Sunday, 4 December 2016

Yes, the single market sucks. Here's why we should stay in

This week on the blog has been almost entirely devoted to the matter of the single market and our continued membership of it. It has been my aim to cover as many bases from as many angles as possible. If anything it will save me from further repeating myself. One thing I have learned though is that the response to them on Twitter invariably comes from those not inclined to read such articles before commenting so I am, for the most part, wasting my time.

Those who do insist that we should leave, again without bothering to read my arguments then present me with the usual fluff from Civitas and various mainstream media sources. Typically the Telegraph and City AM. It is interesting that they decry mainstream media most of the time, except for those occasions when it reinforces their beliefs.

In terms of the specific criticisms made, there is very little to argue. The single market most definitely is bureaucratic and expensive and in some respects deeply corrupt and overly centralised. Less so as a non-EU member but all the same, if you were starting from scratch you would first look at other ways of achieving the same thing. The single market is very much a legacy project.

I take the view that we should never have joined it. The reality though is that we did join it and experienced a good deal of pain to reach a state of compliance. Now that we have, we do not want to repeat the pain of remodelling to an entirely new regulatory regime, not least when it would add very little value. Now we are tasked with making good of what we have.

Just the act of leaving the EU ditches a lot of the unnecessary supranational nonsense that we will all be glad to see the back of, and if we stay in the EEA what we would be left with is just those parts necessary for the functioning of the European trade system - the single market.

The core of that regulation is no longer strictly EU law. During the referendum we hear all manner of nonsense about Norway being subject to "fax democracy"- waiting by the fax to be told by Brussels what the rules are. This was never true. It's amazing that so many on the leave side have swallowed it wholesale since it is a piece of remainder propaganda. Norway has always had the means of opting out and decisions are arrived at through the EEA secretariat.

What is less noted is that the EU goes through much the same process in the creation of its own technical rules. This blog has rehearsed those issues too many times to count, but the fact is that most of the rules pertaining to just about every corner of the economy you can think of come from international regulatory forums where the EU is just as much a rule taker as everybody else. Where there isn't a global standard, the EU standard becomes the global standard and vice versa.

While the legacy body of law is very much rooted in the EU, moving forward the rules we would adopt via the EU would be rules we would adopt in any configuration, in or out of the single market. This is why the oft repeated myth that Norway has no say is trite piece of spin. Norway is very much involved in the process at the top tables before law gets anywhere near the EU - many tiers above the European Parliament. Norway is then able to vote of its own accord and is able to veto any modifications made by the EU when it comes to direct adoption.

As notes, entirely of its own volition, Brussels has ceded legislative authority over vehicle construction and safety, and on vegetable and fruit marketing standards, and is now a law-taker in these spheres. It has not made new laws here for many years.

Add to this the WTO TBT and SPS agreements, and the Vienna and Dresden agreements on standards, and we see that much more of the Single Market acquis has been ceded to regional and global organisations – to say nothing of the global nature of financial services legislation. For all that has been written about the single market over the last two years this is one facet of the debate that mainstream interests steadfastly refuse to acknowledge.

And in case you need that spelling out, that means we are witnessing the emergence of a global single market with the WTO acting as a central arbitration mechanism. One other body, less spoken of, but equal in stature is the World Customs Organisation which is devoted to enhancing systems for customs cooperation, and in the fullness of time will make the EU entirely redundant. To depart from the European single market in order to set about regulatory divergence would in fact be akin with pulling out of a global system of rules devoted to free trade.

In this you might wonder why we should keep the EU as an intermediary. The obvious answer is we shouldn't, but at the same time there is no particular rush. I would ask why go through all the pain of detaching ourselves when the EU is gradually dissolving its own authority as the global system matures? 

In the meantime, our strategy should be to use our foreign and aid policy to bring developing nations up to the global standard, using our own expertise so that we build a core of allies well disposed toward the UK for when we have major disagreement with the EU at the top tables.

In a lot of ways the EU debate is entirely obsolete and has been upscaled to the global level. This is a lesser acknowledged element of globalisation that few, even in the big leagues, pay any attention to. The ever narrow hang ups about the UKs continued membership of the single market do not take into account the direction of travel and unjustly occupies too much of our attention. 

In more ways than one there is no urgency in leaving the single market. We have already severely weakened the EU by voting to leave. The rump EU is going to have to think very carefully about its own future and whether it can continue with its current DNA. There are stresses and fragmentations happening Europe wide where the EU might well be forced to become an entirely different animal. The federalist ambitions will go into the dustbin. I think it's just a waiting game. 

When that happens we will see the EUs trade exclusivity obliterated as more nations demand special conditions and exemptions and realise Britains model is in fact superior. We are often told that the Norway Option is suboptimal, and indeed it is, but it is a question of what we can evolve it into and how we can exploit it to our advantage. If we're canny about it, we can shape the single market in ways we never could as EU members while enjoying an unprecedented right of refusal. Who knows, by the end of the process, we might have the European free trade zone we should have had to begin with!

We heard all the baloney during the referendum that we should stay in the EU and help reform it. That was always a nonsense. The structure of the EU was designed from inception to resist any such reforms. The founding fathers knew full well it would one day face such a test. The single market, however, is not the property of the EU, it is fluid and is slipping out of the EUs control. We can give it a helping hand to become bigger and better, and there's nothing the EU can do to stop us. Why would we pass up an opportunity like that?

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