Friday, 8 June 2018

On the telly again (part 5)



As you can see the hard Brexit turnips have their panties in a bunch this week. It would appear they are seeking to leverage the EU's backstop position into a whole UK solution. How many times do they need to be told that this is not going to happen?

The NI situation is somewhat unique and any settlement will be an exemption from all the norms of trade and if the EU isn't careful it could find itself open to legal challenges. I wouldn't be surprised if they need to negotiate WTO waivers to complete implementation.

What the EU is not going to do though is allow us to pick and choose from the single market. They couldn't have been any clearer than that. they won't compromise their system integrity even for those much vaunted German car makers.

The EU is keen not to set any new precedents as it would force it to liberalise more than it wants to. We therefore have the choice between an FTA or EEA. An FTA means becoming a third country - which is only marginally better than the disastrous WTO option.

It is conceivable that they could go the extra mile as they have with Switzerland but only on the proviso that we, like Switzerland, adopt the rules verbatim with direct ECJ applicability. That really is "vassal state". Worse than the EEA by a long shot.

And the ultra Brexiters really haven't thought this through. If we are dismantling the entire EU system then we will have to replace it with something. No prizes for guessing that no credible plans are in place for that eventuality.

So that means, when the penny drops, we will post-exit, during the trade negotiations, be begging the EU for another transition -and it could be several years before some systems can be transposed. Regulatory change is a meticulous, expensive process and rather time consuming.

There are two ways that goes. The EU could say yes in which case they have us by the short and curlies, and we are stuck in a perpetual Brexit limbo. Just long enough for a new government to hit the pause button and try to leverage transition into a permanent solution.

But then it could also say no and leave us facing the full cliff edge in which case all of our exports are subject to third country controls. That's a real smack ion the balls for any industries who depend on frictionless trade and EU authorisations.

The consequence of that will be a major political crisis where the UK goes cap in hand to Brussels, yet again begging for concessions which either won't be possible or come at a price. That price will be adoption of rules under ECJ and probably a large financial contribution.

Strategically, Hard Brexit by any known definition is moronic and the sickening irony is it would be an own goal by Brexiters making us the vassal state we sought to avoid becoming. All of which could be avoided by retaining the EEA.

But you can't communicate this to the BrexitCentral idiots or the TPA moron (species Mongus Moroni) - because they're still infatuated with Tory chants of "free trade" - which all grown ups think is absolute nonsense.

The hard Brexit muppets keep telling us there is a way around the regulatory issues - but there isn't. Each time they are asked to produce a credible proposal they float a variation of Legatum's mutual recognition nonsense - despite all senior figures in the EU saying no.

The basic gist is they want a loose form of regulatory alignment where the UK on a whim, without coordinating with the EU can veto new rules or modify them while maintaining the same level of market participation. Cake and eat it stuff.

This obviously doesn't work if you think about it. By agreeing to this the EU would be allowing the UK the sole authority to set the lowest bar of market entry. Why would they do this? But that's the problem. The ultra Brexit morons don't think at all.

Though I have been described as an EEA evangelist, that's not actually correct. I know its flaws better than anyone - but I also know that it beats the alternatives hands down because it is dynamic and configurable.

More to the point it would get us out of the EU without endless transitions and would allow us to recover faster in such a way that people would get used to the new deal and remain bots would struggle to make a good case for rejoining. Efta is an entirely sensible approach.

If there were a case for abandoning enhanced participation in the single market then I would be pushing it because some regulatory systems are a bridge too far even for me. The problem though is that Leave has not come up with a credible alternative.

Nobody serious thinks there is any economic utility in deregulation and business does not want the hassle of retooling for a new regime that affords them less market penetration. There is no combination of FTAs I can see that would rival EEA membership.

The guff about trading with the rest of the world looks thinner by the day and Trumps promises weren't worth the paper they were written on. So are we really going to put our faith in the likes of Rees-Mogg and Johnson? Do these people look credible even for a nanosecond?

The buccaneering free trade future they promise simply isn't going to happen. Their theories are obsolete dogma built on a foundation of intellectual sand and haven't been relevant for decades. EEA may be imperfect but it's the best way out of this mess.

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