Many areas of life are so complex that trying to come up with an overall account of the many and varied forces at work is almost impossible. Both writers and academics tend therefore to take the sensible decision of only analysing niches and particular aspects of the whole.

But occasionally someone steps forward and tries to illuminate the whole thing. One thinks, in economics, of John Maynard Keynes and his General Theory of Employment, Interest and Money. Naturally, the general theory did not quite live up to its billing, but it still succeeded in highlighting the impact of hitherto unappreciated factors such as a deficiency of demand and the “animal spirits” of potential investors.

In physics, work continues on a so-called “theory of everything” that I cannot pretend to get my head around other than to say it is clearly ambitious.

So, at the risk of falling flat on my face and having my every contention disproved in the coming weeks, I feel the time has come to offer a general (political) theory of Brexit.

I think I have finally figured out what is going on sufficiently to at least have such a theory. Though, as you will see, that theory does not lead to a definitive conclusion about what will happen. Anyhow, let me set out its main constituent parts.

Point One: Theresa May wishes to reach a final endpoint of Brexit – a new equilibrium if you like – that involves a customs union with the EU. Her ministers such as Greg Clark and Philip Hammond have in fact given big corporate employers private assurances that this is what the Government is advancing towards.

But she cannot be open about this because a customs union is a particularly red rag to at least 80 of her MPs and any whiff of Brexit dilution or betrayal causes general outrage among most Tory voters.

So she has decided to take baby steps and take them slowly too. A huge deception of the British public is in fact in progress. Thus May was happy to agree not only the indefinite backstop but also the EU’s preferred sequencing of topics for agreement, with the Northern Ireland border and the financial settlement sorted out before any commitments on trade.

She did this because she wants to lock negotiations onto a path that inevitably leads to a customs union with the EU – despite this being the opposite to her stated policy – however unhappy this makes Brexit purists.

So she absolutely does not want a sunset clause date in the backstop or a unilateral exit mechanism and despite the Brady Amendment passing, has not even asked for either of these things to be inserted into the Withdrawal Agreement. Either of them would allow the Moggites in her party to argue for leaving the backstop to pursue a genuinely independent trade policy if or when future relationship talks get rough.

However, a codicil to the Withdrawal Agreement carrying legal weight and stating the backstop is not intended to be permanent does work for her because it allows for a formal customs union to be mutually agreed later as the way out and that is something that both May and the EU prefer to the backstop in any case.

As EU deputy chief negotiator Sabine Weyand put it: “We should be in the best negotiation position for the future relationship, this requires the customs union as the basis for the future relationship”. As Olly Robbins, the UK chief negotiator, put it in corroboration in comments overheard by the journalist Angus Walker, the backstop was always intended to be a bridge to the final arrangement, not a safety net for the Irish border.

So the policy that May is pursuing, albeit not openly declared, is in fact remarkably close to the one that Labour formally advocates – a permanent customs union that somehow has a bit of give in it letting the UK pursue other trade agreements around the world.

Point Two: There is in fact a large natural majority in the Commons for May’s policy and intended end state. But it has not coalesced into a real thing for two reasons. First, she is unwilling and unable to explicitly set it out because of her own secretive nature and for fear of causing uproar in the Tory grassroots and among pro-Brexit Tory MPs and ministers. Secondly, about half of the natural supporters of this deal are Labour MPs. As such they have been whipped against it by their party leadership.

Given May’s secretive nature and her Tory status, she would indeed be asking a lot to expect “soft Brexit” Labour MPs to back her deal without her openly setting out how it ends with a customs union. As we have seen, she has not surmounted these hurdles yet.

Point Three: Jeremy Corbyn and his inner circle are Brexiteers all day long. They do indeed consider the EU a corporate club that would prevent them from imposing “socialism in one country”. But they are aware that 95 per cent of Labour MPs, about 90 per cent of Labour members and maybe 75 per cent of current Labour-leaning voters are Remainers, many passionately so.

There are a variety of outcomes that Corbyn and his team would be content with. One would be a chaotic no-deal exit if they could be sure that the Conservatives would get the blame and be split by it. Such an outcome might increase the chance of a future Corbyn-led government entirely unencumbered by EU rules on state aid and all the rest. But it carries a big risk of May successfully wrapping herself in the flag, unleashing a wave of patriotic support and actually rising in the polls; a non-violent “Falklands factor”, if you like.

Another good outcome for Corbyn is Theresa May postponing Brexit in clear breach of her promised 29th March leaving date. This would be bound to gain massive traction with the electorate at large, being not about some arcane jargon regarding customs unions or single markets, but being a date in everyone’s diary. It splits the Tory Party and puts Corbyn in the driving seat for the next election, whatever the Tories eventually salvage from the ruins of their reputation. I think this is in fact the best outcome for Corbyn and the one he is working towards.

A third goodish outcome for Corbyn would be May’s deal going through with Labour votes in time for Brexit to take place this spring. This splits the Tory Party and disillusions its supporters and leads inexorably to the kind of “soft” Brexit that Corbyn has promised Labour supporters he will fight for. But it does not hurt the Tories nearly as much as if May has been forced to delay Brexit first and Corbyn will in any case be loath to explicitly endorse May’s deal.

Point Four: Labour MPs who opposed Brexit in the referendum are now deeply split into two tribes. The first recognises Brexit must formally happen but just wish it to be “soft”, i.e. embracing a customs union. The second shares Tony Blair’s messianic zeal that Brexit can and must be stopped altogether via the so-called “People’s Vote”. These MPs, probably numbering 150 or so if you count in SNP, Lib Dems, hardcore Tory Remainers etc, need Brexit delayed significantly in order to have any chance of success.

Oddly, this means that in the very short-term, their interests on this coincide with Corbyn’s: defeat May’s Withdrawal Agreement all the way to 29th March and make her postpone Brexit.

Point Five: But this is a huge call. Nobody knows for certain that Mrs May will be able or willing to call off Brexit just a week or two before it is due to take place. This would be a political calamity for her with her political tribe. It would almost certainly lead to a massacre of Conservatives in the big round of local elections on 2nd May. It would be an ignominious decision to take. So there is a chance that, backed into a corner, May would indeed wrap herself in the flag and go “No Deal”.

Point Six: This is where an intriguing and for me very worrying possibility arises. That mainstream Labour MPs who would be content with a “soft” (customs union) version of Brexit but appalled by No Deal decide at the eleventh hour to swing behind May’s deal en masse, reckoning that it will eventually take the country to their desired end state. Most such MPs detest the Corbyn Labour regime, so would regard it as an added bonus that them doing this might make Corbyn appear to have lost his grip on their party. Given that May’s deal passing under such circumstances also splits the Tories long-term as the future partnership talks wend their way towards a formal customs union, it would seem a winner all round for them.

However, it would need at least 100 Labour MPs to back May’s deal to get it through and unless the People’s Vote brigade acknowledge that the game is up and go down this route instead, those numbers look very ambitious.

So, what will happen? My advice is not to focus on the obvious cross-party political dalliance between the pro-EU People’s Vote zealots like Chuka Umunna and Anna Soubry, but any similar dalliance emerging between the more pragmatic likes of Nicky Morgan and Lisa Nandy. Henceforth the number of Labour MPs backing May’s deal has been very small. But a lot could come over at once as the pressure escalates. And escalate it will. May is keeping a poker face – about the one key political skill she can claim genuinely to have mastered. She is indeed running down the clock. This is going to mid-March at least.

And this is where my general theory of Brexit proves to have its limitations. Because we are dealing with a situation in which multiple groups have multiple interests and imperfect information about each other or the likely political impacts of each possible path.

Would “no deal” help the Tories politically (as I believe) or be a disaster for them (as Oliver Letwin believes)? Will May be able to give sufficient informal assurances to Labour MPs that she is going to deliver a customs union in the end? Might May’s stubborn streak mean that in her mind her 29th March deadline is an actual red line which cannot be rubbed away?

So all I can give you is my view of the probabilities, give these underlying and inter-playing currents.

My odds: 40% that Labour MPs will break in big enough numbers for May’s deal in the next three weeks or so to get it through.

Another 40% that not enough will come across and that May will indeed ask for and be granted an Article 50 extension either of her own volition or because some version of Yvette Cooper’s amendment has been passed that arguably compels her to do so.

And alas just 20% that, having been backed into a corner, May has the guts to stick to her word on 29th March and on no deal being better than a bad deal and delivers a WTO Brexit that genuinely fulfils the instruction given to the political class by the British people on 23rd June 2016.

Yet unless this final path does transpire, we will soon be in need of a General Theory of Brexit Betrayal. I will do my best to oblige.

The post Theresa May is secretly seeking an EU customs union – my general theory of Brexit appeared first on BrexitCentral.

This past week has sadly brought further damaging rhetoric in the Brexit process and some who ought to be statesmanlike have been anything but.

This is surely a moment for statesmanship and for finding a way through the current impasse. We must calm things down and focus on developing a common sense solution to Brexit and the Irish border question in particular. In this context I welcome the visits of both the Prime Minister and the Taoiseach to Belfast and the meeting between both leaders in Dublin: this is the kind of engagement and leadership that is needed to help find a sensible way forward.

I recognise that the UK and the Irish Republic do not agree on Brexit itself and that many in Ireland feel hurt by the decision of the UK to leave the EU. Nevertheless, it is important we all respect democratic decisions of this nature, even when we don’t agree with them. Undoubtedly, the last two years have seen damage done to the three sets of relationships that formed the core of the Good Friday/Belfast Agreement.

The absence of the political institutions, including the Assembly and the North-South Ministerial Council, has been to the detriment of all of us. Just think how differently we might have handled this very difficult situation if such institutions had been in place to provide a forum within which Belfast and Dublin could engage and take a more considered view on all of this. Instead, the politics of cooperation has been replaced by the old ways of megaphone diplomacy.

However, we are where we are and leaders on both sides of the border have hitherto shown a remarkable capacity to overcome enormous challenges in the peace process to find our way to the common ground. In the remaining weeks leading up to 29th March, we must do so again. Whilst it is London and Brussels who take the lead in negotiations, I believe that Dublin and Belfast can play a constructive role in helping to find the solutions.

We can begin by recognising that we already occupy significant common ground.

We all agree that the need to protect the peace process and the political and institutional arrangements of the Good Friday, St Andrews and Stormont House Agreements is vital.

Secondly, none of us want a hard border on the island of Ireland or the creation of a new border in the Irish Sea. Both the Republic of Ireland and Northern Ireland do a substantial amount of trade with Great Britain as well as with each other. The Common Travel Area ensures the free movement of people across the islands and is accepted by the EU. Now we need to find a sensible solution to ensure a similar approach on the smooth movement of goods. We in the DUP are of the view that a pragmatic approach can deliver an outcome on customs and trade that does not fundamentally undermine the EU single market or the UK single market.

Thirdly, both countries want to avoid a ‘no-deal’ outcome if possible as we recognise this could have significant implications for the short- to medium-term economic stability and prosperity of both parts of the island. Building stability and prosperity goes hand in hand with building peace.

For us, the primary problem with the draft Withdrawal Agreement is the backstop. It is not only the DUP that has concerns about the backstop and our opposition to it has been supported by many from all parties across the House of Commons.

On two occasions now, the House of Commons has voted decisively to reject the backstop in its current form and to call for legally-binding changes to these potentially harmful proposals. Our position on the backstop is also supported by other unionists like Nobel Peace laureate Lord Trimble, who has said that the proposals have the potential to “turn the Belfast Agreement on its head and do serious damage to it.”

Lord Trimble is in the process of taking legal action to challenge the legality of the backstop and his case is supported by leading experts on the Good Friday Agreement such as Professor Lord Bew. For such key architects of the Good Friday Agreement to raise serious concerns about the damaging nature of the proposed backstop must surely encourage the Taoiseach and others to pause and consider other options which are capable of commanding a wider cross-border and cross-community consensus.

If the current impasse between the UK and EU over the backstop results in no-deal then it will further damage relationships between Northern Ireland and the Republic and undermine the prospects for restoring the political institutions. The absence of these institutions over the past two years has seen a re-polarisation of attitudes on both sides in Northern Ireland.

In my opinion, securing a deal on Brexit that is broadly acceptable can only improve the prospects for restoring the institutions. It may suit Sinn Fein to have a chaotic situation, but it surely can’t be in the interests of anyone else. Sinn Fein has tried to exploit the uncertainty over Brexit to raise the border poll issue, hoping to force a referendum in the near term. This is, of course, a party that was fiercely opposed to Ireland’s membership of the EU and sought to vote down each successive European Treaty. Clearly, Sinn Fein is self-serving, and its claim to act in the wider interests of the ‘Irish people, north and south’, is bogus.

The consequences of a no-deal outcome will undoubtedly impact on the economies on both sides of the border, with their heavy dependence on the agri-food sector. InterTrade Ireland commissioned the Economic and Social Research Institute (ESRI), an Irish think-tank, to conduct an analysis of the impact of Brexit on the Irish border. ESRI looked at several different scenarios, including one where trade between Ireland and the UK would be based on WTO rules. The resulting imposition of tariffs and non-tariff barriers in this scenario could result in Irish trade to Great Britain falling by 12%, British trade to Ireland falling by 6%, Irish trade to Northern Ireland falling by 14%, and Northern Irish trade to Ireland falling by 19% – resulting in a total reduction in cross-border trade of 16%.

Agri-food in particular is a sector that has expressed concerns about no-deal. A study of the impact of a no-deal Brexit on the EU’s agri-food industry has claimed that beef and cheese exports from Ireland to the UK could collapse by up to 90% with the loss of over 3,500 jobs. No amount of preparation by any government can nullify the significant economic implications outlined.

Additionally, a further fall in the value of sterling in a no-deal scenario would worsen the outcome for Irish exports to Great Britain and Northern Ireland. In this scenario, Irish trade to Great Britain would fall by 20%, British trade to Ireland would remain broadly similar (at +0.3 %), Irish trade to Northern Ireland would fall 21%, and Northern Irish trade to Ireland would fall 11% – so there would be a total fall in cross-border trade of 17%.

Despite these stark statistics, there are some who seem determined to impose the backstop. Yet the Withdrawal Agreement and backstop in their current form have been roundly rejected in the UK Parliament because they could lock us indefinitely into an arrangement that undermines the economic integrity of the UK. The backstop is designed to prevent a hard border but could ultimately result in no-deal and actually compel the EU to impose a hard border in Ireland.

Having been an MP for over 20 years and in frontline politics since the early 1980s, too many times have I seen politicians become wedded to an idea and intent on implementing it, even when they are aware of the dire consequences. Now is not a time for brinkmanship but for leadership.

I am convinced that there are better solutions than this. Whilst I am not going to be prescriptive in this article about what they may be, I am aware of several ideas, including the ‘Malthouse Compromise’, that are surely worthy of serious consideration. If the political will is there on both sides, I firmly believe we can find a solution.

The people of the United Kingdom voted by a majority to Leave the European Union. Despite this, the leadership of the EU and some in the UK have sought to frustrate the will of the people and to make it as difficult as possible for our country to Leave. The indefinite nature of the backstop would harm the constitutional and economic integrity of the UK.

The EU leaders have asked Parliament to state clearly what we want. That answer is now clear and the EU must address British concerns about the backstop if a no-deal outcome is to be avoided.

If the EU truly want to avoid harm to the peace process and to protect the political arrangements established under the Belfast/Good Friday Agreement, then they need to take account of unionist concerns as well as those of nationalists, otherwise, as Lord Trimble has said, they violate the core principles of the Agreement.

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The recent vote in Parliament attempting to prevent a no-deal outcome on Brexit was counter-productive and non-binding. Any attempt to hobble the Government’s negotiating hand would have been a self-inflicted wound. It was also irrelevant, since virtually no-one in the UK is advocating no deal.

The preference of the European Research Group (ERG) of Conservative eurosceptic MPs has always been for what is usually called a ‘Canada-plus’ free trade agreement. Everyone also supports sensible side deals on such issues as aircraft landing rights, air and vehicle safety certification, and truckers’ licences. It may not be the Withdrawal Agreement signed off by Theresa May, but it is a perfectly coherent UK offer, especially if accompanied by undertakings on the Irish border.

It is entirely logical for Brussels to play hardball at this stage of the talks. The EU still see some prospect of Parliament reversing its rejection of the Withdrawal Agreement and are, of course, fully aware of the non-binding vote on no deal. However, the EU’s current refusal to re-open the Withdrawal Agreement is unlikely to be a guide to the endgame in March.

It would nevertheless be logical for the EU to offer Parliament a sweetener in the form of a codicil attached to the Withdrawal Agreement. This codicil could suggest that the EU will try hard to ensure that the backstop is either never used or will be used for only a short period.

However, this is unlikely to work since prominent ERG MPs have said that they will reject any formulation that does not replace the current wording of the Withdrawal Agreement with a clear get-out clause from the backstop. The likelihood is, thus, that the deal will once again be rejected if it returns to Parliament.

The Prime Minister’s first preference is clearly still to get an amended Withdrawal Agreement through Parliament. Her strategy all along has been to give Leave supporters a formal exit from the EU and control over EU migration, but to give companies an outcome very close to the customs union and single market. The recent Nissan decision not to build the new X-Trail model in the UK will have strengthened this resolve.

The voting strength of the ERG, however, means that a fall-back position is now under consideration – the ‘Malthouse Compromise’. This is close to the ERG’s long-standing preferred option, with the involvement of prominent Remainers giving the plan a far higher profile than we might otherwise have expected. These MPs find the Withdrawal Agreement unacceptable. They also share a survival instinct and wish to prevent their party from fracturing and losing the next election.

If and when the Withdrawal Agreement fails again to pass in Parliament, the plan is to have a compromise which the Malthouse group hope will command sufficient Tory and DUP support (together with up to forty Labour MPs from Leave-voting constituencies) to provide majority backing in Parliament. This can then be presented to the EU who will need to choose between this and no deal.

The Malthouse Compromise is based on a free-trade agreement with no tariffs or quotas. A commitment to avoid new infrastructure on the Irish border is supported by proposals for advanced customs and trade facilitation measures of the sort already in use on, for instance, the Swiss border. Regulatory equivalence of the type that currently exists for meat imports from New Zealand are proposed to remove the need for sanitary and phytosanitary checks for food and animal imports. Non-regression clauses of the sort common in modern free trade agreements are proposed to address EU concerns over unfair competition. Provisions on citizens’ rights and payments to the EU would be carried forward from the Withdrawal Agreement.

The Malthouse plan could involve an extended transition period agreed under Article 50 to allow time to negotiate a free trade agreement (which should not be difficult between two entities which already have free trade). Additional payments would accompany an extended period.

Alternatively, the free trade negotiation could be conducted without a formal transition period through making use of the provisions of GATT Article 24 as long as the EU agreed that formal FTA talks could begin soon after 29th March. Article 24 allows countries engaged in formal free trade negotiations to suspend the most favoured nation rule of the WTO and to continue with the existing tariff-free trade arrangements. In either case, the period would finish by December 2021 at the latest.

The EU is likely to resist consideration of this alternative for several weeks, but once the Withdrawal Agreement has sunk without trace, and both sides face no deal, there are three strong reasons why it might accept the Malthouse Compromise.

First, an agreement secures the £39 billion (or more) promised in the Withdrawal Agreement. Secondly, an agreement avoids potentially high tariffs for EU exporters into the EU. The EU currently sells £55 billion of products in high-tariff food and vehicle sectors into the UK. Exports from the UK into the EU in these sectors are lower at £21 billion.

But the most pressing reason is to secure a frictionless border in Ireland. The UK has guaranteed no new border infrastructure, deal or no deal, but without a deal there will be a problem on the Irish side to maintain the integrity of the EU Single Market.

It is obviously better for Ireland and the EU to accept some deal on the Irish border rather than no deal at all, even if that deal were inferior to the backstop in their eyes. The UK will also prefer to avoid no deal but can live with tariffs and side deals.

This is an extract from Brexit and Backstop: everything you need to know, published today by The UK in a Changing Europe.

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‘No-deal’ may be coming.

That’s been the view of a great many commentators since at least the publishing of the draft Withdrawal Agreement in November, and especially since the Government’s defeat on the meaningful vote last month.

Last week it was the turn of Sabine Weyand, the EU’s deputy chief negotiator, to state the possibility: “There is a very high risk of a crash out not by design, but by accident.”

Given that risk, what do we actually know about no-deal?

There’s been a lot of waffle on the subject. Predictions have ranged from a 1920s-style recession and civil unrest at the one end, to an equally specious vision of ‘sunlit uplands’ and painless transition under Article 24 of the GATT at the other. Fortunately, my colleagues at the IEA have looked at key claims focused on the delays at ports, aviation and the availability of medicines, as well on other issues such as the Irish Single Electricity Market and the return of mobile roaming charges. Today, they’re tackling fears around food supply.

The above briefings may not cover every aspect of Brexit, nor the broader macroeconomic picture as painted by Whitehall forecasts, but a clear pattern does emerge. Although there are genuine issues associated with ‘no-deal’, when looked at in detail, many of the issues are less intractable than they might seem.

Take the risks around ports and ‘just-in-time’ supply chains. The fear here is that delays at ports, arising from either checks on regulatory compliance or additional customs paperwork, cause sufficient delays to shut down the Dover-Calais crossing. Dover handles roughly 17% of UK goods trade, processing 10,000 vehicles a day. 99% of these originate in the EU (including the UK) and are processed in around two minutes each. Checks on lorries from outside the EU take an average of 20 minutes. The Freight Transport Association stated in 2017 that an additional 2-minute delay per lorry could cause a 17-mile queue on either side of the Channel.

However, there are several reasons to believe that this scenario need not occur. The key is that none of those with a stake in what goes on in Dover-Calais want it. The worst-case scenario is what occurs in the absence of any anticipation or mitigatory action.

But these problems have been anticipated and action is being taken.

See the multiple statements by Xavier Bertrand, the President of the Hauts-de-France region. For a 2-minute delay to occur on average, roughly 10% of lorries would need to be subject to 20 minutes of extra-EU checks. However, the UK only checks 4% of extra-EU shipments and the Republic of Ireland only 1%. Incidentally, this 1% check rate is what officials at Calais have suggested for UK traffic.

The normal riposte to these claims is that the EU still requires ‘SPS’ checks on 100% of consignments of food products for human consumption, as well as checks on animal feed and other animal produce. But these checks do not take place at the border. In the case of Calais, the inspection point is 12 km from the port and so vehicles exit the port to be checked without causing additional delays.

This scenario is illustrative of many of the risks of ‘no-deal’. Big problems like the continued availability of medicines break down into smaller problems such as agreement on conformity assessment and obtaining Marketing Authorisations. These can often be solved by unilateral action on the UK’s part (we have already committed to recognise EEA approved medication) and sensible steps by firms.

Many of these steps have already been taken. Often players on the EU side face similar incentives to make reasonable arrangements (e.g. the EU extending existing road haulage arrangements in the event of ‘no-deal’). Even the seemingly intractable ‘Irish border question’ is, in reality, a selection of smaller technical issues which on their own are far from insoluble.

Unfortunately, forecasters predicting doom and gloom are unable to accurately account for firms and officials adjusting. Their models are insufficiently ‘granular’ as they simply don’t have the necessary information. Often, neither does government. But the small firms that have to cope with these problems, those with real ‘skin in the game’, do. Make no mistake, adjusting is still costly, both for firms and ultimately consumers, but these costs are lower than the disaster headlines would suggest. Just as importantly, they can be spread out over time.

The truth is that ‘no deal’ is broad and wide ranging enough that no-one knows precisely what will happen, including us. But that doesn’t mean it has to be a disaster. If firms and local officials know what they’re facing, they can be flexible and use their ingenuity to find solutions. Politicians would be well served to trust credentialed experts less, and our economy’s real problem solvers more.

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I read the news with increasing incredulity. After Michel Barnier’s spokesman told us that in the event of no deal there would have to be a hard border (How? 275 manned border posts? Expecting people to accept the blocking off of all but a few crossing points?), Barnier himself was forced to admit: “We will have to find an operational way of carrying out checks and controls without putting back in place a border”.

Later, speaking at an event in Brussels, Barnier’s deputy, Sabine Weyand, said that other options for the Irish border had been extensively discussed, the EU side were agreed that a time-limit to the Irish backstop defeated the purpose of having one and that “there is a very high risk of a crash-out, not by design, but by accident…”

So Barnier and Weyland have acknowledged that the EU’s insistence on including in the Withdrawal Agreement a temporary backstop – that will only be lifted by entering into a permanent trade agreement on the same terms because soft border controls will never be acceptable – will have the consequence that the Agreement will be rejected, leading to soft border controls being applied immediately.

The only possible explanation for such blatant perversion of logic is that the EU (Germany, France, the European Commission) are not interested in pragmatism, fairness or negotiation to mutual advantage but only in the exercise of power (‘winning’) – whether it be over the UK or over its own member states such as Greece, Hungary and Italy – regardless of the adverse consequences to their populace.

Weyand has kindly explained her justification for insisting on the temporary backstop (and presumably similar terms of any trade deal that will supersede it):
“We looked at every border on this earth, and every border the EU has with a third country – there’s simply no way you can do away with checks and controls,” she said (referring presumably to a hard border since checks and controls of some kind are, of course, essential).

This, then, is the EU’s irrefutable justification for saying that soft border controls are impossible: anything that has not been done before is, by definition, impossible. It is precisely this stifling, rigid, rule-driven madness and resistance to innovation that we must escape in order to be able to prosper on the world stage.

Meanwhile, we have to listen to the ludicrous predictions of Armageddon that will arise from “no deal” (i.e. leaving without the Withdrawal Agreement and transition period) Most famously recently we’ve had the Border Force’s prediction of an 87% fall in throughput through Calais (which even the Border Force described as the ‘reasonable worst case’). It’s impossible for us to know how they have arrived at that bizarre conclusion because no-one has seen their report. The story emanates from Sky News which stated that they hadn’t seen any leaked Border Force report but only “a slide from an internal government presentation marked ‘Official-Sensitive’ and titled ‘Freight Traffic Contingency Assumptions’” which purported to be “a recent internal assessment much of which was omitted from public no-deal documentation”.

It is upon that prediction, of an 87% fall in throughput through Calais, that the chief executives of Sainsbury’s, Asda, M&S, Co-Op, Lidl, McDonald’s, KFC and others have based their dire warnings of severe food shortages and higher prices; and now we have Imperial College predicting an additional 12,000 deaths in Britain caused by increases in the cost of fruit and vegetables leading to people being unable to afford to eat enough of them. Quite why the costs of such foods should increase so substantially when we move outside the trade barrier wall erected to protect French farmers isn’t mentioned, let alone explained.

UK food exports to the EU will be damaged by the imposition of the Common External Tariff that the EU imposes on all third counties. Reuters reports that France is hiring an additional 700 customs staff to be ready to deal with imports from the UK in event of a no-deal Brexit because “merchandise coming from Britain could face up to four separate customs procedures under a post-Brexit regime against only one currently. That could translate into an extra two minutes per truck going through border controls, which could potentially lead to long queues gridlock in ports,” according to French minister Gerald Darmanin. However, it’s puzzling to me as to why extra procedures will be required since all EU regulations are to be incorporated into UK law on exit, so nothing will have changed in terms of standards when we leave. And any departures from those standards (probably not imminent) will not be clandestine but by well publicised statute or statutory instrument.

Whether or not UK food exports will be hit by extra customs controls as well as tariffs, there’s an apparently obvious solution in that, if there’s a reduction in the flow of food from EU farmers supported by our CAP contributions, there’ll be more space on our shelves for us to buy and consume home produce. True, that will not be sufficient to help us as consumers because, as the British Retail Consortium tells us, “in March, the situation becomes more acute as UK produce is out of season [so] at that time of year, 90% of lettuces, 80% of tomatoes and 70% of soft fruit sold in the UK is grown in the EU”.

Of course, the potential starvation and deaths to which the food retailers and Imperial College refer relates not to the processing by Calais of imports into the EU from the UK, as discussed above, but to the processing through Calais of EU food exports to the UK and I’m puzzled as to why French customs are interested in produce leaving France and what they might need to do differently post-Brexit. In any event, it would be very surprising indeed if the EU didn’t do its utmost to ensure the continued smooth delivery of agricultural produce to its biggest customer. Where does all this nonsense come from?

But back to the Irish border, and Sabine Weyand’s description of the EU’s stance – captured on film here – is of great assistance and significance. She makes statements that, on the face of it, don’t seem to be capable of being reconciled.

On the one hand she says [at 11:44] that “there are ways out by alternative arrangements” but then a few seconds later [at 12:00] says, referring to the Brady amendment, that “they don’t exist”.

She says [at 10:15] that “technological solutions are not enough to do away with the border” but [at 12:30] opines that during the transition period they will discuss “what additional facilitative measures will be needed on the Irish border in order to do away with a hard border”.

It seems to me that all Theresa May has to do in her negotiations is to draw attention to that last statement and emphasise that that is all that we are asking for – namely that there is no need for the backstop because it is agreed that the border will be policed by soft border controls using such facilitative measures as are deemed necessary.

The Irish say the backstop is essential because they think that, without it, there will need to be a hard border. But there doesn’t need to be – as Michel Barnier has now admitted.

What are the EU afraid of? Soft border controls are in use now at the Irish border – a combination of administrative cooperation, whistle-blowing, auditing and site raids by customs, tax and regulatory enforcement officials, all supplemented by occasional random spot-checks on roads leading up to and cameras at the border.

The thoroughness of such controls is a matter of degree. No border is fool-proof as only a very small proportion of cross-border consignments is ever physically checked, even at hard borders. By the end of the transition period, the Irish border could be controlled by the system of checks by then developed and, if either party considers that more robust controls are required, the nature and timing of such further improvements could be settled by agreement or arbitration. A no-deal scenario would remove that head start, but the same evolution process would apply.

It is only the nature of the goods and produce crossing that border that can be of relevance. Other aspects of the Free Trade Agreement, such as access to fisheries, have no relevance whatsoever to agreeing appropriate controls on movements across for the Irish border.

Currently the UK is in full alignment with EU standards. Any future divergence will require monitoring. If, say, chlorine-washed chicken is permitted in the UK but not in the EU, that fact will be known to and respected by reputable suppliers. If considered necessary, regular supply chains can be monitored at the origin or destination.

Whether the backstop has been invoked is of no relevance to the ability to combat smuggling. Smuggling can be detected and deterred, as at a hard border, only by intelligence and random checks, methods that are already employed at the Irish border, for example, to inhibit VAT evasion.

Rejection of a legally binding agreement that the border will be policed by soft border controls will demonstrate beyond doubt that Parliament was right to reject Mrs May’s Withdrawal Agreement but, furthermore, that even without the backstop, we cannot proceed with negotiations in a situation where the Irish border question remains open – since it will only be closed by a long-term arrangement that replicates the backstop. The only solution is to close the issue now by presenting the EU with a fait accompli on 29th March.

The EU’s position is so ludicrously irrational that it can have only one of two explanations. The first is that they are unbelievably stupid. The alternative is that they regard it as totally impossible that the UK will leave the EU without a deal (and thus the currently offered deal) – but that is despite saying, publicly, that they now see no deal as becoming an increasing possibility.

Since this makes no sense whatsoever, I am confident that, as David Davis told the Exiting the EU Select Committee back in October 2017:

“It’s no secret that the way the union makes its decision tends to be at the 59th minute of the 11th hour of the 11th day and so on, and that is precisely what I would expect to happen… If there is a time limit on a negotiation the union stops the clock, it assumes that it’s still at 11:59 until it is concluded, sometimes over the course of 24, 36, 72 hours thereafter and that’s what I imagine it will be.”

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In the aftermath of Parliament’s rejection of the draft Withdrawal Agreement, there is a way forward for the Government which allows a smooth transition into a No Deal scenario after 29th March, if found necessary, and then allows the UK to negotiate its desired comprehensive Free Trade Agreement with the EU without having to impose tariffs or quotas in the interim. There is a mechanism to ‘manage’ a No Deal scenario; one that works within existing WTO rules, and that is not widely known about.

This is essentially an alternate transition or interim period, but within WTO rules without having to levy tariffs or (arguably) pay membership fees to the EU, but requiring some customs forms levied on the 7% of UK businesses (400,000 out of 5.7 million UK private registered businesses) that actually trade with the EU. This is the deal with the EU used by China, the USA, India, Australia and New Zealand for example.

These recommendations are based on my nearly ten years of experience as a member of the European Parliament’s International Trade Committee, working on EU trade deals such as those with Canada, New Zealand, India, South Korea, Japan and Columbia/Peru, and drawing on high level discussions I have had with senior trade representatives for the EU and the World Trade Organisation (WTO).

In the event of No Deal, there is a strong case to maintain preferential tariff and quota rates at zero between the UK and the EU for a limited period – thought to be around two years. There are a number of arguments for exemptions to what are termed ‘Most Favoured Nation’ (MFN) rules, which require the same treatment in terms of tariff rates and treatment between WTO members to avoid discrimination. They are:

1) It is to the advantage of fellow WTO members to minimise disruption between our two large markets, which would reduce knock-on impacts to their imports/exports to the UK or EU markets. WTO members have to show financial harm to justify objections to practices (or tariff schedules). Civitas calculate that £13 billion of tariffs would have to be levied on EU goods entering the UK and £5 billion on UK goods entering the EU Single Market if standard tariffs are levied under No Deal. This is one justification for keeping preferential rates of tariffs for a period whilst a full trade deal is finalised.

2) There are exemptions under National Security grounds such as over the issue of Northern Ireland, which the IEA have argued as a case for an exemption, but this is less appealing given its association with US and Russian cases for exemptions, such as over US tariffs on Chinese steel.

3) Exemptions to ‘Most Favoured Nation’ (MFN) rules under Article 24 of the General Agreement on Tariffs and Trade (GATT) 1947. This appears to be the most substantive argument. WTO rules state that preferential benefits, such as tariffs and quotas for goods which are more favourable than MFN treatment, may only be extended to another country if it is part of a customs union or a free trade area. The ultimate legal authority to grant such preferences is Article 24 of GATT , incorporated into the WTO regime when that body commenced operations in 1995.

Article 24 is helpfully the ultimate basis in international law for the existence of the EU itself as a preferential trading bloc, which grants preferential treatment to its members within the Customs Union.

If the UK accepts Donald Tusk’s offer of a free trade agreement along the lines of CETA+++ or what I propose as ‘SuperCanada’, then the UK and EU will be in the process of moving towards creating a free trade area – Tusk has offered a tariff and quota free deal plus services (whilst leaving the EU Customs Union) – so qualifies under this criterion.

There are two under-appreciated aspects of Article 24 which have direct relevance to our situation, and which provide reassurance.

Firstly, Article 24, para 3 states:

The provisions of this Agreement [i.e. the requirement to extend MFN treatment equally to all] shall not be construed to prevent:

(a) Advantages accorded by any contracting party to adjacent countries in order to facilitate frontier traffic

  • This has direct relevance to the position of Northern Ireland, and our adjacent country of Ireland. Some commentators have claimed that a sensitive and appropriate management of trade which respects and upholds both the letter and the spirit of, for example, the Good Friday Agreement would be in some form an unauthorised infringement of MFN treatment. That claim is clearly untrue.
  • There is also no obligation under WTO rules to erect a so-called “hard border” on 29th March. Government may continue discussions with our counterparts in Dublin to arrive at adequate and effective technological measures for the management of trade with minimal friction. You will have noticed the encouraging signs that the Irish Government already appreciates this fact. (See, for example, “Ireland has no plans for hard border after Brexit, says Varadkar”, from The Guardian of 21st December 2018)
  • We can expect that there will be considerable international sympathy for measures which support the situation in Northern Ireland, and hence a reluctance on the part of third countries to lodge objections. Although given the sensitivities this should not be stressed too heavily, such an exemption falls into ‘National Security’ related actions.

Secondly, Article 24 not only authorises member states to operate lower/zero tariff free trade agreements, it also permits them to offer lower/zero tariffs pre-emptively during the course of negotiations. The relevant provision, Article 24 para 5, is worth quoting at length, with emphasis added to the critical wording:

Accordingly, the provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of… a free-trade area or the adoption of an interim agreement necessary for the formation of… a free-trade area; Provided that:…

(b) with respect to a free-trade area, or an interim agreement leading to the formation of a free-trade area, the duties and other regulations of commerce maintained in each of the constituent territories and applicable at the formation of such free–trade area or the adoption of such interim agreement to the trade of contracting parties not included in such area or not parties to such agreement shall not be higher or more restrictive than the corresponding duties and other regulations of commerce existing in the same constituent territories prior to the formation of the free-trade area, or interim agreement as the case may be; and

(c) any interim agreement referred to in subparagraph… (b) shall include a plan and schedule for the formation of such… a free-trade area within a reasonable length of time.

(A WTO declaration, the Understanding on the Interpretation of Article 24, 1994, clarifies that the ‘reasonable period of time’ in para 5(c) will generally taken to be no more than 10 years.) I estimate based on EU trade deals to date, that a UK-EU comprehensive Free Trade Agreement could take around two years, especially given the unique reality that the UK is starting from a convergent position with the EU, with zero tariffs and quotas and with our laws and standards currently harmonised.

  • If, before 29 March, the UK has reached an ‘interim agreement’ with the EU to pursue negotiations towards a comprehensive free trade deal, both sides would be permitted under WTO rules to continue with the present zero tariff/zero quota trading arrangements. There would be no disruption to the man or woman on the high street. No Deal would mean No Change, as the cost of goods would not go up.
  • In the present situation the ‘interim agreement’ would not have to be an extensive document running to hundreds of pages. The schedule of items covered by the negotiations would be all goods, as already envisaged in our discussions with the EU. The plan which the document sets out would have to amount to little more than a timetable for regular meetings and an ultimate deadline, some years hence, by which point negotiations will have to be concluded.
  • An ‘interim agreement’, then, need be little more than an agreement to continue talks – while also continuing zero-tariff and zero-quota trade on both sides – plus a deadline no later than 29th March 2029. I accept that the EU has so far declined to agree any deadlines (other than 29th March) but since the absence of a final cut-off point has been a major contributing reason for Parliament’s rejection of the Draft Withdrawal Agreement, perhaps the EU will now reassess that stance.
  • Whilst legal challenges at WTO level might be expected from an unhelpful member, the reality is that any such challenge is unlikely to get to the WTO ‘court’ – its appellate body – for at least two years and possibly longer, and only if that body finds the UK non-compliant would any compensating actions be authorised such as tariffs. This is within WTO rules, and if any challenges arise a fully compliant Free Trade Agreement should already be in place by the time any appellate body were to meet. The EU is now under extreme pressure from EU27 industry and commerce who enjoy a £96 billion surplus with the UK.
  • You will recall that the draft Political Declaration indicates the EU want to reach a comprehensive Free Trade Agreement with the UK on the basis of zero tariffs and quotas (see paras 17, page 5, and para 23, page 6) and extending to services (para 29, page 7). Those provisions are fully in line with numerous public statements made since the 2016 referendum by Donald Tusk, President of the European Council, and Michel Barnier, European Chief Negotiator – offering a CETA+++, or what I term a ‘SuperCanada’ trade deal, on 7th March 2018, 30th August and 6th October 2018.

It is significant that Heiko Maas, Foreign Minister of Germany, has already indicated a willingness to continue talks (see “Germany says EU ready to talk if UK rejects Brexit deal” on Reuters, 15th January).

Conclusion

This approach would continue the pre-29th March status quo in trading arrangements and patterns without interruption, justified by an explicit provision of the WTO regime. The possible grounds on which any third country could lodge an objection to this are extremely slight (unlike for schedule changes).

An ‘interim agreement’ would therefore be an important component of a ‘Managed No Deal’ outcome from 29th March. It permits trade between us and the EU to continue without tariffs or quotas under No Deal while creating a space for negotiations to be reset and recommenced on the basis of reaching a SuperCanada or CETA+++ trade treaty.

I urge the Government to now adopt this course of action, as it will mitigate the main impacts of a ‘No Deal’ Brexit and eliminate the task of having to assess and charge tariff rates on 19,753 MFN tariffs under the EU Customs Union, thereby substantially reducing friction at borders.

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The letter sent from Jean-Claude Juncker and Donald Tusk to Theresa May in the last 24 hours shows more clearly than anything else possibly could why the draft Withdrawal Agreement is fundamentally flawed: not only the lack of substance in the letter, which adds nothing new to the sum of human knowledge, but also the lack of any form of collegiate kindness or helpfulness to the Prime Minister.

When the Prime Minister addressed the 1922 Committee on 12th December, she assured colleagues that she would secure legally-binding wording to address concerns over the Northern Ireland backstop. Now we learn there will be no end date to the backstop or unilateral exit mechanism for the UK. So, yet again, the EU have let the Prime Minister down.

The lesson is clear: we need to vote down the Withdrawal Agreement by as large a majority as possible. Only then can we move on and either negotiate a new agreement (as David Davis argued at the weekend) or Leave without a deal on World Trade Organisation terms with a view to later negotiating a new relationship.

The Government and the Conservative Party must remain committed to delivering the result of the referendum, as repeated in our 2017 manifesto, which pledged to leave the Customs Union and the Single Market, accompanied by the declaration that No Deal was better than a Bad Deal. Otherwise, the credibility of our democracy will be thrown into chaos.

The draft Withdrawal Agreement does not respect the result of the referendum. The Government should be seeking to unlock the negotiations by returning to the Canada-style option offered by President Tusk, using the tried and trusted techniques and procedures so that rules of origin and customs checks are conducted away from the Northern Ireland border, to make unnecessary the hard border that everyone agrees must be avoided.

The backstop means we will be trapped under the thumb of the EU with no date to escape – and unable to strike trade deals. It means we would be trapped indefinitely as a satellite of the EU, obeying its laws without a say, unless the EU and its Member States gave permission for us to leave. The UK will be paying £39 billion – equivalent to £1,443 per household, or £60 million per constituency – and getting nothing in return. We will not take back control of our money, laws and trade. Remaining in the Customs Union is a breach of the 2017 Conservative Manifesto on which I and all my colleagues stood.

The backstop drives a regulatory barrier down the Irish Sea, severely damaging the Union and moving Great Britain and Northern Ireland further apart. This deal keeps the supremacy of the European Court over our own law and sells out the UK fishing industry, excluding them from any trade deal, and envisaging a deal where the Prime Minister trades away our fish in return for market access.

We remain effectively in the EU for an extendable ‘transition’ period, paying and accepting new laws over which we will have had no say. Unrestricted immigration of EU nationals will still be continuing for years after we leave. This commitment comes with no guarantee of a future trade agreement. Worryingly, this deal will deny the UK an independent trade policy while potentially keeping us out of existing EU trade policy. We would be cut off from the world with our trade and economy regulated from Brussels without any say.

So, let us be honest: the Withdrawal Agreement is a terrible deal – worse than Chequers, less popular than the Poll Tax and only one in five voters think it honours the referendum result. The only way to get a better deal for the UK is for Parliament to reject it and force the Government to renegotiate with the EU.

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The letter sent from Jean-Claude Juncker and Donald Tusk to Theresa May in the last 24 hours shows more clearly than anything else possibly could why the draft Withdrawal Agreement is fundamentally flawed: not only the lack of substance in the letter, which adds nothing new to the sum of human knowledge, but also the lack of any form of collegiate kindness or helpfulness to the Prime Minister.

When the Prime Minister addressed the 1922 Committee on 12th December, she assured colleagues that she would secure legally-binding wording to address concerns over the Northern Ireland backstop. Now we learn there will be no end date to the backstop or unilateral exit mechanism for the UK. So, yet again, the EU have let the Prime Minister down.

The lesson is clear: we need to vote down the Withdrawal Agreement by as large a majority as possible. Only then can we move on and either negotiate a new agreement (as David Davis argued at the weekend) or Leave without a deal on World Trade Organisation terms with a view to later negotiating a new relationship.

The Government and the Conservative Party must remain committed to delivering the result of the referendum, as repeated in our 2017 manifesto, which pledged to leave the Customs Union and the Single Market, accompanied by the declaration that No Deal was better than a Bad Deal. Otherwise, the credibility of our democracy will be thrown into chaos.

The draft Withdrawal Agreement does not respect the result of the referendum. The Government should be seeking to unlock the negotiations by returning to the Canada-style option offered by President Tusk, using the tried and trusted techniques and procedures so that rules of origin and customs checks are conducted away from the Northern Ireland border, to make unnecessary the hard border that everyone agrees must be avoided.

The backstop means we will be trapped under the thumb of the EU with no date to escape – and unable to strike trade deals. It means we would be trapped indefinitely as a satellite of the EU, obeying its laws without a say, unless the EU and its Member States gave permission for us to leave. The UK will be paying £39 billion – equivalent to £1,443 per household, or £60 million per constituency – and getting nothing in return. We will not take back control of our money, laws and trade. Remaining in the Customs Union is a breach of the 2017 Conservative Manifesto on which I and all my colleagues stood.

The backstop drives a regulatory barrier down the Irish Sea, severely damaging the Union and moving Great Britain and Northern Ireland further apart. This deal keeps the supremacy of the European Court over our own law and sells out the UK fishing industry, excluding them from any trade deal, and envisaging a deal where the Prime Minister trades away our fish in return for market access.

We remain effectively in the EU for an extendable ‘transition’ period, paying and accepting new laws over which we will have had no say. Unrestricted immigration of EU nationals will still be continuing for years after we leave. This commitment comes with no guarantee of a future trade agreement. Worryingly, this deal will deny the UK an independent trade policy while potentially keeping us out of existing EU trade policy. We would be cut off from the world with our trade and economy regulated from Brussels without any say.

So, let us be honest: the Withdrawal Agreement is a terrible deal – worse than Chequers, less popular than the Poll Tax and only one in five voters think it honours the referendum result. The only way to get a better deal for the UK is for Parliament to reject it and force the Government to renegotiate with the EU.

The post Juncker and Tusk’s letter to Theresa May changes nothing: we must vote down the draft Withdrawal Agreement appeared first on BrexitCentral.

What follows is an open letter to the Prime Minister written by a businessperson who backed Leave at the referendum but who for professional reasons is currently unable to enter the political fray.

Dear Prime Minister,

I have watched with a sense of appalled inevitability your recent unsuccessful visit to Brussels, characterised as it was by a lack of ideas, an absence of combativeness and a reckless and relentless desire to cling on to every rotten element of the vassal state deal that you and your small Remainer clique of advisers in Downing Street have concocted with the EU. Harsh words? Perhaps, but they are words that are endorsed – sometimes in more polite phrases, sometimes in less polite phrases – by the vast majority in our country and even of our Parliament.

Why are you so recklessly clinging to every suspect element of this ‘Brexit in name only’ deal? Many believe the problem all began with your still-secret promises made to Nissan, the car manufacturer in Sunderland, shortly after you took power in 2016. You have never published those promises. Many of us guess that it was partly as a result of those promises that in your talks with the EU you then gave away – whether in ignorance or because you never truly meant to leave the Customs Union – every possible negotiating element that would allow the United Kingdom to pursue its own independent economic and trade policies. Was that so? Can you not come clean with the electorate and tell us what those Nissan promises were, how much they are now constraining you and how much your desire to cling to your secret agreement with one company, Nissan, has led you to all this foolishness? Because if that is the case, then the honourable thing for you to do would be to resign and let someone else – someone not burdened by that promise – create a way forward for our country that is not shackled by that apparently all-constraining Nissan cursed promise.

If there was no such promise, then I am puzzled by your insistence that a WTO-terms deal – what is most truthfully termed a ‘Sovereign Brexit’, the thing that 17.4 million people actually voted for – must be ruled out by you. Your Remainer friends who dominate the media have managed to spin non-facts into a general belief that a Sovereign Deal would be catastrophic. Your grid in Downing Street has, month after month, delivered to a credulous press and public a remorseless stream of doom-laden statements by those rent-seeking members of the business community on whom you have chosen to rely to spin your message. Yet neither you, nor the spinners, nor your business allies, actually ever credibly articulated what the specific negatives of such a deal would be (the contemptible catastrophe forecasts by your discredited Treasury modellers, and by your apparently politically motivated Governor of the Bank of England, are no longer believed by anyone – as I am sure you must know).

What could go wrong, and what would go right, in a Sovereign Brexit? The claims of your Remain-loving enablers as to what might go wrong are economic. They relate first to exports from the EU into this country and second to exports from the United Kingdom into the EU. Once even the briefest analysis is conducted, both sets of claims are quickly seen as hogwash.

Exports from the EU into the UK – no disruption threat there

There have been the most extraordinary and juvenile claims of potential (albeit very short-term) shortages in this country after 29th March 2019. Even you, lamentably, mentioned your diabetes and your desire for being sure of your supply of insulin. Who persuaded you to say that? Did you give the slightest thought to how ridiculous that scare story was? Insulin is sold under a wonderful system we call private enterprise, from one company to another. In the UK’s case, it’s mostly a Danish company selling insulin to companies in Britain. The insulin is put on a plane or a boat and comes over to our country. What, do you assert, would prevent this from happening after a Sovereign Brexit? Come on, what? Are you saying that the EU would somehow seek to prevent insulin being placed on a ship or a boat and exported to us? You aren’t saying that, are you? Such an action would be illegal. Or, OK: let’s even say that, however unlikely, the EU indeed decided on 29th March to start acting entirely illegally (again: for a short period of time only, which is all they could possibly ever do). Then the UK would get its insulin from the US, or the Danish company would sell the insulin to Norway, or some other non-EU country, which would then export it on to the UK. Businesses successfully deal with complications of this sort all the time. All that the EU’s (highly, highly unlikely) illegality would result in is the Danish company losing money, one way or another. But you and I know that the EU wouldn’t shoot itself in the foot like that.

So, were you claiming instead that Britain would somehow put up barriers against Danish insulin coming into the country after 29th March? We wouldn’t, would we? Come on, you know that, don’t you? So why did you raise a false scare story, that would have had tens or hundreds of thousands of diabetics worried that their supply of insulin was suddenly going to dry up, when you know it’s hogwash? Isn’t that the sort of rabble-rousing nonsense that we try not to do in the Conservative Party?

Insulin is just an example of any other product that comes into the UK from the EU. We would not prevent any product from arriving; the EU would have no legal locus (or indeed any physical ability) to prevent any product from being sent; can you please just stop being silly and admit that there would be no supply shortages in the UK? (And please, can we in particular try to keep our Conservative ministers from making fools of themselves, in their eagerness to support you, by escalating the level of ludicrousness of such scare stories from a possibility of momentary disruption of a day or two, through to six-week problems, through to six-month problems? The more outlandish their claims get, the less anyone believes them – though some Remainers tactically pretend to. We will actually need to have a set of ministers who are seen as competent by the UK electorate after all this settles down, if the Conservatives wish to remain in power.)

The UK’s exports to the EU – not credible to assert any long-term or even short-term disruption

Let’s turn to the second set of scare stories running against a Sovereign Brexit. We keep being warned about “lorry parks in Kent”. The idea is that Calais will somehow impose restrictions on us, so that we won’t be able to get our goods speedily into France and through to the rest of the EU. Of course, we send just 6% of the UK’s exports through Calais, and those exports can swiftly be diverted to go through other ports, were Calais were to seek to prevent the easy flow of UK goods into Europe. But we needn’t particularly worry about anything like that happening, because every local official from Calais, and the Pas de Calais region, has said that this will not happen. It would take an edict from President Macron – an edict that would be entirely illegal, whether in EU law or in the WTO agreement – to impose such a blockade (Indeed: if you really were to believe – and I for one don’t think you do – that Macron would truly seek to impose an illegal blockade, then it would be utterly abject of you, and unworthy of the Prime Minister of our sovereign nation, to bow to a perception of a threat of this sort).

In any event, let us assume that the worst happens and that Macron does indeed seek some way of blocking British exports into the EU. The French did that once before, when they for a while diverted Japanese VCRs to Poitiers, so that EU manufacturers could win in the VCR market. They were very swiftly brought to court by the WTO and made to stop. Japanese VCRs continued to dominate the world (and the EU) market. France have never tried that trick again. And what would be the result for the French, were they to try it on us? Well, within a couple of weeks, as their just-in-time-systems were affected, thousands of French and German auto workers – possibly tens of thousands, in the unlikely event that the French were successful for more than a few days – would be thrown out of work, as French and German car manufacturing plants had to shut down. Do you really think, Prime Minister, that this would be allowed to happen? Or is your assertion, that somehow the EU would inflict such a monstrous act of self-harm upon itself, just a stance that you are pretending to believe in, so as to insist on this foolish deal that you and the EU are trying to impose upon the British people?

In either case – exports or imports – the very wildest claims are of a possible disruption that would last for, even your wildest claims allege, only a few months. Why, then, should this be the dispositive consideration, when we are talking about Britain’s future for many decades to come? Why would you shackle the country permanently to a lordly EU, in order to avoid a very temporary (and, if you read my above arguments, not going to happen anyway) disruption? Why would you abandon even the threat of a WTO terms deal – and in so abandoning it, allow us to become the hapless prey of what everyone now knows are entirely ruthless EU negotiators?

The Irish Border and the Backstop – a Hoax

On the Backstop, and its claimed urgency and importance, the trick is to look at your language, where one finds your people always using the passive mood – a classic giveaway. You say you are worried about a hard border “being imposed” (passive mood). You do not offer a noun in front of the verb, to show who it is, exactly, that is predicted to be going to do this “imposing”. That’s because, in fact, nobody wants to, nor do they intend to, impose such a border. You have said that Britain will never impose a hard border. The EU has said that it will never impose a hard border. The Irish have said that they will never impose a hard border. The Revenue of the UK has said that imposing a hard border will in all circumstances be entirely unnecessary. Talk of a hard border is nonsense, and you know it. Plan after plan has been published showing how the Irish border question can easily be dealt with, away from the border. To assert that this issue might bring back the IRA, that there will be one disaster or another if we don’t have the Backstop, is irresponsible. Which brings us back to what many aver, that the Backstop is just a cover for implementing some promise you made to the auto industry in 2016, that we would be in some form of Customs Union with the EU – precisely the thing that 17.4 million people voted against.

(And by the way, could you please get your people to stop briefing the credulous media as to how the EU don’t like the Backstop? To believe that – if indeed you do – would be a colossal, monumental piece of self-delusion. The EU love this Backstop, created as it is without an exit clause, with the EU entirely in control as to when – if ever – the backstop is removed. And Leo Varadkar is of course – and rightly – terrified of a Sovereign Brexit because the Irish economy would, unlike the UK’s economy, drastically contract as soon as we stopped buying Irish agricultural products and started buying cheaper, alternative produce from New Zealand and Argentina, were the EU to fail immediately to agree a free trade deal with the UK.)

As constituted in your proposed deal, the Backstop turns Britain into a permanent, shackled vassal state of the EU, subject to all its laws, on which we’d have no say; gradually reduced to a pathetic vestigial outcropping of the EU, with German goods and French produce increasingly defined under EU laws as the only sources that we will be allowed to accept. If the EU wishes – and why should they not? – that Backstop would be for good. Our manufacturing, already half destroyed by our membership of the EU, would continue to shrink, and our farmers and fishers would continue to be at a disadvantage – forever.

The positives of a Sovereign Brexit

So much for the specious arguments that a Sovereign Brexit would be problematic, and that your surrender deal is therefore necessary. But what about the positives for a Sovereign Brexit? I sometimes wonder what Downing Street’s grasp of numbers is like. Do you have any true feel for what £39 billion, so insouciantly promised to the EU in return for illusory favours, could do for this country were we to spend it on ourselves, as we could if we opted for a Sovereign Brexit, rather than giving it away?

For a start, were there any sector (including your much-loved auto sector), but let us say, for example, the agricultural or the fisheries sector, that indeed for some (unlikely) reason suffered during any years of further negotiations, then just a small fraction of this £39bn would be enough to keep those industries whole, for the (in the scheme of things) short period it took to get a free trade deal with the EU. We do not owe this £39bn to the EU. It’s possible that the EU could make an argument for us paying over a small fraction of that amount as one or another obligation, that we might eventually agree, but we certainly wouldn’t pay it any time soon, were the EU to keep on playing the sort of hardball with us that they have adopted so far as their negotiating posture; it would take them years, possibly decades, to establish legally that we owed the money.

Regardless, there is no way that the UK would ever have to pay anything but a small fraction of the full sum. Don’t you think, Prime Minister, that the EU are rather keen to have that money? Do you not see that by ruling out a Sovereign Brexit, and by promising to pay the money before you have agreed a trade deal with the EU, you have taken two enormous bargaining chips off the table? Wouldn’t keeping that money in a Sovereign Brexit scenario make a huge positive impact for the UK?

So, for a start, we’ll have that £39 billion (a sum that in your deal, as we pay it to the EU, will massively and worryingly increase this country’s debt – for no clear return). But a Sovereign Brexit will give us so much more than just that money; we’ll retain our ability to do free trade deals with that part of the global economy from which 90% of future global growth will be coming (you may know this as the ‘not the EU’ world. I hope you sometimes think about it?); we’ll keep our ability to unshackle our entrepreneurs from EU regulation (so that, as just one random example, we can regain the 12% of the global clinical trials industry that we used to have, until EU regulations in 2002 suddenly collapsed our share to around 2%); and above all, the clothing, food and other essentials that the people of the United Kingdom buy in the future being far cheaper as we move outside the protectionist barriers of the EU’s Customs Union and Internal Market.

You know very well, Prime Minister, how all of your allegedly neutral and objective advisers have ostentatiously ignored all of these benefits. You know they have failed to seriously review the many analyses that show that far from a Sovereign Brexit being negative for the British economy, it is likely instead to have a significant positive effect. You know that the insistence of your Treasury officials on publishing neither their models, nor the assumptions they put into those models, make an absolute nonsense of the credibility of those models and a mockery of the alleged impartiality of those officials. Please, Prime Minister: you are juggling with the future of this country. At the very least, you should be honest with the people of this country – both in acknowledging the above points, and in forcing your officials to own up to the way they have jammed their thumb onto one side of the scales of public opinion.

Prime Minister, you are offering us a deal where you propose to break up the Union and hand Northern Ireland over to the EU. You intend to hand over money ahead of any trade deal, thus assuring that whatever is agreed in that deal will be even more horrendous than what you have come up with so far – Gibraltar threatened, our fisheries destroyed, our people deprived of their chance for the benefits of free trade and subjected to semi-permanent, quite likely perpetual, enshacklement to the EU. You have gone back on every single promise you made when the Conservative Party made you their leader, when you gave your Lancaster House speech, when you said “Brexit means Brexit”.

The sorry band around you are desperate for your deal to go through because if we went for a Sovereign Brexit instead, they, and their enablers in the media and big businesses, would be exposed as the complete charlatans that they are, when a WTO terms Leave is implemented (the Leave that those 17.4 million voters expected to happen). This is why your myrmidons are fighting so hard, because all of them – your advisers, the civil servants involved, the Treasury forecasters, your small clique of Remain ministers, The Economist, the FT, the BBC, and on and on – would have no choice but permanently to disappear from public life once we implemented a Sovereign Brexit and all their egregious negative spinning and outrageous scare stories were proved as false as their original 2016 Project Fear was.

You, however, Prime Minister, have a glorious chance to escape their fate, by doing one thing: you can still, now, and energised by Juncker’s utterly disrespectful behaviour to you in this past week, turn around to the European Union and say, finally:

“Fine. I understand you don’t want to do a deal. We’re now going to go full bore for a Sovereign-terms Brexit. Let’s sort out some administrative things like us allowing you to fly your planes over the UK, but other than that, let’s see each other in Geneva at the WTO. Do come back to us if you want to discuss some kind of Canada-plus deal, but otherwise, let’s all spend our time constructively in the next three months preparing for Britain’s Sovereign Exit from the EU.”

For the sake of our country Prime Minister, please take this chance. Now.

The post A plea to the PM from a Leave-supporting businessperson: Stop the scare stories and embrace a Sovereign Brexit appeared first on BrexitCentral.

It is now clear that there is very little support in Parliament for the Prime Minister’s Withdrawal Agreement. The most important objection is the so-called Irish backstop in Protocol 9 which essentially keeps Northern Ireland in the EU indefinitely and binds the UK into a customs union from which there is no release unless the EU says so – which it would have little incentive to do. Even under our present terms, we can leave if we choose.

Other options such as another referendum, or some version of “Norway” are for various reasons unworkable. It is equally clear that neither side wants a “no deal” scenario. However, if a solution could be found that preserves the transition period and most of the Withdrawal Agreement, it must be considered, for the sake of continuity, good relations with the EU and the island of Ireland.

This week, I – along with Robert MacLean and Hans Maessen – have laid before policy-makers an alternative that we believe would remove those aspects of the Withdrawal Agreement which are unacceptable, and yet retain the genuine progress achieved to date. This is not to say that there is nothing else in the Withdrawal Agreement which is objectionable, including its one-sided structure. However, in the spirit of compromise, we do not pursue those matters, but offer a solution to the heart of the problem. This, we believe, solves the Irish border issue on a permanent basis, enables a backstop to exist on a basis acceptable to all reasonable stakeholders and builds on the EU’s offer to the UK of an advanced Free Trade Agreement with regulatory cooperation, customs facilitations and Irish border facilitations. This is part of a bigger project to propose the real legal text of a Free Trade Agreement between the UK and EU.

First, the proposed backstop needs to be replaced, with an alternative based on a basic Free Trade Agreement in goods and agri-food, with a chapter on Customs and Trade Facilitation, and Irish Border Facilitations, which would in due course become part of the ultimate comprehensive Free Trade Agreement which the UK and EU will seek to negotiate, with some additional provisions for regulatory cooperation, and stand-alone dispute settlement mechanisms. Our proposed backstop could last for a fixed period, say ten years – on any view long enough for a comprehensive Free Trade Agreement to be negotiated between the UK and EU. In other words, our backstop can function as a front-stop, should the need arise, unlike the EU’s, which gives them no incentive to release the UK from de facto EU control. Since the backstop is the ultimate permanent arrangement, there is no loss of negotiating leverage for the UK to remain in it, nor is it a threat.

Contrary to what the Government has claimed, this does not involve the use of “magical” new technology but existing customs facilitation procedures already in use across the world. It avoids a hard border – which in any event all sides have pledged to do – respects the Good Friday Agreement and removes the challenge to the territorial integrity of the UK posed by the creation of “UKNI” in the existing Withdrawal Agreement, aptly described as “a new country”. From the EU point of view, it enables a smooth UK withdrawal and avoids an attempt to exercise jurisdiction in the territory of a non-Member State.

We also believe that, if the current flawed and legalistic process is allowed to hit the buffers, there is an opening for a more political solution driven by European heads of state, since neither side wants a no-deal outcome. Naturally, the UK Government must prepare for no deal, since there is always the possibility of no deal, through no fault of the UK. The UK Parliament cannot control the actions of the EU and therefore for the UK Parliament to decree that there shall be no deal is pointless; it is also extremely damaging, as it tells the EU that the UK will accept any deal. We must become serious negotiators and understand that being prepared for no deal is a way of ensuring a better deal for both the UK and the EU.

We must also be prepared to push back against the fear and risk-aversion, and ask for what we want, presenting a draft Withdrawal Agreement to back it up. We have done altogether too much negotiating with ourselves.

From an EU point of view, any failure by the EU to reach a deal acceptable to its nearest neighbour, closest ally and largest third-country market will have enormously adverse political and economic consequences, within the EU and around the world. There are significant and powerful economic forces at play, and not all are in the EU’s favour. For example, one aspect of the EU’s very large favourable balance of trade with the UK – now seriously at risk – is the EU’s need to maintain its high market share in UK markets for its agricultural exports. The farm lobby is the most powerful in Brussels, and in Member States. The EU must know that no responsible UK government could, or would need to, allow no deal to mean food price inflation, and that we would have to either apply a third-country tariff of zero for certain agri-foods, or open the relevant trade quotas to other countries (on a first come, first served basis). Irish beef farmers, French beef and dairy, and Bavarian dairy farmers would lose market share almost instantly and this will have a massive impact on them. For the UK, lower food prices could well be the unexpected bonus of the rejection of the present Withdrawal Agreement.

While there will no doubt be those who say that what we are offering is not enough to save a very bad deal, there will also be those who say it is too much for the EU to accept. But our aims are straightforward: to put on the table the necessary changes to the Withdrawal Agreement, a concrete future framework for a trade agreement that builds on their offer to us and, shortly, the full text of such an agreement, specifically noting what the EU has already agreed in other contexts. Let us lift our eyes to a higher vision of what this relationship should look like, instead of the myopic approach all sides have adopted thus far. Let us also recognise that it is impossible to determine the full conditions of our withdrawal, without knowing much more about the future relationship. Indeed, that is the inherent illogic of the EU’s negotiating mandate, which is partly responsible for the current predicament, but that cannot politically bind us at this late stage.

Nonetheless, we have produced a concept of what the Alternative to the Withdrawal Agreement might look like. We strongly advise the Government to present this to the EU immediately, along with a clear framework of a Trade Agreement, the full legal text of which we will also shortly table. Since this builds on what has already been offered, there is very little reason for the EU to reject it. We badly need to show our peoples on both sides of the Channel and the Irish Sea that we have momentum and are moving towards a good resolution. We have a huge responsibility: future generations will not forgive us if we fail them.

As explained, the text we will shortly circulate essentially replaces the proposed common customs territory with a Free Trade Agreement and comprehensive customs and trade arrangements that can serve as the backstop, or if you prefer, front stop, in Ireland. Some changes may be necessary to the Political Declaration, in order to conform to our changes to the Withdrawal Agreement, but most of it can stand, as can much of the Withdrawal Agreement, for example citizens’ rights and financial matters, subject to the money being based on benchmarks and milestones related to progress on the free trade agreement. Some issues, such as Geographical Indications, belong in the future trading arrangements, rather than the Withdrawal Agreement. The UK must also be able to negotiate its WTO modification by itself without having to consult with the EU, and then be free to operate in the WTO as an independent player. We have also turned the non-regression clauses into the sorts of mutual disciplines you would see in a typical Free Trade Agreement and ensured that they are mutual. We have provided that the transition period may be extended by agreement but there is no need to provide for extension now. Deadlines in trade negotiations are important, and concentrate negotiators’ minds. We see no reason to prolong business uncertainty for years.

The changes we have outlined allow a deal to the benefit of all European citizens to be reached before 29th March 2019.

The post Here’s how to solve the Irish border issue and make the Withdrawal Agreement acceptable appeared first on BrexitCentral.




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