Saturday, 28 December 2019

Britain is at the mercy of Tory groupthink

Intellectually the Brexit debate is still firmly lodged in square one. It's still bogged down in tribal dogma and sycophancy. We may have had a national debate spanning three years around Brexit issues but the nuances of trade have yet to sink in, and for as long as there are editors willing to give houseroom to partisan propaganda designed to mislead the ignorant we are not going to advance our collective understanding of the issues.

The first tedious question is whether Boris Johnson can secure a deal inside a year. But that depends on what you're leaving out. A trade deal can be either be a simple agreement on tariffs or it can be an all encompassing trade and cooperation treaty. How long is a piece of string?

So how then do you measure if a deal is a good deal? Again that's entirely relative to requirements. Here we are (or should be) seeking to maintain a high level of continuity to ensure existing trade built up over thirty years can survive. Much of our trade exists only because of the single market by way of removing technical and regulatory barriers to trade.

But then there are political priorities as well as immediate commercial concerns. There was always a balance to be struck between sovereignty and trade. The greater the emphasis on sovereignty, the less cooperation we can expect. The EU cannot extend preferences to any country that would allow that country to unilaterally set the lowest bar of market entry. Not even member states can do that. The EU, therefore, is bound by its own rules ad well as the precedents already set.

All the negotiating prowess in the world does not change the fundamental realities and constraints we now face. A deal of a sort is feasible inside a year but the question is whether it will be sufficiently comprehensive in scope. There is nothing wrong with prioritising sovereignty over trade as long as you are prepared to take the hit to exports, or at least have a direction in mind to mitigate those losses. As yet there is no coherent mitigation strategy.

The immediate concern, though, is that we don't even have a year under the current arrangements. The first year of Article 50 talks were consumed by unproductive bickering over the sequencing of talks, with each side talking past each other, with the UK having failed utterly to understand the structure of the talks and the power dynamics in play. With Boris Johnson playing to the gallery there is every reason to expect more of the same procrastination.

In normal circumstances at least a year is given over to scoping talks to define the parameters of any trade relationship to provide a framework for ongoing negotiations. This has to be mutually agreed. No doubt some preparatory work has been done, but much of it based on the misapprehension that the EU can and will make special concessions for the UK. The EU certainly does have wriggle room and can creatively interpret its own rules, but the general principles of its own systems will be upheld. For them it is an existential question.

This is not to say a comprehensive deal is not possible. It should be noted that the EU has a great deal of experience and all of their flagship FTAs share common components and boilerplate tracts where there is nothing to be gained in contesting them. The level playing field provisions are a low bar designed to prevent more egregious exploitation, and where technical standards come into it there is nothing to be gained by deviating from the global norms we are committed to through the EU and WTO.

Further to this, pre-existing templates for mutual recognition of conformity assessment mean that even a basic deal can go far beyond current low expectations. The EU managed to put together a comprehensive system to address the Northern Ireland issues in under a year and there is every reason to believe they have already built the foundations of any wider future relationship.

Here we can expect more or less the same pattern as before, with a last minute row over a manufactured point of contention (ie the backstop), diverting media attention away from the volumes of mechanisms we don't even contest. We'll see some impotent grumbling from special interest groups such as fishing but without the luxury of time they will be steamrollered when the political impetus is to get a deal done.

This time around we probably won't see the same sort of high drama we saw over the withdrawal agreement now that Johnson has a comfortable majority. If an extension is needed it will be a short technical extension to finalise the details and make space for ratification. No doubt there will be a spell of biff-bam theatricals where the media will, as usual, miss the point of it, but a deal is not outside the realms of possibility.

The measure of whether it is a good deal is to a large extent in the eye of the beholder. What matters is is not so much what is in the deal, as what is not. If we are determined to break out of the EU regulatory ecosystem then we'll find ourselves confronted with a good deal more export red tape on anything from chemicals to cosmetics through to aerospace and airline services. There is not much in between being a single market member and a third country. We may well escape new tariffs but our goods and services will struggle to remain competitive in European markets.

The crucial thing to note, however, is that the more contentious element of any comprehensive trade treaty is less to do with the sectors it covers as the dispute resolution system where if the UK does commit to any regulatory cooperation there will be a heated discussion over the role of the ECJ. The more comprehensive the agreement, the more contentious that becomes, where the sovereignty gains start to crumble one by one.

That is when the Johnson administration comes under particular scrutiny from all sides including the Brexiters where any major concession to the EU is a serious loss of face. That is why Johnson will inflict serious damage on UK trade. It's better to be hailed as the hero of the hour who brought home a deal when his opponents said it couldn't be done and kick the economic consequences into the long grass, so that by the time they begin to bite they can blame it on just about anything but Brexit. Or rather his wholly inadequate deal. The people always pay for the vanity of politicians. That is a feature of our model of short termist democracy.

By opting for a shallow deal with only rudimentary cooperation on standards and regulations, the most contentious part of any negotiations (governance mechanisms and institutions) can be evaded. That may secure Johnson's fortunes in the interim but but does not resolve the matter of our future relationship with the EU. A shallow deal provides only a foundation which will then lead to a decade of further negotiations resulting in either a future treaty resembling associate membership or something comparable with the messy compromise Switzerland has.

Like Switzerland we will find that negotiations are a long continuum that confronts us with a number of uncomfortable dilemmas years after we have declared "mission accomplished". It will take some years to build the kind of comprehensive relationship we need ultimately ending up with what we could have had by way of rejoining Efta and retaining the EEA agreement. All the while UK exports will be left out in the cold.

Of course nothing I'm saying here is at all new and this was all anticipated well in advance of the referendum - as detailed in Flexcit. Attempting to lodge these basic points in the debate has proven impossible and all attempts have been futile. When up against powerful agents of propaganda feeding audiences what they want to hear, deliberately oversimplifying the issues and distorting the narrative, we can only sit back and let them discover it for themselves. Tory arrogance is unshakable. They're living in their own tightly sealed ideological bubble and nothing, not even the primary source Notices to Stakeholders can make a dent in it.

Ultimately the Tory tribe will adopt whatever narrative it is spoonfed, and will defer to the anointed gatekeepers in order to keep the faith. Even when pushing Steiner's nonexistent divisions around on the map, they'll keep the flame burning. Even after we've moved ourselves outside of the EU regulatory ecosystem and our aerospace sector gradually implodes they'll still be blaming the EU. That moment of realisation will never come. Groupthink means you're never wrong.

For a while to come the Tory alternate reality will hold firm. With a deal in the bag the headline consequences of Brexit are muted and staggered buying the Tories a grace period to firm up their excuses. That may see them through the next election with the opposition still in the wilderness, but at the end of the day even a good excuse is still an excuse - and you can't pay the mortgage with excuses. 

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