Tuesday, 20 November 2018

Brexit's missed opportunity

I have long suspected May would have to cave in to the EU and breach at least one of her red lines in order to secure a deal. I previously took the view that the smart thing to do would be to accept the backstop but have a plan in mind to make damn sure it never gets activated. The problem, though, that having ruled our Efta, any future package is going to have to replicate the effects of the backstop in full to avoid its activation.

What it looks like to me is that the backstop makes so many stipulations to quite deliberately put us in the position where the the backstop must be activated and when that happens it will be permanent.

That then leaves us with a deal that leaves us tied to a whole raft of EU governance with direct ECJ applicability but with none of the present trade advantages of the single market. This allows the EU to keep the UK on a tight leash, preventing us from diverging in any meaningful way or exercising national sovereignty while also being able to cannibalise UK market share in everything from financial services to manufacturing. It's an ambush.

Faced with the obliteration of no deal, with May now probably having an inclination as to how bad it would be, she has likely arrived at the view that she has no choice. In broader philosophical terms no Prime Minister of any country would willingly sign up to such an ambush but it's either that or go down in history as the PM who smashed the British economy. As it happens, the effect is much the same only May is opting for slow bleed rather than sudden death.

This is where the ERG Brexiters have failed badly. They could give May a get out of jail free card if they have a viable alternative. But they don't. They are instead clinging on to a number of entirely bogus notions - none of which stand against the barrage of scrutiny. They are a busted flush.

They could, if they wanted to, pivot to Efta EEA and that would make it easier for Theresa May to pivot to it, but they won't do that because they are in thrall to a number of obsolete ideas about deregulation and still wedded to the empty rhetoric of "Global Britain". Mrs May, therefore, has to choose between two equally unappealing destinations.

As to whether the deal makes it through parliament is anyone's guess. I rather suspect it will. Parliament is remain inclined and though they hate the deal there are enough of them sufficiently anti-no deal to reluctantly sign off on it. Meanwhile, among the remain commentariat, Efta will take a temporary leave of absence from this reality because it suits them to pretend there is no alternative which strengthens their case for remaining. Or so they think.

Whether or not signing the deal kills off the Efta option in terms of the future relationship I do not know. It certainly complicates matters. It would have been easier had we set upon that path to begin with. But then who am I kidding?

Efta EEA is eminently sensible in that, though it binds us to a degree of EU regulation, it does (unlike May's deal) safeguard jobs and trade. It is far from the glorious return of sovereignty but it is a starter for ten. and there is at least a firewall between us and the ECJ. Still though the Brexit blob trot out the same old complaints still oblivious to the fact that any future agreement will involve some level of regulatory subordination and if we are not in Efta then the ECJ will call the shots and we will adopt the rules verbatim.

In ordinary circumstances Efta would be a no-brainer and the logic of it when measured against the alternatives wins hands down. There are two problems though. Remainers, leavers and the EA are all determined to skirt around the fact that there are controls on freedom of movement in the EEA. everyone is determined to believe that substantial reform of it is not possible.

There are two routes to ending freedom of movement in the EEA. We can either follow the Liechtenstein process (Article 112) or we can work with the other Efta members to work up a new proposal. Efta with the addition of the UK is a power in its own right, giving us more leverage than we would have standing alone.

Nobody, though, is thinking long term or in terms and still determined to view Brexit as an event rather than a process. Everybody seems to think it can all be wrapped up and finalised in a few years when the the truth of the matter is that any relationship with the EU will be an evolving continuum.

The second major problem is that even though the weight of argument points to Efta, the grassroots leavers have bought the ERG propaganda wholesale, believing that technological unicorns solve the Irish problem and that no deal is some form of mythical "world trade deal" and our ticket to economic renaissance. Nothing is going to persuade them otherwise. Not the EU notices to stakeholders, not expert testimony, and certainly nothing produced by the UK civil service. All trust in media is gone too.

But then the remainers are every bit as intransigent and two dimensional. There has evolved a claque of remain inclined Brexitologists who have made a massive meal of the Northern Ireland issue, turning it into a cottage industry and even the brighter ones are still massively overstating the significance of the custom union. Between the EEA and the Union Customs Code, enough of the bases are covered for Northern Ireland and anything outstanding can be dealt with in an NI specific protocol.

Central to this is a total lack of understanding of what the EEA is. They haven't explored it and they don't want to know how it works or how it can be developed. They simply reach of the cliches, assuming the EEA is the Norway model, failing to understand that no two EEA states have exactly the same configuration. This is why they continue to bleat "but Norway still has customs checks".

Worse still the EEA Efta option has been tarnished well ahead of the game. A mythology built up around it during the referendum and little can be done to overturn it, not least when the BBC "reality check" hacks continue to reinforce the myths. Even when faced with May's deal where we actually do accept the rules with no say and with direct ECJ effect, they will still say the same of the EEA. It didn't help that remainers immediately after the referendum reached for the option, not because they thought it was a good idea, but because they saw it as a way to put the genie back in the bottle. This makes leavers instantly suspicious.

So here we are, amidst a perfect storm or arrogance, ignorance and intransigence. In all likelihood, give or take a bit of drama, resistance to the deal will buckle. We may see a bit of manufactured shuttle diplomacy to give may a fabricated handbag moment, carefully orchestrated with the EU, and this will be beamed into televisions up and down the land and the public will believe it just as they believed David Cameron used the veto.

I take the view that if May signs the deal then we will move on to the next depressing inevitability as May (or whoever replaces her) goes down the path of an FTA, further walking into the ambush and solidifying the grip of the so-called backstop. T'here could be the opportunity to pivot to Efta, but I see the same boneheaded obstinacy even when we reach the moment of truth. It is therefore in our best interests to walk away, whereby the consequences of no deal will dissolve the resistance to Efta, not least because the ERG Tories will stand discredited and disgraced. We can only progress when those pieces are off the board.

Sadly we won't walk away. I know this because anything I think could, should or will happen generally doesn't. There is enough of a track record of Westminster/media incompetence to expect the worst and if they can find a way to make things worse than they need to be, they will. Short of a miracle we are destined to become a vassal state colony of the EU for as long as it exists or until the establishment in the UK is dislodged.

The opportunity missed here is that the UK could have slotted into the Efta community and resumed cordial relations with the EU while being free to seek trade opportunities elsewhere, taking up a leadership role in Efta and a number of other forums. We'd have secured a viable all round compromise that allows us to settle the question and move on from the European question. Instead we will likely enter a new, more toxic phase where nobody is satisfied and nothing is resolved.

This is why it was necessary to have a Brexit plan and face up the the uncomfortable realities of trade in the modern age. This is something Rees-Mogg and his merry band of miscreants refused to do from the get go, preferring instead to weave a mendacious fiction that has led us all up a blind alley. They will seek to deflect the blame on to the EU and Theresa May, but it is their intransigence and dishonesty that has engineered this series of events and in the end May will do the only thing she could do. The fault is theirs and theirs alone.

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