Richard North, 12/01/2017  
 


If anyone needs to know what a "bubble" is, they need only go to Conservative Home, where one can be seen in action – defining its own ignorance by the voluntary exclusion of information. The core example is Paul Goodman's piece, asserting of the Brexit negotiations: "If May wants a good deal, she must be prepared to walk away – and mean it".

This fatuous trope is one which has been floating around the fringe of Westminster politics, much-loved by the Tory right which is convinced that there is no great peril in relying on the WTO option, despite the growing body of information to the contrary.

The immediate definition of the bubble comes with CH's treatment of the debate on Liechtenstein, the EEA and freedom of movement. For the sake of convenience, we can take the opening shot in the debate as this piece published in late June, just after the referendum.

Despite the best attempts at sabotage by the BBC and others, the thesis survives and, in recent days we've been getting indications that it is being taken very seriously by some MPs and in Whitehall.

We did not see it is a coincidence, therefore, when Christopher Howarth popped up on Conservative Home with a spoiler. Howarth is Steve Baker's gofer and the researcher for the European Research Group of right-wing MPs, a group dedicated to pursuing a "hard" Brexit.

There follows my comprehensive demolition of his ill-researched and sloppy work – which fails to refer to my original work and offers a distorted version of it. But this has completely ignored by CH, which treats EUReferendum.com as if it doesn't exist.

Instead, we get CH editor, Paul Goodman, tell us that the non-negotiable baseline of Theresa May's Brexit negotiating position is that we must regain control of our borders. This means, he says, that we will no longer be members of the Single Market, since membership is incompatible with such control, "as Christopher Howarth explained yesterday on this site".

What now comes over is that, as far as Goodman is concerned, the matter is settled. Their favoured analyst has pronounced on it and the debate on Conservative Home is over. And this is how the ignorati manage to remain ignorant. They deliberately exclude themselves from information that might contradict their preconceived views, rig the debate and then seek to close it down.

Staggeringly, we find ourselves in agreement with President Obama who, in his valedictory speech yesterday, declared: "Increasingly, we become so secure in our bubbles that we start accepting only information, whether true or not, that fits our opinions, instead of basing our opinions on the evidence that is out there".

The trouble with "bubbles", though, is that their walls are invisible to those who are inside them – they act rather like two-way mirrors. Thus, people in bubbles (such as Obama) can see those around them but not their own intellectual prisons.

The antidote is open - and honest - debate. It also requires people to be scrupulously accurate in their research and then also to accept that much research is a continuum, where we are progressively learning, correcting our mistakes and adding to our knowledge. That militates against adopting fixed positions for all time, and also requires proponents to reconsider their positions when their factoids no longer support them.

But that is not the way of the self-referential Conservative Home. Another crucial piece of work to which they should have paid attention, but have ignored, is one by Pete, who is worth ten Howarths when it comes to critical analysis.

Days before Goodman's lacklustre article, Pete argued that we should only walk away from the negotiating table where we were negotiating a trade deal, in circumstances where failure did not alter the status quo. In the coming talks, however, failure would radically changes our standing in Europe and the world. The mentality that suggests we can walk away is one that has yet to comprehend Brexit.

Article 50 talks, he says, are not simply a matter of negotiating a trade deal. There is much, much more. The UK government is charged with negotiating an administrative de-merger from an organisation with which we have have a 44-year relationship, amounting to an unprecedented degree of political and economic integration. It must also negotiate a framework for continued cooperation with the EU on over three hundred regulatory and technical areas, covering a huge range of issues. 

As such, there is no WTO baseline. Failure to agree an ongoing framework for the range of issues of mutual concern would mean that we would be looking at multiple a cliff edges. Dealing with them would require a number of emergency measures which could very easily be sabotaged by Member States looking to capitalise on the confusion. We would have no formal means of discourse with the EU and all of our enhanced rights would vanish.

This is the point that is being missed. Long ago when we were first writing what was to become Flexcit, we confronted the range and complexity of the issues to be discussed and concluded that we would be hard pushed to complete talks inside two years. Something had to give. Our answer was to "park" trade, taking the Efta-EEA option off the shelf in order to continue our trading relationships, buying us time to deal with all the other issues that demand attention.

This was never about the Single Market - or even just trade. Eventually we saw the UK leaving the Single Market, but on our terms at a time of our choosing – not under the cosh of time-limited Article 50 negotiations. The key issue was and is not whether we leave the Single Market, but when and how.

As we pursued these ideas more deeply, we eventually concluded that we should take the Single Market with us, and reform it as an intergovernmental institution based in Geneva, exploiting the process of globalisation which is already under way.

Needless to say, none of our concerns about the dangers of the WTO option percolate Conservative Home and its fellow travellers. For Goodman, its "minuses" amount merely to "finicky details" and "potential problems". One of the most obvious, he writes, is whether our customs would have the capacity to cope with the new conditions. Then there is the mass of "finicky details" that have the potential to add up to significant problems.

Displaying world-class ignorance, Goodman goes on to say that one of those most often cited is aviation – flight numbers, landing slots, and so on. Another, he says, is the recognition of the licensing of medicines.

Separately, says Goodman, there is the question of how Britain and Ireland would handle customs, border control and citizenship. The controversy over how important passporting is to the City rolls on. But, he says, it is far from impossible to believe that, although the City won't collapse, some jobs will leak abroad (though less to Paris and Frankfurt than to New York). Some firms might take fright at tariffs, low though most of these will be, and seem to relocate. Potential investors could look elsewhere.

Bizarrely, in Goodman's single reference to customs, we see only doubts expressed as to whether our customs would have the capacity to cope with the new conditions. There is nothing of the newly acquired status of the UK as a "third country" and the treatment of UK goods by the officials of EU Member States.

Part of our concerns relate to the cessation of mutual recognition of UK conformity assessment. In the event of a collapse of negotiations and the UK walking away, as Goodman wants, the existing EU regulations which confer such recognition cease to apply to the UK as it would no longer be an EU Member State.

However, Goodman's complacency is embellished by a commenter who asserts that there has been "a good deal of exaggeration of the risks". Conformity assessment problems, he says, "are overstated especially given the large amount of self-certification allowed and the abundant scope for a deal on mutual recognition". And therein lies exactly the problem. Indeed there is "abundant scope for a deal", but if the UK walks away, there can be no deal.

Similar mistakes are made by Andrew Chapman in a tedious series of posts in his blog, not least relating to the activities of "notified bodies" and the continued recognition of UK bodies after a sudden withdrawal by the UK.

The point I have made is that the validity of certification issued by notified bodies is verified by customs officials by reference to a list in the Official Journal. But, once the UK drops out of the system and becomes a third country, the UK bodies will be removed from the Official Journal. And if they don't exist, certificates issued by them cannot be validated.

There is provision within the Commision Guidance (p.87) for the suspension or withdrawal of a notification. Under normal circumstances, certificates issued by the notified body up to that point, remain in force, until their normal expiry date.

However, this is conditional on the notifying Member State ensure that the files of that body are either processed by another notified body or kept available for the responsible notifying and market surveillance authorities at their request. But since the UK – which would perform this function – would no longer be a Member State, it is hard to see how the conditions could be satisfied.

Despite this, Chapman thinks it is "highly unlikely" that existing certificates will suddenly lose their validity at Brexit. And if, he says, "that rather implausible scenario did come to pass, it would certainly be known about in advance, and UK exporters would then take the necessary steps to obtain valid certificates before they sent their goods to the border".

So here we go again. The point of relying on WTO rules as the "walk-away" option is that there is no advance notice - and no negotiation with the EU over mitigating measures. We face a "sudden death" scenario. In due course, as I point out in Monograph 2, emergency measure could be arranged, but it might be several weeks, if not months, before order could be restored to the resultant chaos.

Crucially, as the EU's own Blue guide points out, imports from third countries are treated very differently from those produced by an EU member state. While the latter are subject to internal checks by national market surveillance authorities, with third country imports, points of entry to the EU's external borders become the relevant places to stop non-compliant and unsafe products coming in.

Thus, customs authorities are told to "carry out initial checks, at the first point of entry, on the safety and compliance of the imported products". In accordance with specific guidelines, which rely on Council Regulation (EEC) No 339/93, those checks must be on "an adequate scale" and must include "documentary, physical or laboratory checks".

Thus, from a zero inspection regime, UK goods would become subject to mandatory checks, their scale based on risk assessment. This will be conditioned by this guidance. UK imports will effectively be treated as "new trade flows", where data are limited after the termination of customs cooperation arrangements. According to Community guidance on risk analysis, the imports will have to be regarded as high risk and subject to the highest intensity of checks. 

These are just some of the "finicky details" that have the potential to add up to "significant problems". They alone are so significant that trade – at least over the short-term – could grind to a halt.

Yet Mr Goodman and so many others seem to be in denial about the effects of the WTO option they so keenly advocate. But it is not good enough for them to skirt over the "potential" damage and leave the "finicky details" to others. All the indications are that this option will cause extreme economic damage. It is not something that should be entered upon willingly. Everything possible should be taken to avoid it happening.

Inside Mr Goodman's bubble, though, the seriousness of the situation has yet to percolate. And as long as his exclusion of relevant information is so rigorous, nothing will change. But in so doing, he and his gang have ruled themselves out of the game. If nothing can penetrate the bubble, nothing coming out of it is of any consequence.






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