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Brexit: beyond reality

2017-10-24 07:12:25

Mrs May was on her feet yesterday, reporting on the European Council meeting to Parliament, as recorded by Hansard and summarised by the Independent and the Guardian.

If this was Apollo 13, about now I'd be calling down to Earth saying, "Houston, we have a problem". But such is the terminal nature of this particular problem that the man in the white waistcoat wouldn't be saying that "failure is not an option". He'd be on the 'phone to his travel agent planning a long break as far away as he could get.

Basically, the problem revolves around Mrs May and her firm belief that the UK will be able to conclude a free trade agreement with the EU by the end of the Article 50 negotiating period. Thus, she seriously expects us to start progressively implementing this agreement from the date we leave, in her so-called implementation period.

However, at least one MP displayed healthy scepticism. This was Labour's Angela Smith who argued that the free trade deal "may take some time to negotiate". Did the Prime Minister accept, she asked, that she was actually referring not so much to an implementation period but a proper transition?

Mrs May wasn't having any of this, though. "The withdrawal agreement", she said, "can only be considered and agreed taking account of the future relationship". Thus, she added: "It is important that we negotiate that future relationship, so we have both the withdrawal agreement and the future partnership, and the implementation period then is a practical implementation period".

Angela Smith, we are told, then "indicated dissent", to which Mrs May noted that: "The hon. Lady looks as if she does not believe that that is possible".

In Mrs May's book, of course, it is eminently possible. "The point is that we start these negotiations on a completely different basis from any other third country", she averred. "We start on the basis that we are already trading with the other member states of the European Union on the basis of rules and regulations, and when we leave we will have taken those EU regulations, EU law and the EU acquis, into UK law".

Yet, to get to this point, the Prime Minister had perpetrated a remarkable sleight of hand. "The withdrawal agreement", she had said, "can only be considered and agreed taking account of the future relationship".

In fact, that is not the case. Article 50 states that the agreement should set out the arrangements for the departing State's withdrawal, "taking account of the framework for its future relationship with the Union.

The omission of that one word "framework" completely changes the meaning of the phrase, and presumably gives Mrs May the entirely false impression that the trade agreement has to be finalised.

Furthermore, she is completely wrong in assuming that regulatory conformity gets the UK a free pass, and a rapid conversion to a free trade agreement. I've written a great deal about this but, if one were to sum it up, the problem is that we comply with the acquis as it applies to Member States. As a third country – which we will be when we leave – a whole raft of different, additional law applies. And we are very far from complying with that.

Such obstacles, and many more yet to be specified, have already led Michel Barnier to conclude that all we can expect by the end of the Article 50 period is to have begun scoping our future relationship. But now, in a long-standing arrangement the EU has with a group of European papers, including the Guardian, Barnier has spoken out in detail, confounding Mrs May's unwarranted optimism.

Rejecting the idea of an implementation period, he takes the Angela Smith line and talks of a "transition", to ease the UK's exit from the bloc and to give time for trade negotiations. But that transitional period would require the British government accepting the continuation of EU law and the jurisdiction of the ECJ.

Nor can we rely on just a two-year period. Former Taoiseach Enda Kenny suggests that it is likely to last much longer than anyone expects.

Speaking at an event in New York organised by Matheson solicitors, he took the view that it "has to be as long as is necessary". And that elicited an interesting comment from the managing partner of Matheson, Michael Jackson. He said the two-year period "is the average transition time for a single EU directive that has to be implemented by companies. We're talking about something that’s much bigger and much more unprecedented here". Jackson believed it was going to take anything up to five years to properly transition.

Returning to Barnier, he essentially confirms this, talking of any future trade deal having to be negotiated over "several years". Furthermore, there is going to be nothing "deep and special" about the deal. "From the moment the UK told us that it wants out of the single market and the customs union, we will have to work on a model that is closer to the agreement signed with Canada", he says.

Negotiations, he added, would be highly complex and would take many years before they could be put to the national parliaments for ratification. And, rather than promoting regulatory convergence, the EU will be aiming to "frame a difference" – whatever that means.

Of the "no-deal" scenario, Barnier says: "We do not want it at all, but we do not exclude any option. Such a scenario would cause us problems, and much larger [ones] in the UK". For instance, he adds, "That would mean leaving the single European sky agreement, and no longer being able to mutually recognise pilot qualifications or get take-off or landing clearance".

But it is Mrs May's insistence that we can conclude a free trade agreement by the time we leave that precipitates the "Houston" moment. She is declaring that, unless she gets her way, she will reject the Commission's idea of a transition period. This is delusional. There is not the slightest chance that we will have a completed trade deal, ready to sign, by the time we leave. 

On that basis, we really do have a problem. If Mrs May seriously believes that we can conclude a free trade agreement by 29 March 2019 – and one that is to be "deep and special" as well - we are on a direct trajectory for a "no deal" exit. And any such "no deal" is likely to be a no deal, with no meaning no.

That our Prime Minister could have so misinformed herself really is quite staggering. If we hadn't already lost confidence in her ability to manage the Brexit process, this would be the point where we would realise that she was no longer in control.

Worse still, the casual way the media is treating this is almost as damaging. We really are looking at a major crisis in the making, the consequences of which we can scarcely imagine. Yet there is no focus and no serious attempt to portray the seriousness of the situation or warn the public of its existential nature.

To that extent, the media are as bad as our politicians. Both groups have transcended reality and are not even attempting to address the most important issues – if they even begin to understand them. Even the best of them, alongside the Commission, are still talking about transition, when they actually mean a "stop-gap" or interim period.

The reality is that it was never going to be possible to conclude a fully-blown trade agreement within two years. The government thus had a choice of extending the Article 50 period or of going for the "off-the shelf" Efta/EEA agreement. The failure to opt for either has led directly to the crisis to which we are heading.

That the entire political and media corpus has been unable to come to terms with this simple truth is an indictment of the system, which is no longer capable of serious analytical thinking. This is a system which has passed its sell-by date and before we get anywhere, we are going to need a replacement. For that, there is perilously little time.