Brexit: confusion reigns

12/04/2019

And so it came to pass that Mrs May delivered her statement to the House of Commons on her adventure in Brussels.

But her statement and the subsequent debate did nothing to shed any light on our predicament as a nation. If anything, it further muddied the waters, providing testimony – to those who are capable of understanding it (which did not seem to include many in the House) - of their ignorance.

If we cut to the chase, the crucial issue was the customs union, making 23 guest appearances in the debate, with "customs" in further combinations adding nine more mentions of the word.

Oddly enough, the customs union first popped out, not from the lips of Mrs May but from the man with ambitions to replace her – Jeremy Corbyn. In his response to Mrs May's statement, he expressed his "disappointment" in reading Liam Fox's letter which he had penned earlier in the week, ruling out a customs union as the "worst of all possible worlds".

When Corbyn then averred that this seemed to be an attempt to scupper meaningful talks by all but ruling out Labour's customs union proposal, he positioned the customs union at the centre of the talks on which Mrs May was relying to get her Withdrawal Agreement through the Commons.

Mrs May did not answer this point directly, so it took Kenneth Clarke to suggest to her that, in order to reach a settlement with the "principal Opposition party" would require at the minimum the, "sort of customs arrangement and sufficient regulatory alignment at least to keep our trade as open and free as it has been across the channel and in the Republic of Ireland".

This time, the prime minister took the bait, responding that she was looking at the customs arrangement that "would be in place in that future relationship". This, she said, was reflected in the political declaration, that we want to retain the benefits of a customs union - no tariffs, no quotas and no rules of origin checks.

For Yvette Cooper (the very same), that wasn't good enough, so she goaded Mrs May by asking whether she was now willing to consider a common external tariff with the EU - which is a key part of any customs union – or did she still rule that out?

Yet it was the response to this that really started to get us somewhere. The different language used, the prime minister implied, tended to conceal that there was more agreement on the customs union than is often given credit for. We have been clear, she said, that we want to obtain the benefits of a customs union, while being able to operate our own independent trade policy.

The Labour party wanted a say in trade policy, she said, so the question was, "how we can provide for this country to be in charge of its trade policy in the future".

Moments later, she was to repeat this in a response to Conservative MP Andrew Murrison – the issue was about having the benefits of a customs union and an independent trade policy, "the freedom to make those trade deals around the rest of the world that we want to make as an independent country".

There we have it, except that the prime minister is setting up a horribly flawed paradigm in asserting that there is any immediate difference between her position and Labour's. For sure, she can have the benefits of a customs union – and specifically no rules of origin – without a customs union. All she needs is a no-tariff free trade agreement, and then unilaterally to adopt the EU's WTO tariff schedules.

Where the problem comes is with the independent trade policy. In terms of substance, if Mrs May wants to keep a tariff-free arrangement with the EU, and without rules of origin, then she must keep in place the EU's WTO schedules, which have the effect of a common external tariff. But that places no more – and no less – restrictions on formulating trade policy with other third countries.

Unless she is thinking of the common commercial policy – which would be the wrong thing to do - the fact of a customs union or its equivalent places no restrictions on formulating trade policies with other countries other than in limiting the scope to conclude tariff agreements.

But, since tariffs these days are only a very small part of what are now called comprehensive free trade agreements, the limitation is hardly of any significance. On that basis, there are no grounds to go to war with Labour, or refuse an agreement with it. If the freedom to make trade agreements is the only issue, there is nothing to argue about.

Sadly, the real issue is something else – the fact that, when it comes to securing frictionless trade, the customs union is  an irrelevance. We have the political equivalent of two bald men fighting over a comb.

Stephen Kinnock raised this after a fashion. "A stand-alone customs union simply does not cut it", he said, adding: "In the options that will be presented to us if the talks do not work, can she guarantee that full membership of the Single Market through the European Economic Area will be on offer?"

Unfortunately, as he so often does, he confused the issue, by asserting that "full membership of the single market is the only way we can guarantee workers' rights and the integrity of the Union and do something for the services sector".

This gave Mrs May her "get out of jail free" card, as she pointed out that full membership of the single market was not necessary to deal with the City of London and its financial services, nor was it needed to ensure workers' rights.

You can see what Kinnock has done here. He has oversold CM2 to Labour in order to get his party's support, but in so doing opened himself to being slapped down by the prime minister. If only he had said that the EEA was a vital step towards securing frictionless trade, this little bit of history might have been different.

Looking at it another way, if all we wanted in life was no tariffs, no rules of origin checks and no quotas, then all Mrs May has to do is offer is a free trade agreement with the WTO schedules, and we are home and dry. In this sense, the two parties are as bad as each other.

But, for all that, we don't want a customs union because that does impose unnecessary restrictions on our long-term flexibility. This is the difference between the rigidity of a treaty and a unilateral commitment which can be altered in the future, with considerably less formality.

Yet, even then, this is down the line. As both Mrs May and Donald Tusk point out, there is already plenty of scope to deal with such matters in the political declaration. But since this doesn't kick in until the Withdrawal Agreement is ratified, there is nothing to gain by arguing the toss right now.

What happened in the Commons yesterday, therefore, was a complete waste of time, taking us no further forward. If we want to tie up frictionless trade, to the extent that we can dispense with the Irish backstop, then the way forward is to ratify the Withdrawal Agreement.

Then – undoubtedly with the aid of an extended transitional period – we need a comprehensive deal on the lines of a much-amended EEA Agreement, complete with its institutional architecture, and a bundle of bilateral agreements which take in such things as climate change, VAT, data protection, civil aviation, agriculture and fisheries, scientific cooperation – and much more besides.

Even with six months to go before we are due to face the cliff-edge again, we haven't got time to play these vacuous games, inside or outside of parliament. We need to get our priorities right.

And in this, we are not helped by the idiot pair, Nick Boles and Lucy Powell, writing in the Evening Standard that "it is not currently possible to maintain frictionless trade and avoid a hard border on the island of Ireland without the UK being in the same customs territory as the Republic of Ireland and the rest of the EU".

That claim is so manifestly untrue that one wonders how the same pair can, with straight faces, also promote their CM2 plan which would have us take up the Efta/EEA option – but without the vital provision of the multiple bilateral agreements that are also needed to secure frictionless trade.

Largely though, confusion reigns throughout. For Open Democracy, we have Ruth Bergan and Laura Bannister - another pair of self-appointed pundits – writing on customs unions. They seek to convince us that a customs union would still allow the UK to negotiate new trade deals covering large chunks of the economy.

This much they get right, but then spoil it all by asserting that the customs union "doesn't necessarily cover regulations and standards" – when it doesn't ever cover either.

They then compound the error by grandly declaring that the benefit of a customs union for the UK "would be to retain at least some degree of frictionless trade which goes some way to resolving issues at the Northern Ireland border" – when it would have no impact at all on securing frictionless trade. All you need to prove that is to go to the Turkish border and watch the lorry queues.

The sort of moronic interventions that we are getting here are entirely typical of this debate, constantly dragging us away from the essential priorities, and muddling the issues.

At this rate, six months down the line will have done nothing for us. Our politicians and pundits will still be prattling about the wrong things, with no end in sight. As the MPs disperse to the constituencies for their Easter break, they might as well stay there and not bother coming back.