Richard North, 07/03/2017  
 


There are few people who could have failed to be impressed by the evidence from Ivan Rogers in his session with the Brexit select committee. The trouble was that he was facing a group of MPs, all of whom have their own agendas and, in the way of things, very little respect for the truth.

That was certainly the case with Peter Lilley, who had confronted the former ambassador to Brussels with a question about the problems of negotiating free trade agreements with Canada.

"Surely", Lilley said, "that is a totally different thing from negotiating a free trade agreement when you start off with free trade. Canada had 5,000 different tariff lines and the EU 12,500, behind each of which protected interests had grown up, and you were having to say, 'We will reduce this over three years if you reduce that over two years', and so on".

"It takes a long time", Lilley averred. "If you start from zero tariffs and go to zero tariffs, why does it take more than 10 minutes? This is only about tariffs; we will deal with non-tariff barriers later".

This is exactly the scenario that the UK will face in its negotiations with the EU, where we start from a zero tariff base. As long as both sides agree to the status quo, the issue of tariffs should detain us for no more than ten minutes – a proposition with which Rogers readily agreed.

Thus, we saw in the Express yesterday, a headline driven by Peter Lilley declaring: "2 YEARS? Brexit negotiations could take JUST 10 MINUTES 'and Ivan Rogers admitted it'". 

Peter Lilley, we are told, thinks if the EU shows some common sense regarding trade tariffs the negotiations could be wrapped-up in no time - and he claims Ivan Rogers agrees with him. Thus, the legend goes: "If Britain is prepared to offer the EU a no tariff agreement and the EU is willing reciprocate then there is nothing left to talk about" – this according to the "Tory grandee".

Said Lilley: "If we are starting from a position of no tariffs and are working towards a position of no tariffs then there's no need for it to take longer than 10 minutes. What's there to negotiate?" And this, he says, he put to Ivan Rogers "and he agreed with me".

But what Rogers actually said was: "Yes, on tariffs, in principle that is right. The problem is non-tariffs". And then, on an invitation from Mr Lilley, went on to discuss non-tariff barriers. The problem, he said, was "divergence". The "colleagues" think that we have deliberately left the European Union for a purpose and therefore, although we may be convergent on day one, we are not going to be convergent on day 201.

This, therefore, weakens Lilley's position, because he does not believe there to be any valid point which stands in between him and the "quick deal" thesis he has been pushing for some time now. There is, he suggests, exactly the same problem with "all sorts of different countries". He then continues:
They agree that they veterinary arrangements are identical on day one, but they may change between the EU and Iran or the EU and Brazil subsequently. All such agreements have built in dispute resolution agreements for if there is divergence. Is not the one thing you have to agree a dispute resolution agreement for subsequent divergence?

That is what all of the negotiation will be about, because you start with identity, whereas on any other arrangement you would start with differences and a huge amount of the negotiation is reconciling those differences, and only a small part is the subsequent divergence. We only have that small part, the subsequent divergence, to negotiate. Is that correct?
Rogers, in response, does not dispute that dispute resolution and adjudication can be sorted out. This is not insoluble, with goodwill on both sides to solve it, he says.

Most free trade agreements (FTAs), though – he says, are agreed by people who are converging towards each other, from a low base. The EU-UK deal, on the other hand, would be an unparalleled FTA. Nobody has ever concluded an FTA having had deeper integration from which they are disentangling from each other. In the jargon of Brussels, "it is often referred to as a de-accession process".

The reverse, of course, is when countries are joining the EU and they have an accession process, where they have to accede over 35 chapters of the acquis, and gradually gravitate towards the acquis and get each of those chapters ticked off.

The "colleagues" see Brexit as a de-accession process, where progressively we are likely to diverge from existing elements of the acquis. We will start from a position of convergence, but we have not done this in order to leave the European Union and then keep in aspic the EU acquis in British law. It does not make any sense to do so.

Thus, the EU is likely to say: "Hang on, you are likely over time to diverge really quite substantially from the acquis, because otherwise you would not have done this, and you must think that you can reap material advantage from divergence from the acquis".

However, we are then asking the EU to sign up to a deal where everything is enshrined in UK law, and no longer subject to supranational jurisdiction. The EU will need a governance process to know how far the UK is going to diverge, and on what, and then what happens when we do diverge”.

If we say we want to liberalise the world of agriculture, and operate a different agricultural regime and a British agricultural policy that looks different and much better, I hope, than the CAP, then others will say, "Hang on - you want full and untrammelled market access in agriculture for your sheep meat, but you are not applying the rules".

And at this point, Lilley intercedes by conceding that we have to negotiate a process for dealing with divergence. But what he doesn't say, and doesn't ask, is how long that will take.

Yet, we have had sundry politicians during the referendum campaign and subsequently calling for a "bonfire of regulations" and a Prime Minister committed to a Great Repeal Bill which allows us to repatriate the EU acquis and change it in our own good time. We will, she says, be taking back control.

I cannot recall any government entering into negotiations with the EU on an FTA, with the slogan "take back control". Unsurprisingly, the "colleagues" will be deeply suspicious of the UK, and will be looking for cast-iron guarantees on regulatory convergence.

Furthermore, they will want to secure a dynamic agreement, where there is a process where new measures introduced by the EU in common areas will automatically and speedily be adopted by the UK, in order to maintain ongoing convergence. This is to avoid the position where, over time, the UK sits still while the EU is tightening its controls, thus gaining a trading advantage.

Here, there is a potential for considerable conflict – and it is a real issue. And against the EU's demands, Mrs May will be doing her best to protect her own political position, gaining as much autonomy as she can, in return for the greatest degree of market access that she can broker.

Like as not, this will mean going though each industrial and commercial sector, one-by-one, arguing for over the degree of access and the concessions that have to be made.

As the Canadians have just found, a comprehensive FTA does not give them untrammelled access to the EU's fresh meat market. They still have to obey specific EU rules, and still have to go through all the hoops to have their establishments approved. Looking at the detail of CETA, from p.297 onwards, the regulations which have to be followed are specified in detail.

As for motor vehicles (p.286), the Canadians commit to harmonising their regulations though UNECE and WP.29, thus agreeing to share the same regulatory code.

Under their agreement on regulatory cooperation (p.173), the Parties agree to be bound by the TBT Agreement, the SPS Agreement, the GATT 1994 and the GATS, these various provisions requiring them to keep technical regulations in lockstep.

And if this sounds severe, there is a separate provision by which neither Party is prevented "from adopting different regulatory measures or pursuing different initiatives for reasons including different institutional or legislative approaches, circumstances, values or priorities that are particular to that Party".

However, this general provision is expanded by no less that 883 separate and specific references to "market access", either cementing in reservations or entering specific requirements.

No one is going to suggest that all of these points are necessarily (or at all) contentious, but the sheer volume of issues to be covered will suggest to any honest observer that they cannot be covered in ten minutes. Rather, they will observe, it is the weight of detail such as this which explains why FTA take so long to negotiate.

In his own piece on this issue, Pete goes on to list "those 303 or so elephants in the room" that go towards constituting the other non-tariff barriers.

And there, it seems, we have another level of divergence – a divergence from the common, decent, standard rules of debate. Lilley, for a Tory, is regarded as an "intellectual" and although that is a pretty low bar, he must know that the sheer weight of material that must be addressed under the general heading of non-tariff barriers is huge.

But, instead, he still allows the claim that this is all about tariffs, and that the negotiations can be done in ten minutes. This is not an honourable man speaking, and neither are those around him who agree with, or endorse his perversions.






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