Brexit: a showpiece of ignorance

27/04/2018

The picture above says something for the fabled customs union and its supposed effect on eliminating border checks. What you see is the joint French-Belgian customs post at Callicannes near Poperinge on the Franco-Belgium border – about halfway between Dunkirk and Lille.

What is so special about it is that this massive facility wasn't built until 1988, some twenty years after the completion of the EU's customs union (at a cost then of the equivalent of €1.5 million). As this report indicates, it remained active for five years, until the completion of the Single Market, whence it fell into disuse. It is still there to this day, crumbling and unloved, a curiosity on Google street view.

With my other posts showing pictures of customs posts in use well after the completion of the customs union (with some additional pictures on Twitter here and here), it must now be obvious to anyone - even those with meanest of intellects – that the EU's custom union did not secure the removal of internal frontiers or the abolition of border checks.

That, however, did not stop Yvette Cooper yesterday (one of the original Blair's babes) leading the debate in the Commons which, in Hansard, gets the title "Customs and Borders".

Her motion had the House noting, inter alia, that "the free circulation of goods on the island of Ireland is a consequence of the UK's and Republic of Ireland's membership of the EU Customs Union" and called on the Government "to include as an objective in negotiations on the future relationship between the UK and the EU the establishment of an effective customs union between the two territories".

The motion was, of course, absurd – identified very quickly by Conservative Kevin Hollinrake, who challenged Cooper with in two early interventions, pointing out that, if we were still in the customs union but not the single market, checks would still be needed for product standards. Was she, therefore, "actually proposing membership of both the single market and the customs union".

Cooper, in her first reply, conceded the point, stating that there were "wider regulatory issues that need to be addressed". But it was her second reply that revealed her real agenda – when she referred to the common external tariff. "If we are in a customs union", she said:

… we have the common external tariff, the consequence of which is that not only all those products, but all the components and agreements of the products can spin back and forth across different borders within the EU and not have to face rules of origin checks. Many businesses are particularly concerned about the rules of origin checks, because that means that they have to account for where the different ingredients come from. If they suddenly change the mix of ingredients in a product or if they suddenly change the source of their supply, they might also suddenly have to change their evaluation of the rules of origin (ROO) and fill in different forms. That is a huge ongoing burden for businesses, employers and particularly for manufacturers. It is not just a one-off cost or an easy thing about ticking an online box.

From this and her subsequent comments, it transpired that her main (and really only) case for customs union membership was that this somehow allowed us to avoid these "rules of origin checks", the existence of which have become totemic for the more strident remainers.

One can now see the game more clearly. Obviously, for the Europhile tendency, opposed to leaving the EU, the customs union binds us more closely to the apron strings of "mother Europe". Participation in the Single Market via the EEA is not enough. As Hollinrake remarked, if we remain part of both, "is there any point in leaving the European Union at all?"

With no other justification for customs union participation, Cooper was therefore cute enough to talk up "rules of origin", relying on the ignorance of her fellow MPs (and the media in general). This ensures that they do not realise that ROO do not routinely (or hardly at all) trigger border checks.

As it stands post-Brexit, any UK trader wishing to sell goods into the EU will have to prove that the goods originate in the UK if they are to benefit from the low or zero tariff rates that we expect to negotiate with the EU. The burden of proof is on the trader, who must produce one or other official documents, such as the EUR.1, which are taken as official proof of origin.

If the trader fails to produce the appropriate documentation, or cannot demonstrate that any foreign content (at the levels defined) benefits from the system of preferences, then penal tariffs are applied, which can be based on the notional worst-case scenario.

The procedures and conditions are complex but, as set out here, with the burden of proof on the trader, there is no need to check consignments to ascertain whether tariffs are due. They apply automatically unless the trader can prove otherwise.

Documents themselves must be verified officially in the country of issue, on top of which we have the WCO rule book and the WTO Agreement on Rules of Origin. These require, in the event of the importing state being concerned about the veracity of any details furnished, the originating state to carry out investigations to determine whether origin is correctly claimed.

Thus, under normal circumstances, determination of ROO is an administrative procedure, audited in the originating countries and at destinations, with electronic payments being made where required.

Documents are transmitted electronically where systems permit. However, under the Union Customs Code (UCC), the full electronic system does not become mandatory until 2020, with provision for extension to 2025. In Norway, the UCC is only just being implemented, so some physical checks will have to continue for a some time, but once the system is fully implemented - there and elsewhere - physical checks will normally only be undertaken as part of ongoing fraud investigations.

Therefore, spectre of intrusive ROO checks – with the attendant delays - is an invention which need not trouble us. But one can see the attraction to the likes of Cooper, who are actually grasping at straws, variously in an attempt to delay or to subvert the Brexit process.

They are getting some comfort from Michel Barnier who, it seems, is not ill-disposed to muddying the waters with his references to problems arising from leaving the Single Market and Customs Union. Generally though, we see him combining references, as was also the case in yesterday's Common debate. The proceedings in Westminster thus degenerated into a showpiece of ignorance, with many MPs either unable to tell the difference between the two, or eliding the customs union with the Single Market.

Bearing in mind that in the EEA Agreement there is Protocol 4 on rules of origin, what we actually need to see is a similar agreement. We also need to agree formally to harmonise our systems with the UCC. Details can then be tidied up, as necessary, with an Exchange of Letters (or similar devices), as has been the case with the Kingdom of Norway.

With all that, yesterday's debate was an exercise in futility – a complete waste of time. It was contemptuously dismissed by by Pete, which is a proportionate response to the contempt with which the MPs are treating us, the voting public. Respect must be earned.

Although, in a near-empty House, they carried their non-binding motion by acclamation, there is scope for more mischief down the line. But this is a matter where – rightly for once – the government is ignoring parliament.

Had the MPs focused instead on the Single Market, the outcome might have been different and more positive. But that was not the game the MPs chose to play. Between the wreckers and the "useful idiots", they basically reinforced the view that parliament has lost the plot.