Brexit: last chance saloon

Thursday 12 October 2017  


It would seem that for some in the bubble the penny is starting to drop. A no deal Brexit is not the minor inconvenience that the Tory ultras pretend it is. The Leave Alliance has long warned that no responsible government should even consider leaving the EU without a deal, but it would appear that is where we are drifting as a consequence of Tory incoherence.

We should not, however, be surprised. It has taken until now for the media to properly focus on the consequences. Until now the debate has largely been confined to the FT and occasional Times articles with no real sense of urgency. The public is largely still in the dark as to what no deal actually entails and due to the histrionics of the remain campaign last year, many won't believe it until they see it.

Effectively a no deal Brexit is the severing of all of our external trade relations and the deletion of all of our single market permissions. It is as though a system administrator changed your mainframe password. Yes, you might still have a computer, but without being able to log on, all you can do is play Minesweeper.

Many assume we exaggerate as to the effects, and believe a traffic jam at Dover is hardly a show stopper. This is a naive view. The damage comes from the ripple effects where small interruptions to supply chains are multiplied and magnified across every sector. We are so deeply integrated with the EU that it is impossible to map all of the possible consequences. A no deal Brexit is akin with performing separation surgery on conjoined twins with a hammer and chisel without anaesthetic, hoping that the weaker one will live.

The longer term ramifications of this are incalculable. We can say with confidence that it would lead to a substantial loss of trade along with our international standing. Living standards will very rapidly fall. Recovery will not come soon.

As to whether this can be avoided is all in the hands of the gods. Events seem to have taken on a life of their own. Westminster seems incapable of acknowledging the immediate peril. It would seem that the event horizon has already been crossed and unless talks are extended we will run out of time.

If this is to be prevented the there is only a short window for politicians to act. The Prime Minister has made her play. She has extended her offer to the EU - knowing that the EU cannot indulge her. The Tory machine spinning hard to make it seem like EU intransigence is at fault rather than the refusal to engage in phase one issues. This sets the stage for a walkout where the Tories believe the EU will come chasing after us.

The EU is unlikely to respond well to such blackmail. If the UK is determined to walk out then the EU will do little to stop us. We cannot expect the EU to save us from ourselves. That is why this is the most crucial time of all. The domestic political impasse must be resolved. May must be prevented from pulling her stunt and we must make people wise to this cynical trickery.

If parliament gets its act together there is the possibility of salvaging the situation. This government would have to fall and in its place we would need a pragmatic and cooperative approach. For all that many have been keen to dismiss the EEA option, none be able to offer a more realistic approach. If we want to leave with the minimum of economic harm and legal difficulty it still presents itself as the only viable path.

This is is a fundamental test of British politics. It is a test of whether MPs can put the nation's interests before their tribal loyalties and whether reason can permeate the Westminster fog. Should they fail us in this then there is no turning back. They will have started something quite ugly and we will all pay the price.

For the moment it does not look good. We do not have confidence that there are sufficient numbers (or any) MPs who have enough grasp of the subject to be able to intervene effectively. Even the very best of them are lacklustre, and will miss the point. It may well be that this must play out to the disaster it has become. 

12/10/2017 link

No, You Do Not 'Feel European'

Wednesday 27 September 2017  

Guest post by blogger Sam Hooper

Remainers protest, but enjoying spaghetti and Belgian beer was never sufficient cultural commonality with Europe on which to build a deep political union

It has long been a conceit of EU apologists and arch-Remainers that political union with Europe makes sense because we have "so much in common" with Europe, more so than with other countries, including those of the Commonwealth and the Anglosphere.

This tedious and self-evidently false argument bubbles up with regularity, with the Evening Standard's Richard Godwin making a particularly glib and superficial argument as the EU referendum battle raged:

I just feel European. I’m part of a generation that has had easy access to mainland Europe for both work and play. I like Penélope Cruz and Daft Punk and tiki-taka and Ingmar Bergman and spaghetti and absinthe and saunas and affordable trains.

As sentimental as it sounds, Europe represents opportunity, cosmopolitanism, modernity, romance, enrichment, adventure to me. Cutting all that off — even symbolically — would feel both spiteful and arbitrary.

The same argument is occasionally expressed with slightly more intellectual rigour, most recently by Jonathan Freedland in the Guardian, who wrote on the day of the Dutch elections:

It would be an irony more bitter than delicious, but could Brexit be having an unexpected effect on the people of Britain – turning us, finally, and despite everything, into good Europeans?

The question arises because of a curious shift underway since the referendum last June. For many years, the intellectual bedrock of the Eurosceptic case was that there was no such thing as a European demos, no European nation underpinning what Eurosceptics believed was an emerging European super-state. The notion of a United States of America made sense because Americans were a true people, sharing a language and sense of common destiny. But a United States of Europe was absurd because Europeans did not see themselves as bound together in the same way.

[..] But look what’s happened since 23 June 2016. Today, the Dutch go to the polls, an event that would previously have passed with not much more than a brief mention on the inside pages. This time, however, the same pundits and prognosticators who last year obsessed over Trump v Clinton have directed some of that same energy to the battle of Wilders v Rutte, trading polling data on social media and arguing about the meaning of the latest move by the rival candidates.

Never has the pro-EU establishment media's bias been on more blatant display than in this piece of self-regarding bubble-ese by Freedland. British public interest in the Dutch, French and German elections, to the extent that it existed at all, was driven almost entirely by weepy Remainers who took a short break from quoting Yeats on their social media timelines ("Things fall apart; the centre cannot hold") to vest their hopes in would-be saviours like Mark Rutte and Emmanuel Macron.

If we can agree that the man on the street - the kind of normal person with a life, who doesn't spend every waking moment obsessing about politics - probably does not think much at all about the politics of other countries, then we should also be able to agree that those who are even slightly politically aware are far more likely to know about American politics and current affairs than those of various European countries, large or small.

Doubt it? Then simply watch the television or print news coverage on any given day. Only this week, British television news bulletins have been dominated by the ongoing feud between Donald Trump and various players and executives of the National Football League who have taken to kneeling during the playing of the US national anthem as a show of solidarity with the Black Lives Matter movement.

This news story has received extensive coverage on the BBCSky NewsITV NewsChannel 4 News, the Telegraph, the Times, the Guardian, the Independent and many smaller outlets:

As well as featuring prominently ahead of domestic news stories in British television news bulletins, this tiresome culture war episode also seems to be exercising the minds of British political pundits and armchair moralisers up and down the country.

What comparable domestic political spat or policy debate in a European country would receive comparable press coverage in Britain? The answer is obvious: none. There is no other country whose day-to-day politicking is obsessed over by the British media and known by the UK populace in more detail as the United States. This is not merely a function of us sharing a common language - do the self-proclaimed "Citizens of Europe" really believe that British people would be fascinated with German or Portuguese politics if only we were not cruelly divided by language?

Nor is this a natural function of America's hegemonic power making their every decision impactful on Britain - indeed, the rituals of American football could not be of less importance to the United Kingdom, nor concerns about police shootings of civilians in a country where most of the police are unarmed. Our deep interest in American news is primarily cultural, not borne out of any informational necessity.

This is not an argument for Britain to become the fifty-first state of America rather than the twenty-eighth state of a United Europe; it is merely to point out that cultural affinity - which is arguably much stronger between Britain and the United States than Britain and Europe - does not automatically recommend (let alone necessitate) political union between countries, while enforced political union between diverse states does not necessarily ensure that a corresponding cultural merger will occur to form a coherent, cohesive demos.

And culture aside, economic interdependence likewise does not mandate political union, as the United States and Canada, the United States and Mexico, Australia and New Zealand as well as the United Kingdom and the Republic of Ireland can readily attest. Economic alignment and interdependence is a necessary condition for political union, but not nearly a sufficient one.

Indeed, the history books are littered with examples of such grand enterprises - using economic interdependence or geographic proximity as an excuse to force political union on an unwilling or ambivalent population - failing miserably. In recent history we need think only of the Soviet Union, which sought to achieve through terror and totalitarianism what the European Union today seeks to bring about with the aid of technocracy, managerialism and corporatism - using anything as an excuse for more political integration except a full-throated cry from European people to be part of ever-closer union.

It is this ever-closer union which we are seeking to leave, as evidenced by the Lord Ashcroft poll taken in the immediate aftermath of the EU referendum, showing that the primary motivation for the Leave vote was a desire to reclaim sovereignty and democratic accountability. It was the continual efforts of political elites in Britain and Europe to build a political union spanning dissimilar cultures, in direct contradiction of this desire and without specific democratic consent, which ultimately made Brexit inevitable.

The EU's "if we build it, they will come" approach to legitimising itself - creating institutions and giving them vast powers at the expense of the nation state, all in the hope that a European demos will magically appear in a puff of smoke - is pure wishful thinking. And as EU and member state political elites insist on responding to growing public dissatisfaction by pledging "More Europe", they will only create a bigger and more unsavoury backlash, yet they seem unable to envisage taking any other course of action.

None of this is to insist that Britain should continue in its current form for a thousand years, or that the nation state remain the basic building block of human civilisation in perpetuity. But in the age of universal suffrage there is no good reason why we should continue to blindly execute a dated, anachronistic 1950s blueprint to fulfil a century-old aspiration of European political union when we should instead be creating new systems of meaningful international cooperation which work with human nature rather than struggling obstinately against human nature. Institutions which enjoy sufficient public support that they can operate in the light rather than work in the shadows, relying on voter ignorance.

Democracy means more than the existence of universal suffrage, elected legislatures and executive offices. These things are a necessary condition, but they mean very little if the demos - the body of people whom the institutions purportedly serve - does not also see itself as a cohesive demos. If Britons were suddenly able to vote in Japanese elections, and share political institutions with Japan, a cohesive British/Japanese demos would not automatically pop into existence sharing a common culture, concerns and aspirations. The same goes for the attempt to create a European demos by imposing a parliament, flag and anthem.

This is why Remainer protestations that the EU is "no less democratic than Westminster" are ignorant at best, and deliberately misleading at worst. While some starry-eyed euro-federalists clearly do see themselves as European first and foremost, they are incredibly lacking in number, and certainly nowhere near a majority. And until this changes there can be no European demos of sufficient strength and depth to sustain the kind of powerful, permanent institutions mandated by the EU.

This is where we must at least partially defer to human nature in this regard, and that's why it is ludicrous to maintain that a political union including Britain and Lithuania could long survive when none can exist between Britain and Australia or Britain and the United States.

And that is why one Guardian columnist's love of Daft Punk and Penelope Cruz movies can never provide a strong enough foundation to hold aloft the European Commission, the European Parliament, the European Court of Justice and all the vasty institutions of Brussels.

27/09/2017 link

Mrs May's damp Florentine squib

Friday 22 September 2017  

Mrs May has today given her much vaunted Florence speech. Billed as a set-piece aimed at unlocking the talks, it has fallen flat. It is remarkable only in how little is actually said. May laid out nothing in terms of the financial settlement and only vague platitudes on everything else. On future relations she has said neither a CETA or EEA agreement would be right for the UK but has left the question hanging as to what would be appropriate. We are no further forward. 

The real question, we suspect, is really one of what she intended to say when she booked this speech. The location and timing were far from accidental and talks were delayed to make space for the speech. It had to have been something more substantive originally. She can't have thought this was worth our time. 

There is a good chance that Boris Johnsons's intervention on the weekend was designed to sabotage the intended speech and what we actually got was Speech B, designed to buy time to avoid a civil war before the Tory conference. This though, only adds to the uncertainty. May has to make choices before spring next year or major banks will walk

Troublingly, this speech takes no account of what the Commission has already said regarding the negotiation process or future relations. It is as if anything Barnier has ever said simply does not exist - so it looks like we will have wasted an entire year before getting down to business. The danger is now accidental Brexit.

As to talk of a two year transition - this is wholly meaningless. Spacefiller. Entirely disposable noise. Ultimately there is nothing at all to take seriously here. We are still left to guess what Brexit looks like. Meanwhile, the clock ticks. 

22/09/2017 link

Brexit: a starter for ten

Tuesday 19 September 2017  

One of the particularly prevalent myths in relation to the EU is the wrong-headed belief that because we already have "regulatory convergence" or "equivalence" with the EU (having adopted and implemented its acquis), concluding a free trade agreement will be a simple matter.

This is precisely the error made by Liam Fox who argues that: "The free trade agreement that we will have to do with the European Union should be one of the easiest in human history". "We are", he says, "already beginning with zero tariffs, and we are already beginning at the point of maximal regulatory equivalence, as it is called. In other words, our rules and our laws are exactly the same".

Tariffs, as we have said many times, are not significant. But non-tariff barriers, mainly (but not entirely) expressed in terms of regulatory differences, are a major concern when concluding free trade agreements. Under normal circumstances, "regulatory equivalence" goes a long way to reducing them. But it does not eliminate them – especially in the context of agreements with the EU.

Underlying the myth that regulatory convergence/equivalence gets you through the door – as is so often the case with EU related issues – is a fundamental misunderstanding of the way the EU works, and how it organises its affairs.

The root is the failure to appreciate the difference in the control regimes as between member states and external actors, such as third countries seeking to export goods to the territories of EU Member States.

The crucial difference is not so much in the controls applied, but in where the controls are applied. For EU Member States, border controls have been abolished, so control is exercised internally – often at the point of production.

Looking at the meat industry gives as good an illustration as any of this system in practice, not least because this sector has the best developed example of Union controls and their enforcement.

For those wishing to market fresh meat, the system starts way back up the food chain, with extensive controls over animal feed, on rearing systems, on the pesticides that can be applied and the veterinary medicines used.

But not only are the controls specified, the methods of enforcement are set out, and the "competent authorities" are required to report periodically to Commission, giving evident of their enforcement activities.

And in the case of food products, the Commission has its own "police", in the form of inspectors employed by its Food and Veterinary Office. These officials can carry out inspections of any national systems, with complete access to records, personnel and premises, following which they produce reports setting out "recommendations" which national authorities are more or less obliged to implement.

Once animals reach the slaughterhouse, a new raft of controls apply, including prior approval and licensing of the premises and on-site supervision by veterinary officials. There is 100 percent ante-mortem inspection of animals and post-mortem inspection of all carcases, together with a mandatory test schedule for pesticides and veterinary medicine residues.

Temperatures of the meat are rigorously monitored and controlled throughout transport and storage. Carcase meat can only be boned out and jointed at approved cutting premises, again under veterinary supervision, and cold storage plants must be licensed and approved.

Through the system, copious records are kept, and then held by the national authorities, the details processed and routinely submitted to the Commission in Brussels. All meat has to be marked and labelled so as to identify its origins and the establishments in which it was processed.

But, because of this phenomenally complex (and intrusive) internal system of control, there is no requirement for border controls. These have been abolished, allowing free movement of goods throughout the Union.

And, as a final longstop, if any national authority fails in its duties to enforce EU law, the Commission can intervene, issuing warning letters, and taking infringement proceedings, up to and including taking the Member State to the ECJ, which has the power to impose draconian fines.

Now, when it comes to "third countries" exporting meat to the EU, in the interests of a level playing field, the controls imposed must be at least as rigorous as those applied to Union businesses.

However, there is a big difference. The Commission has no jurisdiction over the internal organisation and the enforcement of controls within the sovereign territories of third countries. It cannot take the governments to the ECJ and they cannot be fined for non-compliance with EU law.

Nevertheless, the EU will require as conditions for entry, compliance with EU production regulations, licensing of establishments and much more, in a graduated hierarchy of controls. But, to compensate for the inherent limitations of its power within the third country territories, the EU also imposes border controls.

When we thus turn to Article 229 of Regulation (EU) 2016/429, we see a five-tier control system in place, carried over from legislation already in force.

Firstly, goods must come from a country officially listed as permitted to export the relevant categories; secondly they must come from establishments which are approved and listed; thirdly, they must comply with all relevant animal health requirements laid down by the Union; and fourthly they must be accompanied by animal health certificates and by other declarations and documents as required.

Finally, the consignments must be presented to a Border Inspection Post (BIP) – now called Border Control Post (BCP) – where they must pass inspection. Only when the fees due are paid and the "Common Veterinary Entry Documents" are endorsed can the goods be presented for customs clearance.

Now the point here is that regulatory convergence is implicit in the country listing, in the approval of establishments and in complying with the relevant animal health requirements. But convergence is not an either/or requirement.

The Member State cannot argue that, because it is convergent, it can be exempted from other controls – particularly border controls. Put simply, convergence is the "starter for ten" which gets your products as far as the border. Once there, the documentary and physical checks must be carried out.

Essentially, what it amounts to is that, inside the European Union, members "enjoy" a system of internal controls, which allows free movement of goods throughout the Union without border checks.

For those operating outside the Union, conformity with EU rules is still required, but additional checks are applied before the goods can pass through the external border to enjoy free circulation within the Union. Regulatory convergence/equivalence is a necessary but not sufficient condition for entry.

And while we have used fresh meat for our regulatory example, similarly complex arrangements apply in other sectors, to other goods. And in all cases, border checks will apply. Regulatory convergence/equivalence is not a "get out of jail free" card. It is merely a "starter for ten".

19/09/2017 link

We can afford no more dithering from Mrs May

Sunday 10 September 2017  

Brexit watchers need no reminding that the clock is ticking. All the while there are intractable dilemmas to be resolved which require urgent decision making. By now we should have seen progress but instead Theresa May is held hostage by her hard Brexit fringe. They are determined to stop May making the necessary concessions to progress.

The fundamental folly here is that May is hoping to avoid a confrontation when a confrontation is inevitable. This is one of those instances where making no decision is as bad as making the wrong decision. Either way, we walk away empty handed. There is simply nothing to be gained by trying to evade the inescapable. May must make her move or be damned. History will not be kind to the prime minister who dithered her way to oblivion.

The undeniable truth is that if we seek to avoid a hard border in Ireland then we must negotiate a special status for the province, maintaining much of the technical and legal infrastructure of the status quo. That has obvious ramifications for trade with the mainland - and largely dictates that we stay closely aligned with the single market. Meanwhile, business is sending a clear message that frictionless trade must be preserved and the minimum requirement is a meaningful transition period.     

Consequently we are at an impasse. Reality is wholly incompatible with the aims and ambitions of the Brexit zealots. It is, therefore, up to Mrs May to decide whether appeasing her backbenchers matters more than Britain's future. If she is incapable of making a choice then she must be removed. If that means the break up of the Conservative Party then so be it. The gravity of the situation now requires courageous and extraordinary measures. 

10/09/2017 link

Another Norway myth collapses

Monday 28 August 2017  

000a EEA-030 acts.jpg
There can be few more tiresome canards in the Brexit debate than the oft repeated assertion that Norway (as part of the EEA) accepts three quarters of EU rules. The truth, as always, is very different. Having contacted the EFTA Secretariat, which administers the EEA agreement, they report that 10,862 acts have been incorporated into the EEA Agreement since its inception in 1992 (see screen-shot above). 

Very often, though, acts repeal other acts, and some acts are time-limited as cease to have an effect. Taking this into account, there are 4,957 acts remaining in force today. 

The very latest count of the EU laws in force (today) stands at 23,076. As a percentage of that number, the EEA acquis of 4,957 acts currently stands at 21 percent. In effect, the EEA (and thus Norway) only has to adopt one in five of all EU laws – not the three-quarters that is claimed. 

The three quarters claim originates from a Norwegian Government report in 2012, which makes a mistaken claim in the introduction, repeated in Chapter 1 of the English version (the only chapter to be translated), which is not repeated in the body of the report (available in Norwegian only).

The error made is to claim that "Norway has incorporated approximately three-quarters of all EU legislative acts into Norwegian legislation", when the detail is to be found on pages 794-5, which do not support this claim. 

What we see there is a chart setting out the EU legislation in force (the same source that we have used), only for July 2008 – over seven years ago. In this overview, which comprised a total of 28,031 legislative acts, of which 1,965 were "applicable directives".

The report takes this figure for directives, and compares it with the (then) 1,369 directives adopted by the EEA, then concluding that "about 70 percent of all European Union Directives also apply to Norway through the EEA". 

This is where the error lies, for the 70 percent of all directives is wrongly changed to "all EU legislative acts" in the introduction, expressed as "approximately three-quarters", the figure which has been lifted and used by the Prime Minister. 

However, the report then goes on to observe that EU had 7,720 current regulations, whereas the EEA Agreement comprised 1,349 applicable regulations, approximately 17.5 percent of the EU regulations. When both were taken together (directives and regulations) – 2,718 adopted by the EEA compared with 9,685 in the EU EU acquis, amounting to about 28 percent. 

Interestingly, when the comparison is made on the same basis that we have used (with 24,061 EU legislative acts), the actual percent comes to 11 percent – a far cry from the "three-quarters" claimed in the introduction. 

Even without going into the depths of this report, there is plenty of work to show that the claim has already been discredited. The report we cite, however, looks at a snapshot of 2000-2013, when it finds that only ten percent of EU laws were adopted. But this ignores the fact that many laws are repealed each year. So as we add to the law book, old laws are dropping off the end. 

Thus, the only valid measure is a comparison between LAWS CURRENTLY IN FORCE. We are making the comparison between the total number of laws on the books of the EU and of the EEA - the laws currently in force. That brings the figure to 21 percent, which can be regarded as definitive at this time. 

Yet the three-quarters figure is routinely cited by the BBCOpen Europe and even the Westminster Parliament, even though there is no evidential support for it, based as it is on an error in the Norwegian report. This careless and even mendacious use of a discredited and inaccurate figure, however, characterises this whole debate, where truth is the first casualty of war. 

28/08/2017 link

EEA cannot be used as an interim measure

Sunday 27 August 2017  

A modern trade agreement will set out a number of areas of mutual concern and cooperation. Even the most rudimentary ones will set up working groups and joint committees. They work on the assumption that there will be problems and problems need to be resolved through ongoing relationships. The new Japan-EU agreement is one such example. Larger and more comprehensive deals up-scale all of these things, often forming formal institutions.

The EEA agreement, however, is a different animal in that it is far more extensive in terms of regulatory harmonisation and cooperates through EU agencies and institutions. It is moderated by the EEA secretariat and the Efta court. It covers considerably more than an FTA.

What this government wants, oblivious of other concerns, is "frictionless trade" which in their minds means a comprehensive FTA. Some say this can be achieved by way of Mutual Recognition Agreements (MRAs).

MRAs have only ever been used as a precursor to full regulatory harmonisation. It is one thing to establish an MRA but you are then faced with the problem of maintaining an agreed level of convergence which means any new laws have to be put to a joint committee to ensure they fall under the MRA. This though does not fully allow for free passage of goods. Only full regulatory harmonisation can achieve this. The EU has made this clear. 

In this the EU is actually giving us a helping hand by closing down a few of these delusions. It should help progress the debate. But for the die-hards of Conservative Home, very few still uphold this misapprehension. 

The delusion held by Brexiteer MPs is that full separation from the single market gives us both frictionless trade and regulatory independence. But that is not even true of even the most basic EU FTAs. The latest EU-Japan agreement largely formalises the current trend in compelling Japan to fully comply with standards as defined by UNECE, Codex and ICH. Substantial trade deregulation is not going to happen.

Assuming we did achieve regulatory independence there would be no point. If you want to export to the EU you have to conform to EU standards and register goods within the internal market. Since that regime would offer the most export potential UK manufacturers would ignore the domestic standard. We would be forced to unilaterally recognise EU goods anyway. We could set up our own goods registration system but EU firms simply wouldn't bother with the expense when the EU standard gives them global reach. Put simply there is no deregulation potential even in a basic FTA worth speaking of.

Now keep in mind that this is just the bare bones on trade in goods. There are three hundred other areas of concern all the way up to aviation safety and phytosanitary measures. We are stripping away forty years of systems development for the free movement of goods only to have to rebuild them one component at a time.

By the time we have finished with this we will have pretty much negotiated exactly what Switzerland has only to find we have the exact same barriers to trade they have where we end up trading ECJ jurisdiction for market access. Exactly where we didn't want to be.

Switzerland's meat export regime falls almost entirely under ECJ jurisdiction with zero say in the rules. That then ends up with mission creep where you end up with pretty much the same regulatory harmonisation as an EU member but no EEA firewall like Efta and no system of co-determination.

So what seems superficially appealing in having a more basic agreement with the EU, ignores the fact that trade deals develop over time and come under constant review. We will prune the single market only to end up rebuilding it through the respective strands of our new relationship but ending up on a tether. So much for ending Brussels influence. We suffer a decade of trade limbo for absolutely nothing.

And this ultimately explains the recent intervention by Barnier. The EU knows full well how this plays out and does not want to devote ten years of runtime to this utterly pointless pursuit - not least when they have a system already; The EEA. In fact, we need to move past calling these things trade agreements when they are in fact treaty systems.

So what about using the EEA as an interim to full independence? Well, it should be noted that this in itself is a major legal undertaking. Why would the EU, or indeed Efta, want to go to the trouble for what would be a temporary and disruptive process? Answer: they wouldn't. More to the point, having done this, having given the UK a single market solution, it would not be obliged to invest any further energy in a bespoke FTA. Why bother?

But, like we say, the EEA agreement is not an FTA. It is a treaty system with country specific annexes so it can be tailored and the UK can register opt-outs and trigger safeguard clauses to reclaim those areas it wishes to exclude. To an extent, yes you can pick and choose parts of the single market - but only if you are in the single market framework. There are penalties for doing so but that is a matter for further negotiation.

So in effect, if we want the destination of Brexit to be a far looser trade relationship then the means to achieve that is to join the EEA from the other side of the agreement and then reverse engineer it as far as we can mutually agree. In that respect the EEA agreement is both the transition and the destination.

If, for some boneheaded reason, the UK chooses to avoid this path and tie the EU up in a pointless negotiation for a more basic FTA, the EU will rightly not be very accommodating. It will offer us a threadbare agreement and there will be no offer of a transition and no "frictionless trade". The only transitional status we will be allowed is to a remain a non-voting EU member. We then drop out into an inferior status where we lose a substantial part of our EU trade for no tangible gains.

This all rather points to the inevitability of the EEA. It would seem that the only other path is for the UK to storm out in a tantrum to end up with nothing. Only the nihilistic wreckers on the right of the Conservative Party think that's a good idea.

From our reading of the EEA agreement, for the UK, it is a superior arrangement to being an EU member. We see a lot of potential in it. We can take ownership of it, develop it and enhance it, possibly even expanding it. It works for the UK and is in the spirit of European cooperation. We see no value in reinventing the wheel.

27/08/2017 link


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