Monday, 5 March 2018

Give us this day, our daily thread

Just lately I have not invested the same level of energy in this blog since hits have levelled out and I have all the reference essays I need. I get more traction with Twitter threads so it makes more sense to invest my energies there. Below is a typical example of a Twitter thread. Largely a repetition of what I have already said countless times, but part of the job is repetition, no matter how tedious it gets.

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For the moment the Torybots (compliant activists) are satisfied with Mrs May's proposal. To the uninitiated it sounds like a reasonable proposal and if there weren't already an established system for movement of goods it would be but as a real world proposal it just won't fly.

What Mrs May is asking for is an overall weakening of the EU system, placing authority over its lowest market entry requirement in the hands of the UK government - a non-EU member. This it cannot do.

In order to have free movement of goods you need a number of secondary mechanisms, not least recognition of qualifications and authorisations. Simply relaxing borders is not a legal option. It isn't going to happen.

While the politicians are distracted by the red herring of customs unions, ultimately the instrument central to free movement of goods is the single market. there is no renegotiation of its core features. You are either in it or you are not.

So all Mrs May really has to do is answer a very basic question. Do you want free movement of goods? If the answer is yes (which in part answers the NI question) then we have no choice but to remain a party to the EEA agreement.

If the answer is no then she must invest to ready the UK for standard third country controls whereupon food and general goods must face a whole raft of inspections and red tape. Self-authorisation for circulation of goods in the market comes to an abrupt end.

Since the UK will then seek to keep inspections to a minimum, it will still have to be careful where and how it diverges, not forgetting our international obligation to conform to global standards. Consequently those "bumper trade deals" will not materialise.

Significant divergence leads to a higher risk of regulatory contamination for the EU. It will therefore use its alert systems to determine how invasive inspections of UK goods are. This adds considerable costs for exporters as the exporter bears the costs of inspections, lab tests and the consignment delays. This effectively wipes out JIT exports which have grown specifically because of frictionless trade.

We then find ourselves having lost substantial trade with the EU but still obliged to uphold existing standards and ensure our regime is still roughly in keeping with that of the EU. Substantial divergence will not be possible - which business doesn't even want.

In terms of subsequent deals with other countries we are then left with very little to play with save for marginal tinkering with tariffs - which will be something of an irrelevance since we have tariffs agreements with most of our major partners via the EU already. There is no compelling evidence that leaving the single market will afford scope to enhance trading relationships and no third party agreements can possibly compensate for the loss of EU trade.

A single market settlement may well be suboptimal but I think of it more as a line in the sand that says "this far and no further". It is then a firewall against "ever closer union". That would be a a sufficient compromise.

Short of that we are going to end up spending a small fortune on systems to manage any new trading relationship which would result in more barriers to trade. A collapse of tax receipts and increased red tape would then wipe out any supposed "Brexit dividend".

There are plenty of good reasons for terminating political union and becoming an independent country, but needlessly severing our real world economic integration for a mythical "regulatory sovereignty" just doesn't make any sense. If we want a whole-UK settlement that preserves UK trade, protects jobs and avoids substantial disruption at the borders then we have no choice but to remain members of the single market. I cannot see any advantage in doing otherwise.

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