Brexit: pragmatism redefined

15/09/2021  


Formally, the nation was advised yesterday by way of written statements, one from the recently ennobled David Frost addressed to the Lords, and the other from Penny Mordaunt, to the Commons.

The plebs were then advised in a press release, telling us that: "The government has set out a pragmatic new timetable for introducing full import controls for goods being imported from the EU to the UK".

According to our wise and beneficent government, now the UK is an independent trading country, it was our intention is to introduce the same controls on incoming goods from the EU as on goods from the rest of the world.

The initial timetable for the introduction of the final stages of those controls was announced on 11 March, says the ministerial statement – setting the introduction of checks on SPS goods to start on 1 October. And, says the government, its own preparations, in terms of systems, infrastructure and resourcing, "remain on track to meet that timetable".

However, it goes on to say, the pandemic has had longer-lasting impacts on businesses, both in the UK and in the European Union, than many observers expected in March. There are also, it says, pressures on global supply chains, caused by a wide range of factors including the pandemic and the increased costs of global freight transport. These pressures are being especially felt in the agrifood sector.

Given these circumstances, therefore, our wise and beneficent government has kindly decided to delay further some elements of the new controls, especially those relating to Sanitary and Phytosanitary goods. The key requirements will now come into force on 1 July 2022, a further nine months' delay.

In the following press release, Frost is then cited as saying: "We want businesses to focus on their recovery from the pandemic rather than have to deal with new requirements at the border, which is why we've set out a pragmatic new timetable for introducing full border controls".

With that, it's come to the stage when one has to conclude that ministers in the Johnson administration couldn't even tell the truth if they were ringing up the fire brigade to report themselves on fire and ask for assistance. The lie has become embedded in the very fabric of government.

Unimpressed by this outbreak of "pragmatism", the Financial Times reports that Johnson's government has been "forced" to delay imposing checks on EU goods entering the UK until mid-2022, as it attempts to stop Brexit further exacerbating supply chain problems.

This, though, seems to falling for the Labour party schtick, which has it that delays on border controls were due to the government's inability to tackle supply chain problems caused by Brexit.

"This announcement shows what we have all known for months - that the government do not have a workable, sustainable answer to tackling delays and red tape at the border", says Baroness Jenny Chapman, shadow Cabinet Office minister.

Here, we see iNews go with this canard, headlining: "UK delays post-Brexit border checks on EU imports amid fears over Christmas supplies". The Sun treads a similar path, despite a view in much of the food trade that border checks would have relatively little effect on the supply chain.

The Guardian, on the other hand, goes for the Covid meme in its headline, reporting: "Britain to delay some post-Brexit border controls due to Covid", with the sub-heading: "Brexit minister says 'longer-lasting impacts' of pandemic on businesses have led to timetable shift".

However, this self-same newspaper also reports that signs that the government might have to delay the physical checks emerged in the summer when the officials told angry residents in Dover that plans for a giant lorry park for HMRC and SPS checks "had been radically downsized and would not be ready until July 2022".

It thus concludes that the government's lack of planning for Brexit "meant the necessary infrastructure involving border control posts in key ferry ports including Holyhead, Pembrokeshire and Dover has yet to be built". To this can be added Portsmouth while, even now, the locations of some border control posts remain to be announced.

On that basis, as I remarked yesterday, even if the government had wanted to go ahead on 1 October, it could not have done so because mechanisms for carrying out checks uniformly throughout the country simply do not exist.

Interestingly, when the government announced a six-month delay, from 1 April to 1 October – on 11 March – the Guardian then reported that the delay had been forced "because a network of 30 border posts being built to process incoming goods would not have been ready on time".

Now, though, even though the newspaper acknowledges that the network still isn't ready, it seems content to run with the government's Covid excuse. But then, last time the paper had business correspondent Joanna Partridge reporting. Currently, it has its real experts on hand, Lisa O'Carroll, the Brexit correspondent, and Daniel Boffey in Brussels.

The Financial Times, though, does allow some EU officials to "suspect" that Britain's border control regime is not yet fully ready for the new rules, despite Frost's insistence that the government is "on track".

Obviously enjoying the moment, one EU diplomat savours the irony. "They [the UK government] talked about taking back control", he observes, "but they are letting products into Britain without any controls at all. That’s fine with us".

That point is picked up in the Telegraph. It cites Ian Wright, the FDF chief executive, who complains directly that the delay "actually helps the UK's competitors".

"The asymmetric nature of border controls facing exports and imports distorts the market and places many UK producers at a competitive disadvantage with EU producers", he adds. ""Businesses have invested very significant time and money in preparing for the new import regime on 1 October 2021. Now, with just 17 days to go, the rug has been pulled".

Minette Batters, NFU president, reinforces these points, saying: "While our exporters have been struggling with additional costs and burdens, EU competitors have been given extended grace periods by our own government to maintain access to the UK market relatively burden free".

What nobody seems to be talking about, though, is the impact of a nine-month delay on local council port health authorities. In a way, this is hardly surprising as most hacks do not seem to realise that SPS checks are entirely separate from customs checks, and are carried out by local authorities. I even heard Damian Gramaticus on the BBC 6 o'clock TV news talking about "customs agents" carrying out the checks.

Unless the government comes up with serious money – probably running to several million - to enable local authorities to keep their inspection teams together, there is a real danger that, by the time the checks do come into force next July, there simply won't be the personnel available to operate the new border control posts.

In my view, the FDF and others are being rather optimistic about the impact of border checks on incoming food supplies but, if the staffing of BCPs falls short of operational needs, there really will be problems. And, one should recall, this also applies to airports, many of which handle considerable and growing volumes of freight.

Johnson's band of liars may have got away with it for the time being, by redefining the nature of pragmatism, but – as always – they are simply stacking up problems for the future. This one is set to come back and bite them.

Also published on Turbulent Times.



Richard North 15/09/2021 link

Brexit: on a collision course

27/07/2021  


Whatever could be in terms of a resolution of the Northern Ireland Protocol dispute, it is also evident that nothing rational is going to come from the present cast of actors.

As it stands, the dispute took another giant step to nowhere yesterday, when the Commission issued a statement laying out "practical solutions for medicines supply in Northern Ireland in the framework of the Protocol on Ireland / Northern Ireland, and for sanitary and phytosanitary measures".

This also marked the publication of a non-paper, a proposal aimed at sorting a glitch in the supply of certain medicines to Northern Ireland.

Maroš Šefcovic describes "these solutions" as having "an unambiguous common denominator". They were, he says, "brought about with the core purpose of benefitting the people in Northern Ireland". The solution on medicines, he adds, involves the EU changing its own rules, within the framework of the Protocol.

This concession, apparently, allows for "regulatory compliance functions for medicines supplied to the Northern Ireland market only" to be permanently located in Great Britain - subject to specific conditions ensuring that the medicines concerned are not further distributed in the EU Internal Market.

The medicines concerned here, Šefcovic explains, are primarily generic and over-the-counter products. The solution, he argues, demonstrates the Commission's commitment to the people in Northern Ireland and to the Good Friday (Belfast) Agreement, with a legislative proposal expected in the early autumn in order to be able to finish the legislative process on time.

However. this has had little impact in London. As a UK government spokesman sniffily remarked that the proposal "remains the same as the one [the EU] sent to us in late June" and does not address outstanding "issues and concerns".

While the spokesman then trotted out the usual extruded verbal material, declaring that the two sides needed "comprehensive and durable solutions", the recently ennobled David Frost said that, without a major change to the legal text of the Protocol, the government will consider triggering Article 16.

This seems to represent a step change in Frost's stance. Earlier, he was reported as restraining Johnson from using this "nuclear option", even though he believed the conditions for using it had been met.

Nevertheless, it was made very clear to Dublin that Article 16 was on the cards, with UK officials making clear that it was Johnson, rather than Frost, who was most in favour of triggering the Article. Northern Ireland Secretary Brandon Lewis, was also known to have relayed similar messages to Simon Coveney, Ireland's foreign affairs minister, and Johnson himself has had a telephone discussion with Commission president, Ursula von der Leyen.

With all that, in the context of the UK's Command Paper, it must have been clear to the Commission that, if it had wanted to resolve this issue, its current proposals were not going to do the job. If this is the Commission's final offer, the two sides are on a collision course, where triggering Article 16 now seems inevitable.

If the Commission sees this as an extreme response, it may be because they do not fully appreciate how the political climate in London is influencing matters. Specifically, the Muppet tendency in the Tory party is agitating for the Protocol to be scrapped in its entirety, even at the cost of ditching the entire Brexit agreement, including the TCA.

From that perspective, Johnson must see himself as taking the middle course. On the one hand, he is responding to the extremists in his own party and the DUP leader, who are making their positions increasingly clear.

On the other, he is trying to address the concerns of traders who are having to deal with the realities of cross-border trade, in the context where Johnson gave them the assurance that there would be border checks or additional "red tape".

There is also the view being expressed that Johnson never intended to implement the Protocol and simply intended his "oven ready deal" as a placeholder to get Brexit over the line. And if that is the case, no amount of concessions short of a fundamental renegotiation are going to satisfy the Johnson administration.

The lukewarm response of the Commission, though, could simply be that – to put it at its most elemental – nobody in the EU (Member States or Commission) cares enough to head off the confrontation. Doubtless, they are content to let the procedures take their course, in the expectation that the eventual arbitration (if it happens) will rule it its favour.

And yet, both the Commission and the Member States should by now have some inkling of the irrationality that dominates Conservative Party politics, and the streak of nihilism which verges on self-immolation. There are Tory MPs who would, in the manner of Samson, bring down the temple on themselves, in the pursuit of their Brexit ideology.

In terms of rationality – or the lack of it – one is reminded of the input of Michael Gove on the Single Market prior to the EU referendum. In April 2016, he used a speech to set out "his vision" of what the country would look like in the event of a "leave" vote, declaring that the UK would be part of the European free trade zone with access to the Single Market but "free from EU regulation which costs us billions of pounds a year". This commentary days it all.

But then, in May of the same year, just weeks before the referendum, was reported in the FT saying that the UK would quit the Single Market if the country voted to leave the EU, saying that he wanted the UK to be "outside the single market but have access to it". Full access would include paying into the EU budget, implementing Brussels' regulations and accepting free-movement of people.

This came from a bizarre interview on the Marr Show where Gove actually claimed that the Commission defined membership of the Single Market as membership of Schengen and membership of the single currency. Thus, he asserted, the Commission had it that full membership of the Single Market required you to be in the single currency.

Gove's therefore confirmed that he wanted to be outside the single market. But he also wanted to have his cake and eat it. "We should have access to the single market, but we should not be governed by the rules that the European Court of Justice imposes on us, which cost business and restrict freedom", he said.

When Marr put to him that he was saying that "we would be able to be inside – have the effect of the single market without paying any money in and without accepting free movement of people", Gove responded: "I think the British people want to vote for a deal which you describe as all the advantages and none of the pay-outs".

This represented the thinking at the highest level of the Conservative Party, where "cakeism" became a dominant theme, and still drives much of the dialogue in the Party. And with the discourse stuck at that level, combined with the tin-ear politics of the Commission, it is hardly surprising that this issue is heading towards a collision.

Also published on Turbulent Times.



Richard North 27/07/2021 link

Brexit: reframing the debate

26/07/2021  


I think it is fairly evident from my writing on this blog that I have little regard for Johnson's train-wreck Brexit settlement, or for the actions of his predecessor, Mrs May, in setting us on the path to an early withdrawal from the Single Market.

As most readers will know by now, my preference was for the UK to continue its participation in the Single Market, via the Efta/EEA route, for a prolonged transitional period. That could have lasted possibly as long as 20 years, to give industry and commerce a chance to adapt to the post-Brexit world.

The end game, though, was that we should work towards fundamental changes in the Single Market, and in particular introducing co-decision for all its participants, thus making good Delors's breach of faith during the original EEA negotiations.

By this means, the Single Market would eventually become a truly European entity devoted to managed trade, the property of all its participants. It would cease to be a tool "owned" by the EU, the primary purpose of which was to pursue political integration.

However, for no good reasons, the ambition of staying in the Single Market after Brexit was not to be. We are now confronted with the undesirable scenario of having to work with Single Market members from outside the bloc, without having secured many of the necessary changes which would facilitate trade with the UK as a major third country, sitting on the doorstep of the rest of Europe.

To that extent, the current controversy over the Northern Ireland Protocol (NIP) is not just an argument over the trading arrangements for Northern Ireland.

The deeper issue is that, through trade with Northern Ireland, and with Ireland itself – which for many firms has become an extension of the UK market – we are confronting many of the infelicities of the creaking, inflexible bureaucratic structures of the Single Market, the alternative description for which is a "regulatory union".

Although denied by many on both sides of Channel – mainly by people with a limited knowledge of the history and objectives of the EU - the Single Market label has tended to obscure its primary function.

And since that primary function was to achieve a political objective rather than facilitate trade, the regulation produced by the EU was (and still is) often badly drafted, needlessly complex and in not a few instances counter-productive (in terms of trade facilitation).

Thus, before it was ready or even properly equipped (institutionally or intellectually) – under the aegis of probably the worst prime minister in living memory, if not for all time – this government is seeking changes to the NIP when it should really be focusing on securing more sweeping changes to the Single Market acquis.

The validity of this assertion is easily tested by reminding ourselves that, had the UK as a whole remained within the Single Market (aka regulatory union) instead of just Northern Ireland, the problems currently being encountered would no longer exist – at least, not to anything like the same extent.

It follows that the ultimate solution to the problems with Northern Ireland is not to address the Protocol per se, but to broaden the scope of the "conversation" with the EU, and open up the prospect of a longer-term (and more cordial) discussion about the management of the Single Market, its structure and the utility of much of the regulation.

If this is regarded as ambitious or unrealistic, or both, it shouldn't be. By way of example, a system which devotes a 409-page regulation to specifying the forms to be used by exporters of animals and food products into the Union has to be considered all bad. This is a system in its terminal stage of bureaucratic decay.

The UK's immediate problem, therefore, is that the focus is still in the NIP with little thought being given to the broader context. And, as long as the issues are constrained by this claustrophobically narrow framework, they will probably defy solution.

Already, the Financial Times is underlining the EU's "sense of irritation at the latest British effort to relitigate the Northern Ireland protocol of its Brexit deal". Understandably, this is seen as an attempt to renegotiate a deal before it has even been fully implemented, raising "trust" issues and drawing criticism about "bad faith".

And yet, even the FT conceded that, "within the maximalist British demands there are some legitimate points". It sees these as "an overzealous EU interpretation of rules", which it categorises as "out of proportion to the threat to the integrity of the single market from British goods arriving in Northern Ireland".

The paper sees the risk as "theoretical rather than real", not least, it says, because there is as yet no significant regulatory divergence. But, in so doing, misses the point. The regulation, as they say of hastily bought pets, is not just for Christmas. It is for life. The EU has to deal not only with the situation as it is now but as it could very well become.

In an expression of political naivety, the paper goes on to say that "Brussels can defensibly argue that the UK can remove many problems by signing up to EU sanitary and phytosanitary rules", compounding the naivety by stating that this conflicts with the UK’s desire for free trade deals, but choosing to prioritise that over a solution is, Brussels might argue, Johnson's choice.

It is though, far more than that – it conflicts with the very essence of the Conservative/Vote Leave mantra of "taking back control". In the current political climate, this government (for better or worse) will not allow itself to be seen to be adopting a legal framework dictated by Brussels.

This is where the idea of ownership becomes vital. When the EEA was first mooted, Delors was talking about "a new, more structured partnership with common decision-making and administrative institutions". This, he conceded, was necessary "to make our activities more effective and to highlight the political dimension of our cooperation in the economic, social, financial and cultural spheres".

In line with the times, he referred to he referred to Mikhail Gorbachev's notion of a "common European house", which had been articulated as early as 1987. But, as an alternative, he offered a "European village", in which he saw a house called the "European Community". "We are its sole architects; we are the keepers of its keys", he said, "but we are prepared to open its doors to talk with our neighbours".

This was in 1989 and, if the need to "talk with our neighbours" was real then, it is all the more pressing now. Political discourse is a two-way street and it must have dawned on the EU by now that the post-Brexit environment has created a new reality. The status quo is no longer an option.

On the other hand, this must also apply to the UK. Currently, it wants a "Brexit standstill" which would see much of the NIP put on hold indefinitely, with border checks held in abeyance. This is about as unrealistic as the EU expecting the UK to conform with its version of a veterinary agreement.

It thus seems to me that the only way we are going to see daylight on this issue is by fresh thinking, with allows both parties to reframe the debate in a way that allows both to live with it. The idea of co-ownership of a common resource – mooted by Delors in 1989 – never really went away, and it now needs to be reactivated.

Either way, something is going to have to give. There is no possibility whatsoever of compromise in the debate as currently framed. The outcome of fixed positions will simply be a long attritional war, with no winners.

Also published on Turbulent Times.



Richard North 26/07/2021 link

Brexit: there are perhaps madder things

11/06/2021  


It's Matt Hancock's good (or bad) luck that his much-awaited select committee appearance has been upstaged by the G7 summit, the Biden-Johnson bilateral and the looming "sausage wars". The failure of Cummings to deliver any documentary evidence to support his accusations against Hancock has also robbed the session of much of its sting.

Nevertheless, there is still much to answer for on Covid, and especially on the care homes issue, where documentary evidence continues to come out of the woodwork, indicating that the NHS and the response system in general, was in disarray. This is a subject to which I must return.

For all that, it seems that a tale of unnecessary Covid deaths is not yet going to damage the government, or even Hancock, although there is time yet. Cummings has promised to deliver more information on the pandemic and his time at Number 10, turning himself into a campaigner for truth, justice and the right to wear non-matching socks.

In the meantime, we have the unusual situation where a Brexit-related story is actually vying with Covid for the front pages as the "sausages war" take on a new life with the potential intervention of Biden, alongside some entertaining, if somewhat unhelpful comments from Macron.

Fresh from being slapped by one of his less than devoted citizens, Macron is supposedly ramping up the pressure on Johnson by insisting that "nothing is negotiable" on the Northern Ireland Protocol. "I think it’s not serious to want to review in July what we finalised in December after years of work", he says. "It's not serious between us and it's not serious toward our people".

To that he adds, "I believe in the strength of treaties, I believe in serious work, nothing is renegotiable, everything is applicable", thereby demonstrating – and not for the first time – his less than sure grip on the subject.

For sure, les grandes lignes of the protocol cannot be changed easily, but everything is renegotiable, for a price – the price paid in political capital. And when it comes to details such as inspection frequencies and sausage bans, both the Withdrawal Agreement and the TCA are dynamic agreements. There is provision for ongoing adjustment via the Joint Committee and the Partnership Council, where there is scope for flexibility.

Mind you, if we were to heed the words of, Allister Heath, the all-knowing editor of the Sunday Telegraph, writing on 17 October 2019, there is no need for any flexibility. This great guru opined: "All Eurosceptics should back this deal - this is as good as it gets".

Johnson's deal, he gushed, "passes the smell test: it is a real Brexit, unlike Theresa May's shameful ersatz". It would "allow us to leave the EU, really and genuinely, and govern ourselves like every other independent nation in the world".

In a wave of enthusiasm for the work of the paper's favourite son, Heath added: "It doesn't seek to tie us down, or to keep us entangled permanently into the EU’s legal, political and commercial orbit. It provides for a real rupture for Great Britain, and a hybrid yet democratic deal for the special case that is Northern Ireland, in a way which is far better than a backstop". The deal was:
…more than merely tolerable or acceptable: it is remarkable in the circumstances. It is the best possible Brexit that any PM could realistically deliver in the face of this pro-Remain Parliament, the rigged constitutional stalemate and a scandalously hostile establishment. It is also the only certain way to achieve a real Brexit: another referendum could be calamitous.
And thus this towering giant of a man urged "all Eurosceptics to publicly back Johnson's deal at the earliest possible opportunity". He wrote as "a hard-core Brexiteer who opposed May’s nonsense all the way". This time it's different, he cautioned his beloved readers, "and, in practice, perhaps our last chance".

But how things change. Not two days ago, the very same Allister Heath was writing under the headline "The imperial EU is blind to the folly of its unequal Northern Ireland Brexit treaty", with the sub-heading: "The protocol isn't a just law. It was imposed on the UK by Brussels at the moment of our greatest weakness".

"Why don't the European elites ever learn lessons from history?", Heath demanded, his tone altogether different from those heady days 20 months previously. "It should be obvious", he stormed, "that the Northern Ireland Protocol, signed under duress by the UK, cannot last in its present state".

The "hybrid yet democratic deal for the special case that is Northern Ireland", had now morphed into a classic case of an "unequal treaty". This was the kind that China's Qing dynasty had been forced to sign with all of the imperial powers.

And the result was bitterness at a "century of humiliation" that continues to poison international relations to this day, and a sense of resentment which helped to usher in China's deplorable communist-nationalist regime.

This, in Heath's brave new world, the "only questions" are what replaces the protocol, how quickly and whether it is enough to restore the province's fragile balance and save the Good Friday Agreement. The idea, he says, "that the EU will be able to keep the protocol alive by threatening Britain with a trade war merely confirms the scale of Brussels's delusion".

It is at times like this when one wonders whether people such as Heath are even aware that there is such a thing as the internet, where ordinary human beings can call up the past words of the "great and the good" and compare them with current output.

The fate of a certain cricketer might have guided Heath as to the existence of such a thing but, having met the man, I am not sure that such mundane details could have percolated into his consciousness. "Leaders of Men", as we used to call them in less reverent days, are above such things. They are what they say, when they say it. There is no past, and certainly no room for compromise:
Brussels is asking for too much when it threatens sausage wars: no self-respecting sovereign state can accept this, nor, after years of listening to such nonsense, still believe the ridiculous excuse that "unsafe" British chilled meat products might "leak" into the supposedly sacrosanct European single market. So what if they do? Our sanitary regulations remain the same – and even if and when we choose to change them, it still wouldn't matter, or could be dealt with in other, more sensible ways. It is time to call the EU's bluff: its obsession with phytosanitary rules is merely an excuse to seek to detach Northern Ireland from the rest of the UK.
According to Heath, the UK had no real choice but to sign the protocol. It could either agree to a treaty that essentially handed away parts of Britain's sovereignty over Northern Ireland, or accept a no-deal Brexit that would have created unnecessary economic damage while still not resolving the Irish situation. The EU, says Heath, "wasn't acting rationally: it was set on kamikaze mode, committed to punishing Britain at any cost".

One can quite see the EU's problem here. If this combination of sublime ignorance, arrogance and sheer fantasy is reflected in the UK government's stance, there really is no way forward. Šefcovic might just as well seek out the nearest brick wall he can find, and engage in earnest dialogue with it.

But a Heath-like stance held by government might explain the Commission's otherwise incoherent offer of a "temporary veterinary agreement" as a means of reducing some of the border checks and easing the way for British bangers to enter Northern Ireland.

Given the complexity and the amount of detail that must be addressed, it is hard to see how such an option could be a quick solution or that, given the investment in time and energy needed to negotiate it and set it up, either party could then accept that such an agreement could be "temporary".

Presumably, on the basis that, whatever the EU offers the UK will refuse, it can offer an ostensibly attractive but entirely unrealistic solution in the knowledge that it will never have to implement it. That way, the Commission – with or without Macron – retains the high ground, leaving Johnson to argue the toss with Biden.

In this mad world, there are perhaps madder things. But with Johnson as prime minister, sanity is at a premium.

Also published on Turbulent Times.



Richard North 11/06/2021 link

Brexit: "no breakthroughs … no breakdowns"

10/06/2021  


After yesterday's unsuccessful meeting of the Joint Committee, in which he and Frost sought to resolve the issues over the implementation of the Northern Ireland Protocol, I am beginning to wonder about Maroš Šefcovic.

My immediate cause for concern is a document issued after the meeting, entitled, "Examples of flexibilities identified by the European Commission in an effort to ensure the full implementation of the Protocol on Ireland/Northern Ireland".

This obviously reflects Šefcovic's position and, presumably in an attempt to be helpful, he informs us via his three-page document that the Commission has suggested that "the UK continues to follow, even if only temporarily, the EU’s sanitary and phyto-sanitary (SPS) rules, as it does now".

That is fair enough. The Commission is suggesting neither more nor less than it asks of any other trading partner, mirroring the position taken by other importers. Most of them set the rules with which exporters must comply in order to gain access to their markets.

But that doesn't get the UK round the "sausage ban", much less remove the "official controls" which the British government and the DUP find so offensive. Thus, the Commission overserves: "Most checks on Great Britain – Northern Ireland trade would be removed if there was a so-called 'Swiss-style veterinary agreement' in place".

Helpfully, the Commission also tells us that a "New Zealand-style veterinary agreement based on equivalences would not remove these checks". Nor, indeed would it remove the "sausage ban".

However, to suggest a "Swiss-style veterinary agreement" as an alternative is, to say the very least, being a tad disingenuous. For a start, this isn't a "veterinary agreement" in the same sense that the term applies to New Zealand, which has a stand-alone agreement with the EU.

The 1999 Swiss Agreement (modified and amended many times) is in fact a comprehensive agreement on "Trade in Agricultural Products", the original running to 428 pages, of which one part – Annex 11 – deals with "removing technical barriers to trade", on "animal health and zootechnical measures applicable to trade in live animals and animal products".

In its own official listing, the Commission doesn't even call it a "veterinary agreement", and with good cause. It is much, much more than that, effectively amounting to the complete integration of Swiss rules and systems with those of the EU.

Based on the principle of "equivalence", the criteria for recognition tell their own story, requiring an "assessment and acceptance" of:
- the legislation, standards and procedures, as well as the programmes in place to allow control and to ensure domestic and importing countries' requirements are met;
- the documented structure of the competent authority or authorities, their powers, their chain of command, their modus operandi and the resources available to them; and
- the performance of the competent authority in relation to the control programme and level of assurances afforded.
This amounts to an assessment of the "regulatory ecosystem", to which Barnier has made so many references and, with the other provisions in the Annex, and the Agreement generally, amounts to Switzerland having to accept almost complete integration with the Single Market in this sphere, more so than Efta/EEA countries.

Even if this was practically possible for the UK, politically it would not be tenable. Certainly, it is inconceivable – on past form – that the Johnson administration could adopt this solution and it is unlikely that any other Conservative government could accept this degree of integration and live to tell the tale.

This much, I pointed out recently, responding to a piece by Peter Foster of the Financial Times, asserting that the a Swiss-style agreement was simply not an option.

Unsurprisingly, therefore, the UK has refused this option, but here the Commission is being doubly disingenuous. It has suggested that this could be a "temporary agreement", which could then be reviewed once the UK concluded new trade deals with other third countries. But the very fact that it would need review itself tells you something about the nature of this agreement – and its lack of flexibility.

However, to suggest that something as complex and extensive as this agreement could be crafted as a temporary measure is, to be blunt, absurd. Even though UK legislation and systems are still largely harmonised with the EU, the UK now lies outside the formal remit of the EU and its agencies. Continued integration would require the crafting of new institutions and systems to manage the agreement, as has been the case with Switzerland.

And yet, the FT's Peter Foster is still banging the Swiss drum. No area is thornier than that of veterinary checks on food or live animals, he writes, but it is also one where clear solutions exist "if politics can align with them".

Acknowledging that Frost has rejected such a deal, Foster nevertheless calls in aid Aodhán Connolly, director of the Northern Ireland Retail Consortium. He says that a temporary fully-aligned deal would solve the vast bulk of the immediate problems with the protocol, while providing space to find a long term workable solution.

Connolly warns that unless a deal were done, business was facing a "moment of reckoning" in October when grace periods expired, piling additional burdens on business. "Business is, frankly, fed up with the game-playing and dramas from both sides", he says. "What we need is certainty".

To an extent, one can sympathise, but Connolly is displaying the naivety which has been characteristic of the trade, throughout the Brexit process. And he is joined by another fantasist, Shane Brennan, chief executive of the Cold Chain Federation.

Brennan also wants a veterinary deal, complaining that, without one, British businesses servicing the hospitality, school or prison sectors that could not use the supermarkets scheme would still face burdens that would put many off from doing business with Northern Ireland.

But the reality of the matter is that, as the Commission's own chart shows (illustrated), to get everything it wants, the trade will have to secure a Swiss-style agreement. And that simply isn't going to happen.

On the other hand, without that commitment from the British government, the Commission simply cannot to make any meaningful concessions, and must simply maintain its demands that the protocol is properly implemented.

This has Frost complaining that the EU wants to implement the Northern Ireland protocol in an "extremely purist" way, which seems to be emerging as the "line to take", shared by Arlene Foster and other commentators who accuse the EU of putting the GFA at risk.

The bizarre thing is that, despite his "bonkers" outburst yesterday, George Eustice knew full well what the protocol entailed, writing to the NFU in December last year, warning them about the "prohibitions and restrictions" involved in implementing it.

That leaves the EU arguing that it, and it alone, is protecting the GFA, asserting that the UK's refusal to implement the protocol it is the cause of the current problems. That, as we saw, leaves the issues unresolved, with Frost David Frost declaring that there had been "no breakthroughs", but no "breakdowns".

Where we go from here is anybody's guess.

Also published on Turbulent Times.



Richard North 10/06/2021 link

Brexit: Swiss-style not an option

20/03/2021  


When it really gets going, there is no end to the drivel that the Financial Times can produce. Its latest misguided intervention, in the hands of the egregious Peter Foster, is to inform us how the UK government can solve the Brexit stand-off over Northern Ireland.

Foster's miracle solution is a "Swiss-style veterinary agreement", which he asserts "would remove much of the red tape for UK food exporters at a stroke", a canard fully endorsed by former Friends of the Earth lobbyist Sam Lowe.

Lowe thinks the UK should re-consider its decision to break completely free of EU rules, and also goes for the miracle solution, arguing that we should "re-enter" into negotiations on an EU-UK veterinary agreement, similar to Switzerland's.

With two of the more prominent Brexit bullshitters in full flow, this inevitably attracts the support of the Twitterati, such as David Phinnemore, professor of European politics at Queen's University Belfast and a stark reminder that "professor" is a job title and not a qualification.

The one thing of which one can be certain is that, of all these latter-day enthusiasts for miracles, none of them have actually read – or even acquainted themselves – with this fabulous solution. And my absolute certainty is easily tested by the simple proposition that there is no such thing as a "Swiss-style veterinary agreement", as such.

For sure, the EU does enter into Sanitary and Phytosanitary Agreements with a number of countries, within which it entertains specific veterinary agreements.

There was, for instance, the EU/Canada veterinary agreement, adopted by the EU on 15 December 1998, still in force and now built into CETA, to be terminated when that treaty comes fully into force.

Then there is the EU-Mexico Veterinary agreement, built into the Economic Partnership, Political Coordination and Cooperation Agreement, and you can even have the EU-New Zealand Agreement, initially settled in 1996. But that only concerned trade in live animals and animal products.

As to Switzerland, there is indeed an agreement, signed in June 1999 and coming into force in June 2002. But this is styled as an agreement on "Trade on Agricultural Products", the original version extending to 218 pages, going way beyond just veterinary matters.

Thus, if the UK wanted a "Swiss-style veterinary agreement", it would have to buy into the whole package. With multiple amendments, it covers everything from plant health and animal feed, to trade in wine sector products, marketing standards on fruit and vegetables, animal health and zootechnical measures applicable to trade in live animals and animal products.

Foster, who quite evidently, has no real idea of the nature of what he is advocating, remarks that Frost asserts that the beating heart of his Brexit is a "Magna Carta tradition" in which freeborn Englishmen are instinctively opposed to the notion that "other people set laws we have to live by".

In the case of the Northern Ireland protocol, though, the cost of reclaiming sovereignty for one food service company came in at about £150 for every consignment of goods sent from Great Britain to Northern Ireland, or about £50,000 since January.

But Foster also asserts that the rules are not impacting on voters, which begs an important question: if the voters are largely oblivious to the disruptions caused by Frost's "Magna Carta" Brexit, then would they really notice if the government took practical steps to remove them?

It is here that he argues that we should sign a "Swiss-style veterinary agreement" with the EU. At a stroke, he says, that would remove almost all the bureaucratic pain being faced by UK food exporters. He claims it would also address the most costly and intractable elements of the Northern Ireland protocol.

Sam Lowe claims that such a deal would leave the UK "permanently bound to EU food hygiene rules", but in return there would be no more need for export health certificates and the reams of other red tape currently strangling UK businesses.

Says Foster, no one apart from those directly affected, really cares about food hygiene rules. He asks, "Is anyone really sitting in the pub, thumping the bar and moaning that their Magna Carta rights have been traduced because Cornish lobstermen are following EU phytosanitary rules?", then flatly stating, "I'd hazard not".

But the point is that a simple veterinary agreement would not remove "almost all the bureaucratic pain being faced by UK food exporters". Where an agreement is confined only to "hygiene rules" – as Canada and Mexico have found - EHCs are still required, the products still have to be submitted to Border Control Posts for inspection and fees are still charged.

Only in the exceptional circumstances of New Zealand are the rates of inspection (and the fees) reduced, but all the other controls apply and the products which New Zealand can export are severely limited.

When it comes to Switzerland – apart from Efta/EEA states - the arrangements are unique. Only this country (and Liechtenstein, which is treated as part of Switzerland for the purpose of the controls) outside the EEA is allowed to import meat and other animal products without subjecting consignments to border inspection.

This, however, is because, as a landlocked country, all imports either originate from Union producers or, when bought from third countries, have to be routed via Union border control posts.

EU Member States, therefore, are responsible for monitoring compliance with production conditions and requirements, and in particular statutory inspections and the issuing of health certificates.

Furthermore, the Swiss Federal authorities have agreed to allow the European Commission to take the responsibility for overall coordination, inspections/audits of inspection systems and the necessary legislative action to ensure uniform application of standards and requirements within the Single Market.

This is on top of the Swiss authorities adopting a huge tranche of Single Market, Animal Health and Plant Health law. The EU and the Swiss also maintain a joint veterinary committee to coordinate actions, and the Swiss adopt the EU's surveillance and administration systems, including TRACES. Sharing of information is mandatory.

Each party is required to carry out checks at originating establishments, to ensure that they fulfil their obligations and that products to be put on the market comply with the legislative provisions. Checks at destinations may also be carried out. And yet, for all that, EHCs are still required.

Apart from the total integration of a very wide range of legislation, systems and administrative procedures, what makes Switzerland special is that, because of its landlocked character, goods coming from inside Swiss territory will always comply with EU law (there are special arrangements for air freight) and goods coming into Switzerland (air freight aside) have to pass through Union BCPs.

It is because of this, as much as anything else, that border checks can be reduced or, in most cases, eliminated. The situation for the UK – with its much wider access to third country products – is not analogous. Furthermore, Switzerland may only import products from third countries approved by the Commission.

Putting this all together, even if the UK could negotiate a "Swiss-style" agreement with the EU, it is unlikely that the conditions would meet Frost's "Magna Carta" Brexit criteria. The whole of UK agriculture and food production would be subject to EU law, with implementation coordinated by the Commission, working through a standing joint committee.

On the other hand, because of the special circumstances of the Swiss, it is extremely unlikely that the EU would be prepared to make the same concessions to the UK. Quite simply, a "Swiss-style" agreement is unlikely to be on offer.

What is remarkable here, though, is the continued inability of the trade commentariat to get to grips with the EU's "official control" regime, covering animals, plants and their related products. Too often, these people are prepared to make wild assumptions, which lack any acquaintance with reality, having failed to grasp the complexities of this specialist branch of EU law.

And yet, we will keep hearing about "Swiss-style" options, from all manner of self-important persons, even though they are not and never will be a practical proposition.

Also published on Turbulent Times.



Richard North 20/03/2021 link

Brexit: our wise and beneficent government

12/03/2021  


At last, we have a Brexit story that is so straightforward that even the British media can handle it, not least because David Frost made a statement in the Lords that only needed to be copied and edited before delivery.

The statement, though, was a re-run of a written statement made by Michael Gove, so the media had a choice of authors. Sky News, for instance, went for Gove.

The government, its report said, "has delayed bringing in a range of post-Brexit checks on EU imports by around six months - a change that one business group described as coming 'in the nick of time'".

No one would then have put Gove down as the comedy turn, but Sky had him banged to rights, citing him as saying that, "the government had been confident of being ready but listened to firms who said they needed more time to prepare".

Strangely, the TV station failed to highlight this bizarre claim and give it the prominence it deserved, but it surely cannot have failed to note recent reports on the lack of preparedness of the port health system. But then, we are dealing with the British media.

However, we did get the British Retail Consortium (BRC) saying that it would have been "foolhardy" to bring in some of the checks, due to come into force on 1 April, while many of the border control posts needed were still "little more than a hole in the ground".

And ain't that the truth. If Gove seriously believes that the UK inspection system would be ready by 1 April, then he's living in the land of the fayries. But then, the likes of Gove do not worry about details. When they need to, they simply make it up as they go along. The BRC's "holes in the ground" are a mere detail.

Alas, Sky News weren't able to offer much more detail – they have much more important things to do. Fortunately, we don't have to go chasing after the media these days. Thanks to the miracle of t'internet, we can actually cut out the middle man and go direct.

Cutting through the self-serving cant (that's spelled with an "a") and we find we have "a clear revised timetable for the introduction of controls".

Firstly, pre-notification requirements for Products of Animal Origin (POAO), certain animal by-products (ABP), and High Risk Food Not Of Animal Origin (HRFNAO) will not be required until 1 October 2021. Export Health Certificate requirements for POAO and certain ABP will come into force on the same date.

Customs import declarations will still be required, but the option to use the deferred declaration scheme, including submitting supplementary declarations up to six months after the goods have been imported, has been extended to 1 January 2022. Safety and Security Declarations for imports will not be required until 1 January 2022.

Physical SPS checks for POAO, certain ABP, and HRFNAO will not be required until 1 January 2022. At that point they will take place at Border Control Posts. Physical SPS checks on high risk plants will take place at Border Control Posts, rather than at the place of destination as now, from 1 January 2022.

Pre-notification requirements and documentary checks, including phytosanitary certificates will be required for low risk plants and plant products, and will be introduced from 1 January 2022, six month later than planned. Then, from March 2022, checks at Border Control Posts will take place on live animals and low risk plants and plant products.

Just to make it more simple for the hacks, the government has also produced a press release, but this one also introduces a new narrative.

Our wise and beneficent government is not delaying border checks because it is so inept that it couldn't organise the proverbial piss-up in a brewery. Oh no, our wise and beneficent government is simply focussing "on recovery from Covid", delaying import border control processes, "to enable UK businesses to focus on their recovery".

There is a lot of focussing going on here, but when the players take time out from this pressing activity, businesses have further time to prepare for changes at the border and minimise disruption as the economy gradually reopens.

Meanwhile, our wise and beneficent government can get on with recognising "the scale and significance of the challenges businesses have been facing in adjusting to the new requirements, at the same time as dealing with the impacts of Covid".

I suppose if a batch of Martians came out of hiding from Nasa's Mars Rover, and attended a press conference, they might possibly be convinced by this, but they would probably be the only ones.

This, though, would not worry David Frost. "As a sovereign trading nation outside the EU", he says, "we have freedom to take decisions in our national interest – and in the interest of our businesses".

"We will now introduce border controls broadly six months later than planned to give traders time to focus on getting back on their feet as the economy opens up after a difficult year", he adds.

And with that, he exudes confidence that "this new timetable will allow import businesses to re-establish their trading arrangements after a difficult period due to coronavirus, in the most straightforward and lightest touch way possible".

Demonstrating that he really does live on a different planet, Frost would then have us believe that the government will "continue" to give businesses the support they need to trade effectively with the EU.

This magnificent support includes: export helplines; webinars with experts; and support via the government's network of 300 international trade advisers. This, we are told, is in addition to the £20 million SME Brexit Support Fund, "made available in consultation with the country’s biggest trade bodies".

With all that, one wonders, what could possibly go wrong? Well, despite being officially reprimanded by the UK Statistics Authority for using unpublished and unverifiable data in an attempt to deny that Brexit had caused a massive fall in volumes of trade through British ports, our wise and beneficent government is already convinced that things are getting better.

Through the hard work already put in by traders and hauliers, Frost asserts that we have "already seen overall freight volumes between the UK and EU rebound after an expected dip in January".

That dip, of course, had nothing to do with the structural changes to our trading relationship with the EU. It was entirely a result of Covid-19 restrictions, pre-January stockpiling, and some "initial teething problems" as businesses adapted to new rules for trade with the EU.

Says Frost, "the very latest management information shows that overall freight volumes between the UK and the EU have been back to their normal levels since the start of February".

There is no dealing with that level of fantasy. This is the Johnson administration, naked in tooth and claw. But, whether for good or bad – and there are problems either way - this delay was always going to be. And for our wise and beneficent government to ante up with the real reasons is simply too much to expect.

Also published on Turbulent Times.



Richard North 12/03/2021 link

Brexit: it can only get worse

06/03/2021  


Yesterday was day three of "dump the protocol". Day one was supermarkets, day two parcels and now the government is modifying its guidance on plant exports, to cover moving agricultural and forestry machinery and growing media from GB to NI.

The existing text still stands, with a copy-out of Annex VII of Regulation (EU) 2019/2072, banning the export of soil, and restricting the growing media which can be used. But now a new passage has been inserted (pictured above), headed: "Temporary operational measures for movement of some goods from GB to NI".

First to report it was John Campbell, the Northern Ireland Economics and Business Editor. He later wrote a piece announcing: "Government relaxes more trade rules between GB and NI", and confirming that the move was taken " without the agreement of the EU".

What is specifically involved is permission for traders to move used agricultural and forestry machinery without the need for a phytosanitary certificate, providing they have been washed to remove excessive soil and plant debris. This, the guidelines explain, means that machinery can still be moved if small amounts of soil remain.

As to growing media, bulbs or vegetables that have been grown in soil can be sent from GB to NI even if they still have soil attached. Furthermore, plants can be moved to NI with soil and other growing media attached, provided they are from an authorised business meeting GB plant passporting requirements for soil.

Although it might not be immediately apparent to some, there is a qualitative difference between yesterday's measures and those from the previous days. The first two sets involved an extension of the "period of grace", intended to end on 1 April but now delayed until 1 October.

This set is different in that it deliberately sets aside a provision on Union law listed in Annex 2 of the Northern Ireland Protocol, which the UK government has agreed should apply to Northern Ireland, by virtue of Article 5(4). The specific instrument suspended is Regulation (EU) 2016/2031, as implemented by Regulation (EU) 2019/2072.

The UK government states that this is a "temporary operational measure", but unlike the "period of grace" extension, it does not point to an end date. Nor is there any indication of what might replace the suspension, or whether there is an intention to renegotiate the application of this provision.

As such, yesterday's measures are in a different league to the previous "period of grace" extensions, and more clearly a breach of the Protocol. I don't see the argument that it is "temporary" cutting much ice, and especially as there is no end date identified.

One might, therefore, have expected to see fairly prominent media reporting – which might have been the case in an alternate universe where the royal soap opera didn't dominate the news.

But, in terms of substantive reports, apart from the BBC website, all I can see (at the time of writing) is a self-important report in Politico, grandly proclaiming that the UK's Northern Ireland Office had "confirmed Friday to POLITICO that, with immediate effect, many products containing soil are being cleared for shipment once again from suppliers in Britain".

As with others, the site wrongly attributes the EU measures to the single market, stating, "Another day, another unilateral British move to pull away from EU single market rules involving Northern Ireland". No media reporter, as yet, has picked up the qualitative difference in the measures.

Despite what amounts to the clearest breach so far of the Protocol, Downing Street is still playing silly buggers. Of yesterday's measures, a government spokesman said: "These temporary, practical arrangements recognise the need to ensure biosecurity on the island of Ireland is not compromised whilst addressing barriers which stop goods moving into Northern Ireland".

Meanwhile, the incredible Liz Truss claims that the UK is "absolutely not" trying to provoke a row with the EU over post-Brexit border arrangements.

At least this gets close to matching the fabled insouciance of Jacques L'Escroc Chirac. This was the man of whom it was once said that he could steal a pot of jam and when challenged - with his fingers still in the jar and the booty smeared on his lips - could look you in the eyes and say, without a blush: "Moi, monsieur? But I don't eat jam." Perhaps, after all, the Conservatives have learnt something from our membership of the EU.

However, while this is disturbing enough, in some senses one is even more disturbed by the response to yesterday's news of James Barnes, chairman of the Horticultural Trades Association (HTA).

Predictably, he welcomes the news, saying that is association had been raising this issue with government for the past five months. That says so much when the EU's plant health provisions were almost certain to apply regardless of any trade deal, a likelihood that must have been obvious since Mrs May's Lancaster House speech in January 2017 – better than four years ago.

Barnes goes on to say that, while these temporary measures "will allow GB businesses to send their stock to Northern Ireland for this season", a permanent solution needs to be found on this along with changes to the restrictions on prohibited species and seed potatoes, which still remain in place.

He then adds: "This easement only applies to Northern Ireland. The UK and EU need to start coming to some firm and pragmatic decisions to change the current restrictive plant health regime on all trade between the UK and EU".

Given though, that the UK has just unilaterally abrogated a provision of the Northern Ireland Protocol, this is hardly conducive to a happy meeting of minds, where the EU will agree to lift plant health restrictions which apply to every other third country in the world including Efta/EEA countries, allowing one exception for landlocked Switzerland.

That Barnes also thinks that some sort of deal can be reached "on all trade between the UK and EU" lies in the realm of what some might consider to be wildly optimistic, even to the extent of being sustained by unicorn milk.

And yet, Barnes is not out on his own. His demeanour is common to that of many other trade body leaders who still have not come to terms with Brexit and the nature of Johnson's bodged deals. But in the case of plant health, even EEA membership would have been to little avail.

For once, just once, it would be helpful to see some realism. As an island state, the UK is in an excellent position to develop its already high disease-free status, ready to become a reservoir of healthy replacement plants, servicing areas which find it harder to exclude disease.

But this yearning for a past gone, that is never to be recovered, smacks of a morbid lack of realism which bodes no good for an industry which has yet to come to terms with Johnson's dowry. Yesterday was as good as it gets, and from hereon, it can only get worse.

Also published on Turbulent Times.



Richard North 06/03/2021 link

Brexit: chicken or egg?

02/03/2021  


A survey carried out by ICM for the think-tank British Future, part of the "Talk Together" consortium, has suggested that Brexit is gradually receding in the nation's consciousness.

On the basis of the results, the think-tank suggests that as an "inter-group identity conflict", Brexit is likely to gradually receive less prominence as UK society goes through a process of acceptance and reconciliation.

Only a quarter of people (25 percent), it finds, are still emotionally invested in the politics of Brexit. Just 12 percent identify as "leavers", slightly outnumbered by the 13 percent who identify as "remainers".

For 53 percent of people, we are told, their primary political identity now lies elsewhere, with traditional tribal politics reasserting themselves, pushing them mainly into the Conservative or Labour camps. Another 21 percent do not identify with any political party or cause.

What might give some insight into this process, though, is an observation the Brexit was a salient issue in the discussions held by the think-tank in November and December 2020. That, they concede, was when the UK-EU trade negotiations featured more prominently in the news.

It was also a prominent theme of the discussions held in Northern Ireland, where people were fearful about its economic impact and that the Irish border might become a flashpoint for violence.

Thus, while British Future thinks that we might be "getting over" Brexit, what the think-tank might be seeing is a reflection of the loss of media focus. It is not beyond the realms of possibility that there is a correlation between lack of media interest and receding public consciousness. The question is which came first – the chicken or the egg – the lack of public interest or the fall-off in media attention.

Possibly, where it all went wrong was the media expectation of queues stretching from Dover to Aberdeen, and empty shelves in the supermarkets. But when the lorry-watchers were frustrated, and Brexit got complicated, the journos began to lose interest. As the politicians also retreated, thus refusing to provide the essential biff-bam dynamics, it was inevitable that coverage would diminish.

Then, for all their protestations, it is fair to say that most people are easily led. Despite the substantial fall-off in their print circulation, the legacy media and broadcasters still largely set the news agenda. And in this they can rely on the responses of the politicians, as they feed off each other.

Thus, if a subject is ignored by the politicians and media, it will struggle for attention. Many an issue suffers that fate and, for the moment, it is Brexit's turn to be sidelined.

However, it is almost certain that the corollary applies. If the politicians re-engage with the subject, and the media start taking an interest again, one can expect public interest to recover, and the same old partisan passions to revive.

And here we can be certain that Brexit hasn't gone away. From the speciality magazines, the trade bodies and, to an extent, the local media, there is no shortage of tales of woe.

A casualty recently in the frame was the pet food industry, picked up by the Financial Times after a press release from the Pet Food Manufacturers’ Association (PRMA) reporting that the industry was "struggling to export to the EU".

The UK pet food industry is valued at £3 billion and in 2019 exported £285 million-worth of goods to the EU versus £45 million to the rest of the world. With exports being hugely important to the industry, businesses are being harmed.

Three things are adversely affecting the industry, articulated by Michael Bellingham, PFMA chief executive. These are the familiar litany of red tape, vet shortages and hauliers refusing to accept animal-based products in case they are stopped at the border. "Two-thirds of members are not getting their product through. It's a big issue", Bellingham says.

The "vetnary" problem has an interesting twist. Many official veterinarians are unwilling to take on the extra work of certifying animal by-product consignments because they are not confident about what is required – another graphic example of the fatuity of the EU (and other administrations) in elevating the profession to its God-like status, when so many of its practitioners are out of their depth.

On Twitter the industry woes are amplified by the Canagan Group, which illustrates the paperwork required to send one order to the EU (above). It also complains that it faces £100,000 year on veterinary inspection fees, when the previous cost was zero.

Despite the brief interest from the Financial Times though, and marginal interest on Twitter, the story hasn't taken off in the rest of the national media. It is unlikely to do so now.

Similarly, a Welsh story on the experiences of the Archwood Group - a leading manufacturer of timber products, based in Chirk, near Wrexham - is staying in Wales.

Josh Burbidge, Managing Director of the group, explains that his company's exports to Ireland "have caused the most challenges, with our goods being held up at the border between Northern Ireland and the Republic of Ireland for around three weeks".

"Initially", he says. "the issue concerned what information was required and in what format for the customs declarations. For example, the HMRC system needed to be updated because our goods had been incorrectly flagged as needing phytosanitary documentation". This resulted in products being held at the border for around three weeks until the orders were reclassified.

Nevertheless, he says, "We continue to face delays of our products reaching the Republic of Ireland because the customs paperwork is taking a long time to process, which adds to our costs".

The company is also having to bear the cost of using special heat-treated ISPM pallets to transport products over the border, with the prices for these rising significantly. And the rules of origin have complicated matters further because Archwood Group's customers now face import duty for products the company buys from outside the UK, such as plastic mouldings.

David Hopkins, chief executive at the Timber Trade Federation comments that Archwood's problems "are indicative of those faced by hundreds, if not thousands, of small to medium sized businesses across the UK".

The costs, he says, can be carried and spread more easily by larger firms delivering larger orders. But, the costs are the same for each one of the multiple smaller deliveries that companies like Archwood are making across borders. They obviously want to keep their customers in those countries so face a choice between increased costs and lower margins or losing business altogether. This is not a recipe for business growth.

For those prepared to trawl though the undergrowth, there is no shortage of material to report. But as Pete observes, our interest in the EU as an entity is on the wane, and the debates of technical substance are no longer fashionable. Brexit's self-appointed experts are scrabbling for a fading limelight.

Despite that, it really won't go away. Says Pete, when the next big kick off happens, it won't be over tariffs or food export rules. But there is a running sore that won't be put to bed until it's out in the open. With so much damage and disruption, it is only a matter of time before the issue is capturing the headlines again.

Also published on Turbulent Times.



Richard North 02/03/2021 link

Brexit: that petty and vindictive EU

01/03/2021  


I missed a couple of "Brexit" pieces in the legacy media yesterday, not least one in the Mail on Sunday. This was a classic Mail rant, with one of those long headlines which tell enough of the story without their readers having to dip into the main copy. It read:
How Brussels has launched a spiteful war on our glorious snowdrops and rhododendrons: Petty and vindictive even by EU standards, they're banning the import of plants that have touched British soil - putting jobs at risk and raising prices in garden centres.
When I first looked at this, I thought that this might be another instance where the UK was taking a "hit" from leaving the Single Market, in which case the paper would be partly author of our misfortunes.

After all, at a time when it really mattered, one of the key cheerleaders for the anti-EEA brigade has been the Mail, publishing in December 2018 an issue-illiterate diatribe from Dominic Lawson against the Norway option.

But, looking at the EU law, two things emerge. Firstly, the legislation is not part of the Single Market acquis. Two main laws apply: the 101-page Regulation (EU) 2016/2031 of 26 October 2016 on protective measures against pests of plants; and the very much longer Commission Implementing Regulation (EU) 2019/2072 of 28 November 2019, establishing uniform conditions for the implementation of Regulation (EU) 2016/2031, running to 279 pages. Neither are EEA relevant.

The second thing to emerge is how recent these laws are, both of them having taken effect on 14 December 2019 – only shortly before the UK left the EU. The timing is such that these laws, amounting to a major revision of the EU's plant health laws, would have had no formal input from the UK, which ceased to have any formal legislative role in the EU, the moment the Article 50 papers were lodged on 29 March 2017.

As to the Mail on Sunday's assertion that the EU is "banning" British soil, this is essentially true. The prohibition is set out in Annex VII of Regulation (EU) 2019/2072, which lists "plants, plant products and other objects whose introduction into the Union from certain third countries is prohibited".

Point 19 refers, where "soil as such consisting in part of solid organic substances" from "third countries other than Switzerland" is specifically prohibited. According to Point 20, the import of all organic growing media - apart from peat or coconut fibre, previously not used for growing of plants or for any agricultural purposes – is prohibited.

Nevertheless, we were warned about what would happen in the event of the transition period ending, without a covering agreement on phytosanitary issues, the latest advice published by the Commission in a revised Notice to Stakeholders on 13 March 2020 – the original having been published on 21 March 2018.

What could then have happened during the TCA negotiations was that Frost and his merry men could have sought an equivalence agreement. There is specific provision for that in of Regulation (EU) 2016/2031, Annex II, Section 2, which states:
Measures taken to manage the risk of a pest shall not be applied in such a way as to constitute either a means of arbitrary or unjustified discrimination or a disguised restriction, particularly on international trade. They shall be no more stringent for third countries than measures applied to that same pest if present within the Union territory, if third countries can demonstrate that they have the same phytosanitary status and apply identical or equivalent phytosanitary measures.
This is essentially a copy-out of the WTO SPS Agreement and could have provided the foundations on which border controls between the UK and the EU were relaxed, in respect of plant health provisions. However, when it came to the TCA text, there was no mention of equivalence, and the die was cast.

Thus is opened the way for the Mail on Sunday report, which starts off by telling us that this period should be peak season for Joe Sharman (pictured), a man known as "Mr Snowdrop" and one of the biggest growers in the country. Sharman, whose customers include the Queen, sells thousands of bulbs from his Cambridgeshire nursery to buyers in the EU and beyond. He also drives vanloads to sell at snowdrop festivals in Germany. But, says the MoS, not this year. "At a stroke, draconian EU regulations have wiped out half of his business".
The punitive new rules, which treat British growers as if they were located thousands of miles away in China or Brazil, have all but ended his export business. They have even prevented deliveries of snowdrops and other plants to homes and garden centres in Northern Ireland, which, following the Brexit agreement, remains under EU trade rules.

So extraordinary are the regulations that a plant that has so much as touched the soil of Great Britain can never be exported to the EU or any part of Ireland. No one has calculated the total cost of the regulatory assault, but what is certain is that British horticulture has seen millions of pounds wiped from its profits overnight.
Here, the paper is conflating separate issues, but the essence of what it conveys is correct. The tolerance for the presence of propagating material entrained with Snowdrop bulbs is set at zero. Joe Sharman is well and truly stymied.

But, says the MoS, to him it's an act of spite, particularly as British plants have been grown to exactly the same standards as those in the EU for many years. "I've had German customers in tears. These people have been buying from me since 1988 – they're my friends", Sharman says. "I've shed tears, too. I never thought I'd have to deal with this. I’m now hoping the EU leaders get off their high horse and let us trade".

On top of this, we are told that "the sheer weight of regulation and the stringent detail – some of it bizarre – make it all but impossible for British growers to turn a profit".

Under what the MoS insists are "new" post-Brexit rules, Britain is treated as a "third country" for horticulture, which means that for every consignment of plants – be it one bulb or one million – an expensive "phytosanitary" safety certificate is required, stating that the goods are soil- and pest-free.

These are issued by an inspector from the government's Animal and Plant Health Agency (APHA) at a cost of £127.60 per every half-hour spent on the consignment. The certificate itself then costs a further £25.52.

Species such as snowdrops are more tightly regulated. Controlled by CITES – the Convention on International Trade in Endangered Species of Wild Fauna and Flora – snowdrop bulbs require additional permits at a cost of £74 per order.

Then come the rules about soil, says the paper. Plants that have been grown in, or have ever touched, British earth can no longer be sent either to the 27 EU countries or to Northern Ireland because of the supposed potential risk of pests and disease. Even pots that have been placed on or touched the ground are deemed unsafe.

With words such as "infuriating", and references to "harsh rules" and their "sheer complexity", especially in relation to the rules applying to Northern Ireland, we are left in no doubt that this is the "spiteful" EU at its worst – although none of the growers cited actually make that charge.

However, the rules are regarded as "impossible to comply with", although it is also claimed that the UK is treating plant imports from the EU under the same rules as before. This seems to suggest that there are different rules in force, which is not the case. The EU regulations have been adopted by the UK and are part of the statute book. They are simply not being applied.

But, while one can sympathise with the growers who are caught up in this nightmare, it has to be said that these rules apply to all other third countries. If they were to be any different, Frost should have sought equivalence for the UK, and many of the problems could have been avoided.

Clearly, the rush to get a deal left little time for such considerations – another aspect of Boris's botched Brexit, that is so damaging British business. But such is that "take" from the MoS that "Boris" gets a free pass. This is a "spiteful" action by a "petty and vindictive" EU, the only Tory-approved way that Brexit can be reported.

Also published on Turbulent Times.



Richard North 01/03/2021 link

Brexit: loving the luvvies

18/02/2021  


There is plenty of ribald comment on the appointment of David Frost to the cabinet because he is "unelected". But criticism of that is a cheap shot. Cabinet ministers are never elected. And, historically, there have always been ways for prime ministers to bring trusted aides onto their teams.

If there is to be criticism, it's because Frost is a thoroughly useless individual who made a pig's ear of the TCA negotiations, landing us with a mess that we haven't even begun to address.

And, to add insult to injury, he is to replace Michael Gove as co-chair of a committee on implementing the Brexit withdrawal deal, taking charge of forging a new relationship with the EU and seeking to "maximise post-Brexit trading opportunities".

In many ways the appointment is typical of the Johnson administration, where loyalty is everything, inadequacy is its own reward and there are no penalties for failure. As long as Johnson is prime minister, Frost's position is secure, no matter how much more damage he does.

As to the damage already sustained, the legacy media continues to exhibit its curious myopia, with BBC 2's Newsnight carrying indifference to new heights. There, one sees Kirsty Wark, anticipating a "major speech" by Starmer today, speculating on his fate, "if Johnson makes a success of Brexit" – as if that was actually a possibility.

Such attention that the media can spare on the march of reality is still focused largely on the frustrated wanderings of thespians and minstrels, with the woes of the National Theatre taking the lion's share of the limited coverage.

This highly subsidised national institution, we learn, is shelving plans to tour productions to mainland Europe "due to uncertainty over work permits because of Brexit". Before travelling to work in a number of EU countries, many working in the arts will now need to apply for short-term work permits.

Productions have already been postponed as a result of Covid but hopes of resuming European touring, with a production of "The Curious Incident of the Dog in the Night-Time" (pictured), have been dashed "because of Brexit legislation". "The potential additional costs for visas and current uncertainty around social security contributions mean regrettably it is currently not financially viable", the National Theatre spokesperson wails.

Tacked on to this story is a report of a letter from the performing arts union Equity, which has the luvvies united in implored Johnson "to go back to the negotiating table" to ensure visa-free work in the EU. The letter states that creative practitioners are desperate to work in Europe once pandemic restrictions lift, but "the current Brexit deal is a towering hurdle to that".

"Before, we were able to travel to Europe visa-free. Now we have to pay hundreds of pounds, fill in form after form, and spend weeks waiting for approval – just so we can do our jobs" it complains. Perhaps they should have a word with Dominic Delfino.

Only brief coverage is given to the ongoing situation in Northern Ireland, with news of orders for 100,000 trees for the province being cancelled, as a result of the EU's phytosanitary rules.

The Daily Mail, though, prefers to home in on the "red tape chaos" hitting Cliff Richard Wine, as orders from his vineyard in the Algarve are lost or delayed by "increased bureaucracy".

That, on top of Frost's "promotion", effectively sums up today's media "take" on Brexit, squeezed out by Covid-19 news, the Duke of Edinburgh's "precautionary" sojourn in hospital and anything other distraction that was to hand.

Still lingering on the sidelines, unappreciated and unreported, is the growing realisation in the equestrian fraternity that they have been well and truly stuffed by Brexit.

Obviously lacking in sufficient "luvvie appeal" (for the moment), the Hare & Hound returns to the subject with a complaint the cost of travelling horses abroad by ferry has increased by around 318 percent since the end of the Brexit transition period.

In an attempt to ramp up the profile of the issue, the British Equestrian Federation (BEF) is gathering evidence to lobby Government on what needs to change and is asking people to contact them with details of their experiences, particularly at border control posts (BCPs).

It seems that Parliament's environment, food and rural affairs (EFRA) committee has also launched a call for evidence as part of an inquiry into moving animals across borders post-Brexit, with a deadline set for 17 March.

However, BEF interim chief executive Iain Graham says the federation is "acutely aware" of how the new cross border requirements are affecting the equestrian community, but he accepts the legislation in place at present.

Perhaps that's the industry's problem. Instead of writing whiney letters to the prime minister, the Federation is "working with stakeholders" to find ways to improve, streamline and digitalise the processes involved.

To that effect, it is working with the British Horse Council at national government level and the International Horse Sport Confederation to find ways to improve the situation. also setting up an independent equine sport and business working group, to represent riders, operators, producers, breeders and show organisers.

Areas the BEF has identified as "needing immediate review" are the export health certificates and the manual process of sending these to BCPs. It is also pushing for improvements on waiting times at BCPs, which is a cause for equine welfare concern, and wants a telephone hotline established, with Defra's assistance, so anyone having issues can seek instant help.

With such modest expectations and a distinct lack of whingeing, it is perhaps unsurprising that the media is more inclined to give the drama queens in the entertainment industry more coverage. He who whines loudest gets the best press.

Nevertheless, as the sectors adversely affected by Brexit multiply, there must surely come a time when even the media begins to notice that the grand experiment is going seriously wrong.

One can almost imagine in the next few weeks or so, some self-important journalist "discovering" the problems of the equestrian industries, and plastering an "exclusive" on the Politics Home website or in the Telegraph. And once this has been "owned" by the fourth estate, it will quickly be copied by other media organs, each congratulating themselves for their "quality" journalism.

But one wonders how long it will take them to realise that many of the same problems apply to motorsport, from rallying to Formula 1, any number of sports – including cycling races – and even film makers and photographers organising fashion shoots and the like. Putting them together, instead of offering random, sporadic reports, could make all the difference.

For the time being, though, it seems we are condemned to live in a sort of news "limbo", where the media pay lip service to Brexit as an issue, without really engaging in the substance, churning the same basic sub-set of stories.

Rather like the run-up to the "completion" of the Single Market, when all the media were interested in was "Euro-sillies", like standardised condom sizes, fishermen in hairnets and other Johnsonesque fabrications, the media have reduced Brexit to a "red tape" soap opera.

No wonder they love the luvvies. This fits perfectly with the narrative.

Also published on Turbulent Times.



Richard North 18/02/2021 link

Brexit: a sense of unease

09/01/2021  


Yesterday, carried over into today, marked the point at which the legacy media stepped aside from their lorry-watching – in expectation of huge queues – and started to report on the slow-motion train wreck emerging from the end of the transition period.

One of the first pieces I spotted yesterday was from the Guardian (widely used because of the absence of a paywall), which recounted the trials and tribulations of truck driver, Roger White.

Mr White arrived in France at 2.30pm on Tuesday with a truckload of hard cheese from Somerset. Before Brexit, the Guardian says (although it means the end of the transition period), he would have rolled off the Eurotunnel train and carried on up the A16 to Belgium, unloading his wares a few hours later at his ultimate destination in Utrecht.

But, we were told, 24 hours after setting foot on European soil, the 69-year-old driver from Yeovil was still sitting in his cab in the Eurotunnel compound in Calais after being asked to reverse into a special unloading bay at a newly built border control post for sanitary and phytosanitary checks (SPS) checks on food. "I’ve been here since yesterday afternoon and I am stuck here until God knows when. I have to wait until I am cleared to go", he said.

White, according to the paper, knew there was trouble ahead when he drove off the shuttle and the electronic display assigned him the orange lane instead of the green, indicating he would be subjected to an inspection by authorities. Remarkably, he comments: "I think they are picking on the English trucks maybe", as there was nothing wrong with the cheese. "Just missing paperwork", he said.

One might sympathise with the plight of Mr White, but somewhere in the chain of events which led to him being delayed for 24 Hours in Calais lies an extraordinary level of stupidity in allowing a high-value cargo to be sent to France without – as White puts it – the necessary "paperwork".

After all, the moment Mrs May – back in January 2017 – decided we were no longer going to be part of the Single Market, it was a matter of certainty that the full SPS regime for products of animal origin was going to apply to UK exports to EU Member States.

I wrote about the regime in detail in January 2017, and although the piece was focused on the meat industry, it is very similar for all products of animal origin.

Since there are no exceptions for any third country – which the UK was to become – and the requirements were sketched out in the Commission's notice to stakeholders, there can be no excuse for despatching such a load without the required "paperwork".

Yet, it seems, Mr White has not been alone in his misfortune. The Telegraph - relying on "industry sources" – tell us that French officials have warned the majority of lorries arriving into the country from the UK with food products are not meeting "new" EU requirements around phytosanitary (SPS) controls.

Of course, these are not new requirements – just newly-applied to Great Britain (UK minus Northern Ireland). Thus, it is not as if UK vendors are having to deal with something totally new. Anyone familiar with shipping products of animal origin from a third country (such as Australia) to the EU should be able to advise. And, I believe, the UK government has an Australian personage on its staff.

But that has not stopped one industry insider telling the Telegraph that, "The French quite rightly are fed up with us". They are saying that "there is so much stuff coming in that is non-compliant with the paperwork that it can't continue".

Says this [anonymous] insider, "We need operational detail on exactly what is not working. This all boils down to the fact that we did not have properly tested systems in place before January and is absolutely predictable".

There is, apparently, a document which has been circulated to British hauliers, which lists five areas that [French] customs officials say are leading to disruption at the UK-France border.

These include hauliers failing to fill out a specific box in departure declarations, changing destinations at the last moment, failing to provide the correct notification for agrifoods and lacking the original export health certificates, as well as failing to organise an agent to handle SPS paperwork on arrival in France.

These are pretty fundamental failures and one wonders what companies and their trade associations have been doing since 2017 to prepare for the inevitable that was going to happen, deal or no deal, with the government having published guidance since November 2016.

Unsurprisingly, we are thus seeing Michael Gove warning businesses to brace for "significant disruption" at French ports, which have been ordered to "crack down" on lorries arriving from Britain with incorrect paperwork, as from Monday.

This comes as business leaders are complaining that "post-Brexit red tape" is already hampering the flow of trade across the Channel, eliciting a response from Gove, who says that the government would "redouble" its efforts to communicate changes to firms and hauliers.

He adds that the impact of new EU trading arrangements would be felt most firmly on the "Dover-Calais route", with figures released yesterday showing 700 lorries travelling through Kent had already been turned away at the border since 1 January.

The majority of these refusals, though, have been due to coronavirus testing issues rather than non-compliance. But the Cabinet Office says that heightened traffic in the coming days means that disruption is likely to intensify.

And in France, where officials are said to have shown leniency to hauliers arriving from the UK in recent days, it is claimed that port authorities, carriers and operators have been instructed to start turning back lorries if they are found to be non-compliant.

However, what might help in the short-term is a change in the terminology. The use of the phrase "red tape" somehow trivialises the issue, more so when we get The Times referring to the "fine print" and the "burden of extra paperwork".

The paperwork, in most respects, is only a part of the regime which includes rules for certification of products, conformity assessment, inspections, sampling and testing of goods.

These complex and rigorous formalities are the new normal and are very far from trivial. Exporters and shippers need to treat them seriously, and accept that compliance is now part of the cost of doing business in Europe. To dismiss them as "paperwork" or "bureaucracy" does not do justice to the scale of the problem confronting business. Nor is there any value in calling for pragmatism. Far from taking back control, we are no longer in control.

Sadly, for some, the cost will be too great, not helped at all by increased shipping costs which are combining with the hike in transactional costs to create a perfect storm.

For one computer manufacturer, for instance, it is claimed that, six months ago they could get a container of parts shipped to the UK for between £2-2.5k. A month ago it was £8k and yesterday they were quoted £16,500. One of their gaming PCs has gone from £1,599 to £1,849 in a month.

But, as with paperwork, costs (and delays) are only the tip of the iceberg. Scottish fishing is being particularly badly hit, with customers pulling out in their droves. Other customers cannot be serviced. Elsewhere, firms are simply relocating, as with the BASF Teeside plant where hundreds of jobs are to be lost as production moves to France. And they are not on their own.

Shortages and waste also contribute to the picture in a scenario which could last for years. Says Shane Brennan, chief executive of the Cold Chain Federation, which represents chilled transport and storage companies, there is a "growing problem and sense of unease" among its members.

Anyone seriously studying the situation will share that unease. This is only just starting and even now we cannot predict where this emerging crisis will take us.

Also published on Turbulent Times.



Richard North 09/01/2021 link

Brexit: opening the back door

06/01/2021  


While Covid-19 and the new lockdown continues to dominate the headlines, the aftermath of TransEnd (still referred to as "Brexit" by many media sources) remains the non-story of the year.

A media lorry watcher gives us some information from ferry-operator DFDS, which says that, on 1-2 January, 1,351 vehicles went through the Port of Dover. That compares with 3,239 last year, a cut of more than half in traffic volume over the year.

The agency Bloomberg gives us rather more information, although it amounts to the same thing. Between 7 am on 31 December and 7 am on 4 January, lorry crossings at Dover averaged a thousand daily, compared with 2019 when the average was 6,500. On Monday morning, the traffic was light, with no sign of hold-ups at the Eastern Docks.

However, Richard Ballantyne, chief executive officer of the British Ports Association says that this is "probably the calm before the storm", observing that, "It's always quite quiet after the new year".

Apart from the New Year's holiday, the relative quiet is put down to companies ordering early in anticipation of potential delays, and a reduction in demand because of the temporary closure of France's border in late December.

Another factor has been a deliberate policy of some trucking groups to avoid Dover and to delay truck movements for a few weeks until there is some sense of where the problems lie.

This is confirmed by Jon Swallow, co-founder of Jordon Freight, which ships goods between the UK and the EU. But he sees trouble ahead after taking multiple calls from businesses on Monday which believed that the Christmas Eve trade deal relieved them of the need to file paperwork to cross the Channel.

Swallow notes that their optimism is misplaced. Firms will still need to file customs declarations and comply with other new formalities due to Brexit, he says, adding: "We're so shocked. These are not small companies".

Delays and diversions, however, seems to be having an effect. There have been reports (by Reuters and others) of empty shelves in a Paris branch Marks & Spencer. Items out of stock included sandwiches, salads and a turkey tortilla with curry. A spokesperson for M&S said the border controls were causing delays to deliveries, although it was working on the problem with suppliers.

Paris wasn't the only location affected though. Other reports had the M&S branch in Dundrum Town Centre in Dublin running with empty shelves. A section of the chilled goods area, which usually contained pre-prepared chicken products, was bare and other fridges also contained empty sections.

That may have something to do with a small number of trucks being turned away from Dublin Port, although local officials seem to be making light of the matter. The head of Revenue's operations at Dublin Port, Tom Talbot, says that in the "early days, things at the Port are very much bedding down". He expects it will bed in "very, very quickly".

Nevertheless, as reported on this blog nearly three years ago, the Irish have been taking measures to by-pass the UK to avoid problems in UK ports arising from the use of the so-called "land bridge" route to continent.

Picked up by the Financial Times - trailing in our wake – we see them report that direct freight shipments to European mainland have been increased.

One current example is the ferry operator, Stena Line. It is doubling its pre-Christmas capacity on its direct freight link between Rosslare in south-eastern Ireland and the French port of Cherbourg. Although sailing times are longer on direct sea crossings, Simon McKeever, chief of the Irish Exporters Association, says there is a good demand for such routes.

The FT cites him as saying: "There is definitely for some time been a desire to seek out an alternative to the land bridge and we are seeing members looking to avail of more direct shipping routes to the continent, to the extent that some companies are having difficulty booking space on the inward-bound journey from France early in the new year".

According to the FT, the Irish Maritime Development Office, a government body to develop and promote shipping, has advised exporters and importers to examine alternatives to the land bridge since 2019. Direct continental roll-on roll-off and lift-on lift-off routes from Ireland are the "fastest-growing routes" in recent years, it says.

The paper dates the expansion from 2018, since when several new direct freight services have been introduced, linking Ireland with ports in France, the Netherlands, Spain and Portugal. However, we noted progress in late 2017.

It was then that the ferry company CLdN SA was preparing to deploy its newly-built ro-ro ferry, named the Celine, to the port of Dublin. This 234m giant, with the capacity of 8,000 lane metres (equivalent to nearly 500 articulated trucks), had originally been intended to serve the UK-Belgian route but has now been pressed into service on the Dublin-Zeebrugge route, by-passing the UK route to the continent via Holyhead.

This was joined in early 2018 by a new sister ship, the Delphine, which had just made a maiden call to Dublin Port. It too was intended to serve the Rotterdam-Zeebrugge-Dublin route.

Brittany Ferries also announced the first ever direct ferry link between Ireland and Spain. The company was to operate two direct return sailings weekly from Cork to Santander in Northern Spain, from the end of April to November of this year. A new ship was to be chartered to serve the route.

Coming right up to date, from 2 January, there has been a new roll-on roll-off service between Rosslare and Dunkirk. This, senior figures in Irish transport say this has the potential to be a game-changer, with six sailings a week in each direction.

DFDS, the Danish operator of the new service, aims to displace a significant portion of the 150,000 shipments on the land bridge. "We obviously need to eat into that to a relatively large extent", said Torben Carlsen, chief executive of DFDS. "We probably need 40,000-50,000 of those movements to make this route viable".

Glenn Carr, general manager of Rosslare port, says freighters had booked "very strong loads" in both directions on the Rosslare-Dunkirk route as the service started at the weekend. Similarly, Stena Line said its first post- transition sailing to Cherbourg from Rosslare had sold out.

The Rosslare-Dunkirk sailing takes 24 hours, about six hours longer than travelling between Dublin and Calais via Britain. But going via Dunkirk provides more time on the road after arriving in Europe because truckers will not have been driving for a day. By contrast, the drive through the British land bridge limits truckers' hours on the road after they arrive in Calais.

The FT also cites Perennial, an Irish freighter specialising in direct services to the continent. It had moved to boost its capacity to meet a sharp rise in demand before the end of the UK transition period.

Chris Smyth, Perennial's commercial director, said: "A lot of it is being driven by the big supermarket chains. The multiples are putting pressure on the fruit importers because they need continuity of supply. On the export side, it's big Irish meat and dairy producers. Because it's food product, they want to avoid both the customs documentation and any [sanitary and phytosanitary] checks".

One almost senses that Ireland could be pitching itself as a distribution hub for the UK. It would be rather ironic if shipments from the continent via Dover were re-routed to Irish ports and then trucked to the UK via Holyhead where, for the time being, there will be no inbound checks.

This could explain why in 2018, Irish Ferries ordered a new, €165.2 "super cruise" ferry to serve the Holyhead - Dublin route, capable of carrying up to 1,500 cars or 330 trucks across the Irish Sea. It will be the largest cruise ferry in the world in terms of vehicle capacity, and will be one of two super-cruise ships serving the route, by-passing Northern Ireland, and its "cumbersome" checks.

Rather than Northern Ireland becoming the "back door" into the Single Market, we could be seeing Ireland become the EU's back door into the UK, outflanking British preparations in Kent. If that happens, the scene at Dover yesterday (pictured) may yet become the norm.

Also published on Turbulent Times.



Richard North 06/01/2021 link

Brexit: tea break's over

26/12/2020  


There is that incredibly old joke where a man goes to Hell, and is shown round the place so that he can choose his work detail for eternity. In the first room, the occupants are busy working, up to their waists in shit. In the second, the scene is repeated only the workers are up to their chests.

The third room, though, is very different. Everybody is sitting round drinking tea, and they are only up to their ankles in the brown stuff. "Ah!", says the man. "I'll have this room". Just at that point, the overseer stomps in and barks to the denizens: "Right! Tea break's over. Back on your heads!".

Well, I guess the tea break is over, and an analysis of the EU-UK Trade and Cooperation Agreement beckons. But, although the Commission said on Christmas Eve that it would be published "shortly", it now seems to have re-defined "shortly". As I wrote this blogpost, I had seen no sign of the document.

Clearly, though, it does exist, and it is now posted. This is after Barnier and EU Ambassadors spent some time yesterday discussing it and, if the Guardian is to be believed, Member States are quite happy with it.

Up to then, us mere plebs were way down the food chain just now. Although the BBC claimed to have a copy, there was through yesterday no indication of when the treaty was going to be openly published. One trusts that our MPs were also amongst the privileged few as they are supposed to be passing the implementation Bill on the 30th, having been recalled from their Christmas breaks for the day.

There is an interesting reflection here. The European Parliament, in the heart of the thoroughly undemocratic European Union, is refusing to ratify the treaty because MEPs say that there is insufficient time to scrutinise it. Thus, the Council is planning a "provisional application" lasting to the end of January, to enable proper scrutiny.

The Westminster parliament, on the other hand, is willing to approve the whole thing next week, in less than a day – a timescale that, to say the very least, is somewhat optimistic.

Anyhow, the MPs will do what they do, and they will be accountable for what they do, or don't do. But, for my part, I'm reluctant to pontificate about the treaty until I've seen it – and even then it will certainly take more than a few days to get fully to grips with it.

Mind you, I suspect that it wouldn't matter how long some of the MPs were given, they still wouldn't understand it – with the idiot Johnson in the lead. This is the man who, in his speech on Christmas Eve actually clamed, of the treaty that, "there will be no non-tariff barriers to trade".

Personally, I would put this down to lying – this, after all, is what Johnson does. But the man does have a history of having a very slender grip of the details, so it might be possible to concede that the prime minister has made a mistake.

Frankly, though, I would sooner he was lying. The idea that we have a prime minister, supposedly masterminding our future relationship with the EU, who does not understand the concept of non-tariff barriers is more than a little bit worrisome.

But there is difficulty in accepting the "mistake" thesis. Even Johnson doesn't write his speeches solo and, with a speech of the importance that he has just given, one would have thought that it would have been checked by Frost and high-level civil servants. And, while Johnson is pig ignorant, it cannot be the case that his senior staff share that ignorance.

If we widen the scope of our inquiry, and look at how the treaty is described elsewhere in official terms we see the UK's official summary which has some interesting observations to make about the Sanitary and Phytosanitary (SPS) Measures.

This Agreement, it tells us, "includes an SPS Chapter which ensures that the UK and the EU can maintain fully independent SPS rules to protect human, animal and plant life and health, preserving each Party’s right to independently regulate, while not creating unjustified barriers to trade. This is standard practice in free trade agreements".

This is all very anodyne and reassuring, with the comforting idea that the treaty is "not creating unjustified barriers to trade". It's not quite the same as saying "no non-tariff barriers to trade", but it's close to it.

Now compare and contrast the EU version which tells us in respect of the SPS regime, "UK food exports must have valid health certificates, and (phyto-)sanitary border checks will be carried out systematically".

If that isn't a definition of non-tariff barriers, I don't know what is. As much to the point, the checks carried out by the EU stand up to challenge when measured against the WTO SPS agreement, so they cannot be considered to be "unjustified barriers".

At our most generous, we could say that the British government is seeking to play down the nature of the barriers to which UK exports will be exposed. A more cynical soul might call this a lie by omission.

From the same EU document, we also see a section warning that UK producers wishing to cater to both EU and UK markets "must meet both sets of standards and regulations" and "fulfil all applicable compliance checks by EU bodies (no equivalence of conformity assessment)".

If the first part of the section is bad news, the second is extremely bad. This is confirmation that the UK has failed to secure a mutual agreement on conformity assessment. This means that the customs officers of EU Member States will be entitled (and, in fact, required) to test most UK manufactured goods for conformity with relevant EU standards.

The frequency of checks will be determined on the basis of risk assessment, but the further UK domestic standards diverge from those set by the EU, the higher the risk rating. British goods could be subject to complex and expensive checks, giving rise to considerable delays at the borders – and creating uncertainty on delivery time guarantees.

On a related issue, we have Johnson in his speech boasting that, "We have taken back control of laws and our destiny", and that, "We have taken back control of every jot and tittle of our regulation".

But, when we look at the official summary we see that the Agreement contains an "Annex on motor vehicles and equipment and parts thereof", which has as its aim "to eliminate and prevent unnecessary barriers to trade in motor vehicles and parts". It thus confirms that the Parties "will mutually recognise approvals based on UN regulations".

And so we see that the UK, like the EU is relying on UNECE and WP.29 to formulate motor vehicle and equipment standards, rather than the UK creating its own and seeking EU recognition. Far from taking back control of "every jot and tittle of our regulation", we are in exactly the same position we were before we left the EU, working to international standards.

The same, incidentally, goes for chemicals, where there are "joint commitments to comprehensive implementation of international classification and labelling rules". This, of course, is the "Globally Harmonised System" (GHS), another common standards system administered by UNECE.

Now we've got hold of the treaty proper, though, we're back on our heads with a vengeance. But, even with what we already do know, it is painfully obvious that 1 January isn't going to be a happy event for many businesses. And this is only the start.

Also published on Turbulent Times.



Richard North 26/12/2020 link

Brexit: the poverty of debate

09/12/2020  


Sometimes, I think the only thing worse than the legacy media not writing about Brexit (and related issues) is when they actually do. Their capacity to resort to trivia and misinformation is endless, the outcome being that they waste far more time than is gainfully occupied in learning about the subject.

I am reminded of the occasional programmes on the Discovery channel, featuring Australian gold prospectors. They have the fortune to be kitted out with high-power metal detectors which enable them to sift the nuggets of gold from the millions of tons of featureless soil presented to them. We could do with a similar device, but one which sounds off when worthwhile information is approached.

Occasionally, though, some of the drivel produced can have its uses, if only to reveal the depth of ignorance of its authors, such as this piece which gives us some insight into the intellectual poverty of our political classes.

The specific point here is that former chancellor George Osborne is commenting on the state of the current EU-UK trade talks, where he bemoans our departure from the "common market" (he means Single Market), which in his book illustrates that the economy "has been sacrificed to maintain the purity of sovereignty".

With this in mind, he then offers a finely-toned "suspicion" that, "our splendid isolation is an illusion, and that we’ll end up 'voluntarily' shadowing the EU rules and standards that we once helped shape". This is offered as if it was something new and profound, of such importance that it is given pride of place in the sub-heading to the piece.

When it comes to continued membership of the Single Market, I in turn have my "suspicion" that Osborne has forgotten about the speech he gave in April 2016 – two months before the referendum – in which he disparages what he calls the "Norway model".

Membership of the European Economic Area, he says, is where "you get access to part of the single market but you have to pay into the EU and accept free movement, without any say over either". And with that, he then gets Liz Truss to tell us that we would have to implement EU legislation but "we'd have no say over the rules".

This "pay, no say" meme was a classic, trotted out on many occasions by the government and the "remain" campaign, but now Osborne is displaying his own brand of "cakeism", asserting that, even without the "Norway model" we might still end up implementing EU rules.

It is a great pity that he didn't say so at the time, especially as he was sponsoring a Treasury analysis which sternly told us that, in order gain significant access to the Single Market outside the EU, "the UK would have to give up its current significant influence over EU decision-making and become a rule-taker rather than a rule-maker".

The thing is here that if Osborne really had the first idea of how the system worked (then and now), he would know that, in or out of the Single Market, the UK would to a very great extent be a rule-taker, in common with virtually every developed country in the world, and the EU itself.

This was picked up by Pete recently who cited John Braithwaite on Sovereignty and Globalisation of Business Regulation, (in: Alston & Chiam (eds) 1995. Treaty-Making in Australia. Globalisation versus Sovereignty. The Federation Press, Annadale, NSW). Braithwaite says:
In the world system, Australia is substantially a law-taker rather than a law-maker. This process of globalisation of regulatory law has been accelerated by the General Agreement on Tariffs and Trade (GATT). Thanks to GATT, our food standards will now, effectively, be set in Rome rather than Canberra or Sydney. The impact of the GATT is no more than an accelerant of what has been going on a long time.

For years, some of our air safety standards have been written by the Boeing Corporation in Seattle, or if not by them, by the US Federal Aviation Administration in Washington. Our ship safety standards have been written by the International Maritime Organisation in London. Our motor vehicle safety standards have been written by Working Party 29 of the Economic Commission for Europe. Our telecommunications standards have been substantially set in Geneva by the International Telecommunications Union.
Where there is a difference with the EU institutions and agencies is in the process being two-way, with the EU often influencing standards-setting bodies. This interaction is so prevalent that special terminology has been invented to cover it.

The EU is variously said to "upload" rules to, or "download" them from, international bodies. "Downloading" is defined as the incorporation of international "soft" rules (standards, principles, guidelines) into EU legislation. "Uploading" is the incorporation of EU legislation (or parts of it) into international regulation.

Nevertheless, as more and more issues are addressed at regional and global level, the EU is gradually outsourcing its regulatory agenda. More than 80 percent of the EEA acquis (and therefore the EU's Single Market legislation) falls within the ambit of existing international organisations and agreements, and is thus potentially amenable to this process.

In terms of detail, over 33 percent of the acquis comprises "technical regulations, standards, testing and certification". Much of this is implemented through standards bodies which will eventually emerge as ISO standards. Another 28 percent of the acquis comes into a category defined as "veterinary and phytosanitary matters". This includes compositional standards for food and food safety.

However, while the EU is able to influence the global regulatory agenda, so indeed can independent countries, with a piece I wrote in June 2013 illustrating how Norway was a powerful player in this respect, where its economic interests were involved.

It boils down to how much national governments are prepared to invest in the global system, with research money and sponsorship of institutions buying influence and the ability to shape standards long before they become law at EU or national level.

There is every reason why the UK might in the future become an influential global player, and it already plays an important role in the formulation of global financial regulation, particularly through the likes of the Basel Committee on Banking Supervision (BCBS), which produced the Basel III agreement which formed the basis of the EU's measures on the adequacy of banking capital, known as the CR IV Package.

The BCBS itself is a committee of the Bank for International Settlements (BIS), the latter established in 1930 as a bank under Swiss law. Its share capital is owned by 63 central banks, representing countries from around the world that together account for about 95 percent of world GDP. It is not, therefore, a governmental organisation and has no supranational powers.

Currently, it works alongside the G7 and "top tier" organisations such as the Financial Stability Board (FSB), together with the IMF, the World Bank and the OECD, to provide the template for banking law of global application. And an independent UK is an influential member of all these organisations.

In an evaluation of financial regulation in 2013, a House of Lords Committee found that when it came to EU banking laws, "it is likely that the UK would have implemented the vast bulk of the financial sector regulatory framework had it acted unilaterally, not least because it was closely engaged in the development of the international standards from which much EU legislation derives".

One might have thought that, as an ex-chancellor, George Osborne might have known this, but one is left wondering what he managed to learn during his period in office. It doesn't look as if it was very much, and what little he might have learnt he has clearly forgotten.

But when our political elites are so clueless about the way the world runs, it is not surprising that the Brexit debate has been so impoverished. What is alarming though is that these people are so lacking in knowledge that they don't even begin to realise the extent of their own ignorance.

Also published on Turbulent Times.



Richard North 09/12/2020 link

Brexit: fantastic moments

11/11/2020  


Following on from yesterday's piece, which mentioned the problems affecting food supplies to Northern supermarkets once the Northern Ireland Protocol takes effect, it seems this one is going to run and run.

Having seen the story in RTE, we're now getting it in the Guardian, which is running a headline which has Arlene Foster is telling the EU that there is no need for border checks on Northern Ireland supermarket food. Imports from big chains in Great Britain, she says, can be trusted post-Brexit.

This follows warnings from J Sainsbury and Marks & Spencer, which the paper ran earlier. These firms, we are reminded, are concerned that certain lines of meat, fish and dairy products may be restricted because of the checks that will be imposed on food and animals entering Northern Ireland from Great Britain from 1 January.

Repeating the elements of the RTE story, the DUP leader and Michelle O’Neill, the deputy first minster, said they have "urgently asked the EU to consider the serious implications and impact on our essential food and produce supply chains".

They argue that it is "simply not credible" to impose health checks at ports on "goods [that] are sterling packaged by well established companies", which pose "zero risk that they would use a backdoor" into Ireland and thereby the Single Market.

What makes this story especially interesting, however, is that the protests fly in the face of the Irish Protocol, which specifically applies the "official controls" to Northern Ireland, which makes such checks mandatory when shipped from the rest of the UK.

Now, it's almost as if Arlene Foster and Michelle O’Neill haven't actually read the Protocol, or understood the implications. Furthermore, they clearly have a very limited understanding of the nature of the EU's official controls if they believe that there can be any exemption.

But the ignorance seems to extend to well beyond the politicians, with Sainsbury's chief executive, Simon Roberts, saying that the trade needed something akin to a "trusted trader status" to help the free flow of goods.

This is the sort of BS one expects from Singham and his idiot cohorts, which I examined back in 2018 when the idea of the "Smart Border 2.0" was being touted. It was precisely then that a certain "customs expert", Dr Lars Karlsson, was suggesting that: "Checks under sanitary rules, a key regulatory area for agricultural trade, could be covered under the trusted trader arrangements".

As I remarked at the time, though, the man clearly had no knowledge of non-customs systems. The AEO "trusted trader" certification to which he referred was (and is) a customs system and has no bearing on sanitary or phytosanitary issues.

Crucially, the EU does not operate a preferential access system to BIPs (now BCPs) and under WTO rules, they are required to give access on the same terms, in a non-discriminatory manner, to all third country users.

This is the point that any number of the gilded commentariat seem to have problems understanding. The EU must treat all third countries the same. Once they start granting preferential access to individual countries, they will be obliged to grant the same concessions to all other countries – thereby prejudicing the integrity of the Single Market as a whole.

The nearest the EU gets to special treatment is in the New Zealand Agreement but, as I explain here, there are very special circumstances that apply (as well as to Canada).

But, what would not help Northern Ireland is that, while the agreements with New Zealand and Canada reduce the frequency of inspections, they do not eliminate them entirely nor remove the requirement for consignments to be presented to a Border Control Post for documentation checks and such physical checks as are required.

Currently, "official control" regulations for products of animal origin specify 100 percent documentation checks while fresh meat, fish products, whole eggs and certain other products require a 20 percent physical inspection rate.

For poultry meat and poultry meat products, milk and milk products, egg products and certain other products – including, for some strange reason, honey (or perhaps not) – the inspection rate increases to 50 percent. One out of every two consignments must be inspected.

It should be appreciated that the documentary checks include "identity checks", which means physically reconciling container or vehicle contents with the manifest. This can even require the opening of packaging and carrying out tests to confirm the products are as described - detecting horsemeat labelled as beef, for instance.

Nevertheless, the concessions made to New Zealand are substantial. Although 100 percent checks are still required, in most cases the physical inspection rate drops to two percent, and in some cases it is down to one.

However, this is no free pass. In fact, the "high purity" regimes adopted in New Zealand abattoirs are so stringent that no more than a handful of UK abattoirs (if that many) could meet the standard. It would certainly not apply to a mixed range of products of diverse origins.

Thus, Foster and her partner in crime are whistling in the wind, as is Mr chief executive Simon Roberts. The best they can get is a reduced inspection rate, although even that is going to be problematical as the BCP designated for Larne will not be completed for 1 January.

From the Guardian, we learn that the exact nature of these checks is still being discussed at the EU-UK joint committee tasked with implementing Brexit. This is chaired by Michael Gove and Maroš Šefcovic, a vice-president of the European Commission.

We are also told that a confidential update on talks suggests Gove and Šefcovic have yet to agree on the frequency of the checks and the requirement that every product coming in from Great Britain has a health certificate.

That much is unsurprising as the types of consignments, representing mixed loads with products from many different sources must present an administrative nightmare. As the products will be packed for retail sale, just the task of furnishing producer health certificates could prove extremely difficult – and expensive.

But what Foster and O’Neill simply can't get away from is that the regime they are confronting is written into the Protocol, which Johnson championed and the UK parliament approved. And, one might recall, when he signed it on 24 January this year, he described it as a "fantastic moment" for the country.

This was the document that would end years of "argument and division" and was a positive change for the UK. Said Johnson at the signing, "We can now move forward as one country – with a government focused upon delivering better public services, greater opportunity and unleashing the potential of every corner of our brilliant United Kingdom, while building a strong new relationship with the EU as friends and sovereign equals".

Now we see the practical implications of this "fantastic moment", the United Kingdom isn't looking so "brilliant", when Mr Sainsbury can't even send a truck-load of goods to his shops in Northern Ireland.

And come 1 January, if not before, I suspect there will be a lot more surprises, but very few of Johnson's "fantastic moments".

Also published on Turbulent Times.



Richard North 11/11/2020 link

Brexit: the Commission view

03/09/2020  


An unusually long address by Michel Barnier – this one at the Institute of International and European Affairs in Dublin - serves to set out the Commission's view of the final stages of the "future relationship" talks between the UK and the EU.

He starts with reminding us that that we are now less than four months away from 1 January 2021, the date chosen by the UK for its "economic and commercial Brexit", after the "political Brexit" in January this year – a date arrived at because the UK refused any extension of the transition period.

In another statement of the bleedin' obvious, he tells us we have no more time to lose. A final agreement must be reached by the end of October if there is to be a new partnership in place by 1 January 2021. This is the only way to give enough time to the European Parliament and the Council to have their say. Everyone, everywhere, says Barnier, 'must be realistic about this strict deadline'.

Even then, the "economic Brexit" will have negative consequences – many negative consequences. But, Barnier says, "if we all act responsibly, we can contain some of those consequences". As to the current negotiations, Barnier stresses that the EU wants a close partnership with the UK - provided the conditions are right. But, so far, the UK has not engaged constructively on those conditions. He repeats, therefore, that he is 'particularly worried - and disappointed - by the UK's lack of engagement on three points'.

For his first point, we are told that, since the start of these negotiations, the UK has refused to engage on credible guarantees for open and fair competition. Yet, the EU has been clear from the very beginning that any trade and economic partnership – between economies as close and interconnected as the EU and UK - must include robust and credible mechanisms to avoid trade distortions and unfair competitive advantages.

This is particularly important, Barnier adds, in the area of state aid, where the potential to distort competition using subsidies is significant. And a level playing field that ensures common high standards - in areas such as labour rights and the environment - and with effective domestic enforcement and dispute settlement mechanisms, is the only way to start a new relationship between the EU and the UK on a firm and sustainable footing. Furthermore, this is also what Prime Minister Johnson agreed to, explicitly, in the Political Declaration last year.

The second point is that, since the start of the negotiations, the UK has not shown any willingness to seek compromises on fisheries. And contrary to media reports this week, the UK government's position has not evolved in past months. No new legal texts have been tabled by UK negotiators.

In a damning comment, he then says that, where the EU has shown openness to possible solutions, "the UK has shunned our offers". Yet the UK government's position would lock out Ireland's fishermen and women from waters they fished in long before Ireland or the UK joined the European Economic Community in 1973 - and of course, the fishermen and women of many other EU countries. That, says Barnier, is just not acceptable.

He says the EU fully understands and respect that the UK will become an independent coastal state, outside the Common Fisheries Policy. But it will not accept that the work and the livelihoods of these men and women be used as a bargaining chip in these negotiations.

Any solution, he says, must ensure a balance between further developing the activities of British fishermen and women, safeguarding the activities and livelihoods of European fishermen and women, and preserving natural resources. Without a long-term, fair and sustainable solution on fisheries, there will simply be no new economic partnership with the UK, he then tells us.

In Barnier's third point, he has it that, since the start of these negotiations, the UK has been extremely reluctant to include any meaningful horizontal dispute settlement mechanisms in our future agreement. Yet, this is the only way to ensure that what the parties eventually agree on is respected.

And on all these issues, Barnier says, we are simply asking to translate the political engagements taken in the Political Declaration into a legal text - nothing more, nothing less. Speaking like a teacher marking a recalcitrant pupil's work, he adds: "Yet, on all these issues, the UK side continues to disappoint".

And yes, the EU knows well the UK's argument. It wants a clean break from the EU, full sovereignty, and the freedom to set its own rules and spend its money as it wants, with no constraints from Europe. And it is for all these reasons, apparently, that the UK insists it cannot commit to a level playing field or to basic safeguards for our future relationship – not even when it comes to fundamental rights.

On the other hand, British negotiators are still seeking continuity in many areas. That is not a "clean break" at all. On transport or on energy trading, on its role for conformity assessments for goods, and on many aspects of police and judicial cooperation, the UK government is still looking to keep the benefits of the EU and of the Single Market, without the obligations.

Wearily, Barnier remarks that the UK often claims it would be in the EU's interest to grant it a special status in these strategic areas of cooperation. But this is evidently not the case, and hardly in the EU's long-term economic interest.

For instance, he says, British proposals on rules of origin would help the UK to develop its role as an assembly hub for the EU. They would allow the UK to source goods from around the world and export them, with very little alteration, to the EU, as British goods: tariff- and quota-free.

British proposals on road transport would allow British truckers to drive on EU roads without having to comply with the same working conditions as EU drivers. The UK's proposals on air transport would allow British airlines to operate inside the EU without having to respect the same labour and environmental standards.

In the area of energy, he complained, the UK is asking to facilitate electricity trade without committing its producers to equivalent carbon pricing and state aid controls. In this area, as in others: without a common framework on state aid, the UK government would be free to hand out subsidies at will.

Furthermore, any such support would not be confined to the green economy, but also polluting industries – and not just industries of the future, but also traditional sectors, such as steel and automotive – before exporting these, tariff and quota-free, to EU markets.

How, Barnier asks, can we conclude a long-term economic partnership agreement – between sovereign partners – without knowing which system of state aid or subsidies the UK will put in place, or without any assurances that the UK will not use its new regulatory autonomy to distort competition with us in the future?

There is no issue, he says, with regulatory divergence – unless this distorts competition. Then, he says, "we have a problem", as in the food sector. Here, not only is the UK looking to go back on protections for Geographical Indications secured in the Withdrawal Agreement, it has also given no reassurance on the future sanitary and phytosanitary regime that the UK will apply after 1 January 2021. Again, he asks, "How can we make progress on sanitary and phytosanitary issues when we have no idea how the UK's system will evolve?"

But even with an ambitious future partnership with the UK – which would help limit the negative impact of Brexit - there will be big changes on 1 January 2021. On that date, the UK will leave the Single Market, the Customs Union, all EU policies, and all of the EU's international agreements.

On that date, therefore, customs formalities will apply to all imports and exports with the UK. The EU will no longer recognise UK type-approvals for cars, and financial institutions established in the UK will lose the benefit of the EU's "financial passports". No trade agreement – no matter how ambitious – can change this.

Yet, for all that, Barnier continues to think that Prime Minister Boris Johnson wants an agreement with the EU. This is also the wish of Presidents Ursula von der Leyen and Charles Michel, the European Parliament and the 27 Heads of State or government. Thus, the EU will do everything in our power to reach an agreement, until the very end. But, he warns, we will not sacrifice – never sacrifice – the EU's long-term economic and political interests for the sole benefit of the UK.

In past months, he avers, "the EU has repeatedly shown flexibility and creativity to work with the UK's red lines: on the role of the European Court of Justice, on preserving the UK's legislative autonomy and on fisheries". It is time, he says, for the UK to reciprocate on those issues that are fundamental for the EU.

And with that, Barnier announced that he would be be back in London next week for the eighth negotiating round. After that, he sincerely hoped to be able to tell a story of real, tangible progress in all areas.

Don't hold your breath.

Also published on Turbulent Times.



Richard North 03/09/2020 link

Politics: independence day

13/06/2020  


The Times has caught up (paywall) with yesterday's story about the government's plans to waive border checks on incoming goods, come the beginning of next year when the transition period ends. Apparently, it isn't quite the free-for-all that might have been imagined. The government is planning to phase the implementation of controls, with three "waypoints": January, April and July.

From January, full customs checks and tariffs will be applied to what are known as "controlled goods". These include alcohol, tobacco and firearms. For other goods, importers will have up to six months to submit completed customs declarations and to pay any tariff that they have accrued. There is no general payment waiver, and records will have to be kept.

There will also be limited phytosanitary checks, but these will only apply to live animals (which will, presumably, take in pets) and high-risk plants. The health checks will be widened out in April, when all products of animal origin including, meat and meat products, pet food, honey, milk or egg products will have to pass through inspection points. Pre-notification will be required and, one presumes, fees will be payable.

After six months, starting on 1 July, the government then intends to make all goods subject to customs declarations at the point of importation, with tariffs payable on entry. The levels have yet to be settled.

The more immediate story though, is that Michael Gove (also paywall) has formally told Maros Sefcovic, an EU Commission vice-president, that there will be no extension to the transition period.

This actually came from Sefcovic himself at the European Commission in Brussels, from whom we learn that the Chancellor of the Duchy of Lancaster "could not have been clearer" in his formal notice to the Commission. Apparently, "he explained this was the promise that was given to the British citizens in the electoral campaign".

"[He] was", Sefcovic said, "very clear, unequivocal on the fact that the UK is not going to seek the extension and because this was the last joint committee before the deadline expires we take this decision as a definitive one". And, with that, he made a plea for "acceleration of work on all fronts".

Gove himself has confirmed the news, saying: "We have informed the EU that we will not extend the transition period. The moment for extension has now passed".

This, of course, means that the UK needs to make preparations to implement the Irish protocol, the agreed controls on goods crossing the Irish Sea, of which at the moment there are few signs of readiness. Sefcovic wants more details from Whitehall on its plans. A UK command paper was "long on aspiration but short on detail", he says.

Unsurprisingly, Michel Barnier is on the case. "We must now progress on substance", he tweeted as it was confirmed the end of June deadline would expire without a request for an extension.

It is now down to Johnson and three presidents of the major EU institutions to set the pace in their virtual meeting on Monday, with a programme of intensified negotiations arranged for July. A Downing Street spokesman is telling us that, "This new process will involve a mix of formal negotiating rounds and smaller group meetings, both in London and Brussels".

The joke of the moment, though, is the UK government statement which declares that, on 1 January, "the UK will regain its economic and political independence", making out that these words actually have any meaning.

Clearly unaware of the irony, the government had churned this stuff out just as the ONS reported that April's GDP dropped 20 percent on the previous month, effectively wiping out 18 years of economic growth. Together with March's figures, total value is down more than a quarter.

This is the "economic independence" of the poor house, where the government is now slave to the cold winds of a global economic recession that could well drag out into a prolonged depression which could redefine global politics as well.

In fact, the OECD forecast for the UK is a 14 percent contraction of the economy on the year. Technically, if we get sustained recession for two or more years, or a decline in real GDP of at least ten percent, that is a depression. Arguably, we are already in depression territory.

Despite that, Johnson is burbling about a "bounce back", apparently planning on driving a consumer-led boom, with a visit to the high street in his first public appearance since the start of the lockdown. That is what it has come down to: a prime minister telling people to buy stuff from shops.

The experience, as The Times has discovered, may be shopping, but not as we know it, Jim. If you want to try on a pair of shoes at Kurt Geiger on Monday, it says (not that I would know what that is) "the assistant will first snap on some blue plastic gloves".

Then, the paper tells us, "You have to sanitise your hands, put on disposable socks and quite possibly queue to be seated. If the assistant has chosen to wear a mask as well as gloves, you will find that you are being served by someone who looks like a dentist". I suppose, if you are lucky, you might be able to get some quick root canal treatment on the side.

Here, the obvious point is that, as long as social distancing and other Covid measures are in place, there can be no normality about retail sales and, without that normality, there won't be the volume that is needed to drive a recovery. And then, with the economic uncertainty, ordinary people would be mad to spend on anything other then essentials, much less take on additional debt.

As for politics, over the last weeks or so, the government seems to have ceded its independence to the mob, with the authorities boarding up statues and, in London, boxing in Churchill and the Cenotaph. If that's what political independence looks like, then Churchill lived in vain.

The sorry part of this, though, is that the free trade mantra, so beloved of the Tory headbangers, begets interdependence. That word, believe it or not, means that we all depend on each other – the global village and all that. It is the very antithesis of independence, unless that is defined incredibly narrowly.

And that, for the time being, is the game the Tories are playing. As it stands, the practical implication is that we must open our country to the free flow of goods, with no significant border checks, thus exposing us to a torrent of sub-standard products and counterfeit dross. We are so "independent" that we are unable to do it any other way.

Thus, we are not so "independent" that we are able to take total control of our own border controls. We must simply be content with the idea that, if we were able, we would not have to coordinate them with our nearest neighbours in order to maximise efficiency and ensure the free flow of goods.

Instead, we have to phase them in to match practical realities, with much of the planning on a wing and a prayer, as there are no facilities at many of the ports to make the intended checks, and no provision for financing the infrastructure. Many of the smaller ports will die.

Independence, therefore, amounts to conferring on ourselves the "freedom" to have our imports and exports massively disrupted, at considerable extra expense. And while our politics are similarly constrained, our economy goes further down the drain.

No doubt, this will all come out in the wash. In a decade or so, additional border controls will have become the new normal, and new generations will grow up never having known any different. But one cannot help think that we will have lost something.

In this context, "independence" also means the freedom to cooperate with our neighbours. The original objections were to membership of the EU, as a supranational construct. Nothing in the book said we had to be different, just for the sake of it. That's not what independence is about.

Thus, in the hands of this government, it looks as if "independence day" is going to be a bitter-sweet moment – fine in theory but totally mangled in practice. 

Also published on Turbulent Times.



Richard North 13/06/2020 link

Brexit: treaties for dummies

28/02/2020  


It was a matter of singular ill-timing that, at the very moment the Johnson administration produced its own White Paper setting out its negotiation mandate on the forthcoming "future relationship" talks, the UK's Appeal Court issued its judgement on the government's approval of a third runway at Heathrow Airport.

On the one hand, we have the stern declaration in "The UK’s Approach to Negotiations" that, "Whatever happens, the Government will not negotiate any arrangement in which the UK does not have control of its own laws and political Life".

On the other, we have a British court ruling that the government's action on Heathrow is "illegal" (actually "unlawful") in that it produced its Airports National Policy Statement (ANPS) without taking into account the Government’s commitment to the provisions of the Paris Agreement on climate change, concluded in December 2015.

Specifically, the commitments on climate change require that the reasons for the policy set out in the ANPS "must … include an explanation of how the policy set out in the statement takes account of Government policy relating to the mitigation of, and adaptation to, climate change".

Thus, we have a very clear instance of where the government is not master in its own house, having to defer to provisions of an international treaty, duly signed and ratified. As per the Vienna Convention on the Law of Treaties (Article 27), a party (in this case the UK government) "may not invoke the provisions of its internal law as justification for its failure to perform a treaty".

In that context, the Johnson administration's search for "a relationship based on friendly cooperation between sovereign equals, with both parties respecting one another's legal autonomy and right to manage their own resources as they see fit", is something of a chimera.

Through innumerable international treaties, of which the Paris Agreement is only one, the government has ceded its legal autonomy and is bound by the provisions to which it has agreed. Insofar as sovereignty is involved, as long as the government retains the power to cede from, or otherwise abrogate an agreement, that elusive quantity is upheld.

It is quite remarkable however, that the entire media corpus has seemingly failed to put two and two together, and remark that the Heathrow judgement shows the government to be chasing after a fantasy in respect of the forthcoming EU negotiations.

Every single international agreement of any substance – and certainly a "future relationship" agreement with the EU – will to an extent curtail the government's "legal autonomy" (I think they actually mean "legislative autonomy"). To demand a treaty that has no impact in this respect is to ask the impossible.

Looking at the government's White Paper in the round, Pete has produced a useful analysis which goes some of the way in identifying specific flaws in a poorly framed strategy. Amongst other things he points out, "if you want total regulatory independence, don't live directly next door to the number one global regulatory superpower".

Yet it is that drive for regulatory independence which seems to dominate the White Paper, with an almost plaintive plea that the EU should accord the same terms found in the EU-Canada Agreement (CETA), without apparently having a very clear idea of what is involved in that Agreement.

No more is this so obvious as when it comes to the government's strictures on Sanitary and Phytosanitary (SPS) Measures. There it not only wants to "build on the WTO SPS Agreement in line with recent EU agreements such as CETA", but it also calls in aid the EU-NZ Veterinary Agreement, looking for an equivalence mechanism.

One is almost embarrassed for the government, by the sheer amateurishness of its approach. One squirms inwardly, praying that our negotiators really are not as gauche as this document indicates, and that they are far better informed than its authors.

When it comes to CETA, therefore, one hopes that they are familiar with Annex 5-D, which sets out "guidelines to determine, recognise and maintain equivalence". There, they will find that the criteria for the determination and recognition of equivalence are "to be agreed at a later stage".

In other words, there is no formal recognition of equivalence in CETA. As far as exports to the EU are concerned, as Canadian meat producers are finding, "equivalence" means full conformity with EU requirements.

As to the references to the EU-NZ Veterinary Agreement, this really shows up the amateurishness of the UK approach. There is indeed an allowance for "equivalence" between EU and NZ law, but it is not equivalence as we know it - and definitely not something our producers would be particularly happy about.

What it means in practice is that New Zealand has, in theory, the freedom to make its own domestic law in any way that it pleases. But, when it comes to exporting animal products (which is the substance of the Agreement), it must accommodate all the requirements set out in EU law.

Inasmuch as it is extremely inconvenient (and expensive) to produce to multiple legislative codes, the way New Zealand achieves this is by shadowing EU law – even to the extent that every time the EU changes its law, NZ enacts new laws to include the new requirements.

Thus, the "equivalent" law is only equivalent as long as it shadows EU law, and even then animal products still have to be submitted on entry to the EU to a BIP (BCP) for inspection, albeit at a reduced rate, with reduced inspection fees.

Basically, goods to be exported to the EU must satisfy a regime of domestic law plus EU add-ons. Producers thus have to conform to the baseline NZ law, but to that are added more detailed (mandatory) requirements, laid down in what are called the EU Overseas Market Access Requirements (EU-OMAR) – the details of which are actually confidential.

It is not the case, therefore, that NZ domestic law is regarded as "equivalent". The local laws are modified and added to until they have exactly the same effect as EU law. And, in any event, there is certainly no question of mutual recognition. The EU effectively converts "equivalence" into meaning "the same".

These small examples, however, illustrate the difficulties in properly critiquing the government's efforts. The devil, as always, is in the detail – a level of detail which is not only far beyond the capability of the media, but outside the scope of most of the self-appointed "experts" which form the favoured claque which feeds the media.

Another example is the White Paper's views on the UK and the EU establishing a Bilateral Aviation Safety Agreement (BASA). This, the White Paper says, " will facilitate the recognition of aviation safety standards and regulatory cooperation between the UK Civil Aviation Authority (CAA) and the European Union Aviation Safety Agency (EASA)".

But what this doesn't recognise is that the UK's system of aviation safety regulation has largely been dismantled, as authority has been ceded to EASA. Thus, the UK aerospace industry body ADS, has said it would take approximately 5-10 years for the CAA to rebuild its safety regulation capability to take over from EASA.

That the UK can therefore stand as a "sovereign equal" with the EU, with the "right to manage their own resources as they see fit", is sheer wishful thinking. In aviation and in so many other areas, we have lost much of our domestic legislative capabilities and are entirely reliant on the EU to manage our legislative processes.

But most of all, as we see from the White Paper – with its references to the WTO's TBT and SPS Agreement, to the World Customs Organisation (WCO) and even the WP.29 UN Regulations hosted by UNECE, for vehicle safety and environmental protection – a huge amount of what we implement in this country is already determined by international agreement, handed down via the EU.

In terms of chemicals, the White Paper even talks of cooperation between UK and EU authorities, including on implementing the Global Harmonised System of Classification and Labelling of Chemicals – which is, of course, a UN initiative, administered by UNECE.

In future, international agreements are still going to dominate our regulatory processes, and in regaining our notional "independence", we are increasingly going to discover the "double coffin-lid" phenomenon, as we find that many of the apparent EU provisions have been established at a regional or global level.

An almost complete failure of the White Paper to recognise or understand this dynamic rather illustrates that the Johnson administration is out of its depth. With the likes of Johnson having spent years railing against "EU Rules", he and his fellow travellers have simply failed to realise how much the world has moved on.

When we have Gove, therefore, telling us that, "As a sovereign, self-governing, independent nation", we will have "the freedom to frame our own laws …" and "determine our own trade relationships", he is in cloud-cuckoo land.

Yet these are the dummies who are set to negotiate a new trade treaty with the EU. They haven't a clue, and the EU negotiators will take them to the cleaners. It looks as if our lot have some reading to do (illustrated).



Richard North 28/02/2020 link

Brexit: the mandate has landed

26/02/2020  


Sometimes, the smallest clue can give a quite disproportionate insight into the game of an opposing player – like the "tell" skilled poker players might rely on to guide them in their bidding.

So here we have, at last, the EU's mandate for the forthcoming negotiations, a document which does more than simply set out the Union's position. It also gives an insight into the thinking of the "opposing team" – if that's the way you want to think of them, and some idea of capabilities and skills.

For some time now, I've been coming to the conclusion that the intellectual capacity of the EU – as a collective – is declining. We're past the stage where the founding fathers and their immediate successors had a close grip on issues, and a real understanding of the nature, the aims and the objectives of the Union.

We've now got to the stage where we're dealing with apparatchiks, little more than jobsworths, who are in it for the power and prestige (and the money), but who do not have that deep-rooted understanding of their roles which can only come with conviction and emotional empathy.

This has become apparent in the recent past, where even the Commission has confused in its own rhetoric the difference between its Customs Union and the Single Market, and when we have a body which has lost sight of the definition of its own functions, we have an institution which has lost its soul.

And so to the "clue" that is going to give us an insight into the thinking of the EU's negotiating team, to be found in paragraph 30 of the mandate, which deals in depth with the sanitary and phytosanitary (SPS) provisions which will form a crucial part of our trading partnership with the EU.

In the area of SPS, the mandate says, "the envisaged partnership should build on and go beyond the WTO Agreement on SPS measures, with the objective of facilitating access to each Party's market while protecting human and animal health, as well as plant health", then going into some detail as to the scope of the agreement.

All this is fair enough, especially as it asks that the SPS provisions "should respect Union rules and take into account the respective international standards, guidelines and recommendations of the International Plant Protection Convention (IPPC), the World Organisation for Animal Health (OIE) and Codex Alimentarius".

If we were looking for something that approximated CETA, that's almost what we've got. In that agreement, the EU is looking for compliance with an amalgam of Union and international standards, and since most EU standards are in any case based on those international standards - to which the UK also subscribes - there should be no great hardship in agreeing to the thrust of the proposals.

But there is one crucial difference between what CETA sets out, and what this mandate is angling for. This we see towards the end of paragraph 30, where it states that: "The envisaged partnership should uphold the application of the precautionary principle in the Union as set out in the Treaty on the Functioning of the European Union".

Now speaking personally, as something of an expert in the field of food safety, I have no great hang-ups when it comes to the application of the precautionary principle, as long as it is applied properly by people who know what they're doing.

And, in the context of food safety, the Commission's views are a model of its kind – despite now being published twenty years ago – predicated towards guiding legislators and those responsible for framing standards in the dark arts of risk management, especially where there are elements of uncertainty.

But the perspicacious reader will note that the reference offered is to a communication from the Commission, which falls far short of being a treaty provision. And yet, the mandate, in this case dealing with SPS provisions, refers to the precautionary principle "as set out in the Treaty on the Functioning of the European Union".

In fact, in the TFEU, there is only one reference to the precautionary principle, and that is in Article 191, where it deals with the environment. For the mandate then to apply this to SPS provisions is to extend the Treaty into areas that it doesn't venture.

At best, this is an error. At worst – and we are probably in that territory – there is an underlying political agenda. The precautionary principle has been used in the EU to justify the prohibition of genetically modified crops (GMOs), so the inclusion of this reference is probably a coded indication that the EU will be looking for a similar prohibition in the EU-UK agreement.

Either way, this is an indication that we are not dealing with the "top team". The inclusion of a non-existent treaty reference is shoddy, and suggests that we are dealing with people who are not entirely on top of their brief. And that is useful information to know, even if "Team UK" is similarly lacking.

The thrust of the mandate also suggests that it is going to be details, such as agreement on GMOs and fishing, that will be be the battleground. There is no rigid demand for regulatory alignment, and nothing that could be construed as requiring "dynamic alignment". In these areas, the mandate is eminently reasonable, following largely along the lines of existing "new generation" treaties.

For sure, the envisaged partnership "should include an ambitious, wide-ranging and balanced economic partnership", but this is conditional on there being "sufficient guarantees for a level playing field so as to uphold corresponding high levels of protection over time".

However, according to Part 15 of the mandate, commitments should be "commensurate with the scope and depth of the overall envisaged partnership and the economic connectedness of the Parties". Essentially, the more you give, the more you get.

Nevertheless, within hours, No.10 Press Office was on the case, protesting that the UK was determined to protect "its own legal autonomy". The EU, it said, had respected the autonomy of other major economies around the world such as Canada and Japan when signing trade deals with them, adding: "We just want the same".

By way of comparison, it asserted that the EU had been willing to offer the US zero tariffs without the kind of level playing field commitments or the legal oversight they had put in the mandate, quoting Paragraph 36 on trade and competition from the TTIP mandate of 2013.

In general terms, this merely stated that the agreement "should aim at including provisions on competition policy, including provisions on antitrust, mergers and state aids", and "address state monopolies, state owned enterprises and enterprises entrusted with special or exclusive rights".

Game, set and match, you might think, except that the selective quoting leaves out Paragraph 36 on "trade and sustainable development". This declares:
The Agreement will include commitments by both Parties in terms of the labour and environmental aspects of trade and sustainable development. Consideration will be given to measures to facilitate and promote trade in environmentally friendly and low carbon goods, energy and resource-efficient goods, services and technologies, including through green public procurement and to support informed purchasing choices by consumers. The Agreement will also include provisions to promote adherence to and effective implementation of internationally agreed standards and agreements in the labour and environmental domain as a necessary condition for sustainable development.
If one compares and contrasts this with the Political Declaration, we see that Johnson has already agreed that the future relationship "must ensure open and fair competition, encompassing robust commitments to ensure a level playing field", while the adherence to international standards is a feature common to TTIP, the Political Declaration and this newly published mandate.

Essentially, there isn't a fag paper's difference between the phrasing of the EU-UK and the TTIP mandates. As to the Declaration, it goes on to say that "the precise nature of commitments should be commensurate with the scope and depth of the future relationship and the economic connectedness of the Parties", a phrasing that is almost identical with the mandate phrasing. This states that commitments should be "commensurate with the scope and depth of the overall envisaged partnership and the economic connectedness of the Parties".

Thus, if the UK is looking for ways to sabotage a deal, blaming the EU for its "intransigence" as the excuse for failure, it will have to go beyond the ritual protests about the level playing field, so volubly rehearsed by the fanboy gazette.

The EU, basically, is playing it straight when it comes to level playing field conditions. These follow closely the lines set in the Political Declaration and are part of every treaty negotiation it has entertained since it embarked on its "new generation" programme.

The UK is being treated no differently than Canada, Japan nor any other country in this series. Furthermore, there is no quantum difference between these provisions and the sort of conditions that apply between the US and Canada in CUSMA.

If there are to be sticking points, these are going to be found elsewhere in the mandate, which has enough traps to keep negotiators busy for more time than there is available to settle the deal. These we will have to address in another post.

In the meantime, à propos yesterday's post, we are seeing a serious escalation in the coronavirus crisis, with cases having been reported from across Europe. Italy, Spain, Austria, Switzerland and Croatia are in the firing line.

There is a real possibility now that the hitherto separate issues of the putative pandemic and Brexit begin to collide. In the uncertainty created by current developments, no plans for the immediate future can be taken as read.



Richard North 26/02/2020 link
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