Brexit: a stinking well of ignorance

05/06/2018

There are actually times when we need to be quite pleased that the government has shut down and is no longer listening to anyone on the Brexit front. That most definitely needs to be the case with the latest dip into fantasy by Open Europe, which has just produced a report entitled "Striking a Balance".

Boasting a team of four, led by Stephen Booth, bearing the grand title of "Director of Policy and Research", the document is edited by Henry Newman, director of the think tank and, as the Telegraph helpfully tells us, is a former aide to Mr Gove (he who was so "sick of experts"). And through this collective effort, it becomes their "blueprint for the future UK-EU economic partnership".

One wonders, in producing it, the authors sought to be different for the sake of being different. But it has always been the case that Open Europe has eschewed the Norway option and has plumped for a "middle way".

That was the case in July 2012, when former director, Mats Persson was on the case, arguing that "Britain should pick-and-mix over Europe instead of apeing (sic) Norway". Britain, according to Persson, could not simply "become like Norway" and leave the EU. It was "too big a player" for that.

However. six years down the line, even under new management, Open Europe is peddling the same mantra. "The UK", it says, "should not seek to remain part of the European Economic Area (EEA) Agreement, which would provide ongoing membership of the Single Market". And nor should the UK seek to form a new customs union with the EU.

Instead, the UK and the EU should agree to "managed alignment" over goods standards and regulations, in return for the UK's Swiss-style participation in the Single Market for goods.

And to make this "managed alignment" work, Open Europe has planted its very own magic beans and come up with something quite extraordinary and wondrous by the name of a "broad-spectrum enhanced mutual recognition agreement".

This magical device would mean most goods manufactured by one party would be considered pre-authorised for sale across others. Only in highly-regulated sectors would the UK possibly need to agree to continue to follow EU regulations.

Even then, this process would not be automatic. It would, according to the Open Europe team, be open to the UK Parliament to diverge from the EU's regulatory framework, but if this divergence could not be resolved via negotiation or legal means, market access to the EU could be affected.

At least, though, they've got the message that customs checks represent only a fraction of procedures that take place at a border, acknowledging that the majority of these are regulatory controls on goods. But, under the Open Europe magical model - where the UK agrees to accept and apply EU rules on goods in domestic law - there is high potential for mutual recognition of regulations to avoid the need for border checks.

All you need to do then is combine this magic with a comprehensive customs facilitation agreement that moves customs procedures away from the border, the team says, and you have "a strong basis for maintaining an open border on the island of Ireland".

I suppose it is just possible that the Open Europe team haven't realised it, but what is remarkable about this, and the huge emphasis on mutual recognition (which is mentioned 66 times in the 110-page report), is how similar the scheme is to the that proposed by the Legatum Institute.

This emphasis is something I picked up in my own evaluation of the Legatum work – an issue I had dealt with a year previously. And it was then that I pointed out that, in the context of the EU, mutual recognition of standards was largely confined to Member States working within the framework of the Single Market.

With only very rare exceptions – which amount in any case to the harmonisation of standards – the EU simply does not afford mutual recognition of standards to any third country. The EU cannot allow a widening of the principle to the UK after Brexit as it would allow us to dictate our own standards yet have full access to the markets of EU Member States on grounds more favourable than those states enjoy.

You can see why, of course, that Legatum and Open Europe must ignore my work (and that from Pete). It is not a matter of us being "nasty" about them, as some would aver. In actuality, we are raining on their parade, demonstrating that they have made the most fundamental of errors in their calculations of what would be a workable post-Brexit plan.

The point is that, once you strip out mutual recognition of standards from these proposals, there is very little there of substance. And where both Legatum and Open Europe go out of their way to exclude continued participation in the EEA, they can only sustain this by claiming special mutual recognition privileges – which is simply not on the table.

In part, they get away with this by what one can only assume is a deliberate sloppiness in the use of terminology. Not for nothing do I refer to the Single Market as a "regulatory union" – phrasing also used by Sir Ivan Rogers. Thus defined, you have to be part of the Single Market in order to gain the benefits from it. You do not have "access" to it – you are either part of it, or you are not.

By talking in terms of access though, the likes of Open Europe can play word games, referring to "very high levels of access" to the Single Market, as if there was a graduated entry which could be negotiated in terms to suit the UK. This falsely presents an "all or nothing" situation as if there is room for bargaining.

Furthermore, there is a tendency to imply that "access" affords frictionless trade. But the fact that Switzerland and "the Ukraine" (sic) are said by Open Europe to have very high levels of access to the Single Market (in goods), this can be taken to mean ease of access as well.