The wide-ranging Free Trade Agreement with zero tariffs proposed by Donald Tusk in March foundered on the supposed problems of the border between Northern Ireland and the Republic of Ireland. In response, the Prime Minister proposed in her Chequers document to bind the UK to a “common rulebook” – really the EU’s rulebook – for goods in order, she said, to ensure continued frictionless trade between the EU and the UK.
This attracted little political support in the EU because it was seen as “cherry-picking” and even less in the UK for leaving us as permanent, non-voting rule-takers. The proposals were rejected on a technical level by the professional customs body, CLECAT, whose 19,000 members handle 80% of European customs transactions. They found that Chequers “would require five to ten years before it can be applied in practice… new/non-existing systems and procedures will potentially lead to more complications.”
Reports this week suggest that the Prime Minister has now gone even further to secure a deal at any cost. Her new “backstop” proposal is for an open-ended customs union. She has ruled out customs union membership 21 times, so this would represent a humiliating defeat. The UK would have submitted to everything the EU demanded, paying them over £40bn for the pleasure and completely ceding our international trade policy to Brussels in clear breach of the Conservative Party’s manifesto commitments.
How has the Prime Minister got into this mess? Her motivation – a seamless border – is well founded, but her premise is that the only way to guarantee this is by some new, complicated customs arrangement. This is simply not true.
Firstly, only 4.9 per cent of Northern Ireland’s sales are with the Republic of Ireland, representing under 0.2 per cent of UK GDP. We should not, surely, give up our law-making capability over a wide area for the sake of that tiny fraction.
Secondly, there is already a border now – for tax, VAT, currency, excise duty and security – managed by technical and administrative procedures. These existing measures provide the foundation to maintain frictionless trade after Brexit. The Heads of HMRC and the Irish Revenue have confirmed this, saying that any additional requirements can be achieved without any new facilities at the border.
To see why, consider the range of simplifications to customs procedures and administrative obligations available under EU law. These are an ideal fit for much cross-border trade, characterised by regular, repetitive shipments – the same milk, from the same cows, from the same farm, in the same tankers, on the same roads, to the same destination. These obligations typically require only a one-off registration and, for regular trade, negligible costs of repetition. Companies already have to report all cross-border trade for VAT purposes, and the current system provides a framework for streamlining customs controls. Even small traders can – and currently do – take advantage of a voluntary registration to claim back VAT.
The agri-food sector accounts for just under half of all cross-border trade. Inspections can be necessary for these products but can, in practice, take place many miles from the physical border. I saw this myself when I visited Rotterdam, Europe’s largest port, this week. The Border Inspection Point is 40km from the docks and deals with 30,000 shipments annually from all over the world, including from outside the Single Market and Customs Union. There, 97-98 per cent of chilled or frozen meat and fish are cleared without physical inspection. Only 2-3 per cent are physically checked, based on intelligence, and 90 per cent of those shipments are cleared well within an hour.
The simplest way to avoid the need for animal checks between Northern Ireland and the Republic of Ireland is by maintaining an all-island biosecurity zone for disease prevention and public health. I visited the facility where inspections already take place for livestock shipments from Great Britain at the port of Larne. There are clear lessons from Rotterdam as to how such checks can be managed efficiently and how intelligence can minimise the need for lengthy inspections.
The Prime Minister’s convoluted customs proposals are unnecessary. Existing technical and administrative processes can ensure that a frictionless border is maintained after Brexit, not as a temporary, cobbled-together “backstop” but as a durable, long-term arrangement which allows for the wide-ranging, zero-tariff trade agreement which Donald Tusk proposed. That, surely, is the optimal solution for all sides.
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The referendum was not fought around a choice to ‘Leave’ or ‘Remain’, but rather a choice between the ‘economy’ or ‘democracy’ – at least that’s how the choice has been framed by the ongoing Remain campaign.
The Remain campaign, especially since the result, has focused on economic risk. Project Fear saw every major public institution, including the US Presidency, pile in to coerce a Remain vote with economic predictions of doom. Remain was presented as a continuity of economic stability.
Leave voters, however, were motivated primarily by democratic concerns: the simple wish to have laws both made and adjudicated locally, by representatives who could be voted in or out.
The odd thing is that economic stability and democratic legitimacy have been presented as mutually exclusive.
Brexiteers are presented as economically reckless, pushing a puritanical, ideological commitment to self-representation and democratic consent, in a world where democracy is too high a price to pay for economic and technocratic stability engineered by a superstate.
Remainers present themselves as the continuity of liberal democracies that are first and foremost technocratic, economic projects, where democratic concerns can be overplayed and lead to dangerous things like right-wing populism.
Presenting Remain as economic continuity played well into the hands of eurosceptic Remain voters with little appetite for economic uncertainty.
But, of course, it is a false choice.
Vibrant democracy and vital economy go hand in hand. Democracy underpinned the entire course of the rise of free market economic success stories in the North Atlantic and distinguishes the UK and our sovereign democratic allies from the communist bloc, southern hemisphere dictatorships and China.
At UK 2020, the think-tank I ran with Owen Paterson, much of our research demonstrated the economic vitality possible outside of the EU by: influencing global trade bodies as a full participant, not just as a 3% of one; freedom to enter bilateral trade agreements able to respond with greater agility to fluxes in the global market; and the ability to exert diplomatic reach and influence across emerging markets.
But the choice between democracy or economy is necessary for the continuity Remain campaign because the EU is undemocratic. Remainers know this.
Have you ever wondered why support for the European Union was so mute until 2016? Did you ever hear a pro-EU conversation down the pub? Why did even pro-EU Prime Ministers like David Cameron and John Major drape their speeches in eurosceptic language?
The answer is: because there has never been popular support for membership of the European Union; any support shown was usually sceptical; and most importantly because the architects and enthusiasts for the UK’s membership were isolated elites who achieved ever closer union by stealth.
To date, no-one needed to make a europhile case. Rather, 2016 was the first time the population was able to express its long held euroscepticism.
Defenceless against the EU’s democratic deficit, the Remain campaign argument could only claim the economic high ground and denigrate democratic credentials within our political culture: concern that a perceived hate crime was being carried out en masse by Leave voters. They say the vote was undemocratic because too many old people voted and not enough young; too many thick people were voting who had received mandatory state education through to the age of, wait for it, 16; the question wasn’t clear; the process not democratic enough; the plebiscite should be considered in constituent parts, such as Scotland or London…
But the absurdity of this divorce of economic competence from democratic vitality was expressed most baldly in a recent tweet from Broxtowe MP Anna Soubry:
The uncomfortable truth is that #Brexit cannot be delivered. It’s time we all faced the reality and were honest with the British people. We owe them a huge apology for a referendum with an option that was undefined & undeliverable. https://t.co/ejimmtPLNV
— Anna Soubry MP (@Anna_Soubry) October 14, 2018
While guised as compassion for a misled electorate, the gravity of her comments eluded her. She believes that the Government cannot extract itself from the EU.
Worse, it belies that democratic participation is impossible, or can only be managed if the parameters are strictly limited. Reading the tweet it was hard to imagine Anna Soubry could believe that there is even a role for Parliament, except as a bully pulpit to tell the masses how dumb they are. For if Government cannot act, why does it need to be held accountable? If Government does not need to consult the people, because it cannot do what they want, why bother with representation at all?
Which is why the call for a “People’s Vote” is so entirely grim. It is the stealth project, guised as concern for economic competence, dressed in populist clothes, to subvert a democratic process.
The truth of this is clear when you consider what a second referendum question would surely have to look like:
1. Are HM Government’s Brexit negotiations such a demonstration of incompetence that you would rather just Remain in the EU and be governed by them instead?
2. Are you still happy to pay tax and parking fines even though the social contract no longer exists, as long as there is economic stability?
Obviously with this last question, there would be no ‘Yes’ or ‘No’ response because the People will already have spoken through David Lammy and John Major. At least the youth of course would be particularly happy, and continue to enjoy open borders by moving to Romania in the vast droves that they have been doing since the former Soviet Bloc joined the EU.
But the disregard of democracy in the name of economic competence is most cynically combined in the Chequers plan. This has been crafted to maintain a technocratic ease for ‘economic stability’ without delivering the democratic mandate. Anna Soubry is right: Brexit is not being delivered. But the solution is not to shrink-wrap democracy to fit Theresa May and her team’s limited imagination, but to deliver Brexit. If that requires a different Prime Minister to do so, then so be it.
Economic vitality and democratic legitimacy do go hand in hand. One cannot be enjoyed without the other. Removing democratic legitimacy by subverting the plebiscite would be to significantly undermine the very basis of our thriving economy. Not only that, but the economic case for leaving the EU is compelling, and been described in some detail on this site.
And for those Remainers who think economic competence trumps democracy, their campaign’s best bet would be to suffer the UK to Leave. Their self-sacrifice, as their predicted economic Armageddon ensues, would surely be rewarded with a second referendum and a 100% Yes vote.
Outside of the EU, the referendum question would be a clear one: Do you want to join the European Union? Yes or No.
The people would know what they were signing up to: joining the EU, the euro, giving Brussels freedom to involve itself in the UK’s national budgets and social security, as well as increasingly run our military, diplomatic affairs, court decisions and the rest.
No more ever closer union by stealth, no more government leaflets with falsehoods about a ‘special status’ in a ‘reformed EU’.
For true Remainers, a ‘Join the EU’ Yes/No question, once Leave has been tried and tested, must surely be the way to really get stuck into the EU and to know that the people had chosen it.
But Remainers know this would be the end of their EU dream.
For once we have left the EU, voters will see it is possible to have both a flourishing economy and a vibrant democracy.
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