Wednesday, 12 July 2017

Brexit: an inevitable failure

Pic via UK Defence Journal

Blogging is a little difficult for me this week. I have written countless explainers and in-depth posts about trade and Brexit in general. There comes a point where there really isn't much point in repeating it. Every day it goes a little further off the rails and every day the case for Brexit looks thinner. Putting in any sort of effort seems redundant.

This is not to say there aren't things of note going on. The spat over Euratom would ordinarily be blogworthy but as usual the media is going round in circles, going over issues the blogosphere nailed many months ago. Since the media does not look out of its own claustrophobic circle there is little point in rehashing such material, and since it's going round in circles, the opportunity will no doubt arise again.

In many respects the entire debate is at a standstill. Reality is not filtering through and the groupthinks are proving inconquerable. All we can do is watch and wait for when these proceedings hit the wall.

The problems are as previously stated. The Brexiteers are only part of the problem. In the mind of a Brexiteer we are only a short hop away from a future as a buccaneering free trade country strutting its stuff on the world stage. We can sweep away tariffs, open up markets and prune away the deadwood regulations - and if that causes problems for EU trade, well, they can just reach into the bag of three letter acronyms and pretend there is a mechanism they can deploy to dig them out of the hole.

We've seen this before with the Conservative Home cultists and the crooked Shanker Singham. There is plenty in the bag to chuck up a smokescreen of bullshit - and with Brexiteers swallowing it wholesale and MPs insufficiently informed to call them out on it, it sails by unchallenged. Meanwhile our media asks why there are so few women on the negotiating team. That is the ultimate problem.

In this I am not the first to note that that a trainwreck Brexit would actually be one well deserved. With a government so utterly incapable of retaining knowledge we are just asking for it. As much as this is a characteristic of Brexit, this only exemplifies the deep rot within government.

Some years ago now, EUreferendum.com mounted a herculean campaign, without much input from me, to steer the MoD away from procuring lethal mine-magnet vehicles for the army. Eventually the MoD caved in and shelved a number of substandard trucks in favour of Mastiffs and other MRAPs, but this week we learn that the UK has ordered 2,747 Joint Light Tactical Vehicles in a $1.04 billion deal.

As has had to be spelled out countless times, mine and IED protection is built into armoured vehicles from the ground up. It's much the same as any design. Your design objectives have to be factored in from the very beginning. With mine protected vehicles the key objective is blast deflection, seeking to minimise the exposure to direct blast.

The key to this is a V shaped hull. This is something that was almost grasped by the end of the Second World War. These such design concepts appeared on vehicles during the Rhodesian civil war, but over time, we have forgotten the lessons. A price in blood was paid to relearn such lessons in Iraq and Afghanistan - and scores of soldiers died without good cause.

Less than a decade later and the army is making the same basic mistakes, falling for the glossy propaganda of the manufacturers as to its protective capabilities, without ever once doing its own assessment. Though cost is obviously a factor, this is not merely a matter of saving lives. This is about winning wars. As we have pointed out before, a shooting war can be won but it's no use if you're losing the propaganda war at home - and that is what makes the preservation of life essential.

It was a wizened retiree at my last place of employment who remarked that any institution is much like a jelly mountain. You can apply pressure to change its shape but that requires some considerable energy. The moment you release such pressure, even for a nansoceond, it will wobble back into its default form. There is no place this applies more than the MoD - but it is particular to government.

We could very well divert our energies once more to exposing this calamity but there is only really so much we can do. The only force capable of continuing to apply pressure is our media. But in order to do so it must have the institutional memory, knowledge and experience to play the game. It must also have a sense of priorities. We cannot hope for a successful Brexit if our media does not function. In that assessment, here is a screen-shot of today's Daily Telegraph. Judge for yourself...

Still no clue at the FT


James Blitz at the FT offers his "insight" on the state of play in the Brexit negotiations.
The way out of this dilemma is to use the transitional period as a financial tool. During that period the UK will have to pay the equivalent of its current contributions. In our view, the period is likely to be longer than the UK officially admits, simply for technical reasons. A five-year transition period could deal with all of the outstanding claims, leave enough time for an FTA to be negotiated and ratified, and give business time to prepare for the post-Brexit future.
So apparently five years is all that is needed to perform the legal engineering miracle of the Great Repeal Bill, rebuild all our domestic regulators, design and equip our own enforcement regime, our own market surveillance systems and customs software. Five years is apparently all the British state and UK industry needs to transition into an FTA, the contents of which are still a mystery.

In all likelihood we will get nowhere close to a finalised deal in five years. A transition period cannot even begin until such an agreement is concluded and then we are looking at ten years at least to have all the systems in place. Since a transitional status itself would take some years to negotiate there is only really one status we can have - EU membership with no voting rights for as long as it takes.

In that regard, this is in keeping with Theresa May's Lancaster House speech. She said we couldn't be half in, half out. It seems that we will be all the way in for a long while, until we are out. All the time in the world for Brexit to be parked permanently. Since David Davis doesn't know what he wants, what is needed, or how to get it, it increasingly looks like Brexit is a wet fart.

We are told that the debate on the single market is settled. David Davis thinks he knows how to get frictionless trade without it. He's grasping at straw, plucking concepts out of the air with zero comprehension as to what they mean. When it gets down to it he will hit brick wall after brick wall. Trusted trader schemes and AEO cannot happen without regulatory harmonisation, mutual recognition is not going to work and there has to be an arbitration body and that will be dominated by the ECJ. Since he doesn't want Efta, that's his only option.

This prompts some in industry to start asking what they can do to prepare for such an arrangement. I would venture that there is nothing to be done. We lack the competence and the knowledge to deliver anything other than a total shambles - one so unpredictable as to render preparation useless. With this level of upfront denial, hostility and ignorance, unless there is a change of tack, this can only descend further into farce.

The talented Mr Heath


This is what Allister Heath thinks a serious newspaper looks like.

Monday, 10 July 2017

Mark Wallace: dim as they come.


In a tragic display of credulousness Mark Wallace of Conservative Home retails his understanding of trade. He says that "Part of this trend for cherry-picking supposed facts to construct such a story involves the myth that the United States and others have somehow gone off the idea of striking trade deals with the UK, one of the world’s largest economies, after Brexit. That’s why the positive reports to the contrary from the G20 are important – as per the Sunday Times:
‘After talks with the prime minister at the G20 summit, the US president pledged to strike a trade deal “very, very quickly” after Britain leaves the EU.

Trump said it would be a “very, very big deal, a very powerful deal” that would be “great for both countries” before confirming that he was planning to come to Britain…
In a coded swipe at her mutinous ministers, May said China, Japan and India also wanted to do deals. “I held a number of meetings with other world leaders at this summit and have been struck by their strong desire to forge ambitious, new bilateral trading relationships with the UK after Brexit,” she said. “This is a powerful vote of confidence in British goods, British services, Britain’s economy and for British people.”

A senior government source said: “The president made clear that he believed the UK would thrive outside the EU.”’
Yesterday from Forbes.com we get a pretty decent idea of why a speedy US-UK deal is not going to happen. Of course, I would go further in pointing out that any deal has ramifications for EU trade because of the inherent risk conflicts, and even in the best case scenario a US-UK deal will come to little because of the inherent differences in regulatory culture.

Course this is nothing at all new to readers of this blog or anyone who reads outside the self-referential toryboy circle-jerk. That's why trade analysts are laughing at little boys like Wallace.

Meanwhile I'm taking flack on Twitter from Iain Martin among other toryboy hacks because I'm a big meanie to them. Apparently one is supposed to be appropriately respectful to foaming zealots who want to wreck the economy as fast as possible. That way they will drop everything and adopt your ideas. So I'm told.

It would seem that if you prick their fragile little egos they will ignore your point, even if the economy depends on Tories growing up and getting to grips with the issues. I suppose the poor little snowflakes must still think it's all about tariffs. After all this time they've still learned nothing. Still, must be difficult reading a book on trade with a toryboy dick in your mouth (figuratively speaking?). But that's what it takes to make it in the bubble. Can't let reality get in the way.

None so blind as a toryboy


Allister Heath (or one of his office juniors) has written about reviving the Brexit spirit.
Yesterday, Donald Trump said that America and the UK were working on “a very, very big” trade  deal, a deal that will be done “very, very quickly”. The president is known for hyperbole and there were, of course, no details, but this is exactly the kind of post-Brexit scenario that the British Government should be working towards – and on a global scale.
Erm no. This is not going to happen. But on we go...
Eurosceptics must revive the dynamic politics of last year’s compelling referendum campaign. Unfortunately, the Government has not been doing this. Since the election it has been rudderless and chaotic, allowing opponents of Brexit to dominate the public conversation. These refuseniks have been able to convey the impression that Brexit itself is now in doubt, or at least that Britain’s position is so enfeebled that only an extremely long and potentially permanent transition is necessary. 
This is chickens coming home to roost. The roots of this problem started with Vote Leave which was very much a Tufton Street takeover of the referendum campaign, which sought to exclude everyone who wasn't a Tory Brexit puritan. The reason opponents of Brexit have dominated the public conversation is because the Toryboy Brexit set are simply incapable of defending their piss weak position. Shooting down Troyboy Brexit drivel in City AM, CrapX and the Torygraph is now a cottage industry.

Worse still, the Toryboys have used their influence to undermine anyone on the leave side who isn't salivating for the most damaging Brexit possible. Over the last few months Heath has been undermining Christopher Booker, to the point of demoting him and relegating his column to the back pages. This is how these people operate. They are conniving shits with a long track record of this behaviour.

Then we've had Conservative Home running a year long campaign of disinformation. They know full well that what they write is dishonest garbage but, like the Telegraph, it's more about reinforcing the prejudices of readers rather than imparting useful information and winning the argument. Their stuff is so deluded that anyone remotely familiar with with subject of international trade and regulation is laughing at them. They are an object of ridicule. The only people who can't see it are the Toryboys themselves. They only read each other so why would they ever stumble across anything intelligent?

Ultimately it's the Toryboy set who are undermining Brexit by building a belief system. As a leaver I'm supposed get behind this and tell them how marvellous they are - and furiously retweet any bilge that Brexit Central stumbles across. Sorry. That's something else that isn't going to happen.

As to Brexit being in doubt, you don't have to be a refusenik to envisage a scenario where the government is so out of its depth that there is a coup to halt Brexit. It would be a rare thing for parliament to actually have the balls to assert itself, but this is certainly a time for surprises. It is already descending into farce, not least because this government does not have a plan. That's something else the Toryboy set can take a bow for. Heath and his compatriots plagiarised the bits that suited their bullshit and ditched the inconvenient truths.

As to Britain’s being "so enfeebled that only an extremely long and potentially permanent transition is necessary", it's not a case of being enfeebled. It's just that you can't unravel forty years of technical, political and economic integration in just a few short years. Brexit is a process, not an event. If you haven't understood this much then you haven't understood anything. And that really is at the core of the problem. They haven't understood it, they never did, and have gone to extraordinary lengths to deny the reality of our predicament. It is this fundamental error upon which all subsequent errors stand. Heath then tells us:
Labour and pro-Remain forces in Parliament threaten to undermine the Repeal Bill, the legislative device necessary for Brexit to happen, and the CBI protests that Britain must stay in the single market indefinitely – an unnecessary and wrongheaded idea. All this has to be countered by a serious and concerted pro-Brexit fightback. It is time for a reboot.
Hmm, well, see, the thing about a reboot is that you change things. You stop doing what doesn't work and start thinking about the nature of the problem. The fact that the CBI and just about every business lobbyist in the country is opposed to "hard Brexit" really should tell you something. If Tories can't win over business opinion then it can't win at all. That actually was the point of having a plan. He then says:
The argument for Brexit will not be won in a single battle but waged over several campaigns as part of an ongoing war. First, we need a new Brexit movement outside of the Tory government. Some of the seasoned campaigners who won the referendum need to be rehired and a large organisation created to constantly and forcefully put the intelligent case for a pro-growth Brexit. 
This is again failing to comprehend the concept of a reboot. Those same "seasoned campaigners" are the architects of this current mess, and what Heath (if he has written this) means by "a new Brexit movement outside of the Tory government" is yet another Tufton Street sock puppet pushing the same crap ideas. What will that achieve? It doesn't expand the base. It preaches to the home crowd. He just wants his brother-in-law (Matthew Elliott) to be given a job. 

This also fails to notice that they already have such an outfit. The Brexit Central/ConHome axis is attempting all of that - and is still failing to win the argument. These people are manifestly incapable of making an intelligent case for Brexit. As outlined in detail over the course of this blog, almost everything they believe in is demonstrably wrong. More than anything, the Tory right is engaged in a long campaign of self-deception and denial and now the wheels are falling off.

This drivel from the Telegraph actually isn't worth more of my time, but what this tells us is that they at least realise that their grand project is on the rocks and it needs saving. Yet, somehow they believe the same people who wrecked it are the people who can save it. Bizarre.

This all stems from a militant refusal to engage in reality and back a workable plan. Having refused to take on board the most basic concepts of Brexit they stand naked, exposed and ridiculed. They can't take on new information, they're bogged down in ideological quicksand and they can't get their lies straight between them. They've blown it.

As to who I mean by Toryboys, I mean the real thickos. That's Daniel Hannan, Mark Wallace, Paul Goodman, thieving Allister Heath, corrupt Steve Baker, inbred Matthew Elliott, and all the grubby, devious dick-smoking social climbers in the IEA/ASI. They wanted to own Brexit, and from their position in London they succeeded. These egotistical know-nothings thought defending their little dungheap more important than succeeding. Now it's crashing just like we said it would. Another teachable moment for those who can't be told anything. Good job, dickheads.

Sunday, 9 July 2017

Brexit: not looking good

Various morons of a broadly Tory persuasion have remarked that "if Japan can get a free trade deal with the EU then we can too".

Technically this is not incorrect. We can negotiate a treaty on trade with the EU. The question is how you transition into it. If we weren't already an EU member and we only had rudimentary agreements with the EU like Japan then negotiating a deal that leads to further integration is no biggie. Britain, however, is not at the same starting point. We are not entering a trade agreement, rather we are reverse engineering EU membership which is a whole different kettle of fish.

As I have remarked before, free trade to the extent we presently enjoy only happens becomes of shared institutions and regulatory harmonisation. Frictionless trade does not happen without it. All of this is governed by a network of rules and systems and software. There is no reverse engineering it without having an idea of where you want to be, what is actually possible, and with enough time to develop domestic administration capability along with the procurement for all the software you need to run independent regulatory and customs systems.

The inability to comprehend this is what makes Julia Hartley Brewer, Jacob Rees-Mogg, Toby Young, Melanie Phillips, Brendan O'Neill, Conservative Home and the likes just a complete waste of oxygen.

To ramp down from EU membership is a massive legal undertaking and you need a framework to do it. In the first instance you want something that is close to EU membership but not actually EU membership so you can modify the agreement over time as you are ready to repatriate regulatory competences. That's the EEA: the so-called Norway Option.

In case I have not yet made this abundantly clear, let me state for the record that this is the only credible means of doing it. The only other option is sudden severance in which case all of our constitution is thrown into chaos and our exports to everywhere collapse almost overnight, or we stay in the EU until a cut off date while a base FTA is negotiated and then we crash out into a far less comprehensive deal which covers only about of a fifth of the technical concerns we need to address.

At this point I am running out of ways to say this. I don't know what it will take for this to sink in. I don't know how many more times I can explain it. And then of course I'm trying to explain it to people who don't even want to know. What the hell hope is there?

Unless politics manages to somehow miraculously grow up and accept that EEA/Efta is their only chance of getting out alive then we face either total economic oblivion or remaining in the EU. The former means we probably never recover, the latter means losing all of our safeguards and powers of veto in the EU. They have one chance to make this happen, but it looks like they have made an enemy of sanity and cling to their own ignorance out of tribal devotion. Safe to say that, unless there is a change of tack soon, this does not end well for Britain.

Friday, 7 July 2017

EEA cannot be used as an interim measure


A modern trade agreement will set out a number of areas of mutual concern and cooperation. Even the most rudimentary ones will set up working groups and joint committees. They work on the assumption that there will be problems and problems need to be resolved through ongoing relationships. The new Japan-EU agreement is one such example. Larger and more comprehensive deals up-scale all of these things, often forming formal institutions.

The EEA agreement, however, is a different animal in that it is far more extensive in terms of regulatory harmonisation and cooperates through EU agencies and institutions. It is moderated by the EEA secretariat and the Efta court. It covers considerably more than an FTA.

What this government wants, oblivious of other concerns, is "frictionless trade" which in their minds means a comprehensive FTA. Frauds like Shanker Singham say this can be achieved by way of Mutual Recognition Agreements (MRAs).

MRAs have only ever been used as a precursor to full regulatory harmonisation. It is one thing to establish an MRA but you are then faced with the problem of maintaining an agreed level of convergence which means any new laws have to be put to a joint committee to ensure they fall under the MRA. This though does not allow for free passage of goods. Only full regulatory harmonisation can achieve this. The EU has made this clear. 

In this the EU is actually giving us a helping hand by closing down a few of these delusions. It should help progress the debate. But for the die-hards of Conservative Home, very few still uphold this misapprehension. 

The delusion held by Brexiteers is that full separation from the single market gives us both frictionless trade and regulatory independence. But that is not even true of even the most basic EU FTAs. The latest EU-Japan agreement largely formalises the current trend in compelling Japan to fully comply with standards as defined by UNECE, Codex and ICH. Deregulation is not going to happen. One wonders if snake oil salesmen like Singham have ever read an FTA.

Assuming we did achieve regulatory independence there would be no point. If you want to export to the EU you have to conform to EU standards and register goods within the internal market. Since that regime would offer the most export potential UK manufacturers would ignore the domestic standard. We would be forced to unilaterally recognise EU goods anyway. We could set up our own goods registration system but EU firms simply wouldn't bother with the expense when the EU standard gives them global reach. Put simply there is no deregulation potential even in a basic FTA worth speaking of.

Now keep in mind that this is just the bare bones on trade in goods. There are three hundred other areas of concern all the way up to aviation safety and phytosanitary measures. We are stripping away forty years of systems development for the free movement of goods only to have to rebuild them one component at a time.

By the time we have finished with this we will have pretty much negotiated exactly what Switzerland has only to find we have the exact same barriers to trade they have where we end up trading ECJ jurisdiction for market access. Exactly where we didn't want to be. Switzerland's meat export regime falls almost entirely under ECJ jurisdiction with zero say in the rules. That then ends up with mission creep where you end up with pretty much the same regulatory harmonisation as an EU member but no EEA firewall like Efta and no system of co-determination.

So what seems superficially appealing in having a more basic agreement with the EU, ignores the fact that trade deals develop over time and come under constant review. We will prune the single market only to end up rebuilding it through the respective strands of our new relationship but ending up on a tether. So much for ending Brussels influence. We suffer a decade of trade limbo for absolutely nothing.


And this ultimately explains the latest intervention by Barnier. The EU knows full well how this plays out and does not want to devote ten years of runtime to this utterly pointless pursuit - not least when they have a system already; The EEA. In fact, we need to move past calling these things trade agreements when they are in fact treaty systems.

So what about using the EEA as an interim to full independence? Well, it should be noted that this in itself is a major legal undertaking. Why would the EU, or indeed Efta, want to go to the trouble for what would be a temporary and disruptive process? Answer: they wouldn't. More to the point, having done this, having given the UK a single market solution, it would not be obliged to invest any further energy in a bespoke FTA. Why bother?

But, like we say, the EEA agreement is not an FTA. It is a treaty system with country specific annexes so it can be tailored and the UK can register opt-outs and trigger safeguard clauses to reclaim those areas it wishes to exclude. To an extent, yes you can pick and choose parts of the single market - but only if you are in the single market framework. There are penalties for doing so but that is a matter for further negotiation.

So in effect, if we want the destination of Brexit to be a far looser trade relationship then the means to achieve that is to join the EEA from the other side of the agreement and then reverse engineer it as far as we can mutually agree. In that respect the EEA agreement is both the transition and the destination.

If, for some boneheaded reason, the UK chooses to avoid this path and tie the EU up in a pointless negotiation for a more basic FTA, the EU will rightly not be very accommodating, will offer us a threadbare agreement and there will be no offer of a transition and no "frictionless trade". The only transitional status we will be allowed is to a remain a non-voting EU member.

We then drop out into an inferior status where we lose a substantial part of our EU trade for no tangible gains - in that we would be entirely at liberty to trade elsewhere as an EEA member. Shanker Singham says otherwise but that's because he's a liar who will tell Tories what they want to hear.

This all rather points to the inevitability of the EEA and it would seem that the only other path is for the UK to storm out in a tantrum to end up with nothing. Only the nihilistic wreckers on the right of the Conservative Party think that's a good idea.

From my reading of the EEA agreement, for the UK, it is a superior arrangement to being an EU member. I see a lot of potential in it. We can take ownership of it, develop it and enhance it, possibly even expanding it. It works for the UK and is in the spirit of European cooperation. I see no value in reinventing the wheel.

This though is not good enough for the Toryboys. They cling to a bizarre fantasy which cannot possibly work and is in nobody's interest. They've never bothered to learn what it is, how it works or what is involved in a modern trade relationship. Through their pigheadedness we could very well see Brexit derailed entirely.

With that in mind I am becoming gradually more ambivalent about Brexit. I would be saddened if it didn't happen because I see a lot of revolutionary potential in it, but a defeat of Brexit would be one well deserved by the Tory right. It would be a teachable moment for ideologues. Once again it would show that plucky upstart movements like Ukip can rise to a position of power - and influence the course of events - but without a plan to deliver they achieve nothing. Perhaps that is the lesson UK politics needs most of all. 

Wednesday, 5 July 2017

That time again

If you are at all paying attention to what's going on, Brexit still hangs in the balance because of the ineptitude and indecision of this government. This blog is a tireless effort to ensure we get the right deal and that we leave without self-immolating. I would hope that you agree with me that I am producing quality content and making an original case for leaving. If that be so, supplies are running low, so please do chip in. I don't like to ask but this blog is only possible with your support. Thank you.


Life can be good outside the EU


It's not often you come across a fair minded evaluation of the Norway option. This post by Nick Sitter and Ulf Sverdrup is one of the better efforts I have seen. Read it. It points to how the EEA agreement is more of a system than a trade deal and is configurable. As a basis for a new relationship with the EU, it's a no-brainer.

The authors have it that the EEA deal allowed Norway to maintain formal sovereignty while delegating actual sovereignty. I think that is perhaps a clumsy assessment in that they outline the many mechanisms by which the institutions of the agreement serve as a firewall where the adoption of rules is a matter of process and negotiation. But they are broadly correct in that the emphasis on formal sovereignty is there - which is exactly what we want from Brexit - the end of political union, while maintaining a framework for ongoing cooperation.

What is refreshing about their assessment is that it recognises the limitations of the arrangement without making a fuss about it. They argue that there is a need for a non-EU state to establish clear priorities and to pick its fights intelligently. "A non-member can have an impact in a policy area if it prioritizes, and explains its domestic constraints. But going for the ‘select all’ option on the conflict menu is not wise. Norway has managed to keep fisheries, agriculture as well as oil and gas out of the EEA. The UK government is well advised to decide – and to signal clearly and openly – what its real red lines are".

This brings us back to the issue of freedom of movement. In most respects we can accept the EEA acquis without much confrontation but Brexit, politically, requires that we address the issue of immigration. This is where we can use the instruments within the agreement. We can very easily present a case for limitations on freedom of movement.

There is an assumption that our reasoning must be watertight and withstand intense scrutiny. But this is politics we are dealing with and one of those "domestic constraints" is a popular requirement to have more control on who we let in and under what circumstances. There is every reason to believe a compromise is possible, not least since the alternative is a far longer resource intensive exit process, which is good for neither party.   

I would go into more detail but we have touched on these issues elsewhere to a greater extent. What piques my interest here is the final lesson offered.
The final lesson concerns life outside the EU. Non-members are in effect relegated to the role of a lobbyist – albeit sometimes very important lobbyists. This is a new role, in which expertise, policy competence and the wisdom to gather information, advocate solutions, and intervene at the right time counts for more than formal power. As a lobbyist on the outside, the UK will compete with many governments, organizations and firms. Norway’s experience shows that outsiders can have influence on the EU system, particularly in policy sectors where it is a ‘super power’ – such as oil and gas, but most often such influence depends on successfully aligning with the interests of key member states, and arguing in line with what is best for Europe and the EU, not on the need for special exceptions.
This is absolutely critical to the whole Brexit argument. We are repeatedly told that Norway has no say in the rules. A tiresome canard we are so very tired of debunking. The Norway experience shows that when they pick their battles well, enlisting support from other non-EU members it is able to obtain substantial concessions and pressure the EU to revise its policy even internally.

To say that the UK would be a "lobbyist" is a fair assessment but I would go one further and say that the UK would be an active and powerful one. Assuming we can successfully conclude Brexit with an EEA agreement, or something of its type, then the UK does not become a down-and-out charity case. It has a means of coordinating a high level of cooperation while being a free agent on all of the many global forums capable of acting in the direct national interest without subordination to Brussels. We would still enjoy more economic clout than most EU members, and we should not forget that even as a member of the EU we are a lobbyist and we don't call the shots.

A key thing to note however, is that the authors state that as a lobbyist "the UK will compete with many governments, organizations and firms". The latter is a seriously important observation because it gives us an insight into the bigger games in play. The nexus of power in world and regulatory affairs is a multifaceted, multi-forum exchange where coalitions of big business, unions, NGOs and nation states broker agreements, regulations and standards. The EU is far from being the "top table".

Ditching the parochialism of EU politics, we must turn to the more interesting news from last year, regarding the formation of a new international public-private sector coalition, the Global Alliance for Trade, an alliance designed to streamline border management in developing countries associated with implementation of the new WTO Trade Facilitation Agreement (TFA).

The new alliance was announced at the 10th WTO Ministerial Conference in Nairobi, Kenya and consists of governments, international companies such as Maersk Group, DHL and Wal-Mart, and the International Chamber of Commerce and the World Economic Forum. The objective of the Global Alliance for Trade is to accelerate trade facilitation reforms by supporting swift and wide implementation of the WTO Trade Facilitation Agreement (TFA).

Today, customs processes can involve large amounts of documentation that typically are not digitalised. This and lack of coordination between private and government actors adds unnecessary waiting time and delays to traded goods, resulting in added inventory costs and the risks of penalties for importers and exporters. Reforms aiming at reducing transit time of goods across borders can increase trade flows significantly and thus drive growth and job creation in low- and middle-income countries. The WTO estimates that a full implementation of the TFA can add $1 trillion to the global GDP annually and 21 million new jobs globally.

A successful implementation will therefore benefit all countries involved, as well as importers and exporters. The first step for the Global Alliance for Trade Facilitation is to diagnose the largest trade barriers in specific countries. A new player on the scale of the Global Alliance for Trade should actually be major news. News of it came to me, not via the BBC but from Maersk's own Twitter feed. That speaks to the irrelevance of the media.

It is not yet clear just how influential this alliance will be but in the past, WTO alliances have helped shape global regulations that even the EU has adopted. It will likely have a much greater consultative input than the EU in opening up new markets - and when it comes to the defining international agreements, it will sit alongside the EU as a power in it's own right.

This is another marker in the timeline of global trade whereby the big deals are no longer between nations and blocs but between non state actors and regulatory agencies. This is very much the birth of a global single market.

In addition to Myanmar, Norway, Vietnam, Brunei, Zambia and Ukraine, the following WTO members have also accepted the TFA: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia and Kenya.

This is a forum where nation can speak unto nation in bringing down barriers to trade. Unless of course you happen to be an EU member, where instead we have to go off to Brussels and ask nicely if they would consider raising our concerns on our behalf.

Just imagine that - a global forum on trade where little old Norway can have an independent vote, yet the UK, the fifth largest economy cannot. This is the real top table - this is the real engine of global trade. This is real global engagement. From this will flow new agreements to adopt new regulations.

The notion that we would be isolated outside the EU ignores the fact that nobody is isolated - and nations are free to pick and choose alliances and coalitions according to what suits their most pressing trade concerns. There are any number of configurations that can rival the EU as a power - and even the threat of voting against the EU (if we had our own vote) would be leverage we do not presently have as members. As members we can be summarily overruled - and we are forced to adopt the common EU position.

Very often that common position is less to do with doing what is best for global trade than it is protecting the EU's internal economy. Far from engaging with the world, the EU is putting up more barriers and acting on the global stage with a view to asserting its own presence rather than working in the spirit of cooperation.

In fact the EU is often criticised by global regulatory agencies and trade alliances for gold plating regulations specifically to create further barriers and tilt the playing field in its own favour. It stands in the way of better regulation and creates administrative burdens where none previously existed. As it seeks to usurp its own member states, critical regional expertise is muscled out, depriving the global community of valued input.

As we continuously point out, there is a whole universe of trade and governance over and above the EU and the myopic fixation we have with little Europe is damaging our global standing as well as holding back global progress. It's time to cut the apron strings and step out into the new world. The EU will still be our ally and friend, but we cannot allow it to be our master. The world has moved on and the future is different to the one they imagined.

Tuesday, 4 July 2017

Brexit trade: a different game by different rules


Much of what I write here is repetition. As a campaigning blog I make no apology for it. It all needs to be said and we need to keep saying it for as long as needs be. I live in hope that eventually it might sink in.

If by now you have bothered to find out what the customs union is then you know that if you are leaving the EU then you are leaving the customs union. It is an integral part of the EU treaties. We cannot remain in it. We can however, have a customs union agreement, as does Turkey, but actually it's not necessary. 

The concern is that without a customs union agreement then UK goods are subject to the application of rules of origin which in more basic terms means car manufacturers are slapped with a tariff. If, however, the UK adopts the EU's schedule of tariffs for the rest of the world and keeps it harnessed to the EU, then it is either charging other third countries the same or more tariffs than is the EU. As such, there is no financial advantage to be gained by using the UK as a back door to the single market, and there is no lawful justification for applying Rules Of Origin.

The UK can unilaterally agree to maintain the EU's tariff schedules. If done unilaterally, it is in effect an unilateral customs union (for want of a better description). It gives the opportunity for the UK progressively to pull in trade deals with its own tariff levels, adding ROO to specific countries, without falling foul of generic rules - wherever we see a commercial advantage in doing so.

However, this could be written into a more generic EU trade agreement - but that would likely end up with the UK paying tariff revenues to the EU and restricting the scope of future trade deals. A Customs Union agreement would lock us into an inflexible system.

Whichever way we look at it though, it becomes clear that there is no absolute freedom to hare off and pick and choose our tariff rates with the rest of the world. Every deal will have to be forensically modelled for commercial viability. In many cases the effect of new deals will be minimal or have an impact on EU-UK trade to such a degree that it isn't worth the trouble. We should also note that if we want to carry over certain EU deals with the rest of the world then there could be complications. Some threads you don't want to pull on.

This blog, though, maintains that there are indeed trade opportunities for the UK and the dismal Euro-parochialism of the FT is unwarranted. Though there is disagreement on what from the Brexit settlement will look like, it is still the policy of this government to seek a deep and comprehensive relationship with the EU. Political subordination is not necessary for that to occur. If Martin Sandbu of the FT is heralding a Japan-EU FTA as an example of outward looking globalism, without Japan joining a political union, without an oversight entity, then why should the "inward looking" narrative apply to the UK?

For now the British establishment is still finding its feet with trade. It is a policy areas we have all but abandoned for forty years. The national debate is still mired in either eurocentric dogma or a bizarre fixation with tariffs. This will change - eventually.

To get the most from Brexit, we will have to abandon the idea that tinkering with tariffs is the only way forward. More so, the bilateralism as favoured by the EU is an inappropriate strategy for the UK. Bilaterals tend to be between superpowers and their satellites which dilute the potential for inter-satellite state agreements. The content of the EU-Japan FTA will likely have consequences for our own arrangement.

Ultimately, as a services economy the UK's best interests are served by further developing international standards and using economic development strategies to bring more countries into the global rules based system. That means they can trade more with everyone, and more trade for them is more opportunity for our fintech and services sector. As a free agent on international regulatory forums we are free to innovate and to pursue avenues that would otherwise be blocked by the EU.

In fact, that was as good a reason as any for leaving the EU. CETA is still bogged down in procedure, TTIP is probably not going to happen, and the EU will continue to invest its energies in decade long talks which are by no means guaranteed to succeed. More to the point, what may lead to greater utilisation for Germany is not necessarily beneficial for the UK.

Collective trade endeavours take far longer, are more prone to failure and devote a great deal of diplomatic resource which the UK can't really afford. Rather than trying to looking for big bang deals with existing partners we need to be investing in enhancing the global systems of trade, championing Trade Facilitation and promoting global standards, making incremental gains as we go. The EU is a superpower playing superpower games. The UK has to adopt a different mentality.

In this we must look to New Zealand to see how it's done. Rather than operating in geographic ideological blocs, New Zealand has sector specific alliances pushing for between relations with partners, and in some instances is able to join forces with others to bring pressure to bear on the EU. The UK working with Efta allies stands more of a chance of breaking down EU barriers than it did as a member. We'll have a free vote and right of initiative in all the places where it matters.

For the moment, there are few signs the government is on the ball but the UK Permanent Representative to the WTO, Julian Braithwaite, most certainly gets it, and for all that we have some pretty dismal politicians we still have some of the best diplomats working behind the scenes. The ones who have not yet resigned, that is.

For a time to come though we will struggle to find our feet. One of the more damaging consequences of EU membership was to break trade out as a separate competence to aid and foreign policy. We are still treating it as technocratic endeavour that is distinct from politics. This is why many of the trade wonks opining on Twitter have little of value to say. They are trapped in the pre-Brexit paradigm. Technocrats through and through, unused to the idea that their way is not the only way.

In trade terms I view Brexit as the difference between being self-employed and working for a large corporate. Working for a large corporate you get the regular pay-cheques, stability and certainty but ultimately it crushes the spirit, you obey all the rules, you do things they way they tell you and innovation is crushed by bureaucratic inertia and indifference. Working for yourself, you get to choose your schedule, which customers you prefer and the mode of working best suited to your skills. At first you struggle to pay the bills but eventually you expand your customer base and win a reputation for being able to do those specialised things that large corporates cannot.

Depressingly, for the time being, we will have to suffer the ineptitude of the Tories and probably a godawful term of Jeremy Corbyn, but politics is cyclic and eventually the UK will find a new settlement. By then some better ideas will have taken hold and we should have learned from some of our failures. That is only to be expected. That does not, though, mean that the UK is down and out.

Assuming Britain can avoid a trainwreck Brexit, we are still a first world developed country with some of the best thinkers around and we have intrinsic cultural and economic assets that even Brexit cannot take away. What we need is to break out Euro-parochialism and Brexit miserablism and take the initiative for once. In that we will have to look in places other than the FT. The poor dears are still in denial.

As far as the FT is concerned, anything less than total political and economic subordination to a supranational quasi-state is "inward looking" (unless you're Japan), and Britain is so enfeebled it can never again prosper. Since they are a London based outfit, obsessed with London politics, you can see how they might think that. British politics is not overflowing with credibility right now. But ultimately it is British people and British ingenuity that has brought prosperity to Britain, often in spite of our politicians. The FT is not alone in finding our political class wanting. For as long as voters hang on to their disdain for these morons, there is hope for us yet.

Monday, 3 July 2017

Suella Fernandes: The poison in the well


Suella Fernandes, writing in the Telegraph, gives us her insights into post Brexit trade. It's the usual hackneyed Brexiteer dribble about the single market being protectionist and freezing out poorer countries. This blog has touched on this countless times and I cannot bring myself to go over it again. The fact is that it doesn't matter. Many of the criticisms levelled at the single market are about right but criticism of itself is useless unless you have a better idea and a credible means of getting there.

Of the EU, Fernandes says "An inherent lack of legitimacy and accountability in the EU have diminished the potency of UK politics. And this has had a destructive effect on our politicians having any sense of clear vision or inspiration. That lack of imagination has led itself to an exaggerated sense of powerlessness dulling down politics through a spiral of technocratic and administrative decisions. Whether we are talking about trade, immigration, our courts or agriculture, in all regards, the EU has killed off innovation in politics".

There is not a single word of that I disagree with. Every Brexit campaigner sees this with crystal clarity - and can see why the current political crisis is very much a product of our EU membership. This is why, despite reservations, I would still vote to leave every single time.

Fernandes says "As the new Chairman of the European Research Group, I am passionate about making the uplifting case for Brexit: that of opportunity, freedom and prosperity, in which many of my colleagues in the Conservative Parliamentary Party believe. Brexit is a chance to reignite that ability to inspire and enthrall". "Politics needs to be less about mechanistic procedures and more about The Big Vision. Less about systemic management and more about creating on a grand scale with radical thinking. More like Disraeli, Churchill or Thatcher who designed stirring blueprints of society. Brexit must not become a bean-counting exercise, which it could. We are not dividing up the estate after a bereavement. This is a birth and a chance for new beginnings; not a death".

Again, no problems there, but anyone can promise the world. What really matters is not what you can promise - not the vision you can paint, but how you intend to achieve it. The practical politician offers the vision, and then tells his followers how he intends to fulfil it. This accursed woman is just offering empty words. Lacking any subject knowledge (ironic for a chair of a research group) she reaches for the scriptures of her ultra Brexiteer colleagues.
Our trade potential is ready to blossom. We have a real chance to activate a new era of global growth through free trade. By negotiating a new broad free trade agreement with the EU; leading the way with a ‘prosperity zone’, as reflected by the Legatum Institute’s Special Trade Commission, with countries such as Australia, New Zealand and Singapore that believe in open trade, competition on merit and property rights protection; and building new economic partnerships with Commonwealth, African, Caribbean and Pacific countries to open up channels for agricultural products, the UK can be a beacon of free trade and fair trade.
This stuff has been debunked before. This is a zombie proposal that won't die no matter how many times it is mercilessly gunned down. You cannot waltz out of a comprehensive relationship after forty years and expect that the rest of the world has remained in stasis and is eager to pick up where we left off. It just doesn't work like that. The EU is our biggest single customer and any new agreements we sign must be carefully assessed as to how they impact our most important relationship.

And this is the beef I have with the ultra Brexiteers. Trade is complex discipline where nobody is a free agent and every action has consequences. Lofty visions collapse under the slightest scrutiny and absolutely nobody in the business takes the snake oil of Legatum Institute seriously. Legatum is a bandit operation on the hunt for consultancy fees, aided and abetted by their parliamentary sponsor, Steve Baker. If we had a competent and inquisitive media they would be all over him. It's bent as bent gets.

Frankly, these people are dangerous. These people would have us carve up our existing trade relationship with the EU in a hurry on the back of some cockameme assertions in pursuit of the flimsiest of visions that simply do not hold water. That is actually cheating - it is political dishonesty at the highest level. You raise expectations and put yourself on a plinth, without the first idea of what it is you are really after - much less how you can deliver it.

This is ultimately where our media is failing. They should by now be on top of the issues and taking the likes of Fernandes to pieces. Instead they are still struggling with basic terminology, and like Fernandes, barely aware of what any of these concepts mean.

In that regard, it is not Brexit that is destructive, rather it is the ignorance of our politico-media classes. We are told this week that Brexit has caused a suspension of investment in the UK automotive sector. It didn't have to be that way. The uncertainty could have been eliminated from the get go with a coherent plan to preserve present levels of market access. Instead we got the vague, thin gruel "cake and eat it" stuff in May's Lancaster House speech. This is an entirely self-inflicted wound and the Tories are entirely responsible for it.

Meanwhile, having resisted the obvious for what is now years, the consensus elsewhere is finally catching up to what we have known all along. Brexit is a process, not an event, and preserving the single market is the only practical means of doing it. And yet, for all that, even at this late hour we are having to fight the ignoramuses on the Tory right in a battle for what is now a matter of national survival. Such is the extent of our political dysfunction.

Sunday, 2 July 2017

Trade: Just forget America


Assuming Brexit isn't going to be an absolute total disaster - which is by no means a safe bet, Britain will likely end up with something akin with the EEA agreement if not actually the EEA agreement. This would not be ideal, but satisfactory. If Brexiteers wanted more out of Brexit then they should have thought up a credible alternative.

This is going to have to be the direction of travel because we want the same level of trade with the EU and if we want to carry over existing trade deals the EU has with third countries then we will have to maintain adherence to the EU's regulatory regime.

As outlined previously, this is going to have an effect on the sort of trade we can do elsewhere. Mixing and matching standards creates complications and risks and any future deals will have to be carefully assessed. In that respect it's going to be easier to seek out trade deals with nations already seeking to converge with the EU or nations with underdeveloped regulatory regimes where we can work with international bodies toward bringing them into the global rules based system.

In this respect the USA is probably the trade prospect least likely to succeed. Having its own distinct regulatory culture and its own system of standards the chances of convergence are somewhere around nil. If the EU did not succeed then Britain will not either. Britain will only get a comprehensive deal from the US on the back of EU efforts. It is unlikely to happen under Trump and if the historical record is anything to go by, a Democrat president is not going to be all that accommodating either.

It is the contention of this blog that the UK needs to look at multilateral solutions in international standards bodies and think about trade differently. I am told that this will be met with resistance in that the US does not want to adopt global standards. This is nothing we don't know. There is an executive order on regulatory cooperation and the direction of travel is for new standards to have a degree of interoperability but for now that is as much as we can expect from the US.

With all that in mind I think the best strategy for the UK is to formulate trade policy as though the USA doesn't exist. Of its own volition it has opted out of multilateral efforts, a deal with the EU is a long way off, it has bigger and more local priorities and it is difficult to see how the UK alone can make substantial progress.

We have heard encouraging noises from the USA, particularly from Republican voices, but like their Toryboy counterparts, their understanding of trade is wafer thin. The goodwill may be there but the practicalities of a comprehensive agreement make it wishful thinking for the foreseeable future.

As much as anything there is no guarantee the UK would even ratify a deal with the USA. As EUReferendum.com noted, by the time the Guardian and others have finished with their exposés on US livestock welfare standards, with cattle crammed in feedlots of a 100,000 or more head, there is no way a British public is going to accept US produce. Meanwhile the UK agriculture lobby is one of the most influential and anything which threatens them will be torpedoed. 

When one adds to this the behaviour of different markets the reorientation of UK trade is not going to be that easy if it is even possible. To become more global it will first need to become less European, and that's probably not going to be a good idea. 

Whatever happens our trade policy will have to fit around whatever the EU is doing. As much as loyalty to one or other regulatory regime is a binary choice for us, the same applies to others and if they choose the EU, they won't make any intellectual diversions for the UK. With that in mind we are going to have to abandon EU style bilateralism simply because we are not big enough to compete with the EU at its own game. 

To get the advantages of Brexit we will have to take a more active role in the global standards bodies because they will dictate the substance of the regulations the EU adopts and writes into its own trade agreements. That is the trade sphere we are locked into so that is where we must engage. It is that which will increase trade potential with states holding comprehensive agreements with the EU.

Where we can outpace the EU is by focussing our trade policy on international development. As mentioned before the WTO drive is for more inclusive trade, with one of the major goals being financial inclusion. That is a goal we share and we have the links to do it. 

The UK has strong ties with Pakistan and there is every reason to enhance our trade with them. Only 4% of Pakistanis save with a formal financial institution. This needs to change. As much as this is an opportunity for a lot of the FinTech innovators in the UK, it is also a priority for the UK in that the externalities of such a policy means less money laundering. A real concern for the UK in its fight against terrorism and also a big issue with the UK having a sizeable Pakistani population transferring funds to Pakistan and elsewhere. 

On a more basic level Codex is working hard to install Codex standards in India, Pakistan and Bangladesh. UK aid helping to accelerate this process is not going to be a bad thing. If anything it prepares the ground for more comprehensive EU agreements and makes their success more likely. If we coordinate our efforts with the EU on the understanding that we will be a party to such future agreements then the UK can be an agile and valued ally for the EU.  

Again I would point out that trade is a political tool and we can gear it to our foreign policy. Trade is not solely about increasing trade volumes. Better links with the USA may be desirable but there is no intrinsic necessity for it. We do, however, have a vested interest in pulling Pakistan out of the dark ages - not least because it will remain a major source of immigration. Improving Pakistani governance through trade is mutually beneficial but largely in our own self-interest. 

By pioneering good governance in LDCs we are not only working in the common good, we are the ones who will likely be first to encounter the inherent regulatory inadequacies and with our new found right of proposal in regulatory affairs we can be the first to table remedies. It puts us first in line to sell business to business services. 

One of the chief criticisms of the EU is that it is a "protectionist racket". That much probably isn't gong to change but what we can do is work toward improving the regulatory base of emerging economies thus improving their access to the EU market. As an a independent agent we can then build up alliances to put pressure on the EU in all of the international bodies whereby it may be forced to dismantle some of their protectionist measures. 

As I have ventured many times before, Britain is going to have to take a much more collaborative approach to trade rather than continue the delusion that we can play the game as the EU does. There are many entry points and avenues in the global rules based system which the EU cannot and does not exploit to its advantage - and we need to show how being independent can be an asset to the EU. In this DfID can no longer be an abstract department. It must be central in our trade efforts and a key part of our foreign policy. We need to stop treating aid as a humanitarian slush fund and put it to use in the immediate national interest. That is something we can learn from the USA. 

Here we have a problem in that the Tories steering Brexit are unlikely to comprehend any of this. This is why they have set their sights on a deal with the USA and still think CANZUK is a viable idea. There may be some scope in the future for tinkering with tariffs but it's not going to be the miracle cure they seem to think is possible. 

But then the trade wonks we are looking to for advice are equally useless in that they are geared toward trade as the EU does it, often taking their cues from US trade thinkers who also operate from the position of being a regulatory superpower. That dynamic does not apply to the UK and we will need entirely new thinking, a radical overhaul of our trade policy and a reappraisal of what we are seeking to achieve. Current thinkers on the subject are seemingly too set in their ways to acknowledge that other strategies exist. 

That, though, reminds us why Brexit is probably a good idea in the long run. The EU is not going to change its ways and for as long as it exists we will be waiting years for EU to conclude talks only for them to fall over at the last minute because of an issue in relation to soft cheeses. I think an independent Britain can rewrite the book and look toward unbundling these concerns so that we are making incremental progress. EU methods are very much suited to the old world in which the Brussels was the alpha and omega of regulation but not now the game has changed. 

As things stand now, I think the UK is headed for a humiliation in picking the USA as its number one trade target. We are going to waste a lot of political capital, time and effort on something that always was a non-starter. That might very well damage our standing internationally and further damage confidence in the UK. If we are to make a success of Brexit then we need to get real and we need to realise that the EU does not go away just because we are leaving it. It is a fact of life and if we go up against them we will lose. The only way we can succeed in the trade game is to remain a close ally of the EU. If we are going to succeed then Brexiteer attitudes need to change.

Brexitland does not exist


I think it must have been 2007 I stood atop of a cold hillside in Bradford with Rageh Omaar, presenter of Channel 4's Dispatches. He and his team had come to do a documentary on immigration. Only a couple of years on from the 7/7 bombings, immigration and Islamic extremism were hot topics and the BNP was at its peak.

They chose Bradford because it was a convenient backdrop for the subject. I agreed to speak to the cameras because I wanted to put a more nuanced argument across. I don't recall exactly what I said but I had remarked that the complaint was not with immigrants, rather it was the government who had taken the brakes off without consultation or consent. I thought I did a pretty good job of it. For forty minutes we stood shivering while I got my point across.

When it came to air though, the opening scenes were of me in the distance walking side by side with Omaar, seemingly deep in conversation. These were just establishing shots and I could just as well have been talking about anything. The narration had it that I was moving to Scotland to get away from Bradford because of immigration. That wasn't true. I just didn't want to live in Bradford because it sucks more generally, and I wanted a fresh start. I was pretty angry at that because it hinted that I was part of the non-existent "white flight" taking place at the time.

I did, however, get the last laugh in that, of the forty minutes I spoke to camera, giving them plenty of material, they only managed to use about twenty seconds of it. It could have been because I was shivering so much but it wasn't until later I realised what had gone on.

The producer for the programme had asked me if I knew any other people who might have something to say on the subject. I gave the lady the number of one of my good friends who lived in the city centre. As it happens, he declined to speak to them on camera. He saw them coming where I did not. "What they wanted was a working class Yorkshireman to have a moan about the pakis" he observed. At that moment it became clear why my footage was not used. It wasn't the racist rant they were after.

In effect they had already written the script and were casting for it in much the same way as you would produce a drama - only this way you don't have to pay the people you use.

Thinking back, I probably should have made an official complaint. Their portrayal of me was a distortion and I found it intensely embarrassing. Just as well I did move away. Ever since though, knowing how they operate, I have been extra cautious of anything I see on TV, knowing that what we are watching just isn't real. London hacks sketch out their preconceptions then go and find a walking cliché to confirm it.

In that regard I am equally sceptical of remainer narratives in that they are very much informed by that same kind of "journalism". We've seen plenty of its type with the Guardians' John Harris's forays into Stoke on Trent and Sleaford. A condescending safari expedition into Brexitland. This kind of dishonest hackery spawns its own sub-genre of commentary, where the leave voters are pathologised as some kind of jelly-brained dupes incapable of reason.

Don't get get me wrong, you can very easily dig out footage of some real muppets with some very stupid ideas, very often Question Time audience members, but actually neither side has the monopoly on idiocy. You can find a broad spectrum opinion on the subject and some will be less credible than others. There has been, though, a concerted effort to portray Brexiteers as ignorant peasants with backward views.

In fact, I tend to find it's the London Tory Brexiteers who are the dimmest of the bunch - the ones who are actually supposed to be able to make a credible case and know how the EU works. Talk to actual working class people and they have more of a clue than is believed. For sure you're not going to get an in depth conversation about non-tariff barriers but the perceptions of the EU, largely being a remote, bureaucratic and mysterious entity over which we have no real control, are about right.

Brexit is not something that appeared out of nowhere. Our collective experience is of a left wing centrist consensus government which doesn't change regardless of who you elect, where views on further EU integration are completely ignored. Brexit was the reward for their hubris. The remain campaign largely confirmed what we already know; the political class's contempt for us is absolute.

Ultimately Brexit was a two fingered salute to our political class - and to a large extent our media. Behind that though is the desire for a change of direction - to initiate some real change - and after twenty years or more of political stagnation, any change will do.

Where it will settle, nobody quite knows, but this is how democracy works. If they'd listened to the public to begin with we wouldn't have snatched their toys away. Now that we have, we can have a serious debate about the state of our politics. That was not going to happen any other way - and that, as much as leaving the EU, is what I voted for.

Brexiteers are not the only dinosaurs


The remain-o-sphere is busy tweeting the announcement that the EU is about to conclude an FTA with Japan. Following that comes the bitter tears and recriminations about Brexit. Tedious indeed.
Very early on after the referendum we saw Japan registering its concerns about our future relationship with the EU. This tells us that Japan has a stake in the outcome and is very much interested in maintaining trade links with the UK. 

What we can say with some confidence is that Japan will be open to either adding the UK to the EU agreement as an annexe or it will simply seek to replicate it. I would favour the latter since it gives us a chance to optimise it. Since the principles are already agreed with the EU there is little reason to expect attitudes to the UK to be much different.

The obvious point I would make is that any FTA with Japan will likely be a cooperation agreement, the backbone of which will be regulatory harmonisation largely titled in the EU's favour. This is a regime with which we already comply and will likely not deviate from. We are well placed to replicate it. More to the point an FTA does little more than formalise and accelerate the general direction of travel. We know this by way of looking at existing FTAs.

Looking at the EU-Singapore FTA, seven years in the making, the basis for free trade is regulatory convergence. In just about every comprehensive agreement you will find words to the effect of:
The Parties may agree on taking into consideration the glossaries and definitions of relevant international organisations, such as the CODEX Alimentarius Commission (hereinafter referred to as “Codex Alimentarius”), the World Organisation for Animal Health (hereinafter referred to as “OIE”) and under the International Plant Protection Convention (hereinafter referred to as “IPPC”).
This largely echoes the WTO agreement on Technical Barriers to Trade (to which we are a signatory) which states:
Where technical regulations are required and relevant international standards exist or their completion is imminent, Members shall use them, or the relevant parts of them, as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued, for instance because of fundamental climatic or geographical factors or fundamental technological problems.
Which is scarily reminiscent of text found in the chapter on renewable energy in the EU-Singapore FTA:
Where international or regional standards exist with respect to products for the generation of energy from renewable and sustainable non-fossil sources, the Parties shall use these standards, or their relevant parts, as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued. For the purposes of applying this paragraph, the International Organization for Standardization (hereinafter referred to as “ISO”) and the International Electrotechnical Commission (hereinafter referred to as “IEC”) shall in particular be considered relevant international standard-setting bodies.
As with regulations we find the substance of trade deals is outsourced to the many international regulatory and standards bodies. Elsewhere in these such agreements we find the usual commitments to inter-agency cooperation in pursuit of further harmonisation. It will likely contain agreements on scientific collaboration. With the UK having two of the world's top universities, Southampton and Bristol, there is every reason to expect similar collaboration. Brexit is not the end of international cooperation.

The take home point, however, is that this all points to the gradual obsolescence of the EU. While it is still influential in regulatory affairs, with every agreement it signs, control of the regulatory agenda slips from its grasp. The international standards bodies as referred to in the fine print are where the real action is at. Brussels is no longer the centre of the universe.

Much will be said of the EU-Japan FTA on the automotive sector, eliminating ninety per cent of tariffs on car parts, which is nothing we are not at liberty to do when we leave the EU, but more important is our enhanced say in the rules on all the global bodies by way of not being bound to the common commercial policy.

We should also note that the EU-Japan agreement is not concluded until it's concluded. It still has to go through the ratification mill and will end up going round the houses when it stalls on the matter of European soft cheeses - which seems to be hang-up de jour. There is every reason to expect that the UK can be more agile and more pragmatic.

We have seen in recent years a departure of the US automotive industry to Mexico which trumps the US on free trade. It has agreements with 45 countries, meaning low tariffs for exporting those cars globally and favourable deals on the import of components. We can debate the intricacies of these such agreements and their consequences but the point is that there is life after Brexit and the UK has not become an international pariah. The UK is a market worth tapping.

It now seems to be an article of faith that Britain drops off the map entirely by way of leaving the EU. It is tiresome in the extreme. Britain has a great deal of expertise and goodwill internationally and there are creative means of playing the trade game outside of the ossified structures of the EU. No doubt we will have to hit the ground running and we have a lot of work on our hands to compensate for Brexit but histrionics are uncalled for. Even an EEA Brexit gives us substantial scope to become more competitive.

If there is any reason to have doubts about Brexit it is that we lack the political competence to make full use of the opportunities. That, though, is no reason to remain. There likely will be a Brexit bullet to bite but electorates will be unforgiving of dilettantes and slackers. We will probably have to tolerate the fag end of this Tory administration and, sadly, maybe even a term of Corbyn, but while our political class dithers in a parallel universe of its own, the public debate will overtake it.

The fact the are now seeing Twitter debates on cumulative rules of origin tells you that policy thinkers are starting to engage on a more serious level. This will eventually feed through into the political domain. Eventually we will get to grips with it because we cannot afford not to. There are bigger games in play.

For the moment the outlook is somewhat bleak since David Davis is the closest thing to competent this government can muster. There is a steep learning curve. Incompetence was always an inevitability. This is what happens when you delete a major area of policy from the domestic capability. There most certainly will be a price to pay for that.

As much as we must reacquaint ourselves with the art of international trade with must also reshape the politics of it. I get the impression that our corps of trade geeks are post-patriotic internationalists and technocrats working to a formula rather than looking for the distinct advantages to exploit in the national interest. They are locked into obsolete practices as favoured by the EU. If we are to make the best of Brexit we will have to rethink trade and keep the experts at arms length.

From a purely technocratic perspective trade is all about maximising trade volumes but, actually, we should remind ourselves that technocracy must be subordinate to politics and that trade is very much a tool of politics. Before we start playing the game we need to be sure of what our strategic objectives are. These are not necessarily the same as the EU. Though our rootless technocrats may very well be the best expertise available the driver has to be a body politic with a clear vision of where it wants to be. If there is any criticism of Brexit then it is a lack of a coherent vision.

We should also be mindful that not everyone is acting in good faith. If one listens to US trade officials one very much gets a sense that we are dealing with a ruthlessly self-interested country. The USA does not play "all friends together" and the tone is very different from what we are used to. In that respect we should be cautious of entering any US talks but we should also be watching them closely to see how it's done. The EU is in pursuit of any trade for its own sake. The UK, however, has certain political obligations manifested by the Brexit vote which it must bring to the fore of trade thinking.

I take the view that if we're going to be trailing in the wake of the EU seeking to borrow and replicate bilateral deals then we may as well not bother. These such agreements are resource intensive and time consuming and at the end of it there is still no absolute assurance that it's worth the time. If the core of our efforts is regulatory harmonisation then the WTO TBT agreement gives us the framework. Bilateralism is to an extent reinventing the wheel. Our trade endeavours must be based on effects based policy - playing to our particular strengths.

If we look at the policy spearhead of the WTO the game is now all about trade facilitation and enhancing SME access to the global markets. As a leader in FinTech innovations and B2B services the UK needs to be looking very closely at trade facilitation and global regulatory systems. This is where we can bring our expertise to bear and punch above our weight. Tinkering with tariffs on soft cheeses is penny-ante stuff.

For the moment the remain-o-sphere is still weeping into their sleeves chanting the "no say in the rules" mantra. They will keep this up long after we actually leave the EU. To admit even for a moment that Brussels is not the centre of the regulatory universe means admitting that there might actually be a rationale for Brexit after all. There's the WTO, ITU, UNECE, Codex, ILO, FAO and ISO and a number of other influential working groups on everything from nuclear medicine to space policy. We're not going to get a grown up debate about trade until the remainers are able to recognise that the EU is not the only game in town.

A very valid criticism of leading Brexiteers is that they have a very stunted view of trade, barely aware of the concept of non-tariff barriers. They believe the world is a binary split between the meddlesome red tape of the EU and the unregulated wild west of the rest of the world. That though is only marginally worse than the remainer perception that Brussels is the alpha and omega of rule making when there are many instances where the EU is just as much a rule taker and no longer in full command of the regulatory agenda.

Quite obviously the EU still has the ultimate say over the terms of market entry and as we know conformity to standards is not the only requirement for free access to the EU internal market, however the EU sans UK will find the rest of the world now has a powerful ally in bringing pressure to bear on the EU. Acting alone we do not get to dictate anything but by building sectoral alliances there are ways of backing the EU into a corner. Not only is Norway an independent member of Codex, it even hosts the all-important Fish and Fisheries Products Committee. Thus, it is the lead nation globally in an area of significant economic importance to itself. With the UK repatriating its own waters, there is every reason to believe the UK will be an influential voice.

I'm not going to sugar-coat Brexit. We are setting off on the back foot and if we really are leaving the single market then Brexit will be more painful than it needs to be. We will find by leaving the single market we don't get the regulatory independence that Brexiteers believe is possible and we will have hobbled ourselves for only marginal gains in "sovereignty". We must not, however, get carried away with the idea that we will have no say in the rules, nor are we helpless.

Though I am not known for my forgiving attitudes to Brexiteers and I'm the first to call out panglossian nonsense I do not believe for a moment that the UK is without potential and there ways in which complimentary and collaborative styles of playing the trade game can benefit both the UK and the EU. The UK as a free agent is able to innovate without internal delays and in so doing can be the first past the post in raising regulatory initiatives at the top tables. Present rules on industrial ship scrappage are a Norwegian initiative and ship lifecycle standards are a product of the IMO and ISO.

For all that we are told that Brexit means "turning inward" I find there is nothing quite so inward looking as the belief that EU membership is the fullest extent of international engagement. I am also unconvinced by the argument that the EU in any way amplifies our voice. If you don't have a free vote or a means of veto then you are in fact a subordinate. If Brexit means losing a vote in the EU to gain one at the top of regulatory affairs then I will take it gladly. I will take a punt on British ingenuity over EU technocracy every single time. I wouldn't write Britain off just yet.