Wednesday, 7 September 2016

Back in the business of governing

There are two Brexits on the table. And the choice is evolution or revolution. One avenue brings about a significant change in our EU relationship that could otherwise not be secured as a member. The other means hitting the nuclear button and letting the chips fall where they may.

There is no real middle way. Some argue that we can negotiate a "British option" centred around a "free trade deal" but by the time you have added all the nuts and bolts and peripheral agreements it starts to look exactly like the picking and choosing the EU is not inclined to entertain. It has a mechanism for close integration. It's called the EEA Agreement and the EU will not be in a rush to tailor a whole new model just because the UK demands it.

The nuclear option is one that basically means a unilateral withdrawal from multiple areas of cooperation, permanently souring EU relations and breaking international law. It also means losing all of our preferential trade agreements not just with the EU but with nearly everyone else as well. I see no justification for doing this. There are no upsides to it unless the intention is to be poorer and live under a far less sophisticated legal system. Superficially it may seem appealing but when you examine the practical consequences of it there is nothing so bad about the existing system that warrants such an act of wanton vandalism.

So that really does leave only the single market option. There are several advantages to this. It is not so radically different from the status quo but it does give us options and gives us the freedom to formulate policy on trade, energy, aid, foreign policy, agriculture and fishing. You would have to be wilfully blind not to see the opportunities and advantages in this.

What's more is that it shelves a cultural and political divide that has plagued British politics for the last forty years and has prevented governments from governing effectively. As much as there are intangible and unmeasurable effects there are also opportunities to be had in this "democratic moment". The people have decided that a change of direction is necessary and this is a catalyst for broader domestic reforms - not least localism which is long overdue.

Nobody, though, is going to argue that the EEA represents an optimal settlement for the UK. Initially it is worse than EU membership. It does mean a temporary slowdown in inward investment. It does mean losing some preferential trade agreements. It does mean accepting that Vote Leave was offering a false bill of goods. But that doesn't matter.

For forty years the UK government has closed down much administration which is now carried out by the EU meaning administration is carried out remotely and not in the national interest. In that regard government has almost forgotten how to act in the national interest and instead follows rather than leads. Having abdicated responsibility for key areas of policy our politics has atrophied leading to one of the worst crops of politicians in living memory. Our MPs are manifestly incapable of competently debating the issues.

That though is not a reason to remain in the EU. It underscores why we must leave. Presently trade policy debate is normally confined to the tatty offices of the European Commission. Now we are leaving we are having a far reaching nationwide debate and learning as we go. The subject matter is now back in our political lexicon and in so doing has demoted and displaced the frivolity that has occupied parliament in recent years. Our government is back in the business of governing rather than subordinated administration.

The effect of this cannot be underestimated. Having lost a number of trading advantages the UK will have to act decisively and with purpose. It does not have the obtion to let things slide. As we go through the process of asking what effect Brexit has on various subject matters we will discover the universe of global conventions and treaties that form the bedrock of our legislation and and will re-engage in all those areas normally obscured from view. If free movement of goods and services is our goal then it is the WCO and WIPO where our efforts must be directed.

Here we will discover that we need a whole new approach to trade. Over the years the EU has made some impressive inroads in its trade agreements but if we adopt the EU bilateral approach we could never in a thousand years hope to match them. The alternative approaches are where we can make smaller steps and progress incrementally but operate a lot faster - and in the end surpass the EU while it's still negotiating big bang deals like TTIP to no avail.

One of the most frustrating aspects of EU membership is the lack of decisiveness and its inability to respond. Immediately we resolve this issue. By leaving the EU we regain our right of initiative at all the global regulatory bodies and we need not ask permission from the EU. We can build alliances and form a consensus which spurs the EU into action. It may even be that we can gang up on the EU, as Australia has in the past to force internal EU reforms. It is more likely that we can achieve reforms to the CAP from outside the EU. 

It is said that inside the EU we enjoyed greater influence which is to an extent true in terms of steering the direction of future policy but what concerns us is the process of modernising those methods, policies and institutions that form the basis of the EU. At nearly every turn attempts to reform them have resulted in patches and sticking plasters where bureaucratic inertia and defensive self interest of member states bring reform to a standstill. 

With the combined weight of Efta and with strengthened relations with Australian and New Zealand - and also being the fifth largest economy we can bring some serious force down on the EU and give it the kick it needs. Next on the agenda is to kick start the process of extending the single market, using our aid budget to assist in conformity and seek out new mutual recognition agreements. 

From there the EU will begin to realise that a major change in approach is required and we will start to see genuine demands from the inside for structural reform. That was never going to happen if we stayed in the EU. 

The way things are done now is that global systems of trade are developed (much like the EEA) with mechanisms for constant renewal, review and modification. The EU, however, is a series of treaties, set in stone, designed for one-way integration. A terminal weakness. It cannot survive unless there is a system for waivers and exceptions. If we'd had that in the first place we wouldn't even be leaving. By the time that process complete, we might have the European economic space we should have had in the beginning. Brexit will be the European reform we've been screaming to have for decades. 

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