Brexit: the worst of all possible worlds

Saturday 24 March 2018  

It seems as if Russia has served its unintended purpose of distracting from the European Council and the guidelines on the future relationship with the UK. Mrs May has walked away with expressions of solidarity from the EU and Member States, claiming the deal brokered with the EU has laid the ground for a "new dynamic" in the talks.

With that, a complacent media is variously reporting that Mrs May has achieved "success in negotiating a standstill transition deal", while the Mail has the prime minister hailing the "spirit of opportunity". The Wall Street Journal even went so far as to declare: "Prime Minister Theresa May concluded on Friday what probably counts as her most successful EU summit".

This is an utterly bizarre "take" on what feels like the most ignominious surrender since Lord Cornwallis ceded Yorktown, Virginia to Washington on 19 October 1781 – on receipt of news of which, Prime Minister Lord North is said to have repeatedly exclaimed, "Oh, God! It's all over!".

In accepting the terms set out in the guidelines adopted by the European Council yesterday, Mrs May has effective opened the way to a further 21 months of subordination to the EU, without being able to take part in any of the decision-making processes that attend membership of the EU.

Not only that, the guidelines pave the way to a future partnership that "will inevitably lead to frictions in trade" and "unfortunately" will "have negative economic consequences, in particular in the United Kingdom".

In entirely uncompromising terms, the European Council has reiterated that "any agreement with the United Kingdom will have to be based on a balance of rights and obligations, and ensure a level playing field", noting that, "a non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member".

The Council recalls that the four freedoms are indivisible and that there can be no "cherry picking" through participation in the Single Market based on a sector-by-sector approach, which would undermine the integrity and proper functioning of the Single Market.

Thus, it further reiterates that the Union will preserve its autonomy as regards its decision-making, which excludes participation of the United Kingdom as a third-country in the Union Institutions and participation in the decision-making of the Union bodies, offices and agencies.

Leaving no room for ambiguity, it states that the role of the ECJ "will also be fully respected" and, while it is ready to "initiate work towards a balanced, ambitious and wide-ranging free trade agreement", it cannot "offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof".

At the Council, we heard that the EU "wants to have the closest possible partnership with the UK, which would cover trade and economic cooperation, security and defence, among other areas". However, we are told, the EU 27 leaders noted that UK's current positions "limit the depth of such a future partnership".

Donald Tusk told reporters, "We want to use the positive momentum in the negotiations to finally settle outstanding issues such as the solution to avoid a hard border between Ireland and Northern Ireland". He added: "In parallel, we will start our first talks about the future EU-UK relationship. Leaders will assess in June if the Irish question has been resolved, and how to go about a common declaration on our future". 

 Even to get this far, the UK has had to agree to substantial payments to the EU budget, make substantial concessions on the free movement of persons through the transition period, and to commit to a solution on the Irish border which Mrs May declared "complexly unacceptable" to any UK prime minister.

One other price we have had to pay is the effective "betrayal" of our fishermen as the UK agrees to a continuation of the hated Common Fisheries Policy.

Even then, the transition is not a done deal. The Times is reporting that this is not enough to calm the jitters of business leaders. Thousands of jobs in the City of London, it says, will begin migrating to continental Europe from next month. Mrs Mays "success" will not to stop companies in regulated areas such as finance, chemicals and pharmaceuticals from implementing their contingency plans for a so-called hard Brexit.

All aspects of the deal are linked under the principle of "nothing is agreed until everything is agreed". The companies have concluded that the chance of a failure to resolve remaining differences about the transition period, such as over the Irish border, is still too high to take the risk of not being able to trade in Europe after March next year.

According to the paper, one "senior city figure" has said that between 5,000 and 10,000 jobs of finance and support staff would move by the end of this year. Another figure advising companies on their Brexit plans said more than half of all the companies they had contact with in regulated industries were intending to go ahead with their contingency plans.

This, in fact, is only to be expected. The shape of any free trade deal that the EU is prepared to offer will not give market access to UK-manufactured pharmaceuticals, chemicals, automotive and aviation products, and a host of other products. Even cosmetics will be affected.

Interestingly, calls Mrs May's deal a process of "managed surrender" which, I suppose, is something more than Cornwallis managed. As a sub-heading, it declares: "London talks tough but gives Brussels what it wants".

Yet, the national humiliation is by no means over. The withdrawal talks, says, are likely to become even more lopsided as an unofficial October deadline for agreement on the framework of the future UK-EU relationship draws near.

Any resemblance with a negotiation among equals is purely cosmetic, it adds. And that will be a different sort of cosmetic to the ones we will no longer be able to sell in the EU and wider EEA.

Michael Leigh, a former head of the European Commission's enlargement department, sees the withdrawal process in terms of an accession negotiation in reverse. And, like our entry negotiations, the balance of power and time are, once again, not on London's side. The prospect of a no-deal Brexit is more harmful to the UK than to its continental partners and we have too much to lose.

Leigh reminds us of how, during our entry negotiations, the UK's chief negotiator Con O'Neill described how, for the accession process to succeed, we would have to: "Swallow the lot and swallow it now". It turns out, Leigh says, that "leaving the bloc is a strikingly symmetrical process".

Despite this, the "ultras" have been remarkably quiescent. One wonders if the essence of the May surrender has really registered with them. Their house journal the Telegraph, for instance, leads today with an "exclusive", headlining: "Cars to travel slower than bicycles on England's clogged-up roads within a decade". The European Council is scarcely reported, while most of the media seems to be obsessing over the sacking of a person called Owen Jones - I think.

Whether the "ultra" silence represents merely the calm before the storm or just another Tory surrender on the scale of Maastricht remains to be seen. "Ultra" leader Rees-Mogg and the other mouths alongside him will have their chance, no doubt, on Monday when Mrs May reports to the Commons on her adventure in Brussels. But something tells me we should not hold our collective breaths.

It is, after all, the combined efforts of the "ultras" that have brought us to this point, where the "least-worst" Norway option has been rejected, only for us to end up with something inestimably worse. One hopes, at least, that they are able to express a little shame for what they have done.

These people, though, are High Tories. They don't do shame, although they are past masters at betrayal. It's what they do superbly well – the only thing in which they actually excel. But, in this case, first and foremost, they have betrayed themselves – as well as those who were foolish enough to rely on them. North's first rule of politics comes to mind: never trust a Tory. The second rule is: always obey the first.

For those who might have looked to the bankrupt Ukip for salvation, all they have is an etiolated ex-leader throwing dead fish into the Thames. Farage might just as well throw himself in afterwards, for all the good he is – despite an apparent Damascene conversion, confiding recently that that the government's "biggest mistake" was not going straight way for the Norway option.

Any which way, Brexit is now going to be a matter of counting the job losses and the missed opportunities. It didn't have to be this way but, if we have a political class where incompetence seems to be its highest aspiration, I suppose we should have expected it. Now we have to clean up the mess.

Richard North 24/03/2018 link

Brexit: catch-up day

Friday 23 March 2018  

It is almost four years to the day that we received a perfunctory note from the IEA informing us that our submission for their "Brexit Prize" had not even made the final shortlist – in common with every other submission that had suggested adoption of the so-called "Norway option".

The disgusting Lord Lawson and his biased panel of judges had rigged the competition so that no such heresy made the final cut. But days later, I was able to publish the first version of Flexcit, the 98 pages which has since expanded to its current 406 pages, augmented by 17 Monographs and not far short of two million words written on this blog.

No one with any honesty can say that Flexcit didn't make a mark. After having read it, and met me several times, Dominic Cummings - of what was to become Vote Leave - know all about it,but deliberately rejected it.

His were the spurious grounds that a coherent plan for leaving the EU would be "divisive" to the Tories who were to hijack the campaign. In the event of a leave vote, the great Cummings idea was "to force a new Government to negotiate a new deal and give us a new vote". How did that work out Dominic?

As to, I met Arron Banks several times in his offices in Bristol and personally handed him a copy of Flexcit. We even did a special version for him, called the "The Market Solution". But, after showing initial enthusiasm, he took fright after Ukip extremists gave him a hard time. He then dumped the plan without even the good grace to tell me. That is the measure of the man.

Nevertheless, we ran our own Leave Alliance campaign, with Flexcit at its centre. And, with an online copy freely available, we registered more than 100,000 downloads. The media knew all about it, but it was quite deliberately ignored. It didn't fit the narrative.

But those four years down the line, I suppose we must be expected to hold our hands up in awe as the great Simon Jenkins finally acknowledges the value of the "Norway option, believing it "offers the only sensible way for Britain". He also tells us that: "The smart money in Brussels was always on the Norway option".

That is not to say that Jenkins fully understands its advantages – but he's closer than some. The so-called European Economic Area, he says, "was a simple 'off-the-shelf' basis for a bespoke deal with the UK".

Of course, it acquires its prestige not from us lowly creatures who have nurtured it for so long. Jenkins relies on "a favourable analysis" last month in The Economist. Even though superficial and error-strewn (it claims, for instance that Iceland has never invoked Art 112 of the EEA Agreement), it obviously impressed Jenkins enough for him to give it a punt, especially when the august journal declares that, given all that has passed: "It seems perverse now to reject the option out of hand".

Jenkins now sees the barrier to forging a new relationship with Efta, lying: "not in negotiating it but in overcoming Theresa May's belief that her fate depended on some 50 backbench leavers and the editors of the Sun and the Daily Mail. She was terrified of them".

This is typical bubble-talk, though, seeing things through the spectrum of Westminster politics, again at a wholly superficial level. In fact, the poison long predates Mrs May, stemming from when David Cameron and Vote Leave saw common cause in trashing what they insisted on calling the "Norway model".

With the media never bothering to get past the low-grade "pay-no say" propaganda of both sides, or the added canards that the option meant buying into unrestricted freedom of movement and staying subordinate to the ECJ, the "Norway option" has never stood much of a chance.

Now, however, we are perhaps beginning to see a crack in the dam. Underlying Jenkins's Damascene conversion is the same conclusion to which we are drawn: that the UK is simply running out of options. This makes Efta/EEA the obvious escape route. 

Unlike Jenkins, though, who thinks that Mrs May will "drive her hard Brexiters into sullen acceptance [of the Single Market] or resignation, my reading is that the prime minister will never back down on her Lancaster House stance.

Rather than the Jenkins's thesis that the unacceptability of the "vassal state" transition will give Mrs May the opening she needs to pursue the Norway option, it is more likely that she will try to force the transition settlement through the House, regardless of the opposition.

Like the Financial Times, I tend to the view that Mrs May will abandon her current "red lines" and accept any deal she can get. In this, she can always rely on her back benchers. Confronting electoral oblivion, they will cave in and back their leader – just as they did in the final Maastricht vote.

Thus, I don't see a sudden change of heart coming from No. 10 – any more than I see the media suddenly recognising our role in the debate, and the fact that we have done more than most to keep the Efta/EEA option alive.  

But that, as we have so often observed, is the way the media works. Nothing exists until they have discovered it or "invented" it for themselves. And such is the fear of independent political blogs, and especially serious and well-informed blogs such as this one, that they will go to any lengths to avoid drawing attention to them, or acknowledging their work – even if they draw heavily on our material when it suits them.

A classic example of this parasitic relationship comes with Ian Dunt of who has made a career of lifting other people's ideas from blogs, twitter and other independent sources.

Nonetheless, for all his assiduous "borrowing", he has only just noticed that "Free market extremists" are hijacking the "Brexit trade chaos". Picking on the recent Policy Exchange report, he regales us with its dastardly plot, whereby it is "demanding Britain unilaterally reduce its tariffs as part of a potent new Britannia-rules-the-waves trading adventure".

The intent is, says the egregious Dunt, "to use Brexit as a hard reset on British society, eradicating the protections available to struggling industries and unleashing a kind of Viagra-capitalism. It's basically Thatcherism 2.0".

Never mind that unilateral tariff reduction is Minford's agenda and that we've been banging on about it for several years. Never mind the close relationship between the Policy Exchange and Legatum, and with the IEA. Dunt is obviously behind in his reading and is only just catching up. Soon enough, he will "discover" this and claim it for his own.

Meanwhile, the rest of the media is indulging itself in the ongoing drama of the blue passports and the news that the printing contract could go to a Franco-Dutch company.

Perhaps the most entertaining comment comes from the Evening Standard. "Surely", it observes, "this is exactly the kind of global free trade the Brexiteers told us they were all in favour of? Britain benefiting, as the free market delivers the most competitive product to our citizens".

Rubbing salt in the wound, it goes on to say, "That's certainly what they once claimed. Jacob Rees-Mogg said 'free trade puts consumers first and lowers prices for all'. Yet he, and a host of other Brexiteers, now tell us that the new passport contract should have been awarded to a British firm - not because it offers a better product at a better price, but for the simple reason it is based in Britain".

But, in their rush to point out the EU dimension, none of the media pointed out that, even after Brexit, we will still be signatories to the WTO Agreement on Government Procurement. Ironically, the likes of Rees-Mogg, so keen on WTO rules, would still – most likely - find his treasured passports printed abroad.

Thus, even when they do their trivia, the media so often miss the point. But in this case, we hadn't done it on the blog for them to scavenge. No doubt, in fullness of time, the media will catch up once more, and discover the WTO link all by themselves. That is what they do.

Richard North 23/03/2018 link

Brexit: a solution at hand

Thursday 22 March 2018  

If the increasingly impotent politicians wanted any guidance as to how to deal with the nightmare of a post-Brexit Irish border, all they have to do is look at the EEA Agreement. Right from day one, this has been staring them in the face.

In particular, they should be looking at Chapter 3 (Article 21) and then Protocol 10 on the simplification of border controls and formalities, and Protocol 11 on mutual assistance in customs matters.

As one might imagine, though, these are the provisions which form the regulatory basis for trade between Norway and Sweden, a border which is relatively free-flowing but not entirely frictionless. Truckers can find that clearance during busy periods can take as long as an hour and a half to get their loads cleared.

As a result, numerous voices have argued that, for all its advantages, the so-called "Norway option" would not provide an entirely adequate solution for a border-free Ireland.

But what the pundits fail almost completely to understand are two things. Firstly, the nature of the EEA agreement is that it is infinitely flexible. Neither the Agreement nor the Protocols set out the finite details of the arrangements and such as are agreed can be changed through established mechanisms via the EEA Joint Committee.

These changes can be introduced either as specific amendments to the EEA Agreement of via EEA relevant legislation promulgated by the EU and adopted into the EEA acquis. There is no technical limit to the number of changes, nor the frequency, permitting a process of ongoing development.

Secondly, and having regard to the first point, the Norwegian land border with Sweden – which has been continually under scrutiny as the possible model – is considered to be unfinished business. With technological and procedural enhancements planned over the next ten years, the movement of goods is expected to be even smoother than it is at present.

Many of the limitations on freedom arise from policy differences between Norway and the EU, and especially in relation to VAT, duties on alcohol, tobacco and vehicles, and from minor differences in the rules relating to the import of medicines, waste , explosives, fireworks and hazardous substances.

However, with online registration of controlled imports, with prior issue of transit permits, it is anticipated that vehicle traffic through existing customs posts will be reduced by as much as 70 percent within five years. Many of the goods which currently require physical checks will be routed to sites away from the borders, where they will be cleared.

One exception would be animal and plant material but this problem is much reduced because of the adoption of the "official controls" on foods of animal origin – and the plant equivalent - removing the need for border inspections for produce from EEA states.

The take-home point from all this, therefore, is that while the Sweden-Norway border, as it stands, is an example of what can be achieved under the EEA regime, it is not the definitive model and would not have to be copied exactly if applied to Ireland.

Any Irish border arrangement would come out of a bespoke agreement which would take into account the special needs of the island and, even then, would be amenable to continuing development and improvement. But, like Norway, where the Union Customs Code was adopted and entered into force in October-November 2013, while its substantive provisions starting to applying in May 2016, the UK would also continue with the UCC.

One special feature that could be adopted, though, is the border agency cooperation system. In 1960 and 1969 respectively, Norway signed agreements with Swedish and Finnish authorities, This allows a division of labour where the national border authorities of each country are allowed to provide services and exercise legal powers not only on behalf of their home state, but that of their neighbouring states as well.

When goods are exported from Norway, either a Swedish, Finnish or Norwegian customs office may take care of all paperwork related to exportation from Norway and importation into the before mentioned countries. This is also the case when goods are imported into Norway.

As a result it is unnecessary to establish customs offices and deploy customs officers on both sides of the border. It is decided through bilateral negotiations which country or countries will manage a border post, as well as the allocation of costs.

Thus, if trucks do have to stop, it is only at one customs checkpoint. Then, each country's enforcement personnel have the right to operate up to 16km (10 miles) into each other's territory, with mobile inspection units operating within the zone.

Altogether, a "bespoke" EEA system, melded with the latest technology, would resolve all the underlying problems in Ireland, with the border as near invisible as makes no difference. Controls would be applied, but there would be no barriers to traffic at the borders.

The problems, therefore, are neither technical nor procedural, but political. They stem entirely from Mrs May's decision to take us out of the Single Market (EEA). And, despite the blathering of the masses, the customs union is completely irrelevant. Within the EEA, tariffs and quotas disappear. A separate deal on ROO can also be accommodated within the agreement, and we retain our AEO approvals.

Turning it round, there is no solution to the Irish problem without the UK's participation in the EEA Agreement. The barrier, then, is Mrs May. Either she has to change her mind or she has to go.

Given that she does not change her mind, possibly the time for her to go is after the 29 March 2019, when we actually leave the EU. Then, under a new premier, the UK could use the transition period to negotiate with Efta, with a view to rejoining, and with all the EEA contracting parties with a view to rejoining the EEA.

If both coincide with the end or the transition period – which is the status quo option – then we will have administrative continuity and disruption will be minimised.

On that basis, the Efta/EEA option is not dead – merely delayed. And if we follow the principles of Flexcit, the current proposed transition becomes a transition to a transition. However, we cannot rule out negotiations during the transition period on reform of the EEA, to incorporate co-decision on rule-making, as Delors originally proposed.

Any solution though, will require a vastly improved level of competence on the UK side, together with a far better appreciation of how the EEA Agreement is structured and how it works. Moreover, the mantras have to be ditched, and people need to understand that the EEA is, for the moment, the only game in town.

Richard North 22/03/2018 link

Brexit: getting absolutely nowhere

Wednesday 21 March 2018  

"You pays your money and you takes your choice". The saying, incidentally, was used by Mark Twain in 1884, at the end of chapter 28 of ''Huckleberry Finn".

Applying it to the modern day, you can read the BBC and it will tell you: "Swedish expert offers post-Brexit Irish border solution". The gist of the story is that, according to customs expert Dr Lars Karlsson, there is a technical solution to keeping an open border in Ireland after Brexit.

Go to the Belfast Telegraph and you will get much the same story: "No physical border possible, customs expert tells MPs". This is a reference to Karlsson's evidence to the European Union Committee yesterday. It is possible to have no physical infrastructure on the Irish border after Brexit, he says, but only if the political will exists in a best-case scenario.

But, if you end up with the Irish Times, you get a different spin. The headline declares: "Post-Brexit Border unlikely to be frictionless, Swedish expert says". And this time we have Karlsson conceding that "crossing registration and CCTV" – required for some versions of his border scheme – are "too much" for some.

For the sake of completeness, though, this is the option preferred by Snake Oil Singham, who endorses Karlsson's report written for the European Parliament in November 2017, with the somewhat wordy title: "Smart Border 2.0 Avoiding a hard border on the island of Ireland for Customs control and the free movement of persons".

Says Singham: "It will be hugely beneficial to have a bilateral border process in operation, as is the case in the Norway/Sweden border, and as described in the 'Smart Border 2.0' report for the European Parliament by customs specialist Lars Karlsson".

And, of course, Karlsson, president of KGH Border Services; Former Director of the World Customs Organization and Deputy Director General of Swedish Customs, is the expert. He has that perfect combination of a gold-plated cv, years of experience and all the prestige you could ever ask for.

But he is also the classic example of the narrow subject specialist, so constrained by his own discipline that he is totally blinkered, knowing nothing of the world outside his domain. As a result, although he delivers his evidence with enthusiasm, confidence and enormous authority, when it comes the Northern Irish border, his report is of next to no value.

What is extremely unhelpful about his work is that it looks at the customs issues, reflecting his blinkered approach to the subject. He is, after all, a customs specialist. But, despite the manifest inability of so many to appreciate the reality, there is a great deal more to border controls than just customs.

Not least, and by no means exclusively, there are the all-important "official controls" covering the movement of animals and foods of animal origin – the so-called sanitary controls, requiring veterinary inspection at Border Inspection Posts (BIPs). Fish and fish products also come under the official controls, requiring a separate breed of food inspector to monitor them.

Separately, there is the huge raft of phytosanitary controls, from plant health certification, to the monitoring and certification of timber products – including the ubiquitous pallets used to transport goods – and foods of plant origin: fruit and vegetables, but also nuts, spices, cereals and much else. Throw in animal feed and you have a huge range of goods, most of which must go through what are called designated points of entry.

Yet, in Karlsson's report, you will see is only one, incidental reference to phytosanitary requirements, no reference to sanitary controls, not a single reference to border inspection posts or designated points of entry, no reference to the EU's "official controls" and no mention of veterinary inspections.

As we well know, by far the greater proportion of vehicle inspections are required for sanitary and phytosanitary purposes, respectively in Border Inspection Posts and Designated Points of Entry, where presentation is mandatory before the goods can be submitted for customs clearance. The system is entirely separate from customs, and their officials take no part in the process.

In his report, Karlsson takes a special look at the Sweden-Norway border, offering the border control system as the starting point for a more comprehensive system. Using the best of available technology and systems, grafted on to the Sweden-Norway system - he believes we would provide a frictionless border between the two Irelands.

But, with the focus entirely on customs, he fails to take into account that both countries are in the single market, one in the EU and the other and Efta/EEA state. Both adopt internally the "official controls". Therefore, neither country treats the other as a "third country" and there is no application of official controls at the border, and no requirement for phytosanitary controls.

Nor are these minor or incidental omissions. Karlsson is clearly out of his depth. In his evidence to the select committee yesterday, he talked about "trusted trader" schemes to deal with agriculture. In slightly more detail, he tells the Irish Times that: "Checks under sanitary rules, a key regulatory area for agricultural trade, could be covered under the trusted trader arrangements".

Clearly, the man has no knowledge of non-customs systems. The AEO "trusted trader" certification is a customs system and has no bearing on sanitary or phytosanitary issues. The EU does not operate a preferential access system to BIPs and DPsE and, under WTO rules, they are required to give access on the same terms, in a non-discriminatory manner, to all third country users.

Then, crucially, this does not get past the central problem that the facilities do not exist at present and, should they be provided, they would constitute hard border infrastructure, confounding the pledge to avoid this. The very requirement means that there will be a hard border.

Mind, if Karlsson gets it wrong, he is not alone. Shanker Singham, the self-appointed expert in all things to do with trade, goes spectacularly off the rails, drivelling about mutual recognition (of both regulations and conformity assessment) for meat products and animals, ignoring completely the existence of official controls.

At the stroke of a pen, so to speak, Singham invents his own private, unique world where over fifty years of community legislation and the entire food control acquis disappears in a puff of smoke, miraculously paving the way to a frictionless border.

Failing this, he asserts that that the EU "has a formal Mutual Recognition Agreement with New Zealand that lists a number of sanitary measures in animal health and animal derived products where the parties have agreed recognition of equivalence, and associated reductions in border checks".

He also assets that "CETA also includes a protocol in similar terms". In Singham's miraculous little world, therefore, for the UK and EU "it would be reasonable to expect, at least while the respective regulations are still harmonised, to recognise not just the regulations but also the testing and enforcement regimes and thus avoid the need for controls at BIPs".

Here, for a start, Singham confuses the entirely separate concepts of "mutual recognition" and "equivalence". In terms of errors, this is akin to a car mechanic looking for the carburettor in a car fitted with fuel injection. It is a rookie mistake which rules out any claim to expertise. This is a man who simply has no idea what he's talking about.

For sure, the EU and New Zealand have an agreement which allows for "the progressive recognition of the equivalence of sanitary measures", but that in no way exempts imports of New Zealand produce from being presented at BIPs. They must go through the system just like produce from any other third country.

For sure, New Zealand enjoys a reduced inspection rate, as low as one percent for physical inspection of lamb carcases. But, as I explain here, that is a special situation.

Lamb is considered to be low risk, and a "high purity" inspection system applies to New Zealand produce, something that few UK abattoirs could replicate. And, with their more complex disease patterns and involvement in a wider range of zoonoses, such low inspection rates would never apply to cattle and pigs.

Thus, when Singham asserts that "CETA also includes a protocol in similar terms", he is just plain wrong. Canada "enjoys" inspection rates of 10-15 percent, against the normal requirement of 20 percent. And all produce has to go through BIPs.

But, God help us, this is what represents state of the art knowledge amongst the chatterati. Whether Karlsson or Singham, you have the blind leading the blind, spectacularly misleading spoon-fed MPs who haven't the wit to find out for themselves that they are being led astray.

And it doesn't even stop there. Even in Karlsson's specialist area, he gets it wrong. In assessing customs requirements, he takes no account of the fact that inspection frequency is based on risk assessment - a legal requirement under the UCC. He only makes one reference in his entire report to risk assessment. But what needs to be considered is that the Swedish/Norway border is a very stable, longstanding system, where the parameters are well understood.

With a new border between the north and south in Ireland, in the absence of experience and a lot of new systems in place - with plenty of people prepared to exploit any gaps - the border might be considered high risk - and for some years. Therefore, assessments of rates of customs inspections might be grossly under-represented, as is the resource requirement.

But if we can't get past these basics, there is no hope for us. In the hands of the ignorant, any idea of sensible planning goes out of the window. We are looking at fantasy worlds that simply don't exist, with the debate going round and round in circles – getting absolutely nowhere.

Richard North 21/03/2018 link

Brexit: what you see is green

Tuesday 20 March 2018  

If, for my first stage of Flexcit, I had written up the transitional agreement currently on offer to the UK government, it would no doubt have elicited exactly the same responses we're now getting from the "sell out" merchants.

They've been squeaking all over the internet, and for very much the same reasons for which they were originally complaining – the vassal state schtick they said was the problem with the "Norway option".

Now they are getting the "pay-no say" scenario that they thought they were getting but were not. And they haven't a leg to stand on. Having sabotaged any attempt to get a sensible resolution, they're lumbered with their own worst nightmare. If it was just them getting what they deserved, the current mess would be worth it.

As it is, when Jacob Rees-Mogg and others board a boat and pass by Parliament throwing fish into the Thames in protest at the alleged "sellout", as they are promising to do, we might pray for a nautical disaster which has him following them into the Thames.

Ironically, the price we will have to pay for the "transition" that Rees-Mogg has done so much to bring about is a settlement of the Irish question. That bill remains unpaid. The cannery has been kicked down the road again, with no proposals forthcoming from the UK government.

The best the "ultras" can offer is stunningly ill-informed drivel from Snake Oil Singham (now of the IEA), technically illiterate, strewn with errors and false assumptions. Needless to say, it is given pride of place on the "ultra" noticeboard CapX - but as long as this sort of stupidity is given house room by the chatterati, there is little hope for us.

Inevitably, nothing of Mr Singham's stupidity will have slightest impact on the Commission. And, in the absence of anything sensible there looms the infamous "backstop" whence, "the negotiators agree that a legally operative version of the 'backstop' solution for the border between Northern Ireland and Ireland, in line with paragraph 49 of the Joint Report, should be agreed as part of the legal text of the Withdrawal Agreement, to apply unless and until another solution is found".

This is the 'backstop" that a certain Mrs May dismissed as "completely unacceptable", saying that "no UK prime minister could ever agree to it". It could, she said, undermine the UK common market and threaten the "constitutional integrity" of the country by creating a new customs barrier in the Irish Sea.

But, not only has she caved in and is dumping Northern Ireland by apparently accepting something unacceptable, fishing also gets the "sell out" treatment. Had this travesty been proposed the day after the referendum, it would have been rejected out of hand. But now, it is been lauded as a "success" by our Brexit minister.

We have got there by a process of attrition. A totally unprepared UK government has fed its negotiators into the Brussels grinder, the outcome of which was as predictable as sending raw troops over the top to face German machine guns in the first battle of the Somme.

However, even the BBC in its TV news bulletins noted that M. Barnier had gone out of his way to point out that, "nothing is agreed until everything is agreed". The General Affairs Committee gets its bite today and then there is the European Council on Friday, which will probably rubber stamp the draft agreement. And then we're back on the treadmill.

Despite that, the idiot Davis is drooling that we've taken a "decisive step" towards a Brexit settlement. Yet, can it really have escaped his attention that the Irish question was there at the beginning, and is still there?

That reality is not going to conceal the drama of M. Barnier's presentation yesterday, where he stood in front of a backdrop and proudly declared: "What you see is green". From where he stood, you could hardly see the white – the areas where agreement has not been reached. And white, for this day, was Ireland.

If it's reality, you're after, though, cut to the Independent. It has Jonathan Powell asserting that Mrs May's handling of the border question could bring the entire Brexit negotiation "crashing down". He accuses her of committing "the worst possible sin" of having "boxed herself in". Her Mansion House speech had "not solved the substantive problems" and, in his view, "her problems on Brexit may only just have begun".

Right on cue, the Belfast Telegraph reports UUP's Nicholson saying that the backstop option for Brexit is "unacceptable", a position that will never change as long there is one Unionist MP left standing.

The Scots, on the other hand, are wound up about fishing rights. Reuters tells us that the SNP has called the current deal "a sell-out" and a Conservative MP has warned that it would be easier "to drink a pint of cold sick" than sell it as a success.

That is where it is going to get interesting. Mrs May will come back from her "triumph" in Brussels on Friday but, on the following Monday, will have to face the Commons with her report. It is unlikely to be a "frictionless" passage.

Yet, the delusions persist – and doubtless will continue. From the very start of her tenure, Mrs May has evaded reality, made worse by being surrounded by second-raters who are trapped by their own stupidity. It seems impossible for her to break out.

When it comes to the crunch, that has been the problem all along. This is not a society that can handle expertise, or one that has any respect for knowledge. And when a snake-oil salesman of the calibre of Shanker Singham can be taken seriously, his influence reaching to the the very heart of government, we are in very serious trouble.

Even now, though, there is still time to take a different route. It is unlikely that it could work under this prime minister, though, so it is time for her to go. She has already secured her position as the worst premier this nation has had to suffer in living memory, so has nothing to gain by staying on.

If by some miracle she was deposed before the current deal is separated, a new prime minister could perhaps go to Brussels and ask for an extension of time, sufficient for us to set a new course in the direction of Efta/EEA. But for that to happen, much of the dead intellectual wood surrounding the government needs to be put to the torch.

Therein lies the real problem. If the prime minister is the pinnacle of stupidity, she rests on a huge base which will be almost impossible to shift. The rent-seekers have lodged their positions and are not going to give them up easily.

Nevertheless, reality will eventually have its day. Whether on 29 March 2019 or some time later, the UK will become a fully fledged third country, whence all the stupidity will be exposed for what it is. A shock to the system is inevitable and it can hardly be less than profound.

Out of the wreckage, perhaps, we might be able to salvage something, and start again. But until the stables are cleansed, we'll not be seeing much more of the "green" of which M. Barnier was so proud.

Richard North 20/03/2018 link

Brexit: descent into chaos

Monday 19 March 2018  

If it is fair to say that few in industry and commerce have any real idea what will happen on the borders with EU Member States on day one of Brexit. And if uncertainty prevails in the private sector, one can be pretty certain that most government agencies will also be in the dark.

Quite what the situation will be, in terms of what can be exported to the EU, and what can't, no one at this stage actually knows, and there is no means of knowing. Much will depend in the first instance on whether a transitional period is agreed, and the nature of any agreement - with the devil very much in the detail.

The best case scenario, from the viewpoint of exporters, is a status quo transition where we carry on much as before. This basically kicks the can down the road, turning Brexit day into a non-event as far as the export of goods goes. Only when the transition period expires will we have to deal with a new set of rules to deal.

As to the worst case scenario, that will arise in the event of "no deal". Either by accident or design, we will go into Brexit day with no administrative agreements between the UK and EU Member States, relying on what is called the "WTO option".

Here, there is something of a definition problem as a "no deal" can be graduated. We could, for instance, have a basic agreement on tariffs – and possibly one on VAT – but not very much else. But, until we're faced with the details, there is no way of defining the precise impact on our exporters.

A similar pall of uncertainty hangs over our importers. Ironically, the self-same WTO rules on which the "ultras" are so keen to rely will require that goods coming into the UK from EU Member States are treated in exactly the same manner as goods from third countries. Grayling's idea of a check-free border on the UK side is fantasy.

What is being given far less attention than it should, though, is what is going to happen on the other side of the Channel (and the Irish Border) on Brexit day, in the event of a no deal. And there, if possible, there is as much uncertainty as there is over here.

But if that is an issue in its own right, there is a further complication arising from the unique situation where neither side is fully aware of what the rules are. With very few exceptions, border rules have been built up between nations over a long period, with major changes phased in gradually, sometimes over a period of years.

It is that, more than anything, which keeps the system working – the fact that it is populated by people on all sides of the fence who know the rules, know what they are doing and are used to working with each other.

Now, take a day-one scenario where the UK, literally overnight, becomes a third country. As far as officials in EU Member States go, in the absence of a deal between the UK and the EU, the UK will suddenly cease to exist. The UK as an EU Member State, accessible on all the EU databases, will no longer be there. And inclusion on third country databases is not automatic – nor uniform in respect of different sectors and products.

For certain products, such as medicines, there are very rigorous rules relating to market authorisation, and UK pharmaceutical manufacturers have been warned (by the EU) to transfer their authorisations to EU-based entities in order to keep trading on or after Brexit day.

But, in the nature of things – and not least because there will be some delays before the European Medicines Agency can sort out all the transfers – by Brexit day, some UK exporters will have acquired EU-based market authorisations, and some won't.

Now put yourself in the position of an official in Calais on Brexit day, confronted with a truck carrying several different types of medicines, packaged for retail distribution. What would the previous day have gone through unchecked will now have to be stopped. The paperwork will have to be checked to determine to the products carried and whether the market authorisations are valid.

The trouble is that the documentation may or may not have been updated. In a stable, long-standing system, officials might rely on everything being correct but, where such huge changes have been made, it is possible that not all the details will be correct. Documents, therefore, will have to be carefully scrutinised for errors.

Obviously, medicines which are not correctly authorised will not be admitted. In a mixed load, they will have to be removed and returned to the UK – or the whole load must be rejected.

However, the complications are only just starting. Permission to market medicines rests not only on the authorisation. The manufacturing plant has to be officially inspected and certified as conforming with the guidelines for good manufacturing practice (GMP). Then, each batch must be certified by a Qualified Person (QP) as conforming with statutory requirements, before it can be released for sale.

In the absence of mutual recognition agreements (MRAs) on GMP and conformity assessment – which would be the case in the "no deal" scenario – then any products manufactured in the UK would have to be rejected, even if they carried a valid market authorisation, current in an EU Member State.

The complication now is that many medicines are produced in bulk in one plant and then shipped to others for various levels of packaging. Tablets, for instance, may be blister packed in one plant and then inserted into retail outers in another. Thus, our hapless official will have to check further to see whether the product was made in the EU and just packaged in the UK. And even then, if GMP requirements apply, the medicines will have to be rejected.

Probably, to be on the safe side, all medicines coming over from the UK will have to be rejected. That, at least simplifies the jobs of the officials. They will just need to keep a look out for any vehicles carrying medicines. They will have to be intercepted and returned to the UK. That will also apply to vehicles seeking to cross into the Republic of Ireland.

The worst of it is, though, though, that the complications not stop there. For a considerable number of medicines, the market authorisation holder is in the UK, while the product is manufactured in a number of sites elsewhere.

The authorisation for the beta-blocker Bisoprolol, for instance, is held by Sandoz Ltd, in Frimley, Surrey, but it is manufactured only in Germany, Ireland, Slovenia and Poland. Many other medicines have a similar profile. For many of these, even though they cross no borders, it will not be legal to sell them in EU countries.

And all this is just one sector. One presumes that a company marketing nuts and bolts for general engineering use will be able to market their goods in the EU. But if they are intended for use in vehicles, and (especially) in aviation, export may not be permitted. Vigilant border officials will have to check loads to ascertain the intended use of multi-use parts.

Any number of manufactured goods, which require third party certification, will also have to be intercepted and rejected, and it goes without saying that animals and foods of animal origin will not be permitted entry. Even the pallets on which goods are shipped may be rejected if they have not undergone the correct timber treatment.

What we are dealing with here, therefore, is potential chaos. Thousands of vehicles each day, crossing over to EU states will have to be checked, and possibly thousands returned to the UK until shippers get used to the new rules, and know what to avoid.

And this is the reason why we cannot countenance the so-called WTO option. The WTO only sets the frameworks – the detailed rules are made by the EU and they also have to be obeyed, or the products will be rejected. And your customs systems can be as "streamlined" as you like. If products don't conform, all that means is that they are sent back quicker.

Yet, nothing of this is getting through. We see recently the Brexit Committee report on the progress of the UK's negotiations on EU withdrawal. It paints a gloomy enough picture, but it's only scratching the surface, calling the wrong witnesses and asking them the wrong questions.

Even worse, we get to hear of a secret report from government that says our customs system will not be ready in time for the start of the new relationship with the European Union at the end of 2020. That assumes we get a transition deal.

The longer we leave it, of course, the better prepared in some respects we shall be. But such is the volume of change that its sheer extent will defeat any measures to prepare for them – always accepting that the resources are available. EU member states may be reluctant to commit those resources. The chances of them being ready on time are virtually nil.

Gradually, therefore, we are descending into chaos. This is unavoidable. The only thing we can influence is the degree.

Richard North 19/03/2018 link

Brexit: a respite from Putin

Sunday 18 March 2018  

Of all the things that the UK might want to do as an independent nation, freed from the obligation to shadow EU foreign policy, picking a fight with Russia was probably not at the top of the list. But if we are going to take on Russia, it would be best if we understand what we're taking on.

Some interesting insight into this comes in Booker's column today when he recalls his visit to the Soviet Union in 1980 to cover the Olympic Games.

Sitting in Moscow, as the capital of the largest country on earth, at a time of high Cold War tension over the invasion of Afghanistan, it became obvious that Russia saw itself ringed on all sides by enemies, all along its thousands of miles of frontier from Nato Norway in the west to China in the east. It was a country gripped by an intense sense of paranoia.

The charge sheet against Russia in recent years may be long, from Putin's ruthless suppression of dissent to saving the Assad regime in Syria. But the one disaster the West has never understood was one entirely of its own making.

On this, there is a public figure who correctly read the crisis erupting over Ukraine in 2014. That was Tony Brenton, our ambassador to Moscow from 2004 to 2008. He recognised only too clearly that the trigger for that shambles was the hubristic desire of the West to see Ukraine, the historic cradle of Russian national identity, absorbed into the EU and Nato.

The crisis was set off by the coup whereby one corrupt but pro-Russian ruler of Ukraine was replaced by another willing to sign the agreement leading to Ukraine's EU membership.

Thus, the response of the Russian-speakers of eastern Ukraine and Crimea was wholly predictable. They wished to be ruled by their fellow Russians in Moscow rather than by some mysterious, alien bureaucracy in faraway Brussels, and were prepared both to vote and to fight for it.

They were, after all, confronting the question of why people with such a fierce sense of national identity should want to become part of an empire deliberately set up to eliminate national identity. Yet, to this day, the West remains powerless to do anything about it except make indignant noises of protest at the ineluctable consequences of its own actions.

Some understanding of this psychology might have helped inform our response to the poisoning incident in Salisbury, where finger-wagging condemnations were only going to elicit one, very predictable response.

That we are now in a confrontational situation, with the wall-to-wall coverage given to President Putin, is doubly unfortunate. Says Booker, it is diverting attention from the possibility that this week may see the near-breakdown of what have been billed as "the most important international negotiations Britain has been involved in since the Second World War".

It is now four months since David Davis, the Brexit Secretary, assured MPs that all our difficulties with the EU would be happily resolved at "the 59th minute of the 11th hour". That moment has now arrived.

The European Council meets this week to consider its "draft withdrawal agreement", still without any sign of resolution to the impasse that could prevent negotiations continuing.

The key as ever is the Irish border, which, for trading purposes, the EU insists will have to move to the Irish Sea, to protect the "integrity" of its single market, but which Theresa May insists no British prime minister could possibly accept.

To narrow it down still further, as Booker explained in February last year, just after Mrs May announced that we were to leave both the single market and the European Economic Area (EEA).

Following this blog, he reported on the disaster looming over the arrangements whereby the multi-billion-pound racing industries of Ireland, Britain and France can move racehorses between their countries to race or for sale without any hindrance.

The moment we leave, as the EU again warned on 27 February of this year, these arrangements, mandated by directive 2009/156, will lapse. As with so much else facing Britain's trade with our largest export market, up will go complex (and in the case of racehorses, prohibitive) border controls.

Last week's Cheltenham Festival, the highlight of our racing calendar, could be the last but one where those all-conquering Irish horses can appear (although "transition" might allow one more in 2020).

At least in that respect people will finally see the kind of thing we are letting ourselves in for by choosing to become a "third country", not just outside the EU but also the wider EEA (where, to avoid all these difficulties, we could have chosen to remain).

But this of course is only a small part of the story. This week seems likely to mark the moment when the "irresistible force" of Brexiteer wishful thinking collides with the "immovable object" of those implacable EU rules. And, by the way we have chosen to play it, this could be the moment when any further meaningful talks with the EU are at an end.

That, at least, was the situation when Booker left it, his column going to press on the Friday. But since then, we've had further talks in Brussels at official level and there are to be face-to-face discussions between M. Barnier and David Davis on the Monday. The leaves open the possibility that there will be a last-minute compromise that will keep the show on the road.

Perversely, one factor which could work in the UK's favour is precisely the situation which has been dominating the headlines for nearly two weeks – the Salisbury poisoning. More or less obliged to show solidarity with the UK, to avoid a public rift with a Nato ally, the Europeans may be disposed to apply temporary patches to the cracks in the Brexit agreement, and kick the cannery down the road to the June European Council.

According to The Times, what may be on the cards is the device of a political declaration on the transition. This will be provisional and still dependent on full implementation of the "Irish protocol" in the draft withdrawal agreement. Sources suggest that both sides are confident that a deal will be brokered.

As it stands, if there is no closure on the withdrawal agreement there will be no transition agreement. There cannot be a transition agreement on its own. But is some sort of accommodation isn't reached, then the Brexit negotiations come screeching to a halt on Friday.

However, the "colleagues" have far too much invested in their current stance to give much away on a permanent basis. Not least, there is Mr Tusk's credibility. If they give ground on the transition period without settling the Irish question, they will seriously weaken his authority. And in the EU, such things matter.

What could get everyone off the hook, for the time being is the one being mooted in London – the possibility of extending the negotiations past the two-year period, and then adding to the transition period. This is being suggested by the Brexit select committee, to the chagrin of committee member Rees Mogg, which itself is sufficient to commend it.

Without a fundamental shift in the UK's position, though, this can only be seen as an attempt to stall. It does not solve anything in its own right. Either Mrs May's government will have to solve the problem of how to ensure Ireland has a "soft" border, or it's game over. And if that is to be the case, many would prefer it to be sooner rather than later.

But in all this, there is something we've never really factored in. If it is going to take time for the UK to prepare for Brexit – which indeed it is – the same will apply to the remaining EU Member States and the institutions. There may be less political opposition to the idea of an extension than we first thought.

That notwithstanding, to my mind it was touch and go as to whether the talks collapsed this coming Friday. It will be hugely ironic if Putin's Russia is the immediate factor which takes the heat off. But if the respite is only temporary – then it must be, then all we've managed is to stay in the frying pan, while toasting our feet in the fire.

And maybe it will be too much to expect the headlines to recognise the real reason for any delay in execution, but I will be looking for that single line on the coming Saturday which declares: "from Russia with love".

Richard North 18/03/2018 link

Brexit: a gap too great to bridge

Saturday 17 March 2018  

As he was incautious enough to say it to camera, we saw our foreign secretary on TV last night declare that it was "overwhelmingly likely" that the Russian president, Vladimir Putin, personally took the decision to use a nerve agent to attempt to kill the former double agent Sergei Skripal on UK soil.

"We think it overwhelmingly likely that it was his [Putin's] decision to direct the use of a nerve agent on the streets of the UK, on the streets of Europe, for the first time since the second world war. That is why we are at odds with Russia", Johnson said.

This means that a UK cabinet minister has personally accused the president of another sovereign state of attempted murder, "attempted" only in the sense that no one has yet died.

It is not in any way possible that Johnson can have any evidence to support such a claim and, should he have had it, the place to make such a charge was not in the centre of a Battle of Britain museum display, as he played with the artefacts.

This lacked the necessary gravitas and was wholly inappropriate. Should good evidence exist, then the proper place to air it would have been the despatch box in the House of Commons. A far better person to have made any charges would have been the prime minister.

In that Mrs May has not moved swiftly to disown her foreign minister's statement, we must assume she supports his action, demonstrating that, with Mr Johnson, she is not fit for office. One need not refer to the Russian response. Such an action on the part of senior officers of the Crown displays an unacceptable lack of judgement.

Yet, not only will these people remain in office – without the stinging rebukes that their action (and inaction) deserves - they are at the heart of our Brexit planning and delivery, and demonstrating the same dismal level of judgement in the execution of these tasks.

And to add to Mrs May's dereliction – which goes far beyond the normal level of incompetence to which we have become accustomed – is yet another sin of omission, this one to remain silent after yesterday's absurd statement by Chris Grayling, another of her cabinet ministers.

As we recorded yesterday, he told a BBC Question Time audience that: "We will maintain a free-flowing border at Dover, we will not impose checks at the port, it is utterly unrealistic to do so. We don't check lorries now, we're not going to be checking lorries in the future".

In a situation which is difficult enough for businesses which have to plan for Brexit, this is equivalent to smacking a ten-ton boulder into a quiet boating lake on a balmy Sunday afternoon. In its own specific area, it points to a lack of judgement of the same order of magnitude as we got from Johnson.

Unsurprisingly, Grayling's intervention has triggered a response from a number of MPs. In a letter to Mrs May, they have observed that the comments were "not a serious solution to how to manage the border post-Brexit".

In all, 29 MPs have signed the letter, including former shadow cabinet ministers Chuka Umunna, Heidi Alexander and Chris Leslie, as well as fellow Labour MPs Rushanara Ali, Stella Creasy, Tulip Siddiq and Liz Kendall. But, in so doing, they display a not much better grasp of the issues than the minister they criticise.

For instance, they declare: "It is extraordinary that a government that says it aims to ‘take back control’ now admits it is not even going to try to control the transfer of goods across our borders, in the event we leave the customs union", thereby demonstrating that they have no clear understanding of the role of a customs union, or the function of the Single Market.

The worst of it though is that the letter carried the letterhead of the Freight Transport Association (FTA), with the principal signatory deputy chief executive, James Hookham.

Rightly, he says that Grayling would have us "open up the UK's borders to potential abuse and breaches" and that the UK government would be unable to stop any new checks being imposed on the French side. He then avers that Grayling "seems to have forgotten that borders have two sides, and the UK cannot dictate what happens to freight when it reaches French customs".

But, in a subject where the devil is in the detail, he then goes on to say that: "Mr Grayling cannot speak for the French customs authorities, which will be required by EU law to undertake a percentage of physical checks on cargo such as fresh produce or medicines from a nation outside the EU, which is what the UK will become".

The correct term is "third country" and one wonders why it isn't used. And in asserting that a percentage of physical checks is required by EU law on cargo such as fresh produce or medicines, Hookham has got it wrong. He is conflating the "official controls" on animals and products of animal origin with other measures where there are no specific requirements. Generally, the frequency of inspection is decided by Member States on the basis of risk assessment.

And, of course, the official controls are not the responsibility of customs. Once again, we see a failure to distinguish between different parts of the system – crucially important in this case, as the inspection of foodstuffs will require the infrastructure of Border Inspection Posts, with a lead time of many years.

One would expect people such as Hookham, on the front line, to get such things right. But like so many in industry, as in politics, their knowledge is skin deep. Worryingly, they seem unconcerned by their own ignorance and show no willingness to remedy it.

But when we have yet to see a single journalist display anything like an adequate grasp of the issues, it is unsurprising that there is no effort to get things right. A media which is content with any old tosh will get precisely what it expects. Every time a journalist dips in to the subject, we see woolly, incomplete and superficial attempts to describe the problem, but none of them ever get near.

So we had yesterday the self-important Faisal Islam, flooding us with factoids to the extent that he ends up confusing himself and any readers incautious enough to rely on him.

The SOP for journalists – typified by the likes of Islam – is to interview a number of talking heads and aggregate their ignorance to provide a narrative which will fill the allotted space. They (the journalists) have no means of judging the veracity of that they are told because they have no knowledge of their own or understanding of the issues.

In this case, Islam relies on Christopher Snelling, also of the Freight Transport Association – the "go to" source with sufficient prestige for Channel 4's needs. Describing the "no deal" scenario, he tells us: "any goods going through will have to have checks, anything that is food or livestock or medicine will have even more checks on standards and health and all of that will be massively disruptive to businesses and consumers in Britain".

To know that this is not wholly correct, all you have to do though is read the EU law or, to make it simpler, there are now 47 Notices to Stakeholders which set out the position. And, as we have written so many times, the immediate problem won't be inspections but marketing authorisation.

As with meat and meat products (and animals), until the UK is formally approved and listed for export, there will be no movement of product at all. Any which is attempted will be returned or destroyed.

One really has to ask what it is going to take to get this through to politicians and the media. But an insider view of the government system is not at all encouraging.

The entire mandarin system, we are told, does not understand the law or ever read it. Even (or especially) senior civil servants do not understand the primacy of process in the way the EU does business - internally and with third countries - and we are being treated as a "soon-to-be third country".

Not only are these critical mistakes, with potentially dire consequences, we have a class of mandarins that do not even know what they don't know. They neither know where to look nor how the thing really works from the inside, and do not have anyone left who does. The other side is, as a consequence, shredding them.

Dominating the Whitehall tree of ignorance, is an overwhelming arrogance, imbued with an untouchable confidence that "we know best". They will not know they have been taken apart until it's too late, putting us in a bad state, politically and bureaucratically. We need some serious people. But they are in perilously short supply.

As for the media, we have a more complex dynamic. Because they've all started out on the wrong foot, they don't want to admit their errors or the paucity of their earlier reports. And if they start now flagging up BIPs as a major issue, that opens them up to questions as to why others haven't been flagging up the problem (as in the trade or select committees). No one wants to be first.

I've spoken myself to a lot of the trade people and their knowledge is distressingly limited. They have never experienced the regime pre-EEC/Single Market and have no conception of it. And they don't know the law. Everybody glibly talks about EU rules, but nobody actually reads them. Asked by journalists to describe the system, they convey not information but ignorance, And if they have sufficient prestige, the journalists lap it up uncritically.

Another problem is conceptual. The journalists (as well as the rest) equate border controls with customs controls. They simply don't get it that customs are only a tiny part of the system. But knowledge of the rest of the system is minuscule, Their ignorance is profound and the knowledge gap is too great to bridge. They will have to find out the hard way.

But, for their ignorance (and lack of judgement) – be it Russia or Brexit - it is us who will have to pay.

Richard North 17/03/2018 link

Brexit: the poison chalice

Friday 16 March 2018  

I do hope that the people who so approve of Mrs May's new brand of justice are never in front of a jury where the rules that seem to apply to Russia also apply to them.

Meanwhile, the distraction has paid off. Brexit has almost disappeared from the media, leaving a rump of disjointed stories and not a hint of a unifying theme. The low-key negotiations between officials in Brussels have scarcely been reported and the latest version of the draft withdrawal agreement has slid into the public domain with minimal comment.

This is an upgrade to the document we reviewed on 1 March – the one that had proposals on Ireland that had Mrs May declaring that no prime minister could ever accept them.

And while, apparently, there has been a little bit of give and take on the transition period, the blue touch paper issue of Ireland is essentially unchanged. It still remains for Mrs May to deliver up her alternative to the Commission or put up with a "wet" border. But, as Mr Putin has just found, our prime minister doesn't do alternatives.

Thus, on the basis that nothing is agreed until everything is agreed, two weeks have achieved precisely nothing. The new draft has been issued in time for it to be circulated to the 27 Member States, so we can take it that this is the version which will go to the European Council.

But when Mrs May goes to Brussels in a week's time, in order to attend the first day of the Council, you can bet that Russia will be on top of her agenda. And, if the media take their cue from her, Brexit will barely get a look in. That will leave the Council meeting as 27 to spend the next day on the issue. They will probably spend more time on it in that one day than Mrs May has in the last month.

As well at the withdrawal agreement, though, they will have the latest set of draft guidelines on the framework for a future relationship with the UK to approve. These haven't been formally published yet, so we might get some media interest when copies are officially available. But there again, they might not.

David Davis himself is due to go over to Brussels on Monday – his first visit since Christmas – but there seems little he can do, and there is nothing specific on the table for him to approve. And his boss has already ruled out any movement on Ireland. However, there will be a press conference with Mr Barnier, so we may glean something of the situation from their comments.

This will be the same day as the meeting of the General Affairs Council. Assembling in EU27 format, it will discuss the draft guidelines. This is effectively, the formal approval, preparatory to the European Council meeting which will rubber stamp the GAC decision.

The Salisbury poisoning aside – which has given Mrs May the perfect excuse to ditch Brexit for a while – there seems to be a new tone to the mood music. The UK government as a whole is giving every indication of having lost interest in the negotiations. There is a smell of fatalism, where everybody seems to be waiting for the outcome, powerless to affect it.

On the other hand it could be that cabinet members have no idea what is waiting for them. Even last night, we had Chris Grayling, Transport Secretary, asserting that there would be no post-Brexit lorry checks at Dover. Under no circumstances, he said, would the UK create a hard border.

This was on that grave of souls, the BBC's Question Time, where he roundly declared that "We will maintain a free-flowing border at Dover, we will not impose checks in the port. We don't check lorries now, we're not going to be checking lorries in Dover in the future. Absolutely clear, it cannot happen.

Nearly two years since the referendum, it is hard to believe that a cabinet minister could be so blithely ignorant of the realities – but then Grayling is a Tory. Since Mrs May has ruled out continued participation in the Single Market, a hard border is inevitable. But if the man thinks we can get away without one, then there is no surprise that he is not concerned about the lack of progress.

We see the same litany being churned out by other ministers, and a pervasive belief that the EU will open its borders at the last minute and let the goods flow. This "eleventh hour" resolution is certainly one to which David Davis has referred, and perhaps he genuinely thinks that Mrs Merkel will come to our rescue, just to keep German cars rolling towards Britain.

Strongly bolstering that fantasy is the assertion that since the UK is already fully compliant with EU law, there should be no new barriers to trade once we leave. The nuances of EU requirements, such as the obligation in so many cases for businesses to be established in the EU, and the requirement to meld with the entire EU "ecosystem" simply passes these people by.

Likewise, Tory ministers have convinced themselves that their "frictionless" border in Ireland will be a practical proposition. Thus, whatever anyone says, there is no real expectation that there will be any problems. Everything will be alright on the night.

Currently, the Northern Ireland Affairs Committee is warning that Mrs May's pledge of no hard border can only be achieved if the UK "remains aligned with EU rules" for the foreseeable future. There is "no evidence", it says, of a technical solution to allow Northern Ireland to break free from the customs union and single market without the return of border posts and checks.

However, there is very little likelihood that this report will be taken seriously. Select committee reports come and go. Most are hardly worth reading. None seem to have any lasting impact.

With a strong strain of delusion, which reaches right to the top, you can see why Barnier and other EU officials are struggling to get their message though. Their warnings are dismissed as "project fear" or simply not believed. We may get another taste of that from Davis on Monday as he radiates complacency when he should be in a state of panic.

Everything, however, still hinges on the Irish border question. At the European Council, Mrs May is expecting to put the transition agreement to bed and Davis is confident that a deal will be struck. One of the key lubricants is that the EU is to drop its opposition to Britain signing trade deals during the period.

He seems to be forgetting Tusk's ultimatum though – that there can be no progress until the Irish question is settled. And it's there that the Irish Times injects a note of caution.

The paper retails that UK optimism that the Council will endorse an agreement on the transition period "may be premature". This comes from the famously anonymous "EU diplomatic sources" who are raising questions on the details and also on the broader issues of the withdrawal agreement. Crucially, the Tusk doctrine seems to be prevailing in that there is reluctance to separate out discussion of the transition deal from the withdrawal agreement.

As long as the EU insists on linkage, the UK is actually going nowhere. And while UK ministers may choose to ignore the Northern Ireland Affairs Committee report, the Commission will almost certainly take note of its views that technical solutions are not feasible.

That leaves an increasingly edgy business community that is finally beginning to realise that the government may not be able to deliver on a smooth transition. Thus does Sir Charlie Mayfield warn of "Brexit inertia" within companies that is "undermining efforts to improve British business performance".

"Undoubtedly, one of the great issues with what we're facing with Brexit is that it is causing a further sense of [inertia] and causing an impact on productivity — at least on confident investment in the future", he says. "There are good reasons why businesses are hesitating".

Not very much longer, one suspects, and hesitation will be translated into action as those companies that can will bail out and look to solutions outside the United Kingdom. That in itself may force Mrs May to focus on something more than Mr Putin, and fracture the delusional state within the Tory ranks.

While there is still the "Salisbury obsession", Mrs May can play, but soon enough there will be another poison chalice waiting for her, and it will not be filled with Novichok.

Richard North 16/03/2018 link

Salisbury: alternatives galore

Thursday 15 March 2018  

With eight days to go before the make-or-break European Council, which could seal the fate of the Brexit negotiations, the issue has virtually disappeared from the media and the politicians have spiralled off into their own fantasy over the Salisbury incident.

As we try to make sense of this, we see the issue attracting its own quota of conspiracy theorists, polluting the pool of information on which we must rely.

But, it is an ironic thought that, when it comes to conspiracy theories, the most pervasive and damaging of these, perhaps of all time, was perpetrated by the UK and US governments. This was the one that had Saddam Hussein's forces equipped with WMD, and the means to deliver them outside Iraq.

Since that time, it would be a very naïve person who would uncritically believe either government on claims relating to WMD and, before sanctioning or accepting the need for any action in respect of them, one would expect to see a high standard of evidence.

In this case, however, Mrs May has not delivered anything like good evidence to support a claim that the Russian state was behind the attack on Sergei Skripal and his daughter. Furthermore, the case she has made is flawed, with demonstrable errors.

To assert this is not to "defend Russia", as some have accused me of doing. As to whether there was Russian state involvement is a question I cannot address and have not attempted to answer. But then, that is not the issue.

The key question is whether Mrs May has made in public a credible case for taking action against Russia. Clearly, she has not. Furthermore, she does not claim to rely on information that has yet to be revealed. She has stated her grounds in public and it is on these that she relies.

Latterly, her government asserts that the attack fits into a pattern of behaviour "in which Russia disregards the international rule-based order, undermines the sovereignty and security of countries worldwide and attempts to subvert and discredit Western democratic institutions and processes".

That, however, seems perilously close to a "usual suspects" doctrine, relying entirely on circumstantial evidence. This is not something that a prosecutor would rely on in a court of law. And why, one might ask, when there is so much as stake, should anything less be required of the UK government?

Thus, the most rational thing we seem to have heard yesterday was from Mr Corbyn's spokesman, who said the history of information from UK intelligence agencies was "problematic" and refused to say that the Labour leader accepted the Russian state was at fault.

The spokesman told reporters: "The government has access to information and intelligence on this matter which others don't. However, also there is a history in relation to weapons of mass destruction and intelligence which is problematic, to put it mildly. So, I think the right approach is to seek the evidence to follow international treaties, particularly in relation to prohibitive chemical weapons".

The Labour leader had been given security briefings on the incident. Asked if Mr Corbyn believed Russia was responsible for the attack, the spokesman said Mrs May continued to leave open the possibility that Russia had lost control of the nerve agent.

When it came to Mrs May's statement to the House, however, the prime minister took the view that the Russian government had provided "no credible explanation that could suggest that they lost control of their nerve agent" and "no explanation as to how this agent came to be used in the United Kingdom".

Further, she said, there was no explanation as to why Russia has an undeclared chemical weapons programme in contravention of international law. Instead, she declared, "it has treated the use of a military-grade nerve agent in Europe with sarcasm, contempt and defiance".

What came then was the death of logic. There is extremely good and undisputed evidence to suggest that Novochok was produced at the Uzbek plant, in an area where the Soviet Union lost control in the early 90s. It is also the case that we are dealing with a binary agent, where the precursors can survive lengthy storage.

It is an entirely tenable scenario, therefore, that tradable quantities of the agent have been on the market for decades, accessible to non-state actors without the knowledge or intervention of the Russian (or any other) state.

As an a priori hypothesis, this is just about as credible as any, allowing for any one of a number of diverse nefarious groups to acquire and use the this agent for their own purposes – and inexpertly at that. This did not have the hallmarks of a professional "hit".

Yet, for Mrs May, there was "no alternative conclusion other than that the Russian state was culpable for the attempted murder of Mr Skripal and his daughter, and for threatening the lives of other British citizens in Salisbury, including Detective Sergeant Nick Bailey". This, she said, "represents an unlawful use of force by the Russian state against the United Kingdom".

What in fact, her statement represented was either a failure of imagination or a determination to close down her options before even starting to evaluate them. And, as an intellectual exercise, if you play this game, it is inevitable that you end up with "no alternative conclusion".

Nevertheless, there are other views as to whether a Russian state attack on the Skripals was credible. From Peter Hitchins, for instance, rehearsed reasons to doubt the obvious explanation, citing Ben Macintyre of The Times.

"Various aspects of the supposed attack on Sergei Skripal are distinctly odd and refuse to fit into an accepted pattern of Russian espionage activity", Macintyre wrote, pointing out that no power has ever before killed a spy that it has swapped. To do so was dangerous, probably fatal, for future exchanges. Why would anyone do such a deal with you, if the exchanged spy was then likely to be killed?

A similar exposition can be found from Séamus Martin in the Irish Times, while Estonian MEP Yana Toom tells us that Russia obviously had no operational interest in Skripal, who was convicted in 2006 and deprived of his military rank, who was pardoned in 2010 and then exchanged. She added:
Even if we presume that the Russians have gone irreversibly crazy - which specifically is what one is attempting to convince Europeans of - and are an embodiment of irrational evil, a demonstrative poisoning with Russian poison a week before the Russian presidential election would be idiocy.
If Special Services wanted to kill someone, they would leave no trace, Toom said. "And a task like this is more than accomplishable in London - it is not the most peaceful city in the world", she noted. "Leaving so many traces was possible only when done for a specific purpose. And I can't think of any that would be beneficial for Russia".

The idea of the Russian Special services descending to that level of incompetence is perhaps beyond imagination, but clearly, it does take precisely that – imagination – to help us through the maze.

That was what was so stunning about yesterday. We saw a House of Commons, braying and bleating, with perilously few exceptions, united in its conviction of Russian guilt. It not only lacked imagination, barring Corbyn, there was hardly a sentient thought to share between the MPs. It wasn't a legislature we were watching. It was a lynch mob.

And this is the body that feels qualified to decide on Brexit. We are living in truly desperate times.

Richard North 15/03/2018 link

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