Brexit: choose your planet

15/04/2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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