Monday, 23 July 2018

The EEA is the only intelligent Brexit

The UK can get most of what it wants by agreeing to the EEA. It creates a stable framework which can be introduced in stages as each country specific protocol takes effect, creating space for continual negotiations - allowing us an independent trade policy almost immediately.

The first priority is to deal with the administrative act of leaving the EU. Subsequent issues can be refine and negotiated precisely because the EEA is an adaptive framework. The issues can be ironed out over time. It's better than a perma-transition vassal state.

The EEA would provide a great deal of legal certainty for business, ensuring that the regulatory environment for trade remains intact - allowing them to remain in the UK and resume their investment plans.

Because the EEA is an adaptive framework there is scope for negotiated opt outs and managed divergence in those areas where the UK doesn't do that much trade with the EU. In most cases it would be unnecessary as the EU and UK will conform to the global standards and rules.

This would take roughly three to five years to arrange but that;s our fastest way out of the EU short of severing all formal relations with the EU - which nobody gains anything from apart from the disaster capitalists on the Tory benches.

Once the core of the EEA is agreed we then look at introducing controls on FoM via Article 112 - which starts of a political process whereby a new settlement can be agreed. That though is a secondary issue in that the mandate was to leave the EU. We must deal with that first.

In the future we can then host talks with other Efta states with a view to broader reforms of the EEA to allow members more scope for divergence in their areas of interest. Efta+UK is a power in its own right and could be more assertive than it is.

Right now it looks like there isn't going to be a deal but we still have time to raise the alarm. The only people who believe the WTO option is viable are Tory cranks. We can turn the weight of public opinion against them.

It should be noted that if we do crash out without a deal then it certainly can't stay that way. We will have to rebuild formal relations with the EU somehow, and even at that point the EEA is the most intelligent recovery plan.

The chief benefit of the EEA is it significantly reduces the workload of Brexit not least the legal engineering involved in technical regs. We have enough to be getting on with since EEA still repatriates trade, aid, fishing, agriculture and a number of other competences.

Though the EEA is nominally an off the shelf solution it still ends up being bespoke and there will have to be a lot of renegotiation just to make the system work in light of the UK's unique circumstances. We need a comprehensive framework and only the EEA comes close.

The short of it is that no FTA is ever going to be comprehensive enough and an FTA still means becoming a third country so there is still a cliff edge there and we will lose a lot of EU trade unnecessarily due to an increase in costs and customs red tape.

Moreover, the EEA avoids the need for a NI backstop. It is a whole UK solution whereby we can adopt the Union Customs Code and work out a chapter for rules of origin, thus avoiding the need for a customs union - which would be total overkill for the little it does.

If there are then special needs for NI, which to me seems unlikely, we can negotiate an NI annex in the EEA but this would not leave it as part of the EU customs territory. Objections to this would be unreasonable.

The UK has had plenty of time to come up with an alternative proposal but has failed to produce anything coherent and certainly nothing the EU can agree to. The EEA is really the only realistic mode of exit if we want to avoid wrecking the UK economy.

Moreover, the UK would be a proud participant of Efta and it would be an excellent platform from which to launch our future trade strategy. It would also quell calls for Scottish independence and preserve the Union. The SNP leader has also called for an Efta solution.

If we crash out then we will only end up back here again, and the EU will not reopen trade talks without first signing off on a financial settlement and installing the proposed NI backstop as it currently stands. We therefore gain nothing by crashing out.

At that point the EU will then drag its heels while it cannibalises UK market share and the political limbo will see a gradual bleed of investment into the UK. We then get eaten alive in future EU trade talks.

This is why the EEA is the most sensible since the backbone of the trade aspect is already agreed for the most part which would remove the opportunity to cannibalise UK trade or freeze us out of specific sectors. If we end up negotiating from scratch we're the weaker side.

The EEA is only 27% of the EU acquis. It leaves trade governance intact and most of it is based on global treaties and standards we would adopt anyway so there is little point in wailing about being a "rule taker" which isn't actually true anyway. The UK will have a say.

The EEA is the closest there is to a clean Brexit because everything else is a very long and messy process which will do enormous and unnecessary damage. Moreover, the EEA is designed for continual re-evaluation so the process of Brexit can be flexible and continuous.

More to the point, because the EEA is an adaptive framework everything in the agreement is negotiable to an extent. The best way to "cherrypick" from the single market is to actually be in it.

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