Richard North, 05/11/2017  

Booker in his column today deals with one of the consequences of leaving the Single Market. The problem, he says, is that, by choosing to leave not just the EU but also the wider European Economic Area (EEA), we become to the EU a "third country".

As Ryanair explained to a Lords committee back in March, the "traffic rights underpinning the bulk of air traffic to and from the UK will no longer exist". To fly anywhere outside the UK, we will have to negotiate more than 100 complex bilateral agreements with other countries.

Also, as we pointed out last week, our airlines must also apply to the EU to become a "third country operator". But they can only do this once we have left the EU; and by a devilish Catch-22 in the rules, it then takes 30 days before they can be approved to allow us to fly again.

All of this, says Booker, will be hard enough to negotiate if we do get a deal. With Theresa May's "no deal", forget it. But when the Commons Transport committee recently interviewed luminaries from the airline industry, none of it got mentioned.

Like David Davis, the chief executives of British Airways and Heathrow merely assured MPs in effect that somehow everything will be "all right on the night". No one present seemed to have the faintest idea of just what a disaster we could be heading for. But, yet again, if only we had chosen to stay in the EEA, none of these problems would arise.

Predictably, Booker's piece attracts its usual collection of naysayers, unable or unwilling to address the reality of the consequences of this line of action. But what makes their ritual denial all the more ironic is an article yesterday in the Telegraph which more or less endorses what Booker has to say.

In the article, we are treated to the warnings of "three separate EU sources in both Brussels and a leading EU capital" to the effect that the British government is living in "fantasy land" if it believes that it can an amicable break-up with the EU in the event of a "basic’ Brexit".

Senior EU officials and diplomats are saying that British expectations of a "no-deal, deal" have failed to understand the ramifications of the UK pulling out Europe without paying its bills.

Although David Davis believes the EU would do a "basic" (or "bare bones") agreement in the "very, very improbable" event that a deal proved beyond the two sides, thereby averting the worst-case scenario where we leave with no agreement at all. "Whatever happens we will have a basic deal without the bits we really want", Davis said.

However the European officials are "adamant" that if the UK exits the EU without a deal – leaving an immediate €20 billion black hole in the EU's seven-year budget framework – there will be no appetite to engineer a soft landing for the UK.

In fact, the words used by a senior EU diplomat leave no room for optimism. "This is pure fantasy", he says. "The idea of a 'no-deal deal' completely fails to understand the EU, or the fury that would result if the British leave without paying their bills". He adds: "At that point, the EU wouldn't be looking to make a parachute for the UK, it will only be working out how to cut strings".

Then, we are told, a second Brussels-based source was equally clear. "If things go really sour the 27 will be in no mood to try to collate a number of last-minute mini emergency deals for 'free'. We’ll be busy enough trying to sort out the budget fallout".

This fits entirely with the observations of Sir Ivan Rogers and kicks into touch the fatuous idea that the UK negotiating team can walk away from Brussels on the Friday, having closed the book the Article 50 negotiations, and then turn up on the Monday morning bright-eyed and bushy-tailed ready to discuss a series of mini-deals – including a comprehensive air services agreement.

This is a fiction created by the "Ultras" who originally thought they could rely on "WTO rules", only to find that there were huge areas not covered. In an attempt to fill in the gaps, the "no dealers" thus invented the concepts of the "unmanaged" and "managed" no-deal, the latter having been embraced by the Department for Exiting the European Union.

In the "unmanaged" scenario, which the Telegraph reminds us was recently described as a "bad-tempered" Brexit by Philip Hammond, the UK "would crash out of the EU with no deal whatsoever, causing significant initial disruption over trade, aviation, data-sharing" – and much else.

However, given the scale of likely chaos, even the hardest of the "Ultras" acknowledge that this would be hard to bear. Thus the envisage this entirely fictional "managed" no-deal scenario. This has the Government believing it would strike a number of quick deals to mitigate the worst impacts of leaving without a trade deal.

The Telegraph refers to the use of "Mutual Recognition Agreements" to keep trade flowing, although it probably means the MRAs on conformity assessment. These, and "separate deals to keep planes flying and data flowing" would comprise the "managed" no deal.

Already there is disagreement between DexEU and the Treasury over how long it would take to stand up such deals – if they were offered. The Treasury has argued preparations would need to begin as soon as March next year, if it became politically apparent that a deal with Brussels was impossible, while DexEU believes the Brexit brinkmanship could run up until October before seeking a "managed" crash out.

But another complication arises in that EU sources are warning that any "no deal" scenario that took place outside the Article 50 framework – which, the Telegraph says, can be ratified by a majority of EU states – would also force the UK to ratify those "quick" deals through the EU's 38 national and regional parliaments.

"Even the simplest the aviation deal, for example, could not be drafted overnight", the Brussels source warns. "And even if it could be, the political environment surrounding a breakdown in talks would hardly be conducive to rapid ratification by EU parliaments".

Worryingly though, nothing here begins to approach the full complexity of the issues that have to be faced. It is a fundamental tenet of international law that parties to an agreement cannot bind other parties which did not take part directly in the negotiations, and sign up to them. In that the Article 50 settlement is secured by qualified majority voting, there is a limit to what can be included without breaching international law.

Aviation deals, for instance, would have to be agreed outside the Article 50 process with unanimous assent by all parties. And if, as is quite rightly observed, an aviation deal could not be drafted "overnight", there will necessarily be a hiatus before an agreement can be reached.

In days gone past, when Booker had picked up something of importance, with wider relevance than just his column, he used to let his paper know and they built in his findings into other stories. This has long ceased to happen, but had the paper taken note of Booker's words about TCO approval, this article could have factored it in.

That there is a 30-day gap between applying and being granted TCO approval is not an invention. If the EU sticks to the letter of its own law, UK-registered airlines fleets will, perforce, be grounded for those 30 days, even if we leave the EU with a deal.

With many other aspects to be satisfied – such as REACH registration – there are huge complexities awaiting us even if we settle an amicable Article 50 agreement. And, if – as indeed the EU is saying – "no deal" means what it says, walking away without a deal is, as it always has been, a recipe for catastrophe.

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