Brexit: another crisis over?

16/09/2020  


I am still puzzled by the prime minister's original claim that the UK Internal Market Bill was intended to "break the blockade", so to speak, in the event that the EU does not grant third country listing to the UK.

This, as we know, is the first of a three-stage procedure required before the UK can export live animals or products of animal origin from Great Britain to EU Member States and – through the exigencies of the Irish Protocol - to Northern Ireland.

If there was any doubt that this so-called "blockade" was real, we at least have a semi-literate piece in the Telegraph to confirm what we know. Headed, "Brussels warns lobby groups that UK food exports to EU and Northern Ireland could become illegal", it tells us that "British cheese, lamb and beef will be outlawed unless UK gives details of its future food rules by November".

Where the article departs from reality is in asserting that "Brussels has warned farmers, businesses and animal welfare campaigners that it may be forced to ban all British exports of live animals and animal products such as cheese, beef, eggs, chicken and lamb from 1 January".

We then learn that, "European Commission officials told a meeting of trade associations and other stakeholders in Brussels on Friday that the ban was inevitable unless the UK gives details of its future animal health and food safety regime by the end of October".

I sincerely hope that no European Commission officials expressed themselves in such lurid and inaccurate terms – but then it is difficult getting the staff these days. The point – which should have been recognised by journalist James Crisp who wrote the piece – is that we're not dealing with a ban, as such.

Third country listing is an administrative procedure, requiring an applicant country to conform with detailed requirements set out in EU law. In much the same manner as an applicant for a driving license has to comply with certain requirements – such as passing a driving test – the applicant country must "pass the tests" or it doesn't get listed.

But in the same way that you would not suggest that someone not qualifying for a driving license was "banned" from driving – which is an altogether different process – there is no question of the UK being banned from exporting. Basically, by choosing not to comply with the requirements, we will have excluded ourselves from the EU market, and from exporting to Northern Ireland. Unfortunately, The Sun is also using the same "ban" terminology.

In this instance, the issue seems to revolve around our import controls for animals and animal products. The UK government has opted to relax controls for the first six months of the year and then, post I July 2021, has not specified in detail what the control regime will be.

Entirely reasonably, the EU is taking the view that unless the UK's regimes comply with its statutory requirements – by the end of October – it will not list the UK. Indeed, it cannot. Under WTO anti-discrimination rules, it cannot treat the UK differently from any other third country.

Then, if it did not require full compliance, it would be in breach of its own rules. As such, the Commission would be open to ECJ proceedings by any other third country trader (or government) or even traders in EU Member States – with or without the support of their governments.

We do, incidentally, need to move past the schoolyard defence, complaining about the Commission upholding its own rules because it also breaks them elsewhere. The tu quoque defence was ruled out during the Nuremberg trials and applies to neither international nor domestic law.

Should the UK decline to conform with the listing requirements and is thus unable to export from Great Britain to Northern Ireland, it could of course, invoke Article 16 of the Protocol (safeguards), arguing that its application "leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade".

In that case, supplies could be shipped as normal, although the EU could then take "proportionate rebalancing measures as are strictly necessary to remedy the imbalance". This might include sanitary checks at the Irish Republic border, which would rather defeat the object of the Protocol.

Johnson, however, initially claimed that his way past the "blockade" was the UK Internal Market Bill which, if it comes into force, includes a "mutual recognition" provision which he hinted could be used to circumvent that lack of EU listing.

Although Johnson has apparently abandoned that idea, he has not ruled out taking action, expressed during Monday's debate in terms of: "we are not taking powers in this Bill to neutralise that threat, but we obviously reserve the right to do so if these threats persist…".

Reading this literally, it would suggest that Johnson still has ambitions of using the Bill to break the "blockade". His response could thus be read as "we reserve the right [to take powers in this Bill] if [the] threats persist". Looking into this, there is a mechanism available to him, which he chose not to disclose when challenged by Ed Miliband. As it stands, in the Bill Clause 11(1) rules out the application of "market access principles" to Northern Ireland, but this exclusion can be modified by 11(2).

This sub-Clause allows the application of the mutual recognition principle for goods in relation to "all qualifying Northern Ireland goods" as if they were produced in, or imported into, Northern Ireland. In other words, if animals or animal products were defined as "qualifying Northern Ireland goods", they could (in theory) be imported into Northern Ireland, in breach of the Protocol.

Now, the point at issue here is that "qualifying Northern Ireland goods" have not yet been defined. That power lies with a "Minister of the Crown" by way of Regulations, written into Section 8C of the European Union (Withdrawal) Act 2018, as amended by the 2020 Act (Section 21).

Interestingly, Bill Cash would then have it that Section 38 of the 2020 Act would apply, asserting Parliamentary sovereignty over section 7A of the 2018 Act (other directly applicable or directly effective aspects of the withdrawal agreement).

Whether this is what Johnson has in mind can only be a matter of speculation. But it does appear that there will be a mechanism for him to use if the UK Internal Market Bill becomes law, without him having to go back to parliament. To what extent the EU is aware of this also has to be a matter of speculation, but it can hardly be a surprise that it has reacted sharply to the publication of the Bill.

However, the Express is asserting that the government is planning to publish a draft food safety bill next month, which will transpose Withdrawal Agreement commitments on animal and plant health into UK law. In that is the case, and the conditions of the Official Control Regulations (Regulation (EC) No 854/2004 and Regulation (EC) No 882/2004) can be met, then another crisis, such that it is, will be over.

But if it really is that easy, one has to wonder why Johnson has raised the temperature in the way that he has, unless – as some believe - he thinks that this is the way to break the current negotiation logjam. At the end of the month, when the draft bill is unveiled, will it be smiles all round, followed by the conclusion of a deal?

Also published on Turbulent Times.



Richard North 16/09/2020 link

Brexit: listing time

14/09/2020  


Responding to the claims of Johnson et al, Michel Barnier has responded on Twitter to say that the Protocol on Ireland/Northern Ireland "is not a threat to the integrity of the UK".

We agreed this delicate compromise with Boris Johnson and his government, he writes, "in order to protect peace & stability on island of Ireland. We could not have been clearer about the consequences of Brexit".

Responding to Johnson's specific charge that the EU "might actually stop the transport of food products from GB to NI", Barnier retorts that "sticking to facts is also essential". A case in point, he says, the EU is not refusing to list Great Britain as a third country for food imports (SPS). To be listed, we need to know in full what a country's rules are, including for imports, he says. The same objective process applies to all listed countries.

Nevertheless, it would appear that the EU has not yet listed Great Britain, which has David Frost answering in his capacity as the PM's negotiator in the current and last autumn's talks.

On the Protocol, he says, we indeed negotiated a careful balance in order to preserve peace and the Belfast (Good Friday) Agreement. It is precisely to ensure this balance can be preserved in all circumstances that the Govt needs powers in reserve to avoid it being disrupted.

As to third country listings, he goes on to say that the EU knows perfectly well all the details of our food standards rules because we are operating EU rules. The situation on 1 January 2021 is accordingly perfectly clear. We have discussed this frequently with the EU including last week.

Any changes in future, he says, would be notified to the WTO and EU in the usual way with plenty of lead time. The EU lists dozens of countries globally on precisely this basis, without any sort of commitment about the future.

Yet it has been made clear to us in the current talks, Frost then complains, that there is no guarantee of listing us. He adds: "I am afraid it has also been said to us explicitly in these talks that if we are not listed we will not be able to move food to Northern Ireland".

The EU's position, Frost asserts, is that listing is needed for Great Britain only, not Northern Ireland. So if GB were not listed, it would be automatically illegal for NI to import food products from GB.

Thus, he concludes, "I hope the EU will yet think better of this. It obviously makes it no easier to negotiate a good free trade agreement and the solid future relationship which we all want".

And yet, as I remarked on Saturday, we raised this listing problem four years ago and we should not now be in a position, with only months to go, where it is still unresolved.

Nevertheless, it does seem to me that Frost is being rather presumptuous in expecting third country listing merely on the basis of track record (i.e., that we currently meet the requirements).

The EU's listing process is by no means automatic. It is a lengthy technical and administrative process, the top tier of a three-tier system comprising: (1) listing; (2) approval of establishments; (3) process controls and inspection at points of origin and subsequent processing. It is through this system that the EU ensures that exporting countries meet the standards for foods of animal origin set out in EU law.

The listing itself is conditional, and the listing process is intended to ascertain whether the "competent authority" in the applicant country has the systems in place which will enable conformity with EU food law. Furthermore, it implies that the country will make its best endeavours to ensure that conformity with the conditions of listing will be maintained.

The point at issue is that (2) & (3) are carried out by the competent authority of the exporting state. In listing a state, therefore, the EU has to assure itself that the competent authority has the ability, the resources and the commitment to enforce EU standards. Even if the first two apply, if the state lacks the commitment, then the EU would not be happy with listing it.

In this context, though, it seems the specific reservation is with import controls and the standards applied to imported foodstuffs. Clearly, if imported goods do not meet EU standards (for instance in terms of permitted pesticides and maximum residue levels), and they are used as ingredients in UK processing – or even just repackaged and re-exported – then UK export standards might be compromised.

Nothing of this is academic. Obviously, food entering EU Member States from third countries is inspected in Border Control Points (BCPs), but any modern food control system does not rely simply on single point inspections. It requires what the EU terms a holistic "farm to fork" approach, with controls at every stage of the process.

And although the system does occasionally fail (as with the horsemeat scandal), we are not really in a position to complain. The original system was devised by the UK, primarily to regulate meat imports from countries such as Argentina, enhanced in the wake of the Aberdeen Typhoid Outbreak and copied by the EU.

Where UK politicians are glibly talking about "deregulation", about adopting their own standards, and about making trade deals with the likes of the US, which do not conform with EU standards, then we really cannot be surprised if the EU is cautious about listing the UK. It is perfectly in order for the EU to seek bankable assurances that standards will be met, which are often secured by way of Free Trade Agreements.

Barnier makes the point that, when it comes to listing, "the same objective process applies to all listed countries", and that must be the case. WTO rules will not allow otherwise. But this applies both ways. If the EU can't be more severe in assessing the UK than it is with other countries, it cannot be more relaxed either. Otherwise, those other countries will demand the same treatment.

But this now gets interesting with Northern Ireland. Frost confirms that the listing applies to Great Britain but not Northern Ireland. Under the Protocol, as we know, the Province remains in the Single Market, applying EU law. Thus, it can only import foods of animal origin from EU Member States and listed third countries.

It follows, therefore, that if Great Britain has not been listed by 1 January 2021, no foods of animal origin can be exported to Northern Ireland. On the other hand, Northern Ireland can still import from the Republic of Ireland, from any other EU Member State, and from any other listed third country (such as Canada).

In anticipation of such a possibility, there is a huge amount of outrage, with Ambrose Evans-Pritchard talking of the UK's need "to defend itself against predatory diplomacy".

But the outrage is vastly overcooked. Listing is a technical process and either the UK meets the requirements or it doesn't. This isn't even for Barnier to decide. It is decided by the EU's Health and Food Audits and Analysis Office, located in Grange, Ireland, and the decision to list is made by the Commission in accordance with the criteria set out in Regulation (EC) No 854/2004.

Specifically (with certain exceptions), third countries can appear on the lists only if their competent authorities "provide appropriate guarantees as regards compliance or equivalence with Community feed and food law and animal health rules". If the UK can't provide those guarantees, no amount of special pleading will get it listed.

Furthermore, this listing process has to be carried out irrespective of any free trade agreements. The process is entirely independent of such deals, and applies to all third countries.

One wonders, though, whether Barnier has picked up the implications of Clause 2 of the UK Internal Market Bill, on mutual recognition. This includes Northern Ireland (see Clause 53), which would seem to indicate that the listing requirements of EU law have been by-passed.

If this is the case, then the current argument is moot. The UK government will be ignoring EU law and allowing produce to move from Great Britain to Northern Ireland, irrespective of whether third country listing has been secured.

It will be interesting to see whether this is raised in the Commons debate today or whether, like so many things, it goes by default because MPs haven't the wit to do their jobs.

Also published on Turbulent Times.



Richard North 14/09/2020 link

Brexit: a cart and horse

13/09/2020  


There is no question that the Protocol on Ireland and Northern Ireland is complicated – fiendishly so.

And I would wager a year's wages (if I was actually paid any) that Johnson didn't read it before he signed it, or since. He will be totally reliant on Janet & John summaries written by his officials and spads. That is the way he works and, only armed with profound ignorance could he be so confident in blazing his trail of misinformation.

However, the controversy that arose last November when the prime minister assured worried exporters they would not have to fill in customs declarations when they sent goods across the Irish Sea needs some clarification.

At the time, Johnson was questioned by an exporter about whether his business would have to complete extra forms, when he said: "You will absolutely not". But he went on to clarify this in terms of goods going to Northern Ireland and those coming from the province to Great Britain.

Johnson did, in the video clip published, make it clear that there would not be checks and tariffs on goods going from Northern Ireland to (as he says) the United Kingdom. We would have, he said, "unfettered access".

That was true and remains the case, although there is a third element. Johnson was less clear about paperwork, recommending that if any business was asked to fill in any paperwork, they should telephone the prime minister "and I will direct them to throw that form in the bin".

It was here that Johnson seems to have been wrong, in that under the EU customs code (elements of which will apply to Northern Ireland) traders will be required to make 'exit declarations' when goods leave the province, even when going to the rest of the UK.

There was, though, some dispute about whether the EU would grant a waiver as the provision, it was argued, was incompatible with the commitment to unfettered access.

From what I can ascertain, though – as of last July, the government had not secured a waiver, and businesses were in the dark about precisely what would be required of them. Johnson, at the very least, had jumped the gun.

As to goods moving from Great Britain to Northern Ireland, Johnson has never disputed that some checks will be required and tariffs will be levied where there is considered to be a risk of them subsequently being moved into the Union. Setting the criteria for applying tariffs is allocated to the Joint Committee.

Up to press, we have had no information on those criteria and now Johnson is asserting that the EU is about to impose those tariffs. But I can find no provision in the Protocol for that to happen. Setting the criteria seems to be a power reserved exclusively to the Joint Committee.

I do readily concede though that the Protocol in complicated, so it would be easy to miss what might be termed a fallback provision. But I can't see that awarding default powers to the EU would have been acceptable. The situation is covered by the dispute settlement procedure where, if the Joint Committee fails to deliver, either party can seek a ruling from an arbitration panel.

On the face of it, therefore, the prime minister is wrong in claiming that the EU is about to impose tariffs. But where this gets seriously bizarre is that he now seems to be asserting that "any such tariffs … would be completely contrary to the letter and the spirit of the Good Friday Agreement".

The situation is further confused by Hannan who is now claiming that the Withdrawal Agreement was passed on the basis that a trade deal would be not only agreed in 2020 but fully implemented.

Such a deal, he asserts, would ensure that Northern Ireland faced no tariffs, either vis-à-vis Great Britain or the Republic of Ireland, since there would be no tariffs between the UK and the EU.

And then notwithstanding the fiction that he then offers as to the progress of the talks, nowhere can he cite an actual provision in the Withdrawal Agreement that in any way makes its implementation (or not) conditional on securing a trade deal.

Hannan – as does Johnson – also seems to be under the misapprehension that the EU is set to impose checks on goods moving from Great Britain to Northern Ireland. But, as I explained yesterday, these checks are not imposed de novo. They automatically apply the moment the UK moves out of the Single Market.

What the Protocol does is move those checks (and the application of tariffs) from the border between the Republic of Ireland and Northern Ireland, to the entry points in Northern Ireland. With or without a trade deal, most of the checks would still apply.

But now we have Hannan claiming that the legislation placed before Parliament this week (the UK Internal Market Bill) "is, though you wouldn't guess it from the coverage, narrowly and specifically designed to prevent such barriers, which might be applied maliciously".

This, however, cannot be found in Clause 42 of the Bill, which gives the Secretary of State power to disapply or modify export declarations and other exit procedures" and then only "to goods, or a description of goods, when moving from Northern Ireland to Great Britain".

This is absolutely nothing to do with tariffs or checks and it does not impact on goods being shipped from Great Britain to Northern Ireland. What it seems to be about is removing any requirement for exit summary declarations in the event that the UK does not secure a waiver, thus allowing Johnson to honour his promise that NI traders sending goods to Great Britain will not have to complete any paperwork.

To that extent, any breach in international law is "very specific and limited" and, presumably, would only kick in if the EU did not allow a waiver. As to the state aid provisions, they are rather more serious, but that is also another story.

On the face of it, it is hard to see how such a minor provision could be considered to be "undermining the Union of our country", or in any way seriously endangering peace and stability in Northern Ireland.

The rhetoric, though, is remarkable. Says Johnson, "we cannot leave the theoretical power to carve up our country – to divide it – in the hands of an international organisation". Thus, he says, "We have to protect the UK from that disaster, and that is why we have devised a legal safety net – in the UK Internal Market Bill – to clarify the position and to sort out the inconsistencies".

At first sight, this appears nothing short of delusional, as if it is writing into the Bill powers which don't seem to be there there, to deal with things which were agreed and embedded into an international treaty and cannot be removed without a major beach of international law.

But when Johnson wants to prevent barriers to trade between the nations and regions, he actually means it. He wants anything approved for sale in Scotland or Wales to be good for sale in England or Northern Ireland, and vice-versa.

And its there that the focus has been too tight. So far, I've been looking at Clauses 42-43. But if we look at Clause 2, we see 'the mutual recognition principle for goods – a requirement that goods which have been produced in, or imported into, one part of the United Kingdom ("the originating part") … should be able to be sold in any other part of the United Kingdom, free from any relevant requirements that would otherwise apply to the sale.

But that's not what he signed up to. Under most circumstances, goods shipped to Northern Ireland from Great Britain must comply with EU standards. His Bill seeks to change that, and constitutes a major break of the Protocol. It drives a cart and horse through the agreement.

This is not at all "very specific and limited". If this Bill goes through, the Protocol is a dead letter. And the EU cannot let that pass by.

Also published on Turbulent Times.



Richard North 13/09/2020 link

Brexit: another fine mess

16/07/2020  


Some companies, it seems, are taking the threat of a no-deal TransEnd seriously – according to the Financial Times. Several large listed companies are starting to increase their stocks of supplies, having exhausted stores accumulated ahead of the last time a no-deal scenario was expected.

They are also, apparently, working on contingency plans to ensure that they can manage the worst-case scenarios of high tariffs and hard borders, despite the extra costs they have incurred adapting to the coronavirus pandemic.

This is just as well, as it would appear that yesterday's round of EU-UK talks have not – as expected – broken any new ground. "Team Johnson" is pushing the EU to agree the outline of a deal by the end of July, while Brussels seems not to have changed its stance on demanding concessions on level playing field issues such as state aid.

Three companies are cited by the FT. One is Electrocomponents, the FTSE 250-listed electronics distributor. It says it is building up its inventory in case of a no-deal TransEnd, that will see it hold millions of pounds of extra stock.

"We are building up the Brexit buffer again, which last time was about £30m of fast moving inventory", says chief executive Lindsley Ruth. "Regardless of the outcome of trade negotiations, we are well prepared for the future and have a plan for all scenarios".

Carmaker Bentley – which, typically of the motor industry, relies on just-in-time delivery of supplies from Europe - is to start preparations in the event of border disruption. It has increased warehouse space to carry up to ten days of supplies of parts, up from two days.

Then, Paul Forman, chief executive of Essentra, says his FTSE 250 supplier of plastic and fibre products would "hope for the best and prepare for the worst". His company is beginning to stockpile again.

He tells the FT: "We have had a pretty robust dress rehearsal with Covid. Our plans are in place and have been reviewed by a Big Four accounting firm". He adds: "The B-word started moving back up the board agenda again about six weeks ago. In the second half we will build the inventory up by only £3-4 million".

On the other hand, Geoff Mackey, corporate affairs director at BASF, the German chemicals group, says his company is not actively stockpiling. But it is looking at the government's border operating model (such that it is) for the impact on operations, alongside the costs of switching to a new UK regulatory regime.

In a no-deal scenario, the chemicals industry expects to face average tariffs of about 6 percent. Mackey estimates this could add around £40m to the UK company's costs.

However, illustrating the relationship between the costs of tariffs and non-tariff barriers, he is able to identify the additional costs of re-registered products with a new UK regulatory regime that will come into force at the end of the transition period. This could cost another £60-70 million "with no added value", Mackey says.

Well-established, wealthy international companies such as BASF are better able to deal with such major changes than smaller companies, which lack both the resources and corporate skills to prepare for post-transition life. The Covid-19 pandemic hasn't helped, pushing many to the brink of collapse.

A typical example might be the engineering company Northern Industrial. Its managing director, David Lenehan, says he hasn't given "Brexit" a second thought since the Corona pandemic. He has been fully focused on trying to get through the current crisis. He thinks Brexit "will be a walk in the park compared to coronavirus", but there again, he could be thinking of Jurassic Park.

That brings us to John Glen, an economist at the Chartered Institute of Procurement and Supply. He warns that the government has problems getting businesses to prepare for 1 January.

There have already been three false starts, he says. "Getting business engaged, and in particular small and medium sized firms, when they are still trying to survive coronavirus will be a major challenge". Finding the right sites for the new customs areas and designing the technology would also be a challenge in five months, he adds. "All of these pieces need to be in place to keep the trucks rolling".

However, life cannot have been made easier by the government's latest plans to give control of around 70 regulatory areas currently dictated by Brussels to devolved UK governments.

Sectors covered include environmental law, renewable energy policy, flood risk management, land use, water quality laws and forestry policy. Matters such as animal welfare, blood safety, the control of hazardous substances, and public procurement are also covered.

These will be devolved to the Scottish, Welsh and Northern Ireland governments as part of the government's cunning plan.

Where divergences occur, the government will rely on the principle of mutual recognition of standards, to ensure frictionless functioning of the UK's internal market. Products from any of the four UK areas will be acceptable throughout the whole UK, even if they are made to lower standards in one or more areas.

Reflecting the chaos over facemask policy, where the "advice" from No.10 seems to be all over the place, creating more confusion than clarity, one wonders whether the government has really understood the implications of this move.

In trading terms (certainly within the EU's Single Market), the principle of mutual recognition applies only in the absence of harmonised standards. Thus, if there is a standard applicable to any particular product (or component), mutual recognition doesn't apply.

Where UK companies are planning to export goods to the EU, their products must conform with Union standards, where they exist. But where the products (or their components) are potentially sourced from four zones each with their own individual regulatory codes, demonstrating conformity could get quite tricky.

This is especially the case when it comes to such issues as environmental law, where the "level playing field" requirements could exclude products even where there is nominal conformity with posted product standards.

That problem intensifies over time as legislation is a dynamic field. Future conformity cannot be assured if Brussels changes its laws and any one of the four UK regulatory areas fails to keep up.

At the very least, with no border controls between the areas (with the possible exception of Northern Ireland), Brussels might be expected to intensify its own border checks when importing goods of UK origin, as well as requiring "rules of origin" declarations to identify goods sourced in the devolved areas.

If one didn't know better, it is possible to think that HM government is going out of its way to make things more complicated for businesses, hampering their ability to trade with the EU, above and beyond the basic constraints which will inevitably apply.

Needless to say, Whitehall claims it is doing the right thing by the devolved administrations, arguing that the plan is a "power surge" for them. Even without the EU implications, though, those administrations remain suspicious. Scottish officials fear that Johnson will use this as a back door, bringing in substandard goods from the US, which Scotland and other devolved areas will be obliged to accept.

Michael Russell, the Scottish government's constitution secretary, says that London’s stress on powers that the devolved administrations would gain is a "deceitful smokescreen". Speaking for his government, he adds: "We will not be co-operating in any way with that action and will challenge it in every possible way including in the courts".

Even if the government's intentions were pure, therefore, it seems it will come unstuck on the horns of complexity and suspicion. Any which way, this is another fine mess we have to deal with.

Also published on Turbulent Times.



Richard North 16/07/2020 link

Brexit: notices for readiness

30/06/2020  


Possibly the best indicator to date that we're headed for a no-deal (or very limited deal) TransEnd is the news that the European Commission has taken upon itself to update its original "notices to stakeholders" on Brexit, and populating a new website.

This has the somewhat uninspiring title of "Getting ready for the end of the transition period", but then the Commission does seem to have recognised that calling it "Brexit" is inappropriate, and it hasn't cottoned on to TransEnd yet. It probably never will.

However, the text is sound enough. It tells us:
Even if the European Union and the United Kingdom conclude a highly ambitious partnership covering all areas agreed in the Political Declaration by the end of 2020, the United Kingdom's withdrawal from the EU acquis, the internal market and the Customs Union, at the end of the transition period will inevitably create barriers to trade and cross-border exchanges that do not exist today.
Delicately turning the screws, it then goes on to add: "There will be broad and far-reaching consequences for public administrations, businesses and citizens as of 1 January 2021, regardless of the outcome of negotiations. These changes are unavoidable and stakeholders must make sure they are ready for them".

Originally, there were over a hundred "notices to stakeholders", but these are now being reviewed and updated as necessary. So far, 51 (by my count) have undergone the treatment and been reissued as "notices for readiness".

Entering the first of these notices, on air transport, we see a similar admonition. "During the transition period", we are told:
… the EU and the United Kingdom will negotiate an agreement on a new partnership, providing notably for a free trade area. However, it is not certain whether such an agreement will be concluded and will enter into force at the end of the transition period. In any event, such an agreement would create a relationship which in terms of market access conditions will be very different from the United Kingdom’s participation in the internal market, in the EU Customs Union, and in the VAT and excise duty area.
Helpfully, this notice starts by telling readers that, since 1 February 2020, the United Kingdom has withdrawn from the European Union and has become a "third country". In a footnote, it then defines that controversial term for those who confuse it with "third world country". Simply, it is a country which is not a member of the EU.

Considering that prime minister Johnson is wittering on about "free trade areas", he might also benefit from one of the other footnotes, which warns that a free trade agreement does not provide for internal market concepts (in the area of goods and services) such as mutual recognition, the "country of origin principle", and harmonisation.

Nor, it says, does a free trade agreement remove customs formalities and controls, including those concerning the origin of goods and their input, as well as prohibitions and restrictions for imports and exports.

I am so pleased that this hits on the head the stupidity of Shanker Singham, who has been telling his idiot followers that we could do a deal with the EU on mutual agreement (of standards). He's wrong. You can't. It is an "internal market concept", which means you have to be in the internal market to get it. And since we're not (or won't be) we will not qualify.

But the air transport notice is fairly straightforward compared to the one on aviation safety rules. Here, there are six pages of dense prose which, if we do leave without a deal, amounts to a holy pile of grief. We really, really do need to conclude a deal with the EU.

The really interesting one, though, is on "Chemical Regulation under REACH", which coincides with the news that Defra has confirmed that it will implement its own version of the EU's system, from the end of the transition period.

Unsurprisingly, industry has been rather keen that the UK should align with the European regulatory system. But this is not to be. The UK Government will implement a "UK REACH" run by Defra and the Health and Safety Executive (HSE), replacing the European Chemicals Agency (ECHA).

There is no arguing that REACH is a highly bureaucratic and expensive regulatory system, but we do export an awful lot to the Continent and divergence could cost us dear.

Last time I looked (which was a little while ago), together with pharmaceuticals, with which chemicals are grouped, UK exports to the rest of the EU amount to some £50 billion annually (slightly more than half is attributable to chemicals). The combined value was nearly a quarter of our total exports to the EU (£223.3 billion in 2015). I doubt it has changed very much.

If we end up with two systems, even if they are quite close at the start, they are bound to diverge over time. Chemical firms exporting to the EU will thus have the worst of all possible worlds, having to comply with two separate regulatory systems.

It actually seems that the UK isn't even going to try to align with REACH, according to parliamentary under-secretary of state of Defra, Rebecca Pow. This woman actually asserts that "having control of our own laws outweighs the costs" – which is fine when you're not paying those costs (not directly, at any rate).

The other side of the coin is that some chemical manufacturers on the Continent may decide that the UK market is not big enough to support additional registration costs, in which case we could find ourselves short of chemicals vital to manufacturing industries, even to the extent that certain products will no longer be made in the UK.

The other problem is that there are other third countries which have adopted the REACH system – South Korea being one – and that may disrupt import and export trade with them. Non-conformity could be a very expensive deal.

Worse still, this seems to suggest that HMG is not taking the problem of non-tariff barriers at all seriously. We remain to be convinced that Johnson and his ministers even know what they are.

But the new notices do tend to point out the scope of the problem. We see categories ranging from audiovisual media services (such satellite TV) to biocides, cosmetic products, food law, industrial products, medicines and recreational craft (boats).

Each company seeking to export goods and services caught by EU rules, where UK rules are divergent, will have to make hard decisions as to whether it is worth dealing with dual regulatory systems. The bigger companies may find it economic (or not), but the smaller companies which only export to the EU might find it not worth their while.

Here it is not only additional production costs which may factor, but also conformity testing and approvals, where many firms will have to duplicate expensive and onerous procedures, for no commercial gain.

The trouble is, that for all the noise about current negotiations, drawing up agreements on non-tariff barriers and related matters is a complex and slow business. There simply isn't time, therefore, to carve out a deal which will satisfy the needs of industry. The chemical industry will not be the only victim.

Thus, when on 1 January 2021, as Michael Gove avers, "we will take back control and regain our political and economic independence", there will be a price to pay.

Also published on Turbulent Times.



Richard North 30/06/2020 link

Brexit: blancmange deals

18/06/2020  


From having almost disappeared off the agenda, swamped by Covid-19 news, Brexit – or, to be more accurate, Trans-end – is making something of a comeback.

Pete has even been moved to write about the subject, commenting on the government declaring its formal interest in CPTPP, the Pacific regional trade agreement. He is not impressed: this is mainly a regional agreement on tariffs with investment and services provisions, only marginally more sophisticated than the WTO baseline.

Like every trade agreement, though, it has its winners and losers, with Canada benefiting from an uptick in sales of animal products to CPTPP partners – an interesting outcome as the EU-Canada CETA failed to deliver for the Canadian livestock industry.

The trouble is that even recent data is of little help in assessing performance. Covid-19 is progressively rewriting the global trade map. What might have looked promising, pre-pandemic, may offer very different prospects now. Before the disease hit, there was even talk of the US rejoining what, after all, is son of TTP, together with China.

More than a year ago, that possibility was being touted as a way of reducing tensions between China and the US, although hopes of China joining are being kept alive.

The latest seems to be that China’s decision-makers and stakeholders remain uncertain as to whether the benefits of the CPTPP membership would outweigh the costs and therefore remain divided on whether to proceed. There has even been a suspicion that the agreement is a politically-driven containment tool, although the lack of interest of Trump's USA has tended to alleviate concerns.

However, it does say that, for the UK, CPTPP is something of a leap in the dark – but then that is a reasonable description of Britain's entire post-Brexit trade policy. The interest here seems more like displacement activity, to siphon attention away from the lack of progress on the EU front.

Much as the Johnson gang would like to think otherwise, trade issues with the EU are not under control and neither are they going away. We're seeing multiple reports that Berlin is unimpressed by the recent "tiger in the tank" rhetoric, and is urging the EU Commission to draw up contingency plans for a no-deal Trans-end.

This, apparently, comes from Reuters, which has got hold of an internal German government document which "casts doubt" on Johnson's optimism about an early deal.

"From September", the document says, "the negotiations enter a hot phase", noting that "Britain is already escalating threats in Brussels", wanting "to settle as much as possible in the shortest possible time". It predicts that the UK "hopes to achieve last-minute success in the negotiations", a favoured MO for Johnson.

The German Foreign Office is fully convinced that the transition will not be extended beyond the end of this year, and this says that it is, "important to preserve the unity of the 27, to continue to insist on parallel progress in all areas (overall package) and to make it clear that there will be no agreement at any price".

Rather looking for the headline, one suspects, the German Foreign Office has coined the newly-minted end point as "no-deal 2.0", although it is difficult to imagine how this might differ from the original version.

For all that, Berlin is suggesting that the situation is not as bad as it has been, arguing that some of the more important issues were sorted by the Withdrawal Agreement. But it still believes that London's decision not to extend the transition might lead to a "cliff edge", compounding the economic damage caused by the coronavirus crisis.

The lack of great concern might reflect the different position of the Germans, vis à vis Brexit, as they are proportionately less vulnerable than the British to the trade impact. But it doesn't take a great genius – of even a German civil servant – to work out that a no-deal Trans-end might add to the grief on Covid-19.

Ursula von der Leyen, meanwhile, is putting her own oar in, reiterating the somewhat hackneyed EU stance that there will be no post-Brexit deal without the famed "level playing field" – the one for pigs in pokes to romp on.

No one can fault von der Leyen for her determination to make statements of the bleedin' obvious, as she says, "The negotiations with the UK always promised to be difficult and they have not disappointed".

Presumably without the aid of the Commission supercomputer, she has worked out that "We are now halfway through these negotiations with five months left to go". But she also adds that, "we're definitely not halfway through the work to reach an agreement". That much isn't new, and neither is her saying: "We will do all in our power to reach an agreement".

I suppose she, and the cohorts of EU officials will be saying that right up to the point when the UK walks away without a deal, muttering something like "we tried" in all of its 24 official languages.

Despite that, there does seem to be some movement on the fishing issue, with von der Leyen conceding that, at the end of the transition period, the UK will have clawed back "sovereign rights" over its waters. VDL says that all Brussels wants is a "long-term agreement", to give continuity to EU Member State-flagged vessels which have acquired rights.

This, though, is the pinch-point, as the UK is only prepared to look at access on a year-by-year basis, starting afresh each year with annual negotiations on fishing opportunities.

Seeing as the UK has always railed against the annual fisheries 'quota fest' in Brussels, and approved the introduction of multi-annual allocations, it is a bit rich for "team Johnson" once again to be applying annual limits. That is no way to run a commercial fishery.

Von der Leyen has thus told the European Parliament that "No one questions the UK sovereignty over its own waters". What she wants is "predictability", which means guarantees for vessels which have been sailing in UK waters "for decades".

What is going to be as difficult, if not more so to resolve, is the issue of treaty governance. This has had relatively little coverage, but right from the start, the EU has wanted a single, over-arching agreement, with standard rules and institutions, and a common dispute procedure.

This was the stance it took with the ongoing negotiations with Switzerland, arguing that the multiplicity of treaties was resource-intensive and needed to be rationalised. The Commission can hardly ask anything different of the UK, but the British government is still looking for a series of stand-alone agreements, none of them dependent on the others. Refusal of the UK to play could be a deal-breaker.

The European Parliament, on the other hand, is repeating its threat that it might hold back on ratification of any deal that doesn't meet with its expectations, with Kati Piri, the parliament's rapporteur on the "future relationship" negotiations saying that "parliament is united on a strong text with a clear political message, and that message is simple: yes we want a deal, but we will not simply consent to any deal".

No one serious though really believes that the European Parliament will strike an independent note if the Commission approves a UK-EU deal.

With these negotiations, though, nothing ever seems to be settled. Almost from the sublime to the ridiculous (except that big money is involved), Barnier is accusing the UK of trying to reopen an already fixed agreement on protecting EU regional food specialities, with mutual recognition of "geographical indications".

This may seem an issue of relatively less importance, but it perhaps serves to confirm the EU's view that dealing with the UK is like negotiating with a blancmange. Nothing ever settles and the moment you get close, it wobbles.



Richard North 18/06/2020 link

Brexit: dem planes

08/03/2020  


There is something rather odd about the phrasing of the announcement made by Grant Shapps, transport secretary, in respect of the European Union Aviation Safety Agency (EASA).

According to Shapps, who has been speaking to Aviation Week, the UK will withdraw (my italics) as a member state of EASA after the transition period and shift responsibility for aircraft certification and safety regulation to its own Civil Aviation Authority (CAA).

The point at issue is the choice of that word, withdraw. We are not going to withdraw, as such. The UK ceased to exercise any role in the management of EASA when it left the EU at end of January this year. And, at the end of the transition period, all EU law related to aviation safety will cease to apply to the UK and the UK will automatically no longer play any part in the EU's aviation safety system.

There is a provision whereby a European third country can participate in EASA (see Article 129), but the conditions are such that the UK could not entertain such an arrangement, not least that it would have to adopt all EU law relating to aviation safety. Working within the framework of EASA would also mean having to accept the jurisdiction of the ECJ.

We have known this would be unacceptable for some considerable time though, which makes the Aviation Week "exclusive" something of a non-story. We actually wrote about it in 2014, and several times since then, with an especially relevant report in late 2018, where I noted that the issues were fully apparent in January 2017.

This, of course, hasn't stopped the likes of the BBC and the Guardian treating this as something new, using the "hook" of the secretary's comments as the justification for the story - typical of the breed where nothing is news until they have published it.

The Financial Times, however, takes a different slant, headlining: "UK aerospace industry warns of risk from leaving European agency". It thus tells us of the industry warning of jobs and investment at risk, and its preference that the UK should continue to participate in EASA.

This is underlined by Paul Everitt, chief executive of ADS, the aerospace industry trade body, representing industries delivering £36 billion a year. He declares that "UK influence in EASA ... helps make our industry attractive to the investment it needs to be home to the development of a new generation of advanced aircraft technology".

There is something rather pathetically naïve about this statement, not untypical of the general approach of industry to Brexit. There is no likelihood whatsoever of a Johnson administration accepting the terms set out in EU law for participation in EASA. Dropping out was a done deal the moment Johnson became prime minister.

However, this is now going to create a massive problem for civil aviation, both in terms of design and manufacturing and operations. In the first instance, the UK must rebuild its body of law, covering a vast range of enterprises and activities. Then it must reconstruct the CAA which, having ceded many of its functions (and personnel) to EASA, must re-acquire capabilities to act as an independent regulator.

Shapps talks glibly of the UK, outside of EASA membership, seeking "mutual recognition of certifications in bilateral agreements with other countries and blocs".

He also seems to indicate that this will be something of a leisurely process, stating that the CAA will "eventually" assume responsibility for new aircraft type certificates and airworthiness approvals, suggesting that this will occur "over a period of time".

What he doesn't seem to appreciate is that, when the UK is outside EASA, many of the certifications and approvals issued to UK enterprises (and individuals) will no longer be valid and that certification issued by the CAA will not be recognised.

Pending a formal agreement with the EU on aviation safety, this will mean that many certificates and approvals will have to be renewed in one or other of the EU Member States, at considerable inconvenience and expense – assuming there is time. As it stands, there is considerable risk of major disruption, and a very strong chance that some businesses will be unable to function.

As to any formal agreement with the EU, this will have to be in the form of a Bilateral Agreement on Safety in Aviation (BASA) which, if the USA is any guide, will have to be a long and complex agreement, especially as we are starting from scratch.

Within any such agreement, Shapps can forget any idea of mutual recognition. The US and the EU rely on "equivalence". Any idea of mutual regulation is usually based on the adoption of US Federal Aviation Agency (FAA) standards.

In the future, it is unlikely that the UK will be treated any differently, which means that the UK will have to demonstrate that its rules and procedures have the same effect as the EU regime. And the chances of that happening to any substantial degree in the near future – or even by the end of the year – are precisely nil.

As we know, the industry body ADS estimated that it might take ten years to rebuild our regulatory capacity. But it has also put a price of £40 million a year for the venture, against a current contribution to the European agency of £1-4 million annually.

In the interim, British businesses will be forced to rely on the good offices of either EASA or the FAA for approvals and certification. But the irony is that, in September 2017, the CAA chief executive Andrew Haines was predicting that, should we leave EASA, "we should adopt the existing EASA regulatory system, rather than developing a new framework from scratch".

The end result of a great deal of turmoil and expense, therefore, might be that we end up with exactly the same system that we had before we left the EU. And as long as we are then locked into a BASA with the EU (and the US), there is no scope for any regulatory divergence. And nor would we want any. Aviation is a global industry and it would be entirely impractical for the UK to go it alone. What is coming over, therefore, is a sense that this government has vastly underestimated the complexity of dropping out of the EASA system, while substantially over-egging any gains from so doing.

That said, as long as it is the intention of the UK to avoid any commitments on regulatory alignment, there is no other option. We will have to go through a long, arduous and expensive process, in the knowledge that, for those enterprises which have survived the coronavirus crisis, life will be that much more expensive.

Eventually, given the tarnished reputation of the FAA over the Boeing 737-MAX affair, the UK may be able to carve out a regulatory niche, providing services for third countries such as Brazil. But the competition from European regulators will be strong, and they have a considerable head start.

The downside of that is that the aerospace sector in the UK, needing to work more closely with the regulator, might transfer much of its design and development, and its manufacturing, to EU Member States. But at least, we have taken back control. And we all know how much sense that makes.



Richard North 08/03/2020 link

Brexit: designed to fail

29/02/2020  


When it comes to trade in goods, there are three basic levels of regulatory integration: mutual recognition; equivalence; and harmonisation. The least onerous for enterprises wishing to export to the EU is mutual recognition, except that the EU permits this only for intra-union trade and then only in the absence of relevant harmonised standards.

Nevertheless, that didn't stop the likes of Shanker Singham advocating this back in 2018 as the basis on which the UK could trade with the EU in a post-Brexit world, conferring on it the much sought-after regulatory autonomy.

It has taken from then until now for this Muppet tendency to understand that mutual recognition isn't a flyer, leading us to the situation we were exploring yesterday, where HMG seems to have embraced the second option, going for regulatory equivalence.

Even then, the government seems to have an extremely slender grasp of the nature and application of this option, and appears to be treating it as a slightly firmer version of mutual recognition, with little more than semantics separating the two concepts.

But this is the latest attempt by HMG to assert its regulatory autonomy, symbolising its determination at all costs to avoid harmonisation of standards. In its book, harmonisation means ceding regulatory autonomy to the European Union, whereby we become mere "rule-takers", with no say in the formulation of new standards.

However, the fact that the government has fixed upon equivalence actually shows a lack of understanding as to how the EU tends to apply the concept, in most cases taking "equivalent" to mean "the same", with very little if any flexibility. In practice, it becomes harmonisation in all but name.

Not only does the government fail to understand this, though, it seems to be running away with the impression that equivalence will bestow on businesses that magic property of frictionless trade.

Despite constant explanations and reminders from Michel Barnier, it still hasn't taken on board the need to maintain the regulatory ecosystem, and even full harmonisation is only a starter for ten. Equivalence, even if accepted, will not give us frictionless access.

The government's White Paper on our future relationship with the EU, therefore, is not only flawed. It betrays an inherent weakness in the UK's position, where it is fighting for something which is essentially unattainable and, even if granted, would not give the UK what it thinks it would get.

If we had a halfway competent media, this crucial weakness would have been exposed and dissected, identifying the fact that the government is badly mishandling its trade negotiations with the EU.

But, for want of the ability to carry out a technical appraisal of the government's negotiation position, the media has by-and-large gone for the lightweight, easy pitch, reporting on the government's threat to walk away from the talks if by June significant progress has not been made in reaching a deal.

As it stands, the negotiating mandate the government has set itself means that it cannot achieve any progress – however that is measured. Our negotiators are setting us up for a fall, seeking an outcome which would not begin to satisfy the trading needs of this nation. This is like taking an exam with the deliberate intention of failing.

Yet, with coronavirus dominating the headlines, about the only media pundit of any consequence prepared to address the government's Brexit policy this weekend is Matthew Parris , writing under the headline: "We’re talking ourselves into a Brexit bust-up".

Even then, Parris is way behind the curve. He is critiquing the speech of David Frost which was delivered nearly two weeks ago.

Nevertheless, Parris is not impressed, arguing that our chief negotiator's simplistic and nationalist vision of our place in the world "doesn't deserve to be taken seriously". Taking exception to the reliance on Burke, he notes that the text was billed as being "striking, heavyweight and philosophical" but, while conceding that it was certainly "striking", dismissed it as "lightweight and tendentious: a call to battle, not to negotiation".

"I'm at a loss", he says, "to explain why most of the media treated this, the keynote speech on Britain's negotiating position, as a profound and intellectually serious contribution", declaring:
It is peppered by giveaways about the spirit in which our chief negotiator is approaching his task. He sees himself as a pugilist, full of passion. For him this is a liberation struggle. He's going into battle against a usurping force that has been "governing" us. He sees the EU as intrinsically a bad thing, bad for all its peoples, most of whom are deluded about its supposed merits.
This, of course, is Parris the Europhile speaking, but that is the best we have on offer for the moment. Otherwise Frost, and his master Johnson, are being given a free pass by the media, which has largely given up even attempting to promote a serious or informed debate.

Even the supposedly sober Financial Times, sharing ground with the BBC, avoids the substance and goes for the headline: "France warns UK on 'artificial' Brexit talks deadlines". Thereby following in the tradition of biff-bam journalism, the FT reduces the narrative to a spat between France's Europe minister, Amélie de Montchalin, and the Johnson administration.

Speaking at Chatham House in London, she said that the EU governments "do not care so much" about the existing deadlines for the talks. "If we need six more months so it will be",” she added, stating: "The 10-month deadline is only relevant in terms of the British political agenda".

In all probability, Montchalin is not much brighter than our own dismal crew of politicians, although I may be being unfair to the woman. She was, after all, able to observe that the UK was not Canada, it had a much bigger economy, was much closer (to France) and was much more important.

In a sense, however, the EU (and Member States such as France) is part of the problem. Knowing the UK's hang-up about regulatory autonomy and the related dispute about the "level playing field", it still seems reluctant to offer us a way out, or even a sop to our wounded pride.

Yet, it should not be too difficult to point out that many of the regulations about which the UK seems so concerned have originated at a regional or global level, to which effect the EU is as much a rule-taker as the UK, if not more so. The UK has its own voice on the global councils, so it is wholly wrong to say that we have "no say" in the formulation of the rules coming out of Brussels.

Despite the first round of talks starting on Monday, and with the terms of reference published we are not really any further forward. The debate has ossified, largely around a few badly explained points, with both media and politicians seemingly unable to address the substantive points.

But then, the Twitter commentariat doesn't seem much better, and I am not getting any sense that the public is at all engaged with the issues. It is fair to say, though, that we are entitled to look to the media for a lead, leaving Pete to remark that, with Brexit having moved on to the details stage, it's now outside our media's gnat-like attention span. It wouldn't report the issues correctly even if they were capable of it.

Brexit, he says, was notionally about accountability but nobody seems serious about holding the government to account. Johnson can please himself. The one standard that won't change after Brexit is good old British incompetence. And it wouldn't surprise me if this was "directed" incompetence, dedicated to ensure that the coming talks can do nothing but fail.



Richard North 29/02/2020 link

Brexit: treaties for dummies

28/02/2020  


It was a matter of singular ill-timing that, at the very moment the Johnson administration produced its own White Paper setting out its negotiation mandate on the forthcoming "future relationship" talks, the UK's Appeal Court issued its judgement on the government's approval of a third runway at Heathrow Airport.

On the one hand, we have the stern declaration in "The UK’s Approach to Negotiations" that, "Whatever happens, the Government will not negotiate any arrangement in which the UK does not have control of its own laws and political Life".

On the other, we have a British court ruling that the government's action on Heathrow is "illegal" (actually "unlawful") in that it produced its Airports National Policy Statement (ANPS) without taking into account the Government’s commitment to the provisions of the Paris Agreement on climate change, concluded in December 2015.

Specifically, the commitments on climate change require that the reasons for the policy set out in the ANPS "must … include an explanation of how the policy set out in the statement takes account of Government policy relating to the mitigation of, and adaptation to, climate change".

Thus, we have a very clear instance of where the government is not master in its own house, having to defer to provisions of an international treaty, duly signed and ratified. As per the Vienna Convention on the Law of Treaties (Article 27), a party (in this case the UK government) "may not invoke the provisions of its internal law as justification for its failure to perform a treaty".

In that context, the Johnson administration's search for "a relationship based on friendly cooperation between sovereign equals, with both parties respecting one another's legal autonomy and right to manage their own resources as they see fit", is something of a chimera.

Through innumerable international treaties, of which the Paris Agreement is only one, the government has ceded its legal autonomy and is bound by the provisions to which it has agreed. Insofar as sovereignty is involved, as long as the government retains the power to cede from, or otherwise abrogate an agreement, that elusive quantity is upheld.

It is quite remarkable however, that the entire media corpus has seemingly failed to put two and two together, and remark that the Heathrow judgement shows the government to be chasing after a fantasy in respect of the forthcoming EU negotiations.

Every single international agreement of any substance – and certainly a "future relationship" agreement with the EU – will to an extent curtail the government's "legal autonomy" (I think they actually mean "legislative autonomy"). To demand a treaty that has no impact in this respect is to ask the impossible.

Looking at the government's White Paper in the round, Pete has produced a useful analysis which goes some of the way in identifying specific flaws in a poorly framed strategy. Amongst other things he points out, "if you want total regulatory independence, don't live directly next door to the number one global regulatory superpower".

Yet it is that drive for regulatory independence which seems to dominate the White Paper, with an almost plaintive plea that the EU should accord the same terms found in the EU-Canada Agreement (CETA), without apparently having a very clear idea of what is involved in that Agreement.

No more is this so obvious as when it comes to the government's strictures on Sanitary and Phytosanitary (SPS) Measures. There it not only wants to "build on the WTO SPS Agreement in line with recent EU agreements such as CETA", but it also calls in aid the EU-NZ Veterinary Agreement, looking for an equivalence mechanism.

One is almost embarrassed for the government, by the sheer amateurishness of its approach. One squirms inwardly, praying that our negotiators really are not as gauche as this document indicates, and that they are far better informed than its authors.

When it comes to CETA, therefore, one hopes that they are familiar with Annex 5-D, which sets out "guidelines to determine, recognise and maintain equivalence". There, they will find that the criteria for the determination and recognition of equivalence are "to be agreed at a later stage".

In other words, there is no formal recognition of equivalence in CETA. As far as exports to the EU are concerned, as Canadian meat producers are finding, "equivalence" means full conformity with EU requirements.

As to the references to the EU-NZ Veterinary Agreement, this really shows up the amateurishness of the UK approach. There is indeed an allowance for "equivalence" between EU and NZ law, but it is not equivalence as we know it - and definitely not something our producers would be particularly happy about.

What it means in practice is that New Zealand has, in theory, the freedom to make its own domestic law in any way that it pleases. But, when it comes to exporting animal products (which is the substance of the Agreement), it must accommodate all the requirements set out in EU law.

Inasmuch as it is extremely inconvenient (and expensive) to produce to multiple legislative codes, the way New Zealand achieves this is by shadowing EU law – even to the extent that every time the EU changes its law, NZ enacts new laws to include the new requirements.

Thus, the "equivalent" law is only equivalent as long as it shadows EU law, and even then animal products still have to be submitted on entry to the EU to a BIP (BCP) for inspection, albeit at a reduced rate, with reduced inspection fees.

Basically, goods to be exported to the EU must satisfy a regime of domestic law plus EU add-ons. Producers thus have to conform to the baseline NZ law, but to that are added more detailed (mandatory) requirements, laid down in what are called the EU Overseas Market Access Requirements (EU-OMAR) – the details of which are actually confidential.

It is not the case, therefore, that NZ domestic law is regarded as "equivalent". The local laws are modified and added to until they have exactly the same effect as EU law. And, in any event, there is certainly no question of mutual recognition. The EU effectively converts "equivalence" into meaning "the same".

These small examples, however, illustrate the difficulties in properly critiquing the government's efforts. The devil, as always, is in the detail – a level of detail which is not only far beyond the capability of the media, but outside the scope of most of the self-appointed "experts" which form the favoured claque which feeds the media.

Another example is the White Paper's views on the UK and the EU establishing a Bilateral Aviation Safety Agreement (BASA). This, the White Paper says, " will facilitate the recognition of aviation safety standards and regulatory cooperation between the UK Civil Aviation Authority (CAA) and the European Union Aviation Safety Agency (EASA)".

But what this doesn't recognise is that the UK's system of aviation safety regulation has largely been dismantled, as authority has been ceded to EASA. Thus, the UK aerospace industry body ADS, has said it would take approximately 5-10 years for the CAA to rebuild its safety regulation capability to take over from EASA.

That the UK can therefore stand as a "sovereign equal" with the EU, with the "right to manage their own resources as they see fit", is sheer wishful thinking. In aviation and in so many other areas, we have lost much of our domestic legislative capabilities and are entirely reliant on the EU to manage our legislative processes.

But most of all, as we see from the White Paper – with its references to the WTO's TBT and SPS Agreement, to the World Customs Organisation (WCO) and even the WP.29 UN Regulations hosted by UNECE, for vehicle safety and environmental protection – a huge amount of what we implement in this country is already determined by international agreement, handed down via the EU.

In terms of chemicals, the White Paper even talks of cooperation between UK and EU authorities, including on implementing the Global Harmonised System of Classification and Labelling of Chemicals – which is, of course, a UN initiative, administered by UNECE.

In future, international agreements are still going to dominate our regulatory processes, and in regaining our notional "independence", we are increasingly going to discover the "double coffin-lid" phenomenon, as we find that many of the apparent EU provisions have been established at a regional or global level.

An almost complete failure of the White Paper to recognise or understand this dynamic rather illustrates that the Johnson administration is out of its depth. With the likes of Johnson having spent years railing against "EU Rules", he and his fellow travellers have simply failed to realise how much the world has moved on.

When we have Gove, therefore, telling us that, "As a sovereign, self-governing, independent nation", we will have "the freedom to frame our own laws …" and "determine our own trade relationships", he is in cloud-cuckoo land.

Yet these are the dummies who are set to negotiate a new trade treaty with the EU. They haven't a clue, and the EU negotiators will take them to the cleaners. It looks as if our lot have some reading to do (illustrated).



Richard North 28/02/2020 link

Brexit: getting down to detail

08/02/2020  


An Ipsos MORI poll commissioned by the Evening Standard is telling us that, despite Johnson asserting that Brexit is already "receding in the past behind us", most people think there is unfinished business.

Only 15 percent thought he had "completely" fulfilled his promise to get Brexit done, while 29 percent felt he had "mostly" met the pledge. Around 36 percent accepted that Brexit had been "to some extent" completed and nine percent thought he had "hardly" achieved anything, That left a disconsolate rump of eight percent who believed that Johnson had "not fulfilled his promise at all".

In some senses, this poll illustrates is the difficulty of getting coherent answers from a highly subjective question. The response must surely depend on how individuals define Brexit. And then there is also the political bias, with Conservatives exhibiting more positivity. Some 68 percent said that the prime minister had mostly fulfilled his promise and 25 percent were prepared to say that he had completely fulfilled it.

On the other hand – brainwashed Tories apart – this poll provides some evidence to suggest that most people are not taken in by Johnson's rhetoric. This presents him with an ongoing challenge as he tries to make getting Brexit "done" a fait accompli, so that he can move on to new glories.

That. however, has not stopped Jonathan Lis, deputy director of British Influence, complaining about the government's attempts to control the political vocabulary, arguing in the Guardian that the Foreign Office's "contorted language" of Brexit is a smokescreen.

Unfortunately for him, and the understanding of the general public, he has chosen to major on Johnson's alternative to a Canadian-style deal, his so-called Australian model. Like so much of the media, and others, he takes the Canadian option as a "hard Brexit" and chooses to cast "Australia" as "trading on WTO terms", or, more succinctly, "no deal".

"It doesn't matter that Australia is negotiating a free trade deal with the EU and is in any case a relatively minor trade partner on the other side of the world", says Lis. "This friendly-sounding euphemism for 'no deal' helps the government cover up what it has already done and obscures the reality of what it is about to do next".

In a burst of rhetoric, he then asks why the government thinks it can get away with promising something sunny and open such as "Australia" when the reality – he claims – "will mean a self-imposed commercial blockade".

What strikes one about this is the ignorance and lack of curiosity of the man. Although one might expect the media to drop into the easy assumption that the Australian model means no-deal, this man has less excuse, claiming as he does to be deputy director of a think-tank (not that that means too much these days).

However, it really doesn't take much effort to look up the history of trading relations between Australia and the EU, and a fairly straightforward search will readily illustrate that, while no formal free trade agreement (FTA) – as defined by WTO – exists between the parties, there is an extensive web of agreements between the parties aimed at facilitating trade.

A good source (one of many) is a report by the University of Melbourne entitled "Australia and the European Union: trends and current synergies" – financed, incidentally, under the EU's Erasmus programme.

The EU and Australia, the report says, have a longstanding relationship of over 50 years. They have had annual official dialogues for some decades and a history of sectoral agreements, with official diplomatic relationship starting in 1962.

The relationship has evolved from earlier decades of disagreements and perceptions of "a tyranny of distance", where engagement has been challenged by difficult relations at times. For some time, bilateral relations were characterised by tensions and what has been termed "Antipodean antipathy".

There were frequent disagreements particularly regarding agricultural trade and also climate policy but, the report says, in recent years the EU-Australia relationship has reached a level of unprecedented cooperation that is characterised by a multi-policy, all-of-EU and all-of-Australian government approach.

Formal trade agreements have been in place since 1994 with an Agreement on Scientific and Technical Cooperation and the European Community-Australia Wine Agreement.

Then, in 1997, the EU-Australia relationship reached a new chapter with the signing of the Australia-European Joint Declaration (DFAT 1997). This had initially been expected to have a treaty level status but concerns from the Australian government about the EU's human rights conditionality clauses resulted in a decision to downgrade the agreement to a political declaration.

A year later saw a Mutual Recognition Agreement on Conformity Assessment and further technical agreements were to follow, including further agreements on trade in wine.

The Joint Declaration was succeeded in April 2003 by an Agenda for Cooperation, which identified priorities for a partnership over the subsequent five years, including security and stability issues; education, science and technology, transport; and migration and asylum.

The year 2008 saw a new Partnership Framework, which updated and replaced the previous two major bilateral agreements. It sought to encourage closer practical cooperation in five areas: foreign and security policy; trade and investment; the Asia-Pacific; climate change, environment, and energy security; and science, research, technology and innovation.

This was followed by a Framework Agreement, which was concluded in 2017 and has been applied on a provisional basis since 4 October 2018. This Agreement has for the first time brought the relationship to a treaty level.

Bringing the chronology up-to-date, in November 2015, the EU and Australia agreed to commence a scoping process prior to the launch of negotiations for an FTA. Negotiations were formally launched on 18 June 2018.

We are told that both Australia and the EU have a strong desire to demonstrate their commitment to the international rules-based trading system and the negotiations form part of the EU's strategy to "shift…trade policy towards the negotiations of what the EU terms 'new generation free trade agreements'".

Looking at the current Partnership Framework, one already sees many of the aspects that are to be found in EU trade agreements, and especially a commitment, where appropriate, to coordinating positions in international and regional organisations and fora, including the UN and its specialised agencies, the WTO, G20, the FSB, the OECD, the World Bank Group, and several regional organisations.

We also see the parties agreeing to cooperate within the framework of the WTO Agreement on Technical Barriers to Trade and through the Agreement on mutual recognition in relation to conformity assessments, certificates and markings between the European Community and Australia.

Already, therefore, the EU is pulling Australia into its network of global and regional operations and, with the talks currently in progress between willing partners, this relationship can only intensify.

If Johnson feels that "Australia" represents a light touch relationship with the EU, he is sadly mistaken and, contrary to the view of Lis and others, even now it cannot be taken to constitute a no-deal approach. The Framework Agreement is a fully-fledged treaty which covers many of the areas that an EU-UK future relationship agreement would cover.

Nonetheless, Lis is convinced that the government is trying to control people's attitudes by exerting control over their lexicon. This, he says, is not simply an attempt to reframe voters' opinions but their minds.

It is, he asserts, seeking to confuse us with jargon, misinformation and contradictory statements, deploying slogans to anaesthetise us from its actions. We will, he believes, eventually become so exhausted that we believe the government when it tells us to blame someone else, or else stop caring altogether. This, he argues is the real meaning of taking control – but of the people, not for them.

What might be more useful, though is if Lis and his fellow travellers toned down the rhetoric and addressed the issues. At a strictly practical level, Johnson's idea of an "Australia" type of deal is fatuous and ill-considered. And since it can hardly be taken as to represent no-deal, his critics should be devoting their energies to demanding clarification.

Those who oppose Johnson's agenda should not be taking his statements at face value, or attributing unsupportable meanings, and get down to the detail. This is where the debate should be taking us.



Richard North 08/02/2020 link

Brexit: a spat in the making

04/02/2020  


I don't think I've ever read such a disjointed, badly drafted speech from any prime minister as the one delivered by Johnson yesterday. Totally lacking in gravitas, the whole thing was an embarrassing muddle.

Or, as Graham Lithgow put it, "Not to call Boris Johnson incoherent, but you'd get more sense out of a lethally intoxicated acid casualty attempting to recite the Gettysburg Address with a swarm of locusts in his mouth".

It is perhaps unsurprising that Downing Street excluded the Guardian's John Crace from the venue in the Greenwich Old Royal Naval College. A speech on the eve of vitally important trade talks with the EU, that opened with a description of James Thornhill's ceiling decorations in the Painted Hall as "gorgeous and slightly bonkers", is beyond parody.

And what can one make of the description of the UK as a "country ready to take off its Clark Kent spectacles and leap into the phone booth and emerge with its cloak flowing as the supercharged champion, of the right of the populations of the earth to buy and sell freely among each other"?

Not so very much better is the written statement to parliament, although it is written in a more sober fashion, setting out the government's proposed approach to the negotiations with the EU about our future relationship.

These contrast with the European Commission's press release, and a measured statement from Michel Barnier to introduce the Commission's recommendations on the EU's negotiating mandate.

Not hours after the delivery of Johnson's speech, we had the "take" from the Mail, headlined: "Boris Johnson slaps down Michel Barnier saying Britain will NOT obey Brussels rules to get a trade deal - after EU negotiator demands the UK commits to a 'level playing field' and gives access to fishing waters".

In a taste of things to come, the paper told us that Johnson had "brutally slapped down Michel Barnier after the EU negotiator demanded Britain signs up to EU rules to get a trade deal". The prime minister, it continued, "insisted" that there was "no need to tie the UK to Brussels regulations, or vice versa, as he condemned growing protectionism around the world".

Thus, says the Mail, "the two sides are on a collision course again, with Mr Johnson vowing he will never accept Brussels regulations as the price for a trade deal". And this after a speech in which the prime minister pointedly omitted the word "Brexit".

As to the details of both side's pitches, evaluation is probably beyond the scope of the legacy media as we know it. Instant Twitter reaction from favoured "experts" on live feeds simply doesn't cut it, and nor does the off-the-cuff reaction from a "a quick glance at both texts".

By the time the information has been absorbed and properly analysed (if ever), the media will have moved on to its next hystérie du jour, leaving behind a simplistic narrative that will probably miss most of the main points.

One thing which is unarguable, though, is Barnier's assertion in his statement that even if we do achieve a "best-in-class" free trade agreement, it will not be "business as usual". All imports of goods, or services supplied in the EU, he tells us:
… will need to comply with EU rules, be it on safety, health or other standards protecting our public policy objectives. As a result, goods entering the Union will, for example, be subject to regulatory checks. These are the automatic, mechanical consequences of the UK's choices.
We are finally getting to the point, therefore, that I made almost exactly three years ago when I asked my readers to imagine a medieval walled city, inside which the traders happily do business – with the public and between themselves – secure within the fortifications.

When a trader (unhappy with the rules and regulations) decides to move his stall outside the walls, I argued, he cannot then complain that he is no longer able to trade freely with the people still inside.

We will have two separate markets instead of one single market, says Barnier: rules of origin and customs formalities will apply between the UK and the EU; access to the EU market will be subject to certification and market authorisation and supervision activities. Specifically – despite the babbling of Shanker "Snake Oil" Singham (so popular with the legacy media), and others, "there will be no harmonisation or mutual recognition of rules".

One needs to repeat that latter point for emphasis: "there will be no … mutual recognition of rules". This means, Barnier reminds us, "that UK financial services suppliers will no longer have the passporting rights they used to enjoy under Union legislation". And it will mean a whole lot more.

Another crucial issue, which is being heavily rehearsed is the so-called "level playing field", or the "flanking policies" as I prefer to call them. Johnson in his speech declares that: "There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar".

This, on the face of it, is the deal breaker, as the EU's recommended negotiating position states that the envisaged agreement should "uphold the common high standards in the areas of State aid, competition, state-owned enterprises, social and employment standards, environmental standards, climate change, and relevant tax matters". In so doing, it adds, "the agreement should rely on appropriate and relevant Union and international standards".

Nothing, however, is quite as it seems. In respect of competition policy, subsidies, environment and climate, labour and tax, the government's written statement is more precise than the prime minister. It asserts that "the government will not agree to measures in these areas which go beyond those typically included in a comprehensive free trade agreement".

Yet, the most favoured "comprehensive free trade agreement" is the 1,598-page Canada-EU Comprehensive Economic and Trade Agreement (CETA), which Johnson insists that he wants. On close inspection, however,this yields provisions on competition policy (Article 17.2), while the parties also:
…recognise that economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development, and reaffirm their commitment to promoting the development of international trade in such a way as to contribute to the objective of sustainable development, for the welfare of present and future generations.
To that effect, the parties agree to promote sustainable development through the enhanced coordination and integration of their respective labour, environmental and trade policies and measures. They also commit to:
…promote dialogue and cooperation between the Parties with a view to developing their trade and economic relations in a manner that supports their respective labour and environmental protection measures and standards, and to upholding their environmental and labour protection objectives in a context of trade relations that are free, open and transparent.
There is, in fact, very little difference between the scenario set out in the EU's recommended negotiating position and the fully-fledged Canada-EU trade deal. And, if it is tolerable in CETA, then the UK can surely have no objection to much the same provisions in any coming trade agreement – unless Johnson is really angling for an Australian-type deal.

The latter relies on a joint declaration rather than a treaty, augmented by a Mutual Recognition Agreement on conformity assessment and a few other instruments.

Predictably, the BBC's celebrity know-all thinks "there is no Australian free trade deal with the EU", although she is by no means the first to make this mistake. However, this supposedly non-existent agreement actually commits the parties "to pursue policies aimed at achieving a sound world economy marked by sustained economic growth with low inflation, a high level of employment, environmental protection, equitable social conditions and a stable international financial system".

For this to work for the UK, though (as we set out in Flexcit as early as 2015), the government would have to make an additional commitment, by way of the declaration, to continued regulatory harmonisation. It would also need to negotiate an agreement on tariffs plus a series of bilateral agreements on programme participation. Thus, even an Australian-style trading relationship is not an easy option.

Nevertheless, the government's "pick 'n' mix" approach has the makings of an epic spat with the EU – a gift to idle hacks who can project a biff-bam soap opera instead of dealing with the real issues. It has all the ingredients of a classic media-fest, with the evil EU and its gang of foreign villains lined up to take the fall.

Somewhere in between though, there is a need to cut through the noise and work out what actually is going on. The upside is that, when it comes to the Brexit that dare not speak its name, we are unlikely to be short of things to write about.



Richard North 04/02/2020 link

Brexit: the deed is [almost] done

30/01/2020  


I would have preferred our exit from the European Parliament yesterday to have been done with dignity. But Farage and his ghastly crew don't do dignity, preferring instead to break the EP rules by waving national flags in the chamber to accompany the Great Leader's final speech.

Farage had previously been warned (in an earlier session) against such demonstrations and the repeat, in this case, predictably drew a response from Mairead McGuinness, the vice-president in the chair. She switched off Farage's microphone, leaving him to mouth soundlessly to the chamber.

Rebuking Farage, she told him to "Sit down, put your flags away", adding: "you're leaving - and take them with you". This did not stop his MEPs raising a cheer for their leader – another tasteless, if somewhat raucous display.

When it came to the vote, 621 MEPs approved the motion to consent to the Withdrawal Agreement, 49 opposed and a mere 13 abstained. With 751 MEPs elected for this round, that means that 68 did not vote, either because of absence or for some other reason.

That provoked an outbreak of singing from the chamber, with a rather fractured rendition of Auld Lang Syne, some MPs waving EU-UK "half-and-half football scarves", with prominent union flags, the like of which had recently invoked McGuinness's ire. All that was left was a few public displays of emotional gushing by reluctant departees and it was done.

The General Affairs Council is now scheduled to declare that the Article 50 proceedings are concluded, as required by the Treaty. This will be conducted in writing today, presumably by the permanent representatives acting as plenipotentiaries.

Then, and only then, will all the formalities be complete, clearing the way for the UK to leave the Union at midnight, Central European Time, on Friday, ending our membership of 47 years and one month, respectively of the European Communities (which included the EEC and Euratom), the European Community and the European Union.

Should there ever be a United States of Europe, we are unlikely to be part of it. Even though some MEPs have pledged to "leave a light on" for our return, Guy Verhofstadt has made it clear his preference for a UK shorn of "opt-ins, opt-outs and [budget] rebates. These are conditions which, if applied, would present an insuperable barrier to a UK determined to rejoin.

For the moment, however, it is clear that any thought of returning to Brussels with our tails between our legs (or otherwise), is firmly off the UK political agenda, with the Labour leadership campaigners all refusing to include that commitment in their personal manifestos. It may be that a new Lib-Dem leader is prepared to burn a candle in the window, although who cares? It will do nothing more than attract moths for the foreseeable future.

Meanwhile, Johnson has signalled to the fanboy gazette that he will be telling the EU that he is prepared to accept post-Brexit border checks rather than allowing Britain to be a rule-taker.

Johnson, of course, is not the one who personally will have to bear the delays, disruption, costs and loss of business concomitant with accepting border checks with the EU, but he is nevertheless preparing to concede this in what is being slated as a "major speech", setting out his aims for a trade deal next week.

The man, we are told, will say that sovereignty is more important than frictionless trade. Whitehall sources have told the Telegraph that, while Johnson wants to avoid tariffs and quotas on cross-Channel trade (to say nothing of trade across the Irish Sea), he will never "cave in" to demands for alignment on regulations, despite knowing "the consequences that flow from that".

Bolstering this "hard line" stance is Sir Robbie Gibb, described as Theresa May's Downing Street chief of staff, but actually her press spokesman/comms chief. He asserts that the EU has failed to grasp that the UK's political landscape has "utterly changed" as a result of Johnson's majority at the general election.

The new year, he says, is producing the same old briefings from Brussels: that the EU will set the sequence for the coming talks; that we will have to make concessions over our fishing rights for access to EU financial markets; and that EU judges should have the final say over any trade disputes with Britain.

That this man ever had anything to do with advising Mrs May, however, illustrates the lack of knowledge and understanding that pervades even the highest level of the state.

Gibb asserts that the current Irish protocol – as a "stand-alone provision" - has the effect of keeping Northern Ireland in both the EU and UK customs areas and, he says, with these arrangements, Britain is free to diverge from EU rules when it wants. This is the biggest change that the EU does not seem to grasp.

This government, he goes on to say, wants a good trading agreement with the EU but not at the expense of UK sovereignty. With that, he avers, the EU can also choose to keep friction to a minimum for the benefit of its business as well as ours.

And then, in what amounts to the "money quote", he actually suggests that the EU "can stop playing hardball and accept mutual recognition of our standards as they do for many other countries in certain sectors, such as Canada, Japan and the US".

Even after all this time, we have people such as this who fail to understand the difference between "equivalence" and "mutual recognition of standards", the latter applying exclusively to members of the Single Market – a concession given to no third countries, including Canada, Japan and the US.

The trouble with such people is that they never step outside their own little bubbles. Had Gibb done so, he might have recorded the complaints of Canadian meat producers, which I reported in March 2017.

Here we got an understanding of how "equivalence" actually works in practice. Despite implementation of CETA, we had Ron Davidson, head of international trade for the Canadian Meat Council, saying, "We do not have what we would call commercially viable access to the European market".

More than two years later, we have an article in CBC News reporting (predictably) that the Canada-EU beef trade deal was "not working as well as hoped".

European health standards, it said, were "too costly and complicated for Albertan beef exporters", stating that: "a difference in food health standards between the European Union and Canada is being blamed for beef exports falling short of expectations, despite a promising modification to a trade agreement between Canada and Europe".

Remarkably, in 2018, Canada sent just 3.1 percent of the 50,000 tonnes of meat authorised for export each year, and in 2017 the total was only 2.3 percent. That means CETA earned only $12.7 million for Canadian producers in 2018, against a theoretical potential of $600 million in any one year.

This is by no means an isolated report, with the Financial Post later publishing a headline that complained: "Beef and pork for cheese deal sours as strict EU health rules hinder Canadian exports under CETA".

Here, we see that, despite the new opportunities afforded by the deal, pork and beef exports to Europe have hardly budged, despite being "one of the most important elements for Canada in this negotiation".

Canadian exporters filled none of their frozen beef quota in 2018, and just 1.5 percent of their pork allowance. By contrast, European cheese exporters have taken almost full advantage of CETA, filling 99.2 percent of Canada's quota for fine quality cheese in 2018 and 71.1 percent of the quota for industrial cheese.

Then, in the last few days, we had France 24 asking: "Is Canada on losing end of CETA free trade agreement with EU?"

The answer, as one might expect, is yes. But that is the reality Johnson must be prepared to accept when he sets the pace for the coming negotiations. And when his stance is endorsed by the ignorance of such people as Gibb, with Farage apparently telling us that everything will come right as German car manufacturers will insist on a good deal, we haven't much to look forward to.

They can all wave their little flags, and I suppose we'll be seeing a lot of that over the next few days. But then the reckoning will start.



Richard North 30/01/2020 link

Brexit: silence may be preferable

23/01/2020  


Columnist Martin Kettle, in a headline in the Guardian has the nerve to tell us that Brexit is not "done", so "we" have to start talking about it again.

Of course, we haven't stopped talking about Brexit and, with some constancy, have been at pains to point out that the claim of Brexit being "done" is something akin to fraud.

But then, Kettle isn't talking about us. The "we" to which he refers is the legacy media, an institution which has just spent the best part of a month bloviating about the royal soap opera, to the exclusion of just about everything else, including Brexit.

And that rather adds to the bulk of evidence demonstrating that the media really does live in a world of its own. Nothing exists outside their foetid bubble and because they have gone silent on something, that automatically translates into the generalisation that "nobody" is talking about that particular issue.

But, before we embrace the idea of the media pouring out a torrent of news about the most important domestic political issue this century, we might also call for a significant upgrade in the quality of reporting and analysis. As much of what we actually get is hardly worth reading, more volume isn't necessarily to be welcomed.

A good example of this is one of the most recent propaganda offerings from the fanboy gazette which parades the "shock-horror" headline: "EU preparing to give UK worse trade deal terms than Canada or Japan", augmented yesterday by one of those fatuous "explainers", which serves to illustrate how little its author actually knows.

In the original piece, we have Peter Foster using that irritating formula, telling us that the Telegraph has "learned" that the European Union "is preparing to offer the UK a trade deal on tougher terms than its deals with Canada, Japan and a host of other leading trade partners".

As a statement of the bleedin' obvious, this really does take some beating. Even with the paucity of media coverage, you would need to have lived on a remote desert island for a couple of months not to be aware that this was the EU's intention. How many times does a Commission spokesman have to repeat this before it's no longer news that the Telegraph deems fit to print?

But the self-important Foster hasn't finished with just this stunning "revelation". He goes on to pronounce that, "in what will be seen by industry as an unusually harsh move", the European Commission has warned EU member states that it would be a mistake to allow some UK industry bodies to be allowed to certify that goods conform to EU standards.

Confusing his terms somewhat, he makes it known that he is referring to "so-called Mutual Recognition Agreements (MRAs)", when in fact he actually means Mutual Recognition Agreements on conformity assessment – an important distinction which is necessary to avoid confusion with MRAs on standards, or even professional qualifications, all of which are very different things.

According to Foster, MRAs (on conformity assessment) "are granted to other key EU trade partners to facilitate the smooth movement of goods in key sectors". But, he says, such an agreement "could be withheld from the UK if it only seeks a basic trade deal".

Actually, that latter assertion is a matter of certainty. It almost goes without saying, as one usually finds such agreements embedded only in the most comprehensive of free trade agreements, and then with clear-set conditions.

For instance, in CETA (the EU-Canada trade deal), there are 178 references to conformity assessment, including the central declaration (Art 4.3) that the parties "shall strengthen their cooperation in the areas of … conformity assessment procedures … in order to facilitate trade between the Parties".

But this is immediately followed (in Art 4.4) by the further declaration that: "the Parties undertake to cooperate to the extent possible, to ensure that their technical regulations are compatible with one another". This is then heavily reinforced by Chapter 21 of the Treaty, on "regulatory cooperation", where we get this statement:
The Parties recognise the value of regulatory cooperation with their relevant trading partners both bilaterally and multilaterally. The Parties will, whenever practicable and mutually beneficial, approach regulatory cooperation in a way that is open to participation by other international trading partners.
When it comes to stand-alone MRAs on conformity assessment, these are in fact – contrary to the impression given by Foster – quite rare birds. Outside the framework of a single, comprehensive FTA, the EU has only agreed seven of them in its entire history. These are with Australia, Canada, Israel, Japan (now superseded by the new FTA), New Zealand, Switzerland and the USA.

Yet, apart from the Swiss agreement, these are actually pretty thin stuff, only covering a fraction of goods traded, with one exception – Switzerland. And here in the "Blue Guide" (download EN version), we find the reason why.

"The MRA concluded with Switzerland which entered into force on 1 June 2002", the Commission tells us, "is a comprehensive agreement based on the equivalence of the legislation of the EU and Switzerland".

Then making the point that "the case of Switzerland remains quite unique", it points out that the provisions of the Agreement and the harmonisation of Swiss technical regulations with those of the EU "ensure seamless market access for EU products to the Swiss market, and vice versa".

This was only possible, the Commission says, because, on the one hand, "Switzerland has an existing technical infrastructure (e.g. the public or private institutions dealing with standards, accreditation, conformity assessment, market surveillance and consumer protection) which is equally developed and deemed equivalent to the one existing in the EU".

That much could apply to the UK but, on the other hand, "Switzerland has chosen to modify its legislation in the sectors covered by the agreement, in order to align it with that of the Union. Furthermore, it has committed to maintain its legislation aligned whenever amendments to it are introduced by the Union to the applicable EU legal framework".

And there's the rub. As long as the UK is determined to make a meal out of regulatory autonomy, asserting at every possible opportunity that it intends to diverge from EU regulation, it is not going to get the EU to open its doors and offer it things such as MRAs on conformity assessment.

Never missing the opportunity to reinforce its own failures, though, the Telegraph gives the job of explaining the detail to Victoria Hewson - the IEA's Head of Regulatory Affairs and Research Associate - which she lamentably fails to do.

Even the headline is wrong, proclaiming: "In rejecting mutual recognition, the inflexible EU would violate the spirit of WTO rules", a mad assertion that suggests a complete misunderstanding of the role of MRAs on conformity assessment.

The "Blue Guide" itself points out that, where conformity assessment is required in regulations, national authorities of EU Member States may refuse to accept attestations of conformity issued under accreditation by non-European accreditation bodies not complying with the EU requirements.

However, it says, this refusal cannot be based on the sole argument of the non-fulfilment of the EU requirements by the third country accreditation body. The conformance to the EU requirements by the third country accreditation body is not a condition for acceptance of conformity assessment results.

In practice, the EU adheres to the principles of the WTO Agreement on Technical Barriers to Trade, and will accept third country conformity assessment on a case-by-case basis. What a formal MRA on conformity assessment does, therefore, is give certainty to exporters. There is no discrimination involved.

Where government-to-government agreements are in place, the Commission says, "national authorities of EU Member States will accept the test reports and certificates issued by bodies that the foreign party has designated under the MRA … in the categories of products or sectors covered by the MRA".

Hewson, incidentally, asserts that China has an MRA on conformity assessment with the EU – which it doesn't. But, this being the Telegraph, there is no need to be concerned with mere facts. Thus, back where we started, by all means let the media start talking about Brexit again – but let it first have something worth saying. Otherwise, a period of silence may be preferable.



Richard North 23/01/2020 link

Brexit: trading places

29/11/2019  


Despite continued speculation, it seems to me to be pretty obvious that, in the eleven months that Johnson is allowing for the negotiation of our "future relationship" trade deal with the EU, there isn't going to be enough time to conclude a Canada-style comprehensive trade deal, much less a "super-plus" Canada deal, or whatever the pundits want to call it.

It is also a matter of record that the Tory manifesto does not promise to secure a comprehensive trade deal with the EU, for such is any Canada-style deal. The word "comprehensive", in relation to any trade deal, is noticeably absent from the manifesto. In fact, the word is only used once in the entire document, and that refers to a review of pension schemes for women.

One can also take note of the simple fact that a free trade agreement is a variable quantity. It can be a hundred or so pages long, or it can be several thousands of pages. It all depends on where the parties set their sights.

Putting these simple facts together, we can conclude – as we have already done – that Johnson has no intention of concluding a Canada-style deal with the EU by the end of December 2020. It will not happen because it cannot happen – to achieve such a deal is simply impossible in the time. Therefore, any discussions on the impact of such a deal are irrelevant. We need to be focused on likely scenarios.

Assuming that Johnson intends to honour his manifesto commitment, we already know that he can agree a "bare bones" or de minimis treaty with the EU and get it signed in time for it to take effect when the transition period finishes, at the end of December 2020. Logic tells us that this would certainly amount to a basic agreement on tariffs and quotas, perhaps with some provisions on rules of origin and anything else that can be achieved in the time.

Some pundits argue that the EU would necessarily impose conditions before it would agree to freeing up tariffs, etc., but there is no logic in this assumption. A tariff-free deal would be to the greater advantage of its Member States so there is no reason why the EU should block such a basic treaty or complicate matters by imposing conditions.

As to the rest, one must recall that the EU made considerable preparations for a no-deal exit by the UK – as did the Member States. These and other provisions still stand and can be reactivated to fill in the gaps left by a "bare bones" treaty, in order to keep the wheels of commerce turning.

Since Barnier has already conceded that he is prepared to entertain a deal which encompasses just the "core trading arrangements", it is safe to assume that both the EU and UK are moving in this direction and this is the most likely outcome. That, in turn, renders very unlikely a no-deal scenario for the end of December 2020. Whatever the pundits say, this is not really on the cards.

Nor must it be assumed that an initial "bare bones" treaty will be the end of the matter. We know that the EU very pointedly made it clear that it would not entertain so-called "mini-deals" in the event of the UK leaving without a withdrawal agreement. But Johnson intends to leave the EU at the end of January 2020 with his version of the withdrawal agreement in place – assuming the Tories win the election.

Thus, the original prohibition on negotiating a series of mini-deals no longer stands. Furthermore, there are longstanding precedents applying to the EU and third countries – such as Switzerland and Norway – which allow for such an incremental approach to treaty-building.

Once we have broken away from the EU at the end of the transition period, therefore, we can reasonably expect the EU and UK negotiators to return to the table and conclude a further series of agreements, either as protocols to the basic treaty, or as stand-alone treaties – in a process that could last a decade or more.

Such a scenario I have already rehearsed in a number of posts, but it is worth summarising it here as it is – as I see it – the most logical outcome for our trading arrangements with the EU, and one that we should at least explore. It serves as an antidote to the steady stream of ill-informed commentary polluting this subject.

As to the consequences, we can expect a sharp downturn in the volume (and value) of goods that we export to EU Member States. Not least, we will almost immediately lose an estimated 20 percent of our trade which relies on mutual recognition of standards.

The exact volume, nobody knows, as even the Commission is guessing when it comes the extent of trade which comes under this category. Those goods most affected may be high-value, speciality food products, and things like building materials and components where use is subject to local by-laws or the national equivalent.

Obviously, services will be badly affected – the extent of which will depend on many different factors, which are difficult if not impossible to predict. But it is inevitable that we will take a substantial hit, especially if there is no reciprocal agreement on the movement of workers, rights of establishment and mutual recognition of qualifications. Business should be lobbying to have these issues placed high on the list of negotiating priorities.

In one area, we can possibly afford to be optimistic – stemming from the fact that we are already fully aligned with EU standards. This is in respect of conformity assessment, where UK notified bodies are already operating in accordance with EU law. It should be a relatively simple matter to tack on a mutual recognition agreement on conformity assessment to a basic treaty.

On this, and other matters, it would be exceedingly helpful if one of the first things a new Johnson government did was to publish a White Paper, setting out our negotiating objectives with the EU, and some idea of how we intend to proceed with negotiations.

In some ways, the incremental approach does have its advantages (even if the economic costs may be high). It cuts short the politically sensitive transition period and removes the need to pay ongoing contributions to the EU budget. Crucially, it also takes away the time pressure (and removes the talks from the headlines). Negotiators will be more able to proceed at their own pace, without agreements being forced by artificial deadlines.

Needless to say though, that is not that way our government works – not of any colour. Our political masters seems to be great proponents of "mushroom management", and it is unlikely that we will see any coherent statement of the government position.

That is especially the case with any Johnson government, as it is quite evident that we as a nation are undergoing a substantial policy change in respect of trade, dropping the European preference and moving over to an Atlanticist stance, brought to fruition by a comprehensive UK-US trade agreement.

Such a policy change is not a necessary consequence of Brexit. We could, for instance, have maintained a "Europe first" stance by adopting the Efta/EEA option. But it has been clear for some time – and increasingly so, of late – that the Tory Right is using Brexit as an excuse fundamentally to reorientate our trade policy (and much else besides).

This is far wider, with far more profound consequences than the narrow concern over the effects on the NHS (which are probably overstated), and it is a pity that Labour's paranoia has been allowed to dominate the debate. Such a profound policy change should be widely and openly debated before it becomes accepted as the way to go, and the hole-in-the-corner approach by the Conservatives is intolerable.

That notwithstanding – and in the absence of any open declarations – we must assume that a new Johnson government intends to make up for losses in European trade with increased trade from America and other third countries.

If that is the intention, then this should also be stated openly – with estimates of expected losses and the time taken to recover them from other sources. Business needs this in order to prepare. It is thus wholly unacceptable that we should be having to guess government intentions on such an important matter, and especially during a general election campaign.

Instead, I fear we are going to be subject to the same patronising, low-grade misinformation from our political masters, bolstered by the usual flow of speculative drivel from our legacy media and their favoured "experts".

We deserve better.



Richard North 29/11/2019 link

Brexit: taking shape

27/11/2019  


In the grand scheme of things, Corbyn is an irrelevance – an unpleasant little man who was never able to rise to the demands of his position or assume his place in history. But, at the moment, he is also an unwelcome distraction – dragging attention away from more important matters that will determine the fate of this nation.

However, since there is little chance that the Labour leader will get near the reins of power, the focus on his inability (or unwillingness) to control the antisemitism in his party will simply have the effect of reinforcing his undesirability and add to the reasons why he will never become prime minister. It will not change anything.

His greatest contribution to history, therefore, will have been to preside over a wholly ineffective opposition which has thus failed to have any material impact on the career of a Tory politician who, in all senses, is unfit for any office more important than a road-sweeper yet is set to lead his party to victory in December.

Meanwhile, great events continue to take shape, not least the progress of the United Kingdom towards Brexit and, in particular, the nature of the future relationship which must be negotiated once the UK has left the EU.

And here, at least – in the wake of yesterday's lecture from Sir Ivan Rogers – there has been a development in the form of a closed-door (but widely leaked) briefing to MEPs in Strasbourg by Michel Barnier, appraising them of his priorities in the coming negotiations.

Of some considerable significance, although he warns of the difficulties incumbent in concluding negotiations in the short timeframe that prime minister Johnson is expected to set, he does not rule out reaching an agreement in the time. There is no talk of a no-deal from this quarter.

From the Financial Times, which seems to have one of the most comprehensive reports, we learn that Barnier conceded that the eleven months from the UK's planned exit on 31 January until the end of the transition period would normally be far too short to negotiate a trade agreement. But, despite that, Brussels would strive to have a deal in place for the end of 2020.

For that to happen, though, the talks would have to focus initially on core trading arrangements, such as plans for duty-free, quota-free trade in goods. These matters lie within the exclusive competence of the Commission and can be agreed without requiring ratification from Member States.

In terms of priorities, Barnier also stressed that he would be seeking to ensure continued strong co-operation with the UK on security and defence. No detail has been given on how this is to be secured, but there are mechanisms which range from the informal "understanding", to the political declaration and the full-blown treaty.

In practical terms, a political declaration would avoid the need for ratification and, while not legally binding, would stake out mutual commitments and obligations which could subsequently be elevated to treaty status.

Other issues also beyond the scope of the Commission to agree are matters such as road haulage and aircraft take-off and landing rights. Barnier says that sorting these could take longer than the eleven months so the plan seems to be for the EU to rely on the unilateral contingency measures crafted by Brussels to deal with the no-deal scenario.

What seems to be taking shape, therefore, is a fudge based on a "quick and dirty" treaty which will only accommodate the basics, while the wheels of commerce will be in the hands of the Commission until firm arrangements can be made.

This differs from the no-deal scenario where the Commission has been adamant that there would be no mini-deals to keep the wheels turning. Here, the initial treaty would effectively act as a framework agreement which would be added to by way of protocols, negotiated without time constraints – possibly over a period of years.

Overall, this would very much be to the advantage of the EU. Not only would it be the beneficiary of a "bare bones" treaty, it could then set the timetable for further talks and call the shots, as the dominant trading partner.

In the longer term, much will depend on the UK's willingness to adopt the EU's so-called flanking policies, on such matters as social and environmental standards, with market access held as a carrot to incentivise the UK's agreement.

Such things, for instance, as a comprehensive mutual recognition agreement on conformity assessment could be high on the list for post-transition talks. That agreement could be a stand-alone treaty as it is between the United States and some other countries, or it could be tacked on to the "framework" agreement as a protocol – with exactly the same status.

All being well, if the UK does leave the EU on 31 January, as Johnson intends, Barnier plans to present national governments, via the General Affairs Council, with a draft mandate for trade talks in February, in the hope that it could be approved in time for negotiations to begin on 1 March. This might need a special European Council, as the first meeting for 2020 is not scheduled until 26 March.

This phased approach, which Barnier seems to concede is the way forward, might be a neat way to overcome Johnson's insistence on ending the transition by December 2020. Although the UK will take a substantial economic hit, the most obvious effects will not be immediately visible and those that follow can be disguised in government statistics for some time.

From the point of view of the new Johnson government – if the Tories win the election – they can claim their "victory" in achieving a trade agreement without resorting to an extension, and thereby claim to have honoured the manifesto commitment. In reality, they will have concluded only a partial treaty and talks will likely continue for some years – if not decades.

In many respects, this does begin to look very similar to the way Norway-EEC relations were handled in the aftermath of the Norwegian rejection of membership in 1972. This relied on a very short, basic treaty, negotiated in little more than six months, which was then expanded over a number of years with the addition of protocols.

A different way of doing things would be to negotiate a series of stand-alone treaties, more in line with the Swiss model, although the EU has never been particularly keen on this mechanism and even now is looking to revamp the whole system,

Of course, the combined experience of Norway, Switzerland and others eventually led to the EEA Agreement in 1994 and, even now, after a period of a decade or more, we would perhaps see an EEA v.2, with the UK joining forces with Efta states to forge a joint cooperation treaty with the EU. Maybe this is what it will take.

As soon as the immediate Brexit talks are out of the way, though, the EU has other fish to fry. It must attend to a long-delayed treaty of its own, which has been on hold ever since the UK's EU referendum.

Touched upon by the Telegraph, a fuller report can be found on the CNA website. It tells us that France and Germany are looking to the EU to convene another "Conference on the Future of Europe", which they believe is necessary to make the EU "more united and sovereign" across a range of challenges.

This, of course, is entirely expected and one of the many reasons why so many in the UK campaigned to leave the EU. There is never a status quo as, no sooner is one treaty laid down, there is another in the planning stage – and then another one after that, in a never-ending process of integration.

Ironically, had the UK not had its referendum and decided to leave the EU, our government would be gearing up for another intergovernmental conference, and new treaty talks. The big difference would then be that the UK would have to hold a referendum to ratify the treaty. By this means, we could still have been looking at Brexit, albeit delayed by a few years.

As it is, even with the disgusting Corbyn unable to craft a coherent Brexit policy, we are finally looking at an exit on 31 January. But, of one thing we can be absolutely certain. That is not the day when Brexit will be "done". We will have to wait a decade or more for that to happen.



Richard North 27/11/2019 link

Brexit: reality on hold

21/11/2019  


In the beginning, long before Article 50 had been invoked, many of us thought that the future relationship between the UK and the EU would also be settled in the two-year negotiation period foreseen by the Article. Thus, it was anticipated that, at the end of the negotiations, we would drop out of the EU and move seamlessly into a new relationship.

That this was not to be the case only really emerged after Mrs May had invoked the Article, the consequences of which would mean that there would have to be a gap between us leaving the EU and finalising a new agreement, during which period there would be no formal trading arrangements.

Pretty obviously, this was not a happy situation (except for those who thought that the WTO scenario was desirable), opening up a requirement for a transitional period – which Mrs May insisted on calling an "implementation" period.

Had Article 50 been thought through, perhaps the arrangements for transition might have been specifically laid out in the Treaty. But, as it wasn't, the agreement to allow a period was treated by the EU as a concession to the UK, included in the draft agreement of 14 November and endorsed by the European Council on 25 November 2018.

At a time when we were supposed to leave on 29 March, the period was set to end on 31 December 2020, with a one-off provision to extend by either one or two years. This had to be agreed by the end of June 2020, with no allowance for any further extensions. At the very latest, an agreement would have to be concluded by the end of 2022.

Why such a short period was agreed is something of a mystery. EU officials have been very explicit in their warnings that a comprehensive trade deal, along the lines of the EU-Canada trade agreement (CETA), would take "many years". Even the maximum period allowable seemed hardly long enough.

Despite extensions to the Article 50 negotiating period, with us not due to leave the EU until 31 January 2020, the transition period has not been changed, which means that the first period has been whittled down to a mere eleven months and the maximum period foreseen is now less than three years.

This, though, seems to be of no concern to prime minister in office Johnson. He has repeatedly stated that he has no intention of seeking an extension of the transition period past December 2020. In the event that he forms a new government after the general election, that means he is committing the UK to concluding negotiations on a trade agreement, from a standing start, in eleven months.

Justifying his stance, Johnson argues that our current membership of the EU means that we are already in "perfect" regulatory alignment with the EU, so that any negotiations would be quick and simple, allowing a speedy conclusion within the eleven month period.

But, while we are offered this bland assurance, Johnson has not specified the type of agreement he has in mind, nor the degree of regulatory alignment that he is aiming for at the conclusion of the deal. Furthermore, he has given no indication of what flanking policies he might be prepared to accept, such as alignment on employment law, competition policies, environment, data protection and, of course, freedom of movement.

On the other hand, Johnson remains publicly committed to the doctrine established during the referendum, pledging to "take back control of our borders, our money and our laws".

On the face of it, this creates a conflict between objectives. If the UK wants a comprehensive trade deal inside eleven months, it needs to "copy out" CETA, making only those changes necessary to accommodate specific national characteristics. But if it is content with a "best in class" free trade agreement, whereby the UK would be free to set its own regulatory standards, this will entail significant renegotiation.

According to the EU's Director General for Trade, Sabine Weyand, eleven months is not long enough for that. That leaves two likely options, a thin "bare bones" deal or a hard exit from the transition period without any deal.

Given Johnson's pre-election rhetoric, we can probably rule out a no-deal resolution, but a "bare bones" agreement might amount to little more than a tariff and quota-free agreement, plus a "rules of origin" pact and perhaps limited administrative arrangements on VAT, customs cooperation and data sharing. Even a mutual recognition agreement on conformity assessment for a limited number of sectors might be attainable in the time.

Even with these add-ons, the substance of the agreement would be thin, falling far short of a comprehensive free trade agreement, which in itself would represent a significant loss of market access to the EU. Nevertheless, for Johnson, it could still qualify as a "deal" – to be paraded in front of a gullible media, its acceptance guaranteed by compliant MPs who would constitute his working majority in the Commons.

That is possibly the greatest danger that we confront. Johnson could end up believing his own propaganda and take a "bare bones" agreement as sufficient to fulfil his obligation to settle a long-term relationship with the EU.

Obsessed with the idea of forging a trade deal with Trump's United States, he could – and most likely would – argue that any downside to the EU agreement would be more than compensated for by the riches awaiting the UK on the other side of the Atlantic.

By contrast, seeking an extension to the transition period could present Johnson with major political risks. With his campaign slogan, "Get Brexit Done", he has openly committed to avoiding any further delay in the Brexit process, stating that there is "absolutely no reason" for not concluding an agreement by the end of 2020.

In respect of the withdrawal agreement and his failure to honour his "do or die" promise to leave by 31 October, he has been able to blame an intransigent parliament for the delays. But, if he returns after the election with a working majority, he only has himself to blame if he then seeks to extend the transition period – unless, of course, he aims to put the EU in the frame.

Getting the EU to take the fall, however, seems unlikely. Both Juncker and Barnier have warned that a comprehensive trade deal would take "years" and, with Weyand joining the fray, Johnson cannot say that he was unaware of what was involved. Having already decided to finish talking by the end of next December, he must be ready to accept that the only option available to him is a "bare bones" deal.

With his withdrawal agreement, though, he agreed something which many believe is far worse than Mrs May's deal. Yet he is still quite capable of talking it up, describing it as "fantastic" and arguing that there is "no better outcome". With his slender grasp of the truth, talking up a "bare bones" deal would present him with few problems. If needs must, he would describe a train wreck as "fantastic".

And such a scenario is not at all far-fetched. Through the years, Johnson has shown that he has only a very limited understanding of the technicalities of EU membership – to say nothing of international trade. He could, therefore, easily convince himself that he had negotiated the best possible deal.

Where there would be a difference is that, rarely in his career has Johnson hung around long enough to take responsibility for his actions. Usually, he leaves others to clear up his messes. But in this instance, the effects of a "bare bones" deal would swiftly become apparent.

Should these be pointed out with sufficient force in time for Johnson to apply for an extension, he could simply tough it out and stretch out talks to the end of 2022, relying on his majority to see him through.

Articles such as this from Jeremy Warner certainly help, and even Rafael Behr is pitching in via the Guardian, asserting that Johnson's "snappy, inane slogan is the prelude to inevitable lies, betrayal and duplicity".

But if anyone thinks that mere criticism is going to deflect Johnson from his path or that he will spend next year "climbing the steep learning curve towards realisation that Britain thrives on frictionless access to the single market" – as Behr suggests – is probably in for a disappointment.

There is nothing quite so impervious to reason as a man who thinks he already knows the answers, and we now stand at risk of having such a man at the head of our government for the next five years. In the eleven months that follow the election, my guess is that we will see reality put on hold and he will go for a deal by the end of next December.



Richard North 21/11/2019 link

Brexit: miracle of the century

03/10/2019  


One of the oddest things about the media coverage of Johnson's "take-it-or-leave-it" proposal is the assumption that Northern Ireland will remain in the single market for all goods – for a period, at any rate.

That most of the media sources are saying the same thing suggests that they are working to some central crib-sheet, possibly produced by one of the news agencies, but it could even have been from a supplementary media briefing produced by the government.

As to the main government briefing, this is to be found in the explanatory note to the "UK proposals for an amended protocol on Ireland/Northern Ireland". And in that seven-page document (including the title page), there is no reference at all to Northern Ireland staying in the single market. What the explanatory note does say is that:
The introduction of a zone of regulatory compliance across Northern Ireland and the EU would remove the need for regulatory checks and related infrastructure at the border between Northern Ireland and Ireland, while enabling the UK and EU to maintain their own distinct customs regimes ((2) 6.).
However, although this is an official government document, there is an assumption which does not compute. Regulatory compliance is required of all exporters to the European Union. It is a condition of entry.

But compliance alone does not buy immunity from regulatory checks at the border. The privilege only comes with full membership of the Single Market, and that requires a lot more than just regulatory compliance. Conformity with the "four freedoms" and raft of so-called "flanking policies" is also required and - as I am continually pointing out - full implementation of what Barnier calls the "regulatory ecosystem".

It may, therefore, be rather presumptuous of the government to assume that, because Northern Ireland continues to comply with EU regulation in the relevant areas, goods are necessarily going to get free passage into the Irish Republic.

Nor is this detail a matter of pedantry. The EU has the integrity of the Single Market to protect, and it must comply with WTO non-discrimination rules. If it allows free access to goods from Northern Ireland into the Single Market, purely on the basis of regulatory conformity, then it will come under pressure from other third countries to allow the same level of access.

Needless to say, the devil will be in the detail – what may be acceptable to the Commission in principle may founder when the two sides have to get together to produce a workable system. And then there is the matter of services. The explanatory note talks only of goods, yet we know that services are a significant part of the trade bundle between the Republic and Northern Ireland – and the free movement of services will not be permitted.

This is a much understated problem. How, for instance, will the Republic authorities prevent a plumber from Northern Ireland darting over the border to service a client's boiler? This, in fact, is an issue which has been addressed on the border between Norway and Sweden, where tradesmen such as plumbers and carpenters are only allowed to take hand tools across the border. How would such restrictions be enforced on the Irish border, without a system of checks?

Furthermore, it is all very well calling for special provisions to be made for small traders – as the UK government is doing. None such apply on the border between Sweden and Norway, they certainly don't apply on the Turkish border and neither do SMEs in Ukraine get any special breaks. If Northern Irish traders are allowed special privileges, how long will it be before there are demands for equal treatment from other third countries?

We also hear nothing about the 20 percent or so of traded goods which rely not on harmonised regulation but on mutual recognition. The concession which permits free circulation of these goods applies only within the Single Market and, despite the media chatter, Northern Ireland will most definitely not be a member of the Single Market.

Taking all this into account, it is hard to see how the European Union will be able to permit the free movement of goods into the Republic from Northern Ireland, without imposing significant conditions and physical controls at the border. It will also be insisting on the ability to supervise and enforce regulatory conformity within the territory of Northern Ireland, while demanding implementation of the regulatory ecosystem.

But then, if the rest of the UK – as indeed is the case – is to go its own way, it will be imposing its own regulatory border between Northern Ireland and Great Britain. That will mean border checks carried out by UK authorities, controlling access of goods into Northern Ireland and, from there, into the Single Market. Again, one would expect the EU to impose its own conditions, including supervision and enforcement provisions, on this arrangement.

Despite this, there is probably nothing here which presents irreconcilable difficulties when it comes to negotiating a final deal, given that the UK is prepared to compromise on its ambition to regain control of its borders, and other conditions can be satisfied.

Here, one sees that the UK is seeking to rely on a trusted trader scheme, but there is an elephant in the room. Without the EU awarding "adequacy" status to the UK under its data protection legislation (which is yet to be resolved, and may take some years), the exchange of personal data required to make a trusted trader system work simply cannot take place.

But, even if such issues can be resolved, there will be a lot of detail to be addressed by negotiators which will require turning into legal prose before an agreement can be finalised. And these matters are only some of the aspects which need addressing, raising the spectre of the negotiators running out of time. With only about ten days left, it seems hardly possible that they can finalise a watertight legal draft in the time.

Then, this assumes that some of the fundamental issues can be resolved – such as the approval system which the UK government seeks to impose, and the four-year cut-off which allows unilateral termination of regulatory conformity by the Northern Ireland Assembly.

This is something which drives a horse and cart through the concept of a backstop. It passes the buck on the border question, leaving open the possibility that there will be a hard border at some time in the future, frustrating the EU's desire to settle on an arrangement which will last into perpetuity.

Another of those fundamental issues which could well prove a sticking point is the UK assumption that the EU will agree to introduce simplified customs procedures, alongside an "ambitious" temporary admissions arrangement. Both will require amendments to the Union Customs Code (UCC) but, given that the EU has only just completed extensive revisions, with the new code not fully in force, it will be extremely reluctant to countenance further changes.

Equally, the proposal on VAT assumes a degree of integration with the EU system that goes beyond Norway and exceeds that afforded to any other third country. This is unlikely to be conceded.

Looking at what is on "offer" from the UK, therefore, the proposal seems remarkably UK-centric, failing to take into account any of the sensitivities or constraints which might limit the EU's response. Something of this comes over in the letter from the prime minister in office to Jean-Claude Juncker, which is almost truculent in tone.

"Both sides now need to consider whether there is sufficient willingness to compromise and move beyond existing positions to get us to an agreement in time", writes Johnson, adding: "We are ready to do that, and this letter sets out what I regard as a reasonable compromise: the broad landing zone in which I believe a deal can begin to take shape".

It comes as no surprise, therefore, that Juncker's response is not exactly gushing with enthusiasm, even if he welcomes Johnson's "determination" to advance talks ahead of the October European Council and make progress towards a deal.

However, he also noted that there were still some "problematic points" that would need further work in the coming days, notably with regards to the governance of the backstop. Another concern related to the "substantive customs rules", while Juncker also stressed that "we must have a legally operational solution that meets all the objectives of the backstop".

The Commission was now going to "examine the legal text objectively, and in light of our well-known criteria", which could be taken as code for saying that it does not conform with those criteria.

Certainly, the vibes do not seem to be favourable, with the predominant Brussels response said to be "dismay". Barnier, we are told, fears that implementing the proposal could prevent Brussels from protecting its internal market.

With EU sources saying that the flaws in the UK's proposals are such that there appears to be scant chance of agreement by the European Council on 17 October, it looks as if Johnson might need to go back to the drawing board. But, since this is supposed to be a "take-it-or-leave-it" proposal, he seems to be on the verge of producing the miracle of the century - turning the European Council into leavers.



Richard North 03/10/2019 link

Brexit: another look at Norway

31/08/2019  


It was not so very long ago that I wrote a piece on negativity, one of several I've written on this general theme. This one concluded that, when it came to Brexit, it wasn't only parliament that was clear on what it didn't want, but without ideas of what it did want. The whole nation seemed stricken by that same, overpowering sense of negativity.

I was minded of this when reading some of the comments to yesterday's piece. There is nothing so certain to bring out the naysayers than offering a solution (or solutions) to an intractable problem.

Here, there is an interesting dynamic at play. Generally speaking, we tend to respond (with more intensity and length) to matters with which we disagree. I'm as bad as the rest, where my longer posts on this blog's comment section tend to be devoted to disagreeing with other comments (although mainly because they disagree with mine).

Posts with which we agree, and especially in areas where we have little personal commitment, we tend (and I am talking about tendencies) to let pass by. And nobody wants to be seen a toady or sycophant. Some of the more disgustingly vitriolic posts that I have had to delete from this site have been those which make quite explicit attacks on readers who have committed the mortal offence of agreeing with me.

On balance, therefore, there is a bias in favour of critical comment. If I write a piece which is critical of either people or things, I can be pretty well assured of some support on the blog. When I promote something, the naysayers come out in force while supporters tend to be silent.

This is not a tendency confined to this blog – not by any means. Most of the newspaper and political sites host huge volumes of hostile comment, so much so that one ventures a contrary opinion with the greatest of trepidation. Comment sites have become the domain of mob rule and the death of reasoned discourse.

If one is to attempt to apply reason to Brexit, therefore, there are likely to be many people who agree with the findings, but say nothing. On a day when my hit-rate might exceed 60,000, the views of maybe 200 commenters (at most) may dominate the post-publication discussion – the majority of their comments may well be contrarian, painting a completely false picture of reader sentiment.

Many of them will struggle to remain on-topic and will seek any excuse to depart from the issues at hand. With some responses, one sometimes wonders whether they've read the posts to which they are linking. In some cases, one wonders whether they've ever read the blog at all.

Nevertheless, in the final analysis – to use that dreadful cliché – reason must eventually prevail. A real world requires real solutions to practical problems and, while the politicians may beat about the bushes for ages before coming to a conclusion, even they eventually have to concede to reality or be replaced by people who will.

When it comes to the Irish backstop, therefore, reason will eventually have to prevail – simply because it must. There is no point at which an unsound doctrine can survive for all time, without something having to give. Mind you, when it comes to Ireland, what might be seen by outsiders as fairly simple matters to deal with have taken centuries to remain unresolved.

However, the backstop is not about Ireland – per se. The trouble is that explaining this gets repetitive and, after a while, one gets tired of repeating the same things. Those pushing the errors, with a wider constituency, thus start to dominate what passes for the debate – simply by dint of greater perseverance.

But right at the heart of this issue is the simple, unalterable fact that, with Brexit, what was once an internal land border in the European Union now becomes the external border between the EU and the newly defined "third country" state of the United Kingdom.

Under any normal circumstances – if there could ever be such a thing in what is a unique situation – there would be no discussion about border controls. They would apply automatically. The analogy I offered, some time ago, still stands.

You must imagine, I wrote, a medieval walled city, inside which the traders happily do business – with the public and between themselves – secure within the fortifications. When a trader (unhappy with the rules and regulations) decides to move his stall outside the walls, he cannot then complain that he is no longer able to trade freely with the people still inside.

It is not as if the authorities of the walled city have decided to impose new barriers between the unhappy trader and the rest. The walls already existed. Our unhappy trader has moved outside them.

Less easy to understand is the fact that we are not dealing with physical barriers but with tariffs and the far more important non-tariff barriers (NTBs) – mostly regulatory barriers.

In the latter event, the only way of restoring trading equilibrium is to ensure not only regulatory alignment but also full conformity with what is now referred to as the "regulatory ecosystem". As again I've pointed out earlier, regulatory alignment is only the starter for ten. We need the full package, which extends way past mere "equivalence" or "mutual recognition".

Now we come to the particular situation of Northern Ireland. If the full EU package must remain in place for there to be frictionless trade, this potentially creates trading barriers between the province and the rest of the United Kingdom – something which is politically unacceptable to a significant and influential Unionist constituency.

Thus, to avoid the creation of what amount to an external border between Northern Ireland and the rest of the UK, the rest of the UK must then adopt the full regulatory package – unless "alternative arrangements" to like effect can be agreed. And if they can't, within the time – that's where the backstop comes in.

Now, when one looks at the situation rationally, it is self-evident that there are very few workable solutions to this impasse. We are not spoilt for choice here and it is certainly the case that the fraudulent "alternative arrangements" worked up by Shanker Singham and espoused by prime-minister-in office Johnson are not a solution.

One thing that would work is the Efta/EEA option, with new, bolt-on protocols covering such matters as customs, VAT and data protection. The UK, with its past history of integration as a member of the EU, would also have to agree protocols which kept policies akin to the CAP and CFP in place. There is too much water under the bridge – so to speak – for us to walk away from these core EU policies. At the very least, we would need a prolonged transition.

Perversely – and certainly unintended – Johnson's prorogation of parliament, thus creating a new parliamentary session, has opened a new window of opportunity for the Efta/EEA option. It allows the Withdrawal Agreement to be represented to parliament as is, and allows for a workable solution to ensure that the backstop never comes into effect.

And that is why the so-called "Norway Option" must be revisited – and urgently. It is the only credible option which will resolve the Brexit impasse. And that's why it will always bring out the naysayers in force – especially those who don't want a solution at any price.

Irrespective of the chance of success - which is slight - it would be remiss of us if we didn't go the last mile to bring to the attention of politicians the one remaining prospect of a successful Brexit, avoiding the economic trauma of a no-deal. The politicians will probably ignore us – as they usually do – but they can't say they haven't been told.



Richard North 31/08/2019 link

Brexit: fantasy politics

22/08/2019  


Laid out unequivocally in the European Council (Art. 50) guidelines for Brexit negotiations is one of the core principles which set the tone for the talks.

Any agreement, the guidelines say, "must ensure a level playing field, notably in terms of competition and state aid, and in this regard encompass safeguards against unfair competitive advantages through, inter alia, tax, social, environmental and regulatory measures and practices".

In short, that means that the UK will not be allowed to negotiate an agreement which puts it in a better position after Brexit than it would have had as a full EU member, and neither can it be allowed to have greater influence over EU affairs than it had previously.

When it comes to the Single Market, these guidelines readily translate into certain unalterable requirements which would, in effect, amount to the EU's own "red lines".

Specifically, a dominant feature of the Single Market is the body of harmonised regulatory standards, and it is an absolute requirement that Member States should conform fully with those standards. Not only that – except under the most exceptional circumstances – traders wishing to export goods to EU Member States must also conform fully with those same standards.

This is the very basis of the Single Market, where huge effort is devoted to ensuring conformity, and any divergence from set standards is rigorously discouraged.

Yet, in his letter to Donald Tusk this week, the man occupying the post of prime minister blithely stated that he was seeking to ditch the backstop, with its commitment to "full alignment" with wide areas of the single market and the customs union. That, said Johnson, "cannot be the basis for the future relationship and it is not a basis for the sound governance of Northern Ireland".

Instead, Johnson has been making reference to "alternative arrangements", which he re-emphasised in Berlin yesterday, saying: "We do think there are alternative arrangements that could readily be used to address the problem of frictionless trade at the Northern Irish border and you'll have heard them before, whether it is trusted trader schemes or electronic pre-clearing. All that type of solution and more besides is what we will be wanting to discuss".

Doubtless, he has in mind "Snake Oil" Singham's Alternative Arrangements Commission and his ideas on mutual recognition – the adoption of which is the only way that frictionless trade across the border could be maintained without regulatory alignment.

And sure enough, no sooner has Mrs Merkel told the prime minister in office that she would be prepared to listen to his proposals for an alternative to the backstop – ostensibly giving him 30 days to come forward with a "practical and workable" scheme – up pops the egregious Singham in the Telegraph.

With a level of hubris which is probably only exceeded by the second Cummings, he blithely declares that the EU leaders "have got it wrong" and that there are plenty of solutions to the Irish border problem.

Then, in an extraordinary statement – even for him – Singham asserts that "it is now recognised that there will be regulatory divergence", going on to say that: "If there is any alignment to be had, it will be alignment of goals. If our aims are aligned and the regulations put in place objectively achieve them then differences in regulation should not prevent mutual recognition".

Of course, it is very far from being recognised that there will be regulatory divergence. This is wishful thinking to a very advanced degree. The essential feature of the backstop is regulatory alignment and the EU has not moved one iota from this principle.

Furthermore, if you stand back from this and consider what is being proposed, Singham is expecting the EU Member States (and the rest of the world) to conform with the Single Market's harmonised standards, while uniquely allowing the UK to set its own standards. It should then enjoy "frictionless" access to the Market which, to everyone else, is conditional on regulatory alignment.

Not only does this give the UK an unfair competitive advantage, it also puts us in a far better position than we enjoyed as an EU member. Inside the EU, we were bound to comply with EU law. Outside, Singham expects us to enjoy all the benefits of the Single Market without having to trouble ourselves with conformity with its most fundamental precept.

And should the EU actually allow such a situation, not only would it be in breach of its own principles, it would be driving a cart and horse through EU rules, and in particular the requirement to apply the same rules to all its trading partners.

Thus, should the EU allow the UK to work on the basis of mutual recognition, it would be under enormous pressure to open that concession to all its other partners. The Single Market, as we know it, would cease to exist.

Clearly, there is not the slightest chance that the EU is going to accept Singham's idiot proposal and it is to the eternal shame of the Telegraph that they give space to such a lamentable absence of realism.

Nor indeed does it stop there. Where currently the UK enjoys the benefit if mutual recognition, where there are no harmonised standards, that provision ceases on Brexit – deal or no deal. Mutual recognition of standards applies only to fully-fledged participants in the Single Market.

While variously estimated as accounting for as much as a fifth of our trade in goods with EU Member States, I cannot recall seeing any serious discussion in the media or by politicians about this loss, yet there can be little dispute that it will represent a severe body-blow to the UK.

The inability to address such points does, of course, reflect poorly on both media and politicians but there seems to be no limit to the degree to which the likes of Singham are given undisputed platforms to perpetrate his disinformation.

Despite his assertions being demonstrably false, Singham is still allowed to claim that the challenge of sanitary and phytosanitary measures, as well as the requirements for veterinary checks at Border Inspection Posts, " could be solved by moving facilities away from the border and utilising mobile units wherever possible to carry out checks".

Not anyone, it seems, in either a select committee or on the editorial staff of a national newspaper – nor even in critical trade groups – is capable of looking up the relevant EU law to show that these claims are entirely fabricated. And, as long as your lies are bold enough, the Telegraph will print them.

But where this fantasy takes us is anyone's guess. If Johnson is relying on Singham's "alternative arrangements", then he is going to come a cropper. A scheme based on lies and misinterpretations is not a sound basis for public policy, but it appears that Johnson doesn't have the wit to realise this.

Nor does he seem to understand that Merkel is not talking about reopening the negotiations on the Withdrawal Agreement. All that is on offer is another massage of the political declaration, which can hardly deliver more than we have already seen with the Strasbourg Agreement. Johnson is not going to get the backstop removed.

If there was even the slightest doubt about that, today he meets Macron over lunch in Paris, where officials warn that a no-deal Brexit is now regarded as "the most likely outcome", while Macron is taking pains to emphasise that a renegotiation at this point "is not an option".

Scrapping the backstop, he says, is "impossible", presenting the EU an unacceptable choice between protecting its internal market by reintroducing border controls at the Irish border, or preserving peace on the island.

A French official puts the issue nicely in context, saying that: "If the UK considers that having a backstop is absolutely excluded, that is its right, but in that case it limits the possibility of reaching an agreement". And it was supposed to be the British who were masters of understatement.

Macron, though, is even more forthright, pointing to a "British democratic crisis" over Brexit. "The British were asked to choose, in perhaps a simplistic way, without the government telling them how it would be done" he says.

"Many lied about how it would be done, and democracy couldn't find a majority to apply what people decided. It's unheard of, but that's what we're living. We have to help the British deal with this internal democratic crisis, but we mustn't be hostage to it nor export it".

It comes to something when we have a French president lecturing us on a "democratic crisis", but before Brexit is over, I guess we'll be seeing a lot stranger things. Fantasy politics are fast becoming the new norm.



Richard North 22/08/2019 link

Brexit: a suicide note from Number 10

20/08/2019  


Yesterday, the man occupying the post of prime minister sent a letter to the president of the European Council, with copies to each of the 27 heads of states and governments, plus a further copy to the president of the European Commission.

The content was nothing new – simply Alexander Boris de Pfeffel Johnson reiterating the points previously made. He condemns the backstop as "anti-democratic and inconsistent with the sovereignty of the UK as a state" and then proposes that it should be replaced with a commitment to put in place alternative arrangements as far as possible before the end of the transition period, as part of the future relationship.

He also deigns to "recognise" that there will need to be "a degree of confidence about what would happen if these arrangements were not all fully in place at the end of that period". And, out of the goodness of his heart, he tells Donald Tusk that "we" (presumably, the UK government) "are ready to look constructively and flexibly at what commitment might help", consistent with the principles set out in his letter.

So transparent is this ploy that, within hours, the Guardian was writing that the initiative "appears intended to portray Johnson as willing to negotiate with Brussels, even though he is making a demand for the abolition of the backstop that they have repeatedly rebuffed".

By last night "Brussels sources" were once again ruling out any renegotiation of the Withdrawal Agreement, including the backstop. "There was a two and a half year negotiating process in which the EU compromised, including on the question of the backstop", someone described as "a well-informed source" was telling the Guardian.
The withdrawal agreement is not open for renegotiation and the backstop is not open for change. A legally operable backstop to avoid a hard border remains central to the withdrawal agreement for the EU27.
And, as the momentum built up, others joined the fray, stating that the letter was a "clear attempt" to kill off any prospect of renegotiating the Brexit deal, which leaves no "room for compromise".

Another of those wondrously anonymous EU diplomats said Johnson had failed to put forward any "realistic alternatives", adding that "hope and imagination" would not prevent a hard border. By calling for the backstop to be abolished in its entirety, Johnson was effectively ruling out any prospect of the EU offering any concessions.

Earlier in the day, however, Johnson had been insisting that he was "confident" the EU would buckle and give into his Brexit demands, agreeing to renegotiate the terms of the Withdrawal Agreement.

Said Johnson, it was "fine" that Brussels was currently opposed to changing the Withdrawal Agreement as he outlined his belief that the EU will drop its "reluctance" to shift its stance when it comes to the crunch.

And with that, nothing has changed since the very start, when it has been an article of faith amongst the hard core leavers that the EU will give in at the 59th minute of the eleventh hour, as long as we threaten a no-deal and stand firm, intimating that we are fully prepared to deal with the consequences.

That, of course, is the other half of the crass stupidity emanating from Number 10 with Johnson burbling about preparations for a no-deal, saying: "I'm not pretending that there won't be bumps on the road […] but if everybody puts their minds to it, I have absolutely no doubt that we can get ready" – even though the leader of the CBI said it was impossible for companies to be fully prepared for the disruption that would happen if the UK crashed out of the EU without a deal.

The essence of his stupidity, though, is expressed in Johnson's letter, where he re-affirms that the UK is "unconditionally committed to the spirit and letter" of our obligations under the Good Friday Agreement, whether there is a deal with the EU or not.

One assumes that this necessarily means the maintenance of a "soft" border. Although we don't see Johnson make specific reference to this, he does say that his government "will not put in place infrastructure, checks, or controls at the border between Northern Ireland and Ireland", stating that "we would be happy to accept a legally binding commitment to this effect", hoping that "the EU would do likewise".

Unfortunately, what he then says has the effect of making this impossible, by declaring:
Although we will remain committed to world-class environment, product and labour standards, the laws and regulations to deliver them will potentially diverge from those of the EU. That is the point of our exit and our ability to enable this is central to our future democracy.
The point he then acknowledges is that the "backstop is inconsistent with this ambition", misinterpreting its requirement in asserting that it required "continued membership of the customs union" and the application of "many single market rules in Northern Ireland".

A careful reading of the protocol, however, will not reveal any specific requirement from Northern Ireland to stay in the EU's customs union. Rather, it requires "full alignment with those rules of the Union's … customs union", which is actually a different thing.

By shadowing the EU's schedules of tariffs agreed with the WTO – which we already intend to do – and by committing (by way of a political declaration) to conforming with the EU's common external tariff, we would be able to maintain "full alignment" with the rules of the customs union, without formal membership of the customs union.

Nevertheless, Johnson's letter declares that we cannot "continue to endorse the specific commitment, in paragraph 49 of the December 2017 Joint Report, to 'full alignment' with wide areas of the single market and the customs union. That, says Johnson, "cannot be the basis for the future relationship and it is not a basis for the sound governance of Northern Ireland".

Yet again, reference to the offending paragraph of the Joint Report shows the commitment, in the absence of agreed solutions, "to maintain full alignment with those rules of the Internal Market and the Customs Union" – which is not the same as membership.

But at the heart of the problem here is Johnson wanting to reserve the right for UK standards to "diverge from those of the EU". It is that, in his view, which makes the Withdrawal Agreement, and the embedded Protocol untenable, notwithstanding that the ability to secure "frictionless" trade demands full regulatory alignment.

Undoubtedly, in making reference to "alternative arrangements", Johnson has in mind "Snake Oil" Singham's ideas on mutual recognition – the adoption of which is the only way that frictionless trade across the border could be maintained without regulatory alignment.

If that is what he has in mind, then his initiative is doomed, illustrated by an air of unreality as Johnson blathers, "Now of course our friends and partners on the other side of the Channel are showing a little bit of reluctance at the moment to change their position".

There is simply no prospect of the EU moving away from an absolute requirement for regulatory alignment, not least because any deviation from that principle would prejudice the integrity of the Single Market. Concessions would create precedents, and require similar treatment to be afforded to all the EU's other trading partners.

The net effect of Johnson's letter, therefore, is to set in stone a determination to force the EU into setting up a hard border between the Republic of Ireland and Northern Ireland.

There can be no other outcome and it is thoroughly disingenuous for him to "hope" that the EU will be able to avoid "infrastructure, checks, or controls at the border". There is absolutely no way the EU can allow an unguarded back door into the Single Market.

It is, therefore, completely unsurprising that Johnson should have spent almost an hour on a phone call to the Irish premier, Leo Varadkar, only for the conversation to end in stalemate. A joint statement was released, acknowledging no progress over the issue of the backstop.

The prime minister in office has agreed to go to Dublin for talks with Varadkar in early September but, before that – this week - he is to see Merkel (in Berlin for dinner on Wednesday), before moving to have lunch with Macron in Paris on Thursday, ending up at the close of the week with a meeting of world leaders at the G7 summit.

Predictably, Downing Street sources are saying that they are not expecting any end to the deadlock this week, and nor should they. There will be no end to it. Johnson has just written the suicide note for the UK, ensuring that no-deal is our only destination on 31 October.



Richard North 20/08/2019 link
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