Brexit: misdirection

Monday 18 June 2018  



Quite what we are supposed to make of Mrs May's claims of financing additional spending on the NHS from the "Brexit dividend" I don't honestly know.

On the face of it, it is an expression of extraordinary political cynicism by a prime minister who has ceased to have any concern for the truth, but it could just as easily be the act of a deluded woman who has lost touch with any semblance of reality. Either way, this a worrying development – this is not a politician in whom we can have any faith.

My best guess is that we're on the receiving end of a "look squirrel" ploy. Faced with the intractable problems thrown up by Brexit and growing disillusionment with her handling of the process, Mrs May has decided to employ the classic magician's trick of misdirection, diverting attention to the NHS. She then goes further, seeking to create positive linkage between the issues.

That the figure on offer is better than the headline claim on the side of the infamous red bus is also no coincidence. The effect (or the intention) is to restore positive vibes to Brexit, trying to overcome the loss of confidence that has been building up over the months.

It took not more than a few minutes, however, for commentators to deny that there is a Brexit dividend. Even the most optimistic of forecasts suggest that leaving the EU will come at a net overall cost and, if we fail to get a deal from the EU, losses to the economy could run to hundreds of billions of pounds.

By 2023/4, therefore, when Mrs May reckons to be pumping over £20 billion extra a year in real terms to the NHS, the Treasury will be running on air, just trying to finance existing expenditure commitments. Any increased funding will have to come from taxation or borrowing.

If what we are seeing is Mrs May abandoning any attempt to keep her claims in line with anything approximating the truth, then her action would be entirely in keeping with the way the entire Brexit debate is going. Protagonists no longer seem to feel obliged to stick to the fact, and are indulging in crude propaganda in order to make their points.

Another example of this is my one-time friend and colleague Owen Paterson, known famously for declaring that "only a madman would leave the market". Now, in a complete volte face, he is asserting that: "Unless the EU changes its tune substantially any EU trade deal on offer looks as if it will be thoroughly inferior to the WTO Free Trade Option".

Declaring that "it is time that Parliament understood this", he calls in aid a tawdry article in Brexit Central written by none other than Patrick Minford, who in turn refers us to a staggeringly dishonest polemic published by his group, the Economists for Free Trade (EFT), under the heading: "Why a world trade deal exit from the EU will be best for the EU".

What is so difficult for us, though, is that the document relies so many half-truths, errors and outright lies that, properly to dissect it would take multiples of the 14 pages devoted to the original.

Focusing very tightly on one small part of the argument, we have EFF telling us that, when it comes to the UK and EU's trade relations after Brexit, "WTO law is very clear". There can be no discrimination in standards laid down by the EU or the UK. Thus, once a "domestic" standard has been imposed it must be generalised to all foreign countries’ exporters, without discrimination between them.

After Brexit, we are told, companies which want to export to the EU will have to match EU standards and, when they do match these EU standards, "they cannot be discriminated against" – all of which sounds eminently reasonable.

Some standards", the EFF continues, "concern 'behind the border' actions, like the testing of product quality". But this is airily dismissed with the comment that, "if a company wants to export its products to the EU and the EU insists on some such testing or other internal procedures, then the company must follow them in order to sell to the EU market".

What might not be obvious to some, though, is that there is a lie embedded in these statements. Given a "no deal" arrangement, much of this testing is not "behind the border" but at the border. And this is precisely why the WTO option is potentially so damaging. Thousands of consignments daily, which hitherto would have crossed unhindered into the territories of the EU Member States will, post-Brexit, have to be checked.

In some cases, this may only amount to documentation checks but even these alone are enough to cause substantial hold-ups. But, in other instances, detailed inspections and testing will have to be carried out, routinely taking hours and, in respect of some of the testing, days or even weeks.

To get the flavour of how the EFF seeks to deceive, though, we have to dart around the publication, where we happen upon the claim that, where it comes to border checks, "the median developed country lets 98 percent of border traffic go through unchecked … and the remaining two percent checked is cleared within a day".

This, we have already been led to believe, is a situation that pertains globally, on WTO terms, where the EFF relies on spin from a Telegraph journalist on the basis of a comment said to have come from Roberto Azevedo, Director General of the WTO.

The essence of this is that we are supposed to believe that "about half of the UK's trade is already on WTO terms with the US, China and several large emerging nations where the EU doesn't have trade agreements". This, it was asserted that, "it's not the end of the world if the UK trades under WTO rules with the EU".

What was quite deliberately excluded here (and subsequently conceded) is that countries such as the US and China (and many others) do have trade agreements with the EU. What they lack are formal Free Trade Agreements. But where the likes of the US (and China for that matter) have multiple sectorial agreements in areas of mutual concern, the cumulative effect is to serve the same function as FTAs.

In the instance where the UK seeks to trade with the rest of the world, where its relations are bound only by the provisions of WTO rules, we would lack all-important Mutual Recognition Agreements on conformity assessment. Which enables huge amounts of trade in manufactured goods to pass without checks at the borders.

Here, though, we find embedded the ultimate dishonesty. According to the EFF, "leaving without a trade deal does not imply 'walking away' from the Brussels negotiations". There will, they say, "be many other aspects of the new EU-UK relationship that will need to be agreed – eg, airline landing rights".

So, we have a situation here where "no deal" doesn't mean "no deal". Instead, the EU is supposed to allow us to cherry-pick sectorial deals, to cover all those areas where we need agreements in order to facilitate trade – such as MRAs on conformity assessment, cooperation on aviation safety, type approvals of vehicles, and much else.

In the meantime, the UK has resiled on its commitment on budgetary contributions, has abandoned any attempt to maintain regulatory alignment and is insisting on "maximum facilitation" to avoid a hard border with Ireland. there is "no need to negotiate a trade deal with the EU and, hence, the onerous 'backstop'’ requirement falls away".

An assertion that, under these conditions, the EU is going to roll over and agree anything with the EU, simply stretches credulity to breaking point. Yet, only a handful of people are going to penetrate the layers of the EFF arguments and expose them for what they are – specious nonsense.

That, sadly, will not be enough to stop the likes of Owen Paterson – who really should know better – from making absurd statements, and no amount of analysis will turn the tide and dissuade charlatans such as Minford making thoroughly dishonest arguments.

To that extent, the rot starts at the top. There is no credible case to be made that, over the next decade or more, there will be a Brexit dividend. This is not merely a matter of opinion. The overwhelming preponderance of evidence supports the argument that Brexit will impose substantial cost burdens.

For Mrs May then to make claims on the basis of this non-existent "dividend" is more than just an example of episodic dishonesty. By her action, she is legitimising overt political lying at the very highest level. And, if it is acceptable for the prime minister to lie in such fashion, political discourse has sunk to a level where anything goes.

In days gone by, politicians at least made the effort to pretend they believed their own lies. But when such blatant distortion becomes the norm, politics as we know them have ceased to function. The expediency that drives Mrs May to rely on misdirection becomes a wholly destructive force, from which there is no recovery.



Richard North 18/06/2018 link

Brexit: necessary but not sufficient

Sunday 17 June 2018  



It's not very often that I actually look at the metrics for EUReferendum.com, and I had settled on the daily reader rate peaking occasionally at around 30,000.

Looking at the statistics yesterday, therefore, I was somewhat surprised to see that visitors recently peaked at well over 100K (before the Financial Times intervention) and we're regularly getting 80-90K, with the average well above 50K. That effectively means that we are seeing in excess of 1.5 million visitors each month.

This, of course, is a testament to our readers and in particular to those who so generously contribute financially to the site, enabling us to keep going. And apart from some very welcome single contributions, our special thanks go to those we have signed up for regular donations. This steady trickle of funding gives me the confidence to continue without having to worry too much about where the next bailiffs are coming from.

The elevated visitor rate also gives us a voice, when otherwise the legacy media and the establishment would have buried us – having done all they could to exclude us from the debate. And I do enjoy the stern ticking-off from the pompous ideologues on Twitter who never miss an opportunity to finger-wag, telling us that, if only we were "nicer" and more conciliatory, people would start listen to us. As I said yesterday, "this isolation is killing us".

What is most ironic of all in this context is that the attention Pete gets on Twitter is usually proportionate to the number of insults he deploys. His serious, well-considered technical posts are studiously ignored by the legions of "mongs" until they feel sufficiently slighted to intervene, repeating that rather unconvincing mantra that they never listen to him because he is so "horrid" – whence his hit-rate soars.

The most interesting development here, though, is readers volunteering new and unusual insults, enabling Pete to keep up the volume without having to repeat himself too often.

Both of us certainly gets to a point when there seems little value in engaging with elements of the self-appointed commentariat, such as Sheila Lawlor, Director at Politeia, "where she directs the economic, education, constitutional, and social policy programmes".

This woman is part of what Pete calls the Brexit blob (pictured), seen recently writing for Conservative Home. There, she asserts that not only could UK-EU trade continue painlessly and with profit to both sides (either under current international trade law without an EU customs union, other arrangements, or association through the EEA) but a "no deal" could also bring the economy a much needed Brexit boost as it reboots after March 2019.

Already, she chirps, "the rules are in place for friction free UK trade with the EU", adding that, "the WTO prohibits members from any discriminatory barriers or action against countries with regulatory convergence" and then that, "most of the world's trade (around 96 per cent) happens under the WTO umbrella with rules that require trade partners to offer most favoured nation (MFN) terms, oblige members to facilitate trade and customs arrangements, and simplify those for land borders".

That she should be writing this sort of tosh, nearly two years after the referendum, allows the inference that the woman is so stupid that it's a wonder she is able to dress herself unaided each morning. Given the sort of stuff I've been writing on the aviation industry and other industrial sectors, this also suggests an alarming degree of insularity – and even arrogance. Of the 100K-plus visitors to this site, Dr Lawlor is quite obviously not one of them.

The sad thing, though, as Booker tells us in his column this week (no paywall), the likes of Lawlor are not alone in their blind complacency that "frictionless" trade is a possibility after Brexit without any special efforts.

Booker has picked this up personally for it was at his behest that I accompanied him to see the "captains of industry" last week, now leading him to write under the headline "Businesses still haven't woken up to the calamity of Theresa May's decision to leave the single market".

If you want a reinforced dose of stupidity, you can also visit the comments on the Telegraph website where there seems to be an inexhaustible supply of "mongs" only too willing to parade their ignorance.

Setting the scene for the less gifted of his readers, Booker notes that there are fewer than two weeks before the European Council at which we were supposed to agree the terms of our EU withdrawal agreement. Yet, he says, while our politicians squabble around in circles without any real clue as to what they are talking about, we still face total deadlock on the Irish border, that original issue on which everything else was meant to depend.

There is some small comfort in the knowledge that "cannier businesses such as Jaguar Land Rover, major pharmaceutical companies and foreign-owned banks have woken up to the implications of Theresa May's decision to exclude ourselves from the regulatory system that allows them to trade in the single market.

Some of those picked up the information early from this blog, getting information that others have spent thousands of pounds in consultancy fees to acquire – later and not in as much detail. But, whatever the source of their information, they are quietly making their dispositions, relocating key parts of their operations to the continent, along with personnel and funding.

But, as Booker and I confirmed last week (adding to indications gained elsewhere), the vast majority of businesses that rely on trade with our largest export market still have no idea of what could soon be hitting them. Booker tells his readers that when we tried to explain the problems to the senior executives of one major company that will be seriously affected, we were airily told, "Oh, this could never happen".

The root of the problem, of course, goes back to the decision by Mrs May, January year last, to extract us from the Single Market. If only she had properly understood what she was letting us in for, Booker says, she could long since instead have applied to join sovereign Norway in the European Free Trade Association and thus remain in the wider European Economic Area.

On the other hand, sectors such as the aerospace industry worth £74 billion a year (EU-wide), including Airbus, may at last be waking up to the devastating consequences of our decision to leave the Single Market.

But, as Booker observes, when the aviation manufacturers' associations, representing 1,000 firms, recently sent an appeal to Michel Barnier, all they could ask for was a special deal to allow them to continue trading with the EU, on terms which Barnier has already made clear the rules could not possibly allow.

What makes all this so terrifying, says Booker, is that 95 percent of this was wholly avoidable. As he has said before, and says again: if only Mrs May had properly understood what she was letting us in for, she could long since instead have applied to join sovereign Norway in the European Free Trade Association and thus remain in the wider European Economic Area (EEA).

Despite those fools who assert that the Efta/EEA option means we haven't properly left the EU, we would be completely outside the political EU and three quarters of its laws; free to make our own trade deals with the rest of the world; and even to exercise selective control over immigration from the EU.

Above all, Booker reminds us, we would have been free to continue trading within the single market much as we do now, and this prospect of an economic catastrophe need never have been bearing down on us.

At least a handful of Labour MPs dimly understood this. But the rest of our politicians, like the chairman of the company we lunched with last week, have remained lost in the wishful thinking that such a disaster "could never happen". As we shall see, it can, and we will have brought it on ourselves.

And that is as far as we get with Booker. As am I, he is acutely aware that the Efta/EEA option is only part of the solution. It is necessary for us to continue trade relations with the EU after Brexit, but it is not sufficient.

EEA participation alone does not solve the regulatory issues in aviation safety, or in a multiplicity of other industries. We will need bolt-on agreements to deal with the other issues, not least VAT cooperation, before we can even start thinking of frictionless trade.

The trouble is that, when people such as Lawlor haven't even mastered the basics, there is not room for discussing the more advanced issues that we are addressing on this blog. The media narrative is permanently locked in at Key Stage One level, a grotesque groundhog day of its own, where the commentariat constantly churn over the same set of factoids, unable to progress to the next stage.

This is where it gets really worrying. The Brexit debate cannot be summed up in a few woolly clichés. The aviation story tells us how complex things really are. If the debate never gets past the soundbites, there is no chance of getting to grips with these complex issues.

Nevertheless, the current level of readership of this blog does give us hope that there is a growing number of people unsatisfied with the fare they are getting from the legacy media and the blob. That legacy media circulation (and web visitors) is declining, while ours increases, tells its own story.



Richard North 17/06/2018 link

Brexit: no room for doctrine

Saturday 16 June 2018  



Following the piece I published yesterday on aviation safety regulation and Brexit, I spent the best part of the day reading up on various aspects of that regulation, with the general view of better understanding the nature of the beast and how it would be affected by our leaving the European Union.

In so doing, I found myself confronted with such vital issues as the difference between Commission Regulation (EU) No 1321/2014 and Commission Regulation (EC) No 2042/2003 as amended (the answer to which can be found here and such arcane questions as to whether I can import a rebuilt engine and associated components from the US.

The answer to that apparently simple question brought into rather fine focus the fact that I was out of my depth. How else could one describe one's own status when confronted with this:
Under the terms of the EU/US bilateral agreement (BASA), you can import an engine with a "rebuilt" status in block 11, only when it has been released by the original engine manufacturer on a Form 8130-3 using the blocks 13a. to 13e. (left side).
And if that wasn't enough, the response (provided by EASA) helpfully continued:
Please note that Form 8130-3 with "rebuilt" status are not acceptable for components other than engine (regardless whether it has been released on left or right side) therefore the components accompanying the rebuilt engine should either be released REPAIRED/OVERHAULED… (right side) or NEW (left side).
The EU/US bilateral agreement (BASA), by the way, is that document to which I have referred earlier in its 135-page iteration, but is available here as a 140-page consolidated version, taking into account revisions up to 3 May 2018.

This has grown from its original length of 42 pages agreed in 2011 and brought into force by Council Decision 2011/719/EU of 7 March 2011. This, incidentally, is one of only three of the EU's bilateral agreements. The others are with Brazil and Canada. An agreement with China has been concluded but not signed, and negotiations with Japan are under way.

It is these agreements which provide the template to which the UK might look for its own relationship with the EU post-Brexit, in the field of aviation safety. And here, it is important to note that they cover only the EU, not the whole of the EEA. In each case, the parties to the "bilaterals" have signed separate "working arrangements" with the four Efta States, such as this one between Canada and Iceland.

Going into the detail of the EU/US bilateral, one learns from EASA that this has spawned such things as "release documents" signed by the European Community, referred in AMC M.A.501(a)5(a)/ AMC 145.A.42(a)1a). It is such statements as these which further convince me that I am totally out of my depth.

As an aside, it is experiences such as these which also reinforce my disdain for that happy band of creatures who so easily claim to be "experts" in matters of EU law. Material produced by EASA (including the above) is part of the EU's acquis and that relating to the regulatory system would require a lifetime of study to deliver a semblance of expertise.

Such as I have learned, however – reinforced by my study from the last day – tells me we are dealing with something hideously complicated – and more so as competences are shared between the European Commission and its executive agency, the European Aviation Safety Agency (EASA), and the Member States and their own aviation safety agencies, such as the UK's CAA.

Certainly, the regulation of aviation safety is not the place for the fainthearted or the amateur, and thus the impact of Brexit was always going to be complicated. Perhaps this is the most complex of all the regulatory areas which will need to be tackled in order fully to detach us from the EU.

Unsurprisingly, Mrs May has expressed a preference for the status quo, with the UK retaining its membership of EASA. But that cannot happen. The EU's agencies are servants of the Union, established to service the Member States under the aegis of the European Commission. Concessions are made to Efta States, but even they with a form of associate membership of the EU, have no voting rights.

But what can be readily established is that, outside Efta and the EEA, our target must be a bilateral agreement with the EU. These are highly formal and comprehensive arrangements which not only set up the areas of cooperation but also establish joint bodies which enable the agreements to be monitored, interpreted and developed.

In the case of the United States, there is the "Bilateral Oversight Board" (no one seems to want to call it "Bob"); Canada has a less formal Joint Committee and Brazil has a Joint Committee of the Parties as well as Joint Sectorial Committees on Certification and Maintenance.

The big problem we have at the moment is the same problem we have in agreeing a post-Brexit trade agreement with the EU. The aviation safety "bilaterals" are full-blown treaties so we cannot even begin to negotiate with the EU until after 29 March 2019, when we formally become a third country. Equally, we cannot enter into the less formal "working arrangement" type of relationship with EASA until we are a third country.

This is where the ADS/GAMA letter to which I referred yesterday gets really interesting. These aviation bodies have become aware of the effects of Brexit and, in particular, the peril of withdrawing without a transition period. Ideally, they argue, the difficulties could be addressed by talks directly between EASA and the CAA, concluding a "separate aviation deal agreed prior to March 2019".

However, the very solution that the industry seeks cannot be achieved which means that, if there is a "no deal" Brexit, catastrophic disruption to the aviation industry is inevitable. In legal terms, there is simply no way round this.

What this effectively means is that – as I stated yesterday – "no deal" is not a serious option. The effect on the aviation sector alone is enough to rule it out. Factor in all the other problems, in other sectors, and no responsible government could allow it – and nor could MPs, individually or collectively, permit it.

This makes a complete nonsense of the endless dramas we have been seeing in Parliament. Given the prime minister's determination to leave the Single Market, in order to resolve the Irish border issue and move to a transition period, we have no option but to accept the text of the EU's proposed withdrawal agreement, including the "backstop". The idea that Parliament has the option of a "meaningful vote" is absurd. It can accept what government agrees, or drive the nation into chaos.

And that brings us back to aviation safety. No MP is in a position to understand the implications of their votes unless they also understand the outcome of a "no deal" on aviation and other industry sectors. This particularly goes to the "Ultras" who are actively campaigning for a no deal Brexit.

These people need to know that we cannot walk away from the EU without putting in place the structures and agreements which will enable vital functions to continue. We have to negotiate deals because the alternatives are unthinkable.

If our MPs get it wrong, the jobs of hundreds of thousands will be lost, many thousands of businesses will be destroyed and the economy will be irrevocably damaged. There is no room here for doctrine, or riding political hobby-horses. The fate of the nation is at stake.



Richard North 16/06/2018 link

Brexit: a shockwave of tsunami proportions

Friday 15 June 2018  



Following on from my discussions on Wednesday with that dismal example of British management, it was already evident that the whole of industry was not asleep to the potential adverse consequences of Brexit. The pharmaceutical industry (alongside banking) was ahead of the game, and some sections of the chemical industry are aware that trouble lies ahead.

Slow off the mark (publicly, at least) was aerospace manufacturing, which I flagged up as a high-risk element in November last year and again in December, with a further piece in April.

The attention paid by the legacy media has been minimal, although last April the Telegraph and a few others took brief notice as Rolls-Royce engines reported that it was to transfer the "signing off" of British-made airliner engines to Europe. This hardly got the measure of the story but, at least, the paper revisited the general story a few days ago (11 June), with a more realistic headline (online), declaring: "Warning aircraft could be grounded as aerospace industry calls for it to be separated from Brexit talks".

It says a lot for the febrile mood of the media, obsessed as it is with the empty posturing of parliament, that this was given a low-key slot in the business section and (as far as I can see) largely evaded the coprophagic tendencies of the rest of the legacy media.

Yet, the essence of the Telegraph story was that two aviation bodies, ADS and the General Aviation Manufacturers Association (GAMA), had joined together to write a letter directly to Michel Barnier, asking him to intervene directly to mitigate the potential damage which Brexit could cause.

It says something that these bodies are writing to Barnier rather than his UK counterpart, or even a departmental minister, but then the scenarios which they are addressing are not only potentially devastating, but could have consequences for the aerospace industry throughout the entire EU.

The issues addressed centre on the points I have raised in my posts – that, in the absence of a Withdrawal Agreement, approvals of aircraft and components made or maintained (or designed) in the UK will no longer be valid.

As a result, "any aircraft containing engines, parts and spares manufactured in the UK will not be able to fly under EASA's jurisdiction", and UK businesses "would not be able to deliver products such as engines and propellers to EU manufacturers, thereby stopping aircraft production in the EU".

One has to step back to take in the full implications of what is being said here, not only will thousands of aircraft be grounded but also no further aircraft in the entire EU area can be built or maintained using parts manufactured in the UK, closing down an industry turning over in excess of £70 billion a year.

Doubtless, the extravagant nature of the threat is the very thing which is preventing it being taken more seriously. The argument will be raised (as it was on Wednesday by the fine example of British management that I met) that the situation is so serious that neither the UK governments nor the EU could allow it to transpire.

In this, there has to be an element of truth. As we have seen with vehicle type approval legislation, picked up by one of our eagle-eyed commenters, the EU is preparing to make adjustments which will enable European manufacturers to keep operating.

This has been noted, incidentally, by the Financial Times with reference to this blog and its "veteran Eurosceptic author who rarely misses such things (or the chance to be grumpy about journalists)". The ability to keep on top of things, though, is why I value so much the interactive comments, where readers volunteer information that is then fed back into the blog.

However, should the Commission deem it necessary to make adjustments for the aviation sector (which undoubtedly it will), then it stands to reason that it will attend to the needs of EU enterprises first. The 207 CAA-certified British firms will be at the end of the queue, and what is settled will not necessarily be to their advantage.

Actually, dealing with the issues is complex. The ADS/GAMA letter talks of the need conclude bilateral aviation safety agreements, on the lines of the 136-page US-EU Agreement, and this sort of agreement does not come easily or quickly. Furthermore, the UK cannot negotiate with the EU until it is a third country, which means that talks will have to be pursued during any transitional period.

This is one of the reasons why seasoned commentators don't think the EU will cut the UK adrift yet – not in the coming June or even on Brexit day on 29 March next year – no matter how provocative the behaviour of the UK government. The EU and Member State governments are simply not ready: they need more time to get their ducks lined up.

However, the issues raised by aerospace manufacturers are by no means the full extent of the problems faced by the aviation industry in its broadest manifestations. If the Telegraph hacks had done the journalistically impossible, and read the relevant Notice to Stakeholders (or the EUReferendum.com blogposts), they might have got a fuller picture.

They would have found that the EASA jurisdiction, and the writ of EU law, does not just cover aircraft and their parts. It extends to such things as operating certificates for aerodromes, air traffic management and air navigation system providers.

In the event of the UK government failing to settle a transitional agreement, on the stroke of midnight (our time) on 29 March 2019, no EU-registered aircraft will be able to fly into UK airspace (as this would involve relying on uncertified air traffic management systems and navigation beacons). And even if they could, they would not be able to land at any UK airport. Heathrow and Gatwick will be closed to them for the duration.

I wrote about air traffic management back in February last year, but that issue has been hardly rehearsed in public. And again, it could be argued that the EU could never allow approvals of ATM services to lapse, as it would affect air services throughout Europe, as well as trans-Atlantic, trans-polar and other services.

That aside, there are numerous other functions, such as licences and medical certificates for air traffic controllers, certificates for air traffic controller training organisations, certificates for aero medical centres and aero medical examiners responsible for air traffic controllers, certificates for persons responsible for providing practical training or assessing the skills of air traffic controllers.

There are also pilot licences, pilot medical certificates, certificates for pilot training organisations, certificates for aero-medical centres, certificates for flight simulation training devices, certificates for persons responsible for providing flight training, flight simulation training or assessing pilots' skill, and certificates for aero medical examiners, and also certificates for air operators and attestations for the cabin crew.

Brexit is akin to dropping a huge rock into the aviation industry, causing a shockwave of tsunami proportions, the potential consequences of which have not yet come to be appreciated. And, because our international aviation agreements are wrapped up with the EU, it will have global impact.

Getting the attention though, at the moment, is the fate of Rolls-Royce and its announcement of 3,000 job losses. By the time Brexit is over, we could be looking at losses in the hundreds of thousands, and the wreckage of a once-vibrant industry.

If this alone makes a "no deal" scenario an unlikely proposition – no matter what the loons say - the way Mrs May is handling the negotiations means that the "accidental Brexit" cannot be ruled out altogether. It seems we're more reliant on the good sense of EU players than we are our own government to avoid a disaster. But, if that is the case, there will be a price to pay and it will not be to our liking.



Richard North 15/06/2018 link

Brexit: open thread

Thursday 14 June 2018  



I was out most of yesterday at the coal face, discussing with the chairman, chief executive and directors of a major, public company, the impact of Brexit on their operations – some of which were not entirely unrelated to the picture shown above.

Many points came across, one of which was the profound ignorance of any practical detail of impacts. The company has received nothing official from government, from trade associations or customers, with no warnings of any nature to prepare for Brexit day. In their absence, there was no great concern that there were any serious issues which might affect the company.

There was no awareness of the availability of EU material – such as the Notices to Stakeholders. On being advised of their existence, the view was taken that these simply set out a negotiating position. They were not taken as indicative of state of the art.

With the chairman enthusiastically pro-Brexit, he offered the view that the company would ride any impacts. He firmly believed nothing serious was likely to happen – it was not in the interests of the EU to allow it; the UK government would make sure it didn't happen and, in any case, the Germans would not allow it as they wanted to trade with us.

None of those present believed the EU would (in their terms) erect any new barriers against UK goods – for the reasons specified above. Neither the chairman nor the directors had any concept of the Single Market being an entity where the barriers already existed and the UK was moving outside them.

No systematic (or any) study had been carried out within the company on potential adverse effects of Brexit. I was the first to have addressed the board on the issue. My warnings of potential problems were not believed.

I am still processing the information and, having got back late after many hours driving, I'm not really in a position to write a coherent post. Nevertheless, despite being out of touch most of the day, I am aware that the Commons rejected the Lords' amendment on the EEA.

This hardly came as a surprise. There is no great enthusiasm within the ranks of the Tories and, after Corbyn decided that Labour should abstain, there was no momentum to see the measure carried. One can quite sympathise with the frustration of the Labour MPs who defied their whip and voted for the amendment.

What is also frustrating is the loathsome slackness in the way the media report the issue – after all this time. This is the best the BBC can do:
In return for market access, the latter are obliged to make a financial contribution and accept the majority of EU laws. The free movement of people also applies in the zone as it does in the EU.
The piece also allows "critics" to say it (EEA membership) would require the UK to adhere to EU rules without having a say in them - and would not be in keeping with the spirit of the 2016 referendum result.

There is no way of dealing with this low-grade reportage. This is a state broadcaster that has given up even trying for accuracy and objectivity, and the rest of the legacy media is no better. And, if the media can't even treat the Efta/EEA option seriously, it's hardly surprising that our lacklustre politicians find it so difficult to get a handle on it.

Nevertheless, from me, this will have to suffice for the moment. I'll leave this post as an open thread and add to it through the day.



Richard North 14/06/2018 link

Brexit: who cares wins?

Wednesday 13 June 2018  



If chaos and confusion attending the end of the debate on the Lords' Brexit amendments, with the word "shambolic" freely being used, one has to observe that this probably signifies nothing more than a House of Commons that has disappeared up its own fundamental and is now destined for the irrelevance that it has so assiduously earned.

In all the torrent of verbiage that been devoted to this extraordinary day that was yesterday, not a single commenter seems to have observed that the government is being asked to concede something that it is not within its gift to offer – namely a role for Parliament in the talks with Brussels, should Mrs May's designated team find it impossible to get agreement on the UK proposals.

That the prime minister, in the event of the UK failing to reach an agreement – which looks ever-more likely – should then be required to consult with (or take instructions from) Westminster as to what line she should then take, is a counsel of absurdity so manifestly improbable that even the scriptwriters of a political satire might have difficulty raising a laugh with it.

The underlying point here, of course, is that come the October European Council, the UK and EU negotiators will be expected to have agreed the text of a formal Withdrawal Agreement (including a protocol on the much-debated Irish border question), which will then formally be presented to the European Council signifying the end of the negotiations.

Theoretically, at this point, the text must then be approved by the European Council, by the European Parliament and then by the UK Government – the latter requiring the assent of both Houses of Parliament.

However, it is not only the Withdrawal Agreement that must be finalised. The parties must also conclude discussions on the framework for a future relationship, taking in trade, security and much else – with the production of a political declaration, the text of which has to be submitted for agreement by all parties.

Given that there has been no movement since December last on the Irish border question (with other issues also unresolved), and the UK government has yet to publish its proposals for a future partnership, its is quite conceivable – almost to the point of certainty – that the October deadline will not be met.

Aside from the Withdrawal Agreement, the certainly of failure is more or less assured from the cretinous statements published by the Department for Exiting the EU in an animated tweet, setting out its preferred options for trade (pictured).

The fact that we are now seeing Trumpesque "negotiation by tweet" is bad enough, but when we see the government declaring that it "wants seamless and frictionless trade of goods after we exit the EU", then proposing "a comprehensive system of mutual recognition", it is pretty obvious that, even if the lights are on, there is nobody at home.

Taken straight from the Legatum playbook, it will come as absolutely no surprise to learn that there is precisely zero chance of the EU accepting a trading relationship with a third country based on the mutual recognition of standards. This simply isn't going to happen.

Facing that near-certainty of failure to agree in October, one can see a possibility of the talks going into overdrive, and then being extended into the autumn to allow parties more time to resolve outstanding issues. In that the six months allowed for "ratification" is fairly generous, one could see the talks running into Christmas and even the early New Year.

In such situations, hope springs eternal. Talks are never written off until they are over – and the deadline even in January 2019 will not have expired. Even at this late stage, therefore, it will not be possible to state with conviction that the talks have failed and that there is "no deal". That status can only exist after midnight (our time) on 29 March 2019.

Between now and then, it is hard to see what useful (or any) contribution Parliament could make to the negotiations. It certainly could not veto a "no deal": that is completely outside its powers. In deciding whether there will or will not be a deal, the stance of the European Council and the European Parliament will be final. If they decide there will be no deal, there will be no deal, regardless of anything the UK government or Westminster says.

On the other hand, the negotiations – such as they are – are between the European Commission, represented by Michel Barnier as the chief negotiator, working to a mandate decided and set out in writing by the European Council, and the UK government. The Westminster parliament has no locus and cannot intervene directly in the talks. It can only work through the UK government.

With that, it is hard to see how Westminster – even if it was able to speak with a single voice – could credibly instruct the government on a "line to take", much less monitor delivery. It is even harder to see how, at a late stage in the talks, the UK government (independently or at the behest of parliament) could introduce a new or different line of approach. Any new direction would require the Commission to go back to the Council for a revised mandate and an extension of time (the latter also needing the assent of the UK government).

A new settlement then agreed (if, indeed it was agreed) would then have to be put to the Council and the European Parliament for ratification and, of course, the UK government and the Westminster Parliament - taking far more time than is available.

Inevitably, the chances of such a scenario materialising would seem to be rather slender. The most likely outcome is that M. Barnier will seek to continue talks with the UK government on the basis of his current mandate. He is unlikely to entertain any radical departures which would require him to seek a new mandate – with all the delays and complications that that would entail.

Whatever the ambitions of MPs (individually or collectively), therefore - and the febrile "deals" cooked up over the last days and hours with Mrs May - the die is already cast.

As currently constituted, there is no useful role that the Westminster parliament can play in these talks, other than to approve any settlement (should one be agreed). If it refuses approval, then the outcome will be "no deal". That makes the choice what it has always been: take it or leave it. The idea of a "meaningful" vote is delusional.

Bearing in mind that the outcome will most likely be a failure of the parties to agree, this actually renders parliament obsolete – an idle spectator with no more power to influence events than the rest of us. MPs, constrained by existing ties, will be able to make a lot of noise, but will not be able to do much else.

The only way this sorry affair can be brought to any different resolution is if parliament stopped playing procedural games and decided to exercise real power. It needs to bring the government to book by means of a vote of confidence – forcing a new leader to form a new government.

It is only this, presented to Brussels, which might have sufficient impact to change the direction of the talks, allowing the introduction of new ideas such as the adoption of the Efta/EEA option. But this would also require a recognition that more time is needed, with a formal application for an extension of the Article 50 period.

Yet nothing of the events of the last few days – or weeks – have brought us any closer to this state. The frenetic manoeuvring in the Commons to the accompaniment of the over-excited posturings of media commentators has achieved precisely nothing. And with nothing changed, the shambles of yesterday is the shambles of today.

The essential problem here – as we have observed so many times – is that both the legacy media and the politicians have lost the plot. Unable to come to terms that we are playing out a drama on an international stage, where our fate depends as much on foreign actors as it does our own, the politico-media nexus has retreated into its comfort zone and cultivated an infantile demeanour to armour itself against the real world.

Any solution lies in its own hands, but such is the degree of infantilisation that there can be no confidence in the this being understood and actioned. We seem doomed to watch the play being acted out, children trapped in personas they don't understand, unable to break free and play sensible roles.

Thus, as the media hyperventilates and the commentariat so comprehensively misses the point, all we can do is watch and record, with growing dismay. For, whatever the prizes that the gabbling children of our capital so value, the game they are playing is not worth a light. As they squabble to dominate the dunghill of Westminster, all we can say is: who cares wins? The real game is elsewhere.



Richard North 13/06/2018 link

Brexit: the bill comes later

Tuesday 12 June 2018  



I think it's fair to claim that, over the years, we've been at the forefront on this blog, struggling to define the consequences of what has become termed a "hard" Brexit. And pointing out the pitfalls is done for no other reason than to better enable us to avoid them – in the same way that a passenger in a car will point out the potholes to a driver.

From that point of view, we are not seeking out obstacles for the sake of it. If there are ways of mitigating the effects of a "hard" Brexit, these should be explored. It is not in the interest of any sane person to magnify its effects or to ignore measures that could reduce its impact.

To that effect, just over a week ago – in the wake of the Sunday Times piece that forecast Armageddon in the wake of a "hard" Brexit – I looked at some of the ways the potential logjam at the ports could be reduced, or even avoided altogether.

A particular problem for the UK is in dealing with food consignments from EU (and Efta/EEA) Member States. Currently covered by Single Market provisions, they enter the country without any border checks. But, once we leave the EU, the UK will be required under WTO rules to impose checks on those goods to match those applied to other "third countries".

In the absence of adequate inspection facilities – and in any event – the time taken to subject consignments to the full range of checks would undoubtedly lead to significant delays in the ports, sufficient to bring the whole system to a grinding halt, creating the spectre of rotting food at the docks, empty shelves in the supermarkets and people going hungry.

However, in my piece from just over a week ago, I discounted the idea that the UK would purposefully block the import of foods from the continent. For a period at least, I suggested, the UK would most likely waive those requirements in order to keep food supplies flowing.

On the ball as always, we now have the legacy media trailing in our wake, the intervention in this case triggered by Rees-Mogg's comments yesterday when he argued that there would be "no need for customs checks at Dover on EU imports in the event of a no-deal Brexit". His thesis, therefore, is that any delays for exports to Europe would be France's responsibility.

Mogg hasn't really got the measure of this, so it's more a matter of him being right for the wrong reasons. "There will be no need to have any delays on goods coming in from the continent in the event we leave with no deal", he says, "because goods that are safe on 29 March will be safe on 30 March and that means inbound traffic ought not to suffer any delays because it will be our choice".

The facts of the matter, however, are that the UK will be obliged under WTO "non-discrimination" rules to afford the same treatment to EU goods as it current does to goods from third countries. But, under Article IX:3 of the Marrakesh Agreement establishing the WTO, it is entitled to seek a waiver, a provision which allows it to set aside any obligation imposed under the WTO/GATT agreements.

I've written about this back in 2016, referring to a book on the subject by Isabel Feichtner called The Law and Politics of WTO Waivers: Stability and Flexibility in Public International Law. This positions the "waiver" rather neatly as a "safety valve" which allows in "exceptional circumstances" provisions of the agreements to be suspended.

In procedural terms, an application for a waiver must be processed in 90 days – ostensibly by the Conference of Ministers with the support of at least three fourths of the Members. In practice, decisions are usually made by consensus by the General Council, and they are rarely rejected. From 1995 to 2010, over 400 applications were approved.

Given that there would be no difficulty in describing the circumstances of Brexit as "exceptional", the UK should not find it hard to get approval and, even if it is caught out by the 90-day timing, in practice applicants can apply the terms of waivers unilaterally, pending approval. By the time any dispute procedure gets under way, the full waiver will be in place.

Ponderously, the chief executive of the British Ports Association, Richard Ballantyne, finds it "difficult to see a situation where food and other products could be legally imported from another customs territory without being subject to some kind of border check".

Nevertheless, his Association understands that "government may choose to waive these in event of no deal", but concedes: "we are not sure of the basis of that decision". If he read this blog, he might be better informed but, as it stands, he presumes that this "would be an emergency option". Rightly, he adds that "it is certainly not a comfortable fallback position in the medium or long term", but then we are only talking about measures to get us over a short-term crisis.

The award for pomposity, however, goes to Steve Peers, a University of Essex academic and self-described "expert" in all things to do with Brexit. This "legal expert", grandly questions Rees-Mogg's claims, declaring that it is "hard to see" how unilaterally waiving checks "would be compatible with WTO law".

"The basic idea", Peers opines, "that we will check non-EU goods but not check EU if there is no trade deal done with the EU or a customs union agreement will violate the basic rules of the WTO, because that would be deemed discriminatory".

For sure, on the face of it, unilateral action would be contrary to the provisions of the WTO, etc., agreements, but even then this is public international law. It doesn't behave the same way as statutory law. For there to be an actionable claim, aggrieved nations have to demonstrate what is known as "nullification or impairment" – i.e., real loss. There are no "offences" as such and mere breach of a provision is not enough to justify dispute proceedings.

In addition to the waiver process, though, there are also the security exceptions, where any contracting party may take "any action which it considers necessary for the protection of its essential security interests", arising iter alia from an "emergency in international relations".

The "emergency in international relations" is so widely drawn that one could easily imagine that a "no deal" scenario in Brexit would fall under this exemption. And, where applicable, measures may be taken unilaterally which are not even amenable to the examination by the dispute panel.

Nevertheless, if this potentially keeps incoming goods flowing, there is still the likelihood of outgoing ferries (and Eurostar trains) being unable to offload at their destinations, as vehicles awaiting clearance back-up at the ports, causing congestion.

An answer to that, as I have already pointed out, is to manage the loading process so that vehicles are not allowed onto their transports (trains or ferries) until an equivalent number have been cleared at the other end and released from the ports.

This could mean sending transports to the continent either empty, or laden only with empty vehicles returning after delivering goods to the UK. This would keep the goods flowing, although it would have a massive effect on our exports, substantially increasing our trade deficit.

Nor does this rule out more proactive measures. It will be known that certain loads presented to EU Member States border authorities simply will not get cleared. Until the UK is re-listed for the relevant products, no live animals or foods or other products of animal origin, will be admitted into the EU Member States territories.

With these and other products, carriers can be subject to screening by UK authorities and only allowed movement permits if it is believed that goods will be accepted by EU Member States. Without those permits, vehicles will not be permitted to travel to the ports. At the ports themselves, port owners or managers may prohibit entry to vehicles without movement permits.

Given a certain amount of planning and anticipation, therefore, there is no absolute reason why we should see a re-run of Operation Stack on or after Brexit day. The reality might be completely contrary to expectations, with the ports themselves and their approach roads uncannily clear as the trucks are forced to stay at home.

The damage will not necessarily be measurable in terms of visible congestion but in lost trade and reduced economic activity. One can expect the value of the pound to fall as a result, accompanied by a surge in inflation and then a build-up of unemployment.

Deprived of their headlines and pictures of congested motorways, the media will have to rely on archive material (pictured) and might be easily fooled into believing things are under control. But the bill will come – and be higher than anyone could begin to expect.



Richard North 12/06/2018 link

Brexit: going round in circles

Monday 11 June 2018  



So we prepare for the tedium of wasted days in Parliament as MPs gather to debate and vote on a series of amendments to the EU Withdrawal Bill. The waste is evident as, whatever the outcome(s), they will have no impact whatsoever on the Brexit talks.

Pride of place – if that's the right term – is a fatuous amendment tabled by Labour, under the aegis of Kier Starmer, which seeks to add to the Bill the following:
It shall be a negotiating objective of Her Majesty's Government to ensure the United Kingdom has full access to the internal market of the European Union, underpinned by shared institutions and regulations, with no new impediments to trade and common rights, standards and protections as a minimum.
We've been through this, of course. You can't have access, full or otherwise, to the internal market – aka Single Market. As a regulatory union, you can either be in it, participating fully, or you're out. There is nothing in the middle.

This is why terminology, and its precise use, is important – presupposing that there is a basic understanding of the underlying concepts which give rise to the terminology.

It would have helped if the European Union itself had avoided the term "internal market" and used the more graphic "regulatory union". That would have avoided a lot of confusion and, perhaps, allowed us to avoid a few of the more obvious conceptual pitfalls.

Nevertheless, the concept is not that hard to understand. The "regulatory union" means that its members adopt common rules, common administrative, surveillance and enforcement systems, and common dispute resolution. They must also accept the jurisdiction of a governing body which has to power to monitor and enforce compliance with the rules and systems which bind its members.

But then, just supposing the Starmer amendment was passed, and adopted by the government. Mr Davis would toddle off to Brussels and knock on M. Barnier's door and ask him if we could have "full access to the Single Market".

The Commission is just as capable of imprecise language as the best of us but, if Michel was on the ball, he would say, "Mais oui Monsieur, you can 'aff access to the markets of our members. But, he will tell us, that means you must stay in the regulatory union, with all that that entails – including the four freedoms, most notably freedom of movement.

But, it's there, via the very mouth of Keir Starmer, that we find ourselves entering a whole new world of Alice in Wonderland.

Marr does suggest the EEA as an option but this is dismissed by Starmer. Not too well up on his history, he tells Marr that the EEA was the agreement hatched out in 1992 by Norway, Iceland and Liechtenstein. In fact, there were seven Efta countries originally party to the Final Act: Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland.

It may be a minor point but it goes to the man's concern for accuracy and his powers of observation. In the EEA, Starmer goes on to say, you are not in a customs union with the EU. To test that proposition, he went to Norway and then to the Norway-Sweden border to see for himself what an EEA border looked like.

All he learns from the experience, though, is that "there is infrastructure there, there are checks there, you have to hand in your papers". On that basis, he asserts, "it is totally incompatible with a solemn commitment to no hard border in Northern Ireland".

One has to say that if Starmer was really committed to a solution, he would have dug a little deeper. The border between Norway and Sweden is as "hard" as the two countries want it to be, or will tolerate. Within the framework of the EEA, cross-border checks are limited but the countries have come to an acceptable solution. Given the political will, the investment in more sophisticated system would follow and the hard elements of the border would disappear.

Outwith the EEA, however, he falls back on his amendment, declaring that we should "step back" and "accept the challenge about the single market" - set out "in a way that makes sense for the 21st century for the UK".

This, he recognises, means that "there are going to have to be shared regulations and shared institutions". In Northern Ireland, he says, "you can't have standards one side of the border with different standards the other side of the border. Everybody, I think, knows and understands that".

But, on the "indivisible" question of freedom of movement, he says, "that's going to have to be part of the negotiations". He reminds Marr that, in the Labour manifesto , it was made clear that freedom of movement would end when we leave the EU.

Marr, not unsurprisingly, observes that Labour wants "all the advantages" plus "no freedom of movement", to which Starmer asserts that the obligations of the single market are that "you share regulations, you have common standards and that you have shared institutions".

For once, Marr sticks to his guns and insists that this means "you're part of the four freedoms, which includes freedom of movement", leaving Starmer to tell us that "we're facing up to that". If you talk to the EU 27, he says, "there is lots of shared concern about what the future of freedom of movement is. That's the debate that ought to be going on. That's the debate that ought to have happened over the last 18 months".

"We would", Starmer adds, "have to negotiate on the four freedoms, freedom of movement. We need to set out what we want, because this conversation is in a vacuum at the moment".

OK. So, despite Barnier having said again and again that the four freedoms are "indivisible", making it perfectly plain any variation is non-negotiable, Starmer wants to send the UK government back to Brussels to, er … negotiate away freedom of movement.

But it doesn't stop there. In Starmer's brave new Europe, we would also have a customs union with the EU. "We're going to have to have a new agreement", he says, declaring:
We need a single market deal. At the moment both the customs union arrangements and the single market arrangements are hardwired into the membership agreement. We’re leaving that, we need to recreate the right agreement for the UK, which will be a new agreement. And that really is – that should've been the focus of what we're discussing.
What Starmer is proposing, though, is utter moonshine. It is so crass that one can scarcely believe that he could propose it with a straight face. Yet, in so doing, he rejects the one option – supported by MPs in his own party, which could deliver a solution.

As I observed yesterday, within the context of the EEA Agreement, the four freedoms are not "indivisible". But, rather than a possibility, he goes for an Alice in Wonderland fantasy that has not the slightest chance of being accepted by the EU – and none of getting through the Commons.

However, it seems that the real drama is being reserved for the demand for a "meaningful vote", which is said to be a "deciding factor" in Mrs May's future, allowing parliament to reject the any withdrawal agreement that the government finally settles with Brussels.

Yet this is another fatuous exercise. If the agreement was rejected, there is no provision for the negotiations to be re-opened and there is no time anyway. The outcome would, inevitably mean that we ended up with no deal.

But the real issue is that we're headed for a "no deal" scenario. The logjam over Ireland has not been resolved and there are no indications that it will be. And, on that basis, it might be more appropriate for parliament to be pressing for the government to secure an agreement, rather than indulging in party games that makes its job even harder.

That said, given the government's current form, it really doesn't matter one way or the other. If the government can't reach an equitable exit agreement with the EU, the Withdrawal Bill is of secondary importance. A "no deal" exit will precipitate economic disaster.

Sadly though, the media (and the politicians) are in their comfort zone. This is "biff-bam" personality politics centred on Westminster, where the "lobby" can play to its heart's content. But when the action is over and the noise abates, we will be no further forward than we are now.

Having done nothing but go round in circles, we'll be a little bit more bored and perhaps even more disillusioned, but no further forward.



Richard North 11/06/2018 link

Brexit: the wind blows chill

Sunday 10 June 2018  



Of the eight Brexit-related links to reports currently posted on the Guardian/Observer website, only one of those – with a dateline of Friday afternoon – has any direct relevance to the talks in Brussels.

This would not be so bad if the media had explored fully the events of that Friday, but that never happened. And while, traditionally, the Sunday papers review the main events of the week, that isn't happening either. The lead in the Observer is given over to another exposé on Arron Banks, and the Sunday Times carries on the same theme.

Its online lead story, late on Saturday evening was an "exclusive", telling us: "Emails reveal Russian links of millionaire Brexit backer Arron Banks". This then became another "exclusive", with the headline: "Revealed: Brexit backer Arron Banks’s golden Kremlin connection", followed by the Independent publishing: "Brexit donor Arron Banks 'met with Russian officials in months leading up to EU referendum'".

With coprophagia high up on the menu, we have the Sunday politics shows nicely set up for an orgy of irrelevance, allowing commentators to indulge themselves in lurid conspiracy theories about how the Russians stitched up the referendum. Still, it makes an interesting contrast with the 1975 referendum, when the CIA was funding the European Movement, pushing hard to keep the UK in the EEC.

I suppose there is room for a sort of deal here – if we accept that the 2016 referendum result was flawed, will the Europhile concede that the 1975 result was similarly flawed? Can we then also accept that the UK should never have joined the EEC without a referendum, and no further treaty should have been adopted without an additional referendum?

And if we do all that, where does it leave us? We are where we are and the crucial need is to manage the Brexit process – something the government doesn't exactly seem to have in hand. Mrs May, however, isn't getting a great deal of help from the well-meaning but ineffably ignorant Daniel Hannan who, after all these years, still doesn't seem to understand the relationship between Efta and the EU.

This absurd little man - entertainingly dissected in The New European - is arguing from his squat in the Telegraph that "we should join the European Free Trade Association (EFTA)", even if only as a transitional measure. "Then", he says, "we wouldn’t need to worry about a separate transition deal".

Instead, the man burbles, "We could take our time to negotiate a new European settlement that would work in everyone’s interests, creating a broad pan-European free trade area within which our more federally inclined allies could pursue their closer union surrounded by a ring of friends".

Elsewhere, he says: "During the campaign, I suggested that Britain should seek a Swiss-type arrangement with the EU, inside the common market but outside the political institutions", adding that he repeated that call after polling day.

This would seem clear enough – a suggestion that he wants us to go for the Swiss option. Nowhere in his piece does he actually mention the EEA or the Norway option. But he goes on to say that, in Efta, "we'd be clearly outside the Common Agricultural and Fisheries Polices, we'd pay a significantly reduced budget contribution and we'd be untouched by some 85 percent of EU legal acts. We’d also have our own trade deals".

But this sound more like being in the EEA (even if he gets the figure wrong on "legal acts"). This is Hannan to a tee. He wafts in conveying a degree of supercilious self-confidence that would seem to imply knowledge, but this is a front that conceals a bizarre confusion about even the most basic structures of the EU and its associated bodies.

It is a matter of record that Efta does not, as such, have a relationship with the EU. There is no Efta-EEA agreement. Efta members do not, by virtue of their membership, pay anything to the EU budget, and they do not adopt EU law – directly of indirectly.

To enter a relationship with the EU, there are two options. Hannan can have us go for the EEA Agreement - a multilateral accord between the members of the EU and the three Efta states, Norway, Iceland and Liechtenstein. Or he can go for the Swiss option – a series of bilateral agreements with the EU, which owe nothing to membership of Efta. It is worth noting, incidentally, that the current round of EU-Swiss talks started in 1994 and took 16 years to complete.

In effect, Hannan is confusing the two arrangements, without really understanding which it is he wants. In truth, he's never really understood what he wants. There is a hazy zone in his brain which is somehow linked to Brexit, but what he comes out with is jumbled garbage.

At least, though, no one could accuse Gisela Stuart of being confused about "possible alternatives to the EU".

"Vote Leave", she says, "was clear - none of these models would work". The Norway model, with the UK staying in the Single Market, she tells us, "would mean continued free movement of people, paying billions into the EU budget and having to accept EU rules without getting any say over them".

Leaving the EU, according to Stuart, "was about taking back control of our laws, borders, money and trade. These are the red lines set by the public in the referendum and these red lines are crossed if we do not leave both the Single Market and the Customs Union. That's one thing both sides agreed the referendum vote entailed. Indeed, Remainers repeated it over and over again as a threat. Leaving the EU would mean leaving the Single Market and Customs Union".

How it is possible for any sentient being, supposedly at the heart of politics, to be so locked into these myths is beyond comprehension. Great merriment has been gained from the stupidity emerging from Love Island programme but, in reality, Stuart is little different from the thickest of its "stars".

As to membership of the Single Market, here Booker pitches in, using his truncated column to challenge "one of the more deceitful myths built up around Brexit is that what the British voted for in 2016 was that we should get out of the single market".

In fact, he says, this issue was never discussed in the referendum campaign. It only surfaced in January 2017, when Theresa May for the first time announced that this was her intention".

Until then she had repeatedly stated that we would remain "within" the market and that she wanted us to continue enjoying "frictionless" access to it. This was in accord with a campaign poll which showed 52 percent of voters putting our continued ability to trade with the EU at the top of their agenda. Immigration scored only 24 percent.

Booker argues – and it is certainly my belief – that if it had been openly argued during the campaign that we should cut ourselves off from "frictionless" access to our largest single export market, it might have been rather harder to get a majority in favour of leaving. We then might not be looking at the catastrophic shambles which confronts us today.

Looking at my first version of Flexcit - a mere 97 pages which I published in April 2014, I wrote that, having regard to the character of the debate on Britain's EU membership, we see the Single Market, and the related issue of Foreign Direct Investment (FDI), having assumed a totemic status.

It is thus inconceivable, I suggested, that the "out" campaign could have succeeded without it having made firm, unbreakable assurances that current trading relations will continue.

The truth of the matter is that figures such Johnson, Paterson and Hannan all made very public noises about retaining "access" to the Single Market. Here is the weasel Hannan in May 2016 – a month before the referendum. Citing Michael Gove, he wrote:
Britain would find itself in the same position as every other non-EU state in Europe – that is, part of a European free trade area by dint of an intergovernmental treaty. Andorra, Bosnia, the Faroes, Iceland, Jersey, Macedonia, Monaco, Montenegro, Serbia, Switzerland, Turkey – all trade freely with the EU while making their own laws.
Astute readers will quickly pick up the inconsistencies, where Hannan put Iceland, Switzerland and Turkey all on the same plane. But the "killer" passage cites George Osborne claiming after Gove had spoken that: "We have had the Leave campaign admit this morning that Britain would leave the single market…".

Says Hannan, "the Chancellor must have known that Michael Gove was not saying anything of the kind. The only geographically European states that don't have unhindered access to EU markets are Belarus and Russia. No one seriously thinks that that would be Britain's future".

You can make of this gibberish what you will, but Hannan is clearly at pains to convey the impression that we would continue trading with the Single Market, more or less on current terms.

We can go round and round in circles from there, but Booker in my view accurately conveys the sentiment that prevailed during the referendum. No one in their right mind expected that Brexit would amount to terminating trading relations with the EU. There was no mandate for it then, and no mandate for it now.

The great tragedy, of course, is that so many of the Muppets believed we could have "access" to the Single Market without being part of it. But we can't. We are either in it, or we're not. And outside, as a third country, the wind blows chill.



Richard North 10/06/2018 link

Brexit: crisis means crisis

Saturday 9 June 2018  



With the world's press rushing to Brussels to hear Michel Barnier's latest statement – not (picture), the UK media is doing its level best to trivialise what is becoming an existential crisis for our nation, focusing on the ghastly Johnson and his extrusions.

It's not even a question of them not being able to help themselves. By and large, the media doesn't even realise it is doing anything wrong in framing the current Brexit developments in terms of the "tensions" between the prime minister and her loathsome foreign secretary.

The day before yesterday we saw that publication of HMG's proposals for the "backstop" to deal with the Irish border crisis – attempting to break the logjam that could otherwise bring the negotiations to a halt. Yesterday came the response of the EU's chief negotiator – so well-attended by the press.

Diplomatically, Barnier refused to dismiss Mrs May's "customs paper" out of hand but, in observing that it had failed to address regulatory alignment, effectively marked it down as failing to deliver "a workable solution to avoid a hard border". He then expressed serious reservations on the other two criteria by which he was assessing the paper.

Whether stated explicitly or not, that means that the attempt (half-hearted, to say the very least) to break the logjam has not succeeded. That is could never have succeeded – as was evident in yesterday's post – is neither here nor there. The fact is that, after the end of another round of Brexit negotiations, we have made no further progress.

With less than three weeks to go before the June European Council, when a legal text on the "backstop" was supposed to have been finalised and agreed, this means that we are fast running out of time. And, given the official response from No 10, there does not seem to be any likelihood of a meeting of minds in the near future.

A UK government spokesperson, we are told, has reiterated the prime minister's view that she will "never accept a customs border between Northern Ireland and the rest of the UK". She is "also committed to maintaining the integrity of our own internal market. That position will not change".

According to this source: "The Commission's proposals did not achieve this, which is why we have put forward our own backstop solutions for customs. All parties must recall their commitment in the Joint Report to protect the Belfast Agreement in all its parts".

The media in general seems to have got itself obsessed with the "single customs area", which is what appears to have been proposed by Mrs May's "customs paper". But the issue at large is regulatory alignment. HMG has rejected the idea of common (EU) regulations in the whole of the UK, and it is this that prevents there being a common customs area.

We are, therefore, back full-circle. To avoid a hard border between Ireland and Northern Ireland, there have always been only a limited number of options. Either the UK as a whole must maintain regulatory alignment with the EU (as a basic minimum) or the alignment can be limited to Northern Ireland, with the proviso that the hard border is moved to the Irish Sea, between Northern Ireland and Great Britain.

Come what may, if the UK choses a path outside the Single Market, there will have to be a border somewhere. It cannot be said often enough that, when the UK leaves the EU and becomes a third country, the land border between Ireland and Northern Ireland becomes part of the EU's external border.

Even to this day, the UK Government does not seem to have come to terms with the reality of this. The EU is not creating the border – the external border has always existed for as long as there has been a European Union, and the EC and EEC before it. In leaving the EU, the UK has caused that border to move.

Further, if there are to be special concessions in order to avoid this becoming a hard border in Ireland, then the EU must apply a regime which is specific to the circumstances. This also cannot be said enough. In order to maintain the integrity of its entire external border, the EU cannot afford to create a precedent which will allow its other trading partners to claim similar concessions.

We can rail about the iniquity of this for all we are worth, but these are the unalterable facts. Since 1994, we have been shielded behind the EU's external border which has defined the Single Market, "enjoying" the privileges while being bound by the rules. If we are determined to throw off the "yoke" of Brussels and abandon those rules, then we lose the privileges as well. It really is that simple.

That Mr Barnier isn't making life particularly easy for us right now, is also not really the point. The EU collective is now the other side of the table. We cannot look to its institutions and members to look after our interests. That is down to our own politicians and negotiators.

And if they are moving to shaft us, tant pis. That's what they did when we joined the EEC and one of the many reasons why we wanted to leave. Did anyone really expect we were going to get an easy ride? But, difficult though Brexit may be, it is being made even more difficult by the catastrophic inability of our political masters to deal with its realities.

As it stands, Barnier drones on about the indivisibility of the four freedoms within the European Union. And he is right to do so within the constraints of EU law. But it was always open to the UK to opt for Efta/EEA membership, ditching the EU treaties and becoming fully paid-up (to coin a phrase) parties to the EEA Agreement.

What seems to escape Barnier (not that he's actually addressed it directly), is that the EEA Agreement is not an EU treaty. Efta/EEA members do not adopt EU law. They take EU law and convert it into EEA law, which they then adopt.

Within the framework of EEA Agreement, the four freedoms are not indivisible – there are the safeguard measures which permit - as an absolute right under treaty law – conditional modification of the treaty provisions. Even to this day, the Icelandic government imposes restraints on the free movement of capital, invoking Art 112 which puts into effect the safeguard measures.

For some - of extremely limited intellect – there is a belief that safeguard measures are somehow a "loophole", that they are in effect "cheating" and should only be used in exceptional circumstances, or in an emergency. But missing entirely from the provisions are the words "exceptional" and "emergency". The circumstances which give rise to their use must be "serious", but then who could possible argue that there should be flippancy in their invocation?

The point is that safeguard measures - and their handmaidens, the "waivers" – are an established part of the corpus of treaty law. The EU treaties are the exception rather than the rule in not making good use of them.

That said, we get the dismal litany about the various conditions appertaining to and the potential consequences of using Art 112, usually accompanied by a complete failure to understand that Liechtenstein – which has successfully constrained FoM law – does not rely on Art 112. It has negotiated a permanent amendment to the EEA Agreement (permanent in the sense that it cannot be changed without Liechtenstein's agreement) – an option that would be open to the UK as an Efta state, if not now then sometime in the future.

Such matters, though, are not for Barnier to consider – his mandate does not cover the EEA. These are for UK politicians, looking after UK interests, to address. And so far, they have made a complete pig's ear of their responsibilities, displaying an almost criminal negligence in their inability to confront what is probably the only reasonable option we have for Brexit.

Day after day, week after week, stretching into months and now years, we see the same dismal arguments being rehearsed, spilling over into the blog comments, where we get endless, tedious churning around the same failed arguments. Invariably, they are expressed by people who lack either the imagination, the intellect or the will to understand that there is a way out, if we choose to take it. Of some of those, there is a proportion that would wish to see us fail.

But, between the blathering of the media, the crass, criminal stupidity of our politicians, and the venal self-indulgence of a population which can't even bring its own representatives to task, we are now facing a crisis the like of which we have not seen since the war.

The consequences of that, potentially, are devastating. It is not acceptable, therefore, that the malign, disgusting foreign secretary should glibly talk of us not panicking while wishing on us the "chaos" that President Trump might bring. If Brexit means Brexit, crisis mean crisis. This is a territory none of us want to visit.

We have but weeks now before we slide inexorably into that crisis, passing the event horizon to a point of no return. It is unconscionable that we should be dragged into it by the dereliction and stupidity of a gang of loud-mouthed Westminster ignoramuses.

If the Brexit settlement cannot be resolved sensibly, we will live to regret it. But there would then be people upon whom I would wish to see visited a wrath, the like of which only a nation betrayed can deliver. "Last chance saloon" doesn't even begin to capture the gravity of the situation, but the meaning is clear enough. Those who will be the focus of our wrath are drinking at the bar.



Richard North 09/06/2018 link
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