Richard North, 03/02/2017  
 


Back on the trail of the White Paper, we reached Part 8 yesterday, before giving up for the night, on a task that makes watching paint dry interesting. Looking at this Part, one has to concede that the title is nothing if not optimistic. This, we are told (or warned?) is about "ensuring free trade with European markets".

The use of the word "ensuring" is interesting. The word "ensure" means "to make certain that (something) will occur or be the case", on which basis our take home message should be that our Government is going to make certain that we are going to get free trade with our former EU partners.

A perfectly fair response to such a claim is the question "how?" After all, not a few people have raised the prospect of there being barriers to such an endeavour. Even being as gentle and as even-handed as one possibly can be, however, we a still need an answer.

For our efforts, though, all we get for a reward is that Government: "will prioritise securing the freest and most frictionless trade possible in goods and services between the UK and the EU" – which is a fair enough start. We are then told that it will not be seeking membership of the Single Market, something that has by now lost its shock value.

We thus have to be content with the idea that our Government will pursue a new strategic partnership with the EU, including an ambitious and comprehensive Free Trade Agreement and a new customs agreement.

So, we now know what the Government intends to do. But, given the complexity of such an endeavour and the pressing time constraints, what makes the Government think it will be successful? When so many pundits are saying that this is impossible, given the odds, what secret weapons does it have up its sleeve?

In lieu of an answer, though, we get the assertion that "it is in the interests of the EU and all parts of the UK for the deeply integrated trade and economic relationship between the UK and EU to be maintained after our exit from the EU". That is as maybe, but it still leaves the question hanging as to precisely how the Government intends to make certain that this desirable state of affairs comes to pass.

Rather, the government seems intent on laying before us visions of this nirvana, trusting – one assumes – that we will be so enamoured that we forget to ask how it will be achieved.

Thus, with the priority established, we are then acquainted with the Government's objectives. "Our new relationship", it says, "should aim for the freest possible trade in goods and services between the UK and the EU". No one, of course, is going to disagree with this motherhood and apple pie aspiration. Nor would anyone argue with the idea that it should give UK companies the maximum freedom to trade with and operate within European markets and let European businesses do the same in the UK.

Then, as a statement of fact, there is nothing wrong with the idea that our new relationship should include "a new customs agreement with the EU, which will help to support our aim of trade with the EU that is as frictionless as possible". This, after all, is only common sense.

Still, though, we are waiting for word on how the Government seeks to do this. However, for this we are still kept waiting. "We", the Government says, "do not seek to adopt a model already enjoyed by other countries". Is this now leading to the detail which we so much anticipate?

First, it seems, we have to be treated with some more softening up, with the injection of a little factoid: "The UK already has zero tariffs on goods and a common regulatory framework with the EU Single Market", we are told. And now for the meat?

"This position is unprecedented in previous trade negotiations. Unlike other trade negotiations, this is not about bringing two divergent systems together", says the White Paper:
It is about finding the best way for the benefit of the common systems and frameworks, that currently enable UK and EU businesses to trade with and operate in each others' markets, to continue when we leave the EU through a new comprehensive, bold and ambitious free trade agreement.
OK, I sort of get it – although this is hardly being spelt out clearly. Hovering in everyone's mind is the question: "How are you going to do it in two years?" For this we have to read between the lines.

This is not like any other trade negotiation where (as we have heard it argued), must of the time and effort is spent on agreeing common tariff levels and securing regulatory convergence. We are already at that point, so we can forge ahead and come quickly to an agreement on the essentials.

One wonders why, though, if that is the argument being adduced, the Government doesn't come right out and say so. "Look, you dummies", it should be saying, "we've already got the essentials in place, so the rest is easy peasy".

And that, if we've read between the lines correctly, is that. The agreement, says the government, "may take in elements of current Single Market arrangements in certain areas as it makes no sense to start again from scratch when the UK and the remaining Member States have adhered to the same rules for so many years".

All that leaves the Government to do is assert that: "Such an arrangement would be on a fully reciprocal basis and in our mutual interests".

Stripping it to its bare essentials, though, the Government's case is that we already have a trade agreement with the members of European Union, and it's in our mutual interests that we should continue to have one. And therefore, we will have one. Simples.

Stepping back from this slightly, one might tentatively offer a querulous note, asking why the "colleagues" should be so keen to go to all the trouble of forging a new, different agreement with the United Kingdom, with completely new architecture and systems, when they already have one in place. It's called the Single Market.

To this, the only argument the Government can offer is "mutual benefit". Both the UK and EU Member States, it says, benefit from our close trading relationship. The EU is the UK's largest export market and the UK is the largest goods export market for the EU-27 taken as a whole.

Now we get the punch line: "However, the EU currently exports more to the UK than vice versa". In 2015, while the UK exported £230 billion worth of goods and services to the EU, the UK imported £291 billion worth of goods and services from the EU.

That, dear readers, is it. After all the months of argument, it comes down to this. They sell more to us then we do to them, so they will do a deal. And not just any deal. The "colleagues" will give us exactly the "bold and ambitious free trade agreement" that we ask for, and they will deliver it gift-wrapped, with pretty pink ribbon, all in the space of two years. How could anyone doubt that this will be the case?

With that, we are then treated to a Janet and John dissertation about how free movement of good is secured within the EU. This is possibly news to most of the MPs who read it, and this is what they get for our money:
Free movement of goods within the EU is secured through a number of mechanisms, including through the principle of mutual recognition (which means that goods lawfully marketed in one Member State can be sold in all Member States), the harmonisation of product rules (where the same rules apply for a range of goods, such as for fertilisers, in all Member States) and agreement that manufacturers can use voluntary standards as a way of demonstrating compliance with certain essential characteristics set out in EU law (such as for toy safety). In a number of sectors covering typically higher risk goods (such as chemicals or medicines), the EU has also agreed more in-depth harmonised regulatory regimes, including for testing or licensing.
Now, if you will, imagine you are a racehorse breeder with your business reliant on its ability to export horses to destinations within the EU. In the event of Brexit, the UK assumes the status of a "third country", for which the EU's default value is a prohibition of exports. You will have several questions to put to the Government.

Firstly, you will want to know what measures it will take to gain formal approval for the UK as an exporting country. Secondly, you will want to know how the Government will ensure that the licensing and approval mechanisms that apply to your establishment will be recognised by the EU. Then you will need to know whether you will have to face the full rigour of third country checks and certification, including routing exports via a Border Inspection Post, or whether you will be able to revert to the short-cut measures you currently enjoy.

The point made here is that the devil is in the detail. If you have a meat business, or are a Welsh farmer reliant on the export of lambs to the Paris market, what measures is the Government going to take to ensure that exports continue? If you sell chemicals into the territories of EU Member States, what is the Government going to do to ensure REACH provisions are satisfied, and the registrations will still be valid after Brexit?

Those who run a business which do business with the EU – and many more besides – will not get any answers from this White Paper. We are still in la-la land, where the "colleagues" are bound to do a deal, simply because we want that to happen. Never mind the quality – just feel the width. Don't ask for detail says the Government – we only do aspiration.






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