Thursday, 10 August 2017

Always bet on Tory incompetence

It is hard to look at Brexit with any sense of optimism when there is such a fundamental lack of competence at the heart of government. If they were at all attuned to the the inherent risks in the process we would now be seeing government policy coalescing around the EEA option. Instead we are locked into the idea that only a bespoke FTA can be called the one true Brexit.

This raises questions as to how quickly this can be done. There is an assumption that our existing alignment makes this a quick an easy process. One wonders how anyone could think this since there is no evidence of the EU having ever made anything quick and easy.

First of all we would have to negotiate a framework for negotiations. We would have a long list of areas for discussion on anything from pharmaceuticals to aviation. Like the current "negotiations" this would not be a case of negotiating anything. Rather it would be a sequence of capitulation.

When it comes to the sale of medicines in the EU, you are part of the EU system on EU terms or you are not. If you are not you are then treated as a third country where there is little scope for preferential treatment. There can be limited process specific mutual recognition agreements to lubricate third country interactions - such as conformity assessment, all conditional on a number of factors, but this does not amount to unfettered market participation as before.

The same applies to the REACH system for chemicals. You are either in it or you are not. The same applies to the Single European Sky. You are either in it or you are not. So then the whole process becomes a series of ultimatums. We can either accept the rules of the system or we accept massively inferior market access. The latter meaning bespoke provisions, largely stacked in the EU's favour at a pace set by the EU.

Since the UK is likely to kick up a fuss about any involvement of the ECJ we are then forced to design a unique set of protocols for dispute resolution and a system of arbitration. This is politically contentious and difficult to agree, and mode more difficult by the absence of competence on the part of the UK. Our muppets don't understand how the system works and if they don't by now then they never will.

The only way this will go quickly is if the UK concedes to every single point and opts for full participation in EU systems on EU terms. That would be the smart thing to do, which is why we can assume that is not going to happen.

Only when we know what the final agreement looks like can we design any kind of plan for implementation whereupon we will need to acquire all of the necessary facilities, people and systems in order for the change to happen.

If asked to guess I would say that just the negotiating alone, assuming all went to schedule (fat chance) without any hitches would take four years - and then we are looking at a number of years before we are ready to "take back control". We would have to do it on a staggered basis with the framework from transition largely being EU membership with no voting rights.

In this we must note that none of this even starts until the Article 50 talks have concluded and so with the best will in the world, we will not be ready to make any substantive changes until 2024 with an open ended completion date. Looking at it optimistically. This all hinges on whether the repeal bill can be made to function. Without the EEA, and without knowing what the final administrative framework looks like, we can't say with any certainty whether it will.

What you have at the end of that is a gigantic mess leaden with complexity and uncertainty where there is absolute no guarantee of "frictionless" trade. We still need a customs agreement and though we can guess what that would look like, you can count on the Tory right making it more difficult than it needs to be.

The gist of it is that if we don't crash out without a deal and we don't choose the EEA then we are looking at a very long and very slow process, the nature of which we can only speculate for a destination nobody can yet define save to say that it will fail to deliver the benefits of the single market.

This is all predicated on the assumption that the Tories do not make a monumental pigs ear of it, meanwhile we cannot say what is likely to happen in domestic politics which could possibly derail or delay the process. Whether lame-duck May can hold out until the next election is an open question.

Th shortcut to all this is to simply stay in the EEA, not least because it massively simplifies the repeal bill process, but also because it avoids the need to negotiate new provisions on trade systems as it leaves economic integration intact. Since we are not going to get better terms by negotiating a bespoke deal there is simply no point in trying.

This would make the Brexit process a lot faster - and we would be out a lot sooner and then able to configure the EEA agreement through protocols and annexes to the Agreement. The immediate benefit of the EEA is that business would then know the new framework and would have a lot less to prepare for and we would see a return to some degree of normalcy.

Sadly though, unless there is a radical shift in political tides, this rabble will dither until we are at a standstill. I'm betting on a crunch point where it's crash and burn - or just call the whole thing off. By that point, if the public have a say in it, then it will be the latter. The Tories are the remainers best asset.

Ultimately what we are looking at here is a clash of perceptions of Brexit. The Brexiteers view Brexit as an event - one in which all the reforms happen all at once and as part of the exit process. This has never been a realistic proposition. There is simply too much complexity for any one administration to cope and too much donkey work to do before you can get down to the more exciting business of reform.

The Tory mantra is that we should look at Brexit as an opportunity, not a damage control exercise. That is the fundamental flaw in their thinking in that this is a process where we must first manage the administrative task of exiting - and that very much is a question of damage limitation. This is where there is no room for big visions and ideology. This is the tedious, dull and procedural part - and if we treat it as a game seeking to win the advantage then we will lose.

The aim of the leaving process is to get us into a position where things are more or less the same, having minimised the economic harm and physical disruption, after which we have the necessary powers to reform and diverge where desirable. That is the advantage of the EEA. The other way means that we are forced to change everything all at once whether we want to or not, whether it works or not. I can't see it being anything other than messy and damaging.

I still think there is a possibility of an EEA Efta solution in that there is an upcoming danger zone where the lack of coherence and a ticking clock will force the Tories' hand. If not to expedite the process then to salvage any kind of credibility. We must endure a crisis or two before that happens.

This is why you won't find me spending too much time speculating as to what a bespoke agreement  looks like. The EEA is the only possible way we can successfully complete the process and if we go down the avenue of a bespoke agreement then it will become bogged down in ideological disarray to the point where walking away is the only means of leaving. After which, Britain is so irrecoverably screwed that any models we dream up now will be wasted energy.

For now the only certainty is extreme incompetence guided by wilful ignorance. That is the only thing that brings any kind of predictability to this process. If you want to know what the Tories plan on doing then just think of what might work and then try to imagine the absolute opposite of that. Then imagine how they could even manage to fuck that up too.

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