Thursday 15 December 2016

Brexit: navigating in the dark

I was going to blog this by Andrew Lilico. If by this point I need to explain why this is deeply moronic then every breath of mine since the referendum has been wasted. It is so deeply stupid that it defeats me. It requires a line by line demolition for which I no longer have the spirit. It doesn't matter how many times you try to introduce reality into the debate this crapology still persists.

But that's actually how they win. Persistent repetition of falsehood is how they control the debate and the energy required to refute bullshit is a magnitude larger than it takes to produce it. 

Instead, since I am war weary, I would direct readers to this article explaining why holding out for perfection will result in worse than what is possible. There is also this piece, originally appearing in The Times, clearing up the confusion on the matter of the customs union. 

In this I hold my hand up. Like just about everyone else I had assumed that the customs union was what prevents us from making our own trade agreements. I have even excoriated politicians for not knowing the difference between the single market and the customs union. Though I have written at length about the single market, I never imagined the customs union would become such an issue since leaving it is self-evident, so I never really looked closer at it. 

Like many I also assumed Turkey was in the customs union. It has its own agreement linked to it, but is not of it. The one mistake I did not make was assume that the customs union had anything to do with customs cooperation. The hard border Turkey has with the EU is sufficient evidence of that. The EEA is the mechanism for enhanced customs cooperation. 

It is now clear that there is no advantage in staying in the customs union and no real cost for leaving it. Doing so only brings about "rules of origin" costs if we depart from the common external tariff - which may make sense one day, but most trade is now in regard to non-tariff barriers; a focus for Britain, the EU and the WTO. We might as well leave tariffs as they are. 

Hard Brexiteers would have it that we can unilaterally drop tariffs to allowing African products to compete but this overlooks the fact that the EU already has done that (just recently) and it is the non-tariff barriers which remain an obstacle.   

But it is these kinds of distinctions that help us better understand the nature of our future relationship with the EU. If, as Lilico has it, we are seeking to "stay as close to the current arrangements for trading as we can, subject to maintaining the ability to set our own regulations and taxes, and to negotiate our own trade agreements with non-EU countries" then these issues must be resolved.

Anybody serious knows that there are conflicts in these aims and this issues are not as black and white as Lilco paints them. Under no circumstances will we be setting our own regulations. If you've had a real job of any kind you will already know this. In my last role with Airbus we were working to standards and processes as defined by global regulators and standards bodies, and in my current role in the nuclear industry, the EU is nowhere to be found in the standards we work to. 

That we get these regulations via the EU middleman is neither here nor there. Technical regulation has transcended regionalism where the sector leaders get to define the regulation. Global regulation is about the only meritocracy in lawmaking and that is going to be the basis of our lawmaking in the future. Regulatory divergence is a non-starter in or out of the single market.  

Meanwhile, Lilico has it that "the Single Market means (by definition) having free movement and being subject to EU law. That is crystal clear" but actually nothing is "crystal clear". To borrow a phrase I heard this evening, every rule has an exception but every exception has rules. The more we look at the precedents we find that the EU and its proxy arrangements are a mish mash of concentric circles where one could go quite mad trying to define them all. The only thing that is clear is that there are no non-negotiable red lines.

The central point I would make is that in order to have enhanced customs cooperation with the EU then that necessarily will mean funding the agencies that make it work, and in order to have it the price tag is a high degree of freedom of movement if not full freedom of movement - and ending it entirely is not worth the trouble. The EEA is an agreement that facilitates that maximum level of integration and if the government is intent on reinventing the wheel then there is every chance we will get a worse deal than if we simply admitted the reality of our predicament. 

To say we can opt in on a sectoral basis, paying as we go, might sound superficially appealing, but then the question becomes one of which sectors we don't mind throwing to the wolves. It is better to swallow the EEA whole and use the annexe system to disengage from the single market as and when we find we need to. The immediate concern for Article 50 talks is to deal with the administrative procedures. Shelving the technical issues by adopting the EEA sidesteps the messier, riskier negotiations. It is the faster route out of the EU.

It seems to me that the EU is a predicament we must understand our way out of, conceding to the facts whether inconvenient or not. Some facts we won't like, but in the end we will get a better, more amicable deal by accepting reality than constructing one of our own. That means admitting when we are wrong - something that journalists and politicians alike are seemingly incapable of doing. We all want the best Brexit possible, but that means taking the world as we find it, not as we wish it to be. 

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