Friday, 20 January 2017
Tories are a luxury we can no longer afford
The problem I see is the assumption that trade is detached from all other considerations. The easiest part of a trade deal to agree is an agreement on tariffs, but then you move on to the matter of "frictionless" customs. It's not so simple as to have an agreement to wave lorries through on the nod. That is not how it works. Lorries travel through ports unimpeded because of a degree of up front registration and regulatory conformity.
To have that you have to have mutual recognition of conformity assessment and and agreement on standards so you can't start thumping the table demanding that goods are nodded through if you're saying at the same time you don't wish to cooperate on regulatory harmonisation or maintain equivalence.
Moreover, if you want to reciprocate and allow goods in without friction then you are taking a lot on trust. Obviously we don't want to relax our borders like this. We will want EU customs agencies to issue us with intercept alerts of possible fraudulent, faulty or dangerous goods. I can't see that happening for free. So at the very least you are looking at some involvement in EU decentralised agencies and we will need a presence in Europol and other surveillance mechanisms.
So before you can decide what form a trade deal is going to take you need to know which bits you want to disengage from and a justification for doing so. Since the justifications for dismantling free movement of goods are slender, you concede that a considerable level of institutional involvement is required and with that comes payments to the EU budget.
A lot of this is overcome by recent innovations in customs systems many of which are recognised internationally beyond the confines of the EU but if you are looking for maximum continuity of free movement in goods then it follows that any agreement necessarily will be complex and comprehensive. Anything less will see a substantial reduction in trade or an increase in costs.
Hammond has said that said establishing "significant new infrastructure" to deal with potential issues such as Britain's borders and customs "cannot be built and deployed in a few months", which is why a transition deal would be so important. It's all very well saying we will have a transition but a transition to what?
Now were I a small member state I might just take it upon myself to veto any new proposal to protect my own commercial interests. It one only take France to sponsor such an initiative for the whole process to start unravelling. What then? What's the plan B? Meanwhile, as we are transitioning who has jurisdictional authority?
These are exactly the kind of negotiations we didn't want to be having. This is why we needed off the shelf measures which are already agreed. All we're going to end up doing is incrementally adding more to whatever base agreement is agreed which, to visualise it would be like watching a time-lapse of onion peeling in reverse.
The moment it comes into force it will dawn on the powers that be that quitting the single market has considerable disadvantages which cannot be compensated for and then we'll be hammering on the glass asking for a renegotiation - as Switzerland has. The EU will take its own sweet time.
Meanwhile the free trade freaks will be sat there scratching their backsides wondering when all the deregulation starts, only to discover the only scope they have for deregulating adds more paperwork and bureaucracy to trade.
The most magnificent misapprehension of all time is the Tory notion that we pay a fee to access the single market. We don't. We pay for services and we contribute to the running costs of the systems therein that allow for free passage of goods. Yes, it does make for a bewilderingly bloated and expansive government estate but it exists to keep bureaucracy away from business.
The notion that we can just bin it for its own sake and squander the money on the NHS and that the natural consequence of this is "free trade" is one of the most outlandishly stupid facets of this whole debate. It's up there with anti-vaxers.
All of this is happening because of the ignorance of the Tory right and the wider public ignorance. They don't know what free trade is, they don't know what the single market is and have no conception of the social utility of regulation.
If by some miracle we do achieve an agreement with the EU it will be a significantly less favourable deal that the EEA agreement, one which will harm trade and reduce our ability operate in Europe. Free trade in services and free movement of people go hand in hand. This is another Tory blindspot that thinks the single market does not cover services. Effectively, freedom of movement is the single market in services. They are indivisible.
Thanks to the colossal ignorance of the right we are about to commit an act of self sabotage only to have to spend decades repairing it with none of the leverage we had previously. It means we will remain in the EU for longer while we negotiate the every tiny detail while keeping business in a state of limbo. Had we taken what was already agreed we could have been out far sooner without the economic hit. We would then have all the time in the world to transition away from the EEA or reform it so that we didn't even have to leave. Thanks to the Tories we are looking at a wasted decade and we will end up back where we started.
Ultimately I think Tories are a luxury we cannot afford. For all the remarkably stupid ideas of Corbyn and his fellow travellers, the manifest incompetence of the Tories is equal or greater. When it comes to egregious idiocy there is not much that marks them as apart.