Richard North, 22/08/2018  

Doubtless, there are those who positively embrace the prospect of a "no deal" scenario and the chaos it will bring, perhaps as a vindication of their personal belief that Brexit was a bad idea or even for the opportunity it presents for overturning the result of the referendum and getting us back into the EU.

From my point of view as a campaigner for a more rational form of Brexit, I would tend to share a view that the worse the "no deal" outcome, the better – if it then focuses minds on seeking something closer to that which I would prefer.

However, my alter ego the analyst seeks to establish as best I can the likely events attendant on the different Brexit outcomes, the "no deal" scenario getting a considerable amount of attention of late owing to its prominence and the increasing concern that this is the direction we are headed.

In my previous post, I referred to my own personal learning curve. From looking at the strict application of international law, I wrote, one moves on to look at the politics and, eventually, one is able to merge the issues and come to a more nuanced assessment of what might be real world responses.

Obviously, the assessment will change over time but, clearly, the idea that the short-term effects of "no deal" might be less visible than at first anticipated comes as a disappointment to some. They preferred my Armageddon version of the "no deal".

Yet, logic alone would suggest that the UK government, even at its most inept, is not going to see food supplies turned away from the ports while supermarket shelves are empty and people are going hungry – not if there is a way out.

For all his expertise in EU law, George Peretz QC in his article in the Telegraph didn't see a way out. In his book, if the UK needs to ease the logjam at the ports by waiving tariffs and checks on imports from the EU, it will also have to waive them for imports from (for example) China and the US in order to avoid well-founded claims of discrimination.

My view, expressed in my piece, is that if it needed to do so, the UK would waive the checks on goods from EU Member States without incurring any penalty. As long as it maintained the status quo, any aggrieved contracting parties would have difficulty demonstrating "nullification or impairment", and any action against the UK would be unlikely to succeed.

Peretz counters that the UK Government has always had a firm policy of complying with its international obligations, whether enforceable or not.

That, he says, "is a real constraint on policy", adding that "there will be real political consequences for the UK if it proceeds in a way that is in breach of its WTO obligations". Such conduct, he avers, "is not consistent with the Government's stated aim of being a leading free-trade voice in the WTO".

But what he missed was my reference to the UK deciding to invoke the national security exemption, whence its lawyers would doubtless be able to keep any complainants tied up in the minutia of international law and WTO precedents so that, by the time anything was resolved – if, indeed, it was – the crisis would have been long past.

My first reference to the national security exemption was a fortnight ago, set out in GATT Article XXI, which allows any contracting party to take any action it considers necessary "for the protection of its essential security interests", taken in time of war or other emergency in international relations.

In terms of interpretation, the WTO itself makes it very clear that "every country must be the judge in the last resort on questions relating to its own security". The Contracting Parties have no power to question that judgement. The exercise of Article XXI rights constituted a general exception, "and required neither notification, justification nor approval".

To an absolute, unqualified degree, therefore, this constitutes a "get out of jail free" card for the UK. In invoking Article XXI, it would not be in breach of its WTO obligations. It would be working entirely within the framework of the Agreement.

Interestingly, when the US applied a trade embargo against Nicaragua in 1985, citing the national security exemption, it was referred to the dispute panel. It concluded that it was not authorised to examine the justification for the United States' invocation and therefore, "could find the United States neither to be complying with its obligations under the General Agreement nor to be failing to carry out its obligations under that Agreement".

Incidentally, the Republic of Ireland could also invoke Article XXI in respect of the border with Northern Ireland – even if the consequence was to have the EU install customs checks between Ireland and the rest of the EU.

That Mr Peretz missed this aspect of WTO law is perhaps a reflection of the fact that he is not an expert on the WTO. Neither am I, for that matter, but I am a competent researcher and analyst and the application of Article XXI emerged during my wider studies of the WTO Option.

As to his expertise on the EU, he takes exception to what he considers to be my criticism of him "for not being a specialist in EU law", whereas what I do assert is that "having taken cases to the ECJ … does not make him an expert in the wide sweep of European Union affairs".

That lack of broader expertise on EU matters was certainly visible in what I regarded as a superficial account of the impact of post-Brexit border controls. His analysis, I charged, was "pretty superficial and in some areas so incomplete as to be misleading".

Peretz claims in his defence that, in a 1,000-word article, one can hardly be anything other than superficial but what I particularly had in mind was his assertion that: "UK live animal exports will face compulsory veterinary checks at the EU border".

From a real expert one might expect to learn that, given a "no deal" Brexit, there will be no veterinary checks at all at the borders. Live animal exports (and the export of products of animal origin) will be prohibited outright. And that accurate version of the state of the art is shorter than his rendition.

Why all this matters is that, when cautionary tales about the effects of a "no deal" Brexit are so easily dismissed as "project fear", it is vital to present as accurate a picture as possible of the potential effects.

This is especially necessary as the legacy media seems intent on overstating the case. Only yesterday, for instance, we saw in The Times an article headlined: "No-deal Brexit could leave hospitals with drug shortage, say NHS chiefs", a claim that can hardly by sustained.

Here, we have pointed out many times that the problem comes because the EU no longer permits the free circulation of medicines when the holder of the market authorisation is established in the UK. But since that will hardly be a problem for the NHS, which can also procure medicines from the EU, the real losers are the EU Member States which will need to find alternative suppliers.

The same applies to chemicals, where the UK will continue to recognise REACH, and motor vehicles. In the latter case, type approvals issued by regulators in EU Member States will be valid in the UK whereas the type approvals issued by the UK regulator will not be valid in EU Member States.

With the possible exception of aviation - where I do not see how the EU can circumvent the problem of aircraft fitted with UK certified parts which cease to be validly certified after Brexit – many of the headline issues currently being paraded by the legacy media are open to mitigation by the UK government.

If I was advising the UK government (which I am not), in the event of a "no deal" Brexit, I would be suggesting that it concentrates on the headline issues and makes sure they don't happen. With a modicum of planning, and the use of the Civil Contingencies Act, there is no reason at all why there should be a logjam at the ports or queues of lorries on the M20.

With that under control, there will be no food shortages – other then those arising from panic buying (which is a distinct possibility) – no shortages of medicines and none of the more lurid consequences that the media might devise.

But that is not to say that the consequences of a "no deal" Brexit will be benign. What could very easily be a collapse of the UK's export trade with the EU could have a devastating effect – even if it takes a few months to become apparent. That alone is reason enough to avoid a "no deal".

The danger is that, if the short term effects are debunked, people may be misled into thinking that a "no deal" outcome is harmless. And with that, I don't think anybody could rightly suggest that George Peretz has got the full measure of a "no deal" Brexit. It the public are to be properly informed via the legacy media, somebody else will have to add to his work.

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