Wednesday, 20 December 2017

Another day at the Brexit coalface


Today I watched the DExEU committee meeting so you don't have to. The short version is MPs are still struggling with the basic concepts but very slowly getting there. The expert witnesses leave a lot to be desired. The egregious Michael Dougan being one of them.

They are unable to pin down the nature of any future agreement having no concrete definitions of what "full regulatory alignment" means. If they understood how the system works the would know that you need to be a member of the EU's regulatory functions like REACH. The government is still under the impression that "full regulatory alignment" can be tortured to mean something else without the same levels of obligations.

What we did get was a surprising admission in unanimity from the panel was the conclusion that the functions of the single market were more pertinent to frictionless borders than the customs union. This is a point I have been hammering for some months now because people still seem to think the customs union has something to do with customs posts open borders.

On this, the chatterati are still putting it about that there are no alternative solutions to a customs union in order to eliminate the declaration paperwork on tariffs and rules of origin. As much as anything they don't want to know because even the legal experts don't want to engage in that level of detail. It requires some creativity but I still think the customs union aspect is not required.

I think it can be done in the same way as tax self-assessment where the UK government pays the difference in monthly payments to the EU. If it requires any physical infrastructure on the NI border then it's minimal. and discreet.

Whether or not MPs fully grasped what they were told, I cannot say, but I sincerely doubt it. The only one showing promise is Stephen Kinnock for whom I have an emerging respect.

There was some talk about what shape the interim period is going to take. There is considerable uncertainty as to the legality of this and in what from it will take. The government wants to be formally out of the EU by march 2019 and the EU cannot negotiate with a current member, so they are working on the assumption of a "vassal state" framework where we comply with all the rules but with no voting rights.

While that seems simple, there are suggestions that this in itself would require a new treaty and consequently a ratification referendum - and that won't even be the final deal. All of this will have to come out in the wash since even the EU does not as yet have a concrete position on it. It also appears that Mrs May still thinks the full partnership agreement will be concluded at point of departure.

What it looks like to me is a dance of the seven veils where each layer is revealed overtime and we confront each reality as it arises where we will see the UK forced to "capitulate" to reality every single time.

The consequence of this is that we will have a long and tortuous process, where the negotiations take far longer than anyone imagined. There is talk of limiting the interim period to one or two years, but nobody serious thinks it can be done in a short time. There is a good chance we will be in Brexit limbo for four years or more.

Assuming things do not go horribly wrong and we manage to avoid accidental hard Brexit, it looks to me like we will end up negotiating an enhanced FTA with all the peripheral agreements on things like Euratom. They will find fudges along the lines of observer membership for things like EMA and REACH.

Effectively they will be rebuilding the EEA from scratch along with new institutions to service it. This is the long way around that could have very easily been solved simply by retaining the EEA and configuring it over time through the native institutional mechanisms. We will instead end up with something inferior to it.

Having said that, the legal complexity around the interim period may present a window where the EEA looks like the path of least resistance so we could very well still remain in the formal single market. We will also have a customs union agreement simply because they don't have the wit or imagination to do anything else.

Whichever path it takes it will at the very least avoid a calamity, though the extended uncertainty will doubtlessly take its toll. This will then lead to charges of "Brexit in name only" and nobody will be especially satisfied with it. Ultra Brexiteers are going to hate it and remainers are going to wonder why we even bothered since we will, in effect, be opting back in to foundation constructs of the EU.

I take the view one way or another the UK will be a distinct customs entity with its own trade policy - and though it will be constrained by whatever the new relationship is, we will still have a functioning firewall between us and further EU integration. We will have the standard safeguard measures at our disposal and anything else is a bonus. We won't really know until we get there.

This of course, is all speculation. Domestic politics is fragile and the EU is constrained in what it can offer by way of its own rigid framework and international law. It may find it is unable to accomodate a number of UK requirements which may dictate an entirely unanticipated path.

The fragility of the May government means that the ultras might very well have to fall into line and behave themselves. Prior to the snap election they had enough wiggle room to rock the boat but if they pull any stunts they may very well end up handing the Brexit process to Corbyn, which is their worst nightmare. Consequently Mrs May will have a safer run than even she was expecting. She has the headroom to make more compromises - not least since the public mood has likely softened and understanding of the issues has proliferated.

The only immediate certainty in all this is some of the government's wilder self-deceptions are about to come crashing down. Only when that happens are we likely to see any meaningful progress. Firm decisions can only be made when this administration confronts the reality of our predicament.

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