EU Referendum: an intellectual quagmire

27/04/2016  


With less than two calendar months to go before polling day, it is nothing less than alarming to find that fundamental questions relating to Brexit are so far from being settled by Vote Leave that we're not even past first base.

This disturbing insight comes to us via Breitbart London, which has a copy of a letter from Bernard Jenkin MP, Vote Leave director.

Dated 21 April and addressed to a constituent, it rejects the use of Article 50 in the event that we vote for Brexit. Instead, Jenkin argues for negotiating with all the other 27 member states at government-to-government level. The result, he says, "could take the form of a new treaty, which would mean the UK would not need to resort to Article 50".

In the event that there is no agreement, Jenkin adds, "the UK Parliament can pass its own legislation to suspend the application of the EU treaties, but it would be preferable to do this after an agreement with the other EU member states has been reached".

Here, one would like to think that Mr Jenkin is applying the considered weight of legal advice and political experience, coming to a sound conclusion based on the facts on the ground, with due regard for EU treaty and international law.

However, there is no evidence that there is any legal weight behind these scenarios and nor is it possible to adduce any circumstances where they might realistically be applied.

In the first instance, Jenkin is making the same error (although perhaps unwittingly) that Mr Cameron has made in agreeing his supposed treaty. He has neglected the provisions of Article 61 of the Vienna Convention on the Law of Treaties, and the dictum res inter alios acta vel iudicata, aliis nec nocet nec prodocet, where two or more people cannot agree amongst each other to establish an obligation for a third party who was not involved in the agreement.

What these amounts to is that the member states, even if they agreed to carry out negotiations (which seems unlikely), would be acting inter-governmentally (which Jenkin acknowledges), which means they could not bind the European Union – which has its own, separate legal identity – to the terms of any agreement.

The inescapable bottom line, therefore, is that, if there is to be an exit settlement, the negotiations have to be with the EU. And that means working within the constraints of Article 50.

Jenkin, however, hasn't finished. In the event that the member states won't deal (which, of course, they can't), he would have Parliament pass its own legislation to suspend the application of the EU treaties.

Assuming the government would be mad enough to do this and that a Parliamentary majority could be gained, this would amount to a unilateral abrogation of the Treaties. The consequences of this would be so disastrous that one struggles to believe that an MP could even propose it.

What we have to take from this, therefore, is that the Jenkin scenarios are non-starters. There is no practical or legal alternative to Article 50. Yet, despite what should be an unarguable issue, and one settled long ago, Jenkin is not on his own. We have Gove, Lawson and Cummings all coming together to reject the Article.

Behind this, one suspects that Vote Leave officials are aware that the initial two-year duration of Article 50 negotiations makes agreement on a comprehensive free trade agreement impossible. David Cameron's jibes about the seven years taken to agree the Canada deal (which still hasn't been ratified) have hit home.

To get a deal inside the two-year period is going to require compromise – which Vote Leave cannot afford to give, as they haven't thought through the implications. Thus, to get them off the hook on which they have impaled themselves, they are constructing ever more phantasmagorical scenarios to release them from the reliance on Article 50.

Sadly, these are not the actions of adults. We are seeing an almost childish level of naïvety from a group of people who are demonstrating an increasing inability to deal with reality – all of which is creating an intellectual quagmire at the heart of the leave campaign that prevents it even beginning to present a coherent exit plan.

What is terrifying, though, is that this naivety is shared by most of the political class and, if their current work is any guide, the House of Commons Foreign Affairs Committee.

In an extraordinary shoddy and superficial report published yesterday, laughingly under the title: "Implications of the referendum on EU membership for the UK's role in the world", the MPs manage to offer an analysis of the "day after a vote to leave…" that would shame a reasonably bright fifth-former.

Recognising that two-year period immediately after the referendum would present "challenges", they then manage to elide the Norway and Swiss options, treating them as if they were essentially the same.

In exchange for access to the single market, the MPs say, "both the EEA states and Switzerland must pay into the EU budget and adopt a large proportion of EU law - including free movement of people - but they have no say in how those laws are made".

If this is as far as they have got, then the learning curve hasn't even started to lift off the horizontal, leading to a monumental parade of ignorance as they pontificate that: "From a UK perspective, these models would thus bring few benefits in terms of repatriating sovereignty over law-making and immigration, while still imposing many of the costs associated with the status quo".

Yet, having already recognised the "challenge" of the two-year period, they then go on to say that, "rather than following these existing templates, the UK ought therefore to opt to pursue a bespoke arrangement, including a comprehensive Free Trade Agreement (FTA)…".

Amazingly, bringing ignorance to new heights, they actually tell us that:
Detailed and possibly lengthy negotiations between the UK and the remainder of the EU would be required in order to achieve a deeper settlement than the terms of the European Free Trade Association (EFTA), which offers tariff-free trade on goods but - crucially, from a UK perspective - excludes services.
Seemingly, they are unaware that EFTA does not actually have a trade relationship with the EU. The deals are between the three EFTA states, Norway, Iceland and Liechtenstein, as in the EEA Agreement, and between Switzerland and the EU, agreements that were concluded outside the framework of EFTA.

Nevertheless, they conclude that "it is difficult to predict with certainty the type and terms of the new relationship between the UK and EU after a decision to withdraw".

In their view, "it cannot be assumed that the UK would retain full or partial access to the single market if it left the EU, or that it would wish to do so given the restrictions and costs that such an arrangement could potentially incur".

However, it is probable that, "due to the strong economic imperative, the UK and EU would seek to negotiate some form of trade deal as quickly as possible in the light of the political climate".

Then, we are informed that: "the Government should recognise the probability of no mutual interest deal being concluded within the two-year notice period. If no deal could be concluded within the two-year notice period, the UK would move to standard WTO relationship terms and would then need to decide which of the 6,987 directly-applicable EU Regulations would need to be replaced by UK law".

And then, in a text that should be engraved on a brass plaque to mark the nadir of political intelligence in the Commons, the MPs gravely intone:
It is, however, a reasonable assumption that in the medium term a suitable mutual interest deal would be concluded. It is possible that the transition process could be fully co-operative and disruption minimised, but this would depend on how well EU countries respond to a perceived rebuff by the British electorate. As time heals, mutual interest will progressively trump any short-term hurt feelings and both the climate for, and interest in, agreement in the mutual interest would improve.
We are actually paying good money for this extruded verbal material, to achieve nothing but a further attestation of the capacity of our elected representatives to waste time and money.

Whether by MPs or the official campaign, we are so badly served in this referendum that the issues have been submerged in that self-same quagmire. Not for nothing does Mr Brexit argue that the political game playing and personality politics of the referendum campaign is snatching the goal away from us.

When this is all done and dusted, he says, there needs to be a reckoning. We could not even begin to disagree.



Richard North 27/04/2016 link

EU Referendum: first week down, second to go

25/04/2016  


It says a great deal for the dereliction of the official leave campaign that we have Alexander (aka Boris) Johnson still bleating about this referendum being our last chance "to take back control – of £350m a week (and use some of that cash to deliver a seven-day NHS)".

This £350m figure is completely discredited and even many of the apparatchiks dutifully toeing the line don't actually believe it. But not one of them has the courage to confront Dominic Cummings, author of this stupidity.

It doubtless this, amongst other things, that has Simon Heffer asking: "Whose side is Vote Leave really on?" He refers to Cummings at the Treasury in terms of his "bizarre performance", which "left some of us wondering whether he was on day release from a secure facility".

Dan Hodges, now in the Mail also offers his penn'orth, suggesting that this is not a debate between two competing but mature visions of Britain's place in the world. "It is a debate between adults and children", he says.

To support his view, he cites the insensitive Mr Banks who claimed that a £4,300 cost per household of Brexit it represented "a bargain", Michael Gove who seemed to be offering Albania as an alternative vision for Britain, Nigel Farage raging that Barack Obama was the most "anti-British" president in history and Johnson branding him the "part-Kenyan" president.

Advocates of Brexit, he says, opted to base their entire referendum strategy on the claim Britain would be able to swiftly re-negotiate a series of unilateral trade deals with the rest of the world, yet, "it doesn't seem to have occurred to them the rest of the world might have something to say about it as well".

Unsurprisingly, therefore, we had the Telegraph on Saturday telling us that "the Leave campaign desperately needs to up its game".

"The EU referendum will be won by courting undecided voters in the centre ground", it says, "and Mr Obama' s intervention may well have an impact on their thinking". It goes on to say: "The Leave campaign can complain about 'project fear' as much as it likes, and with some legitimacy, but that does not change the fact that many voters see reasons to fear a future outside the EU".

To win them over, the newspaper thus concludes, "Leave has to show that a prosperous alternative is possible. They need to turn an intellectual proposition into a coherent, detailed plan".

That, of course, should have been the position two years ago, when we could have dominated the debate and pre-empted much of the "remain" propaganda. But that still doesn't stop the likes of Charles Moore imbibing the Cummings Kool Aid, arguing that "leave" is not entitled to have a plan.

This is on the basis that the Cabinet Secretary, Sir Jeremy Heywood, would use every possible source of official "information" to tear it apart, and the "leave" campaigners would start quarrelling with one another.

It says a great deal for Mr Moore's perspicacity that, without a plan, "leave" is being attacked for not having a plan, which campaigners are already quarrelling with one another, because they don't have a plan. In the quarrelling stakes, we even have Mr Farage complain that the campaign has "fundamental problems, even though he has carefully avoided devoting any energies to planning a strategy.

In Mr Farage's view, on problems is that it appears that the Leave campaign is just the Conservative Cabinet ministers. We've got to be appealing to a broader group of people than just the Tory electorate", he says. Farage also accuses Vote Leave of excluding him from their campaign – something that was always going to happen. He joins a growing club of "the excluded".

The second problem, he says, is that "if we debate economics and trade we can go round in circles for weeks, and the public will be none the wiser at the end of it". Instead, he feels, we should be talking about the fact we have an open door to 508 million people.

On this, it seems that Gove is preparing to go full kipper, arguing that Britain will be subject to a migration "free-for-all" as the next wave of EU expansion hands millions more people the right to move here. The NHS faces an "unquantifiable strain" if Britain remains in the EU.

Yet ceding the economic ground is seen as a fatal strategic error. Focusing on immigration will never generate enough support for them, says the "remain" campaign – something with which ComRes would agree. It has 47 percent thinking that the economy will most influence their referendum votes, as opposed to 24 percent who put immigration in the top slot.

Bluntly, as the train-wrecks mount, the only really good news is Andrew Stuttaford. He agrees that the "leave" campaign is not in a position to determine how Britain's departure from the EU would be negotiated, but it does need to show that there are Brexit routes and that they can be navigated in a safe and straightforward way.

"Many undecided voters are unwilling to take the risk (as they see it) of leaving the EU, a risk that the remainers are, naturally enough, playing up", Stuttaford says. To that end, "Brexiteers need to explain why those risks are far less than the undecideds now fear, and a pretty good way to do it is—smelling salts—a plan. Brexiteers need to demonstrate not only why Brexit, but how".

As it happens, Stuttaford thinks that the best way to go is some variant of the "Norway option" via membership of the European Economic Area (EEA). "That's a step that initially would change little (and thus would not alarm the nervous) but over time would make all the difference, to which effect, he points people in this direction".

There is another bit of good news though. Owen Paterson is giving a speech at 11.30 this morning, at 10 Carlton House Terrace. Entrance is free to anyone who wants to attend. Some of the points may be familiar to EU Referendum readers.

Note least, Mr Paterson will tell his audience that special status David Cameron "won" in his renegotiation as a sham. If we remain, we get the worst of both worlds – stuck inside the EU but with scant influence. And we will still be on the hook for future bailouts of the ailing single currency.

With that, in campaigning terms, we can only hope that things will get better. They can hardly be worse – last week was the week of the "remains". They got to wear the tee-shirt.



Richard North 25/04/2016 link

EU Referendum: the lie direct

19/04/2016  


The essence of the Treasury case for losses incurred from Brexit is that the UK economy suffers varying levels of GDP drop as a result of our changing trade arrangements.

Crucially, in respect of the "Norway option", after 15 years, the Treasury estimates that the UK would be between 3.4 and 4.3 percent of GDP better off inside the EU than the EEA. In 2015 terms, the GDP impact of leaving the EU for the EEA would equate to a long-term loss of £2,600 a year for each household in the UK.

However, notwithstanding the many false assumptions, there is a central flaw in this argument which completely invalidates the entire exercise. The Treasury is completely ignoring any compensatory effects arising from Brexit. Yet, the very essence of a flexible economy is that it reacts to changing circumstances, and exploits new opportunities arising from them.

A classic example is the response of New Zealand to losing its biggest customer – the UK – when it joined the EEC in 1972. In the late 1930s Britain took more than 80 percent of New Zealand exports. By 1960 it took 53 percent, which reduced to 36 percent in 1970, and five percent in 2007.

The overall effect in the longer-term can be seen in this graph (reproduced above). The very least one can say of the bigger picture is that the effects of the trade realignment are swamped by the larger influences of the global economy, to the extent that it is impossible to estimate the long-term effect.

On balance, though, the general view is that the change was beneficial to New Zealand. From relying on high-volume, low-margin community sales to the UK, exporters – mainly in the agricultural sector – were forced to diversify and seek higher margins to compensate for lower volumes.

This is a process which is continuing to this day, and is responsible for the buoyant NZ economy, despite the downturn in demand from European customers. Particular growth in high-value markets has been experienced in North Asia, and more growth is expected with the agreement of TPP.

The crucial point here, however, is one of balance. For anything to be worthy of the title claim "analysis", it has to look at the upside as well as the down-side. As with impact assessments for legislation, for instance, where one sees costs of implementation and benefits, what matters is the overall outcome.

In leaving the EU, one can expect a gradual realignment of trade – that, for many, is one of the main economic reasons for leaving the EU in the first place, breaking free of its economic sclerosis. Not even to attempt an estimate of potential gains, therefore, is to produce a fatally unbalanced work which has no analytical value whatsoever.

Give the wide range of possibilities, though, the only valid outcome of an honest analysis could be a range of figures. One might expect that to span the positive to the negative, dependent on policy decisions and variables which may or may not be amenable to change.

Here, there is another major lacuna, in that the Treasury exercise makes no attempts to identify these issues, or put a price on them. It does, for instance, tell us that "membership of the EEA" would give the most access to the Single Market, but – since the EEA Agreement does not cover commercial fisheries or agriculture, it argues that we would see the re-introduction of tariffs in these sectors.

What is ignored here is that the EEA Agreement is very flexible. There are provisions for country-specific protocols to bring certain within the scope of the agreement. Thus we see in Protocol 3 a list of certain agricultural products for which there are special arrangements. There is nothing, therefore, to prevent agreement on a UK-specific protocol allowing tariff-free trade on fishery and agricultural products with the EU Members States, on exactly the same lines as currently enjoyed.

Yet another issue raised is the potential cost of rules of origin (ROO), where the Treasury makes great lay of the problems, in this passage:
1.26 For example, ‘rules of origin’ specifically require exporters to obtain proof of origin certificates from their national customs authority to certify the domestic content of their exports when trade is underpinned by an FTA. The economic cost of these is significant. Without the customs union, businesses trading within the EU would have to submit customs declarations, pay Value Added Tax on their products as they cross a border, and accept delays while waiting for them to clear inspections. The OECD has estimated that crossing the border, documentation and other delays can increase the transaction costs of trade by up to 24% of the value of traded goods.

1.27 The impact of these administrative costs would be particularly pronounced for time sensitive industries like fresh food or those participating in complex pan-EU supply chains such as the aerospace and automotive industry. For example, separate evidence from time-sensitive industries in countries acceding to the EU suggests that every 1 hour of customs delay adds 0.8 percentage points to the ad valorem trade-cost rate and leads to 5% less trade.
Here what is being ignored is the Commission's own website. It tells us that, from 2017, the current system of certification of origin carried out by the third country authorities will be replaced by statements of origin made out directly by exporters registered via an electronic system.  The idea of border checks belongs with the Ark.

Furthermore, for the EEA, the system has been enormously simplified, while there are also substantial concessions to Efta states. Few products are now caught by the rules and, where there are long-standing supply arrangements, traders can benefit from the "long-term supplier's declaration".

What thus comes across from the Treasury work is an attempt to find and elaborate all manner of problems that could arise, whether real or not, ladling them into the document to make leaving the EU look as gloomy as possible. This is a tawdry piece of work that lacks credibility and should be ignored. It has no value at all.

In reality, the chances of the UK benefiting over the longer term are probably higher than any chances of us losing. The EU is a backwards-looking organisation which is consistently failing to adapt to the modern world - hardly surprising when the concept of the customs union on which it is based stems from the 19th Century.

Simply the act of leaving is a forward-looking move, while the challenge of breaking back into the real world can only be good for a modern economy. The EU can keep their customs union. We want to play in the 21st Century. 



Richard North 19/04/2016 link

EU Referendum: straw man Osborne

18/04/2016  


To make claims of a government policy paper in the public media, with the core document as yet unpublished, all to influence the EU Referendum, is to treat the voters with contempt. 

But that is the way Chancellor George Osborne has been playing it this morning, with an appearance on the BBC Today Programme, on the back of an authored piece in The Times, tucked safely behind the paywall. The Treasury website, remains blemish-free.

To keep the full report back Osborne undoubtedly needs to do, as he is relying entirely on the straw man technique in order to make this case. He creates what he himself calls a "fantasy" exit scenario and then gets his ever-obedient Civil Servants to put a price tag on it, coming up with a fantasy cost of £4,300 for every household in Britain by 2030.

The point, of course, is that this scenario is not one which any sensible government would dream of adopting. It can exist only as a phantom of the debate, only in the absence of a coherent alternative specified by the official leavers – something that they have not yet done.

We are told also that the Treasury has "carefully modelled" the impact on trade and investment of all of the alternatives to membership of the EU, including the "Norway model", where "we gain partial access to the single market but we still face custom barriers and we still end up paying into the EU and accepting free movement".

Predictably, the public media outpourings offer no detail of the Treasury findings, thereby representing a deliberate attempt to rig the debate. The Chancellor offers the cost of the fantasy option to the public but, on the assumed cost of the more realistic (albeit interim) option, he is silent.

This is a shoddy, low tactic, but it is one that graphically illustrates the weakness of the Government's case. If it had a respectable argument, it would have no need to rig the debate.

For the leavers, then, the answer is clear. We must pick a realistic exit scenario (as in the Norway option, embodied in Flexcit) and cost it out according to the Treasure methodology (but with distortions removed).

We have no doubt that, in this event, Brexit is cost-neutral in the short-term. As for the longer term, there are benefits, and these could be substantial – not only for the UK but the rest of the world. For instance, a re-energised UK, able to act freely on the world stage, could kick-start world trade in a way that the lethargic TTIP talks never could.

By the imaginative process of what we call in Flexcit, "unbundling", we can focus on priority areas which will deliver swift outcomes, for little pain. For instance, a global agreement on the classification and labelling of pharmaceuticals could save businesses upwards of $20 billion a year on inventory and stock-management costs, speeding deliveries and cutting waste.

There are hundreds of other such examples which a flexible and responsive nation can promote, while the trade juggernauts are bogged down in their "big bang" deals that take decades to negotiate and never really happen.

Interestingly, despite the emphasis on TTIP, and the oft' repeated but entirely false claim that the EU does not have a trade deal with the United States, there are already substantial agreements between the EU and US, which together account for goods and services worth €2 billion a day being traded between them, providing some 15 million jobs.

The formal cooperation goes back to 1990 with the Transatlantic Declaration, which was actively developed to become the Transatlantic Agenda by 1995.

However, these over-arching agreements, high on rhetoric and grand declarations are, to use an overworked phrase, reaching the limit of growth. The sheer size and complexity of "big bang" agreements is making them almost impossible to conclude, and very hard to deliver.

Meanwhile, fleet-of-foot nations are developing new arrangements such as partial scope agreements which deliver small, incremental gains and which are quick to negotiate and easy to repeat and enlarge.

Thus, on the plus side of the Flexcit ledger are the cumulative gains that will accrue from the ability once again to broker our own trade deals, and even more so from the leadership we can offer, making things happen on a global scale. That is what is at stake, and that is what Mr "Straw Man" Osborne and his Treasury team don't want you to know.

UPDATE: The paper is now online - 202 pages – entitled: "HM Treasury analysis: the long-term economic impact of EU membership and the alternatives". I'll post an analysis as soon as I can.



Richard North 18/04/2016 link

EU Referendum: another look at Norway

18/04/2016  


It is one of the classic examples of bias by omission that, when the legacy media talk about Norway, they tend to cite Conservative Party politicians or their allies – Europhiles who hanker after joining the EU. But, when we get even one breaking ranks, as has The Sun, we get a completely different picture.

In this case, the newspaper has gone for Trygve Slagsvold Vedum, leader of the Centre Party, the same grouping from which Anne Tvinnereim hails. And, predictably enough, Vedum tells the UK to step out of Brussels' shadow, saying: "You won't regret it - we haven't".

Veredun, or course, best represents a nation which twice rejected EU membership, first in 1972 and again in 1994, whose polling currently has a clear 72 percent against membership.

His message to the Sun on Sunday is for us "to believe in yourselves and take the plunge". He adds: "Norway is proof it can work on your own. We rejected EU membership and we've never looked back".

Echoing a sentiment we've heard from Anne Tvinnereim, Veredun also says: "Many people thought it would be a disaster, thought we would be isolated in business and left behind by the rest of Europe — but that hasn't been the case. In fact we are better for it".

There's plenty more of that from any number of opposition politicians – all the British media has to do is ask. It could even dip a tentative toe into the water and note that "experts believe a Brexit could see the UK follow the Norway model and prosper as part of the European Economic Area".

We do, however, have an awful long way to go when we get this newspaper describing the EEA as: "an association of the EU’s 28 member states which are allowed to trade freely but are not tied to Brussels' laws and regulations". This is a bizarre was of describing the EEA, participation in which requires adoption of the entire EEA acquis.

Not particularly helpful, either, is Kathrine Kleveland, leader of Norway's No2EU, who is also quoted saying she believes her country's success is mostly down to it not being fully governed by Brussels. She says: "The EU interferes with nine per cent of our laws. We are able to make most of our own laws that are relevant to our own people".

That "nine percent" is a figure the No2EU group have been pushing out, even though it is not actually true. They would be far better sticking to the figure offered by the EEA Secretariat.

However, using EEA Lex (standing at 5,046 laws currently in force), and the Directory of EU Legislation (recording 19,532 laws in force), it is always possible to work out the up-to-date figure. At the moment, it stands at 26 percent.

The other issue is immigration, which has The Sun citing Snorre Valen, deputy leader of the Socialist Left Party. He says the UK "could well thrive" out of the EU but warns that Britain should be wary if it thinks leaving would mean closing the borders to migrants. Norway, he says, takes twice as many migrants per head as the UK.

This, though, is considered partly due to the Schengen agreement, to which the UK is not a party. "There is no reason Britain shouldn't do what we did in 1994 and say no to the EU", Valen says.

So there it is. Norway, according to at least one newspaper, is an option. It is far too much to ask for the legacy media to cope with anything sophisticated, such as the idea of the EEA comprising an interim option, pending negotiation of a longer-term deal.

Interestingly, even Cummings understood this, recording in his blog in June last that Flexcit "was based on using the EEA as a transition phase – remaining in the Single Market and retaining a (modified) version of free movement – while a better deal, inevitably taking years, is negotiated". This, he also noted, was "an attempt to take the Single Market out of the referendum debate".

In one of life's fascinating coincidences, that blog was published on 23 June 2015 – exactly a year before what will be referendum day. Cummings was to discuss the merits of Flexcit when he'd "studied it more". Even though we're still waiting, at least Norway is still on the table.

And, perhaps, that's just as well. French economy minister, Emmanuel Macron is saying that Britain would be "completely killed" in global trade negotiations if it voted to leave the EU.

This is another man who doesn't know what he's talking about, but it is as well not to give such people any more scope than we have to. The UK as part of Efta becomes the fourth largest trading bloc in the world. Norway, is more than just an option. It's our pathway to freedom.



Richard North 18/04/2016 link

EU Referendum: no immediate payment cuts

15/04/2016  


It is a matter of regret that, over the next ten weeks, we are going to see much talk on the completely unimportant issue of how much Brexit is going to save. Figures are being sprayed around and hotly disputed in an increasingly tedious cycle of claim and counter-claim. By Referendum Day, probably the only guarantees are that total confusion will reign and nobody will be any the wiser.

Amongst those currently bandied about is the already discredited claim that we send about £350 million to Brussels every week. All this money, we are told, "could be better spent on the NHS, schools, and fundamental science research".

That this simply doesn't stack up has been well-rehearsed. According to the Institute of Fiscal Studies (based on official figures), last year (2015), the gross payment before rebate was £17.8 billion. That equates to about £342 million a week. However, from that was returned £4.9 billion as our rebate. This sum has no conditions attached and is absorbed back into Treasury funds. It is already accounted for and is not available for re-allocation.

Then there is the £4.4 billion returned for spending on EU policy areas. This includes the Common Agricultural Policy (CAP) and rural development. An amount goes to regional funds, and some goes to government bodies for distribution as research funding.

Although this money, after Brexit, would probably no longer be sent to Brussels, the funds are still spoken for. There are no plans to discontinue agricultural or rural support, or regional funding. This money is not available for redistribution.

This leaves what is known as the "net government contribution", which for 2015 is £8.5 billion. From this must be deducted private sector receipts which go straight to the private sector and other non-governmental organisations such as universities. Annually, the figure is about £1.5 billion, bringing the "net contribution overall" down to about £7 billion.

But that is not the end of it. There is also the question of overseas aid. Roughly £1.2 billion of the £11 billion aid budget is managed by the EU and paid as part of the annual contribution. Despite that, it goes towards the UK's self-imposed 0.7 percent GDP quota. If the sum was not paid to the EU, it would still have to be allocated to the aid budget. That £1.2 billion, therefore, is not available for redistribution.

Rounded up, we are left with about £6 billion, although that might not be the case. If we are to retain access to the Single Market on anything like the same terms as Efta/EEA states, there will be a price to pay.

On the same per-capita basis as Norway, the net cost (which would include the equivalent of EEA/Norway Grants) would be £4 billion, leaving a mere £2 billion potentially available for redistribution, or about £40 million a week. That, effectively, is the maximum saving the UK might expect – at least until a completely new deal has been negotiated.

Even then, to suggest that this might represent an immediate saving is still somewhat optimistic. This could be nothing more than a fond hope for the future. There is something else that has to be taken into account.

Given a successful referendum outcome, we might expect to devote most of 2017 to scoping discussions, lodging the Article 50 notification towards the end of the year, after the French and German elections. This means that the two-year negotiation period will not finish until late 2019.

Prior to that, however, and alongside the Article 50 talks, there will be the talks on the Multi-annual Financial Framework (MFF) for the period 2021-2027, set to kick in at the end of the current period, which started in 2014.

The UK will be entitled to take a full part in these talks, up until its point of departure. And it does have a dog in the fight.

As the end of the last budget period, there were outstanding commitments known as RAL, from the French reste à liquider. In 2012, the figure was being reported by an alarmed European Parliament as £217 billion, an issue which got very little publicity apart from Booker.

Together with other liabilities (mostly for purchases and staff pensions) of €103.4 billion excluding borrowings, this requires a carry-over into the EU budget for the 2014-2020 MFF of some €326 billion.

Here, it gets really interesting. Given that the overall budget was trimmed below Commission expectations, yet commitments are escalating, it is hard to see the EU emerging from this current MMF with the liabilities reduced. RAL plus the staff pensions and other payments could easily exceed €350 billion.

Of any liability as it currently stands, the UK's responsibility runs to about 13 percent, which in sterling terms, would put us in hock to the tune of around £30 billion.

How much of that will have to be paid by us will undoubtedly be a matter for discussion during the Article 30 negotiations. If the "colleagues" insist on everything, but "generously" allow staged payments over the MFF period to come, that would amount to about £4 billion a year.

With only a £2 billion surplus available, however, that would mean the UK having to find an extra £2 billion, or £40 million a week – up until 2027 – on top of our existing net costs. Even if we chose to pay nothing as an EEA contribution, our overall saving would only be £2 billion. That is our best-case scenario.

That then supposes that the EU will not demand any compensation for our departure. Like any other major organisation, the EU has undertaken long-term commitments, such as the provision of buildings. It can also claim that it will lose some of the benefits from economies of scale.

On this basis, there is always the possibility of the EU demanding a "divorce settlement", which could account for many billions.

Even without that, it is completely unrealistic to expect any immediate savings from leaving the EU. A realistic scenario is us paying slightly more. There is even a possibility that we will have to find a substantial severance payment.

But this is not important. We are not proposing to leave for the money, and the benefits that will accrue will come from our ability to act again as an independent state. They will amount to hundreds of billions over term. For that, any residual contributions are a worthwhile investment. And with the payments issue out of the way, we can focus on the real reasons why we need to leave the EU.



Richard North 15/04/2016 link

EU Referendum: the stupidity of the politics

08/04/2016  


Reaching 27 million households with a 14-page colour brochure, we now know, costs the better part of £9.3 million. That's what the government is spending on delivering its message, and it's money we can't match.

Nor can any but the most naïve of campaigners ever have imagined the Mr Cameron wouldn't pull this stunt. It's a variation on the ploy which Wilson ran in 1975. It worked then and it was thus reasonable to expect it to happen again. We predicted as much last year.

Actually, what we thought might happen was the distribution of a White Paper. But we can see why Mr Cameron wasn't tempted by that move – that would have exposed his "dodgy deal" to further scrutiny. Instead, he took advantage of the open goal created by the "leave" noise-makers when they refused to get behind a coherent exit plan.

Through filleting the pamphlet, it is easy to see the main thrust of Mr Cameron's attack. "Remaining inside the EU guarantees our full access to its Single Market. By contrast, leaving creates uncertainty and risk", the narrative starts.

Then we are told that, "Losing our full access to the EU's Single Market would make exporting to Europe harder and increase costs", following which we treated to the "killer" argument that:
Voting to leave the EU would create years of uncertainty and potential economic disruption. This would reduce investment and cost jobs. The Government judges it could result in 10 years or more of uncertainty as the UK unpicks our relationship with the EU and renegotiates new arrangements with the EU and over 50 other countries around the world.
Predictably, the usual mantras are then trotted out: "No other country has managed to secure significant access to the Single Market, without having to follow EU rules over which they have no real say, pay into the EU and accept EU citizens living and working in their country".

And then again, we are told: "A more limited trade deal with the EU would give the UK less access to the Single Market than we have now – including for services, which make up almost 80 percent of the UK economy. For example, Canada's deal with the EU will give limited access for services, it has so far been seven years in the making and is still not in force".

There are no less than six separate mentions of the "Single Market", around which, as the Financial Times remarks, are woven around the main themes, "that remaining in the EU benefits Britain and that leaving would create uncertainty and almost certainly be bad for the country".

Says this newspaper: "Since the Leave campaigns cannot agree what Britain's relationships with Europe or the rest of the world would be after Brexit, these points are well made".

This exactly mirrors the point made in the second edition of a book from the Centre for European Policy Studies (CEPS). In an otherwise terrifyingly superficial account, it tells us:
Plan B, or the terms of secession, in the immortal words of Sherlock Holmes, is "the dog that did not bark". The ‘leave’ choice is unknown territory, since it has not been specified by the secessionists beyond vague statements like regaining freedom from Brussels and being able to engage in freer trade with the world at large. Since the posing of a choice between a "known" and an "unknown" is a big hazard in democratic deliberations, this study does some homework that the secessionists have been unable or not wanted to do.
The absence of a plan is then the focus of an opinion piece in The Times. Barely a day goes by without an economist prophesying doom should the UK vote to leave, it says. Yet Oxford Economics modelled nine plausible Brexit policy packages, from which "the most striking conclusion is that, far from being inevitably catastrophic, Brexit has almost no ill-effects in some scenarios".

It also notes that "there is no agreed blueprint for post-Brexit Britain", but remarks that such an agreement would require – amongst other things – the repudiation of free movement.

Striking an economically good deal with the EU "would reek of betrayal to the majority who voted to leave". We're told that the problem with Brexit is the economics, it concludes, but: "In reality it's the stupidity of the politics that would hit the UK hard".

Interestingly, the CEPS came to the conclusion that the "only risk-free economic scenario would be to join Norway in the EEA, but that is also rejected by the noise-makers.

Thus, while the likes of Hannan whinge about the government leaflet, it is his refusal, and the refusal of all the main "leave groups" to endorse a credible exit plan, than has given Mr Cameron an opening to play exactly the scare card that we warned he would.

The way then to have dealt with the government's leaflet, therefore, was to head it off at the pass – pushing our own plan with an intensity that so undermined Mr Cameron's claims that he dare not make them.

Furthermore, no one in the leave campaigns can say they were not told about this. In June last year, I wrote to Dominic Cummings, warning him that the pro-EU side intended to rely mainly on fear. More specifically, I wrote, "it is using FUD - fear, uncertainty and doubt - powerful tools which act in favour of the status quo". Therefore, I said:
… in addition to our negative pitch, and our positive vision, we need a FUD neutraliser. When the enemy argues that leaving the EU is a terribly dangerous venture, we have to counter by illustrating that leaving the EU is a perfectly practicable proposition, entirely reasonable and safe. That is the purpose of an exit plan. It is not to second-guess the government. It's primary purpose is to demonstrate to the wavering voter that leaving the EU is possible and safe.
To that, I didn't even get the courtesy of a direct reply – not that much different from the way Arron Banks's has handled matters, agreeing to my face to adopt a plan and then, month after month, doing absolutely nothing about it.

When we come to analyse the high points and the low points of this campaign, we will most definitely see in it "the stupidity of the politics", where a succession of very stupid and malign people refused to commit to that vitally necessary exit plan.

There are no excuses for this. There is an informal, unspoken consensus that the EFTA/EEA option is the only sensible move, in the context of a structured, multi-phasic exit plan that has this as a compromise answer, opening the way for a longer-term solution once we are out of the EU.

The wilful rejection of a stratagem that would have given us the initiative and put us in the lead has now put us on the back foot, with no answers to an attack that could so easily have been neutralised before it got under way.

As a result, what was always going to be difficult just got immeasurably harder. The "stupidity of the politics" has created new, unnecessary burdens that we will have to fight to overcome. The sad thing is that we can so easily deal with the enemy. If anything is going to bring us down, it is indeed the stupidity of our own side.



Richard North 08/04/2016 link

EU Referendum: border checks for Ireland?

03/04/2016  


In the battle to leave the EU, the situation between Eire and Northern Ireland is emerging as a major fault line in the campaign. Specifically, when we leave the EU, there the land border between the newly-independent UK and the remains of the EU will also become the external border to the EU.

The implications of this are serious enough to have had the Joint Committee on European Union Affairs of the Irish Parliament in June last year express concerns about the re-imposition of border controls and customs checking, with potentially highly damaging effects on Anglo-Irish trade, with serious effects on the economies of the North and South.

This concern was amplified by Irish Prime Minister Enda Kelly and more recently in the BBC and currently in the Irish Times.

Interestingly, this latter piece, by Deputy Editor Denis Staunton, picks up on what he calls the "leave" campaign's greatest weakness - its failure to answer the question of what happens next if Britain leaves the EU and what kind of arrangement with Europe it should pursue.

Vote Leave, he notes, expects Britain to negotiate a trade deal with the EU, something it expects to be a straightforward process. "The heart of what we all want is the continuation of tariff-free trade with minimal bureaucracy", it says.

The Ukip-dominated Leave.eu campaign, Staunton adds, is even more relaxed, suggesting trade with the EU could continue on just the same terms if Britain leaves. "Given that we buy more from the EU than it buys from us, it is unlikely that the EU would seek to change this in the event of us leaving", it says.

When the government published a White Paper on the alternatives to EU membership, Leave campaigners dismissed it as a "dodgy dossier". Britain would not follow the path of Norway, Switzerland, Canada or Turkey in its post-Brexit relationship with the EU, but it would find a solution of its own, they said.

However, Staunton observes that it is an "an irrefutable fact" that in all third-party relationships with the EU, there is a direct relationship between the level of access granted to the single market and the number of EU rules any country must accept.

As a member of the EEA, Norway is more integrated into the single market than any non-EU country. "In return for such access, it must pay into the EU budget, adopt most new single market rules without being able to influence them and accept the free movement of people from the EU".

Switzerland's bilateral agreements with the EU involves similar obligations, while Canada, which has an advanced free trade agreement with the EU, has to accept EU rules when exporting to Europe but has much less access to the single market.

Says Staunton: "All of these countries, including Norway, are outside the EU customs union and, the White Paper warns, if Britain were also to be outside it, there would be a return of customs checks on the border".

Specifically, the White Paper states that, "under most of the alternatives described … the UK would be outside the EU customs union and so trade across the Border with Ireland would be subject to customs controls and rules on the origin of products".

To avoid this, the Joint Committee of the Irish Parliament recommended that, in the event of Brexit, "no external EU border is established on the island of Ireland separating North from South" – wishful thinking that is about as far from reality as it is possible to get.

With the prospect of border checks, however, there are fears there there will be customs posts on the border and huge queues as trucks wait for clearance. But this is a fantasy. It is wrong to assume that, because the UK would fall outside the Customs Union, it necessarily follows that there would have to be checks on goods crossing the border.

This perhaps harps back to the 19th Century origins of the Customs Union as the German Zollverein, as a means of removing time-consuming and costly border checks. In that case it certainly reflects the limited vision and the extraordinary lack of knowledge displayed by EU supporters.

The myopia is all the more remarkable as in 1949, eight years before the Treaty of Rome which put the Zollverein into effect for the original six members of the EEC, and organisation called the United Nations Economic Commission for Europe (UNECE) launched a scheme to remove cross-border checks of goods in transit.

This system, known as the Transports Internationaux Routiers (TIR) was so successful that it led to the negotiation of a TIR Convention which was adopted in 1959 by the UNECE Inland Transport Committee. It entered into force in 1960. It has since been updated and revised, currently standing as the 1975 Convention, as amended, forever breaking the link between customs control and border checks.

At the heart of the system is a document known as the "TIR carnet", issued to registered transport operators for each truck journey, listing the details of the consignments. These have to be kept in secure load compartments and sealed for the duration of the journeys. The specially marked vehicles are given free passage across borders, with any tariffs or other taxes becoming payable only when the final destination is reached.

Currently, thee million carnets are issued each year, equating to 10,000 trucks a day. Between them, they make 50,000 TIR border crossings daily. And the system has since 2003 been undergoing simplification and computerisation, to become the e-TIR system. As a 21st Century system, it is on its way to emerging as a fully electronic, paper-free operation.

As to Brexit, providing that the UK is prepared to re-enact the Community Customs Code and other flanking legislation to which EU recognition of the TIR system is tied, we could adopt the TIR system for Irish trans-border goods traffic.

This would allow for the worst case scenario, where no trade agreement was reached with the EU. Goods would be subject to varying tariffs and conformity inspections, but there would be absolutely no need for customs posts or border checks.

Where unloading has to be supervised and inspections have to be carried out, there is already an established system of what are known as "inland ports" or "inland clearance depots", where checks can be carried out on goods before delivery. Often, these coincide with break-bulk facilities and local distribution hubs, allowing operations to be combined.

As for the Republic of Ireland, a significant proportion of its trade is with other member states. A significant volume transits through the UK and sometimes other Member States before reaching their final destinations. For this, the EU already has a system in place known as the Community Transit System (CTS), its equivalent of TIR.

By this mechanism, goods travelling between Ireland and other EU Members States can use the system, passing though Northern Ireland, if necessary, and other parts of the UK. There will be no customs checks or physical inspections.

The UK can, of course, go further than the bare minimum provision, relying on TIR. If it joined EFTA, it could then take advantage of the Convention on a Common Transit Procedure, as amended, which initially agreed in 1987. This again allows cross-border movement without the need for border checks, bringing it into the ambit of the EU's CTS. The UK currently recognises this for shipping goods between EU member states. It is used for goods travelling through Switzerland.

Within the EU, the UK integrates the harmonised procedure into our own systems, implementing a substantial body of EU legislation. As part of the Article 50 settlement, it would also be open to the UK to re-enact this body of law, and agree to continue the harmonised system. This would have to be settled during the negotiations, but should not present any undue problems, as long as we don't seek to change anything.

Failing all that, there is the possibility of signing off a special, one-off deal. This is exactly what happened in 2004 with Cyprus to facilitate trade between the divided Greek and Turkish zones. Similar in many respects to the TIR and CTS, this could as a last resort provide a model for trade between the North and South.

All in all, therefore, the chances of a Brexit bringing chaos to Ireland, with new customs posts and border checks, is vanishingly slight. And what could be agreed for Ireland could also be applied to Scotland in the event that it became independent. There is little possibility of reactivating the modern equivalent of Hadrian's wall.

Scaremongering apart – for which the major culprit seems to be the UK Government – there is little for Ireland to fear from Brexit, in terms of any disruption to trade. The day after we leave, reporters on both sides of the border will be scratching their heads, wondering what all the fuss was about, as they find they have absolutely nothing to report.



Richard North 03/04/2016 link

EU Referendum: what the bloggers say

21/03/2016  


Having missed out last week and then having been preoccupied with the Leave Alliance launch, the Brexit bloggers this week are producing a more than usually abundant crop. 

We start with Scribblings from Seaham who, in an entertaining piece, joins me in decrying our "supine media" who regularly parrot the latest utterances on the forthcoming referendum by those MPs who still do not realise that their views are of no consequence; and that, at the end of the day, it is the views of the British electorate that matter.

This is a good theme. Despite the many years the media have had to get used to the idea that there was to be a referendum on the EU, journalists still haven't fully understood that a referendum is about people voting, and that politicians have one vote, just like everyone else.

But SfS does refer to one of my recent articles where we again share a distaste for the media's latest ploy, turning what should be an issue-led debate into a grotesque game-show parody, effectively amounting to the "Dave and Boris Show". It becomes dominated by "he says – he says" arguments, with Dave lying his socks off and Boris uttering incomprehensible tosh.

This dovetails beautifully with White Wednesday's latest blog which has him commenting that voters are concluding that the referendum debate is poor and both sides are "not at all convincing".

It didn't help, writes White Wednesday that the "leave" side didn't have a clear workable plan for how they wanted to get out. Actually that was not quite true. There was indeed a very comprehensive and workable plan but because it contained a few things that some on the "leave" side didn't like, "they put their copy in an old cupboard weighted down with concrete and buried it out at sea under cover of darkness. Anyone who talked about it after that night got shouted at and had a bag put over their head".

Oddly enough, to one of our current posts, one commenter has added a reference to Saul Alinsky's seminal work, the Rules for Radicals published in 1971. Rule twelve of thirteen says: "The price of a successful attack is a constructive alternative. Never let the enemy score points because you're caught without a solution to the problem".

Almost everywhere it seems, there is a recognition that the campaign needs an exit plan, everywhere that is except amongst the noisemakers themselves, who rival the obstinacy of a pack of mules in refusing to put one on the table.

Mr Brexit, on the other hand notes that, for a number of weeks now several sources have said that Flexcit, has been doing the rounds in the higher reaches of the civil service.

While David Cameron and his pro-remain friends have been claiming no one has set out what "out" looks like, many around Whitehall have been reading and taking on board this supposedly non-existent Brexit plan.

Yesterday, in a sign that Flexcit has been hitting the mark, the Telegraph dropped this rather pleasing detail into a story about civil servants believing Brexit "could be seized upon by ministers as a liberating moment which would trigger a revolutionary shake-up of public policy":
According to one analysis, developing a Britain-specific deal is likely to take five years, running way beyond the two-year period between a country triggering the Article 50 exit clause and it being released from the European treaties.

As such, it is likely the UK would adopt a model similar to Norway's as holding position, before gravitating to a more bespoke arrangement, according to one scenario under discussion.
This, says WW is Flexcit in a nutshell. It's the staged process writ large.

Lost Leonardo then takes us to The Leave Alliance (TLA) launch, a network of new and established political groups, bloggers and tweeters who are committed to winning the EU referendum for the "leave" side.

What makes TLA unique among the declared leave groups is its support for a credible Brexit plan, Flexcit: The Market Solution. This is a six-phase plan for recovering Britain's national independence in stages, as part of a continuous process, rather than as a one-time event.

That change of perspective, says Lost Leonardo, shifts the Brexit debate firmly in the direction of pragmatic and practical politics. The exact form that our post-Brexit deal takes is less important than our vision for what we will do with our national independence.

Self-governance means taking responsibility unto ourselves and, if our politicians are any indication, a long process of discovery and rediscovery lies ahead.

So as to short cut the economics and trade-centred debate that has been allowed (some might say encouraged) to obscure the more important political question - who governs Britain? - the Flexcit plan advocates remaining in the Single Market and then working to create a genuine free trade area in Europe whilst also rebuilding the national policy-making framework and enhancing our democracy by means of The Harrogate Agenda.

Brexit Door, however, having already sorted the Leave Alliance, moves on to the Tampon Tax, urging his readers not to fall for what is in fact, a "trifling stunt". When you see this kind of nonsense, he writes, respond in the manner that it clearly deserves – blow it a bloody great raspberry! And then focus your attention the real issues and pay the politicians sideshows no further mind.

Before leaving the subject, however, we need to revisit Pete's blog and remind ourselves as to why tax was charged on tampon in the first place – alongside many other countries outside the EU.

The answer is depressingly simple in that it was grouped by the World Customs Organisation in a single taxable category of miscellaneous manufactured goods, alongside sanitary towels, napkins and napkin liners for babies and similar articles, of any material.

Bureaucratic inertia took over from there, and the product acquired a taxable status throughout the world, including the EU. And interestingly, while the UK was willing to be pushed around, in Australia there has been a rather different outcome, although Canada has been more amenable.

Red Cliffs of Dawlish runs one of his typically impressive posts, who remarks on the "baby-ification" of British Culture. One side of the argument is being driven by a Serial Liar and the other side by a Personification of Political Infantilism of our culture.

As for other blogs, The Sceptic Isle is bringing Flexcit to his readership, serialising the pamphlet, EU and Europe looks at Mr Cameron's lies – which should be exciting continued attention, while Semi-Partisan Politics spends time on a detailed examination of Iain Duncan Smith's resignation.

To conclude this review, we look at Pete North's latest blogpost, where he tells his readers to "start fighting like you mean it". This, like many others of his, is an uncompromising piece, which harks back to last Wednesday when two MPs were so offended by my comments about the unwillingness of the breed to challenge the Prime Minister for his lies to the House (and the nation at large).

Our elected representatives should be our line of defence against an over-mighty executive, but we are in a perverse situation where our MPs and MEPs think they are part of the government and it is their role to tell us what to do. Yet, like children, we roll over and acquiesce.

Somewhere along the line we have distorted the relationship whereby we look to such people as leaders rather than servants. That is why this referendum campaign has become so perverse, putting trust in people who know so little about anything.  

Rather than sucking up to the likes of Boris Johnson and Douglas Carswell, we should despise these people for being part of the problem, says Pete. We should be ripping holes in their "worthless ideas" instead of rolling out the red carpet for them.

In this world, we don't want Boris Johnson, Duncan Smith, Grayling or Gove. We don't want Galloway or Farage either. We want rid of the whole lot of them. Brexit is our catalyst to do exactly that. So, Pete concludes, "start fighting like you mean it".

It's a sombre conclusion but one which strikes at the whole referendum campaign. We do need people to fight for themselves, to think for themselves and to make their own decisions. We are not there to serve politicians. They – nominally at least – should be our servants.

If we allow them to set the agenda, to decide for us how we think, if we allow them to take over this campaign, we are giving up the one opportunity we have to exercise our power as a united people. That's our choice and upon it rests our destiny. That will demonstrate whether we are even capable of being a functioning democracy.

We the people, as much as the government and its EU policy, are on trial.



Richard North 21/03/2016 link

EU Referendum: Flexcit, the pamphlet

19/03/2016  


After much labour, we have finally produced the Flexcit pamphlet. It is available as a free download from this link, or the permanent link on the sidebar. If you want hard copy, it can be ordered from the Bruges Group for £5.00 including p&p.

The pamphlet summarises in 48 A-5 pages the online book which has now had in excess of 50,000 downloads. It sets out how the UK can leave the European Union and is intended to show that an orderly exit is plausible and practical, and can be largely risk-free.

Leaving the EU, we acknowledge, is a big step. There can be no serious dispute that a botched process could have dire results. Export of goods and services is vitally important to us. Even in trade with the rest of the world, the EU is often the regulatory portal through which we access other markets so it has a huge influence on non-EU trade.

Any major disruption could do serious harm to our economy, well beyond just our trade with EU Member States. It could even drive us into recession. There is no margin for error. We cannot afford to get it wrong.

To achieve a trouble-free exit, we must have an exit plan. Without that, we believe the "leave" campaign will not succeed. But we expect our plan to have more than just an effect on the campaign. It would have a direct impact on the subsequent negotiations, if we decide to leave.

Our plan, therefore, has to be accurate, honest and pragmatic. And we start with a basic premise. After nine treaties and 40 years of political and economic integration, there can be no clean break. Unravelling in a single step is not going to happen, and certainly not without compromises. This is a point that cannot be made too strongly.

Behind the scenes, having been deliberately shunned by the major campaign groups and the media, that idea has already gained considerable traction. Thus we get the Telegraph today reporting that, "according to one analysis (i.e., Flexcit), developing a Britain-specific deal is likely to take five years, running way beyond the two-year period between a country triggering the Article 50 exit clause and it being released from the European treaties".

"As such", the paper says, "it is likely the UK would adopt a model similar to Norway’s as holding position, before gravitating to a more bespoke arrangement, according to one scenario under discussion" – the scenario posited almost exclusively by Flexcit for the past two years.

This reflects a crucial point in our plan - that negotiations will not take place in a political vacuum. Nor will they start with the formal exit talks. Rather, they will be continuation of a political process that will have started well before the referendum.

This means that our negotiators will not have a free hand. Theirs will not be "blank piece of paper" exercises where shopping lists are drawn up without restraints. Nor will there be room for theoretical assumptions. Negotiators will have to deal with the political realities of the day. And they will be forced to respond to the limitations imposed on them.

Another point is that these will be negotiations – i.e., a process which involves exchanges of views. It starts with each of the parties setting out their opening positions but, to achieve a satisfactory outcome, both sides will have to listen to each other. Compromise will be essential.

Commentators who suggest blue sky options that do not take account of these political realities are being unrealistic. Proposals cannot be taken seriously unless they are politically attainable and publicly acceptable. They must have regard to the political constraints and be acceptable to those with whom we are negotiating. To expect otherwise is pointless.

With this in mind, we stress that great care should be taken with exit scenarios based on economic models. Estimates cannot be any stronger than the assumptions on which they are based. Weak assumptions are poor foundations for any plan. Dazzling predictive models and complex calculations cannot remedy inherent flaws.

Then, we must point out that all solutions must fit with others. There is no point defining certain policies if they create irresolvable problems elsewhere. Partial solutions are not an answer. An exit plan has to work as a whole, even if that requires adopting sub-optimal policies in some areas in order to achieve the larger objectives.

Within these constraints we have to face some unavoidable realities. Firstly, the plan has to ensure continuity of trade with the EU and the rest of the world. No matter how attractive the eventual outcome, exit will never be tolerated if the immediate effect is to damage trade and plunge us into recession.

In our view, that means we must – in the short to medium term – stay in the EU's Single Market. However, the EU has made it abundantly clear that if we want to stay in the Single Market, acceptance of the principle freedom of movement is non-negotiable. We can abolish freedom of movement or we can stay in the single market. We can't do both. On that basis, we have come to the conclusion that, in order to leave the EU and secure the medium and long-term gains that accrue from so doing, we must accept a short-term compromise over freedom of movement.

To add to all this, there is the timescale to consider. Under Article 50 of the Lisbon Treaty, which defines the exit procedures, negotiations are set to last two years. Although we could get an extension, we believe it would be unwise to rely on a longer period.

This creates an inherent problem. Complex trade negotiations usually take a long time to conclude – sometimes a decade or more. Thus, we suggest adopting an off-the-shelf solution rather than a bespoke agreement.

That confronts another reality. Brexit presents an existential threat to the EU. If it concedes an exit deal to the UK that is better than it could achieve within the EU, other Member States might be tempted to leave. A "better deal for Britain" could collapse the entire EU. For that reason, it will never be offered.

Thus, we feel that holding out for unachievable perfection runs the risk of losing the referendum and staying trapped in the EU. We make whatever compromises are needed to get out quickly and resolve outstanding issues once we have left.

Taking all that into account, we propose six stages to our plan. Its very essence is that it is split into stages. We arrived where we are by a series of graduated steps. It makes absolute sense that we should leave in the same way. To manage the process, our six stages work as follows:

Stage one: this deals with the immediate split, for which there are several broad possibilities. There are the options we set out in what we also call "The Market Solution", there is what we call the "Swiss" (bilateral) option, or there is the World Trade Organisation (WTO) option.

Our first stage comprises three options, all aimed at ensuring continued participation in the single Market. First is the "Norway Option" in which we rejoin the European Free Trade Association (EFTA) and trade with the EU through the European Economic Area (EEA).

Whatever initial option we choose, we have to remember that membership of the EU involves much more than trade. We cooperate in a huge range of activities, from student exchanges to the management of airspace, and much else. Before reaching a final agreement, we have to decide on the activities we want to continue, and the terms.

Once we have the right exit option and have defined the areas of post-exit co-operation, we have enough to finalise an exit agreement with the remaining EU Member States. But this is only the start of a longer process.

Stage two: looks at immigration and asylum. Since we have to keep freedom of movement for the time being, we have to work out how better to manage the flow of people into our country. Here, there are many things we can be doing, to pave the way for a longer-term solution.

We will need to take action at a global level to deal with third country immigration, seeking amendments to the Geneva Convention on the Treatment of Refugees, and the 1967 Protocol. We will also have to change or withdraw from the European Convention on Human Rights. We can also limit immigration from the EU by addressing the "pull" factors that make it so attractive to come to this country.

Stage three: here we deal with the drawbacks of EEA membership. We start with the dominance of the European single market by Brussels. As long as the UK is on the edge and Brussels is at the centre, we will have a subordinate status. This is not acceptable in the longer term, so we propose a more equitable market structure.

What we want is a community of equals in a "European village". To administer the market, we propose replacing Brussels with the Geneva-based United Nations Economic Commission Europe (UNECE), on the lines proposed by Winston Churchill in 1948 and again in 1950. UNECE already plays a prominent role in global regulation and trade and is the logical choice.

Stage four: is one of rebuilding independent policy. Illustrating how an independent UK might operate, we look at foreign and defence policy, agriculture and fisheries. We also explore environment policy, and then the linked subjects of climate change and energy. We conclude with financial services and the so-called "digital market".

Stage five: we suggest a new framework for our global trade policy, with an evaluation of areas that are ripe for improvement and exploitation. This is organised into an eight-point programme which opens the way for us to break out of the EU cul-de-sac and rejoin the global trading system.

Stage six: here, we argue that there is little point in leaving the EU if we then return powers to a Parliament which gave them away in the first place. We must stop this happening again. Thus, we offer ways of restoring democracy, bringing both central and local governments back under the control of the people.

In conclusion, we explain how leaving the EU becomes a process requiring continuous and flexible development - from which Flexcit takes its name. That repeats our central point: leaving the EU is not a single event but a multi-stage process.

Even after we have left the EU, the process may take many years to complete, as we seek a steady, measured divergence rather than a "big bang" separation. The aim will be to keep the best of our agreements with the EU while freeing it to follow its own path.

In short, by leaving the EU, we are not ending a relationship. We are simply travelling separately. This is not isolation but an agreement to do many of the same things in a different way, all to our mutual advantage.



Richard North 19/03/2016 link

EU Referendum: an open goal for Cameron

06/03/2016  


"Leave" campaigners, writes Booker, may have dismissed those papers produced last week by the Foreign and Commonwealth Office (FCO) to give the Government's line on Brexit as no more than "baloney" and "scaremongering"; and certainly the FCO’s analysis is terrifying stuff.

We get the impression that it was drafted by clever lawyers, to a brief that they must paint the prospects for a British exit from the EU in as black a light as possible. But there is much in it that the Leave campaigners themselves have not yet begun to understand.

When I say "clever", this is because a lot of what the FCO says is true. It emphasises, as this column has long pointed out, that the only legal way we can leave the EU is by invoking Article 50 of the Lisbon Treaty. They point out that extricating ourselves would not be a simple, sudden act but would involve a long, very complex process – not least because it would be vital for us not to be excluded from the Single Market (which is "Project Fear's" chief argument for us to remain).

When the FCO officials then review all the different options put forward by prominent "leave" campaigners, one imagines what fun they must have had in portraying the process as a murky labyrinth in which every passageway leads only to a disastrous dead end. Again, in much of this they are right. They dismiss the ludicrous idea that our exit could be achieved just by repealing the European Communities Act, which would simply be to ignore international treaty law.

They rightly explain why one-off trade deals, such as those between the EU and Canada or Switzerland, are out of the question, not least because these took many more years to negotiate than would be possible in the two allowed for under Article 50.

When it comes to the idea of relying just on the rules of the World Trade Organisation (WTO), the FCO in fact misses a trick – by failing to point out how this could produce the most disastrous outcome of all, whereby EU countries could still export to Britain while we were barred from exporting to them.

But in other respects the FCO is blatantly dishonest, as when it claims, without any authority, that "the British people would expect" Article 50 to be invoked straight after the referendum. In practical terms, this would be out of the question, since both sides would need up to a year to prepare before full negotiations could begin.

Even more telling, however, is how wilfully the FCO misrepresents what it dismisses as "the Norway option" (clearly the one that most worries it), allowing Britain to remain part of the Single Market as a member of the European Economic Area (EEA).

When, for instance, it makes the familiar Europhile claim that Norway has no say in passing Single Market laws, this deliberately obscures the fact that, as a member of the European Free Trade Area (EFTA) and the Nordic Council, Norway has more say in the preliminary drafting of those rules than Britain.

It has even more say in drafting the ever-growing number of Single Market rules that are passed down to the EU from global bodies, such as the United Nations Economic Commission for Europe, on which Norway sits in its own right as an independent nation, while Britain is represented only by the EU, with only a small part in deciding what the EU’s position should ever be.

If Britain outside the EU was to join the EFTA and the EEA, this would not only give us more influence over much EU legislation than we have now, but, if used wisely, might pave the way to creating the kind of inter-governmentally agreed Europe-wide market envisaged by Churchill after the war, no longer dominated by the oppressively supranational mechanisms of Brussels.

If by any chance the referendum should put us in the position of having to discuss a wholly new reality outside the EU, the only way we could hope to succeed would be by keeping negotiations amicable and positive. Yet ironically, the last people we should want to represent us in the negotiations would be those same Europhile officials responsible for the wholly negative, defeatist line taken in these two sad propaganda documents.

Not that it seems likely at present that we shall find ourselves in that position. Because if anything is likely to ensure that Britain votes to remain, it is the way the "leave" campaigners are all over the shop, without any remotely plausible and properly worked-out plan for how to achieve what they claim to want.



Richard North 06/03/2016 link

EU Referendum: No F***ing Use supporting the EU

05/03/2016  


Rather predictably, the "remains" have got some agribiz luminaries together to write a letter to the Times, trotting out their own version of the pro-EU propaganda. They say:
Leaving the EU is too great a risk for UK farmers. The European single market accounts for 73 per cent of Britain's agri-food exports and gives us access to a market more than twice the size of the US. Outside the EU we could keep all or some of this market, but we would have to abide by EU regulations without a say in their formation and pay into the EU budget without receiving EU payments in return. We'd pay, but have no say.
The letter is fronted by Sir Peter Kendall, former president of the NFU, and Lord Plumb, another former president of the NFU and one-time MEP who briefly became European Parliament president, with nearly forty other signatories.

From a public relations perspective, this is ill-advised. The NFU – which represents only the minority of working farmers – is otherwise known as No F***ing Use, and has acquired for its members the reputation of "whingeing farmers" who only get interested in politics when their subsidies are at stake.

In fact, as Owen Paterson points out, of three EFTA states – Switzerland, Norway and Iceland - in Europe but not in the EU – all get much higher agricultural subsides than EU member states.

Paterson also argues – as does George Eustice - that outside the EU, we would have much more flexibility as to how we spend our money. Paterson states:
Subsidies could be more specifically tailored to satisfy the UK's unique geography and climate. In lowland areas, decisions on which crops to grow and animals to raise should broadly be left to the market. However, there are areas where food production is simply inadequate as an income generator.

The landscapes of the Lake District, the Peak District, and the mountainous areas of Wales and Scotland are the basis for a tourism industry worth an estimated £20-£30 billion per annum; there is currently no mechanism for the market to reward farmers and landowners for the public good, provided by the work they do maintaining and improving these environments.
Such issues are explored in detail in Flexcit, which open new vistas for a post-exit policy, making it clear that UK agriculture would be far better off without the dead hand of Brussels.

Despite this, the Times allows the dismal pro-EU advocates to exploit the lack of coherence in the "leave" camp by stating:
The Leave campaigns talk about trying to negotiate a free trade deal similar to the Swiss model. But that would not cover all products and would not give the same unrestricted access as provided by the single market. Where we did get duty-free access we would still be required to meet EU standards and regulations. In other words, the regulatory bonfire we've been promised by the Leave campaigns just wouldn't happen.
This is the same straw man technique that is being used across the board by the "remains", with no hint that the bulk of agricultural standards are set by the "three sisters" (Codex, OIE and IPPC), by UNECE and the OECD. Conformity within the context of continued EEA membership – where we would have greater say in the formulation of standards – would put us in a far better position.

To those who know, therefore, what we're actually seeing is not argument but the low drone of ignorant Europhiles. They tell us that "leaving the EU would mean reducing our access to our most important market, little or no reduction in regulation, no influence on future rules, the speedy abolition of direct support and an uncertain future for UK agriculture".

Yet, in the EU, the direction of travel is towards a progressive decrease in support payments, matched by increasingly onerous and intrusive bureaucracy. Only the "barley barons" and the subsidy farmers could be happy with situation – and that's who we're hearing from in this letter.

Most real farmers are conscious that the CAP is and always has been a disaster. Outside the EU, agriculture has a future. Inside, only the vested interest of those who are No F***ing Use would prosper.



Richard North 05/03/2016 link

EU Referendum: those trade deals

05/03/2016  


One of the more egregious lies perpetrated by the "remain" campaign, and repeated by Philip Hammond in his Chatham House speech, is the canard about having to renegotiate "EU trade deals with over 50 different countries".

Said Hammond last week, these deals have been based on the negotiating muscle of a bloc with 500 million consumers and a quarter of the world's GDP.

Renegotiating them as a single country, he claimed, would take many, many years. Years in which British businesses would be squeezed out of traditional markets and with no guarantee at the end of the process we could get terms as good as we have now.

If this was actually true, this would present a serious problem – and far bigger than the ill-briefed Hammond makes out – but then he relies on his Civil Service, so you can't expect too much.

Illustrating the scale of the problem, we see that the European Union lists 881 bilateral treaties on its treaty database, together with 259 multilateral agreements.

These treaties cover a vast range of subjects from the "Agreement between the European Union and the Republic of Moldova on the protection of geographical indications of agricultural products and foodstuffs" to the "Agreement on fishing between the European Community and the Kingdom of Norway". Norway, in fact, is party to 166 agreements, and 215 are listed to which the UK is also party.

There is a further distinction as between treaties made jointly between the European Union and its component Member States, and other parties (whether bilateral or multilateral) – the so-called "mixed" treaties, and those concluded only between the European Union and third parties, such as under the Lisbon Treaty Article 207 powers, known as "exclusive" treaties.

On the face of it, Britain is excluded from all treaties once it leaves the EU. Therefore, it would appear that each treaty will have to be examined and, where necessary, the agreements between Britain and the relevant third countries renewed.

That is the thrust of the "remain" lie. The administration and negotiations potentially required in such an event, together with the procedural requirements associated in maintaining treaty continuity, could on the face of it take longer than the Article 50 negotiations needed to exit the EU. They would prove resource intensive, and probably outstrip our current diplomatic capabilities.

However, Hammond and his remainers need to come clean. There is what is known as the "general presumption of continuity", which is cited by authorities on international law. This applied in the "velvet divorce" between the Czech Republic and Slovakia, when on 19 January 1993 the two republics were admitted to the UN as new and separate states. In respect of international treaties, they simply agreed to honour the treaty obligations of Czechoslovakia.

The Slovaks transmitted a letter to the Secretary General of the United Nations on 19 May 1993 expressing their intent to remain a party to all treaties signed and ratified by Czechoslovakia, and to ratify those treaties signed but not ratified before dissolution.

This letter acknowledged that under international law all treaties signed and ratified by Czechoslovakia would remain in force. For example, both countries are recognized as signatories of the Antarctic Treaty from the date Czechoslovakia signed the agreement back in 1962.

Exactly the same option would be available to the UK. It would, of course, need to prepare the ground before committing to an Article 50 notification – which is another reason why we would be unwise to go ahead immediately.

Once alternative arrangements are in place, an exit agreement with the EU would hold no terrors. As we dropped out of the EU treaties, we would simply invoke the procedures leading to treaty continuity.

Conveniently, there is also a template which the UK could use, in the Vienna Convention on Succession of States in respect of Treaties, even though it is not a party to it.

The Convention sets out the procedures for carrying over treaties, where all parties agree to their continuation. It allows for the newly independent State – in this case the UK – to establish its status as a party to an existing treaty by way of a formal notification of succession, lodged with the depository of each treaty.

Nevertheless, participation in the treaties will normally require the consent of all the parties, and the newly independent State may establish its status as a party to these treaties only with such consent. It does not seem likely, though, that many (if any) parties will want to withhold consent.

This procedure, however, might not apply to exclusive EU treaties, where the EU as the contracting party concluded the agreement on behalf of its members, without the individual members acting as contracting parties.

In this case, the UK has no direct locus and, on withdrawal from the EU might have no part in such treaties. But there again, the principles of the Vienna Convention could be deemed to apply, given the political will. In those cases, where the third country is the beneficiary – as in the Mutual Recognition Agreement on Conformity Assessment between the EU and Australia – it would be irrational for that country to withhold consent.

In any event, there are currently very few exclusive treaties, with the EU treaty database listing only 17 made under Article 207, of which only three relate to trade, of the 250 trade agreements listed in the database.

Nevertheless, there is an option which would avoid the possibility of being held to ransom by third countries which do not consent to an independent UK as a treaty partner.

This would involve an agreement with the EU of a treaty giving Britain notional membership status for the strict and exclusive purpose of taking advantage of the third country treaty provisions. Any such arrangement would most certainly be of limited duration, giving time for selective renegotiation and/or re-enactment with the original parties to the treaties.

Even if a few have to be renegotiated, that is not necessarily a significant problem. Talks may be relatively trouble-free and speedy to conclude. For instance, on third country trade deals with developing and less-developed countries, the UK may be willing to offer more generous terms than were available from the EU, in return for a speedy conclusion of deals.

Where for instance the EU is currently demanding that Kenya (and EAC partners) progressively reduce tariffs on imports, the UK may be more inclined to carry over ACP arrangements in the interests of promoting employment and development, all with a view to reducing migration pressure.

With the groundwork already done, draft treaties might be in place long before the Article 50 deadline supervenes.

The point that thus arises is that third country treaties are manageable. For the most part, ensuring continuance is a relatively minor administrative task that can be resolved relatively simply. There is no question of any need for major renegotiations.

For the rest, there is a premium on negotiation, which will form part of the Article 50 exit agreement, but there is nothing which cannot be resolved with goodwill on all sides.

And then there is the get-out-of-jail-free card. Should we take the option of joining EFTA, then we can rely on Article 56(3), which allows for state acceding to the Association to apply to become a party to EFTA free trade agreements.

This, potentially, is a huge short-cut. Parallel negotiations with EFTA, while Article 50 negotiations are in progress, could allow for an orderly transition. As we leave the EU, we could arrange it so that the EFTA agreements could kick in at the same time.

Needless to say, nothing of this will come from Mr Cameron, his sidekick Philip Hammond, or any of the "remains". But the facts are the facts. Third country deals are not a crisis. They are an opportunity.



Richard North 05/03/2016 link

EU Referendum: the good, bad and the lies - 2

03/03/2016  


Following the publication yesterday of the Government's paper on the alternatives to EU membership, we return to the fray with our continued analysis.

Yesterday, we were looking at the Government's "take" on the Norway option. Predictably, it highlighted the downside and, equally predictably, it omitted to mention that the main advantage of this option is its use as a halfway house, to give us a swift exit from the EU within the two-year Article 50 timeframe.

The end game (or part of it) then becomes the creation of a genuine, continent-wide European Single Market, as originally envisaged by Winston Churchill in 1948 – the year I was born and nearly ten years before the Six decided to opt for the EEC, eventually dragging us 27 other European countries into a cul de sac from which we must now escape.

The details of this end game are set out in Phase 3 of Flexcit, with Chapter 11 starting on page 215 referring. This vision far transcends anything Mr Cameron has to offer with his "special status" and is one that is eminently achievable.

But it is only when you treat the Norway option as an interim measure, and sketch out the real end game – which takes in the abolition of the EEA and its replacement with an agreement managed (on our behalf) by EFTA, under the umbrella of UNECE – that an exit plan begins to make sense.

And this is why, of course, the Government insists on casting the Norway option as the final cover, something we do not advocate, and have no intentions of seeking. But then, the last thing we can expect the Government to do is fight our case for us. This we must do ourselves.

Moving on from the Norway option, the Government paper next addresses what is calls "negotiated bilateral agreements". Here, it is on much firmer ground, telling us that "a bespoke UK-EU trade agreement would be complex to negotiate", adding that, "the EU-Canada agreement, for example, has taken seven years to negotiate and is still not in force".

This is an issue we have addressed many times on this blog, most recently here, pointing out that there are few examples of the EU being able to complete a trade agreement inside five years.

Yet, on the very day that the Government published its report, we had Lord Lamont in the Telegraph declaring that "talk about Norway is irrelevant", then grandly stating that "Britain would have its own arrangement suited to our circumstances".

Undoubtedly, in the fullness of time, Britain would have its own arrangements. But what we have here is a blank refusal to acknowledge the time limitations imposed by Article 50.

If we had open-ended negotiations, then we could go for a bespoke agreement. But we haven't. Worse still, if we run out of time, and are force to leave without an agreement, the effects would be catastrophic. The question that the likes of Lamont must address, therefore, is whether they are prepared to take the risk of a failure to reach an agreement, or whether we should hedge our bets.

Making this even worse, though, Vote Leave is still dickering over the validity of Article 50. In a bizarre intervention by Nigel Lawson, we see him resorting to public schoolboy rhetoric, dismissing claims of free trade, etc., negotiations taking 10 years or more as "balderdash".

He argues that the only constitutional requirement for the UK to leave the EU is the repeal of the 1972 European Communities Act. Thus, he states, in the event of a vote to leave, we should invoke the Article 50 mechanism, or some alternative route.

This brings us back to Monday's report, where the Government unequivocally stated that Article 50 "is the only lawful way to withdraw from the EU". If Vote Leave is not even prepared to accept this statement, then it is no wonder that it cannot get to grips with the folly of seeking to negotiate a free trade agreement.

But even in this, there seems a total disconnect. Should the UK – following the guidance of Vote Leave – decide to ignore Article 50 and seek negotiations with the EU on a free trade agreement, prior to leaving the EU, how would it expect the EU institutions to act?

As far as the EU is concerned, it requires a legal base for any action and it has available to it either Article 48, on treaty amendment, or Article 50. In any circumstances, Article 48 would be out of the question, which would leave the European Council to invite the UK to invoke Article 50.

If the UK then refused to invoke this Article, there would be a stand-off. No progress would be possible. But if then the UK repealed the ECA, thereby unilaterally abrogating the treaty, the consequences would be catastrophic. And still, without a legal base, there is no mechanism for the EU then to enter into talks with its errant Member State.

In fact, no British government would ever contemplate bypassing the treaty procedure, so Article 50 is a fact of life - a done deal. It is pointless arguing the toss, in which case we take the two-year limitation as read. And, with no guarantee that negotiations for a free trade agreement could be concluded within two years, it would be foolhardy even to consider this route.

With that much said, the Government is actually kicking at an open door, as it makes its case for the unsuitability of the free trade option.

In making its case, it adds that there are additional hurdles to an agreement, in that – as a "mixed" agreement – it could require the agreement of all 27 of the remaining EU Member States, as opposed to QMV for an Article 50 agreement. Thus, a single state could block it, putting the UK in an extraordinarily vulnerable position.

The next point it makes is that no existing bilateral trade agreement would deliver the same level of access that the UK currently enjoys to the EU Single Market. In particular, none provide equivalent access for services, which accounts for almost 80 percent of the UK economy.

And that is actually a good point. Even the comprehensive Canadian agreement has exceptions and limitations. It runs to 1,600 pages – yet the Single Market acquis comprises around 5,000 separate statutes, far more than the Canadians have adopted.

With the degree of economic integration between the UK and economies of the rest of the EEA, anything less than complete access to the Single Market would involve economic penalties.

There is then the possibility of the Swiss option. It has a higher level of access that does Canada and other free trade partners, but once again we're having to accept freedom of movement and make some contributions to the EU budget.

However, there is an issue here that we explore in great depth in Flexcit, which is referred to in the Government report. "It is unlikely", it says, "that the UK could secure an arrangement like Switzerland. Even if we wanted to do so, it is unlikely that the remaining EU Member States would be willing to offer the UK a similar arrangement".

The point about the Swiss deal, of course, is that it was cobbled together after the Swiss people, in a 1992 referendum, refused to let the federal government join the EEA. As such, it isn't really a considered model – more an ad hoc series of agreements with no underlying cohesion.

Without in any way over-egging the situation, therefore, the government is able to say that the EU-Swiss bilateral agreements are complicated, and increasingly controversial both with the EU and in Switzerland.

Furthermore, both the EU and the Swiss are calling the viability of this model into question. In 2010, the Council of the EU described the model of EU-Swiss relations as "complex and unwieldy to manage and [it] has clearly reached its limits".

In any case, the web of bilateral agreements between Switzerland and the EU has taken many years to negotiate – 22 years in all. Once again, the Article 50 limitation hits home. The "Swiss option" is not and never has been (not since 2009, at any rate) a viable option.

To that, we could add much more – as indeed the Government does – but it would be overkill. Bilateral agreements, including the Swiss option, in the context of Article 50 negotiations, are a non-starter. Thus, we need to move on. In Part 3, we'll look at what the Government has to say about the WTO option.



Richard North 03/03/2016 link

EU Referendum: inappropriate responses

03/03/2016  


Whatever else, this second document only partially analysed by us, is not a "dodgy dossier". For it thus to be described by Iain Duncan Smith, even before he had seen it, is not an adult response. Nor is Andrew Lilico's response at all helpful, when confronted with the challenge of producing our own detailed plan for Britain outside the EU.

Lilico's reply to the demand that we spell out what trading arrangements Britain would have – a Norway option, a Swiss option, a Turkey option, a Canada option, a WTO option, or something else (as explored in a government white paper out today) was expressed in one word: "balderdash" – although he originally chose "poppycock".

Elsewhere, we are still seeing pundits declare that Britain could rely on negotiating a free trade agreement, totally oblivious to the substantive arguments that there is not time, within the two-year framework of the Article 50 negotiations, to conclude a satisfactory agreement.

Far from responding to the challenges posed by Brexit, therefore, it seems the leave camp is in denial. High profile figures are unable even to recognise the need for a coherent exit plan, and are a million miles from producing one.

This is despite the opportunity afforded by the Government's case. Based on a few rational observations, and rightly pointing out the limitations of some of the options, it is nevertheless thoroughly dishonest. More to the point, it is so slender that the arguments can easily be broken.

The leave camp, however, seems determined to pursue a suicidal path, bordering on the incomprehensible, while Vote Leave still seems to be failing to rise to the challenge of proving that it is really intent on leaving the EU.

Yet, despite that, we feel that some progress has been made. Even if the noise makers in the leave camp are unwilling or unable to set out their case, the Government has revealed its own. It has presented us with an easy target and, through The Leave Alliance and our bloggers' army, we are well capable of scoring many a bullseye.

Over the next few days, therefore, I will continue my analysis of the latest paper, as indeed other bloggers are doing, while Ben Kelly makes the case in the Telegraph.

That, I believe, is the appropriate response – cool, clinical demolition of the Government's flimsy case – not public schoolboy epithets which neither address the issues nor present the alternatives which are so very necessary.

As it stands, therefore, the Government has started the debate. We could have been ahead of the game, but we are not. But, while the noise makers do just that, we can at least respond, and let a grown-up debate ensue. 

Defeating the enemy now looks easier than we might have imagined. Our own side, though, is an altogether different matter.



Richard North 03/03/2016 link

EU Referendum: the good, bad and the lies - 1

02/03/2016  


The Government paper starts with a subtle lie: "This paper looks at the potential models for the UK's relationship with the European Union, if there were to be a vote to leave", it states.

In so doing, it actually offers a highly selective view of a limited number of options - by no means all of the , potential models. And it is putting a negative spin on the consequences of the limited number of options it does discus. Pre-eminent amongst the omissions, of course, is Flexcit, despite downloads of this two-year-old plan now having reached 48,000.

That is the way the Government, as with the Remain campaign, intends to play it. It doffs its cap to the unworkable options and, despite the referendum being the people's choice, ignores the only crowdsourced plan in existence - the one that happens to be workable.

Nevertheless, while they think they can ignore us – alongside the leave "noise makers" (a foolhardy mistake) - we don't ignore them. Knowing our enemy is what gives us much of our strength. Thus, for the rest of the day (and following days), we will be analysing this second Government paper of the week, pointing out the good, the bad and the lies.

Looking at the text – and starting with the executive summary - if the Government thinks it is trying to deter people from voting to leave, it needs to try harder. Much of what it seems to think is the downside merely comprises statements of the obvious, which we've long conceded in Flexcit.

Thus, when the Government tells us that, "regardless of the preferred outcome that the UK seeks, the precedents clearly indicate that we would need to make a number of trade-offs".

This is precisely what we have been saying for more than two years. We are not going to get a swift "clean" exit. To get inside the two-year Article 50 deadline, we are going to have to compromise. That we should have to do so is a given.

If the authors of this paper cared to read Flexcit (which they probably have), they would have noted that we say, in effect, that "in return for full access to the EU's free-trade Single Market in key UK industries, we would have to accept the free movement of people".

The Government presents this as if it was something new and terrible. Yet that very issue is at the core of Flexcit. In order to maintain access to the Single Market, pro tem, we will have to take on board free movement. You can read this in Flexcit, page 122, where it says: "it is unlikely that the EU would settle for any formal free trade agreement without some provision for freedom of movement".

Only the rabid wing of the leavers fail to recognise this. For the rest of us, as part of a phased withdrawal from the EU, we can accept continued free movement as the temporary price for a swift exit.

We can also better deal with migration outside the EU – even within the EEA. While Mr Cameron has to go cap in hand to the Commission for his incredibly weak "emergency brake", EFTA states within the EEA can unilaterally invoke "safeguard measures", which far outstrip the minimal (and unenforceable) concessions given to the UK.

The Government then goes on to tell us that access to the Single Market would require us to implement its rules – as if this was something new or special. But of course we would have to implement these rules. This should go without saying. To sensible leavers, this isn't even an issue.

What we didn't adopt though the EEA, we would repatriate anyway. The day after Brexit, all EU laws would continue in force. Only gradually, would we redefine the rule book and, since so much of EU law is now of global origin, we would end up keeping it anyway.

According to the Government, though, from outside, the UK would no longer have a vote on these rules. But inside the EU, we get seven percent of the vote on the Council, while the vast majority (over 3,500 instruments a year) of laws are placed on the A-list and go through without voting anyway.

Then, outside the EU, the UK would have a vote. We would restore our voting rights on international and regional bodies, where most laws start their life and, through the EEA, we would have a veto to block any EU laws that we don't like – if we decide to accept new laws, which is by no means automatic.

Before leaving the Norway option in this preliminary assessment, the FCO tells us that there is no guarantee that we could fully replicate our existing cooperation in other areas, such as cross-border action against criminals.

This is very much the style of the document – innuendo is rampant. But there is no reason why we should expect to continue with any number of cooperative arrangements. Norway does, Iceland does. Why would the UK no do so?

Finally, before moving on, we get these good and faithful Civil Servants artfully tell us that full access to the Single Market would require us to continue to contribute to the EU's programmes and budget.

But hey! We know this already. All of this has been explored fully in Felxcit, and there is no problem with it. We divorce the political ambitions from the cooperative programmes, and there is a price tag that goes with it.

What we don't get from these gifted public servants is any suggestion that the this is anything other than a possible end game. There is no hint that this could be an interim solution and there is more to come – that there more then just the dead end of a Norway emulation. As always, it is not what they say, it's what they don't say.

Next in line, though, is the "Free Trade Area" option. We'll look at that in Part 2.



Richard North 02/03/2016 link

EU Referendum: a decade of opportunity

29/02/2016  


The Government has today published a report on the implications of leaving the EU. This is a modest document (28-pages) which would have it that leaving would create a decade of uncertainty.

In fact, released from the dead hand of Brussels, we could look forward to a decade and more of unprecedented opportunity. But, on one point we do agree. Withdrawal from the EU is a process, not an event – that is the title of the booklet: "The process for withdrawing from the European Union".

With that, the Government is saying that: "a vote to leave the EU would be the start, not the end, of a process". We wholeheartedly agree, and have been saying so for years in Flexcit, adding:
If we see "Brexit" as a process rather than a single event, the act of leaving becomes an enabler rather than an end in itself. In our view, the primary objectives of those managing the withdrawal are to set up the structures and strategies which will provide a sound foundation for the governance and development of a post-exit Britain.
Once this is acknowledged and understood, the whole perspective on Brexit changes. We are able to look at the process as a series of phases, and the concept of a phased withdrawal begins to make absolute sense. Instead of looking for a "sudden death" solution, we can take out time, and manage affairs to mutual advantage, without being troubled by artificial deadlines.

Over the rest of the day, therefore, we're going to look in depth at this report, and the reactions to it, and add to this post to make it our definitive response.

To an extent, some of this report is sensible, measured and factual – and we are not going to disagree with it. For instance, it tells us that the UK's membership of the EU is established by the EU Treaties, and Article 50 is the process set out in the Treaties for Member States to follow when leaving.

It goes on to say that Article 50 "is the only lawful way to withdraw from the EU". It would, it says, "be a breach of international and EU law to withdraw unilaterally from the EU (for example, by simply repealing the domestic legislation that gives the EU law effect in the UK)".

Such a breach would create a hostile environment in which to negotiate either a new relationship with the remaining EU Member States, or new trade agreements with non-EU countries.

This directly contradicts the stupidity of Cummings and other pundits who have argued over term that Article 50 should not be used. At last, we hope, this issue can be put to bed and be done with. When we leave, we will invoke Article 50 – end of. Please let us waste no more time debating this.

Timing of the Article 50 Notification 

Where I would most profoundly disagree with this report is in its reiteration of the Prime Minister's assertion that, as regards triggering Article 50, "the British people would rightly expect that to start straight away".

We address this issue in some detail in Flexcit (see Chapter 3), noting that before any negotiations could begin, there must be some degree of national agreement as to what we might expect from the process.

At another level want to discuss with the leaders of parliaments of the other EU member states what we had in mind, and we would expect our government to mount a "charm offensive", possibly with a programme of reassurance visits to EU capitals.

Successful management of the negotiations will be a major undertaking, requiring cooperation from most Whitehall departments, political commitment and the allocation of sufficient resources. It will also demand a shift in thinking to deal with what amounts to a fundamental change in national strategy, of which existing departments are simply not capable.

As such, it may well be wise to by-pass the Foreign and Commonwealth Office (FCO), which would otherwise be the lead department in relations with the European Union. The Cabinet Office might be a suitable alternative with the negotiating team led by the Chancellor of the Duchy of Lancaster.

This would permit the appointment of a senior and respected person from outside party politics, as the post-holder can be a member of the House of Lords. A good negotiating atmosphere will be vitally important.

Such issues cannot be left to chance. They will require specific actions early on in the process, with the emphasis on presenting the talks as a co-operative exercise. An early appointment of a person committed to the success of the negotiations would send a positive message and would help set the tone.

Given that one of the most powerful complaints about the EU is the lack of democracy in a structure which is said to be inherently anti-democratic, it will be incumbent on the Government to act in a transparent manner, as far as is compatible with the negotiation process.

In deciding the negotiating policy, there is probably no such thing as a best way. Different people and organisations will have different views. Some positions will be passionately held, but driven by emotion and sentiment rather than hard fact. Others will be based on what is believed to be clinical analysis of economic realities.

Nevertheless, sentiment has a place in politics and public opinion must be accommodated. If there is overt public hostility to any particular solution, it may be impossible to implement it.

Furthermore, there will be many uncertainties – not only the known unknowns but the unknown unknowns. To help deal with uncertainty, government should encourage a national debate early on in the negotiations.

This should be kept out of the party political sphere and at arms-length from the government. Specific events may be commissioned and "roadshows" arranged, all under the aegis of the department responsible for the negotiations.

Parliament should have a supervisory role and the appointment of a joint committee of both Houses for the duration could be something worth considering. This could provide material for periodic parliamentary debates. Ministers should make frequent statements to both Houses on the progress of talks.

Additionally, the appointment of an independent Advisory Council – with expert subcommittees – would be highly desirable. Its initial task should be to structure and assist the national debate, to review and explain options and then to advise on the stances Britain might take in the negotiation process.

All of this would take time to set up, and more time to take effect. We cannot imagine that it could take less than a year which means that, if we have a successful outcome to the June referendum, we would not expect to see a notification made before the end of June 2017.

However, there is not much sense in starting the negotiations immediately before the summer period and, in any case, we would be in the middle of the German general election campaign, which does not end until October. We would be far better off, therefore, submitting the Article 50 notification in November 2017.

Given a two-year negotiation period, this would bring us to November 2019, well ahead of the 2020 general election – another factor to be taken into account.

There could, in this context, be a democratic case to make that the start of the negotiations be delayed until the autumn of 2019, so that the outcome could be part of a general election campaign, and the government would have an electoral mandate to pursue its chosen path.

The issues at stake are far too important for negotiations to be rushed. The public would be far more concerned to get a good deal, than be bounced into a bad deal, just for the sake of saving a bit of time.

Duration of the negotiations 

Moving on to the negotiations themselves, the report correctly states that Article 50 provides for a two year negotiation, which can only be extended by unanimity.

Not without justice, it observes that there could be a trade off between speed and ambition. An extension request would provide opportunities for any Member State to try to extract a concession from the UK – placing our negotiators in a very weak position.

On the other hand, failure to meet the deadline or agree an extension would have serious consequences for the UK. Says the report: "an exit without an agreement would leave a large number of important questions unresolved".

That is something of an understatement. Such a failure would have disastrous consequences, bringing UK exports to EU member states to an almost complete halt, and interrupting vital areas of co-operation over a wide range of issues.

It has been our consistent view, therefore, that the UK should aim to complete negotiations within the initial two-year period, without relying on the need for an extension. This, of course, would be easier to achieve if we have settled issues informally before lodging the Article 50 notification.

However, we have also been consistent in noting that to achieve a conclusion within two years could prove very difficult. And predictably, the report comes to exactly the same conclusion. It states:
Trade negotiations are probably the closest equivalent in terms of complexity. Ambitious trade agreements can take up to a decade or more to agree from scoping to ratification, and sometimes take longer. For example, the EU-Mercosur Association Agreement was launched in 2000 and has yet to conclude, and the EU-Canada Trade Agreement (CETA) has taken seven years so far and still has to be ratified by the Council, the European Parliament and National Parliaments.
It might also be noted that the CETA text is not yet binding under international law and will only become so after a legal review and the completion of the ratification process.

On this basis, the chances of reaching a comprehensive deal within two years are extremely slender, leaving the UK with a choice between seeking an extension to the two year time limit and leaving the EU without a proper arrangement in place, trying to rely on WTO rules until a new agreement could be reached.

Since both these options are extremely risky - we then look to another scenario, which even this report agrees is a possibility. "Only where the UK did not seek any special access to the Single Market", it says, "would negotiations be more straightforward and more easily concluded within a shorter time". But, it states, this can only be achieved at "greater economic cost".

It is because of this inescapable conclusion that we came up with the Flexcit scenarios. Essentially, the only way we are going to get out within the allotted time of two years is to compromise and accept a sub-optimum deal – either the Norway option or one of the fallback solutions. And such a deal is only acceptable if it becomes transitional, leading to something better.



Richard North 29/02/2016 link

EU Referendum: what the bloggers say

29/02/2016  


As the referendum campaign moves inexorably towards its official start, the legacy media is obsessing over "Tory splits" and allied matters. To them, it's just a game. They have no commitment to the outcome.

Rather than address the issues, you even get them them writing about their own inadequacies. It's the Independent's turn this week. It notes that we have a Daily Telegraph columnist, Boris Johnson, pitted against a former ITV PR man, David Cameron. This means "the media can narrate the EU referendum in the personalised language it loves: a story of jealousy, ambition and betrayal".

"Of course", the paper admits, "it doesn't mean we will have a better debate on the detail of the relative merits of Brussels or Brexit". In fact, it means that the lacklustre, ill-informed coverage has got even worse, and is set to descend into the realms of the infantile.

Thus, if the British people are content to be lied to by politicians, as Lost Leonardo avers, they are also going to have to get used to being "patronised by a media that seeks to trivialise the real heart of the matter - who governs Britain. This is a media that doesn't know the difference between a "summit" and a European Council meeting, yet reports on Boris Johnson's every fart and eyebrow scratch with solemn earnestness".

As so often, therefore, it is left to the bloggers to do the heavy lifting – bloggers like Mr Brexit who is picking up on the way the Government is attempting to rig the vote. That, says Mr Bexit, makes for "five strikes" against Mr Cameron - his referendum fails the legitimacy test.

Back in the day, he notes, the Government's self-declared approach had been to follow the Electoral Commission's advice. That was when the Commission was calling for the referendum question to be changed. But, since that last September, the mood has changed.

Now, Mr Cameron is not only lying about his non-binding and entirely reversible "dodgy deal" with the EU. He is also fighting dirty in an effort to win "his" referendum at any cost, keeping Britain subordinate to the EU. Five strikes, says Mr Brexit, means that the referendum fails any reasonable legitimacy test.

Because of this, nothing will be considered settled when this referendum goes to a vote on 23 June. It will not have been a fair contest. As in 1975, people will walk away feeling cheated.

And while the legacy media plays its dire games, Mr Brexit isn't the only one to remark on the "dodgy deal". In a short, pithy comment, Leave the EU notes that Cameron and company are clearly so desperate to deceive the British people that they go so far as to lie to us. "Will nobody challenge this contempt?" he asks.

Similar sentiments are expressed by Rob Sanderson who observes that David Cameron seems to have turned being wrong into an art-form. He leaves it to the reader to decide whether that is the art of the propagandist or the imbecile. Whichever you choose think on this, he suggests, "if a man can be so wrong why on earth would you trust anything he says?"

By way of a change, the Brexit Door tackles a different man, Sir Paul Nurse. To say this man had a "car crash" interview, writes blog author Tony E, would be to underestimate the awfulness of Nurse's performance. From a standing start he went from baritone almost to outraged soprano in less than five minutes, as his arguments unravelled in the face of what was for once, a very well informed interviewer in Justin Webb.

He's writing, of course, about the Europhile insistence that science funding will be adversely affected by Brexit. This foolishness over science should be unravelled once and for all, writes TonyE. The arguments put forward that somehow the scientific research community will find work and life intolerable outside the EU is nonsense and must be shown for what it is.

Tackling a completely different issue, Lost Leonardo is also having a go at the Economist's tiresome anti-Brexit tirade. This magazine, which took an active role in promoting the EEC during the 1975 referendum, is staying on the dark side, warning about the economic consequences that could result from a vote to leave.

Its current line is that "Brexit would deal a heavy blow to Europe, a continent already on the ropes", which has Lost Leonardo pondering over the contradictions inherent in this stance.

On the one hand, Britain is too poor, too weak and too stupid to be an independent country and would face economic and societal ruin without EU support. Yet Britain is also such a vital member of the European Union that withdrawal would fundamentally weaken the Western alliance and destabilise the entire global economy.

These assertions are so far from reality that it is genuinely difficult to know where to begin, says out blogger, but nevertheless he gets stuck in – ripping the Economist to shreds. If their oh-so-clever writers cannot see what is staring them so plainly in the face, he concludes, rest assured that the rest of us can. Britain needs a new relationship with the EU and the only way to achieve that is to leave.

UK Unleashed takes a satirical approach to the issues, writing up an interview with a difference with the "ex-Prime Minister, David Cameron". In order to get the truth, it says, "we sat him down and gave him a good shot of sodium pentathol first".

The happy scenario is one where Mr Cameron lost the referendum, and was forced to resign. He is asked of his "dodgy deal", whether he accepted that it wouldn't have been legally binding?

Cameron breaks out in to bellowing laughter. "Of course not", he says, I was desperate though. In hindsight, I should have listened to Lynton Crosby and pushed the whole thing back until 2017. The EU, who I was answerable to at the time, had other ideas though so I had to press for the ridiculous 2016 date".

Against this sophisticated and entertaining approach, Leave the European Union is a new blog on the block, with only a few posts under its belt. But it takes a useful, straight view of the "dodgy deal". If the blog is maintained and matures, it should become a useful source of archival material.

Let's Leave the EU takes a similar line, although offering more detail. Its first and only post so far is the "Norway Option in a Nutshell", promising good things to come.

In a different league entirely is Red Cliffs of Dawlish which has carved a niche for itself with unparalleled analyses of complex subjects. The current topic is an evaluation of the Common Fisheries Policy, based on the sterling work by John Ashworth, published on the Campaign for an Independent Britain website.

Semi-partisan Politics is another professional blog, with Sam Hooper at the wheel. In his latest post, he addresses the vexed question of how much democracy we would sacrifice to reduce uncertainty.

David Cameron, he writes, went to the country at the general election last year offering a Big Government, nanny state "plan for every stage of your life". He now asks us to trust that the future he has carefully planned out for us – one of sheltered irrelevance, tucked away in an anachronistic 1950s regional political union – is the best that modern Britain can hope for.

This referendum, Hooper concludes, provides the opportunity for British citizens to show that we hold our country in much higher regard than does our own prime minister – and to help consign David Cameron, together with our EU membership, to the dustbin of political history.

That leaves Pete, writing for Leave HQ to act as the sweeper, discussing the ongoing attempts by the Europhiles to engineer their own version of "project fear". In a piece entitled, "Brexit scares just don't make any sense", he evaluates what he calls an "insult to our intelligence", the propensity to say that Brexit necessarily will have the worst possible consequences over so many things.

Concludes Pete, we have absolute confidence that Britain, as a modern, liberal and progressive country can and will step up the challenges Brexit presents and our society will be all the better for it - to once again have participatory democracy and politics of substance.

Whatever the "remain" camp say, they can't have it both ways. Brexit can only have a huge and calamitous impact if we have full and total separation overnight. They rightly say that cannot and will not happen. And so do we. So on what grounds can we take them seriously?

And there you have but a small sample of what the bloggers have to offer. With a fraction of the resources, dedicated writers – most often unpaid – are able to provide a focus and a degree of insight that often eludes the legacy media.

The mix of seasoned writers and novices also provides a freshness that we're not getting from legacy commentators, most of whom seem unable to drag themselves away from biff-bam, personality politics. Their dedication warrants the small investment in time from readers, who will be well-rewarded for their efforts.



Richard North 29/02/2016 link

EU Referendum: a slow lose

18/02/2016  


In March 2014, in our completed submission for the shambolic IEA Brexit prize, we wrote in detail about "timing complications" in relation to Article 50 negotiations. If, following the referendum, we wrote, there is a strong demand for the earliest possible exit from the EU, we anticipate that the two years initially set by the Treaty for Article 50 negotiations, will be treated as a maximum.

Although the period can be extended by unanimous agreement, there will be little tolerance for prolonged talks and certainly not for a process that drags on for many years. 

We then pointed out that advocates for bilateral options rarely discuss the time needed to conclude negotiations, adding that even the relatively straightforward Greenland exit took two years to conclude. We also noted that the current round of EU-Swiss talks started in 1994 and took 16 years to complete.

Two years later, picking up on exactly the same theme is Philip Aldrick, economics editor of The Times. In a piece headed: "Fed up with the EU now? You'll be maddened by it if Britain leaves", he adds a year to the Greenland agreement (by including the time taken to bring it into force), telling us that: "Greenland took three years to sort out its trade agreement with the EU - and it only has one industry".

The point is thus made that a deal with the EU might be expected to take considerably more than two years to conclude – unless the UK "could do a Norway and join the European Economic Area for a quick fix that protects growth".

However, being a mere economics editor, Aldrick does not follow though on this. Instead, he writes: "that idea has already been mocked by David Cameron". Brains and thinking capacity are obvious in short supply in The Times, so he takes this no further, and sticks with the idea that concluding a deal with Brussels could take decades. "The simplest problem can tie Brussels up for years", he tells us.

And if Adlrick can see that point – and only two years after we had discussed it at length - it really cannot be that difficult to understand. Thus, you might surmise that the eurosceptic "aristocracy" might also be aware of this problem, and have offer a way of dealing with it.

Sadly, though, such an intellectual feat seems totally beyond them. The Bannermans, Ruth Leas and the Hananns all bleat endlessly about their fantasy trade agreements, and assure us that the EU will want to reach a deal. But not one of the motley crew ever commits to a timescale.

What we do get is optimism by the bucket-load. The EU, we are told, will want to do business with us as we have a huge trading deficit with them. They will find a way of doing a deal, we are assured.

That optimism might be justified in any one of them could point to a single instance of the EU reaching a quick deal with any party. But, for the EU, prolonged negotiations are the norm. One example is the Mexico-EU FTA: preliminary talks started in 1995 and finished on 24 November 1999, the agreement coming into force on 1 July 2000, taking nearly five years to complete.

The Colombia-Peru deal was launched in June 2007 and provisionally applied in the first trimester of 2013, also taking nearly five years. Its 2,605-page length, with 337 articles and dozens of schedules, give clues as to the complexity of the task confronting negotiators, but the UK deal will be more complex still. The Single Market acquis alone is more than 5,000 laws, running to several times the length of this deal.

A deal which was recently cited as a model by David Davis is the EU-Canadian Comprehensive Economic and Trade Agreement (CETA). Yet work on this started in June 2007 and it took until October 2013 for its key elements to be agreed, a period of just over five years. Yet this excludes agricultural and food products – of vital interest to the UK.

Another potential model is the EU-South Korea FTA. Negotiations on this started in 2006 and the final agreement entered into force on 1 July 2011. However, this was only the last stage of a process which had started in 1993. Delivery of the current 1,336-page trading agreement, alongside a broader-ranging 64-page framework agreement on political co-operation, had taken almost 18 years.

Not all negotiations are successful. The EU-India free trade negotiations were launched in 2007 and have still to come to a conclusion nine years later. It was hoped that an agreement might have been reached in 2015 or even later, but the Indian general election changed the political order and introduced new uncertainties. We are still no closer to a conclusion.

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

Talks floundered over European agricultural subsidies and the opening of Mercosur industries to competition from Europe. So substantial are the differences that, in June 2014, EU External Action Service Director Christian Leffler declared: "There is no sense in holding discussions if both sides are not ready".

Then there is the trade agreement with the East African Partnership, being negotiated under the aegis of the Africa Caribbean Pacific (ACP) European Union Economic Partnership Agreement (EPA) negotiations. The talks were launched in 2002 under the Cotonou Partnership Agreement (CPA) where parties agreed to conclude WTO-compatible trading arrangements, removing progressively barriers to trade between them and enhancing cooperation in all areas relevant to the CPA.

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

Even more limited pacts can take many years. Negotiations for the Turkish readmission agreement – allowing for the return of illegal immigrants entering EU member state territories via Turkey – started in November 2002, but the agreement was not signed until 16 December 2013 – an interval of 11 years.

And if all that is history, right up-to-date we have an EU which has spent the last ten months since Mr Cameron's general election victory giving him the run-around over a mere four "baskets" – all in the context of a "renegotiation" where, ostensibly, the "colleagues" don't want the UK to leave the EU.

When it comes to the Article 50 negotiations, we will be up against these same 27-nation states. There will be no common position and we'll be dealing with 24 working languages. The sheer mechanics of reaching an agreement will take time. Even with the best will in the world, there are no short-cuts.

What then makes this so important, and unlike any other negotiations, is the deadline - the two-year time limit. If the UK takes the optimistic line on the assumption that everything will come out in the wash, there is the problem of what happens if an agreement is not reached by the deadline, and the "colleagues" refuse to extend the time.

With unanimity a requirement, this is no small risk. It takes but a single country to say "no" and we are cast adrift without an agreement. The result is certain disaster. And that is the risk the "aristocracy" would have us take. This is the risk which they would put in front of the electorate, with absolutely no answers, and they expect us to win the referendum? 

That, of course, is where Flexcit comes in. When it came to working out what we needed to do, we did not make arbitrary decisions. Rather, we worked out what was the least-risky route, based on the need to avoid what could be a catastrophe. And that's what the current "big leave" campaigns are prepared to sacrifice for reasons which make no sense at all.

There is no logic to this stance - and no justification whatsoever from putting the entire referendum in jeopardy, simply to support the vague nostrums of our self-appointed "aristocracy". Unless there are some serious, sensible compromises made, and the fantasy ideas on free trade agreements are abandoned, we are setting ourselves up to lose this referendum. 

If Cameron then goes early, it will be a race to the bottom, as to who puts the most effort into losing. As it stand, the "leave" campaign is putting itself ahead in the losing stakes.



Richard North 18/02/2016 link

EU Referendum: suffering in silence

13/02/2016  



"Why the constant aggression? Why antagonise potential allies?" asks Alex Story, former CEO of Business for Britain, having briefly replaced Matthew Elliott who has moved on to greater things.

Story has now joined Leave.eu to head up and represent a newly-formed business group. And from that elevated position, he feels qualified to advise me on the response to Ruth Lea's latest offering in City AM. "Why not team up and destroy our insane opponents?" Story suggests.

One can applaud the sentiment. Obviously, we need to be working together: "united we stand, divided we fall", and all that. But Mr Story also needs to work on his naivety.

By way of background, we are engaged in the political battle of the century, and to win it we need to do three things. Firstly, we need to convince enough voters that we need to leave the EU. Secondly, we need to offer them an alternative vision – one which is better than anything the EU has to offer. Thirdly, we have to be able to reassure people that moving from the EU to our alternative is practicable and safe. That is our so-called exit plan.

These three things I have previously described as the "three-legged stool". In my view, they are not optional. Together, they comprise the essential elements of the campaign. Without them, I am convinced that we cannot win this referendum.

What we don't need, therefore, is people of status and some prestige coming out of the woodwork, promoting ridiculous and totally unworkable ideas for an exit plan, and then undermining the work of those people (such as myself and all the other contributors to Flexcit) who have come up with a workable plan.

But, in her CityAM article, that is precisely what Ruth Lea is doing. She knows full well the content of Flexcit, and she thus knows that a major component of the first phase is the adoption of the Norway option. Yet, writes Lea: "attempts to remain within the Single Market by reapplying for European Economic Area (EEA) membership on Brexit (the "Norwegian option") strikes me as totally misplaced".

This dismissal of our work is not accidental. For as long as I can remember, Lea has evaded any debate, devoting her energies to promoting her own child-like nostrums about world trade, ideas that fall apart when subjected to any robust scrutiny. But despite being factually wrong on so many issues, she rejects even the mildest of criticism. She does not engage with it – she simply re-asserts the same errors, time and time again, seeking friendly, uncritical audiences to parade her wares.

Despite the gravest reservations over her current position, and the constant changes, she makes no attempt whatsoever to justify her claims. And far from acknowledging or addressing her many errors, she has yet to acknowledge the possibility that any of the golden words she utters could in any way be flawed. Instead, she consistently undermines our position, using not fact or argument, but a series of ex cathedra assertions, the Holy Writ which lies above the reach of us mere mortals.

To Story and his like, therefore, our response is simple. We ask why Lea seems to be going out of her way, constantly to undermine our work and ignore sensible options - why she insists on pushing her insane ideas and dragging us all down. By what right does she consider herself immune from all criticism yet feel free to dish it out, on matters she clearly does not understand?

To his point about "teaming up", our response is that it works both ways. We have invested a huge amount of work in our exit strategy and all we see of Ruth Lea and her fellow travellers are quite deliberate attempts to damage it. For the likes of Story, effectively, telling us to mute our criticisms of Lea, while she gets a free pass to dole out her pernicious nonsense, is simply not acceptable.

Moreover, this double standard is getting extremely tiresome. We have indeed invested a great deal of work in this enterprise. We have opened up our work to scrutiny, argued it openly and invited comment – of which we have received a great deal. And, unlike Lea and here aristocratic claque, we have responded to it.

Yet, without a fraction of the effort or understanding, we get members of the eurosceptic "aristocracy" casually dismissing our work - mainly to defend their own shoddy, superficial efforts at bolstering their own prestige. And we are supposed to bite our tongues, to avoid antagonising "potential allies"?

It really is quite bizarre that no-one seems to think it necessary to approach Miss Lea and suggest that she tones down her comments to avoid antagonising us. This is strictly a one-way street. But why does anyone think we should accept this one-sided view? Why is it that no-one should think to avoid antagonising us?

To dismiss Flexcit, even if she does not refer to it specifically by its name, as "totally misplaced", is as arrogant as it is unhelpful.

We perhaps can shed a little light on this phenomenon from a comment in the Guardian, where a "leading Tory Eurosceptic" is cited as saying that the anti-EU campaign was experiencing a bumpy patch because many figures had been waiting decades for this moment. He said:
The challenge at the moment is that there are lots of people for whom this is the culmination of years and years and years of work. This is Christmas and birthday and Easter and the moon landing and the second coming of Christ all at the same time, and they absolutely want to be at the heart of it. It is too exciting a gift to let go of".
The limited insight this gives, however, must be carefully tempered. We are dealing here with (largely) the Tory eurosceptic "aristocracy". For decades, they have done very little actual work, but have pontificated long and often, mostly in excruciating displays of ignorance that have characterised the movement as being populated by "loonies", "fruitcakes" and worse.

But now we have a referendum and these people feel they have earned a right to take pole position in the debate, using the platforms afforded as endless opportunities to parade their egos. They are thus defending their own positions and fending off what they see as competition.

The idea of agreeing a consistent message is not one that has ever occurred to them, and the enforcement of message discipline is utterly alien. Worse still, the concept of gauging a message in order to evoke a specific response from a targeted group of voters is one which they could not even begin to comprehend.

But because this "aristocracy" consider it their God-given right to pontificate whenever they feel inclined, in whatever manner they deign to consider appropriate, us lesser mortals are supposed to hold our tongues and give them free rein, no matter how much damage they do.

And so it goes on. But Mr Story and the others really do need to take notice of some very simple ground rules. Unless we unite around a credible, properly structured narrative, and impose a rigorous message discipline on accredited speakers, we are going to lose this referendum.

All the time, we are accumulating hostages to fortune – providing massive amounts of material to the other side, for their use against us for when the campaigning gets fully into gear. At this rate, when it is all over, this same "aristocracy" which has been so cavalier in its approach will be looking around at each other, saying: "how did that happen?" "How did we manage to lose?"

Should the need arise, we will be there to tell them, but I would rather we did not lose. And telling us to keep quiet, so that we can "team up" with the purveyors of the vacuous drivel we've been hearing, is not a message to which we are going to respond.

We've done our homework, we know what we are talking about, and we're not going to tolerate people who should know better undermining our work. We're not going to suffer in silence. There is too much at stake.



Richard North 13/02/2016 link
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