Richard North, 13/04/2019  
 


If, as is indeed the case, the UK now has limited time to make a more informed judgment about what happens next, before we leave the EU in October, MPs could hardly make better use of their time than by reading Pascal Lamy's words in yesterday's Guardian.

Under the heading, "Staying in a customs union after Brexit won't resolve the Irish border issue", Lamy gets to grips with precisely the issues I was laying out in yesterday's piece, bringing a necessary corrective to the stupidity and ignorance we are experiencing in parliament and elsewhere. Referring to Labour's obsession with staying in a customs union, he tells us:
We should all remember that from 1957 to 1993, the European Economic Community was a customs union with internal borders. They were removed only when enough evidence of harmonisation or mutual recognition of regulations was there. The single market without borders is about regulatory homogeneity. Leaving the single market reintroduces a border – the thickness of which depends on the degree of regulatory divergence. The customs union is about the common external tariff. The single market is about common regulations.
Lamy goes on to say that "staying only in a customs union" would not be enough to solve the Irish border question. In just one example he cites, if the UK remains in the customs union with the same common external tariff but imports chlorinated poultry from the US, there has to be a border, because the EU does not accept the marketing of chlorinated poultry. This is a rule of the single market.

Nevertheless, one should not take everything Lamy says as gospel. Even the high and the mighty are capable of error – introduced in this case when he avers that the EU "is unlikely to accept a request from the UK that it should have a say over the EU's trade agreements".

That is fair enough, but then he asserts that Article 207 of the Lisbon treaty makes clear that the common commercial policy is exclusive to the EU's direction. It may be a small point, but it doesn't. Article 207 TFEU sets up the basis of the CCP (separate from the Customs Union, but linked with it in Art 206), but it is Article 3 TFEU which makes it an exclusive competence of the Union.

But with this being the case, the EU cannot have a situation where Member States vest their policy-making powers in the Commission, only then to have the EU share with the UK the decisions which shape the policy. This would be awarding the departing member greater powers than it had while it was in the EU – something the EU has said it will not allow.

But Lamy then goes too far by saying that Turkey, which is in a partial customs union with the EU, "has to follow EU trade agreements with third countries but has no say on them", implying that this is a function of the customs union.

In fact, the Turkish agreement is much more than a customs union. It requires Turkey to "incorporate into its internal legal order the Community instruments relating to the removal of technical barriers to trade", and to adopt elements of the EU's commercial policy, and its competition rules.

Even then, Turkey does have a limited ability to forge its own trade deals with third countries although if it wanders too far, it bumps into Article 45 of its agreement with the EU, which requires that:
In the framework of the application of trade policy measures towards third countries, the Parties shall endeavour, through exchange of information and consultation, to seek possibilities for coordinating their action when the circumstances and international obligations of both Parties allow.
This is on top of Article 12 which states that Turkey, in relation to other third countries, has to "apply provisions and implementing measures which are substantially similar to those of the Community's commercial policy", albeit that these are limited to a specified set of regulations.

Then we also have Article 16, which states that, "With a view to harmonizing its commercial policy with that of the Community, Turkey shall align itself progressively with the preferential customs regime of the Community within five years as from the date of entry into force of this Decision".

Thus do we find the Turkish government itself stating that: "Under the Customs Union, Turkey shall align its commercial policy with the EU’s Common Commercial Policy".

If one was to be pedantic – which one must be to understand fully the legal implications – it would be more correct to say that the "Customs Union" goes way beyond the strict technical definition set out by GATT/WTO and is close to a comprehensive free trade agreement, with substantive add-ons which reflect its role as a pre-accession instrument.

According to Lamy though, using Turkey as his example, he declares that the reality is that in a customs union, "all the power would rest with the EU, with the UK as a follower". But that is more than a little dubious as an assertion. If a customs union agreement was kept to the very minimum technical requirements, the EU's power would be limited to setting the common external tariff.

Even then, this is something we should seek to avoid. A customs union with the EU would be a bilateral treaty, with all that that entails. Harmonising external tariffs by adopting the EU's WTO schedules, which would have the same effect, would be a unilateral decision which would allow us much more flexibility and control - especially as the EU might make changes in the future which we might not want to follow.

However, it doesn't stop there. Sabine Weyand – Barnier's deputy – used to work for Lamy, and she intervened on Twitter to assert that a customs union would contribute to a solution and would be major bonus for UK manufacturing in avoiding rules of origin.

It is here that we get to the division of interests between the EU and the UK. Obviously, the EU would be happy to have the UK more tightly under control by having it tied to a Customs Union, but whatever benefits the UK might gain from that arrangement could be achieved by other means – without the baggage. As far as the UK is concerned, the Customs Union is an unnecessary solution looking for a non-existent problem.

But Weyand can't seem to leave it there. Her first tweet of the day (yesterday) was to retweet a Commission video extolling the virtues of the EU's Customs Union which, it says, saves you money and time, and protects you, your business and our environment.

In less than two minutes though, the film manages to elide aspects of the Customs Union with the Union Customs Code, the Single Market, Border Security, plant health and even firearms exports. In a confused jumble, the authors have ladled in multiple, disparate policies which have nothing to do with the Customs Union.

This isn't the first time that the Commission has done this, and with other of its more technical works adhering to a high level of factual accuracy, one suspects that this isn't deliberate. After all, the advent of the Single Market in 1992 is 27 years ago now, before the time when many people in the Commission – even at mid-rank level – started work. And most of them hadn't even left school, when just the Customs Union was in force.

What we are seeing – as elsewhere – is a loss of people who were actually involved in the events, coupled with a faulty institutional memory which isn't coping with the influx of new people. Thus, we end up with flawed, sloppy work – not direct lies, as the intent to deceive is not there, but misrepresentation all the same. Perhaps, though, if Commission officials can't get it right, we can hardly wonder that MPs have such a poor grip of the basics.

Certainly, in this game, you need a high level of knowledge, not only to understand the issues, but to be able to detect the many misrepresentations that plague this debate.

Lamy, for instance, concludes his piece by saying that, "Being in a customs union might be better than not being in a customs union". But, to be fair to him, he adds that "it would come with very real downsides too", declaring, "it is important that these are also considered".

And it is there that we find the words that open this piece. It is Lamy who says that the UK now has limited time to make a more informed judgement about what happens next. But then he says: "Whatever it decides, it should do so with its eyes wide open. Otherwise, we could all soon find ourselves back on the cliff edge".

Yet, it seems unlikely that these words will be heeded. The tragedy is that our MPs seem incapable of making informed decisions, simply because they have lost the capacity to inform themselves. From eyes wide open, they blunder around in their Westminster bubble, eyes wide shut.






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