Monday, 14 March 2016

I've seen the future - and there's no EU in it

The World Trade organization's Technical Barriers to Trade (TBT) Agreement encourages members to base their technical regulations, standards, and conformity assessment procedures on international standards in order to facilitate trade.

Speaking at this week's TBT Committee meeting in Geneva, Codex Secretary Tom Heilandt recalled that "when standards and other Codex texts are adopted by the Codex Alimentarius Commission they are purely recommendations for application by host governments."

It is on that basis that europhiles tell me I am wrong about the Codex making the rules. The Codex Secretary explains that the uptake of standards depended, to a fair extent, on the strength of consensus achieved in the Codex Commission and also on the national situation in countries who may require the use of a different measure. This measure would need to be justified by risk assessment in case of sanitary and phytosanitary (SPS) measures, but he confirmed that there was a less explicit link when dealing with trade.

All true. For now. But in a world seeking to harmonise export standards, and one where the EU is a dominant market, the fastest and best way to access the EU market, and by way of meeting the highest available standard, the rest of the world, conformity to Codex standards becomes the base level buy in. Some may even be reluctant to enter negotiations unless there is compliance with Codex therefore opportunities are lost.

In that sense you can't really play the game of global trade unless you meet the base conditions. To have differing standards, deviating from the norm, is to add overheads and delays and reduces the chances of mutual recognition agreements.

And so while Codex is not explicitly linked to trade, if compliance isn't already the price of entry to the global markets, then it will be eventually, and that is certainly the destination. Why wouldn't it be? And if compliance is the price to be paid in order to play, while Codex is not explicitly making the rules, it sets the bar as to what must be done in order to trade - therefore in a more abstract sense, it very much does govern.

And while Codex in theory makes only "recommendations"- when the framework is central to a regulatory regime, most of their recommendations are pretty much automatically adopted by those who subscribe to Codex. Being that the case, if the EU adopts them, you have to have a seriously good reason not to do likewise as a non-EU member.

And that's really why independence matters. Modifying these rules and standards at source is the best way to steer and circumvent the substance of regulation - not just for the EU but for the rest of the world.

While europhiles run with the meme that the WTO has stalled, like most commentators they are not looking at the world of Technical Barriers to Trade, where agreements are made between unrelated bodies with reference to the TBT framework.

I don't consider myself fit to be the judge of whether the WTO has stalled but the TBT agreement most definitely hasn't. In the circles of international governance, it's the talk of the town. It may be that these bodies themselves have yet to realise how much influence they wield and their significance to global trade? Why would they? Nobody else does!

As so, while it may be that I have overstated the link between Codex and trade, it's easy to see the direction of travel: a global single market where anybody can opt in just so long as the meet the standards. That is ultimately what we should be working toward, where trade depends more on established frameworks and less on formalised talks between governments and blocs - where the EU cannot use its influence as an exclusionary force.

What world trade needs is its own equivalent of the containerisation revolution where by mutual compliance to standards and adherence to inspections creates for automatic market entry - rather than seeking the permission of governments.

That is what I believe the TBT agreement will evolve into, eventually becoming the central function of the WTO. We want that global single market rather than a closed off European market with privileged access.

Unwittingly the Remain camp, in attacking the suggested Brexit options, makes the point. They remind us that Canada doesn't have full access to the single market in services which make up 78% of our economy. For sure CETA is no basis for a post-Brexit relationship for Britain since the EU is our nearest market, but what they are actually saying is that the EU has protectionist barriers that exclude our very close friends and allies - and we can't fix that without going via the EU and waiting for however long that takes. Thus far, seven years and counting.

By leaving the EU, not withstanding the complications that a CETA deal will introduce, there is still plenty of scope for the UK to enhance its relations with Canada on a more agile basis. While we are in the EU it is a bed blocker to something better.

Anyone who truly believes in internationalism and open global markets really ought to have a vested interest in the EU's eventual demise. We should be looking at a peer to peer model of trade in accordance with global standards, using conventions like TIR to enhance the transportation of goods the world over. We should not require a centralised bureaucracy to dictate the terms and the schedule and certainly we should not need to seek permission from it. Nobody else has to work this way. Why should EU members?

In fact, it wouldn't pressurised me if the EU's own trade analysts haven't seen the writing on the wall for the EU n all this. What is happening externally to the EU is an existential threat. The more multilateralism we see the weaker the EU becomes. This may explain why the EU has stepped up much of its trade activity in order to prove it still has relevance - not only to the world but also to Britain as we head into this debate about our future.

In this regard, I already think the EU is toast whether we leave or not. As the supremacy of global standards takes hold and more nations subscribe wholesale in the way the EU does it will be harder for the EU to dictate the global trade agenda and who can participate.

Eventually we will see it going the way of the Commonwealth were it physically exists as an institution, and we will still pointlessly send MEPs and signatories, but nobody will quite be able to tell you what purpose it serves. It may even be that Britain is the last nation on earth to take it seriously - which would be a joyous irony.

In this, I believe we are better off cutting loose now instead of waiting for the natural atrophy of the EU. It probably won't go out with a bang as many eurosceptics predict. I believe it will just fade into obsolescence and we will pointlessly feed it money so that it can maintain its own self-deceptions.

Whichever way it goes, I just don't see it remaining relevant and I don't think there is any sense in paying the economic penalty of sliding into obscurity along with the EU. Now is the time to be making bold moves. The world economy needs a shake-up and Brexit might just be the thing to do it.

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