the same rules Barnier referred to, we would, like any other "third country", have to wait six months before being put on an approved country list.

On day one after Brexit, all such exports, including those over the Irish border, could come to an immediate halt. Yet, if Ministers believe we can avoid such devastating disruptions to our trade by being given a unique exemption from the rules, this simply confirms their residence status on another galaxy.

It is here that there is this sense of unreality at its strongest. They have already been told what they stakes are, but they choose to believe that the EU negotiators are bluffing. At the last minute, they believe, Mr Juncker will give the nod, all the "colleagues" will roll over and the trucks will be waved through as the come off the ferries at Calais – all because "they need us more than we need them".

This fantasy has as much substance as Scotch mist in a hurricane. Mr Barnier has already made it crystal clear that there will be no concessions from the EU. On the day, as Davis and his idiot crew will be told, this is simply not possible. Any other third country could protest that this would be "illegal discrimination" under WTO rules.

Says Booker, it is high time our Ministers were pressed to explain just how they imagine such a wholesale catastrophe can be averted. But there seems no-one in government who is grown up enough to face reality. Booker himself has had his column all but halved and banished to the back page of the supplement, while the "Ultras" are given free rein in the main pages.

Meanwhile, the clock ticks and the countdown goes on. The grown-up have left town and there is little else to do but to keep reminding people of the impending disaster. But when we do it, we are ignored. When Booker does it, he is relegated to the back page of the supplement. And when the EU's chief negotiator does it, he isn't believed.

The nation is in a coma. The awakening is not going to be pleasant.



Richard North 23/07/2017 link

Brexit: a surplus of stupidity

Saturday 22 July 2017  



One of my seminal experiences when researching for The Great Deception was to follow the media coverage of our applications to join the EEC and then to compare the public record with what was being said in secret by officials and politicians.

One also sees how, in crucial areas, a lack of knowledge or communication distorted contemporary perceptions of events. People, doubtless, were making statements which they believed to be truthful which, with hindsight, were (at best) misleading.

The experience, for me at any rate, serves as a reminder that nothing about Brexit currently coming out of Brussels, or leaking from Cabinet, can be trusted. Even discounting the normal fog of war, there may be active attempts in play either to confuse, distract or even misinform.

In this respect, the recent media reports on transitional periods, and extending freedom of movement past exit day, must be taken with more than a sprinkling of salt. And this is especially so, given that the latest source is Michael Gove, a man not exactly known for his non-partisan views.

However, the leaked report that Philip Hammond is pushing for a lengthy transition period is credible, especially in view of the context, where he was apparently reassuring jittery bankers that the government was seeking to avoid a "cliff-edge" Brexit.

Even the BBC, which dismisses many of the reports as "kite flying", concludes that there appears to have been a "hardening of opinion" in Cabinet around the concept of a transitional period, with greater willingness to accept that certain aspects of EU membership (such as free movement of persons) must continue after exit day.

This is borne out by the Irish Times which writes of a significant change in mood around the British Cabinet. It has it that "senior sources" have suggested that a major shift in opinion is under way that will delay the full implementation of a Brexit deal until 2022.

The irony of this is that, if the Cabinet is indeed willing to accept an extension of free movement, then this rather undermines the Prime Minister's case for leaving the Single Market. During her Lancaster House speech on 17 January, she specifically made the linkage, arguing that we could not continue with the Single Market, as that "would mean complying with the EU's rules and regulations" that implement the four freedoms.

However, it is not only the badgers who seem to be moving the goalposts. Owen Paterson is arguing that the problem with the Single Market – in the form of continued EEA membership – is that "we need to have authority over domestic regulation in order to strike new trade deals".

This is a rather odd assertion, especially coming from one who previously favoured EEA membership, but it pales into insignificance with the Moronic Mogg who is actually arguing that those advocating a transitional phase are seeking to undermine the result of the referendum.

The man told Newsnight: "If we are subject to the rules of the single market and the regulations of the single market, and subject to the fiat of the European Court of Justice, we are paying for the privilege and we can't do free trade deals with the rest of the world, then we are in the EU".

This bovine stupidity gainsays the fact that the Single Market/EEA acquis comprises less than a quarter of the EU legislation in force – and ignores the fact that a large and increasing proportion of rules originate at global level. In or out of the Single Market, we would still have to comply with them.

Mogg also fails to recognise that Efta/EEA members are subject to the Efta Court rather than the ECJ, a confusion that clearly irritates former ECJ Judge David Edward. The EU treaties don't apply directly in the Efta/EEA states, he says, so a soft Brexit wouldn't necessarily mean that the UK would be within the scope of the ECJ jurisdiction any more than Norway is. He then goes on to say:
But if you're going to trade and the whole point of being in the single market is to have freedom of movement, then the ultimate authority on what the rules are within the EU 27 is the ECJ. So for example if there's a question over pharmaceutical standards and there's a dispute as to what the directive on particular pharmaceutical standards says, then the ultimate arbiter is the ECJ. And to that extent traders in the UK who want to trade with the EU 27 have to obey those standards. And the same thing applies in all aspects of freedom of movement.
The other element of Mogg stupidity encompasses the finances. The bulk of Efta State payments (such as Norway/EEA Grants) are not even paid to the EU, yet this venal man wants to turn them into Single Market budget contributions. And as for free trade deals, if he is not aware that Efta/EEA States make their own agreements across the world, then he is competing with cabbages in the IQ stakes.

Most bizarrely of all, with talk of a transitional period lasting five years, during which we will be subject to some EU rules – and thereby fall under the jurisdiction of the ECJ – the one way of ensuring a clean break, taking us out of the EU completely, would have been the Efta/EEA option. Membership of Efta is practically and legally incompatible with EU membership.

And nor, as we keep having to say, do Efta/EEA states adopt EU laws. The EEA Joint Committee takes the laws and converts them to EEA laws, adding them to the relevant annexes, thereby making them integral parts of the EEA Agreement. Once the changes are ratified, they become binding – as treaty obligations.

Sadly, the Moggish tendency to over-simplify (to the point of being grossly over-simplistic) reflects what appears to be a similar tendency in the legacy media. They have managed to turn the debate into a fight between "remoaners" on the one hand, who want a "soft Brexit", and "leavers" who are pushing for a "hard Brexit".

This binary treatment takes no account of nuances, which means that Flexcit supporters have been "disappeared" (along with all other "leavers" who want a "soft" Brexit). The simplistic narrative favoured by the media can only handle a black-and-white representation. There are only "leavers" or "remoaners" and nothing in between.

Nonetheless, the Government does seem to be capable of taking a more nuanced view and looks to be funnelling its thinking down the obvious and necessary route of a transitional agreement. But if that is what it is doing, it is only coming to the same conclusion that we reached over four years ago, having wasted more than a year thrashing around trying to avoid the obvious.

What no one seems to be doing, though, is revisiting the Liechtenstein solution, and exploring means by which freedom of movement can be limited. That has been well and truly buried by the legacy media and the noisemakers who provide most of their copy.

Even now, its adoption could transform the debate, to the extent that one really does wonder whether any of the major players actually want a solution. When one thinks it through, though, even if the UK Government did negotiate limits on citizens of EU Member States, the Borders Agency and the Home Office are so inept that they most likely would fail to enforce them.

The spectre of hard-won concessions from the EU (and the cost of reduced mobility for UK citizens), which are then undermined by enforcement failures, could almost be enough to deter the Government from seeking a settlement.

Still, there are two more glaring omissions. The first is the absence of any clearly defined "vision" from the Brexit team, highlighting the obvious but scarcely discussed premise, that one cannot define a transition agreement until we know what we are transitioning to. We are in very great danger of letting the process define the destination, which can only lead to the mother and father of all messes.

The second omission is one to which we have made constant references, but which is even more invisible than Flexcit. This is the need for a secession treaty to implement a transitional agreement. So far, I have seen nothing written (outside this blog and a brief reference on Booker) on the mechanics of an agreement. This could cost us dearly, if the agreement founders not on content but on execution.

Yet, for a nation that only woke up the detail of Article 50 some months after the referendum, and seems to have difficulty telling the difference between a customs union and a customs agreement, the lack of focus should perhaps be unsurprising.

After all, it has taken long enough for the idea of a transitional period to take root. It is far too much to expect there to be any broad understanding of how this should be achieved – especially in a political community where Rees-Mogg is actually regarded as intelligent.

But this laborious process of discovery, dealing tardily with issues only as they emerge rather than pre-empting the pitfalls and planning for them, does not auger well for the negotiation process as a whole. If it takes to the end of the year before we even start discussing the need for a secession treaty, we will have left it far too late. At the current rate of progress, it will probably take longer.

In the broader scheme of things, though, it probably is already too late. The train left the rails half a mile back and, in truth, we're just waiting for it to grind to a halt. We can handle anything in this country, I have averred – except Tory stupidity. And that we have in surplus.



Richard North 22/07/2017 link

Brexit: a starter for ten

Friday 21 July 2017  



One of the particularly prevalent myths in relation to the EU is the wrong-headed belief that because we already have "regulatory convergence" or "equivalence" with the EU (having adopted and implemented its acquis), concluding a free trade agreement will be a simple matter.

This is precisely the error made by Liam Fox who argued yesterday  on BBC Radio 4 that: "The free trade agreement that we will have to do with the European Union should be one of the easiest in human history". "We are", he says, "already beginning with zero tariffs, and we are already beginning at the point of maximal regulatory equivalence, as it is called. In other words, our rules and our laws are exactly the same".

Tariffs, as we have said many times, are not significant. But non-tariff barriers, mainly (but not entirely) expressed in terms of regulatory differences, are a major concern when concluding free trade agreements. Under normal circumstances, "regulatory equivalence" goes a long way to reducing them. But it does not eliminate them – especially in the context of agreements with the EU.

Underlying the myth that regulatory convergence/equivalence gets you through the door – as is so often the case with EU related issues – is a fundamental misunderstanding of the way the EU works, and how it organises its affairs.

The root is the failure to appreciate the difference in the control regimes as between member states and external actors, such as third countries seeking to export goods to the territories of EU Member States.

The crucial difference is not so much in the controls applied, but in where the controls are applied. For EU Member States, border controls have been abolished, so control is exercised internally – often at the point of production.

Looking at the meat industry gives as good an illustration as any of this system in practice, not least because this sector has the best developed example of Union controls and their enforcement.

For those wishing to market fresh meat, the system starts way back up the food chain, with extensive controls over animal feed, on rearing systems, on the pesticides that can be applied and the veterinary medicines used.

But not only are the controls specified, the methods of enforcement are set out, and the "competent authorities" are required to report periodically to Commission, giving evident of their enforcement activities.

And in the case of food products, the Commission has its own "police", in the form of inspectors employed by its Food and Veterinary Office. These officials can carry out inspections of any national systems, with complete access to records, personnel and premises, following which they produce reports setting out "recommendations" which national authorities are more or less obliged to implement.

Once animals reach the slaughterhouse, a new raft of controls apply, including prior approval and licensing of the premises and on-site supervision by veterinary officials. There is 100 percent ante-mortem inspection of animals and post-mortem inspection of all carcases, together with a mandatory test schedule for pesticides and veterinary medicine residues.

Temperatures of the meat are rigorously monitored and controlled throughout transport and storage. Carcase meat can only be boned out and jointed at approved cutting premises, again under veterinary supervision, and cold storage plants must be licensed and approved.

Through the system, copious records are kept, and then held by the national authorities, the details processed and routinely submitted to the Commission in Brussels. All meat has to be marked and labelled so as to identify its origins and the establishments in which it was processed.

But, because of this phenomenally complex (and intrusive) internal system of control, there is no requirement for border controls. These have been abolished, allowing free movement of goods throughout the Union.

And, as a final longstop, if any national authority fails in its duties to enforce EU law, the Commission can intervene, issuing warning letters, and taking infringement proceedings, up to and including taking the Member State to the ECJ, which has the power to impose draconian fines.

Now, when it comes to "third countries" exporting meat to the EU, in the interests of a level playing field, the controls imposed must be at least as rigorous as those applied to Union businesses.

However, there is a big difference. The Commission has no jurisdiction over the internal organisation and the enforcement of controls within the sovereign territories of third countries. It cannot take the governments to the ECJ and they cannot be fined for non-compliance with EU law.

Nevertheless, the EU will require as conditions for entry, compliance with EU production regulations, licensing of establishments and much more, in a graduated hierarchy of controls. But, to compensate for the inherent limitations of its power within the third country territories, the EU also imposes border controls.

When we thus turn to Article 229 of Regulation (EU) 2016/429, we see a five-tier control system in place.

Firstly, goods must come from a country officially listed as permitted to export the relevant categories; secondly they must come from establishments which are approved and listed; thirdly, they must comply with all relevant animal health requirements laid down by the Union; and fourthly they must be accompanied by animal health certificates and by other declarations and documents as required.

Finally, the consignments must be presented to a Border Inspection Post (BIP) – now called Border Control Post (BCP) – where they must pass inspection. Only when the fees due are paid and the "Common Veterinary Entry Documents" are endorsed can the goods be presented for customs clearance.

Now the point here is that regulatory convergence is implicit in the country listing, in the approval of establishments and in complying with the relevant animal health requirements. But convergence is not an either/or requirement.

The Member State cannot argue that, because it is convergent, it can be exempted from other controls – particularly border controls. Put simply, convergence is the "starter for ten" which gets your products as far as the border. Once there, the documentary and physical checks must be carried out.

Essentially, what it amounts to is that, inside the European Union, members "enjoy" a system of internal controls, which allows free movement of goods throughout the Union without border checks.

For those operating outside the Union, conformity with EU rules is still required, but additional checks are applied before the goods can pass through the external border to enjoy free circulation within the Union. Regulatory convergence/equivalence is a necessary but not sufficient condition for entry.

And while we have used fresh meat for our regulatory example, similarly complex arrangements apply in other sectors, to other goods. And in all cases, border checks will apply. Regulatory convergence/equivalence is not a "get out of jail free" card. It is merely a "starter for ten".



Richard North 21/07/2017 link

Brexit: the production of unmitigated dross

Friday 21 July 2017  



One wonders why, when "leading academics" reach out to us mere plebs with their words of wisdom, they feel to need to adopt a report format redolent of a kiddies colouring book, with childish graphics which seem to have no other purpose than to break up the text.

But then, the answer is inherent in the question. As mere plebs, we must be patronised by these "leading academics". They are sending a message that a grown-up format (like A4 pages) must be reserved for genuine grown-ups (like themselves).

So it is that the taxpayer-funded intellectuals based at King's College London , styling themselves as "The UK in a Changing Europe", have deliberated long and hard and offered us 23 pages of a report on the cost of a "no deal" Brexit.

Unit director Anand Menon seems to be the principal author, although he names no less than 20 co-workers who assisted him in the great enterprise, thus averaging close to one page per person for this 23-page report.

Considering the "no deal" scenario was launched by Theresa May in her January Lancaster House speech, some six months ago, no one could thus accuse this talented group of breaking any productivity records. They average approximately three words per person per day.

However, if we had been treated to a study of unparalleled quality, one might have been happy to forego quantity and judge the report as being worth the (considerable) wait. But it would be a very generous (to say nothing of short-sighted) critic who awarded this production any sort of quality mark.

For those who might wonder, this is the reason for the hostility. These people set themselves up as "experts" and, funded out of the public purse, take it upon themselves to be our guides though the Brexit labyrinth. Yet, all they can produce on this vital issue is a tardy, sloppily-written report, patronising in style and language, and criminally shallow in scope. We are being short-changed.

For an example of the patronising style, we are invited to consider what "no deal" actually means, and what might be its consequences. For this, we have to wade through four pages of script, to find a section of immortal prose which advises us that, "there has been an awful lot of ambiguity about whether 'no deal' refers to a cliff-edge Brexit or a chaotic Brexit" – phenomena that have been previously defined.

Eventually, we get to the point where, as one might have guessed, a "no deal" Brexit involves leaving the EU without an agreement on trade or in the "divorce" negotiations. We must truly count ourselves as fortunate that we have this cohort of "leading academics" to explain such things to us.

Yet, when it then comes to explaining what "no deal" might mean, and what its impact might be, we are told that answering these questions requires "a significant amount of speculation". And with that in mind, our "leading academics" tell us that they "do not claim to provide precise answers", and nor do they "attempt to be comprehensive".

These two things are certainly true, but our "leading academics" nevertheless argue that "the stakes are so high that we consider informed speculation to be both necessary and important".

Actually, I would dispute the need for speculation – significant or not. The European Union is a treaty organisation, bound by an extensive and well publicised acquis which sets out in very great and precise detail the nature of its relationships with external actors. In particular, it sets out very clearly how it treats "third countries", which is what the UK becomes, and how we will be required to respond to its rules, in the absence of specific bilateral agreements.

Therefore, rather than speculate, all one has to do is read the rule books. In these, the EU obligingly tells us exactly what a "no deal" scenario looks like.

Here though, our academics indicate the scale of [their] problem – the "sheer range of issues that need to be discussed and the huge amount of technical detail that will need to be sorted out". Specifically, they say, there are "the many thousands of technical regulations which can get in the way of trade in goods and services".

At three words per person per day, you can certainly see the extent of their problem. We'll be in the next millennium before this group could complete any substantial work. And therein lies the problem. The devil is in the detail and these people are not prepared to do detail.

When it comes to their assessments of a "no deal" scenario on trade, therefore, we get told that there would be "considerable legal uncertainty" around "how trade would continue to flow between the UK and the rest of the EU".

One has to surmise at this point that these "leading academics" haven't quite got the hang of this Brexit thingy. When we leave, there will be the UK and there will be the EU – not the UK and the rest of the EU.

This notwithstanding, we are told that, the default position would be that World Trade Organisation rules would apply on trade between the UK and the EU. This means, the "leading academics" assert, "that exports to the EU would be subject to the same customs checks, tariffs and regulatory barriers that the UK and EU currently charge on trade with countries such as the US".

That assertion, of course, is not true – and one would have thought these academics could do better than repeat this lame canard. At last count, the US had 38 trade agreements with the EU, taking its relationship way beyond the minimum level set by WTO agreements. Not least, there is the Mutual Recognition Agreement on Conformity Assessment, together with a primary Customs Agreement and a secondary agreement to intensify and broaden the first.

Without dwelling on this too much, suggesting parity on WTO rules between the US and the UK - in their relationship with the EU – is sloppy, ill-informed work. It's not speculation. It's just misinformation. And with that, the progenitors seriously damage their credibility.

As we move on, though, sloppiness gives way to superficiality which begets a thoroughly distorted view of the post-exit situation. Of the "no deal" scenario, the academics say:
The first impact would be felt at the borders, where in theory all UK exports would have to pass through customs. The practical feasibility of this will vary from port to port – for some busy ports, like Calais, the practicality of this is uncertain. Dover, it is thought, will be particularly badly affected because it lacks the physical space to store all the goods needing to be processed – not to mention managing new immigration checks.
The first thing one has to address here is that there is no "theory" about UK exports having to pass through customs. On Brexit, the UK positions itself outside the EU's external border. Customs controls will necessarily apply.

It cannot be disputed, however, that the first impact of a "no deal" will be felt at the border – specifically, the ports. These include the airports, although these are not mentioned. But the academics argue that, "for some busy ports, like Calais, the practicality of this is uncertain".

This really doesn't go to the heart of the issue. Calais is ill-equipped to handle current traffic and is undergoing a much-needed upgrade. But that will not equip it to undertake the millions of customs checks that will be needed every year, in order to keep the traffic flowing. Uncertainty there may be on the precise scale of the problem, but there can be no doubt that there will be serious disruption.

As for Dover, space is of course an issue, but the real point is that the port is dedicated to ro-ro traffic enabled by the emergence of the Single Market. Take away the Single Market and the port can no longer function.

Interestingly, back in Muppet Land, some would have it that the report is simply an extension of "Project Fear". And that highlights the report's greatest failings – not that it does perpetuate fear. Rather, it seriously understates the problems attendant on a "no deal" scenario. And, for problems those to which reference is made, there is little evidence offered to suggest that we are confronting a crisis – which indeed we are.

In the "understatement" department, we thus get: "Some short-term disruption to trade is likely, over and above that resulting from new trade barriers". The academics then say: "Manufacturers, especially but not only the car industry, which rely on complex cross-border supply chains and 'just-in-time' delivery of parts, would be severely disrupted and would likely be forced to restructure their supply chains".

This really is ludicrously understated. There will be major disruption to trade, some of which will be so damaged that it will probably never recover. And there is an almost certain likelihood that overall trade volumes will be permanently reduced.

The major understatement, though, is in the many omissions. For sure, the report does not claim to be comprehensive but that does not excuse a lack of detail which serves only to diminish the extent of the crisis that "no deal" will bring.

When it was published, I went through the report and looked for the issues which it did not raise, which have been examined on this blog. Not in any particular order, we have the cessation of food exports and the damage to the meat industry, and serious questions over Border Control Post capacity.

It is likely that there will be no resolution of acquired rights in commercial fishing, there will be serious damage to the horseracing industry and a similar level of damage to Formula One in this country.

We will see the British Standards Institute drop out of CENELEC with the UK losing its place at the European standards "table", problems with the recognition of notified bodies. Then there is the export, and overseas installation and servicing of passenger lifts, escalators and the like, which may become impossible. Also, the small but important hazardous area equipment market may be threatened.

Strangely unmentioned in the report is also the chemical industry which, unable to comply with the provision of the REACH regulation, will be savagely hit. And although the report covers the airline industry, there is no mention of air traffic management. The fate of Active Pharmaceutical Ingredients is ignored, and the all-important digital market is not considered.

Important issues such as Transport Operators Licenses don't get a look in, the threat to vehicle type approvals goes unnoticed, as do the potential problems with the timber industry and geographical indications. Then, our membership of decentralised agencies takes a hit, our investment in Galileo and other cooperative ventures is threatened.

Turning to the actual report, we see broad headings in relation to trade. These cover agriculture, fisheries, aviation, energy and the environment, pharmaceuticals, immigration and resident citizens, and the economy.

A significant part of the agriculture section is devoted to a discussion on tariff schedules, an issue which lies outside the Article 50 negotiations. These are a matter for the WTO and are not affected by a "no deal" scenario. There is also reference to the continuation of financial support for farmers – again a matter outwith the negotiations.

As to trade in agricultural goods, our academics tell us that the "default scenario" would be that "both tariffs and border checks would be reintroduced between the EU and the UK, slowing the flow of trade and affecting the entire food supply chain".

This is not only wrong, but so wrong as to trivialise what could become a national emergency. With anything up to 40 percent of our food dependent on EU sources (including imported animal feed), major disruption at our ports could lead to interruption of supplies and the very real prospect of food shortages.

Yet, to the question as to whether imported food will disappear from supermarket shelves, we get told that this "seems improbable". Laughably, these "leading academics" assert that "major food retailers will be likely to have contingency plans in place to replace imports from the EU with domestic products and imports from outside the EU". This is childishly absurd.

With that, I'm not prepared to waste readers' time on reviewing the other subjects in detail. But, finding a reference to the chemicals industry tucked into "energy and the environment", I will take a quick look at the "analysis". Chemicals product regulations, we are told, are covered by EU rules:
Without equivalent domestic approvals being put in place, UK exporters would find themselves unable to trade with the EU. It is conceivable they might even struggle to do so internationally should there be no UK registration and authorisation system.
Bluntly, this is appalling misinformation. The authors should be ashamed of themselves. However, the fact that no less than 21 academics have lent their names to this nonsense warns us of a crisis. But this one is not in Brexit. It is in academia.

The issue, of course, under REACH, is that the huge investment by British firms in registering chemicals may no longer be recognised by the EU after Brexit. All the products may have to be laboriously re-registered with the European Environment Agency, at great expense under the aegis of newly-appointed "own representatives".

A new domestic registration and authorisation system is an irrelevance. This will not be recognised by the EU and until products are re-registered with the EU, they cannot be exported to EU member states. With over £20 billion in annual exports at stake, this has the makings of a major crisis, both for the industry and the nation.

Possibly, just possibly, the UK could negotiate a continuance, keeping existing registrations valid until replaced, thus allowing trade to continue. But a "no deal" would lead to an abrupt cessation of exports, with some considerable time elapsing before they could be resumed – if at all, bearing in mind the perturbation multiplier. Continental buyers, forced to find other sources, may not come back to their former British suppliers.

It will say something of Anand Menon and his team, though, that my criticism will have no impact on them at all. Smugly content with their own efforts, they will ignore this blogpost, just as they have the previous posts that have offered far more information, with very much greater accuracy, than they have shown themselves capable.

For these people, though, the report has been a success. It has got their name in the papers, as the (largely) left wing media applaud their efforts and reproduce their punchline, that a "no deal" Brexit would be: "A political mess, a legal morass and an economic disaster".

If I came at this without the background knowledge that I have, and looked anew at this shoddy, badly researched work, the best I could give these "leading academics" is a lukewarm "case not proven". Their "informed speculation" is in fact error-strewn rambling. It is wholly unconvincing. It is also quite obviously partisan – as Lost Leonardo points out.

We can't afford this sort of dross. At this crucial time, when politicians seem to have lost the ability to think rationally (or at all), we need academia at its best, to inform and advise, and to put the record straight.

Instead, we have Anand Menon and his team, a disgrace to the very notion of scholarship. These people should be ashamed of themselves. But the tragedy is that they will go to greater heights on the back of their shoddy work, applauded by unknowing and uncritical audiences.

When the chips are down, Brexit will involve not only political failure but a collapse in academic standards. We get the production of unmitigated dross, where quality was desperately needed. Academia stepped up to the plate, but failed to deliver.



Richard North 21/07/2017 link

Brexit: a council of ignorance

Thursday 20 July 2017  



Two weeks ago, on 6 July, Michel Barnier gave a speech in Brussels, addressing the issue of Brexit. We reported it the following day, but it was largely ignored by the media.

"For a third country", Barnier said, "one hundred percent of imports of live animals and products of animal origin … are and would remain subject to EU border controls". To this, he then added: "Moreover, before these products can be exported from a third country to the European Union, the sanitary and phytosanitary conditions for these exports to take place would have to be established".

On 29 March 2019, the UK in relation to the EU becomes a third country and, says Barnier: "One sees clearly, to speak frankly, the constraints that this entails for the agri-food industry". And one does indeed see "clearly" the constraints this entails. Specifically, these constraints are Regulation (EU) 2017/625 and, in respect of animals and products of animal origin, Regulation (EU) 2016/429.

According to Article 229 of Regulation (EU) 2016/429, no animals and products of animal origin may be admitted into the Union from a third county unless that country is officially listed as one permitted to export to the EU. Similar provisions apply to foods of plant origin although we do not yet know what rules will apply as they are under revision.

Country listing, though, is not automatic. Those who want to be vastly entertained can find the criteria set out in Article 230 of 2016/429. This cross-refers to Article 266 and, if I have understood this correctly, six months must elapse between the Commission approving a listing and it taking effect.

Clearly, the UK is not currently on the third country list. It cannot be, because it is a member of the European Union. Nor will it be when we leave the EU, or for some months thereafter.

Because of this (and the restrictions on other foods), I was confidently able to assert on 18 July that: "As near as can be certain, on exit day – 29 March 2019 – UK exports of food to EU member states are going to stop". I added: "This is not a matter for negotiation and nor can it be avoided. It is an inevitable consequence of the UK leaving the Single Market and becoming a 'third country'".

What I was actually doing was putting clothes on Barnier's statement. The effect of what he was saying is exactly that which I assert openly – that from exit day and some time thereafter, there are going to be no food exports to the EU. And for the foreseeable future, exports are going to be heavily restricted.

Now, if you don't accept that, then we're no longer talking rational politics. It can only be that you do not believe M. Barnier, in which event we're dealing with belief systems. You must believe that the EU's chief negotiator is bluffing and that the EU will not apply its own law to the UK when it becomes a third country.

But, if this is really the case, as one commenter asks: "why are we not hearing from the likes of Asda or Tesco?". Possibly though, because these supermarket companies are mainly importers, they are not the ones we should expect to hear from. However, we should certainly have heard from the likes of the NFU, the Food and Drink Federation and the trade bodies representing the meat industry.

Yet, in a strange vacuum of information, organisations such as the NFU have made no mention of crucial issues such as the need for inspections at the point of entry. The best I can find is a powerpoint presentation from Alan Matthews, Professor Emeritus of European Agricultural Policy, Trinity College Dublin.

Headed: "Implications of Brexit for the UK and EU meat sectors", this was delivered to the Agriculture and Horticulture Development Board Meat Export Conference, on 29 June 2017. And if it truly represents meat industry (and farming) thinking on Brexit, they are in very serious trouble.

On one of his slides, Matthews asserts that "we want to avoid or minimise … inspection and sampling at Border Inspection Posts", whence on another he states that it is: "Highly desirable to have a series of Mutual Recognition Agreements attached to [a Free Trade Agreement] to allow for equivalence and mutual recognition of inspection procedures".

It is certainly possible to reduce inspection and sampling but, on the basis of EU law, it cannot be avoided altogether. And even if inspection is minimised, the goods must be presented to a Border Control Post (to use the updated terminology) for document checks and the issue of a Common Veterinary Entry Document (CVED) – see also Commission Regulation (EC) No 136/2004.

As regards mutual recognition of inspection procedures, as the Canadians are finding, there is no such thing. The exporting country either has to adopt EU procedures in full, or the goods will not be admitted. And, while there is provision in EU law for pre-export controls to be carried out by third countries, these are normally confined to specific checks, such as the determination of aflatoxin levels in groundnuts.

In actuality, seeking approval from the Commission for pre-export controls might be a way out – although widescale application would be an unprecedented concession. But, again, approval cannot be given automatically. Formal applications must be made for all the categories of product for which approval is sought, and the Commission must carry out extensive investigations to ensure that the condition set out in EU law are satisfied.

Should this be an option, then one would expect the relevant trade bodies to be pushing for precisely this sort of thing to be included in the Article 50 settlement. But, on this, there has been total silence, with no indication that the industry is even aware of this possibility.

Looking at this in the broader context, this very much gels with the observation of Karen Briggs at KPMG that businesses are "in denial" over Brexit, with some refusing to acknowledge the "significant risks" that will accompany the UK's departure from the EU.

These organisations tend to argue that there is too much uncertainty and complexity or, post general election, they have unrealistic views on the Brexit outcome. As a result, they have yet to take measures to protect themselves from the imminent Brexit fallout, in what is becoming "an increasingly risky and untenable strategy". Ducking major decisions, Briggs added, was no longer an option and firms must make contingency plans immediately.

Analysis of the food industry, though, would suggest that this is not just a question of denial. There also prevails an extraordinary level of ignorance and complacency, the latter bolstering a firm conviction that everything will be alright on the night.

What price then Theresa May's new plan to chair a new advisory group, a so-called "business council", comprising the representatives of major businesses and trade bodies, in the expectation that they will keep her appraised of business sentiment.

Rather, it seems, she will be exposed to that lethal combination of ignorance and complacency, fortified by a strange naivety exhibited by many business figures who become involved in political issues. The hard business sense that drives them in their own enterprises seems to desert them, and they become as gullible as any ingénue when exposed to the blandishments of politicians.

Certainly, we are not getting the alarm signals from business that we should be getting. One of the few trade bodies on the ball being is that representing the pharmaceutical industry but, that apart, all Mrs May will be getting is council of ignorance.

As to the smug, self-satisfied academics on the Brexit trail, these are scarcely making an impact. Briefly, though, we saw in the Independent yesterday (before it was pulled) an article inspired by a report from "UK in a Changing Europe" which asserts that a "no deal" Brexit would be "a political mess, a legal morass and an economic disaster".

Covering only a fraction of the territory we've already covered, and six months after we started to address the issues, it tells of chaos at UK customs due to new checks, tariffs on exports, UK nuclear plants unable to operate, British airlines unable to fly to Europe, UK developed drugs denied approval for sale in Europe. legal limbo for British citizens abroad and EU citizens in the UK and Economic crisis in Northern Ireland.

These and many more such issues should be the stuff or urgent debate and be dominating the media. The cliff-edge looms and all we get is unguided prattle, with talks potentially stalled over the so-called divorce bill.

Nothing it seems, is capable of penetrating the unreal world of the politicians, while the businesses which depend for their survival on an effective Brexit have largely gone AWOL. Their silence will be their undoing.



Richard North 20/07/2017 link

Brexit: the "career psychopath"

Wednesday 19 July 2017  



One of the oddities of Brexit politics is the way Dominic Cummings gripped the debate during the referendum, despite having a very slender understanding of the EU and related issues.

The oddity is not lessened by the fact that he can wander through the offices of senior politicians in a tee-shirt that hasn't seen the inside of a washing machine for several weeks since he first put it on, dirty jeans and scruffy sneakers, being insufferably rude to all and sundry - most recently to David Davis.

In some respects, it is a very skillful scam. If you behave outrageously in such an environment, there is a chance that people are taken in, believing that only someone with the self-esteem that goes with enormous intellect could behave in such a manner. To that extent. Cummings has pulled it off. But it really says something for the bubble – yes, they really are that stupid.

It was thus with the support of the bubble that this ghastly creature went on to play a decisive role in creating the mess that was the Vote Leave campaign.

The essence of his failure – alongside the egregious Matthew Elliott – was to avoid an issue-based campaign, which we could have won convincingly. All we had to do was focus on the prime minister's broken promise to bring back a "reform" treaty. This turned David Cameron into a liar – his whole campaign based on a deceit which we would easily have used to our advantage.

Such a campaign strategy, however, would have created huge stresses within the Conservative Party, something which the predominantly Conservative "leave" donors (who were also paying Cummings) were not prepared to support.

Also being put to Cummings at the time was the need for an exit plan. I had met him several times by June 2015 and was taking an active part in the Exploratory Committee, chaired by Owen Paterson, which was working up plans for what was still then going to be a "no" campaign.

However, as Cummings was to write in his own blog, a year before the referendum, "creating an exit plan that makes sense and which all reasonable people could unite around seems an almost insuperable task". He noted, correctly, that Eurosceptic groups had been "divided for years about many of the basic policy and political questions", and therefore, it was never going to be easy getting a single plan adopted.

At this time, I was in constant contact with Cummings. And after a dinner in a posh Italian restaurant in Westminster, with Owen Paterson,  I had shaken hands with him on a deal that would have had me working as a researcher for the putative "no" campaign. Even when I saw the Cummings blog of 23 June 2015 (coincidentally, a year before the referendum), things still looked promising.

An "interesting attempt" at an exit plan, Cummings wrote, "is FLEXCIT based on using the EEA as a transition phase – remaining in the Single Market and retaining a (modified) version of free movement – while a better deal, inevitably taking years, is negotiated". "This", he added, "is an attempt to take the Single Market out of the referendum debate".

At least Cummings had a clear idea of the basics, whence he promised in his blog: "I will discuss the merits of this idea another time when I've studied it more". But in fact, he never did discuss it – not with me, and not anywhere publicly.

I wrote my response to his blogpost – only then to have a tense conversation with Owen Paterson who relayed complaints about me debating these issues in public.

What I did was point Owen to Cummings's own concluding remarks in his blogpost, where he stated: "These big things must be confronted now in parallel to establishing a professional campaigning organisation and public discussion raises the probability of the NO campaign getting things right".

I had by this time e-mailed the text of my response to Cummings, on his private e-mail. But he never answered it, and I never spoke to him again. I had become a non-person and, although no one actually said anything to me, that was the end of my brief career with what was to become Vote Leave. That is the way these people work.

In his own blogpost, Cummings was already arguing that an exit plan was something that should be left to Government after the campaign had won the referendum. The "no" campaign was "neither a political party nor a government". It had "no locus to negotiate a new deal". Taking on this specific point. I put to him that, in effect, he was saying is that the development of an exit plan should be left to those in the position to execute it.

If this was a valid argument, I said, it would negate much of the rationale for the think-tank industry. Part of the necessary process of advocacy often adopted by think-tanks, I averred, is not only to propose a course of action, but suggest to government the means by which it should be achieved.

It is by no means unusual, I then said, for government to borrow ideas from those think-tanks (or other bodies), in order to execute their policies. One might even observe that the whole idea of the European Union came from outside agencies, as indeed did the methodology for making it happen.

Crucially, I put it to Cummings that an important part of making an idea happen was to suggest (sometimes in some detail) how it might happen. This was another good reason why a exit plan should be produced independently by the "no" campaign.

But there was an added advantage. In the event of success and the Government was forced to negotiate our exit, the plan could be used as the yardstick against which its performance can be measured. If it delivered a less advantageous deal than we suggested was possible, we would have good reason to ask why.

Of course, the official campaign did not adopt a plan. Instead, to satisfy his Conservative paymaster, Cummings built his campaign on a studied, and unnecessary lie – the £350 million claim. And when that had all but failed – disowned even by Farage - Vote Leave was forced to turn the referendum into a beauty contest, which we very nearly lost.

It was a huge gamble, pitting the questionable popularity of sociopathic Johnson against the prestige of the prime minister. Fortunately, the anti-politics mood of the day carried us through, but this was no thanks to the "genius" Cummings.

But what now brings him back into focus is his latest, extraordinary Twitter post, where he has the utter gall to complain that the government triggered Article 50 without a plan. This, in his view, is part of a "circular firing squad".

Amazingly, though (chutzpah doesn't even begin to describe it), he asserts that "Whitehall is systemically fkd", and our "only chance of rationality is largely OPEN process to elicit expertise from OUTSIDE".

This is a man who himself is wedded to underhand dealing and back-stabbing, in which he excels. He is the man who went out of his way to exclude outside expertise from the leave campaign. And, having ignored my advice on the exit plan, we are exactly in the situation I warned about – with no ability to call the government to adhere to what could have been the official campaign position.

In terms of grand strategy. Cummings has played it wrong at every level. Far from the "genius" that the bubble would have him be, he is a serial blunderer who barely won the war and has put us in danger of losing the peace. From behind enemy lines, Pete analyses our parlous position.

A least the Guardian has sussed Cummings, the "career psychopath", pointing out his numerous tactical errors that put him in the dunce league of politics.

So very far from being the "genius" that his credulous supporters would have him be, he is even totally misreading the current situation. We have gone way beyond the situation where outside expertise will help up. That ship has sailed, largely due to Cummings.

What we have in David Davis, buoyed up by his "deranged" Cabinet supporters and the "ultras", is a belief system in play. Briefed by the snake-oil salesmen in the Legatum Institute, Davis has swallowed the Kool Aid in wholesale quantities, believing the mantra that the EU "needs us more than we need them".

When it comes to "access" to the Single Market, he has convinced himself that the restrictions and controls that attend our status as a third country are simply "red tape" which the EU can sweep away if it is so minded. He sees the warnings from Barnier and others as "bluff" and expects, on the day, that officials at the ports will stand aside and let British trucks, laden with goods, thunder past untrammelled.

Buoyed up by this conviction, Davis and his team see no need to negotiate. To them, this is not even a British problem. Our access to EU markets is something for Barnier and his team to solve. They can let us know when they have found the solution.

For us to deal with this, we have to make clear the consequences. This is not going to stop the disaster but, at least, we will know who to blame. That is vital. The failure of the process must not be seen as a result of Brexit – rather the blame must lie with the incompetence of government – the Tory government.

When the disaster hits, this is going to bring down the government: the Tories will not be electable for a generation. That is what is at stake for Conservative supporters. If they ever want to see another Tory government, they need to make a success of Brexit.

Listening to the "career psychopath" is not the answer. Cummings is not the solution. He is part of the problem. Another part of the problem are those credulous bubble-dwellers who have fallen for the scam and believe him to be a genius.



Richard North 19/07/2017 link

Brexit: reality unchecked

Tuesday 18 July 2017  



As near as can be certain, on exit day – 29 March 2019 – UK exports of food to EU member states are going to stop. This is not a matter for negotiation and nor can it be avoided. It is an inevitable consequence of the UK leaving the Single Market and becoming a "third country".

What happens to food imports from the EU is not so certain. This depends on whether conditions are imposed by the UK government which must be satisfied before consignments are allowed entry to our territory. And the intentions of the government in this respect are as yet unclear.

As regards food exports, in an earlier piece, I estimated that an average of about 700 trucks a day pass through the two Dover ports (tunnel and seaport). That is likely to be highly variable though, with a possibility of seasonal peaks up 2,000 a day.

Although this is only a proportion of the average of 12,000 or so lorries passing through, there are enough to cause considerable disruption in their own right. Nevertheless the likelihood is that the rest of the traffic may be disrupted as well, but for different if not entirely unrelated reasons.

There are some measures, even now, that could be taken to reduce the general disruption, although these will only shorten the delays rather than eliminate them. And one possible outcome is the mother of all traffic jams, leading to Operation Stack on steroids.

However bad it gets on exit day, we will be able to do nothing about the logjam at the French end, or on the borders with other member states (not forgetting the airports which take a substantial amount of freight). The decisions will have already been taken. But we can make preparations to mitigate the effects – which indeed we must.

Bearing in mind that close-on 40 percent of our food currently comes from the Continent, if that supply chain is disrupted,we could have serious shortages, particularly in fresh foods. We would be confronting the very real possibility of empty supermarket shelves and people going hungry.

What the government must do, therefore, is prioritise. That means protecting the supply chain to make sure that food imports get through. In the longer term, we will need to sort out the export situation, but first things first – people must be fed.

Early on, some months before exit day, food exporters – whether selling processed goods or primary produce – will need advance warning. They should be told that, from exit day until further notice, no exports to EU member states will be possible. They must be instructed to keep their vehicles away from the ports.

To enforce this, on the day, there will need to be road blocks in place well outside the ports. All commercial vehicles carrying food, live animals, or products of animal origin, must be kept away from the ports and the routes into them.

Other vehicles should only be allowed into the ports on a one out (of Calais) - one in (to Dover) basis, with priority empty vehicles making their return journeys to the Continent.

Thus, for each vehicle that clears a French ports, one vehicle is allowed into a British ports for processing and onwards clearance. This means that the traffic flow is matched to the processing to the speed of the French, thus preventing the ports and ferries (and the trains) from becoming congested.

That there will be a huge drop in the export traffic is a given – but that is going to happen anyway. The more important thing is to clear the way for imports of food, keeping the supermarket shelves full and people fed.

All being well, the first few days after exit day, there may be some relaxations. More goods may progressively be allowed through the system. But until and unless the French and other Continental ports have the facilities in place to check British imports – both in terms of veterinary and other specialist checks, as well as customs checks - the flow of traffic will be drastically restricted.

Despite all that, reality is a long, long way away. Purely in terms of infrastructure, building and equipping the inspection posts and customs facilities – the actual physical structures – there is not enough time to get the buildings erected. Then staff also have to be recruited and trained – and paid for.

Yet, for all the talking, we're getting absolutely nothing from the French state – or any other European states – of any plans to accommodate the extra checks. And the thing is, until the UK has concluded its Article 50 settlement, there is no way plans could sensibly be made.

Thus we dwell in a state of complete unreality. On the front pages yesterday of the Independent and the Guardian, we got Prof Tim Lang publishing a report supposedly on Brexit and its implications for the UK food system. Yet it addresses none of the issues raised here. It really is as if really lives on a different galaxy.

Unnoticed by the likes of Lang, what we are going to see in Brexit is the supply system being smashed. That will be the immediate effect. We need to stop messing about. We need to stop deluding ourselves. The only questions are how bad, and how lasting the damage will be.  

A secondary effect of Brexit on the food supply system will be to crash some domestic wholesale prices, as produce originally intended for export is diverted onto the domestic market. The longer-term effect, though, could be disastrous, driving farms into bankruptcy, giving rise to substantial price increases. And that's without considering tariffs – but then that's a whole different question. In a chaotic system, prediction is near impossible.

Meanwhile, we have that arrogant fool, Dominic Cummings sounding off on Twitter, describing David Davis as "manufactured exactly to specification as the perfect stooge for Heywood: thick as mince, lazy as a toad, & vain as Narcissus". This stupid, stupid man is the one who ignored advice on adopting an exit plan, setting up a crass, negative Brexit campaign which is largely responsible for the mess we're in.

Cummings may even be right about Davis – a man sitting in Brussels with no notes - but he is hardly in a position to be critical of any of the players, given his own dire role in the proceedings.

With the Tory "ultras" rampant, and our all but invisible and terminally weakened prime minister unable to control her own ministers, there seems to be no one in charge. Instead, we get fatuous reports from the likes of Tim Lang who, in all the many years I've known him has never let an original thought sully his mind.

But, while the minions squabble, and the pretenders prance, reality is closing in, unrecognised and unchecked. It cannot be stopped. On exit day, the trucks stop rolling. The die was cast the moment Theresa May decided to abandon the Single Market.



Richard North 18/07/2017 link

Brexit: the persistence of delusions

Monday 17 July 2017  



I suppose the MinBrex spinmeisters must have been a little ticked off this weekend. Having got Jeremey Heywood to tell us how everything is wonderfully under control, the perfidious media – in the form of the Observer - completely ignore him and opt for Gus O'Donnell, a former cabinet secretary, to convey the message on Brexit.

This former head of the civil service – eschewing the current propaganda line – is telling us that squabbles, unrealistic expectations and overburdened administration means UK is in for a "rough ride", with Mrs May facing the prospect of crashing out of the European Union.

O'Donnell is actually given space for his own authored piece which is headed: "Brexit is a massive venture. There's no way these changes will happen smoothly". This, of course, is not only something we could have said. It is  exactly what we have been saying with increasing intensity ever since Mrs May took the disastrous step in January of deciding to walk away from the Single Market.

Needless to say, O'Donnell doesn't bring anything new to the table. His is an opinion piece and that is basically what we get. But when you're the great and the good, you can get away with doing that. You don't have to sully your brain with irritating little things like evidence or supporting material.

However, it is helpful to have that opinion, especially when the man says, "we need to start being honest about the complexity of the challenge". Presumably, he is addressing his own kind, because we (as in EUReferendum.com and friends) have been saying this for years, long before it became fashionable to do so.

O'Donnell does remind us, though, that we keep being told by [some of] our politicians that Brexit can be delivered easily. To that, he retorts: "This isn't correct". Believe me, he adds, "we are embarking on a massive venture. There is no way all these changes will happen smoothly and absolutely no chance that all the details will be hammered out in 20 months".

This is so obvious that one could wonder why it is even necessary to state it, except that, as recently as Tuesday, we had David Davis declaring that, "It will be quite tough to get customs in the right place in two years but it's doable with a bit of money".

According to this deluded man, the only delays in the system are the Continental customs authorities. This is why he thinks "a transition period [is needed]". And, on this at least, O'Donnell agrees, but he then adds that, "the time needed does not diminish by pretending that this phase is just about 'implementing' agreed policies as they will not all be agreed".

Here, then, we're getting a little streak of realism. There is an unfortunate tendency amongst the Muppets to treat the transition period as a "magic bullet", something we can just slot into place to tide us over while all the awkward little details are agreed.

This ain't so and, as we have repeatedly said, outside the framework of the Efta/EEA option, a transitional agreement will need changes to the EU treaties, requiring a full-blown secession treaty.

When I start hearing the likes of David Davis – or any of the great and the good for that matter – talking seriously about a secession treaty and what that actually involves, I will begin to accept that these people might be getting a grip of the situation. But, as it stands, bland assurances that everything is under control simply lack credibility.

Sadly, rationality and sensible analysis are taking a back seat. The argument has divided on ideological grounds. Thus, it is the likes of the Observer which are giving Gus O'Donnell an airing, while the Telegraph and the "ultra" supporters increasingly dwell in the land of the fayries.

Nevertheless, Chancellor Hammond – an earlier adopter of the transitional period idea (and only about three years behind us) – is being joined by Liam Fox, who is buying into the idea of a time-limited period.

None of these people give any indication, though, that they have the first idea of what is involved in securing a transitional agreement. Yet, in the work we undertook to complete Flexcit, we concluded that a full-blown agreement in the Article 50 two-year period was never a realistic proposition.

To that effect, an interim or transitional agreement was the only viable option, but then it was never going to be easy – or quick. Even using the off-the-shelf EEA option, we wanted to delay invoking Article 50 for as long as possible, to give us time to sort out the preliminaries, still making it a tight squeeze to get things done in time.

On that basis, aside from the housekeeping issues and the High Politics, most everything could be vectored through the EEA Joint Committee, without the time-consuming procedural constraints of the Article 50 negotiations. And remaining in the EEA significantly reduced the burden of issues to be agreed. Therefore, I have no confidence in the government's ability to secure even a transitional agreement within the next 20 months.

At least, though, the Financial Times is beginning to look at some of the specifics. And while not approaching them in anything like the detail we have done, their journalists, Chris Giles and Alex Barker, have come to much the same conclusions, citing industry as warning of "massive disruption" and plunge in output if talks collapse.

As it happens, I had a long talk with Mr Giles about this piece and he is kind enough to quote me at the end. I make the point about the economic effect of a crash-out being generally understated as only the effects on exports tend to be counted. However, there is also a significant effect arising from the disruption of imports.

Then there are such things as the pertubation multiplier, about which you will find references only in this blog – despite the damage it might cause.

For the first time also, outside this blog and the Booker column, we see in the Financial Times, reference to the Border Inspection Post problem, with yet another article warning that the UK "must accept its post-Brexit status as a third country".

This again is something on which this blog has led the way, alongside our support for Single Market retention, which was recently noted by journalist William Davison, in a long and interesting piece of his own.

On the other side of the turf, though, we have Simon Wolfson, Next boss and prominent Vote Leave donor, doing a catch-up. He has woken up to the strange absence in the government of a "clear vision on Brexit", observing that the vote, of itself, does not guarantee failure or success of the enterprise. This, we might have suggested before the referendum yet we still get the likes of Iain Martin, in all their pompous splendour, telling the world that no one listens to the Norths because we are so "unpleasant". This is from a man who, unlike Chris Giles and William Davison, has never spoken to me personally on Brexit and, as far as I am aware, has never publicly cited any of our work.

These people will steal our ideas when it suits them, most often – as Pete notes, misrepresenting it because they don't understand it. But when former adversaries such as Oliver Norgrove are coming on board, the Iain Martins of this world are themselves looking shallow and isolated.

Effectively, we also have Gus O'Donnell on board – at least in spirit. Should he need any substance to support his claims, we have done the work and published the reports which back them up. This is a far cry from the opinionated and error-strewn Telegraph which has become an embarrassment, one of its columnist still not understanding the Turkish customs union with the EU.

This is paper that would die of shame, if it had any. But along with its "ultra" friends and government minister, it is content to occupy the swamp of its own ignorance. Alongside that, we seem to have a government which itself is "tearing itself apart", unable to agree as to the line to take.

Disorganised, riven with collective delusions and misinformed by its media allies, it is unlikely that the Government can make any progress on Brexit. But, when chaos does supervene, we will at least know where to come looking.



Richard North 17/07/2017 link
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