Richard North, 04/03/2018  

When Mrs May spoke at the Mansion House on Friday, she recalled the day eighteen months ago when she stood in Downing Street and addressed the nation for the first time as prime minister.

"As we leave the European Union", she said at the time, "we will forge a bold new positive role for ourselves in the world, and we will make Britain a country that works not for a privileged few, but for every one of us". "That pledge to the people of our United Kingdom", she told us last Friday, "is what guides me in our negotiations with the EU".

Yet, if as seems possible, we end up with a "hard" Brexit, there is every chance that the only people who will benefit will be the money men behind the Legatum Institute, and their fellow travellers. And since Mrs May's thinking seems to be dominated by ideas pouring out of the Legatum Institute, it is entirely valid to question her sincerity.

That leads us to consider the eternal question of whether Mrs May's current performance is driven by incompetence or something more sinister. But, whatever the reasons, it is certainly the case that the turning point was her Lancaster House speech, 13 months ago.

It was then, as Booker remarks in today's column that Mrs May announced that she wanted to remove us from all the complex arrangements that allow us unfettered access to our largest export market.

But, as she comes up with her scheme for reducing the damage that will inevitably arise from this action, based on the idea of mutual recognition as the basis for our trading relationship with the EU, Booker gives her the benefit of the doubt, calling it "wishful thinking".

Either way, there can be no question that Mrs May's optimistic phrases about negotiating her "broadest and deepest possible partnership" with the EU are not going to be realised. This says Booker, the enormous question that looms over the whole dismal story of Brexit has been when inescapable reality would at last begin to break in on that endless sea of wishful thinking.

Arguably, last week – and both Booker and I would argue for the proposition - the EU's publication of its "draft withdrawal agreement" was that point it did so. For a year we have had little more than shadow boxing, with both sides simply talking past each other.

The EU has stolidly sat there repeating the rules of the club we have chosen to leave. The UK team, on the other hand, have seemed incapable of practical engagement at any point. We have babbled about "frictionless borders" and Mrs May has gone on about creating that "deep and special partnership".

Overlaying that is the robotic repetition of the mantra: we must "take back control of our laws, our borders and our money", as if these assertions were themselves a substitute for thought.

But last week, with the publication of that 119-page draft text, the moment of truth at last arrived. And what it all came down to as the make-or-break issue was the wholly intractable question of the Irish border.

This is something that Booker has been warning for more than a year, with this blog raising the warning flags a little longer than that. But during the referendum campaign, when I was briefing former Northern Ireland Secretary Owen Paterson on this, I was fairly optimistic that it wouldn't be a problem.

In a piece written in early April 2016, I dealt with the issue of transit traffic, travelling from Ireland though to EU destinations, arguing that there were established systems, such as TIR and the Convention on a Common Transit Procedure, which would ensure the free flow of goods.

In a piece a few days later, I argued that the use of technology and automated systems could do much to reduce any problems. With the spread of such systems, it was inconceivable, I argued, that there would be routine checks at the Irish border.

That is very much an argument put in a report to the European Parliament in November 2017, looking at the Smart Border 2.0, the basis of which the UK government also relies (in part) – to say nothing of the "ultras".

However, all such systems relate to customs checks. During the campaign I forbore to mention the problems that could arise with sanitary or phytosanitary checks – which are separate from the customs process.

But then we were in the depths of the campaign and my underlying assumption was that we would remain in the Single Market, via the EEA. And since Owen was saying at the time that "only a madman" would leave the Single Market, this was a fair enough assumption.

However, in its draft text, the EU has again spelled out – and more formally than ever before - that there is no way under its rules that we can retain that "frictionless" border between the two parts of Ireland, because this could allow Northern Ireland to be used as a back door into the EU market by any country in the world.

Even though electronic systems could provide a partial answer, the UK has not as yet put a formal proposal to the EU as to how border traffic would be managed. And, it is in the absence of that proposal that the EU is taking steps to protect the "integrity of the single market".

The effect of its proposals would be that, to avoid a border between north and south, the customs border would have to move to the Irish Sea, leaving the two parts of Ireland united under the trading arrangements of the EU and thus cutting Northern Ireland off from the rest of the United Kingdom.

As it currently stands, the EU insists this is the only way its market can be protected. And predictably, Mrs May says this is "wholly unacceptable" and that no UK prime minister could agree to it.

Her alternative, though, it the idea that the UK should trade on the basis of mutual recognition of standards. Thus, if we accept the EU's own standards as they apply to the goods exported to us, and the EU accepts our standards as they apply to goods exported to Member States – which would remain at least as high as the EU's - there would be no need for border checks.

However, seductively simple though this might seem, this is not going to fly. We see in the EU's own legislation - Regulation (EC) No 764/2008 that mutual recognition applies (in the main) to "products which are not subject to Community harmonisation legislation". Within the Community, where there is a harmonised standard, trade on the basis of mutual recognition is no longer permitted.

It is inconceivable – as the EU's negotiators have so often pointed out – that the UK will be able to improve its trading position with the EU as a result of Brexit. Therefore, UK traders are not going to be allowed a facility that is not afforded to traders within the community. If harmonised standard exist, UK traders will be required to conform with them. Mutual recognition is out of the question.

The EU will, doubtless, be prepared to consider mutual recognition agreements (MRAs) on conformity assessment, This allows exporters to the EU to check compliance with EU standards in their home countries.

Canada has been one of the nations benefitting from such an agreement but it is interesting to note that within the text, it specifies that the Agreement "shall not be construed to entail mutual acceptance of standards or technical regulations of the Parties and … shall not entail the mutual recognition of the equivalence of standards or technical regulations".

There is no example anywhere in the world of the EU concluding a wide-ranging agreement with a third country on mutual acceptance of standards. It applies only within the territories of the EEA states.

That Mrs May evidently believes the UK can be an exception is clearly an example of wishful thinking. So, writes Booker, the seemingly "irresistible force" of Brexiteer wishful thinking has at last met the immovable object of those EU rules.

Of course, if we had chosen to leave the EU but remain in the wider European Economic Area, none of this crisis need have arisen. But the result is that Mrs May has landed herself in an impasse from which there is now no way out.

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