Weapons grade incompetence

There seems to be some confusion as to why the EU would seek to treat us differently to Japan or Canada. It's really very simple. We have more to do with the EU than we do with other places because they are closer. Closer is easier and cheaper. I've been on several European holidays because my budget can just about stretch to it. I've only been to Canada once because the flight costs hundreds of pounds and I'd have to save and plan for it. I've never been to Japan because it's twenty four hours worth of flying and waiting in airports. That kind of travel is neither cheap nor convenient and it is not done spontaneously.

That loosely applies to goods and services too. It's the basic trade gravity model, and though we can question how hard and fast such a rule is in the age of the internet, it's still very much a rule. There is also the matter of that land border and tunnel we have linking us to the EU. The single market is a system of rules designed to uphold certain standards and norms, and if the EU is to relax its frontier controls for third countries (especially ones who have higher volumes of transactions) then it needs certain assurances.

If you want to understand the EU's position all you have to do is listen to the signals coming from Number Ten. The latest speech from Frost prioritises regulatory independence and sovereignty. The UK has made repeated noises about its desire for a deep and comprehensive relationship with the USA that would necessarily require a departure from the EU regulatory philosophy, along with signals that intends to substantially deregulate.

Moreover, there is no reason to trust the UK. Already Johnson is sending signals that the Northern Ireland protocol in the withdrawal agreement will not be upheld while sending conflicting signals in respect of what it will or won't do in respect of food standards.

The Tories have it that there is no logical reason why the EU would seek to treat the UK any differently, but if an unpredictable UK is conducting its affairs in such a way that that the EU's system is undermined, thereby threatening its own sovereignty, it has to act accordingly to safeguard its own interests.

In the Tory bubble this translates as the EU living in fear of a newly competitive UK threatening the EU's trade. There is an element of that but then if the UK is looking to compete by relaxing standards, there is a higher risk by way of proximity that UK goods and services will contaminate the single market. That then, in effect, allows the UK, a non-member, to unilaterally set the lowest bar of market entry if the EU extends any preferences to it.

This is very much a mindset issue in that the EU does not see goods and services as distinct - which indeed they are not. As such the single market is an integrated system to ensure that competition is fair competition and not based on exploitation. There is strong evidence that freedom of movement does lead to the exploitation of eastern European migrants here in the UK but that's why there are several directives instructing member states to implement systems to "level up". Whether they work or not is another matter. The principle and the intent is there.

This is where it is argued that the the EU is overreacting in that the UK already surpasses EU and international standards and has no good cause for concern. But then it comes back to that matter of trust. the EU has to take the signals coming from Downing Street at face value. The UK is to dabble with free ports and unilateral tariff reductions along with deregulation. Why else would the UK have such an aversion to an agreement that keeps the UK in the EU regulatory ecosystem?

As it happens, this debate is distorted by politics. The level playing field provisions demanded by the EU are not in substance much more than what is already demanded in the EU's more recent trade agreements. The negotiating mandate was tamer than I had anticipated. In all likelihood this is being blown out of proportion for political reasons but also because this government is evidently not in the business of reading trade agreements such as CETA before commenting on what they contain. It would appear Brandon Lewis has not read the Northern Ireland protocol in the withdrawal agreement.

But then this is, as the Tories see it, a negotiation. The UK has still not understood the nature of the beast. It does not understand why the EU takes the line it does, nor does it appreciate that concessions weaken the overall integrity of the EU system. The UK believes that the EU can be pressured into diluting its demands. This is where history is likely to repeat.

We are told that Boris Johnson was able to go to Brussels and secure major changes to the withdrawal agreement. We can argue the toss over that, but at no time did the EU ever buckle in defence of its sovereignty and system integrity. The choice was always a whole UK customs solution in alignment with the EU or a border down the Irish Sea. Some other measures may have been reworded and moved around for cosmetic reasons but the outcomes are essentially the same. In the next round we can expect the same. The EU will do whatever it can to accommodate UK concerns, but will not dilute the principles upheld by its level playing field demands.

The tragedy of this is that the UK is needlessly combative while pursuing a strategy that is ultimately self defeating. An agreement can be reached to allow for UK divergence, but the business case for doing so is weak. The UK will learn the hard way that breaking from the EU's regulatory gravity is both difficult and futile.

But then as remarked previously, the EU is well aware of this. It can afford to grant a slimline trade deal but what matters is the institutional architecture of the agreement, that will see a number of clauses to set up working bodies and frameworks for future cooperation (recognising that bilateral relations are a continuum), in anticipation of the UK "free trade" experiment falling flat on its face, whereby the successor to the Johnson regime will be tasked with rebuilding our European trade links.

Ultimately an FTA is never going to be sufficient for our needs and the next ten years or more will see us rebuilding the sort of deep and complex relationship we need. The only real question is how much damage is inflicted in the meantime. The Tories are stealing the clothes of the sovereignty obsessed Brexit hardcore, not out of any particular devotion to the principle of sovereignty, rather they just want to clear the decks for a radical economic experiment that is not in the national interest or the interests of the EU.

This, to a large extent, is why Brexit is far from "done". It won't be done, or anywhere close to done, until the Tory poison is purged from the system. Only when we're done chasing ideological unicorns can we get down to the business of building a viable relationship with the EU. In the longer term it is likely that we'll end up with a relationship that is three quarters the EEA agreement, because that's the baseline a close partnership of this nature requires given our geographic proximity and our historical ties with the EU.

The sad part is, we could have had that without all the fuss, using the collective clout of Efta to shape and modernise the EEA, using the institutions to dial it back to something we can tolerate. Instead we have to indulge the Tories as enormous cost for a mirage of sovereignty. The negotiating mandate is entirely in line with the EU's policy of embedding multilateralism in its FTAs (particularly the WTO agreement on Technical Barriers to Trade), a practice now adopted globally, where international standards and regulatory mechanisms form the baseline of any cooperation which increasingly pushes regulatory sovereignty into obsolescence. Whoever we choose to align with, that reality will be staring us in the face.

The reality of Brexit is that our departure is not the free hand many believed it was, and with level playing field provisions on the environment and sustainable development, along with other measures on competition, now based on global agreements we are members of in our own right, the likelihood and utility of divergence is minimal. That this hasn't yet registered with the Tories is yet another signal that weapons grade incompetence is in the driving seat.