Richard North, 30/07/2019  
 


If one takes a cold, hard look at the current situation, we have to conclude that we're in the Tipperary scenario – to get there, we wouldn't start from here.

Probably, the only way we could have secured an orderly Brexit was for MPs to have ratified Mrs May's Withdrawal Agreement. Once parliament bottled it for the third time, and the Tories decided to go for a new leader, it was effectively game over. A no-deal Brexit was the inevitable destination.

Arguably, though, there was still one potential window of opportunity. A new prime minister could have approached the European Council to ask for another extension. He could then have used the additional time to broker cosmetic amendments to the political declaration, and then perhaps to call a snap election, creating a mandate for the "new" position, which parliament could not ignore.

However risky that might have been, it would have held the promise of a solution to the Brexit impasse. But, instead, by committing to Brexit on 31 October, the current occupier of the post of prime minister has closed down his options.

Not only do the terms of the current extension specifically exclude using the time to renegotiate the Withdrawal Agreement, the European Union – even with the best will in the world – could not handle the mechanics of new negotiations and conclude a revised deal by 31 October. This is simply not possible.

For Johnson thus to declare that he is willing to negotiate with the EU, as long as it removes the backstop, rather misses the point. For the EU to conduct negotiations with the UK, it must follow the Article 238 procedure set out in the Treaties, the steps of which simply could not be concluded in the short time available.

It would help, therefore, if Johnson – perhaps for the first time in his life – told the truth about something and admitted that his "no ifs, no buts" policy leads inevitably to a no-deal Brexit.

Short of a change of heart where he applies for a last-minute extension, there is no other possible outcome. His precondition that the EU should remove the backstop is a red herring. And his assertion that the odds of a no-deal were a million to one, is of no value: He posits that this requires "sufficient goodwill and common sense on the part of our partners", when what he actually means is that the EU should concede something it has already said it will not.

As well as a first-time venture into the realms of honesty, it might also help if a man to whom the words "f**k business" came so easily, applied them to the source of all our troubles and simply said, "f**k parliament". No-deal is the default option under Article 50 and there is absolutely nothing parliament can do to stop this administration sitting on its hands and letting the clock run down.

With the position clearly stated, acknowledging only the inevitable, the media might also stop its tedious speculation and focus on the one event over which there is any certainty – that we are leaving the EU on 31 October without a deal. Then we can concentrate on the consequences of this outcome, giving the media hackery time to find out what exactly is involved – assuming that any of them are capable of learning.

That would also save us from being patronised by the likes of Dominic Raab (pictured), in his unlikely guise as foreign secretary. Currently, he is taking us for fools by asserting that the UK would be better able to negotiate with the EU after no-deal Brexit, and secure a "good deal". He also asserts that a "stubborn" Brussels would be to blame if the UK crashed out on 31 October.

Taking the last point first, we can see where Raab is going with this, and it very much seems to be part of the Johnson strategy to blame the EU for not doing something it cannot do. But then, in this propaganda game, one doesn't expect the Johnson administration to dally with the truth – given that he even knew what it was.

As to Raab's assertion that the UK will be in a better position with the European Union if it crashes out at the end of October, the man actually seems to believe that a no-deal scenario could provide more leverage when arguing for a free trade agreement and in resolving long-standing issues such as the Irish backstop.

How precisely this works, Raab doesn't seem to specify in any detail. All he can manage is the argument that we would be an independent third country and thus "less subject to effectively the demands of the EU as we are now".

Unsurprisingly, it didn't take EU officials long to intervene and reject the foreign secretary's thesis.

Apart from anything else, one can expect in the immediate aftermath of a no-deal exit, a certain amount of diplomatic frigidity – possibly extending to a full-blown war of words as the two side get stuck into an acrimonious blame game. This could hardly be conducive to calm talks on the future relationship between the UK and the EU.

In fact, says one senior diplomat, a no-deal departure "would mean the complete breakdown of political relations". He doesn't think there would be much trust on the EU side with the Tories, or with Johnson. "Eventually", he says, "we would get around it because we are pragmatic, but this would be really, really bad, because of all the rhetoric around blaming".

Another diplomat, who actually spoke before Raab's intervention, argued that all contact would cease after a no-deal Brexit. "Our phones will not be connected at that time … I don't think they will be connected to someone who has reneged on their obligations", he said.

But what could turn out to be the real "killer" is that the EU would undoubtedly demand preconditions to any talks. If the matter hadn't already been settled, citizens' rights would be high on the agenda. Then the EU would require commitments on the financial settlement and an agreement on the Irish backstop.

In other words, the UK would be no better off in terms of securing a settlement than it is now, with the added proviso that, if the UK was seeking some form of trading agreement, it could well be looking to four or five years before talks were concluded. There would be little incentive for the EU to expedite matters.

What is missing, therefore – as always – is any sense of reality. In the years between leaving with a no-deal and concluding a free trade agreement, the UK would be in a third country no-man's land, where our exporters would have to confront both MFN tariffs and the full range of non-tariff barriers. A substantial reduction in the flow of exports to EU Member States would be an inevitable consequence.

Still, though, the government and even the CBI is maintaining the fiction that we can somehow prepare for our new status as a third country.

For sure, businesses can address certain paperwork issues, such as the preparation of customs declarations, but we cannot prepare for such issues as sanitary and phytosanitary checks at EU Member State borders. These will be conducted after Brexit, but will be entirely outside our control – our exporters will simply have to conform with whatever regime is imposed upon them.

Nor can firms prepare for the fact that the service elements of trade currently conducted will be very difficult to pursue, made especially difficult where mutual recognition of qualifications lapse. It will be very hard to move personnel freely about the continent in order to deliver services.

Perhaps of greatest significance, no business will be able to prepare for the major change in status that comes with us leaving the Single Market. Whereas a UK enterprise can at the moment ship goods to EU Member States without formalities, after Brexit they will find that their goods come under customs supervision when they enter the EU, and can only be released for circulation by an importer, who must be an entity established (and resident) in the European Union.

This change has scarcely, if at all, been discussed in the UK but the change to requiring goods to be placed in charge of an EU-resident importer represents a major barrier to trade, and an active disincentive to EU buyers. For instance, while currently a UK exporter to the EU retains legal responsibility for standards conformity, post-Brexit the importer becomes liable, with significant cost and legal implications.

To that extent, much of the preparation for a no-deal Brexit rests not with UK businesses but with either authorities or businesses in the EU. Bearing in mind we have no control over these processes, we are increasingly in the hands of others, upon whose goodwill we will have to rely. So much for taking back control.

With the Commission no longer monitoring – nor seeking to prevent – barriers to trade between the UK and EU Member States, we can also expect individual states (and businesses) to introduce hurdles which will give them a competitive advantage and make it more difficult for UK businesses to trade.

This will be especially the case for the 20 percent or so of products where there are no EU harmonised standards, and mutual recognition of standards falls away. UK enterprises will suddenly find themselves having to conform with a raft of local standards that many of them didn't even know existed. And without that knowledge, they are hardly in a position to prepare.

In short, a no-deal Brexit is a leap in the dark and there are very severe limits on the amount of preparation that can be done. For the main part, we will not find out where the problems lie until after we have left, by which time it will be too late. Talk of "turbocharging" Brexit plans, therefore, is little more than a cruel hoax.






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