Richard North, 22/05/2016  
 


In terms of constructing a coherent case for leaving the EU, my last four blogposts have done nothing if not demonstrate quite how slender the case is, and how so many are pursuing the wrong issues for quite the wrong reasons.

The trigger point in the recent posts is the idiot Johnson and his particular aversion to the EU's "banana regulations", reflecting a more general rejection of regulation which, in some cases, seems to verge on visceral hatred.

And this, in my view, is where many the "leave" campaign have got it badly wrong, in looking to Brexit as an opportunity to divest ourselves of the huge amount of regulation that has come our way as a result – directly or indirectly – of EU membership.

In this blogpost, therefore, I'm going to look a little more closely at this error and then, when I've finished, I'm going to suggest areas on which we should be concentrating, giving chapter and verse as to why they are so important.

Firstly, turning to the issue of regulation, one of the biggest problems we have – or so it seems to me – is the one-dimensional view of the subject. There is a tendency to declare all regulation "baaaaad", without being able to recognise that there are many different types of regulation, devised and applied for very different reasons and in very different ways.

Depending on the variables, a class of regulation – or even individual regulations – may be either good or bad, helpful or harmful. There are few absolutes. Rarely is regulation wholly bad, and much of that which is applied is helpful and benign.

In this context, it would help if critics devoted a little more time and effort to understanding the basics of regulation and how some of it works – especially that raft of legislation related to the Single Market, to which so many people are objecting.

Here, the discussion so far on the rules covering the marketing of fruit and vegetables has been helpful although – to judge by some of the comments - we're very far from any universal understanding of the nature or role of this group of laws.

What is not always appreciated is that there is no uniform regulatory model that applies across the product spectrum. Some products merely rely on what is known as a general marketing standard GMS), a group of non-specific principles which determine quality parameters. Other products also rely on the GMS, but this is defined by a very detailed UNECE standard. Still others rely on Codex standards and, for a very few, there are specific EU standards. Then, some of the standards apply only to goods traded internationally while others apply to domestic (intra-community) trade as well.

As regards the banana standard, this is an unusual one. It remains in force as an EU regulation but applies only to the internationally traded product. It has no application in domestic trade.

Furthermore, the actual standard is not at all onerous. It is exactly what one might draw up as a basic specification for a good quality product, and presents no great challenge to the grower. But then what so many people miss is that the standard is there to protect the grower. As long as the product meets the standard, it cannot be excluded from the EU market on technical grounds. In other words, neither the EU nor a member state can impose arbitrary standards, or any in excess of the posted standard.

Then, as UNECE points out, standards help in other ways. A buyer can order fruits and vegetables from a producer or trader on another continent, sight unseen, and be confident to receive what was ordered. Because everybody is working to the same (known) standard, this can be certified by national inspection agencies at export, .

The crucial thing is that we have a uniform global standard. As we see from a World Bank study, the biggest handicap for developing world exporters is differences among standards. This is regarded as the most serious problem of all.

This particular type of regulations, therefore, facilitates trade. The mandatory marketing standard makes preparing produce for export easier and, once it is despatched, growers and shippers know that, as long as they have valid orders from their destination countries and meet the technical standards, their products will be admitted and they can claim payment for their goods. That certainty is what underwrites free trade.

Some will (and do) argue that there is no need for a mandatory standard - that this is a matter for traders to agree between themselves. But free-for-alls never work. Standards end up being used for market manipulation, becoming non-tariff barriers which exclude products from specific markets.  

However, it is also the case that no one standard is good for all time. Those which specify pesticide limits are particularly contentious and, where standardisation is lacking, these can constitute real barriers to trade as farmers struggle to meet differing MRLs (Maximum Residue Limits) for the same products.

The World Bank study (cited earlier) reports considerable problems in this respect, where pesticides in use may not registered in the country of destination. The difficulty is that it is not always possible to select the correct pesticide as the country in which the final product will be sold is not always known until after harvest.

For importing countries determined to promote trade in developing countries, therefore, it is essential that standards are devised and revised with utmost sensitivity and flexibility. This is not always the case with the EU. It has, for instance, been a particular problem with produce in Kenya (and in many other countries). Unarguably, the standard is a double-edged sword.

This situation is partially mitigated by the increasing tendency of limits and marketing standards generally to be set at international level. And while, as regards its Member States, the EU has exclusive competence over trade policy, there is an important loophole which still allows Member States some degree of independent action.

Examination of this takes us into the area where, I believe, we should be concentrating, and which provides one of the most powerful reasons as to why we should leave the EU.

To understand quite how important it is we must, for one moment, step back and look at the root of the European Commission's power. This stems primarily from its monopoly of initiative. Only the Commission can propose a new law, and since any existing law can only be repealed by a new law, the Commission is also able to protect the acquis from attempts to weaken it.

At international level, though, the situation is different in some important respects. Since the Lisbon Treaty, the EU has its own legal identity and power to make agreements with international organisations in its own right. It is gradually seeking to upgrade its role as a global actor.

But, while it is a founder member of the WTO and has become a voting member of the Food & Agriculture Organisation (FAO) - and has signed up to a new strategic partnership - it lacks the all-important right to submit items for consideration on the agenda.

Similar restrictions apply to the EU in respect of its dealings with most other international organisations, which means that the greater powers are still held by Members States. And, while the treaty requirements of "solidarity" and "cooperation" require Member States to agree "common positions" with the Commission, and to vote in support of them, the Member States are still able to decide the agenda. At this point, therefore, they can still force change on a reluctant Commission.

The surprising thing is that Members States do have a considerable level of residual power - more so the UK, which is a full member of many international bodies, to which the EU is only an observer, with very limited rights.

But the writing is on the wall. Through what is known as the Barroso-Ashton Strategy (see also Annex 1), intervention by the Council, and multiple interventions by the ECJ (including this one) the EU is seeking gradually to trim the powers of Member States at international level, and extend its own.

In the longer term, therefore, the UK – along with other Member States – will progressively lose its ability to influence the agenda, becoming even more subordinate to the EU institutions.

This brings us to the key issue. The obsession of the "leave" campaign to cut regulation is entirely misplaced. Much of the regulation of which people complain is benign, and would be kept whether we are in or out of the EU. What really matters is our ability to influence the legislative agenda at global level. We need to be able to get rid of that which is bad, to improve the mediocre and to support and extend the good.

The point is that, to some some extent, as long as we retain some residual powers, we can still do this. But our powers are on the wane, and the longer we are in the EU, the weaker we will get. The only way we can maintain (and extend) our power at the global level is to leave the EU.

And that is why we must vote leave on 23 June.






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