Wednesday, 2 January 2019

After Europe

From my travels across the continent over Christmas it's easy to see how Poland has been the beneficiary of EU membership. At one time in recent living memory the main road connecting Warsaw to the economic mainstream of Europe was a poorly maintained dual carriageway. It is now part of the UNECE superhighway network, built to the very latest in road engineering standards.

Between that and the aviation links to most major Polish population centres, Poland has thrived since accession and there is a real sense that Warsaw is on the up. Multinationals have worked out there's hugely underexploited intellectual capital there and big name headquarters can be seen lining the giant causeways carving up the city. If it isn't already, Warsaw will soon be giving Berlin a run for its money.

It also benefits from frictionless border passage with Germany. There is still a degree of border infrastructure, some of which was recently upgraded and will not be fully phased out until the Eastern border, particularly with Ukraine is fully sealed as that border marks the EU frontier. The point, of course, being that internal borders cannot be relaxed unless the customs integrity of the EU territory is full protected. 

At 530km, the Poland-Ukraine frontier is barely longer than the inner Irish Border but is far more challenging to police. Beyond just five official crossings (compared with more than 200 in Ireland), border guards use helicopters, quad-bikes, boats, dinghies, thermal cameras and more to monitor forests and marshes around the river Bug that separates the two territories.

Here we must keep in mind that this is the current state of play even with the EU-Ukraine association agreement. With a low grade civil war burning on Ukraine's eastern border, it is unlikely there will be frictionless trade with Ukraine anytime soon. Such would require full accession to the single market which would compel Ukraine to strengthen its frontier controls with Russia which would prove politically sensitive, if not outright provocative. Consequently, Ukraine will remain a no man's land for the foreseeable future, with no genuine attempts to liberalise border formalities. 

To a point this all underscores why an FTA is insufficient for the UK in its own future dealings which is why the UK needs the EEA if it wishes to maintain the current levels of freight. This, though, does not look like it's on the cards. We can streamline customs cooperation to minimise the impact of third country controls, but those controls will still be enforced. 

When driving through a number of countries, the value of frictionless borders is self-evident. Though many lorries now carry their own refrigeration units, many loads could not withstand repeated delays at each of the frontiers. It is undeniably a good thing.

What is not understood in the Brexit debate is that this did not happen overnight and is not simply a case of agreeing to dismantle border infrastructure. Frictionless trade is a byproduct of dozens of control mechanisms starting at the farm or factory gate. It is only possible through enhanced regulatory harmonisation. This is the very essence of frictionless trade. The benefits of such trade do not come without obligations. 

Most people won't understand this. That's no sin. Why would they? This is all part of the layers of invisible government that we are only ever really aware of when it breaks down - which in a mature system like the single market, it seldom does. There are egregious failures such as the horsemeat scandal, but we are very rapidly able to track contamination back to the source because of the system of traceability built into regulatory controls. 

In respect of this, the single market is not an abstract concept. It is a legal technology. It is a system of infinite detail evolved over a number of years, built on the understanding that if you want free movement of goods and services then everyone has to be working to the same system and it only really works is you have a degree of free movement of people for the functioning of trade. 

This system works particularly well for the EU. Being that the continent is united in driving on the wrong side of the road, and sharing a similar regulatory culture, harmonisation is both desirable and achievable. Crossing borders, sometimes several times a day, is part of everyday life, and intermodal transport networks clearly benefit from functioning to the same regime. The central belt between Calais and Berlin is a major trade corridor encompassing road, rail and canals. Harmonisation just makes sense. 

The extent to which the UK can be integrated into this system is worth some discussion. To a large extent we already are integrated but with narrower roads, no canal system to speak of, the UK does not slot easily into the great machine. Some integration is done entirely for is own sake with no discernible benefit. Arguably, then, the UK would be best placed to have a looser relationship with the single market.

That, though, is not on offer. It's all or nothing. And that's the essential problem. The EEA may provide for configuration for the best outcomes but still comes with a raft of impositions that many feel is simply a bridge too far. The EU takes the view that if there is a single market in goods and services then workers must have the same rights and entitlements throughout and when taken to that extreme, member states essentially lose vital control over what ought to be the sole province of the nation state. I'm firmly in that camp.

This is because the single market is not just an instrument of trade. It is also a vehicle to advance the European federalist project and the scope of the single market is ever expanding - not least because it has to as trade becomes ever more complex. But where do you draw the line? This has never been debated. Power will continue to migrate to Brussels. 

This is the flashpoint that has ultimately led to Brexit, because our own politics is disconnected from EU governance and to a large extent we become passengers and spectators to change we have little say in. Politics becomes redundant as the technocrats take over.

The EU very much likes it this way. These grand schemas are designed for particular outcomes based on best practice where the interference of politics doesn't actually improve anything. It can only delay and frustrate. Democracy is messy and it's slow and it's highly inconvenient if you want results. What technocracy does not account for, though, is that people are attached to their traditions and surroundings and not everything benefits from homogenisation. 

Moreover, it is a mistake to think that these technocratic systems are apolitical. Embedded in every system are political agendas be they to promote recycling or reduce carbon emissions. Very much top down agendas. And though you may very will agree with the intent, there are always costs and unintended consequences. The problem with the EU system is that mistakes cannot be corrected in a timely fashion. Every reform is piecemeal, often inadequate and the result of horse trading. Responsive government it is not. Democracy it is not. 

The UK's rejection of the EU is bold undertaking. There is a particular message here; Brexiters prioritise democracy over the benefits of trade and economic integration. Whether the leave voting public properly understands the gravity of leaving the single market is the reason there continues to be a battle of wills between the governed and the governors. The Tory right have stoked the debate with falsehoods about our ability to continue participating in European markets outside of the regulatory union, overstating the benefits of deregulation. Speaking as a Brexiter I do not think my fellow leavers truly comprehend the damage Brexit will do to the economy. 

What makes it all the more precarious is that we are still short on ideas as to what we do in place of the single market, and what we would change once we leave. Being that the Westminster mindset is not all that different to the one in Brussels, we cannot expect massively different outcomes. Westminster is every bit as susceptible to narcissistic fad politics that leads them to prioritise banning plastic straws over a child rape epidemic.

As remarked previously, Brexit brings little remedy in terms of the political culture, which is as much to do with the archaic Westminster system, further toxified by a trivial and inept media. Moreover, much of the lexiter complaints about the EU in respect of imposed austerity have very little to do with the EU. Greece and Italy as Euro members could credibly make these arguments, but I don't think the UK can. 

It is said that the UK is in the midst of a psychodrama, rooted in an unresolved crisis of identity. There is some truth in this. Our politics as we know it is at the end of its useful life. To large extent the EU has become a proxy in a clash of values where to one camp it represents the epitome of enlightened internationalism, while leavers see it as an evil globalist empire. These views are irreconcilable. 

Moreover, there is no unity of purpose in the EU. Poland and the slavic states very much see it as an economic and geostrategic necessity. Germany and France still view it as a vehicle of reconciliation. Britain sees it as alien and an unwelcome chore. It is difficult to see how there can be a unified view in any single member state when the EU itself has nebulous foundation and perceptions of it are so wildly diverse. 

In the end perceptions of the EU must give way to what it actually is. For all that member states have different agendas, the EU entity has one of its own and everything is geared to that end... ever closer union. It is in the DNA of the EU and is central to everything it does. Eventually it will encroach on the political sensibilities of Poland as it has in the UK - if it hasn't already. In Western Europe, France especially there are increasing questions as to why the national priorities should be subordinate to the needs of EU integration. This will spread east.

Over Christmas we saw that the EU was willing to make one off concessions to France over the spate of yellow vest protests. This is consistent with EU form. In an existential crisis it won't assert its power as the supreme government of Europe. This is why we see both Poland and Hungary let off the hook. If it pushes too far then there is a danger of more members peeling away. 

This is how it goes from here on in. There will be no concerted effort to resolve the Ukraine malaise. France will be allowed to do as it pleases, the Visegrads will drift ever further toward authoritarianism and at some point we'll see a clash between Brussels and Rome. The EU can only limp on to become a tired irrelevance in Europe as reality drifts further from the ideals of its founders. 

There is no dispute that trade liberalisation and cooperation has been a boost for intra-European trade, and one cannot help but marvel at the brilliance of the single market machine. I can think of no innovation that has done more to advance commercial and individual liberties - but if it comes down to a choice between trade or democracy then we must always choose democracy. The real question, especially pertinent to Brexit, is how we preserve the best of what we have built together. 

Here it helps to recall that behind the transport and infrastructure designs of Europe, and the system of standards and regulations related to customs, safety and trade come not from the EU but from UNECE. Established in 1947 it predates the EU as the engine of European technical cooperation and in many ways the EU is a parasite. A supranational government was never needed to achieve the trade integration we now enjoy.

The recurrent theme in any globalisation discussion is how trade liberalisation and technical cooperation is reconciled with sovereignty and democracy. As yet there are no good answers. What we have, though, in the WTO and UNECE is the basis for global technical cooperation at a pace decided by the individual participant. Only that which is relevant is adopted. 

The big idea behind the EU was a failure. The Euro is an anachronism and still nothing superior to the nation state has emerged for the application of meaningful democracy. The EU may limp on for decades to come but as a relic of the post-war era it will one day become as irrelevant as the Commonwealth. Britain's foreign policy thinking should be working in anticipation of this, to reinforce the institutions and ideas that transcend transient projects like the EU. 

Irrespective of Brexit, Britain still needs Europe and we still need a viable platform for European cooperation and technical integration. Commonality in governance systems has clear an undeniable benefits. The question is how we can build on what have been achieved while allowing the nation state to thrive and prosper under self-rule. Moreover, why should it be limited to the confines of Europe?  

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