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 Trade agreements: is "unbundling" the future?

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A little while ago, the Financial Times ran a piece by Alan Beattie on UKIP's trade policy (above), who argued that it "would leave Britain isolated and vulnerable". I didn't write a review then, as there was more to the issue which Beattie was raising.  He chose to confine it to what he termed "Farage's dream of prosperity" which is to be "born of a US treaty". This, Beattie thought, was "a dangerous fantasy".

The points he made, however, went far beyond UKIP's trade policy, and could have been raised without reference to "Farage's dream", one that comes with a promise of a new trade deal "as soon as Britain's exit liberates the UK from the dead hand of European protectionism".

To the unjaundiced eye, writes Beattie, this (UKIP's policy) looks great. But he then observes: "Sadly, such agreements with the US have progressively less to do with free trade and more with restricting competition at the behest of well-organised American industry lobbies".

This is actually the substantive point. It isn't just UKIP which is being led astray. Trade agreements across the board are not what they used to be. For instance, Beattie suggests that, if we attempted a deal with the United States, first up would be the US pharmaceutical industry targeting the National Health Service, the very name of which makes American drug lobbyists visibly bristle.

The centralised NHS procurement system holds down the price of drugs based on the service's own assessments of value for money. This has far-reaching consequences: a quarter of all government purchases of medication worldwide use NHS reference prices, according to estimates by the Office of Fair Trading. That does not suit American pharmaceutical companies, which prefer procurement prices based on markets rigged by restrictive, litigious patent regimes.

The inference, which Beattie develops in his piece, is that trade deals have become encumbered with all sorts of side issues, which extend far beyond the simple necessities for international trade, and move into the area of harmonising domestic policies.

Then, on Monday last, this same theme was picked up by Martin Khor, an executive director of the South Centre, a research centre of 51 developing countries, based in Geneva.

Khor writes of "overloaded 'trade deals'", opening his piece by declaring: "Once upon a time, trade agreements were just about trade. The negotiator's principle was: I'll allow some of your products to enter my market if you allow some of mine to sell in yours". He adds: "Both countries could estimate what the benefits would be for them, and if it was mutually satisfactory, a good deal was made".

Today, though, Khor continues: "trade deals are not mainly about trade any more". The trend, he says, started when intellectual property, services and investment measures entered into the system of trade rules when the old GATT (General Agreement on Tariffs and Trade) was transformed into the WTO (World Trade Organisation).

By way of example, Khor offers companies' patent rights. If they are not "respected", it permits the aggrieved nation to impose extra tariffs on imported products, blocking them as punishment.

This, we are told, has complicated the rules of trade since non-trade issues invaded the system. But this complication at the WTO is minor compared to the bilateral free trade agreements (FTAs) involving the United States and the EU, he says.

A prime example is the Trans Pacific Partnership Agreement negotiations, involving Malaysia and eleven other countries. Under the leadership of the United States, the TPPA includes chapters on many non-trade issues including intellectual property (with standards far higher than in the WTO), rules on investment liberalisation, a system where foreign investors can sue the host states in an international tribunal, and opening up of services sectors to foreign ownership.

Then there are the two issues that directly intrude into the way the government operates. Government procurement, or the rules on how the state decides to award contracts for goods, services and projects, is to be opened to foreigners as if they were locals.

And government-owned enterprises, including private companies in which the state has a share, are to be governed by rules that prevent them from having advantages. The way they buy and sell goods and services are also to be opened to foreigners as if they were locals.

In other words, says Khor, the "free trade agreement" has gone far beyond the terms of importing and exporting goods, and penetrated deep into the structure of the domestic economy, including how local businesses are allowed or disallowed from benefiting from government policies, and how the government conducts its business.

Central to this process is the concept of "regulatory convergence", not dissimilar to the harmonisation of rules that has been a core feature of the EU's Single Market, so much so that when the EU sets the parameters for third countries to join the European Common Aviation Area (ECAA), it writes of its neighbours "linked to regulatory convergence through gradual implementation of EU rules".

Despite the pervasive influence of this concept, to be found as much in the current Transatlantic Trade and Investment Partnership (TTIP) negotiations, too many of the more superficial pundits – Farage included – still believe that current trade deals are a way of cutting back the burden of regulation. As both Beattie and Khor testify, it has precisely the opposite effect.

For this reason, and a complex of others, resistance to the current range of negotiations is building. It is getting harder to reach agreement, and taking longer, so much so that many believe that the day of the comprehensive FTA is over. There are simply too many obstacles.

As an alternative, we are now suggesting in Flexcit a process called "unbundling". Rather than relying on ambitious free trade agreements that promise much but are often able to deliver little, the idea is to go for sector-specific (or even product-specific) solutions, on a multi-lateral or even global level.

Sometimes known as the "single undertaking" approach, they are easier to negotiate and can yield results relatively quickly. They also pose less of a challenge to sovereign entities, which makes them less of a threat to small nations.

An example is the initiative on the classification, packaging and labelling of dangerous substances, which emerged as the Globally Harmonised System of Classification and Labelling of Chemicals (GHS). The first version of the code was formally approved in December 2002 and published in 2003.

This very small step exactly typified "unbundling". Globally negotiated rather than geographically anchored, this was a multilateral rather than a bilateral agreement with a very narrow but vital effect on one particular sector.

Labelling of hazardous materials – more particularly difference in labelling – has been an important non-tariff barrier, restricting trade in a major industrial sector. The entirely uncontentious initiative eases the flow of goods for negligible cost, without any of the baggage we see in contemporary free trade agreements. 

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But what gives this a topical "hook" is that yesterday the EU, together with 13 other WTO members (Australia, Canada, China, Costa Rica, Chinese Taipei, Hong Kong (China), Japan, Korea, New Zealand, Norway, Switzerland, Singapore and the US), seem – without actually labelling it thus - to have discovered "unbundling" (above).

These fourteen formally opened "plurilateral negotiations" in the WTO on liberalisation of trade in so-called "green goods". At the first stage, the members of this initiative will aim to eliminate tariffs or customs duties on a broad list of goods that help clean the air and water, help manage waste, are energy efficient, control air pollution, and help generate renewable energy like solar, wind, or hydroelectric.

At the second stage, the negotiations could also address non-tariff barriers and environmental services. The EU is particularly keen to reduce barriers to trade in services ancillary to goods exported. It cites an example of producing wind energy. It is not enough just to buy the wind turbine: companies also need to have access to the maintenance and engineering services necessary to keep it running smoothly.

It is a great pity that such a noble venture as a trade agreement should be addressed to such a base area of commerce, but the negotiations which are about to start are very much worth watching. Compared with the progress of TTIP, my guess is that we will get more sooner, potentially re-writing the book on international trade.

One thing which should already be lodged, though, is the realisation that free trade areas are not a single, constant type of entity, but a highly varied and continually evolving form of international agreement.

When thus, we see people extol the virtues of FTAs, one needs to ask "what kind"? And, as it stands, for many types of agreement, there are more disadvantages than advantages. Here then, there is more than one "dangerous fantasy". Merely to assume that all FTAs are the same and all work equally well is another one. We have to be more specific.


Richard North 10/07/2014

 EU politics: dolling out the money

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Both Bishop Hill and M E Synon on Breitbart have picked up the EU funding story, and there is much more to come. Total funds dispersed in 2013 to third party beneficiaries amount to €19.34bn, with 33,720 "commitments" averaging €573,571 each.

Staying with the climate change theme, we see that the University of East Anglia was given €4,761,336 in grants, and the Met Office got a relatively modest €2,629,541.

Of the many interesting things emerging, though, are the country spends. One wonders why the United States is so needy that the EU finds it necessary to give it €72,647,859 million (towards 390 recipients). A partial explanation is that some of the money goes to United Nations organisations based in the US, including the UN Development Programme, which gets over €12 million.

In this, though, the UN contributions only account for €27,604,832, leaving over €45 million paid to a diverse range of other needy causes, including – strangely - €8,828,462 given to 45 university recipients. But why the EU should be paying, for instance, the Pennsylvania State University €155,184 for research in violent online political extremism, is something of a mystery.

Other puzzles are why the EU is paying the OECD in Paris €2,669,612 or the TUC €28,439. More sinister than puzzling is why the European Trade Union Institute was paid €10,611,000 and I am distinctly less than impressed with €4,000,000 having been spent on: "Facilitating India's Transition towards low carbon development by supporting implementation of national policies and programmes for offshore wind".

On a more positive note, however, we can put to bed one of the lazy Europhile claims regarding Norway's EU contributions, paid as a result of its EEA participation. The estimated EFTA contribution for the 2007-2013 multi-annual period was in the order of €1.7 billion – averaging approximately €250 million a year. Norway carried 95.77 percent of that cost (€1.63bn).

However, from the Financial Transparency system, we find that Norwegian beneficiaries over the same period were paid €1,01bn from EU funds, making the seven-year net contribution in the order of €620m, or about €90 million net contribution per year.

If the same pro-rate basis was applied to the UK after it had left the EU, it might be expected to find about €1.1bn annually in net payments, which is rather less than some pundits are claiming.

Still, the EU is not all such serious stuff. If you fancy watching a film, you will be pleased to know that the EU has paid a handsome €10,800,000 for the networking of cinemas screening European films, paid to the Association of Europa Cinemas in France.

Never let it be said that "Europe" doesn't do anything for you.


Richard North 09/07/2014

 Global governance: funding the NGO monster

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With no fanfare at all, the European Commission has slipped out the 2013 figures for its Financial Transparency System, a searchable database of grant funding to third parties, including NGOs.

The database is a goldmine of information, telling us, for instance, that the EU paid the BBC €6,100,987 last year, Friends of the Earth (in all its incarnations) €4,188,230, WWF €5,344,641 and the RSPB €3,802,544. What is also of very great interest is that the EU subsidised UN institutions to the tune of nearly €140 million.

All this and much will be the subject of further reporting and analysis, but once again it brings to light the huge amount of taxpayer funding going to unaccountable NGOs, and especially (but not exclusively) climate change advocacy groups. 

In 2013, though, there is a new entrant to the listings – one which has not appeared before on the EU list of recipients. This is the World Resources Institute (WRI), which has been given €1,500,000 of our money for "designing the 2015 global climate change agreement".

What is especially interesting about this is that the WRI is a United States organisation, established in 1982 under Delaware tax laws, with its head office in Washington DC. But, despite a considerable amount of its activity being devoted to lobbying the US government, it has a huge international dimension, receiving most of its multi-million income from governments, their agencies and from multi-national corporations.

Of its $51,595,932 income for 2013, in addition to the EU finding, it gets $8,600,000 from the Ministry of Foreign Affairs of the Netherlands, $4,918,421 from the Agency for Development Cooperation of Norway, $4,890,000 from the US Agency for International Development, $2,987,337 from the Ministry of Foreign Affairs of Denmark, $2,041,263 from the Federal Ministry for the Environment of Germany and $2,000,000 from the Agency for Development and Cooperation of Switzerland.

We also see the Ministry of Foreign Affairs of Norway donating $488,188, the Agency for International Cooperation of Germany giving $372,455, the Development Agency of France giving $262,160, the Department of Foreign Affairs and Trade of Ireland offering $514,155 and the US Department of Energy $375,000.

Not to be left out, we also see the UK's aid ministry, DFID give $2,041,246 to WRI, adding to our contribution via the EU, while the FCO tops up the funding with another $240,351. Including our contribution via the EU, that brings the UK total to about €2.5 million.

Interestingly, Big Oil is right in there as well, with the Shell Foundation contributing $1,000,000, topped up by the Shell Oil Company USA with another $350,000. Other corporates are represented, with the United Technologies Corporation giving $300,000, FedEx, $850,000, KPMG East Africa Limited giving $865,390, McKinsey & Company, Inc, $270,000 and Goldman Sachs $250,000.

But illustrating the incestuous relationship between the NGO "community", we see several of the "usual suspects" on the list. The European Climate Foundation turns up with $879,317, the ClimateWorks Foundation with $533,842, the Energy Foundation with $330,000, the Alliance for Sustainable Energy, LLC with $325,000, Climate and Development Knowledge Network with $251,911, the Climate and Land Use Alliance with $497,941 and Water Conservation International $249,697.

Of global agencies, the United Nations Environment Programme is also represented, contributing $542,990. The World Bank gives $366,076. Charities are also represented, with the Robertson Foundation giving $500,000 and the Rockefeller Foundation $326,000.

Altogether, the top 43 donors – governments, corporates, charities and NGOS, contribute $43,688,366, amounting to 85 percent of the 2013 revenue.

The question is, of course, is why these bodies, with so many governments involved, are giving money to a private US charity, for activities which include preparing the ground for an inter-governmental agreement in 2015, fronted by the UN Framework Convention on Climate Change secretariat.

Accountable to no-one but the US tax authorities, established under Delaware state law, this "charity" should have no role whatsoever in framing agreements between governments the nature of which potentially cost taxpayers billions, the beneficiaries of which are charities of this nature.

In particular, our government and the EU have no business funding such organisations, their very existence representing the darker side of globalisation, where our collective fates are increasingly determined by such unaccountable, faceless bodies, exerting more power and influence than even governments themselves.


Richard North 07/07/2014

 Brexit: the path to ego-driven perdition

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An interesting new blog here, called Politics Satellite,  draws a parallel between the Scottish and EU referendums, with the current campaign looking increasingly like a pilot production for the main event that might come in 2017.

There are many similarities that can be taken from the Scottish referendum campaign and overlaid on a potential EU "in-out" one, from the arguments used to the approaches both sides are utilising to win supporters.

The quintessential issue, though, is that Salmond does not have a detailed, fully worked-out exit plan and, as PS illustrates, this is having a telling effect on the "out" campaign. People – and especially women voters - are asking questions about what might happen if Scotland leaves the Union, and they want answers.

That is the one big similarity that could be a lesson for Eurosceptics to learn, concerning how detail, or the lack of it, is being received by voters.

Says PS, there needs to be a plan and there needs to be details so that when questioned the Eurosceptics can reassure voters that leaving the EU can be done without pain. We won't all be taking a giant leap into a great unknown. Otherwise it looks like, as in Scotland, the women will vote to stay where we are.

However, we are beginning to get to the stage where the anti-EU movement is troubled not by the absence of a plan, but a surfeit of them, with each little groupescule determinedly advocating their own little brainchild, with what looks like an equal determination to ignore other options.

That is one of the very strange things about the situation. If there is a debate about the merits of rival options, occurs largely in the Europhile communities. The "eurosceptic" factions each set up their stalls in isolation, and peddle their wares in grand isolation, each pretending no-one else exists.

Even this weekend, we thus have Alan Murad, Acting Campaign Manager of Get Britain Out, blithely telling us that, "it is important Eurosceptics present viable alternatives to EU membership, something they are often criticised for failing to do".

Without even recognising that there are other workers in the field, he then goes on to promote his favourite little hobby-horse, the idea of "closer ties with the Commonwealth countries", as a substitute for EU membership, something which is very far from being a viable alternative to EU membership. 

Then, engaged in his own personal battle on Twitter, is Campbell-Bannerman - now safely returned as a Tory MEP, after his brief sojourn as a UKIP MEP and his brush with Farage. He is still trying to flog his idea of an "EEA-lite", without the first idea of how that might pan out in the time-limited context of Article 50 negotiations.

As Con O'Neill decided more than forty years ago, when he took us into the Common Market as lead negotiator, the only way to maintain the momentum was to "swallow it whole" – to accept the treaties unchanged. The moment the treaties were put on the table for discussion, the fruits of hard-won compromise would unravel, and any chance of a swift resolution would evaporate.

Similarly, if we are to go to the table with the hope of agreeing a speedy exit plan based on continued participation in the EA Agreement, we need to "swallow it whole". Once we are out, we can then revisit the agreement, making "Brexit" a process rather than a single event. That is, in fact, where Flexcit takes us, a co-operative, online venture that concludes that no single "plan" is workable, thus requiring a flexible response, and then continuous development, probably over many decades.

Such candour is not for the likes of Hannan, though. Relentlessly beating his own drum, he has seamlessly graduated from Norway and EFTA to the Swiss option, without so much as a blush.

But in his typical, High Tory way, Hannan eschews any co-operative approach. His is the top-down down plan which is being looked at by "brilliant" lawyers and which will be revealed to us plebs when he's ready, for us to admire and adore. In his own way, Hannan is as centrist and authoritarian as the "colleagues" he would seek to replace.

Certainly, Hannan the dictator is no debater. His role is to descend from the mountain to hand down the tablets and instruct us mere mortals on the path to righteousness. He will never accept that there could be possibly any flaws in his grand design, a "Swiss option" that even the Swiss have been unable to make work and which the EU has already said (many times), it would not be prepared to repeat.

Whether he is the inspiration for this in the Telegraph remains to be seen, but despite the need to break away from an EU-centric approach, all we get is an unnamed Tory. This source says: "We want to be in a position where we trade with the European Union and cooperate on the issues we choose to cooperate on. Basically the rest of Europe is then a European eurozone that wants deeper and closer union".

Thus we are told: "You end up with the two rings of Europe. The inner ring, which is euro-obsessed, and the next ring around which, although is not in the euro, are still in the European Union but have a looser arrangement".

Clearly, this man was not listening to Prodi last week, who averred of such an arrangement that, "you will not be in the core but the periphery". Prodi thus went on to say: "As you did with the euro, you can be out on the periphery … if you are interested in a loser relationship with Brussels, you will get less and less power".

Altogether, what the eurosceptic community seems to be intent on doing is frittering away its energies on further and further fragmentation of effort, each faction determined to be the proud owners of their own unique plan, to add to those who believe we should not have a plan anyway.

Only the Europhiles, it seems, think it necessary to work together. For us, there is not the slightest attempt even to consider a consensus view, or any thought as to why the europhiles have been so successful and euroscpeticism has been a consistent and dismal failure.

In the meantime, it comes as no great surprise to have Andrew Stuttaford tell us that, for the immediate future, we can only expect a Cameron defeat at the polls next year, which will mean his replacement by a europhile Labour government, and a stake through Brexit.

That, in a way, is encouraging news. As I lurch from mild optimism to extreme pessimism, I am more and more convinced that a referendum campaign will see rival "out" groups vying for attention, with not one of them able to come up with a credible exit plan, leading us down a path of ego-driven perdition.

On that basis, the longer we can delay a referendum campaign, the longer we have before losing it.


Richard North 06/07/2014

 EU referendum: vultures circling the corpse

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Blogged by Purple Scorpion we learn of the doings of Dominic Cummings, more than a decade ago campaign director of Business for Sterling, now emerging to tell us how to run the coming EU referendum "no" campaign.

In a report for Business for Britain, "reformists" and wannabe leaders of the "no" campaign, Cummings reverts to exactly the device which probably lost the Conservatives the last two elections – the infamous "focus group". It was devises such as those which had election campaigners chasing after the supposed opinions of "swing groups" in order to decide how to pitch their messages.

The fact is, of course, is that there are no defined "swing voters" in a potential EU referendum. The last time we had one was in 1975, so one can hardly look at a single group and see what, if anything might have changed their mind since last time.

What Cummings has done, therefore, is take "swing voters" who voted for Mr Cameron in 2010 and might change their mind, using them as a litmus test of how to gauge the message to potential voters in a referendum which we might see in 2017.

In terms of campaign design, of course, this exercise has almost no value. This cohort cannot be taken as representative of the nation as a whole. Nor does it have any particular relevance to a national referendum. We are not talking about a limited number of marginal seats on which elections will turn, but the sum of all the votes cast by the nation, where it is the majority option that counts.

Thus, all we are getting is verbatim extracts of opinions given by people collected to talk about a referendum, giving some colour to an otherwise drab subject. More importantly, it provides a re-launch platform for Mr Cummings, which will stand him in good stead when he, Matthew Elliott and his London gang of think-tankers make their bid for the campaign millions on offer from the Electoral Commission.

This is what they did with the North-East region referendum, swanning up from London to Hoover up the money. While the locals had to fight the campaign unaided, the maestros schmoozed with the donors, telling them how lucky they all were to have them, then writing books to tell everyone how clever they were in winning the poll.

Now history is set to repeat itself. As a referendum begins to look a likely proposition, the smell of money and kudos is enough to bring the gold-diggers and careerists out into the open, the pack leaders adorning themselves with the "CEO" title to mark their own importance. Bless!

Unfortunately,  these are the people, if we let them, who are going to lose us the referendum. Not one of them has the first idea of what they are fighting for or how to pitch a winning campaign.

Cummings, with the benefit of his magical mystery focus group, for instance, tells us that "the combination of immigration, benefits, and human rights dominates all discussion of politics in general and the EU in particular". 

It doesn't, of course. But this is a man that thinks the "biggest change in the EU debate since Brown announced in 2003 that we would not join the euro" is that "people now spontaneously connect the issue of immigration and the EU". It is no coincidence, though, that Cummings is the man that walked away from his paid position in Business for Sterling in 2002, and has taken little interest in the EU ever since. 

He is evidently a man who seems to have missed out on the Lisbon Treaty altogether. But now there is a whiff of money, he's back, ready to take is place in the ranks of the paid CEOs, prepared to fight to the last expense account.  

Setting up his pitch, the born-again Cummings now rushes to give us the benefit of his newly found wisdom, gravely telling us that an "out" campaign would "not have to focus on immigration". It is a massive factor that needs no reinforcement, he says. Rather, the campaign would need to neutralise the fear of leaving and focus on what could be done with the money saved by leaving, both as a positive message and as an answer to the fear of lost trade.

So, from the giant intellect of this great campaigning genius, this is what we get: "neutralise the fear of leaving". Yet, if Mr Cummings had read our lowly blog (which he is far too grand to do), he would have discovered, with not a CEO in sight, that we had managed to work this out over eighteen months ago, all by ourselves. A successful campaign, we said, would be:
…. exploiting the status quo effect and the perceived importance to British economy of the totemic Single Market. In this context, the "out" campaign will only succeed in a referendum if it is able to neutralise the FUD.
This, we said at the time, is a sine qua non, having raised the issue of FUD in January 2013 and pursued it ever since, even labelling the phenomenon with the "FUD" buzzword, something that Cummings hasn't invented yet - although he will.

Some 18 months after the event, therefore, we have a Jonny-come-lately waltz in to tell us what must be done. Sadly though, it is only in the way an exasperated England fan might instruct his team how to win: score more goals than the oppostion, stupid.  But when it comes to exactly what needs to be done, all we get from the maestro is: "There are various ways in which this could be done but these lie outside the scope of this report". Clearly, the fee was insufficient and needs topping up.

That is actually classic Cummings. In fact, it is characteristic device of the golden boys. They swan around the London circuit oozing supercilious confidence, blithely informing their sponsors that the answer is soooo simple - something must be done, dressed up with vacuous jargon and last decade's marketing buzz-words. And they are the ones to do it, for a fee of course.

In respect of the EU referendum campaign, though, there is an inbuilt trap which none of these golden boys have even began to realise exists. Much less have they any idea what to do about it, .

The problem is the very real conflict between the need to get out quickly, preferably within the initial two years afforded by Article 50, and the overwhelming requirement to protect the Single Market – the only way we are going to neutralise the FUD – by continuing to participate in the EEA.

Here, the trap is, of course, Freedom of Movement, which is an integral part of the EEA. Forget trying to release ourselves from it. It is entirely non-negotiable. Thus, on the face of it, we can either deal with immigration or we can "neutralise the fear of leaving". But, on the basis of what we are being offered by the likes of UKIP, we can't do both.

If fact, we can have our cake and eat it. Freedom of Movement is a red herring. The idea of "regaining control of our borders" is an empty mantra. Unless we are to adopt a North Korean style of government, with totally sealed borders, restrictions on immigration would be subverted by illegal immigration, asylum seekers and family reunification, none of which are resolved by leaving the EU. And then, none of those already here can be sent back.

With that, of course, we have not yet officially started the campaign. And, as we know from 1975, sentiment can not only change, it can completely reverse. With a huge humanitarian crisis in the making, where more than 5,000 migrants have been picked up by the Italian navy in the past 48 hours in several rescue operations between Sicily and North Africa, the sentiment can change here as well.

There are those who would sink the boats of migrants, coldly committing murder in the process, or return desperate men, women and children from whence they came, only for them to perish en route or be locked away in camps when they make landfall. But that is to invite a backlash which could leave the "no" campaign flat-footed. The immigration card needs to be played with the very greatest of care.

On the other hand, there is a way of squaring the circle. That is what this post, this one, this and this are all about, options which some readers are too stupid to understand. We avoid the simplistic, empty mantras and address the "push-pull" factors, dealing with the causes rather than the symptoms. Migration is a symptom. Let's deal with the causes.

All of this, necessarily, requires a far more  greater knowledge and understanding of the issues than we have seen to date, and a more sophisticated campaign, with a. But the likes of Cummings play down the need for  knowledge – if only because they lack any grasp of detail. 

Mr Cummings thus stresses that the tiny cohort with whom he chose to spend his time, "know almost nothing about the mechanisms of international trade, the EU's Single Market, the EU's Customs Union, and the interaction of all these complex systems with global regulation".

This means, he says, that discussions about the relative merits of the EU's or EFTA/EEA trading arrangements are not only distinctly foggy in Westminster - they are completely unintelligible to these people, who have not heard of EFTA or the EEA.

In his own condescending way, he tells us that the arguments that are discussed among the tiny number of genuinely knowledgeable people - "the sort of arguments analysed by those who entered the IEA competition" - have no grip on these people, who have none of the knowledge necessary to make sense of them.

In Mr Cumming's tiny little world, therefore: "All discussion of these issues rapidly runs into the sand and talk returns to immigration".

However, as I have already pointed out, the campaign has not even started yet. And in the 1975 campaign, many people very quickly understood what the three initials EEC meant. By the same token, by the time the 2017 campaign is over, a similar number of people will become familiar with the EEA, and the related concept of the "Norway Option".

Where Cummings and his London friends fall down, of course, is that they rely on what they read in the legacy media. And because the "smart set" can't get their brains round complex issues, they think the electorate is going to be similarly vacuous. They will want a "Janet and John" campaign that insults the intelligence, and deals with none of the substantive issues.

What will be needed, though, is for the case to be fully worked out. That is what Flexcit is for. Not one in a thousand will read it, any more than the average Christian reads the Bible, or the average football fan reads the 148-page FIFA manual on the laws of the game. But, if FIFA needs 148 pages to play football, to deal with something as complex as leaving the EU is going to need a lot more.

Then, and only then, will we know where we stand, and have the wherewithal to devise a strategy. And only then can we simplify the case. But having a full version as backup means we will have all the important angles worked out. We will rarely, if ever, be caught out and, as far as the Europhiles go, we will be ahead of the game. Meanwhile, campaigners will benefit from the knowledge that their campaign has substance, and will derive their confidence and will to win from that.

All Cummings can offer, by way of an "obvious idea" though, is "to develop a roadmap and the framework for a new UK-EU Treaty 'Wiki-style'". Such decentralised movements have achieved astonishing things in science and could in politics, he says.

This again is typical of the breed. Apparently plausible, especially to those who have no experience of campaigning in the real world, any such device would immediately become a target for opposition hackers and trolls. Massive effort would have to go into defending something which, by the time it had been savaged and disrupted, would not be worth defending anyway.

Nevertheless, that is not going to make any difference to the "smart set". The referendum is a game for them to play, with careers and names to make, and money to dribble through their fingers as they play. The only thing that won't worry them is whether they win or lose. The game is simply for playing - for as long as the cheques roll in.


Richard North 01/07/2014

 EU politics: a waste of our time and everybody else's

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Matthew Elliott's Meal Ticket (MEMT), aka Business for Britain, has convinced the Sunday Times to carry its usual scam, publishing a scary letter in support of its EU "renegotiation" agenda. The excuse for this proposition is that his fellow travellers in the financial services industry are "extremely concerned" about Britain's current difficulties in preventing the introduction of certain measures by the European Union.

They list the financial transaction tax, the alternative investment fund managers' directive, the prospectus directive, bonus caps, bans on short selling and the restriction of euroclearing to eurozone clearing houses. Each of these things, they say, "will continue to erode Britain's competitiveness in markets in which it has unique global standing".

That empowers Mr Elliott to tell Conservative Home that: "The time has come to take powers back from the EU". Adds our Matthew, "We need new protections against bad and dangerous laws that the EU is proposing. A future renegotiation team needs to go to Brussels and demand new safeguards to protect the City. Business is clear: the City should ultimately be controlled by those in the UK, not EU officials".

One could hardly disagree with the idea that we need protection against big, bad Brussels, but harnessing this to a renegotiation agenda is getting more than a little tiresome. If we are to see any material change, then it will be by invoking Article 50 and then agreeing an exit package.

At his last fundraising bash, though – where Matthew passed round the begging bowl for £50,000 to keep the show on the road – witnesses were appalled by the shallowness of the MEMT approach, with not the least recognition of the global agenda, and the way it is gradually squeezing the EU out of the regulatory game.

As we point out in our Flexcit plan, the role of international agreement origin is no more evident than in the financial sector. Interestingly, there is still a two-way flow. For instance, in a few cases, the EU "uploads" its financial rules, so that they become the basis of international agreements. But, in many cases - and increasingly so - it "downloads" its regulation from international bodies.

A good example of this is the EU's Capital Requirements Directive, the so-called CR IV Package on the adequacy of banking capital. The original source is the Basel III agreement, crafted by the Basel Committee on Banking Supervision (BCBS).

The EU regulation also applies to the EEA so we would keep it on the statute book  it if we adopted the "Norway option". But, even outside the EU/EEA, the essence of the CR IV package would still apply to Britain. It is a party to the Basel III agreement. It would "download" it directly, rather than via the EU.

The process is rarely visible to the popular media, almost entirely unknown to the general public and – apparently – completely beyond the likes of Matthew Elliott. This is perhaps unsurprising. Only very occasionally does a hint of the real power emerge, as in January 2014 when the Basel Committee ruled on leverage ratios for banking loans, the issue at the heart of the 2008 banking crisis.

The picture, however, is extremely mixed. Regulation does not follow a single template. For instance, "over the counter” derivative trading is regulated by the EU's European Markets Infrastructure Regulation. But even this does not work in isolation.

The regulatory package stems from a commitment made in April 2009 by the G20 nations to "promote the standardisation and resilience of credit derivatives markets, in particular through the establishment of central clearing counterparties subject to effective regulation and supervision".

Thus, in an industry of global reach, the EU regulation combines with elements "downloaded" from the US Dodd-Frank Act and from Basel III. There is no single author and, outside the EU, Britain would "download" from similar sources. Its regulatory package would look very little different from what it is now.

On the other hand, the Alternative Investment Fund Managers Directive (AIFMD), of which Mr Elliott and his cronies complain, is indeed largely of EU origin. Quite rightly, it is seen as a building block of "Fortress Europe" – a more protective European market sheltered from competition.

Tellingly, a recent survey had 68 percent of respondents believing that AIFMD will lead to fewer non-EU managers operating in the EU. Some 72 percent viewed the Directive as a business threat. As an EEA member, if we chose to go down that route, Britain would have to retain its provisions. But that is one of the many reasons why EEA membership can only be regarded as a temporary solution.

Nevertheless, simply to attribute cost to additional regulation, and then to "renegotiate" a better deal from the EU, is not a realistic approach to the problem.

In September 2013, Deloitte recorded that new regulations had cost the European insurance industry as much as €9bn since 2010, with each of the top 40 insurers having spent more than €200m on compliance. Of regulation deemed to have a major impact, 36 percent was of national origin. The rest came from the EU or international sources.

Instruments such as the "Solvency II" package, on capital requirements, have international dimensions. Specifically, Directive 2009/138/EC implements recommendations from the International Association of Insurance Supervisors, the International Accounting Standards Board, the International Actuarial Association and nine other agencies alongside the World Bank and the IMF.

At a European level, all of these work with the EU's Frankfurt-based European Insurance and Occupational Pension Authority, and with Member State regulatory bodies.

This has interesting implication for Brexit. Global dimensions mean that leaving the EU, per se, would not afford any significant relief from these provisions. Costs would still be incurred. But it also means that renegotiation with the EU would be a waste of time. We would be talking to the wrong people.

Because of this, an alternative stratagem has been suggested by the consultancy KPMG. It argues that significant costs arise from duplication and the lack of a consistent measure of insurers' financial solvency. Thus, rather than targeting to remove regulation, it suggests the global industry could save up to $25 billion per year from harmonised, consistent regulation.

In this context, rather than a negative, Solvency II is seen as a start of a long process of improving and rationalising the law. But it is also part of a global initiative alongside the Solvency Modernisation Initiative in the US and recent ERM enhancements in China.

Indicative of future expectations was a commentary in Reuters. It complained that one of the great disappointments in the raft of regulatory changes emerging from the financial crisis of 2008 had been the failure of regulators to agree a common framework.

In an attempt to achieve this, a greater role was proposed for the International Organisation of Securities Commissions (IOSCO), the acknowledged global standard-setter for the securities sector.

The way forward was seen as this organisation promoting and facilitating regulatory convergence, something which was regarded as inevitable for global markets. Whatever European issues currently apply, the eventual ambition is to have harmonised global legislation for what is, after all, a global industry.

And for all the wittering from the likes of Elliott, UK regulators are not ill-disposed to this idea. The chief executive of the Financial Conduct Authority, Martin Wheatley, states that his authority intends to "reflect on and embrace" the international nature of markets.

He talks of a "new regulatory landscape" and of driving changes in regulation, infrastructure and culture, as a body at the "heart of international regulation". His view is that the regulator exists "to drive forward a changing global agenda". "You will witness first-hand how we share priorities with our EU and US counterparts, and how we are at the forefront of discussions to address cross-border risks", he says.

Such discussions require access at the highest level, well above the narrow sub-regional entity that is the EU. Despite it being positioned as such by David Cameron, the "top table" is quite simply not the EU.

Occupying that position globally is the G20. Thus, when the EU sought to adopt its Financial Transaction Tax (FTT) – about which Elliott also complains - against British wishes, invoking the enhanced co-operation procedure, it was to the G20 that the financial markets representative bodies turned.

Now, on financial matters, the key body is becoming the G20. But it works through the Financial Stability Board (FSB), founded in April 2009, with a mandate "to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies". It brings together national authorities, international financial institutions, sector-specific international groupings of regulators and supervisors and committees of central bank experts.

It counts as its members the Basel Committee on Banking Supervision (BCBS); the Committee on the Global Financial System (CGFS); the Committee on Payment and Settlement Systems (CPSS); the International Association of Insurance Supervisors (IAIS); the International Accounting Standards Board (IASB) and the International Organization of Securities Commissions (IOSCO). This is, in effect, the standards setters' standards setter.

Significantly, the FSB is chaired by Mark Carney, Governor of the Bank of England. You want the "top table"?  Well, this is it, and our man chairs the meetings.

And guess what? The FSB secretariat is hosted by the Bank for International Settlements in Basel, Switzerland. This institution shifts the focus of power to Basel, where the global agenda is monitored and steered, with regular cross references to its sponsoring body, the G20. The UK is well placed to influence that agenda, working not through Brussels but through Basel, where Mr Carney can talk to the Governor of the Bank of England about what regulations we need. 

All of this, therefore, makes Mr Elliott's prattle about "renegotiation" an unnecessary distraction. For what little advantage he and his shallow friends would gain, they would miss out on the huge opportunities afforded to us as members of the global community, where we properly belong.

The point is that we do not need the EU – it simply gets in the way. And we don't need Mr Elliott confusing the issues, adding another fatuous call for "renegotiation", to add to the cacophony. He is wasting our time and everybody else's.


Richard North 23/06/2014

 Brexit: another nail in the coffin?

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On offer from the Financial Times today is a preview of an as-yet unpublished report from the Centre for European Reform (CER), to be launched on Wednesday. The report is by their grandiose "Commission" set up last year to explore the implications of Britain's exit from the European Union.

We have already had a foretaste of its work with a report on the effect of Brexit on the City of London, on which basis, we can expect the same wearily predictable Europhile drone. The problem is that the CER exudes "prestige". Furthermore, the professional presentation of its work offers a stark contrast to the laughably amateurish style of the IEA "Brexit prize" finalists, and the thrashing of lightweight dilettantes such as Hannan, each pushing their pet nostrums without any concessions to reality.

According to the FT, the CER is going to tell us is that EU membership has been a "boon" for the UK economy, lifting its goods trade with other members by 55 percent, generating increased inward investment and boosting the City of London. Then, entirely predictably, it finds that many of the purported benefits of leaving are "illusory".

We are to be led to believe that, "even within the rule-bound EU", Britain has managed to preserve the second most lightly regulated product market in the developed world, as well as levels of employment protection that are only marginally more restrictive than in the US or Canada – and well below those in France or Spain.

The CER will also tell us that some of the most controversial EU rules – such as the working time directive – have had only a "marginal" effect on the labour market. In other areas, notably financial regulation, it will say, Britain has voluntarily gone further than EU minimum standards.

Thus, it will maintain, "A bonfire of European rules would not transform Britain's economic prospects". According to its report, "The idea that the UK would be freer outside the EU is based on a series of misconceptions".

The trouble with this is that, when I have seen the full 92-page report, in all probability I will be agreeing with the premise. As I have already set out in my own draft report, in the short- to medium-term, the idea that there are significant regulatory savings to be made is "illusory". Most of the schemes which offer such savings, "seem to be based on wishful thinking rather than rooted in reality", I note.

By offering unrealistic nostrums, though, we are allowing the Europhiles to make the running. The CER report makes great play of what it calls an "invidious choice" facing the negotiators of any split with Europe.

If Britain seeks to benefit from the single market from outside the EU, it says, it will have to play by many of the rules it is seeking to escape – while having less influence over them. The flipside would be freedom from those rules, with loss of access to the single market.

Once again, we get the same tired old mantras, but the very same that are on offer from the "eurosceptic" community - both are offering the same ideas. These options, says the CER, include a Swiss-style deal based on bilateral agreements with the EU; a customs union of the kind Turkey has with the EU; or, like Norway, membership of the EEA.

From there, the drone develops: "the UK would still have to comply with the club's rule book without having power to influence it". And, as the lies continues, we are told that the UK "could find itself continuing to pay into the EU budget; a Norwegian-style deal would lower net contributions by only nine percent, while a Swiss arrangement would cut contributions by 55 percent".

Thus, the paper concludes that "the only option" that would make sense would be for Britain to go for as deep a free-trade agreement as possible with the EU, and sign as many bilateral trade agreements with non-EU partners as can be secured.

Even then, says the CER, "an FTA would still not leave Britain with complete regulatory freedom". The EU would "make demands on labour market rules, health and safety and competition policy, as well as product standards. Including Britain's services sector in any FTA would be difficult, given the UK's large trade surplus in services with the rest of the EU".

Needless to say, none of the points made are entirely valid, but there is just suffiicient truth in them to make them plausible. But not only is the FTA "option" politically unrealistic, we would be unwise to allow the Europhiles to set the terms on what our leaving options should be.

Again, though, the problem is that, in principle, I would agree with many of the points made by the CER – as far as they go. None of the available options, including the "Norway option" are viable in the long term. None of them provide the complete solution for Britain in a post-exit environment.

This was something I was at pains to stress in our Harrogate meeting last week. There is far too much emphasis on the initial options – including the "Swiss option" and the "Norway option". We need to extend our imagination to settling what can only be an interim solution. The real plan is to buy time for the longer-term solutions (in the plural). These are the essence of any successful exit plan.

By allowing the Europhiles to set the agenda, and by refusing to devote energy to developing our own realistic exit plans, we risk conceding the game before it has even started.

We can see very clearly the CER strategy, and it's a good one. They take "our" plans and rubbish them – which is easy to do, and then set up a "straw man" option which, in the fullness of time, will be just as easy to demolish. If we allow this, at the critical moment in any referendum campaign, we will be left with no viable alternatives to EU membership, and will have voters flocking to the safety of the status quo.

The real alternative, the idea of a two-tier structure, involving a short-term interim solution, buying time for longer term solutions, is of course one that the Europhiles dare not and will not raise. Because that is the strategy that has a chance of working, they will never discuss it, and will try to ignore anyone who does.

In the absence of publicity on the workable alternative, on Wednesday, we will see the CER making the running. There will be no great drama – no front-page headlines. But, unless we start getting our act together and push for a credible alternative, this Europhile propaganda initiative will be another substantial nail in the coffin. It could be one that ensures we lose any "in-out" referendum.


Richard North 09/06/2014

 Brexit: boring the voters into exhaustion

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As advertised, the ludicrously expensive Continental Drift "In or out?" conference on the EU took place last Thursday, graced by the presence of Matthew Parris who tells us that there are three years to go before a possible referendum on Europe, and "already it's impossible to know what to think".

That is a very predictable outcome of a conference stuffed with an "authoritative line-up of experience and expertise", defined not by depth of knowledge and the breadth of their research, but by their "prestige". There was "hardly anyone on the podium who wasn't a tycoon, a knight, a lord, a professor or an über-boffin".

This, compared with our modest little workshop on Wednesday, when the fruits of some serious work will be discussed, this ensured that paying delegates were left confused and uninformed – precisely as Parris reports.

Parris, armed with the degree of profound ignorance that has become the speciality of the chatterati - believes he was "offered a glimpse of the future" at this conference when, in fact, all he got was the turgid droppings from closed minds, tired intellects and over-inflated egos.

Like some Dickensian ghost of times yet to come, the Times correspondent tells us, "Fate took me by the hand and tiptoed with me through 2015. Then 2016. Then 2017. Three long years we surveyed, Fate and I. Gloomy and appalled we watched what may lie in store for Times readers, for me, and for those millions more of our fellow citizens who will be taking an (sic) thoughtful interest in our country's direction".

The man does, of course, presume too much. On those constrained by the foetid limits determined by the pursuit of prestige above all else could believe that the experience in any way represents the future. For, what Parris saw was not an exposition but a shut down, an attempot to close down the debate.

And what he saw was it was "awful". Says Parris: "Reason fled; meaning turned to mirage; truth itself shimmered, shook and dissolved". The "impressive" day-long symposium was never boring. "Attention was held as the horror grew. We were being treated to a living demonstration of the death of objectivity: a dry run of the insanity that (assuming a 2017 referendum does take place) this three-year debate promises to become".

Then, tucked in was the ultimate objective (and successful execution) of the symposium: "Taking shape before a dismayed audience was the complete impossibility of ever reaching any conclusion", writes Parris. "Crushed beneath a tottering heap of speculative claim and counter-claim, reason, even among the reasonable, began to die".

Cutting to the chase, Parris asks what we learned that was new. "This", he says, "is, after all, only the start of three long years of argument: the debate is surely not yet exhausted?" He writes:
And what did we learn that looked capable of clinching an argument? What anchors in reality, what figures, what numbers could anyone supply? Both within and outside the hall I sensed the silent presence of an audience already weary of propaganda and hype, and hungry for hard facts. But as the day drew on, the facts melted before our eyes.
Three impressions, he adds, "had a certain freshness", for him, at least. The first was quite revealing:
Few, even among the Eurosceptics, are now trying with much conviction to sell the attractions of a Norwegian-style "trade-only" deal for a Britain outside the EU. What Vernon Bogdanor called Norway's "fax democracy" (in which a country has no place at the EU table yet still faces EU costs and regulations) sounded unsatisfactory for the UK.
There we can see where the land lies. The only option with a chance of working – albeit as an interim solution – is the one they all have to reach out and destroy.  This is why the IEA "Brexit prize" had so ruthlessly to exclude any reference to the option. This time, the coup de grace was delivered by the pompous Europhile Bognador, with the gullible Parris only too willing to soak up the propaganda, revealing nothing more than his own ignorance.

The second issue Parris identifies is the financial services industry (as represented on Thursday). It is not mightily fussed about the in-out question. Most of these voices sounded quietly hopeful that their sector could live with or without a British exit. But that is hardly surprising since most financial services legislation is coming from global bodies – not that Parris would know anything about this.

Third, this silly man was "mildly surprised" at the level of confidence that a British prime minister might bring some seriously useful gains home from the EU. Charles Grant from the Centre for European Reform suggested these:

a) Letting national parliaments police "subsidiarity" (the things nation states decide for themselves) and "yellow cards" for Brussels-based intrusion;
b) Completing the single market; liberalising services and the digital economy;
c) Further tightening benefit rules for EU migrants;
d) Streamlining and reshaping a bloated commission;
e) Single-market safeguards to protect the ten non-eurozone members from the eurozone;
f) Entrenching member states' democratic checks on "ever closer union".

This sort of BS might satisfy Parris, but he then asks where the "argument-clinchers" were. "As facts and statistics were tossed on to power-point presentations", he tells us, "a sense of the incurable subjectivity of this debate settled on us. Civitas found a three percent net loss in GDP as a result of EU membership, while the CBI found a four percent GDP net benefit".

Indicative of precisely why we should not get bogged down in micro-economic detail, or even allow the argument to be dominated by economic issues, we then have Parris tell us that, "these figures themselves dissolve into mere assertions when, digging deeper, you examine the assumptions that have to be made before a number can be posited".

Let me illustrate, says Parris: UKIP's Tim Congdon handed out his booklet showing, he told us, that the EU costs Britain "roughly 11 percent" of our GDP. Half of this, he said, comes from the cost of EU regulation. But …
… what he cannot do, because nobody can, is give a figure for the cost of the British-made regulation that might (or might not) replace the Brussels-made regulation. Would parliament want rights of parental leave? Control of chemical food additives? Health and safety legislation? Product specification? Nobody can even guess how much EU-sourced regulation a future "unshackled" UK parliament would vote to replicate. The "cost" of EU regulation is anybody's guess.
We've tackled Congdon before, and his figures have never stacked up - even the facile Parris can see this. But our arguments do stand up, although they were never going to be heard in this venue. That is how they rig the debate – defining who speaks. Their aim is to control the debate and ensure that no workable solutions ever see the light of day.

The success of this strategy on the day was plain for all to see. Parris left the conference, as (he thinks) did most of the audience, "with the settled and dispiriting conviction that the economic argument for or against Britain's EU membership will be impossible to frame convincingly".

It is, he says, "unlikely to gain traction one way or the other, and in the years leading up to a possible referendum would confuse, exhaust and, finally, numb the voters". "He's numbed already, and there's three more years of this to go".

It is there, though, that Parris does as a service. We see the tactics of the Europhiles, and the europlastics. But we also know that they lack imagination, perception and the understanding of the issues. We're well ahead of the game and we know how to energise the debate – which is what we are doing on Wednesday.

The Parris experience is, in fact, encouraging. For £1,800 a piece, the Continental Drift marks have been fleeced. We can deliver the answers and our case gets stronger by the day. And we have no need to take people to the cleaners. The trick is to go for an economically neutral interim solution, by-pass the narrow economic debate and look at the big picture.

The "little Englanders" and the "little Europeans" have one thing in common - neither can break out of the intellectual boundaries they have set themselves. We're going to do the job for them.


Richard North 02/06/2014

 Flexcit: version twelve now available

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If in three years time we are to face an "in-out" referendum, then today we see a landmark which, in the fullness of time, will be of far more importance than the euro-elections just past. This is the completion of version twelve of our Flexcit blueprint for leaving the EU (also accessible from the "Brexit" link on the header menu).

If you believe that statement to be hyperbole, or just another example of North arrogance, you are welcome to attempt making a case. But the fact is that, faced with a choice of whether the UK should leave the EU, the electorate will be far more influenced by existence of a credible exit plan than they will be by the election of 24 UKIP MEPs.

That is very much the case when, with the passage of three years, there is a good chance that a substantial number of these MEPs will not be accepting the UKIP whip anyway and, of those who do, many like Gerald Batten and Lord Dartmouth, will prove to be an embarrassment. They will more likely driving voters into the "in" camp, than assisting with the cause.

Indeed, one of the fatal flaws of the 1975 campaign was its inability to come up with a credible alternative to (then) EEC membership. To date, the "eurosceptic" community has seemed determined to replicate that flaw, with UKIP in particular stubbornly refusing to commit the necessary time and resources to producing an exit plan.

Even the now infamous IEA "Brexit prize" turned out to be a cul-de-sac, with the six finalists, including the winning "essay", turning out to be of such poor quality that they were embarrassing. It is difficult to know which was worse – the poor quality of the work, or the fact that its authors believed they had produced anything of merit.

The one good outcome of the prize initiative, however, was to kick-start the production of this Flexit plan, easily the best and most comprehensive entry sent to the IEA but, like others, rejected because it did not meet the undeclared criteria of the judging process, advocating as it did the adoption of the so-called "Norway option".

What makes Felxcit so good is that it is a co-operative exercise. It genuinely builds on the experience and good sense of this blog's readers, and the many friends, colleagues and experts who have over a period of years offered advice and information which have gone into the current version.

As to version twelve, for the first time, the all-important psychological 200-page barrier has been breached, my personal dividing line between a lengthy pamphlet and a full-blown book. I am now at ease with the idea of calling this work a book, and have adjusted references in the manuscript accordingly.

From the original draft, which ran to 26,000 words and 98 pages in single line spacing format, the work has now added 46,000 words and another 118 pages, to bring it to 72,000 words and 216 pages, with much more yet to come.

It will continue to be, therefore, a "live document", keeping the debate alive, giving readers a much clearer idea of the options and ideas influencing the thinking of those concerned with the mechanics of leaving the European Union.

As for the main changes so far, one of the more important is the integration of material submitted in the Bruges Group's submission to the IEA. There is considerable overlap between our original submissions, but issues not covered in ours, and the special insights in the Bruges Group paper, have been absorbed. Effectively, that makes this book a joint work, incorporating the thinking of the Group.

Compared with the original submission, though, the changes are substantial. The introduction has been considerably expanded. There are additional sections on public education, deregulation and the Swiss option, rejoining EFTA, and absorptive capacity. We have also inserted extra material in many other chapters. Also, the discussions and conclusions chapter has been substantially re-written.

Material scattered through the body of the original paper has been collected together to create an entirely new chapter on what we call our eight-point programme. This is undergoing further transformation. We have considerably expanded the chapter setting out the political background to the putative referendum, work which is as yet unfinished.

We have also collected up material to make up a new chapter on globalisation and another on freedom of movement and immigration - which will be further expanded. There is another chapter on domestic reform, introducing the Harrogate Agenda, and one each on agriculture and fisheries. This brings the current number of chapters to fifteen.

What emerges particularly from the release from the word limit set by the IEA for the original paper is the restrictive effect it was having. Having to cram in technical detail, and meet the judges' requests that each exit option should be argued, meant that the text had to be unusually dense. Adding explanations and examples adds to the length of this work, but it considerably improves its readability and clarity.

In terms of the quality of the work, one of the new chapters dealing with fishing policy, is based on Owen Paterson's Fishing Green Paper, the production of which had him travelling all over the world, over a period of two years, looking at fishing systems in many of the world's major grounds.

With my desk and field research over the same period, plus years of study of the EU system, this single chapter encompasses work of unrivalled scope and depth.

It would be false modesty (and an insult to the many contributors and advisors) to assert that this was anything other than the best exit plan currently available and, by the time we have finished the definitive work in September (the current target), it will be the most comprehensive.

That said, we are under absolutely no illusions about the treatment of the work. Most – and especially the legacy media – will ignore it, many of them quite incapable of judging its value, or even understanding it.

Others will succumb to the "not invented here" syndrome, and some will labour under the false impression that other published plans are better. Still others will reject the work on ideological grounds and then there will be a large, feeble-minded constituency who will have nothing to do with it simply because it bears my name. For these people, no amount of work or quality would suffice. It will be damned by association.

Some argue that I should be more emollient and more accommodating, especially with UKIP, in order to encourage a wider readership, but this is a chicken and egg argument. The fact that there is a division between myself and UKIP stemmed from my insistence that there should be an exit plan. To this day, the current party leader has consistently rejected the idea. Therefore, it is for him to change, not me.

Fortunately, we are not dependent on such a change of heart. We have the internet and can publish the ongoing work, which is precisely what we have done, and will continue to do. It is my belief that, in the battle of ideas, quality and depth of thinking eventually prevails. 

Thus, my view is that we need (and should) make no compromises. Flexcit will eventually prevail because it is simply the best thing on offer in the field, streets ahead of the competition.


Richard North 27/05/2014

 Media: conned by the Beeboids

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I was invited  to take part in a Radio 5 Live debate on the EU scheduled for Tuesday, up against Charles Grant of the CER.  I had been extremely reluctant to do anything with the BBC, but the inquiry came via Booker, who had been extremely impressed with the researcher. When the same researcher contacted me, he promised a 25 minute slot, with assurances that it would be a grown-up debate.

After a long discussion of the issues, where the man had quite obviously done his homework, and agreed about the poor quality of the debate so far, I agreed to go to Leeds for an 11pm broadcast.

However, at the last minute, it appears (unknown to me at the time), Grant pulled out. The programme was thus postponed until yesterday night at 11pm (Wednesday). But this time, I was to be up against ex-Beeboid Lucy Thomas from BNE, and - as I was to find - an obviously biased interviewer, Phil Williams. Then, only after the programme had started and I was already in the studio, was I told there had been "a lot a breaking news". The discussion time had been cut - to an unspecified length. In the event, it was considerably less than than ten minutes.

After an introductory clip, which included a long interview with an academic from Sheffield University, clearly europhile in tenor, Williams gave the first hit to the Beeboid. Far from being a serious discussion, she trotted out the same low-grade europhile FUD that we've been getting for years - including an attack on the Norway option, with me given no time to respond. 

Thomas was then given the last word, with free passage to observe that too many people spent time listening to "people like Dr North".

Thus, for an hour and a half of my life taken to drive to and from Leeds and take part in the programme, all I got to do was trade a few points on two questions and slap down the fatuous Williams. His great contribution was to accuse me of "cherry picking", when I told him that we need to be operating on a global level and "little Europe" was dragging us down.

I suppose I should have known better.  This is actually typical of the BBC, who pulled me in under false pretences - as they so often do. Had I known the conditions in advance, I would not have agreed to take part. 

This is the LAST time I let the Beeb con me. They are time wasters, incapable of hosting a serious debate on any issue of consequence. If we are to rehearse these issues, it is going to have to be without the "assistance" of a wholly inadequate state broadcaster. We are actually better off without it. To be stitched on on-air is actually worse than not being there. 

Meanwhile, Complete Bastard points out that there is another thing we can do without. Between UKIP and the BBC, we are struggling to make headway. 

Life was never meant to be this complicated, and this is only a start. If we ever do have a referendum, we are going to need a powerful web presence to counteract the sheer unprofessionalism of the Beeb, and the low-grade amateurism of UKIP.


Richard North 22/05/2014

 EU referendum: closing down the options

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It has taken less than a week, according to the Observer, for a German to stick his head over the parapet and call out David Cameron over his plans to renegotiate the terms of UK membership of the EU.

This is Gunther Krichbaum, head of the German government's committee on EU affairs, one of Angela Merkel's closest allies. And he has firmly rejected David Cameron's proposal to extricate the UK from the EU's commitment to "ever closer union". Instead, he accuses the prime minister of putting it forward in a "desperate attempt to appease UKIP".

This is not the first time we've heard from Herr Krichbaum though. He stepped up to the plate in early January last year, before even David Cameron had given his famous "Europe" speech when he promised a referendum.

Even then, Krichbaum was warning David Cameron not to try to blackmail the rest of Europe. The prime minister was also told a UK referendum was a high-risk option that might paralyse Europe and end in economic disaster for Britain.

At that time, Carmeron was mooting a hijack of the expected EU treaty, threatening to block it unless the "colleagues" acceded to his demands. Krichbaum's response to that had been sharp, saying: "You cannot create a political future if you are blackmailing other states. That will not help Britain. It needs a Europe that is stable. It needs markets that are functioning".

We must further remind ourselves of what Krichbaum was also saying about the idea of a poll. "You have to ask yourself if it is wise to carry out a referendum", he said, then adding: "It is certainly possible to convince people of advantages of the EU. But there is always a risk that the referendum becomes – as Charles de Gaulle put it – less about the question asked and more about the person who's asking it".

It was also then that he urged British Eurosceptics to think through the consequences of Britain leaving the EU, or adopting the same status as Switzerland or Norway. "Some people claim that Switzerland is in a remarkable position", he said. "I highly doubt that: Switzerland needs the EU, but it cannot influence the political process within the EU. That is a big problem".

"If Britain loses the single market it would be a disaster for the British economy. If Britain left the EU, it would weaken the European Union and the idea of Europe, but it would also weaken the position of Britain vis-à-vis the EU and in the world".

Bringing the situation up-to-date, Krichbaum is now saying specifically that the other member states will not agree to the exemption of the UK from the "ever closer union" provision, which is central to the operation of the EU.

"I can't imagine that the member states would allow Britain to extricate itself from the 'ever closer union' clause. It looks to me like a desperate attempt on Cameron's behalf to appease UKIP", he says.

"'Ever closer union' is a key element in the fabric of the EU treaty, not least because it is the basis for enhanced cooperation between member states", Krichbaum adds. "For example, it allows nine members to come together and cooperate more closely, while other states can hold back. In that respect, Britain already has the opt-out that Cameron now promises: the whole thing is a phantom debate and raises the question about what Cameron really wants".

Krichbaum shows absolutely no sympathy for Camerons aspirations. "It seems his flip-flopping on Europe is now starting to hit back at him", he says. "If you want more influence in Europe, then you need closer cooperation. Britain should try to exert more influence in the EU – I for one would welcome it".

Nor is Krichbaum entirely on his own. While German government officials are not commenting officially on Cameron's plans, Axel Schäfer, deputy chairman of the SPD parliamentary group, says that Cameron was "making the people in your country go hysterical".

He adds: "Would Germany allow Britain to wiggle out of the 'ever closer union' clause in the Rome treaty? That's out of the question. How could we simply remove such a central plank from the foundation of what Europe is now, from a treaty that has been ratified 500 times by various countries across Europe? There is simply no reason to do so".

Perhaps even more worrying for our prime minister, Schäfer goes on to say, "If Mr Cameron thinks he has Germany and Mrs Merkel on his side on this question, I can assure him that he is wrong".

Another German politician into the fray is Elmar Brok, a Christian Democrat MEP, who observes: "It seems ironic that Cameron is focusing his calls for EU reforms on the phrase 'ever closer union', given that it was only put in the Maastricht treaty thanks to Britain in the first place".

"At the time", says Brock, "we would have preferred the term 'federal Europe', but in Britain that phrase was too problematic: for John Major, it implied centralisation, while for many other European countries it implies decentralisation. So the phrase was only put in thanks to Major. If Cameron is still concerned about the language, I would be open to discussions. But you can't suddenly question the basic principles".

Altogether, it would seem Mr Cameron has a problem. But then we knew that already. He was never going to get his treaty, but if ever he had any aspirations in that direction, Krichbaum has firmly put the lid on them.

Coming out so early in the game, though, this gives Mr Cameron little wriggle room. While he remains committed to his 2017, referendum, it is going to be desperately hard for him to convince voters that he has achieved any concessions at all. His options are being closed down.


Richard North 18/05/2014

 Brexit: more scary stories

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In The Times and others we have a review of a paper from the LSE's Centre for Economic Performance (CEP) claiming that a decision by Britain to leave the European Union "would be a risky gamble" that "could result in economic losses larger than those suffered at the time of the global financial crisis".

This, though, is a "worst-case scenario", the nature of which is unspecified in any of the newspaper reports. All we get is that Britain could suffer a fall of up to 9.5 percent of GDP, compared with the seven percent drop in output after the global financial crisis struck.

Only when we get to read the report do we see that the scenario on offer is that the UK leaves the EU and joins EFTA (but not the EEA, which is not mentioned). On the basis that EU members trade substantially more with other EU countries than they do with members of EFTA, the CEP estimates that our trade with the EU will fall by about a quarter.

Combining this with the estimates that a one percent decline in trade reduces income by between 0.5 and 0.75 percent, that "implies that leaving the EU (and joining EFTA) will reduce UK income by between 6.3 and 9.5 percent". That could be equivalent to a cash loss of £50 billion. Then, even at the very best, CEP projects a "optimistic" case that would result in a 2.2 per cent fall in GDP, equivalent to a "substantial" £18 billion loss.

The base assumptions here, though, are fundamentally flawed, not least because the "research" does not distinguish between EEA and non-EEA members. It appears to make the same assumptions for both. Then, while it is true that EU-EFTA trade rates are lower, this is to a very great extent due to the fact that the three main EFTA economies are very different from those in the EU, not least in terms of their protectionist attitude to agriculture – trade in which is excluded from their deals.

In the UK, however, we operate very open trade in agriculture and food (including drink and animal feed). Furthermore, this is a sector that exported about £18.2bn in 2012 of which about £9.5bn went to EU countries.

By contrast, the UK imported in the same year £37.6bn, of which more than £25bn came from the EU. With a near 3:1 disparity between import and export, therefore, the UK is in a powerful position. One might expect it to be able to cut a deal with the EU, based on current trading terms.

Similar dynamics apply to other sectors, which means that the CEP projections, based on existing EFTA arrangements, are simply not realistic. Their supposed losses are scaremongering. Given our trade scenario (with version 11 now available), the "Norway option" would be economically neutral. Trading arrangements would carry over unchanged and there would be no measurable losses.

This, however, does not stop the CEP plunging in the dagger, claiming that the "dream of splendid isolation may turn out to be a very costly one indeed". This is typical Europhile scare phrasing, tedious and predictable.

What worries, of course, is the facility with which the media trot out this low grade speculation, without the first attempt at critical analysis. In any referendum campaign, we're going to see an awful lot of this and a confused and worried public could easily be swayed by this sort of nonsense.

The antidote, of course, is to keep pushing our own analysis – Brexit will be economically neutral, leaving us open to enjoy improved democracy and the other benefits of withdrawal. The trouble is that there are plenty CEPs and no end of scary stories, so we must not allow the battle to be fought on economic grounds.


Richard North 17/05/2014

 Brexit: the 1975 Labour Party alternative

Referendum002.jpgAt great expense, I recently obtained this historic copy of a pamphlet by the Labour Research Department, dated 15 March 1975.   Reproduced below is the text from page 30, headed "The Alternative". 

What immediately strikes one is how little the arguments have changed in what passes for the mainstream, so much so that, with only a little tweaking, this could easily have passed muster as a finalist for the IEA "Brexit" prize.

On the other hand, if this represented the Labour Party view in its unadulterated form, one can quite easily see from the final paragraphs how simple Conservatives might have seen the EEC as a good idea. Anyhow, in this quiet corner if the blogosphere, things are at least changing. Enjoy this while you can:

Supporters of our staying in the Common Market say that if we leave we shall be on our own and out in the cold, deprived of the friends we need. The truth is exactly the opposite. Only by leaving can we recover the powers that are needed for entering into equal trading relations with all countries in the world.

Freed from the restraints of the Common External Tariff, the Common Commercial Policy and the Common Agricultural Policy we shall be able to re-establish our former trading links with low-cost food suppliers and to enter into new links whenever suitable.

We shall be able to resume our former relations with the countries that used to belong to the European Free Trade Area – Sweden, Norway, Portugal, Austria and Switzerland – by entering into an agreement for an industrial free trade area with them, as indeed the EEC has done.

We should also be able to enter into an agreement with the EEC for industrial free trade, for it will be in their interest as well as ours to retain their trading links with us. We shall not be out in the cold at all; but we shall abandon our membership of a regional trading bloc and the use of its bargaining power to support its multinational companies.

These measures will stop the diversion of our trade into the Common Market caused by our membership of it, and in addition we shall be free to take positive measures to increase our trade with developing countries and socialist countries and others who have a greater need for our manufactured goods than the EEC countries who make the same sorts of goods as we do.

We shall have the power to impose selective import controls which have now become a necessity in order to overcome our huge balance of payments deficit. We shall also be able to enter into long-term trading agreements for the purchase of food or commodities on favourable terms. In short, outside the Common Market we shall be able to plan our foreign trade instead of having to leave it in the hands of blind market forces.

Released from the burden of the CAP we shall be free to buy our food wherever it is cheapest including the EEC, and shall be able to restore the deficiency payments system which is best suited to the needs of our farmers.

Freed from the restraints of the Rome Treaty and its competition policy we shall be able to extend public ownership and advance towards socialism at a pace determined solely by the British people and their parliamentary democracy.

Our problems would never be overcome, of course, if we left the Common Market only to pursue the disastrous type of policy favoured by the Tory party in the years 1970-74, relying on competitive market forces combined with state support for the multinationals. Our withdrawal from the Common Market only makes sense if we use the opportunity it will give to make fundamental economic and social changes.


Richard North 08/05/2014

 Immigration: a global solution is needed

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The latest TNS poll has a message for us, reporting that 56 percent of those who want to leave the EU offer as their main reason that it would "allow stronger control of our borders" and thereby reduce migration.

This illustrates the degree to which the control of immigration has overtaken the "eurosceptic" agenda, so much so that it features prominently on the front page of the UKIP election leaflet – one of the reasons why we so readily consider the party has become "BNP-lite" and, as Complete Bastard indicates, the great white hope of the anti-fascist groups.

Confronting the problem of constructing a realistic EU exit plan, however, this idea of regaining control of our borders, to reduce immigration, presents us with considerable difficulty if we are to adopt the so-called "Norway option", which gives us participation in the EEA.

Within the EEA Agreement, the "four freedoms" in the EU treaties are repeated. These are the free movement of goods, people (and the right of establishment), capital, and services. As long as Britain remains a member of the EEA, therefore, these freedoms will continue to apply.

Those applying to goods and services are largely uncontentious but, in the longer-term, application of the freedoms concerning the movement of people and the right of establishment will have to be reviewed if we are to satisfy the requirements of the many who want to leave for reasons of reducing immigration.

However, the EU regards its "freedoms" as a non-negotiable part of the Single Market acquis. This was uncompromisingly reaffirmed by Viviane Reding, a Commission vice-president., who recently stated: "if Britain wants to stay a part of the Single Market, free movement applies". Within the EEA, Britain would be obliged to permit immigration from the entire area.

This, though, is not a problem unique to the Norway option. Even Swiss bilateral agreements have afforded little relief. On 21 June 1999, the EU and Switzerland signed an Agreement on the Free Movement of Persons, which came into force on 1 June 2002.

This extended the right of free movement to citizens of EEA Member States, and was complemented by the mutual recognition of professional qualifications, the right to buy property, and the coordination of social security systems.

By the end of 2012, 23.3 percent of the 8,039,060 population was foreign, compared with 13 percent (7.5 million) in England and Wales. Of the 1,869,969 foreigners in Switzerland, 85.1 percent were European. Three-quarters were nationals of an EU or EFTA member state.

This was despite additional protocols restricting the movement rights of the 2004 enlargement bloc (EU8), and Romanians and Bulgarians. These protocols introduced a "safeguard clause" that permitted quotas on residence permits. EU8 citizens were granted unrestricted free movement rights only on 1 May 2011 while Bulgarian and Romanians will remain restricted until 31 May 2016.

Such has been the increase in immigration that in 2013, responding to increasing public concern, quotas were reapplied to EU8 citizens and then to nationals of all the other EU states.

The restrictions were due to last one year but the Swiss People's Party (SVP) forced a referendum, held on 9 February 2014, on whether they should continue. Before the vote, Foreign Minister (now president) Didier Burkhalter argued that it "would jeopardise … relations with the European Union" and "test Swiss treaty obligations".

Contrary to an assertion that the Swiss model is "the only way to regain control of our borders", Ueli Maurer, Swiss president of the SVP, declared that "Switzerland has given up its freedom to be able to determine its own policies". On the day, 50.3 percent voted to continue the quotas, putting at risk the entire raft of bilateral agreements under a guillotine clause, actionable if any one agreement was broken.

These developments have significant implications for British negotiators. Firstly, the original Agreement and protocols demonstrated that flexibility in negotiations from outside the EU is possible: the Swiss obtained a better transitional deal on accession countries than did EU/EEA members. Secondly, as the Swiss are finding, there is a growing mismatch between what governments agree and what their citizens are prepared to accept.

Thus, while the British negotiators will be under pressure to accept freedom of movement provisions, these might not be acceptable to the electorate. In one recent poll, 61 percent of swing voters in an EU referendum poll (20 percent of the total) saw EU immigration as the most important issue in any renegotiation, compared with 34 percent who saw freer trade with non-EU countries as important. 

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Therein lies the possibility of an intractable problem for an exit plan. Following completion of the Article 50 negotiations, the public may well demand a referendum on the agreement. Negotiators, therefore, will have to take account of what is politically possible, as well as that which seems essential to conclude the agreement. Unrestricted free movement of people could be a deal breaker, forcing Britain to pull out of the EEA and consider other, less attractive options.

There is, however, one fallback position, Articles 112-3 of the EEA Agreement, the "Safeguard Measures" which permit the parties unilaterally to take "appropriate measures" if serious economic, societal or environmental difficulties of a sectoral or regional nature arise and are liable to persist.

These measures had been invoked by Liechtenstein, an EEA member with less potential influence than Britain. They were further reinforced by Protocol 15 (Article 5–7) of the EEA agreement, which allowed Liechtenstein to keep specific restrictions on the free movement of people until 1998.

Given unacceptable effects arising from freedom of movement, the UK is therefore empowered to take remedial action. However, the situation is complicated by the estimated 1.8 million Britons resident in EU territories, and the estimated 4.5 million nationals of mainland EU member states resident in the UK.

They enjoy entitlements known as an "executed right", embodied in the Vienna Convention (Art 70b). "Withdrawal from a treaty", it states, "does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination".

This view is supported by Lord McNair (Lord McNair, 1961, The Law of Treaties, OUP Oxford, pp 531–532) who concludes that such rights established by a treaty will remain in force even if the agreement is terminated by Britain's exit.

In law they are considered to be executed by the treaty and "have an existence independent of it; the termination cannot touch them". Their status will be guaranteed as a result of the "well-recognised principle of respect for acquired [vested] rights".

Nevertheless, the good faith of host countries cannot always be guaranteed. It cannot be assumed that British expats would necessarily enjoy a problem-free transition. Negotiators would have to protect their interests, as well as the needs of business, student and academic movements, and the tourist trade.

This notwithstanding, the greater proportion of immigration comes from non-EU countries, the largest group coming from India. Even from within the EU, though, some immigration is mandated by non-EU instruments, such as family reunification which accounts for 17 percent of UK totals.

Although the provisions are set out in Directive 2003/86/EC, the EU is implementing a right recognised in the European Convention of Human Rights (ECHR), to which Britain is a party. In order to relieve itself of this obligation, Britain might have to reconsider its membership of the Council of Europe, which is the sponsoring body of the ECHR.

This illustrates the need to coordinate domestic and international policies, but there are limits even to this. Migration is by no means a creature of regulation, much less EU regulation. Greater forces trigger population movements and, to an extent, government intervention simply shapes and directs flows. 

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Solutions, therefore, may not lie in release from treaty obligations, or putting up barriers as suggested by the latest UKIP poster, but in reducing the impact of factors which give rise to immigration in the first place. These are the so-called "pull factors" and the more complex "push factors", comprising the "displacement events" which drive migrants from their homes.

In this, Britain can work with EU member states, and would continue to do so even after it has left the EU. In return, the EU might reasonably expect contributions towards joint measures. For instance, where the EU has brokered an agreement with Turkey for it to act as a "safe" country for the return of illegal immigrants, in exchange for visa-free entry of Turkish citizens, these arrangements might also benefit Britain. Thus British taxpayers might be asked to defray costs of migrants' shelters and border security in Turkey, in programmes initiated by the EU.

On the other hand, where movement controls are applied by national governments, there is always the risk of unintended consequences. For instance, "workers' remittances" sent to extended families back home are an important if unacknowledged source of development aid, involving significant cash transfers. In 2012 the total for the EU27 was €38.8bn. Almost three quarters (€28.4bn) went outside the EU.

Disrupting these transfers can cause instability and economic hardship, potentially requiring direct and more expensive intervention in terms of international aid and even military action. In some senses, worker mobility is a very precisely targeted form of aid, and one of the most cost-effective. Changes in arrangements need to be managed with care.

For Britain, though, there is little merit in the EU's common immigration policy. This stems from the European Council at Tampere in October 1999, which sought to address immigration in the context of political, human rights and development issues in countries and regions of origin and transit.

Around that time, it had been recognised that restrictive admission practices had reduced legal immigration to Europe, but had been accompanied by a sharp rise in the number of asylum seekers and of illegal immigrants, and by the growth of smuggling and trafficking.

In 2005, EU political leaders proclaimed the "Global Approach to Migration" as a response to the desperate attempts of immigrants to cross the EU's southern frontiers. This was then redefined in 2011 as the "Global Approach to Migration and Mobility", by which time there were an estimated 214 million international migrants worldwide and another 740 million internal migrants. There were 44 million forcibly displaced people and an estimated 50 million living and working abroad with irregular status.

In the period following Tampere, it has been generally recognised that the EU policy lacked bite, leading to multiple complaints, not least concerning the ability to deal with such issues as the Roma.  Overall, though, "little Europe" was quite simply not up to dealing with the scale of the problem.  

Given the global scope of the problem, there has thus been a tendency to move beyond the geographically-limited forum of the EU and look for global solutions, although outdated agreements such as the 1951 Convention on Refugees and the 1967 Protocol have proved inadequate for the task.

Nevertheless, it is at this level that we are beginning to see progress. The OECD, the ILO and the G20 have all taken active roles in the development of policy, with the ILO in particular working with the UN to produce the 1990 International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families, which entered into force in July 2003. 

No EU Member State has signed or ratified this Convention, although the European Parliament and the European Economic and Social Committee (EESC) have strongly encouraged ratification by Member States, followed by the House of Lords (See p.39). Selective adoption could strengthen Britain's global position, and make it a serious player in global fora.

There, to assist the international community to provide "the framework for the formulation of a coherent, comprehensive and global response to migration issues", on 9 December, 2003 the Global Commission on International Migration was launched in Geneva by the UN Secretary-General and a number of governments. It was comprised of 19 Commissioners and began its activities on 1 January 2004, the core of which was to commission detailed research into the problems and potential solutions. Despite the importance, though, none of the Commissioners were British.

Then, in 2007, we saw the emergence of the Global Forum on Migration and Development, a UN initiative intended "to address the migration and development interconnections in practical and action-oriented ways". Currently, to augment this, there are suggestions that we need a World Migration Organisation analogous to the WTO, where global problems can be addressed in a fully-functional global forum.

And there lie the clues to the future management of immigration. The issues are not resolved solely (or at all) by erecting barriers and turning Britain into an inward-looking fortress. That simply creates a different set of problems. Rather, it is becoming increasingly evident that mass migration is a global problem and needs a global rather than the sub-regional perspective offered by the "little Europe" of the EU. 

As with other issues, Britain needs to be part of the global dialogue, working directly with international agencies such as the Geneva Migration Group and the International Organisation for Migration. We then need the freedom to take local action in support of the national interest, but integrated with global initiatives, which can only happen outside the EU.

This enables us to say that leaving the EU gives us something more important than imaginary and largely ineffective control over our borders. It gives us the opportunity to interact with the global community and address the root causes of the problems, something which the EU has so far failed to do. And it is at the global level that the UK belongs. That is where many of the problems will be solved. 

Crucially, in terms of perception, domestically and internationally, this also paints Britain as an outward-looking global power, rather than the inward-looking "little England" typified by UKIP. That alone is more likely to make leaving a reality, as acquiring a global reach will have a greater appeal to the wider constituency. And we will need the support of this constituency in any "in-out" referendum.

There, we must address the art of practical politics. UKIP is speaking to its own members, but thereby limiting its mass appeal. We need a different,. more imaginative perspective if we are ever going to broaden the appeal of the anti-EU movement and win that referendum.  


Richard North 07/05/2014

 Brexit: lessons from Switzerland

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We've heard a lot about the "Swiss option" recently – the preferred model of the Hannanites and others for their "Brexit" plan. The irony, though, is that – as the referendum on 9 February shows - not even the Swiss can make it work. So fragile is the arrangement that Swiss president Didier Burkhalter thinks that there will have to be a referendum on bilateral relations with the EU by 2016.

In an interview published on yesterday by German-language weekly NZZ am Sonntag, Burkhalter said, "The decision will be at the end of a long process that has only just begun", adding: "Until then there is still a tough obstacle course ahead of us".

Burkhalter dodged a question about whether he wanted to reverse the February referendum, saying that he was striving for "the best solution for Switzerland, no more and no less".

As it stands, the federal government opposes the immigrant quotas demanded by the Swiss people, which have put at risk Switzerland’s bilateral agreements with the EU.

Brussels has already said that Bern cannot pick and choose which agreements it wants and has indicated that if the free movement of people agreement is not continued, other deals, such as freedom of goods and capital, will be revisited.

Burkhalter notes that the federal government is developing an implementation plan on the immigration issue that will be ready by the summer as a "template" for consultation. He says this did not prevent the government from holding parallel "exploratory talks" with the EU and member countries of the union.

Having voted in 1992 against joining the European Economic Area, which effectively blocked any prospect of membership of the EU, Switzerland has enjoyed a series of bilateral agreements with the Union. But with these under strain, the whole relationship is now set for review.

Coincidentally, we see the BBC reporting on the Swiss situation, pointing out the reluctance of the EU to offer concessions.

To offer free trade without free movement to a non-member would be a huge political risk - perhaps prompting countries like Britain, which have made their doubts about free movement clear, to see life outside the union as more attractive, says the BBC report.

It cites Ivo Scherrer, founder of a new political group called Operation Libero, who says: "I don't think we will be able to square this circle". He is working on "a different, less isolationist vision for Switzerland".

"Our [current] strategy makes us vulnerable," he says. "Switzerland is bound to lose access to European markets and institutions, so is the Swiss bilateral route not a strategy to recommend to big member states with big doubts about the EU?"

"Britain would have to decide for itself whether such an isolationist strategy is worth the cost. I personally think it's not," Scherrer concludes.

With that, we also get a contribution from the Financial Times, which has Alexis Lautenberg, Switzerland's ambassador to the EU from 1993 to 1999. Such uncertainty underscores the complications of the Swiss-EU relationship, he says

"When you look at the difficulty that one vote can cause for the whole construction of Swiss-EU relations, it doesn’t give the impression of a perfect model for others to copy". Patrick Emmenegger, a professor at the University of St Gallen, agrees. "A solution as complex as the Swiss one would never work for bigger economies, such as the UK", he opines.

How much of this is special pleading is hard to tell, but the EU itself in a Council report has already concluded that "negotiations as regards Switzerland's further participation in parts of the Internal Market have been marked by a stalemate".

No one can deny, though, that the "Swiss option" is in trouble and it is anybody's guess how it will pan out. But the UK has a real interest in the result. The path Switzerland follows may point the way for Britain's long-term relationship, but it may also show that there are barriers which cannot be surmounted. A complete rethink may be needed.


Richard North 05/05/2014

 EU referendum: in danger of losing everything?

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Following on from Dick Taverne's take on the putative referendum, we now have Hannan pitching in with the message that we should go Tory if we want a referendum.

What both Hannan and Taverne have in common, of course, is that they both believe that an "out" campaign could prevail, whereas this is very far from being a certainty. In fact, the balance of evidence suggests that we would be more likely to lose the referendum, even if Mr Cameron came back from Brussels with empty hands.

Let us suppose, though, that Mr Cameron reneges on his commitment to a substantial rewriting of the treaty, and gives us this hitherto mythical referendum, Hannan does at least admit to worries.

Specifically, his concern is that the campaign might be dominated by UKIP, and focused on immigration, in which case we could lose. He doesn't blame UKIP for galvanising its vote; but almost nothing it says appeals to voters who are undecided on EU membership.

Hence does Hannan note the paradox where, the better UKIP fares in the polls, the lower support for EU withdrawal. The case for independence, he says, needs to be warm, optimistic, internationalist. We need, says Hannan, to explain why the EU has been made redundant by technological advance, why it no longer makes sense to be trapped in a declining customs union.

It's not that UKIP is wrong about immigration, says Hannan. Obviously we shouldn't exclude highly skilled professionals from outside the EU so as to free up space for unskilled migrants from inside. But that can't be the main message.

In the view of Hannan, we need a campaign that appeals to voters of Left, Right and Centre, to children of immigrants, to Scots, to white collar public sector workers, to students. We need, he thus says, to conjure the vision of a global Britain, interested and involved in the affairs of every continent, including Europe.

And all of this, in that airy, superior way in which Hannan excels, sounds so plausible, except that he misses what is probably the single most important facet of the campaign – that we should have a credible, workable exit plan.

What we have all seen over the past year and more is a torrent of FUD, and it is quite evident that campaign supporting continued EU membership will rely heavily on the fear factor. Crucially, as did recently the studies by The City UK, the europhiles will show that none of the recognised exit plans are workable.

Unfortunately for Hannan, that includes his pet plan, where he believes that we should "aim for a Swiss model, based on bilateral accords". So unrealistic is this that it has already been demolished by the opposition.

That actually makes Hannan, in his own way, as much part of the problem as UKIP. In many ways, he is part of a much bigger problem. Thus, when he writes, "Eurosceptics are in danger of losing everything", he is closer to the truth than he imagines.

The bigger problem is that, given that we could be facing a life-or-death referendum in just over three years, we are not ready. And there is no prospect of us being ready.

As it stands, the anti-EU movement is not so much split as completely fragmented. At one extreme, we have groups who regard even the prospect of sitting down to negotiate with the EU as "treachery". We also have those who regard Article 50 as a "trap", most of whom want an immediate repeal of the ECA.

In Article 50 territory, we have those who want the Norway option, the Swiss option, those who rely on stronger relations with the Commonwealth, those who want us to join NAFTA, the EFTA joiners and those who just want to rely on the WTO.

To fight an effective campaign, all the groupuscules are going to have to unite under a single banner, only then to find that unity alone will not be sufficient. Backing the wrong plan, even if there is total support for it, is no better than fragmentation: divided we fall, united we fail.

And there is the real danger for the "eurosceptics". Only with supreme effort do I see some of the groups uniting behind one or other plan, but it will not be the right one. The right one is not yet finished but, even when it is, it is going to be studiously ignored by the likes of the oh-so-superior Hannan – as he is doing already. These people claim to support free markets, but the do not believe in a free market for ideas. 

Already I can see some problems for me personally. As we've seen with calls to support UKIP, there will be huge pressure to support "the" campaign and get behind they "approved" narrative, whatever that might be. This will leave me (and our readers) in a quandary.

We then have the choice of supporting a campaign destined to fail, and become associated with its failure, or of standing aside and watching it fail, then to be blamed because we refused support. The other alternative is for us to mount our own independent campaign, in the hope of compensating for the defects of the "unifiers", and thereby be blamed for causing "splits". 

It is there that the Europhiles have the inbuilt advantage. All they have to do is argue for staying in the EU – and there is only one EU. We, their opposition, have to unite behind a single, workable plan, offering a vision of Britain outside the EU. But there are possibly as many "visions" as there are groups, and that's before UKIP gets stuck in and ruins the efforts of us all. The chance of unity is next to nil.

To some extent, therefore, this could be a re-run of the 1975 referendum campaign, where different groups refused even to have their speakers share the same platforms. And if, this time, the same thing starts happening, the outcome could be the same. So, in that one respect, Hannan has got it right: we are indeed in danger of losing everything.


Richard North 04/05/2014

 Brexit: an application of Bootleomics

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It is nearly two weeks since the IEA "Brexit" prizes were announced, and far from starting a debate, as the Lord Lawson hoped it might, the IEA intervention has killed it dead. Within a few days of the prizes, publicity had sagged and it has now been four days since there has been any media at all.

Nevertheless, I am continuing to work offline on upgrading our own version of the "Brexit" plan, I've been hard at it all weekend and have now been able to upload the latest version of "Flexit" (v.04), accessible here or from the button on the menu above.

Added to the original are more than 6,000 words in over 20 pages, the additions alone longer than one of the entire submissions selected as a finalist for the IEA prize. Oddly enough, I am inspired by a quote I extracted from a paper written almost exactly a year ago by Ben Harris-Quinney of the Bow Group.

"It is now not enough to simply bemoan the failings of the EU", he wrote. "The first priority for all eurosceptics should be to find a superior and realistic alternative, and to actively and constructively work towards it".

What I'm currently working on is an evaluation of why some pundits favour the "Swiss option" for leaving the EU, over the "Norway option", the essence being, in part, that the former supposedly offers a greater chance of securing cost-savings.

From the work I have done so far, it seems that the justification for this is, to say the very least, rather ingenious, coming from Open Europe. I thought it worth running it on the blog to see what my regular ex-readers thought of it.

To save their money, Open Europe, it seems, have a theory is based on a comparative analysis of cost/benefit ratios, as between EU and UK law. According to Open Europe, EU law comes out at 1.02, which means that every pound spent delivers a mere £1.02 of benefits. On the other hand, UK law comes out at 2.35 which means that every £1 spent delivers £2.35.

When the two ratios are compared, they tells us, this gives a 2.5 times advantage to UK law, which has Open Europe arguing that it is more cost effective to regulate nationally than it is to regulate via the EU.

This is a delicious theory, and one that would be very attractive – if it was valid. But the big problem for me is that chalk seems to be being compared with a very ripe cheese. Let's look at a few bits of legislation from the two different systems, in a target year of 2008/9.

On the UK side, we have the Estate agents (Redress scheme) Order 2008 and Estate Agents (Redress Scheme) (Penalty Charge) Regulations 2008. These ensure that consumers have access to independent redress from estate agents and estate agents are fined for non-membership of redress schemes.

Picking more or less at random from the EU side, we have Directive 2008/105/EC of 16 December 2008 on environmental quality standards in the field of water policy (amending and subsequently repealing several other directives).

On the UK side, we have the Local Transport Act, an Act which seeks to empower local authorities by giving them strengthened powers to deliver a local transport system that is best suited to local needs. Back to the EU, we have Council Directive 2008/72/EC of 15 July 2008 on the marketing of vegetable propagating and planting material, other than seed.

The UK then can have Street Works (Charges for Unreasonably Prolonged Occupation of the Highway) (England) Regulations 2009. This is designed to reduce the number of occasions when works in the highway by undertakers take longer than the agreed duration and so help to reduce the inconvenience and disruption caused.

From the EU we then have Directive 2008/28/EC of 11 March 2008 amending Directive 2005/32/EC establishing a framework for the setting of ecodesign requirements for energy-using products.

Back on the UK side, we have Pensions Act 2008 which introduces measures aimed at encouraging greater private pension saving. And from the EU we have Directive 2008/68/EC of 24 September 2008 on the inland transport of dangerous goods.

Clearly evident from this small sample is that very obvious fact that the two legislatures are operating in completely different areas. But even if we expand the sample, it is still evident that we are dealing with very different legislation sets, covering completely different territories.

Taken as a whole, we can accept that the UK law offers a cost/benefit of 2.35 and the EU delivers 1.02 but – and it's a very big "but" – if the UK had produced all the EU law, can we assume that the cost/benefit would have turned out at 2.35 instead of 1.02?

And that, of course, is the point. Different law sets will have different outturns, with the cost/benefit ratio determined as much by its nature as its origin. The idea that changing the source of the legislation will, necessarily, produce a different outcome is surely absurd.

However, from here the plot thickens. When Mr Roger Bootle's firm Capital Economics produced its NExit plan for Wilder's Partij voor de Vrijheid last February – for an undisclosed fee - it went for the "Swiss option" on the basis that the Open Europe scenario could save the Dutch a shed-load of money.

Looking at the comparative analysis of cost/benefit ratios, they decided these could be applied to the Netherlands. Thus, after NExit, Capital Economics argued that, for every regulation transferred from Brussels to Den Haag, costs could be reduced "in line with the difference in the benefit to cost ratios".

Based on an equally dubious estimate of the number of laws that could be repatriated and re-enacted to become domestic law (failing to recognise that much of it now stems from international agreements), the firm then applied the modern equivalent of the magic wand, called "modelling".

This clever technique, straight out of the "climate change" arsenal, allowed Capital Economics to claim that their "Swiss option" gave them an extra €326 billion (2013 prices) in cumulative gross domestic product over the period between 2015 and 2035 (about €15bn a year), "purely from a reduction in the regulatory burden".

Add a nice snazzy diagram (above) and you have a classic example of Bootleomics – very clever and persuasive until you make the mistake of looking at the detail. But, to strengthen its credibility, you can now rely on the six IEA "Brexit" finalists choosing the very same "Swiss option".

And it wouldn't have hurt having that nice Mr Bootle as an advisor to the judging panel, despite being kicked off as a judge after complaints of lack of impartiality. Nice work if you can get it.


Richard North 21/04/2014

 EU politics: we assume too much

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The recent IEA "Brexit prize" submissions brought home to us the depth of ignorance of people supposed to be expert in matters EU. This actually stops you short – one tends to assume that people at least know the basics and when they don't, it is necessary to reassess the way we deal with things.

But, if we need to be wary of the "experts", what about the ordinary public? According to YouGov, their ignorance is profound. For instance, only 16 percent can correctly name the date of the coming Euro-elections. A clear 68 percent didn't know and 16 percent choose the wrong date.

It gets worse. Some 77 percent admit they don't know how many MEPs we have. Only seven percent actually got the figure right. Some 93 percent couldn't even name one of their MPs.

Only 20 percent of respondents could get the number of countries in the EU right, a mere 44 percent of people knew that Norway was not a member of the EU, 27 percent thought Ukraine was a member and 30 percent believed Turkey was in the Union.

I am sure if we started asking more detailed questions, such as the names of the five principle institutions of EU, we would get blank stares. So here we are then, getting excited about arcane details of the EU, nuances in the polls and shades of opinion,  yet the bulk of people don't even know the date of the election. 

This tells us that we cannot assume that what drives us has any impact on the public, or they care about what we care about. For all our knowledge, we're flying blind. Intellectually, we live in a different world.


Richard North 16/04/2014

 Brexit: interesting coincidences

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A weekend of intensive work has delivered a partial but nonetheless detailed forensic analysis of the six IEA "Brexit" prize winning entries, which is too interesting not to share with you. Fill your bowls with popcorn, sit down and enjoy.

Regular ex-readers will recall that, when we first started realising that the IEA was playing fast and loose with its own rules, we suspected that all those entrants (like me) who had gone for the EEA option had been excluded. Then, when we saw all the six prize winners, this seemed to be confirmed. But this is only the half of it.

From our forensic analysis, what we are now seeing is that the winners – all of them – came up with the same very rare solution for their "Brexit" blueprints, which involved not only rejecting participation in the EEA but also seeking EFTA membership. Stay with me and you will shortly see quite how significant this is.

For a start., we first noticed this with Mansfield, who managed to win first prize with this interesting scenario. He wants the UK to join EFTA but entirely rejects the idea of EEA participation. And necessarily, for his proposal to succeed, EFTA members have to accept the UK's application to join them.

However, as we have pointed out, any member could veto British membership. It cannot be assumed that entry will be automatic. Yet, Mansfield does not seek to explore the views of EFTA members as to whether they would accept the UK and, if so, under what terms.

Despite the improbability of Mansfield's scenario, however, we start to see coincidences stack up. A similar lack of curiosity about EFTA's views is manifest in Murray and Broomfield, the second prize winners. They propose that the British government should consider "whether the UK should use as its negotiating position a proposal to re-enter the European Free Trade Area (EFTA) alongside Norway, Iceland, and Liechtenstein". There is not the slightest hint that EFTA membership is anything other than an entitlement. And, like Mansfield, they "propose that HMG should reject any option of joining the EEA".

Tim Hewish, as third prize winner, then follows suit. He takes the position that that "UK future trade policy should not hide behind the EEA or have a complex arrangement like the Swiss". Instead, he believes that the UK should look for "a completely separate bilateral deal". So once again no EEA. But, as for EFTA, here membership is a "vital and rapid tool for the UK to secure FTAs with third parties". And not content with hat, he continues:
We see it as a gateway to join exciting [he possibly means existing] FTAs that EFTA already has as a quickstep solution within our three year plan. For the UK to conduct its own separate deal with all of EFTAs current FTA partners (which has taken them over 20 years to craft) would take considerable time. By joining EFTA, the UK would inherit trade deals under Article 56 (3) of the EFTA Convention.
In this submission, though, there is a slight recognition that that the EFTA membership is "first and foremost a political matter and would need to be discussed at the highest political levels and between all nations involved". There is also an acknowledgement that a UK application "may be subject to increased difficulty due to its perceived size economically, politically, and in terms of population".

That, at least, is closer to reality, indicating entry would not necessarily be automatic – the only one of six who even addresses this issue.

From field trips to both Norway and Iceland, I would concur that EFTA membership would not be automatic. Having had the opportunity to discuss this with a wide range of politicians and activists in both countries, it would appear that any response to an application would depend on many factors.

The political colour of the government's in power, their current relationships with the EU, and the attitudes of the European institutions and Member States to UK membership could be highly relevant, but there is possibly one over-riding factor which will shape the response.

Essentially, in Iceland and Norway both, there are varying degrees of dissatisfaction with the EEA agreement, but also a realisation that the relative power of the three EFTA/EEA members is insufficient to force a renegotiation.

British membership, therefore, is seen as advantageous, but only inasmuch as the UK's strength could add leverage to the EFTA/EEA combination, strengthening their hand against the EU. On the other hand, Britain seeking membership of EFTA for its own selfish reasons, without it being prepared to do some of the "heavy lifting", would not be looked upon favourably.

On this, I contacted my recent Icelandic host, Björn Bjarnason, former Justice Minister in the Icelandic government. He suggested that there was one possible option we could look at, but it would have the UK initially outwith EFTA and the EEA. This had the UK joining with Switzerland to help it renegotiate its bilaterals, coming up with a better deal than EEA members had, which would apply to both countries.

With that in place, Bjarnason said, a British application to join EFTA would be welcome, as it would help EFTA members to improve their relationship with the EU. A Britain thus able to increase leverage would be welcomed. A Britain seeking to join EFTA as a camouflage for something else would merely create political problems within the EFTA.

Nevertheless, none of our winners actually went for the UK-Swiss option. From Clements, the fourth-rated Brexit prize winner, all we see is this earlier sense of entitlement, with two identical - and somewhat presumptuous - references to a Britain which should "reinstate her association with the EFTA". Again, participation in the EEA is rejected.

It is exactly such an approach that, according to Bjarnason (and others), we would expect to be turned down by EFTA members. But that brings in Stephen Bush, at number five in the prize rankings. He considers that EFTA membership will be "close to ideal for Britain to join and she should apply to negotiate this in parallel with the EU negotiations". Again, there is no indication that EFTA members could tell Britain to get lost. Just as before though, we see a rejection of EEA.

Finally, we have Daniel Pycock. He bluntly argues for "access to the European Union's markets from EFTA (rather than the EEA)". This is a misunderstanding of the role of EFTA, as entry to EU markets is gained via the EEA rather than EFTA. The one is not an alternative for the other. And, with that, we have a full house - six out of six going for the "EFTA-only" option.

Prior to the launch of the IEA's Brexit Prize, it has to be said that exit plans offering the precise combination of seeking membership of EFTA and rejecting participation in the EEA have been rare. Normally, one sees EFTA/EEA treated as a single package, accepted or rejected as a whole, primarily because the EFTA membership is normally sought in order to gain access to the EEA.

It should be noted that EFTA membership is not required to pursue the so-called "Swiss option", as the Association played no role in the bilateral agreements between Switzerland and the EU. This we know from René Schwok, writing in an official EFTA anniversary book. In other words, the "Swiss option" doesn't need EFTA membership. 

In fact, the advantage of the bilateral route for Switzerland is that it allowed her to make her own agreements without being bound by the EFTA framework. Thus, the only advantage the UK would gain from the EFTA-only option would be the ability to tap into EFTA's existing trade deals. But if that was the sole motivation, it is unlikely that the UK would be accepted as a returning member.

Now, here's the rub. We wrote at the beginning of this piece that to see this "EFTA-only" option was rare. Actually, it's very rare. In the ordinary course of events, it's difficult enough to find a single paper suggesting this option. There's a good reason for this. It's not a viable option. Normally, we get the "Norway Option", which requires EFTA/EEA membership. Or we get the "Swiss option", which doesn't involve either EFTA or EEA membership.

In fact, so rarely is th "EFTA-only" option that, before the IEA Brexit competition, I haven't been able to identify a single paper advocating it. Doubtless they exist, but they are hard to find. It seems hard to beleive that the winners were getting their inspiration from the internet. 

So what have we got? We have six papers all offered simultaneously by Brexit prize contestants. Since all of them were in competition, we might assume that they did not consult with each other, nor discuss their submissions.

Thus, for each of the six papers, their writers independently came to the conclusion that this flawed (and rare) option offered the best prospect of attaining "the fastest benefits of lower trade barriers" (this, The Boiling Frog reminds us was a requirement of the competition). And all seven writers independently concluded that the "EFTA-only" solution was the winning idea - not that any of them gave it that label. 

Here, one might suggest that the odds of six papers offering the "EFTA-only" option appearing in the IEA's shortlist of 17 papers, drawn from nearly 150, are astronomical. That so many could get through must certainly be a very remote possibility.

But then, what odds should we offer for all those six papers, not only offering this rare option but also going on to be selected as prize winners? And what are the odds of all six of them being chosen, and only those six, with no other option chosen?  We don't even get the more conventional offering of a rejection of EFTA and the EEA. 

Every single one of the six winners insist that we join the EFTA and all six reject the idea of EEA participation. This, one might even say, is unique. I can't imagine the odds Paddy Power might offer if one had suggested this as a likely outcome for the competition. I hadn't even thought of the possibility of an "EFTA-only" solution.

Despite all this though, we have to accept that six "EFTA-only" solutions coming out of nowhere to take all six prizes was completely coincidental. It had to be, otherwise we would have to think collusion – that the organisers had given hints to the "winners" and the "right" answers had been plucked out for the judges to put in rank order, with no other submissions given a look in.

One has to recall that the original IEA plan was that only Mansfield's paper should be published in full. All the other papers would be summarised by Philip Booth, for a "monograph" that he alone was going to prepare - some time after the event. That's what Philip Booth told us. 

Thus, if there had been collusion, and rigged judging, we should never have been able to find out, because none of us could have done the forensic analysis needed to detect it. But since nothing untoward ever happened, I don't suppose that really matters. Why would we want to do forensic analysis?

Without making a fuss, we just have to accept that, out of nearly 150 papers submitted, six totally impractical offerings, identical in suggesting the same rare solution, all made it through to the front to scoop all the prizes. That has to be a coincidence. There cannot possibly be any other explanation.


Richard North 15/04/2014

 Brexit: prize-winner announcement

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We were told that, to coincide with the announcement of the IEA's "Brexit" winner at 8pm yesterday evening, the winning entry would be available on the IEA website. In view of David Myddelton's senior moment, though, I remarked that this would only be as long as they pressed the right button.

However, well after half-an-hour after the announcement, a link to the paper still had not appeared. One wondered whether they were so ashamed of the paper (or themselves) that they didn't dare publish it. Even their press release seemed to have gone astray. 

With the incompetence for which this think tank has become justly famous, the link originally provided gave us an "access denied" (above). However, when the link finally came live, we begin to see why the IEA was so reluctant to publish the full version. We did not expect very much from the IEA, but this was far worse then even we expected.

We had our very grave suspicions that the judges had not fully read our paper, but we are now wondering whether the judges read this one at all.

Working from the press release, we saw that the paper was by Iain Mansfield, a 30 year old member of the diplomatic service based at the British embassy in Manila. It is a poorly-constructed mixture of low-grade wishful thinking, political naivety, and practical minefields that it in no way resembles a workable or even half-way intelligent plan. To say it was "lightweight" would be paying the author a compliment. If the judges did actually select this as the winner, then they need to be deeply, deeply ashamed of themselves.

It took a further hour, however, for the "plan" at last became available on the wesbsite. Now the whole world can see the ghastly thing in all its tawdry detail.

Inevitably, I'm going to be comparing this with my own work – which is exactly what the judges should have been doing. This was a competition, after all, where different writers were pitting themselves against each other. I am not thus an impartial judge, but readers can look at both papers themselves and form their own judgements.

Nevertheless, it is entirely valid for me to compare the relative merits of the two entries - the only two to which I have access. So, starting at the beginning, we have in the winner a document which is about half the length of mine (the text actually less than 9,500 words, excluding text boxes). It has less than half the number of references, and poor quality graphics, most of which don't even look original.

Let us also recall that the judges told us that our entry was "good" and our arguments "intriguing". But, they said that, due to the "extremely high quality of some of the entries" the IEA was not progressing our entry to the final six.

With that, we need to start comparing the detail.  I'll only make a start in this post, looking at where Mansfield argues, of the Article 50 negotiations, that the government should "observe the two-year period and not negotiate for an earlier or later date". 

Here, Mansfield's argument is entirely fair and sensible: we argue much the same. We do not believe it is politically sustainable for the government to conduct prolonged Article 50 negotiations as there will be enormous pressure for an early conclusion. Thus, we argue, the negotiations will be dominated by the need to conclude them speedily.

With that in mind, however, we then go to great lengths to show that this dominating need has a major and unavoidable impact on the nature of the exit agreement. To that effect, we provide evidence which shows that negotiating bilateral free trade agreements with the EU is a complex and lengthy process. The current round of EU-Swiss talks, for instance, started in 1994 and took 16 years to get to the current state. It would, therefore, be extremely optimistic to expect a de novo bilateral deal to be concluded within five years.

Thus, we argue that the bilateral agreement route is not open to the UK within the framework of the Article 50 negotiations. The only way we believe that UK negotiators could get inside the time frame is to take an off-the-shelf deal, and agree it unchanged – the whole deal on an all-or-nothing basis. And this is why we recommend the EEA option – not because it is ideal, but because it is the only realistic option, attainable in the time.

Mansfield, however, rejects the idea of joining the EEA, although he does suggest we join EFTA. As an aside, does he explore the views of EFTA members, as to whether they would accept the UK? He doesn't, but we did.

I actually went to Norway, and to Iceland. The Norwegians and Icelanders both, wanted us in EFTA and the EEA, because we could help them renegotiate the deal. Would they want us in EFTA without the EEA? I very much doubt it – but this is something Mansfield doesn't even explore. And the judges let him get away with it.

Howsoever, what Mansfield advocates is a pick'n mix bilateral agreement, adopting a position "somewhere between that of Turkey's and Switzerland's membership of EFTA". This is not only politically unattainable in the timescale, it is incoherent.

Turkey's relationship with the EU is of membership of a Customs Union. Switzerland has bilateral free trade deals with the EU. The relationship with the Swiss deals and EFTA is complex. Some are via EFTA, some are outside. But the one thing absolutely certain is that there is no position at all between Turkey and Switzerland. Mansfield is comparing chalk and cheese.

And, having talked so some of the other competitors last night, I know that we were not the only entrants to point out the impossibility of attaining an ab initio bilateral deal within the two years.

The judges are, of course, entitled to disagree with our views, but they are not entitled to ignore our evidence in favour of an assertion that has no evidential support, and then claim that the latter submission is better than the former, especially when Mansfield did not offer any serious discussion as to the feasibility of attaining a bilateral deal within the time frame he sets. This is simply not playing straight.

Yet, as we remind ourselves again, our submission - according to the judges - was "good". By inference, though, Mansfield's work was "extremely high quality". This is simply not a tenable statement, and one which will become even less tenable as we delve into this work.. We will assert that the judges have misled themselves, and done us all a grave disservice.

With that, we'll call it a day. We'll pick up the threads again later, when we will look at some of the other nonsense assertions made by Mansfield, and accepted by the judges.


Richard North 09/04/2014