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Brexit: back on our heads

2020-12-27 08:03:57

In a quote attributed to Bismarck (almost certainly wrongly), it is said that, "Laws are like sausages. It’s better not to see them being made".

There is a school of English journalism, however, that has not the slightest interest in sausages and is only concerned with the soap opera of their making, recounting in excruciating detail, the personalities involved and the drama attached to their lives.

Such is the nature of Tim Shipman's Sunday Times report entitled: "Brexit deal: 'Madman' Boris Johnson gets his Hollywood ending". This tells you virtually everything you probably didn't want to know about the making of the EU-UK Trade and Cooperation Agreement, from an entirely London-centric point of view, and virtually nothing of the treaty itself.

The worst of it is that the Shipman offering will probably be hailed as an outstanding piece of journalism, to be piled verbatim into his next, over-long political pot-boiler, whence it will be lauded endlessly by a procession of prestige bubble-dwellers.

For those of us who remain anchored closer to the real world and have to analyse the detail and the consequences of this treaty, we are no further forward in our understanding of the work, other than to conclude – perhaps – that the London end seems to have very little idea of what they have agreed.

What certainly has not come over is that Brussels has secreted into the system a complex and interesting treaty, one full of subtleties which is a long way from the basic "skinny treaty" that many of us originally expected.

It is one, also, which keeps the UK closer to the EU globally-based trading system than anyone could possibly have imagined at the outset of negotiations. It is one of considerable depth which creates a framework for a relationship which, if explored by people of far more diligence than Johnson and his cronies, could eventually be turned into a useful working agreement, albeit at savage cost to the UK in the interim.

That said, the least interesting and most certainly the least important parts of this treaty as it stands are the references to fish, in all its various formats, of which there are no fewer than 368 in 1,246 pages (not including the declarations). It seems that their main function, in the grander scheme of things, is one of distraction, diverting media and political attention from the detail.

While attention has been focused on an industry worth less than £600 million, at stake has been the continuation of an export trade in goods worth £294 billion last year, and £374 billion of imports, a significant proportion of which comprised materials and components which went into our exports to the rest of the world.

To enable that trade, and much else, requires a working framework, which is set out in the first chapter of the treaty. One of the greatest misnomers of this modern world is the term "free trade". We have managed trade. The greater the degree of state involvement, the more freely goods (and services) flow.

In creating a framework, the first thing of this treaty that must be understood is that it is not the end of a process, but the start – where detailed sectoral negotiations will be conducted over term, to knock the basic agreement into some sort of shape which will enable the UK to re-establish a functioning relationship with the EU.

The core of this framework – and the key to the continuous development of the agreement - is the institutional architecture built round a Partnership Council. This supports a Trade Partnership Committee, which in turn supports a network of ten Trade Specialised Committees and three working groups.

Directly reporting to the Council are eight subject-specific, specialist committees and one additional working group, the whole matrix amounting to 20 functional bodies which will deal with the ongoing functioning and development of the Agreement.

Then, adding to and extending the scope of the Agreement (but not a formal part of the Treaty) are three additional components, 26-pages of Declarations, a separate agreement for cooperation on the safe and peaceful use of nuclear energy and an agreement on Security Procedures for Exchanging and Protecting Classified Information.

Although an integral part of the whole and inseparable from it, by far the most important part of the treaty is the institutional framework. Predictably, to this the media has given almost no attention. In fact, it is hard to find any specific reference to it in the national media.

Taking a cue from the way the media have handled our membership of the EU, this will probably remain an invisible subject, which is probably just as well because this will be the "boiler room" of the agreement, the workings of which would probably have the "Brexiteers" shrieking in pain.

For the time being, though, most of the media analytical pieces haven't been worth reading. And what will probably capture most of the headlines in the weeks to come are the elements that create most friction to our ongoing trade with the EU. As regards our exports into the EU's customs area, some of these are likely to be substantial and highly visible.

Specifically, all imports will be subject to customs formalities and will need to comply with EU customs rules. Then, all imports into the EU must meet all EU standards and will be subject to regulatory checks and controls for safety, health and other public policy purposes.

Less visible, but of some considerable importance, will be the rules of origin that will apply to goods in order for them to qualify for preferential trade terms under the agreement.

Bigger, international firms, and those with a presence in the EU, may find it easier to deal with than the SMEs which have previously exported to the EU under the Single Market regime, especially when the full system takes effect in 2022.

Before we get that far, however, there is the soap opera of the Westminster "ratification" of the deal, which is now confirmed for 30 December, for which parliament is being recalled. Already, a head of steam is building up on what is being termed a "betrayal" of the fishing industry, which will doubtless serve as a distraction from the rest of the contents of the Agreement.

And at least one MP, David Davis, is complaining that the one day allowed for the parliamentary approval process is "too fast". In truth, though, any amount of time for most MPs would probably be insufficient. Taking the lead from the prime minister, they will remain in blissful ignorance of the detail, whence the many problems will only gradually emerge, by which time it will be too late to do anything about them.

For our part, we will devote as much time as it takes looking at the treaty. Pete has already made a start and there will be much more to come.

Also published on Turbulent Times.