Richard North, 25/09/2017  
 


One of the great weaknesses of the Brexit debate is the way the pundits readily attack Flexcit yet, when it comes to offering alternatives, are never able to offer anything close to the detail that we have provided.

Nor, when it comes to the first phase of our plan, dealing with the withdrawal mechanisms, do they seem to be able to understand the concept of "least worst option". Thus, to them, finding a flaw (or many flaws) in the plan is sufficient to justify its rejection, notwithstanding that any alternative has more substantial flaws.

When it comes to our prime minister, though, she seems to be operating on a completely different plane. Rather than making what she calls, "a stark and unimaginative choice between two models" - either something based on European Economic Area membership, or a traditional Free Trade Agreement such as that the EU has recently negotiated with Canada – she believes: "We can do so much better than this".

EEA membership, she says, would mean the UK having to adopt at home - automatically and in their entirety - new EU rules. Rules over which, in future, we will have little influence and no vote.

Such a loss of democratic control, she avers, could not work for the British people. She fears "it would inevitably lead to friction and then a damaging re-opening of the nature of our relationship in the near future: the very last thing that anyone on either side of the Channel wants".

As for a Canadian style free trade agreement, although (she claims) this is the most advanced free trade agreement the EU has yet concluded, compared with what exists between Britain and the EU today, it would represent such a restriction on our mutual market access that it would benefit neither of our economies.

Not only that, she adds, it would start from the false premise that there is no pre-existing regulatory relationship between us. And precedent suggests that it could take years to negotiate.

On that basis, therefore, she argues against seeking "merely to adopt a model already enjoyed by other countries". Instead, Mrs May wants us to be "creative as well as practical in designing an ambitious economic partnership which respects the freedoms and principles of the EU, and the wishes of the British people".

Now, if we pause there for a moment and take a look at the territory over which she is meandering, we recognise that in principle there are only three types of relationship we can adopt with the EU. One, effectively, is a non-agreement – the unilateral approach relying on WTO rules.

The next level is a bilateral agreement – on the lines of either Switzerland or Canada – which amounts to a free trade agreement. The things that vary are the scope, and depth of economic integration sought. And then there is the multilateral agreement, where we join up with other parties, such as with Efta, to take advantage of a joint agreement such as the EEA.

Thus, although Mrs May appears breaking new ground, all in fact she is doing is opting for a bilateral agreement. Perhaps she is looking for a wider scope than most, and a high level of economic integration. But all she will get is a variation of the Swiss option. If you wanted to give it a label, you might call it the "Swiss-plus" or the "Canada-plus" option.

Nevertheless, there are, she asserts, good reasons for the "level of optimism and ambition" that will deliver what she calls a "New Economic Partnership". Firstly, the UK is the EU’s largest trading partner, one of the largest economies in the world, and a market of considerable importance for many businesses and jobs across the continent. And, as the EU is our largest trading partner, it is in all our interests to find a creative solution.

Secondly, the EU has shown in the past that creative arrangements can be agreed in other areas. For example, it has developed a diverse array of arrangements with neighbouring countries outside the EU, both in economic relations and in justice and home affairs.

Finally, we share the same set of fundamental beliefs; a belief in free trade, rigorous and fair competition, strong consumer rights, and that trying to beat other countries' industries by unfairly subsidising one's own is a serious mistake.

At this point, one might observe: "so far, so good". The "motherhood and apple pie" narrative is largely unobjectionable but, as our transatlantic partners might say, "where's the beef?". The answer is about as much as you can find in a packet of beef-flavoured crisps.

What we do get - 15 months since the referendum and a quarter of the way into the Article 50 period – is optimism, plenty of it. Mrs May is "optimistic about what we can achieve by finding a creative solution to a new economic relationship that can support prosperity for all our peoples".

Both sides, she says, "have to agree on a set of rules which govern how each side behaves", so "we will need to discuss with our European partners new ways of managing our interdependence and our differences, in the context of our shared values".

Then, "to make this partnership work", because disagreements inevitably arise, "we will need a strong and appropriate dispute resolution mechanism". This, we will need to discuss but Mrs May is "confident we can find an appropriate mechanism for resolving disputes".

And that, is seems, is how we get our "new economic partnership". It is going to be "comprehensive and ambitious", "underpinned by high standards and a practical approach to regulation". This will enable us "to continue to work together in bringing shared prosperity to our peoples for generations to come".

Take away the clichés, though, and there is nothing there. Mrs May is not so much offering a finished product but a quest. She has set us the task of "finding a creative solution to a new economic relationship that can support prosperity for all our peoples". But as to how we go about that, and what it will look like, we have no detail at all. We simply have to share Mrs May's ambition that it will be "comprehensive and ambitious".

However, the emptiness of Mrs May's efforts should come as no surprise. There is a fairly well-established methodology used by the EU when contemplating free trade agreements, and the UK has not even concluded the preliminary stages.

After the political declarations, where the parties state their willingness to enter into negotiations, what invariably happens these days is that the parties conduct what is called a "joint scoping exercise", primarily to define the scope of the proposed agreement and to establish the critical points for its successful conclusion.

We have an example of this with Canada and the same exercise was carried out with Australia, Japan and Indonesia. Then, before talks can get fully under way, the Commission very often carries out impact assessments to identify problems and inform decision-making.

The "scoping" is absolutely crucial and it was only very recently that Michel Barnier reminded us that the process will be applied to the United Kingdom in order to set out the framework for the EU-UK trade relationship to be established in the second phase of the Brexit negotiations.

In April of this year, Barnier told the European Parliament that the second phase of negotiations would be "devoted to scoping our future relations and discussing necessary transitory arrangements", with no suggestion at all that the talks would move on to actual discussions on the substance of a free trade agreement.

Later, on 29 April, the European Council published its formal negotiating guidelines, which made it clear that the Article 50 negotiations would be confined to "preliminary and preparatory discussions on the framework for a future relationship, and to any form of transitional arrangements". There never was any intention to conclude a trade deal.

This completely contradicted Mrs May's Lancaster House speech the previous January, where she declared her ambition to have "reached an agreement about our future partnership by the time the 2-year Article 50 process has concluded".

"From that point onwards", she said, "we believe a phased process of implementation, in which both Britain and the EU institutions and member states prepare for the new arrangements that will exist between us will be in our mutual self-interest".

Without an agreement having been reached, there cannot be any question of an implementation process, as there will be nothing to implement. Nor, strictly, can there be a transition. There is nothing there for us to transition to.

All we can actually hope for, therefore, is a broad "scoping" agreement, setting out the framework of an agreement that we would start to negotiate once we have left the EU. What we also need are interim or "stop-gap" measures, to tide us over until we have a formal trade agreement in place.

Even then, the EU's second phase simply isn't going to happen until there has been "sufficient progress" with phase one. And there is no sign that this hurdle is going to be overcome.

With that, Mrs May's declaration of her grandiose ambitions are nothing more than empty rhetoric. Even if we get past phase one, which looks increasingly unlikely, the next phase is no more than talks about talks, and the agreement of stop-gap measures.

Thus, despite Merkel electoral success, keeping her a German chancellor, we are unlikely to see any progress during this week's fourth round of negotiations. In an unwitting mirror of the Brussels (non) talks, the Labour Party conference is not listing Brexit on the agenda for discussion.

But if Labour has nothing to talk about on this issue, neither – it seems – has the UK's negotiating team.






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