Monday, 19 June 2017

More issue illiteracy from the FT

Writing in the FT Martin Sandbu pretends to know about Brexit. He explores how you might justify a soft Brexit.
"So consider the most obvious soft Brexit option: joining Efta and the European Economic Area, which would keep Britain in the single market on the same basis as Norway, and negotiating with the aim to remain within the EU customs union. (Note that even this is not the softest imaginable Brexit, as the EEA does not cover fish and agriculture. Scottish Conservative leader Ruth Davidson explicitly excludes fish from her call for an “open Brexit”, and her view may command a consensus. Agriculture, however, may face difficulties if trade barriers with the European market go up.)
How can advocates of this soft Brexit solution answer the hard Brexiters’ assertion that this would disrespect the referendum? It is not enough to say that the ballot paper only mentioned EU membership, not the EEA or the CU. The meaning of the Leave vote was what the Leave campaign said: “taking back control” of “our laws”, “our borders” and “our money”, and allow for more trade deals to be struck.
There are sensible answers that soft Brexiters can give on each point. On trade: this was one argument that was always made on pragmatic grounds. Unlike the other considerations, few argued that Britain must strike its own trade deals for the sake of it, but because they would be better and done more quickly than the EU manages. That assertion is rightly losing credibility with the public.
First, because it is now sinking in that leaving the EU customs union entails customs controls on the land border in Ireland. Second, because more people are realising that an independent UK trade policy would have to run just to stand still: before it could improve Britain’s trade position, it would have to recover the more than 50 trade agreements the EU has in place with other countries — not to speak of negotiating a trade agreement with the EU itself. Third, but less recognised, the EU is in fact rather committed to striking trade deals.
One with Canada has just been wrapped up, one with Japan is near completion, while the one with the US has stalled because of Donald Trump rather than anything to do with the EU. If trading more with the rest of the world is the goal, it is easy to make the case that being part of the EU trade bloc is the best available way for the UK to do so.
I'm not going to play silly buggers and split hairs over the mandate. Let's just look at the facts. Norway is not in the EU. It is, however, in the single market because of an agreement. The EEA. Since we want a deal that delivers the benefits of the single market then the EEA agreement is that agreement. Even if we do not go for the EEA/Efta route we will be going the long way around to replicate most of its functionality - but will be forced to flip a coin over which sector we wish to obliterate to get a total cessation of freedom of movement. For the most part, whatever happens we will be a quasi member of the single market to about 80% of where Norway is.

The point of using EEA/Efta is that it serves as the most workable transitional mechanism and is the fastest way to leave the EU. The only other means of transition is ECJ supervision over a much longer term - which is effectively continuity EU membership. That is why I, as an emphatic leaver, would prefer the EEA because at least then we are out of the EU even if we achive no other thing. 

As to the Customs Union, as EU Referendum explains, one cannot be a member of it. We are leaving the EU thus we are leaving the customs union. Turkey is a partial "member" of it but it is a customs union agreement - not membership. We should also note that it is regulatory union and customs cooperation that brings about seamless borders, and is in fact very little to do with the customs union. This is the second hack from the FT today who evidently does not know what the customs union is.   

As to trade policy, the customs union is not the common commercial policy. The UK could still negotiate its own trade agreements with other countries on services, investments, regulations, e-commerce, food, and agriculture. It would leave Brussels to handle the negotiations on tariffs on cars, industrial equipment, trains and electronics. That though is no biggie. The direction of travel, and the EU's own policy is to drive tariffs downward or eliminate them entirely.

Again, though, we need point out that tariffs are really not the issue. There is no low hanging fruit to go after. What concerns us more is our ability to act as an independent agent on international regulatory forums. Readers of this blog will know why that is important. FT hacks will not. As far as this blog is concerned this is one of the more fundamental reasons to leave the EU. 

Sandbu asserts that "Unlike the other considerations, few argued that Britain must strike its own trade deals for the sake of it, but because they would be better and done more quickly than the EU manages. That assertion is rightly losing credibility with the public". Unlike Sandbu I do not have a crystal ball as to the public mood on such matters, but actually if he wanted to know Brexiteer views on trade he could have read one of the many excellent independent Leave Alliance Brexit blogs. 

We very much did argue that if we changed our approach to unbundled sectoral deals then in all likelihood we can achieve a lot more in a shorter time. EU deals drag on for years and as we see this week, CETA has stalled again over the matter of a dispute on cheese quotas. That's very typical of these such agreements. Our view is that individual product types should feature as individual multilateral agreements. The point stands and we will continue to argue that case. 

As ever I could go to town on the rest of the article but if I had to spend my days correcting FT hacks I would never get anything else done. The basic point is that even if we do wish to depart entirely from the single market we will need to evolve out of it - especially if we want to avoid a cliff edge. For the most part the EEA covers all the bases and over time we can use the country specific annexes to gradually opt out until such a time as we were ready to make the switch to some other regime. EU membership has to be reverse engineered. We went in gradually and we shall have to depart gradually. 

This is why we have given little attention to any other model, largely because it is the only fit for purpose model available. More to the point, Switzerland is not a model. It is is the product of several years of diplomacy and bickering, is far from settled and exists as a rag bag of bilateral deals and agreements. It is not an artefact in the same way the EEA agreement is with all its structures and institutions. 

Looked at as a whole we take the view that anything that isn't an EEA brexit will be a hard Brexit largely because there are no other means to reverse engineer the mess we have made for ourselves. But if we want to dispense with the hard/soft/clean Brexit terminology we can reduce it to just two options. We either do it intelligently (EEA) or we go on pretending there is another way and make a massive pigs ear of it. You pays your money, you takes your choice.

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