Wednesday, 14 November 2018

The devil's in the detail - and it stinks

We really wanted to give Theresa May the benefit of the doubt. The devil, however, is in the detail. The NI protocol. If you add it all up, it's a full and permanent customs unions with all the trimmings including the common commercial policy with permanent lock-ins on a raft of regulatory measures. Worse than EEA by a country mile.

The sleight of hand is that it remains in place until "alternative arrangements" are agreed for Northern Ireland knowing full well that if existing EU CU law is applied in full as the baseline then there is no legally viable alternative. Once it's done, it's done.

The basic test is whether the deal allows the UK to repatriate political authority and frees us to reform economic and social policy through our own democratic institutions. It doesn't. We stay aligned across the full spectrum with the ECJ as the supreme authority. We don't like to use the term BRINO because ultra Brexiters will wail and say any deal is BRINO, but if it walks like a duck...

We take the view that the only reason we would sign up to binding commitments in this way is to minimise the economic harm. But being that we would be outside of the EEA thus subject to standard third country controls, we remain subject to EU political control but without any of the economic benefits. We lose UK services access and free movement of goods and by being further locked into the EU regime we lose any of the necessary autonomy to mitigate.

Here May has conceded on her red lines to put the ECJ in charge of a whole raft of policy areas allowing it to countermand any policy decision the UK might make. A full and deep customs union very much does place asymmetric limitations on UK external policy. We detest the overused term "vassal state" but that's really what this smells like.

When The Leave Alliance proposed the EEA option we took the view that there was a hard separation between the ECJ and the UK. It removes ECJ direct authority. We took the view that that the EEA would mitigate the worst economic impacts, staying aligned only in those areas relevant to European trade while maximising our liberty to trade independently. We understood that there would be compromises but at the very least those compromises would safeguard jobs and trade. This deal does not do that. 

The root dilemma of globalisation is trade versus sovereignty. We recognised there would be binding constraints on the exercise of sovereignty but we did so with the view that we were maximising our trade with the EU by doing so. This deal is the mirror opposite. It is all the impediments to sovereignty while the EU is able to cannibalise UK market share and we cannot pursue a full and active independent trade policy. 

Theresa May said no deal is better than a bad deal. We struggled to imagine any deal worse than no deal but if anyone could accomplish such a feat it was Theresa May. Our view has always been that every effort should be made to ensure we do not leave without a deal but we are left to wonder why we would submit to a deal which gives the EU control but does not safeguard jobs.

A customs union is of limited use in this regard. The majority of third country controls related to regulatory concerns and are not alleviated by a customs union. The extended regulatory provisions for Northern Ireland will likely become the baseline for the whole UK but unlike Norway we would have no role in the process. This really is "fax democracy". 

More crucially, any deal should not be judged strictly by which rules are adopted. What matters is the mode of adoption and the systems of arbitration. There is also the question of safeguards and exit procedures. It is on these questions the deal must be judge, in which we are not remotely satisfied. Likely we will adopt rules verbatim without the safeguards and opt outs afforded by the EEA Efta system.

In the coming days we will see attempts to characterise this deal as an amalgam of the Turkey option or the Swiss option. It is neither. It is an incoherent Frankenstein deal that in no way satisfies the objectives of Brexit, fails to honour promises and doesn't even mitigate the economic disruption. 

Unlike may of our fellow leavers we have kept an open mind and stayed open to the possibility that Theresa May would stick to her guns. In the final analysis, though, she has completely and utterly folded, handing away our every advantage to produce a deal even we would find it too obnoxious to ratify. This deal stinks. 

No comments:

Post a Comment