Saturday, 3 December 2016

Like it or not, we need the single market

If you want goods to travel across borders without delays there must be an understanding that goods conform to a certain standard. For goods to be certified there must be standards, audits and inspections. Goods are made to a standard so that manufacturers and producers become trusted operators. That is how they are able to transport goods anywhere in the single market.

Standards and regulations are not plucked out of the air. They are the product of many years of development drawing on the best expertise available. Enforcement of these standards requires a large estate of inspectors and testers. The surveillance systems that safeguard against fraudulent or harmful goods is what allows us to buy with confidence.

Having established these systems we have sophisticated supply chains whereby hazards are removed and consequently insurances are cheaper. And though this creates a good deal of paperwork, most of which is now electronic, the costs are manageable compared with a free for all whereby anything can be shipped regardless of how potentially dangerous it is.

We have these systems to ensure that electrical goods meet certain safety standards. Because of this, instances of house fires have plummeted over the last twenty years and are now a rarity. It is also the reason childrens toys do not have lead, formaldehyde and other dangerous substances in them.

In this, there is good money in circumventing these systems and fraudulent goods can make it on to our shelves. It is only because we have a Europe wide surveilance system that we manage to stop the counterfeiters. We are actually quite good at it now. Food fraud, using relabelled condemned produce would otherwise be a serious problem. There are similar systems in place to prevent harmful medicines and banned products entering the supply chain. It is also the reason we have safe cars on our roads and your chances of surviving a serious incident have never been better.

But this could only happen through a sophisticated network of customs cooperation, linking in with laboratories and policing agencies and standards bodies. This is why the EU has a number of decentralised agencies, some of which are based here in the UK. In order to integrate with the EU we have closed down much of our domestic capacity in order to do it on a joint basis. We have leases, we have future commitments and ongoing projects. All of this could be considered as part of the single market - the most sophisticated trading system of its type.

There are two things one immediately notes about this system. First that none of this comes for free. This is why we pay into the EU budget. The second thing to note is that were we to withdraw from this system, as indeed many on the leave side propose, we would have to set about a number of corporate scale de-mergers. In order to "take back control" we would first have to rebuild our domestic capacity.

But then there some other considerations. In some respects, not least the automotive sector, there is no value whatsoever in "taking back control". We have pooled resources to avoid expensive duplication. Since we will never set about developing a unique regulatory regime for UK vehicles, requiring a duplicate production line, there is no point in breaking away from European and global cooperation programmes.

What we can reasonably expect from Brexit is that it will take quite a long time to organise and plan - and that we will wish to continue particpation in a number of major endeavours. Norway does and so does Israel. And in this we cannot assume that any of it will come for free. Why should it?

And since we will want to continue sending goods over borders without being stopped for inspection and without paying tariffs, it stands to reason that we would want an extensive agreement with the EU. Before embarking on such an undertaking we would first have to define those areas where continued cooperation is in our best interests and those areas where we wish to "take back control".

What we must keep in mind is that in those areas where we do take back control there is a penalty for disengaging with the EU and if we do then we must pay to do our own thing while, for a time, paying to honour our previous commitments. Simply ripping up contracts and agreements is not an option.

In this there has been no serious analysis from the mainstream leavers largely because they think leaving the EU is as simple as knocking up a quick agreement on tariffs and going on our merry way to sunlit uplands. Consequently, they themselves cannot name which areas we would wish to continue particpation in because you can't even get them to acknowledge these issues exist.

What they would find if they did any such analysis is that it is in our best interests to maintain most of what we now call the single market, jettisoning only a number of peripherals which offend conservative sensibilities. I cannot imagine any circumstance where we might wish to continue participation in the European Institute for Gender Equality, but that's just me. I can however see a strong case for continued participation in the European Medicines Agency along with our common aviation and space efforts.

Whether the EU is of a mind to let us pick and choose is the real question. They already have a comprehensive framework for non members to interface with the single market. The EEA. Why would they wish to negotiate another one specifically for the UK when the EEA agreement took eight years? The system is flexible enough for us to negotiate country specific protocols, so why even bother scrabbling for alternatives?

And if it follows that we would want free movement of goods, then it follows that we would want, to a degree, free movement of people. If I produced a specialist airline component of a scientific instrument I would want to send specialist technicians to aid in their installation. There would be exceptions and exemptions with regard to citizenship rights but an element of free movement is essential to the functioning of a free market.

Whether you like it or not the answer is staring us in the face. We must maintain single market membership for the short to mid term - and even in the long term a high level of cooperation and integration is both necessary and desirable. Anything else is just the politics of of the wilfully ignorant.

Whether or not Brexiteers demand that we voted to leave the single market is neither here nor there. The fact is that we are already in it. What is done is not easily undone and certainly not in a hurry - and if we wish to retain hassle free trade with our closest neighbours then much of what we have built in terms of systems and physical assets must remain in place - and with that goes certain political and financial obligations.

The only way we can satisfy the hardline leavers is to pull the plug on all of it, all at once, shattering all good will with our neighbours and plunging our trade into chaos. Our economy would take a massive hit for no long term economic benefit, and it would ruin our standing internationally as well as well as turning our credit rating to junk status. Whatever you think it is you voted for, I'm pretty sure you didn't vote for that.

In this we have two choices. We can have a long drawn out messy divorce, where we remain in the EU until we have brokered a bespoke deal, or we can get our now with the EEA deal that is already available to us. If we opt for the former, there is a greater risk of talks collapsing and a greater risk of remaining in the EU with diminished standing within it. Pragmatism demands that we remain in the single market and if we wish to be further out we will have to gradually evolve out.

While leavers don't like the compromises the EEA requires of us, it stands on one virtue - that it is the fastest route to ending political union and minimises the danger of being sucked back in. From the very first day a number of powers are returned to us over multiple policy areas including trade, aid, agriculture, fishing, home affairs, employment, justice, foreign and defence policy. For now, I think that is sufficient.

Since none of what we pay will ever be spent on the NHS, and it was always the case, I have to ask what is it you so desperately want to take control over that you'd risk us staying in the EU? If making a few compromises now is what it takes, then that really is what we must do. If the Brexiteers wanted it some other way, they should have had a plan. Had they done so they would be in a better position to dictate terms. If now they don't like what is on offer, that is a mess of their own making. 

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