EU Referendum

EU Referendum: driving us over the edge of the cliff


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The Express is now running with the "Norway Option" story, which has Mr Cameron rushing off to Iceland on Wednesday so that he can tell us what a bad deal it is.

That much we've always expected of our Prime Minister, alongside his supporter in the BSE campaign resorting to outright lies, claiming that Noirway has no say over the making of EU laws.

Even at the wildest extremes of the argument, there is no possible way that this absolute can be supported. The facts themselves demonstrate that, at the very least, the Norwegian government is engaged in complex layers of consultation, which negates any suggestion that it has "no say".

But if we can deal with the pathological and premeditated liars in the "remains", it is less easy to deal with the cretinous intervention of Dominic Cummings, who tells the Express that his business venture, Vote Leave Ltd, does not support the Norway Option. "We will negotiate a new UK-EU deal based on free trade and friendly cooperation", he says.

This is the man who, only a few months ago was completely unaware that Article 50 negotiations were limited to two years and that an extension required unanimous agreement of all parties. It is also he who in a recent meeting with experts, where EU legislation was being discussed, piped up to ask "what's comitology?"

It is this same ignoramus who in the Vote Leave Ltd newsletter, goes a little further to claim inexplicably, that "No10 wants Vote Leave to commit to the Norway Option". With there being no evidential base for this bizarre assertion, he then bleats: "We have not and will not. After we Vote Leave, Britain will negotiate our own agreement - we will not just take one off the shelf".

Yet this is exactly the same man who, but a few months ago was sternly declaring:
We are not a Government. We can't negotiate anything. A NO vote as a simple matter of law does not mean that we leave the EU tomorrow. A NO vote really means that a new government team must negotiate a new deal with the EU and they will have to give us a vote on it.
So, in the space of a few months, this genius in his own lunchtime has wobbled from wanting the government to do the negotiations, and us to have a second referendum – something which has been firmly Scotched by Mr Cameron – to a fantasy island dream of negotiating "a new UK-EU deal based on free trade and friendly cooperation".

The point, of course – which we have laboured on in detail in Flexcit - the book this man claimed to have read, but clearly does not understand – is that negotiating an ab initio deal in the space of two years is simply not possible.

Undoubtedly, the EU will want to do a deal, and some aver that it will bend or even break the rules to ensure that Germany can continue selling us cars (those that actually meet the emission standards), but this happy little fiction displays the most profound ignorance of the EU, world trade rules, the Single Market and the way it works.

The details of why this can't happen are set out in Flexcit. But the trouble is that people such as Cummings don't actually read things. They are so important that they get have meetings to get you to tell them what's in the document, and then rely on the limited amount they have been told, rather than on what they haven't read.

What they really need to wake up to is that, in terms of world trade law, the European Union is defined as a Regional Trade Agreement (RTA) and, as such, is permitted under trading rules, to discriminate against non-members (which we would be). As such, it can determine the rules of entry for products intended for its market and, if they are not met, it can refuse them entry.

On the other hand, as long as its products meet international standards, which they tend to do as long as testing hasn't been rigged, we cannot refuse them entry. We are not an RTA and are not permitted to discriminate.

If we choose to impose penal tariffs, we must impose them on all other countries which send us cars. Then, under anti-discrimination rules, we cannot apply any regulations or controls which we don't apply to our own products, and all other imports.

In short, the practical outcome of this is that, irrespective of whether we reach a deal with the EU, its Member States will be able to continue exporting to us, while we will find it very difficult to export to them. The EU very much has the whip hand. It can afford to wait – we can't.

It is, therefore, essential that we craft a deal with them before we leave, and here reality checks in with the very simple but unavoidable fact that concluding complex trade deals with the EU takes time – a lot of time.

For instance, if we take the EU-Swiss trade agreements, which provide the basis for many of the exit models proposed for the UK, these started in 1994 and took 16 years to conclude.

Other examples include the Mexico-EU FTA. Here, preliminary talks started in 1995 and finished on 24 November 1999, the agreement coming into force on 1 July 2000, taking nearly five years to complete in what was actually quite a straightforward deal.

This, though, is not untypical. The Colombia-Peru deal was launched in June 2007 and provisionally applied in the first trimester of 2013, also taking nearly five years. Its 2,605-page length, with 337 articles and dozens of schedules, give clues as to the complexity of the task confronting negotiators.

If we move a little closer to home, though, and examine the EU-Canadian Comprehensive Economic and Trade Agreement (CETA), we find that work started on this in June 2007. It took until October 2013 for its key elements to be agreed, a period of just over five years. However, it has yet to be approved by both parties and cannot come into effect until 2016 at the earliest.

Looking at one of the most comprehensive of the "second generation" trade deals, we can settle on the EU-South Korea FTA, which is often taken as a model for what an EU-UK deal would look like.

Work on this started in 2006 and the final agreement entered into force on 1 July 2011. However, that period was only the last stage of a process which had started in 1993. Delivery of the current 1,336-page trading agreement, alongside a broader-ranging 64-page framework agreement on political co-operation, had taken almost 18 years.

In an example of unsuccessful negotiations, the EU-India free trade negotiations were launched in 2007 and have still to come to a conclusion eight years later. There is no indication as to when a deal will be reached.

The putative EU-Mercosur agreement has an even more chequered history. Negotiations were launched in September 1999 but, despite a re-launch in May 2010 and nine further negotiation rounds, no agreement has been reached after more than ten years.

Talks floundered over European agricultural subsidies and the opening of Mercosur industries to competition from Europe. So substantial are the differences that, in June 2014, EU External Action Service Director Christian Leffler declared: "There is no sense in holding discussions if both sides are not ready". Despite intervention from German Chancellor Angela Merkel, there were by mid-June 2014 no dates set for a meeting between EU and Mercosur negotiators.

Then there is the trade agreement with the East African Partnership, being negotiated under the aegis of the Africa Caribbean Pacific (ACP) European Union Economic Partnership Agreement (EPA) negotiations.

The talks were launched in 2002 under the Cotonou Partnership Agreement (CPA) where parties agreed to conclude WTO-compatible trading arrangements, removing progressively barriers to trade between them and enhancing cooperation in all areas relevant to the CPA.

Early agreement proved elusive, leading to the signing of an interim EPA in 2007, running to 487 pages. That at least ensured duty-free, quota-free access for some products exported to the EU but, after 12 years of negotiations, the remaining contentious issues were unresolved. The last round of talks was concluded at the 39th session of the ACP-EU Council of Ministers in Nairobi, Kenya on 19 June 2014, without an agreement being reached.

On this basis, it is highly improbable that British and EU negotiators could conclude an ab initio bilateral agreement in two years, and probably not in less than five years.

Whatever their attractions in theory, the bilateral options seem hardly viable within the context of Article 50 negotiations, purely on the grounds of the time needed to negotiate them.

To bring home an agreement within a reasonably short time, a different strategy will have to be considered, if there is to be any reasonable likelihood of an agreement being brokered within a two-year timescale. And that is why we went for the Norway Option, using an off-the-shelf agreement to save time.

There are other options, of course, which we explore in Flexcit, but the bottom line is that a bespoke agreement is a non-starter.

Now therein lies a really serious problem. Inept as are the "remain" campaign, even they will not be unduly taxed in getting enough experts and men of prestige to tell us that a bespoke agreement is a non-starter.

If the cretinous Cummings has his way, through the course of the campaign, the "remains" will take great delight in telling anyone who will listen that a bespoke agreement is a non-starter – and that is even without having to lie.

And while we have a credible argument for the Norway Option as an interim solution, to ease our extraction from the EU, and we have a fallback cascade of additional options if that fails, we have no means of supporting a bespoke agreement.

Cummings, therefore – and the claque of supporters who are surrounding him – are driving us into a cul-de-sac. Already having made every tactical error in the book, from starting the campaign too early, to fronting on the cost issues, and dreaming up his "second referendum" stupidity, he now wants to cement our defeat by going for the impossible.

And doubtless, there are those who will say that we must not criticise the Vote Leave campaign, because they are "on our side". But when they are set, Lemming-like on leading us over the edge of a cliff, someone must say "stop".

They've been told, we've written it in Flexcit, and yet these people are determined to go ahead with their stupidity. We will not sit idly by while they wreck the campaign – for no better purpose than to prove they are more stupid and arrogant than even we thought.