Richard North, 17/07/2016  
 


In his column this week Booker starts with reminding us of the obvious – but oft' neglected point that there will be two sides to the forthcoming Brexit negotiations. Our own attention, he writes, has naturally been focused on the three "leavers" appointed to be chiefly responsible for the negotiations: Alexander (aka Boris) Johnson, David Davis and Liam Fox.

The main worry about these three is that they all suffer from the key problem which bedevilled the official Vote Leave campaign: showing little grasp of the tortuous technicalities involved, none of them are known to be "good on detail".

Each them are tapped in the mind-sapping delusion that the UK could negotiate a one-off trade deal, similar to that between the EU and Canada, which would allow us to continue trading freely with the Single Market, while also allowing us to "take control of our borders" and cut further migration from within the EU.

Davis and the rest of the trio even look on with equanimity the prospect of being forced to rely on WTO rules – clearly without having the first idea of the consequences of this option.

But those who have done their homework, says Booker, point out that the trio's ideas are just dangerous wishful thinking. The Canada deal took seven years to negotiate, and would anyway exclude us from significant aspects of the single market, not least those crucial "passport" rights on financial services.

As for relying on "WTO rules" this could even land us in the absurd situation where EU countries could continue exporting to us while we no longer had the EU paperwork needed to sell to them.

This is something that those few pundits who actually think about such things have a great deal of difficulty – denying this possibility. And thereby we see a perpetuation of wishful thinking, bolstered by the profound ignorance which seems to characterise the "leaver" community.

It actually takes little effort to look up the WTO website and look up the rules for Regional Trade Areas and find that RTAs (of which the EU is an example) are partially exempted from discrimination rules, and are thus allowed to impose special conditions on "third countries" – which the UK would become if it left the EU without negotiating a trade deal.

Further explored here (at length – see p.479 et seq), the corollary of this is that the UK, bound by MFN anti-discrimination rules, cannot exclude imports of products from EU Member States, and certainly can't take retaliatory action.

The case, therefore, is exactly as Booker makes out. We could find ourselves in the absurd position where our goods are held up on entry at EU Member State ports, while goods from EU countries sail through customs here, with very little difficulty.

I must admit to getting seriously fed up with the vacuous optimists who so casually assure us that things will work out, without them displaying the least idea of how the EU rules actually work – especially when it comes to the "WTO option".

For goods to be placed on the "Community market" they must conform with the requirements of Decision No 768/2008/EC on a common framework for the marketing of products, with the provisions set out in more detail in the 144-page Blue Book.

Basically, this Decision presents three hurdles: the requirement is for "economic operators" to ensure that the goods to comply with "all applicable legislation", to ensure that all information they provide with regard to their products is accurate, complete and in compliance with Community rules, and that conformity assessment processes are carried out as appropriate.

It is this latter hurdle that presents so much of a problem for those who would have us rely on the WTO option, for there is no provision here for the automatic recognition of conformity assessment procedures. And without recognition, goods will not be permitted entry into the Community Market.

In all probability, there would be little difficulty in securing a Mutual Recognition Agreement (MRA) on conformity assessment, but the point is that the recognition does not come automatically. It must be negotiated.

Thus does Booker remark that it is now being increasingly realised on the continent that the simplest and most practical way for Britain to achieve what we want is to go for that off-the-shelf solution whereby we leave the EU but remain in the European Economic Area (EEA), where we already are, and join Norway in the European Free Trade Area.

Contrary to common misunderstanding, this would in fact give us more influence over the shaping of single market rules than we have as members of the EU. Furthermore, under Article 112 of the EEA agreement, we could unilaterally insist on limited opt-outs from the EU's "Four Freedoms", including free movement of people, exercising a legal right which has already been used a dozen times.

However, the answer to the "British question" that is now being actively discussed in Brussels (which is desperately keen not to see us, or indeed any other country which might wish to follow our example, leave the EU) is a "two-tier Europe", with the eurozone countries at its core, bent on greater political integration, and the rest, including Britain and Turkey, as "associate" or "outer ring" members.

On paper such a compromise might seem quite attractive. Indeed there are those who spoke privately to Mrs May before the referendum who think she might be among them.

But even if we had escaped from some of the political elements of full EU membership, including the European Court of Justice, we would still then belong to what is being called a "restructured Europe", with Brussels at its gravitational centre.

It is this, warns Booker, we need to keep our eye on in the treacherous months ahead. Because it would definitely be very different from the "Brexit" we thought we were voting for on 23 June. In the event, we could find ourselves trapped in a sort of EEA-plus which is very little different from what we would have ended up with had we stayed in the EU through the next treaty change.

The essence here is that concessions made would look so attractive – at a superficial level – that some would be tempted to treat the EEA as the destination rather than the way-station on the way to something better. We must, therefore, keep emphasising that the EEA (in whatever form offered) is only an interim solution.






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