Richard North, 03/03/2018  
 


Despite being the usual cliché-ridden production, yesterday's speech from Mrs May contained a surprising amount of what might be described as technical detail on certain aspects of our post-Brexit trade with the EU.

That is not to say that it in any way added clarity to the speech. Rather, reinforced the already well-established impression that our prime minister is totally out of her depth, calling for things which she has absolutely no chance of getting.

A classic example of this came in the section dealing with goods, where the prime minister laid out a fundamental principle in her negotiating strategy, to whit that "trade at the UK-EU border should be as frictionless as possible".

Needless to say, this oft-repeated motherhood and apple-pie aspiration is meaningless without the detail but, once Mrs May starts to add it, we quickly realise that any degree of "frictionless" trade, on the terms she is setting out, is virtually impossible.

Sensibly, she tells us that "we don't want to see the introduction of any tariffs or quotas", and I don't see any problems with that. It can be delivered with a basic free trade agreement and it's technically uncomplicated. Where things are less easy though are in the area where goods require some form of prior approval before they can be freely circulated in the Single Market area.

Here, Mrs May refers back to David Davis's speech in Vienna and declares that "we must ensure that, as now, products only need to undergo one series of approvals, in one country, to show that they meet the required regulatory standards".

However, since we are to leave the Single Market, the only way that is going to happen is if the UK decides to accept products approved to EU standards, submitted to EU approval bodies by enterprises (or their representatives) which are established in the territories of the EU Member States. Under current EU law, there is no way that approvals by UK bodies will be accepted within the EU.

In other words, we would have to hand over the entirety of our product approvals to the EU and accept its authority to tell our manufacturers what they can sell.

Yet, despite that, Mrs May ploughs on ahead with an explanation of how the impossible is to happen. "To achieve this", she says, "we will need a comprehensive system of mutual recognition" – an invention of the Legatum Institute which has no foundation in reality.

Outside the Single Market, the EU simply does not operate mutual recognition of standards systems with third countries, except in the most limited of circumstances. There is no prospect, whatsoever, of the EU agreeing "a comprehensive system of mutual recognition" with the UK.

What one has to appreciate here, though, is that this is not a minor, tangential issue. Styled as Mrs May's new hybrid, middle way approach that tries to soften a hard Brexit, this is the "magic bullet" which is supposed to overcome the problems arising from her decision to leave the Single Market.

Thus, what we have, essentially, is the prime minister's core strategy on trade built on a foundation of sand. Not only is it untested by having been put as a formal proposal to the EU negotiators, it is so lacking in substance that it stands no chance of surviving first contact.

This notwithstanding, Mrs May averred that the UK "will need to make a strong commitment that its regulatory standards will remain as high as the EU's" and, therefore, finally recognises that this, in practice, "will mean that UK and EU regulatory standards will remain substantially similar in the future".

And then, she noted that many of these regulatory standards "are themselves underpinned by international standards set by non-EU bodies of which we will remain a member". In particular, she noted that the UN Economic Commission for Europe (UNECE) "sets vehicle safety standards. Countries around the world" and that Turkey, South Africa, South Korea, Japan and Russia, are party to the agreement.

For the first time in recorded history, we have a prime minister recognising that the EU is not the fount of all regulation and that "many" regulatory standards originate from "non-EU bodies".

After banging on for all these years, this intelligence has finally percolated to the upper echelons of the political establishment. Doubtless, now, it will be "discovered" by all manner of legacy media journalists and retailed back to us to show how clever they are.

As for Mrs May, her objective is the "broadest and deepest possible partnership", which she wants to cover more sectors and co-operate more fully than any Free Trade Agreement anywhere in the world today.

This, she believes is achievable, not only because it is in the EU's interests as well as ours but because "we have a unique starting point, where on day one we both have the same laws and rules". Rather than having to bring two different systems closer together, the task will be to manage the relationship once we are two separate legal systems.

Therein lies an inherent contradiction because she goes on to say that "our default" is that "UK law may not necessarily be identical to EU law, but it should achieve the same outcomes".

In some cases, she says, Parliament might choose to pass an identical law – businesses who export to the EU tell us that it is strongly in their interest to have a single set of regulatory standards that mean they can sell into the UK and EU markets. If the Parliament of the day decided not to achieve the same outcomes as EU law, it would be in the knowledge that there may be consequences for our market access.

Clearly, she does not seen to understand that the essence of these "non-EU bodies" is to promote common standards, and in virtually the same breath that she extols our "unique starting point" of having the same laws and rules, she seeks to change them and opt for commonality of outcome rather than harmonisation.

There are so many levels at which this is a flawed argument that it is staggering that she can expect anyone to take it seriously. As the EU has evolved, it has moved from the approximation of laws.

No longer does it pursue directives which specify the outcomes and allow the Member States to determine the means of achieving them. It has moved on to a rigid programme of harmonisation, then spreading the gospel from Europe to the rest of the world. And now Mrs May wants it to go backwards.

Not only that, she seems to forget that, once we leave the EU, we will no longer have the same laws and rules. The EU's most important rules are set out in the treaties, which cease to have effect the moment the withdrawal agreement takes full effect. Leaving the EU is an act of divergence which immediately sets us apart from the EU-27.

Furthermore, the huge body of ECJ decisions, current and ongoing, is part of the EU rule book, from which the UK will distance itself. This is part of what the EU calls its ecosystem. As well as the treaty rules and secondary law, it encompasses judicial review, enforcement and interpretation, supervision and market surveillance, and then administrative implementation and enforcement.

Simply maintaining parity with secondary law - and then only for as long as it takes to change it – is to conform with only one element of the EU's ecosystem. We are divergent the moment we leave. Thus does the EU say that a third country cannot have the same rights and benefits as a member of the Union, as it does not live up to the same obligations.

In demanding mutual recognition, Mrs May wants the same rights of access to Member State markets as the members themselves, without any of the obligations. Thus, her core strategy is to stand completely outside the ecosystem, yet demand the "broadest and deepest possible partnership", which affords greater market access than "any Free Trade Agreement anywhere in the world today".

As a core strategy, this is rotten – intellectually rotten. Her whole strategy is rotten at the core and cannot possibly succeed.






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