Brexit: a scorpion's work

Sunday 15 July 2018  



Having regard to Theresa May's response to Nigel Dodds concerning the Irish "backstop", which I mentioned in yesterday's piece, there can be little doubt that, on this point alone, there can be no Withdrawal Agreement.

If that wasn't enough, though, a gimlet-eyed reader also noted another important intervention last Monday, this one by the DUP's Sammy Wilson. Addressing the prime minister, he noted that it had been argued that the policy agreed at Chequers "was necessary to protect the constitutional integrity of the United Kingdom, because it would avoid the need to implement the backstop arrangement with the Irish Republic".

Thus, Wilson asked: "Is it part of the agreement that the Government will sign a legally binding protocol with the EU that would treat Northern Ireland differently? If not, why is it necessary to have a divisive future trade arrangement that is designed to protect the constitutional integrity of the United Kingdom if that was never in jeopardy?

The prime minister's response to this was, to say the very least, instructive. "We have rejected the European Union's proposal in relation to the protocol", she said, then adding:
The expectation is that there will be a protocol in the withdrawal agreement, but we have always made clear our belief that the best resolution of the issue of the border between Northern Ireland and Ireland will come within the overall trading relationship that we develop between the United Kingdom and the EU, and that is exactly what this plan delivers.
Again, we see another interesting use of the indefinite article – experienced in the Brexit debate when discussing the customs union as against a customs union.

Here, we see the distinction between the protocol and a protocol. Explicitly, Mrs May is saying that the current text has been rejected, but she keeps open the proposition of another text being agreed. Implicitly, this has to be different to the original text. It could hardly be the same, otherwise Mrs May would be agreeing the protocol.

If we go back to December's Joint Report and the infamous paragraph 49, we recall the statement that: "The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements".

It was intended at the time (and remains the intention) that these objectives would be achieved through the overall EU-UK relationship. But, if this was not be possible, the United Kingdom would "propose specific solutions to address the unique circumstances of the island of Ireland".

Then, in the absence of agreed solutions, the UK would "maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement".

With respect to the commitment to maintain "full alignment" with the rules of the Internal Market and the Customs Union, this did not pre-suppose that Northern Ireland would remain in either the Internal Market or the Customs Union – merely that the relevant rules should continue to apply.

Clearly, the "overall EU-UK relationship" as set out in the White Paper is not sufficient to avoid a hard border, whence there must be "specific solutions to address the unique circumstances of the island of Ireland", failing which there was the so-called "backstop", which was set out in the protocol to the draft agreement.

With that protocol now firmly and unequivocally rejected, there is no "backstop" in place. Before there can be any further progress on the Withdrawal Agreement, a new protocol text must be produced and agreed.

Given that the "backstop" was supposed to have been settled in June and that there are no new proposals on the table, it does not seem possible that a new draft could be prepared and agreed by the time of the next European Council in October, even if the EU was prepared to discuss the issue.

And it must be remembered that, if any proposal from the UK lies outside the EU's current negotiating guidelines, M. Barnier must go back to the European Council for a new mandate. His first opportunity to do that would be in October, which necessarily precludes an agreement by that Council of a protocol which differed substantially from the original.

However, even with that hurdle out of the way, we still have the overall relationship to address. And that gives Booker his theme for this week's column (no link yet).

Ever since 17.4 million of us voted to leave the European Union, he says, we have been confronted with one question overriding all others: how could we free ourselves completely from the political structures of the EU without doing irreparable damage to our economy?

Through more than 40 years of European integration, the UK economy has become so enmeshed with those of the rest of the EU, that a vast tranche of our economic activity is only legally authorised by a thicket of EU laws.

Was it possible, he asks, that we could extricate ourselves entirely from the EU, while holding on to that economic relationship which, in exports alone, provides 14 percent of our national income, also yielding a hefty slice of Government tax income?

Even before the referendum, he reminds his readers that some of us were urging that there was only one practical way we could get pretty well all we wanted: to become a fully independent country, freeing ourselves from three quarters of the EU’s laws, while continuing to enjoy "frictionless" trade, and also free to sign trade deals across the world, and even to exercise some control over EU immigration.

This was to remain in the wider European Economic Area (EEA) by re-joining Norway in the European Free Trade Association (EFTA). Membership could have solved virtually all the problems which have proved so intractable, including the Irish border, But Theresa May chose instead to leave the EU's economic system altogether, to become a "third country".

Thus have we wasted 17 months discussing entirely fanciful proposals, each of which contradicted the "core principle" which the EU made clear even before we triggered Article 50: that “it will not be possible to cherry-pick and be a participant in parts of the Single Market", to enjoy a uniquely privileged status not open to any “third country” outside the EEA.

Yet, Booker declares, what is Mrs May’s latest proposal, which has provoked such uproar, but again exactly that. It is so detached from reality that it can only end next March in the ultimate disaster, where we crash out without an agreement. Few people in Britain yet have any idea of the chaos which will ensue, as we are shut out of our largest export market and much besides.

Whole industries will go into meltdown. It would be the gravest economic crisis in our history. And we shall have brought it entirely on ourselves, because those in charge of our affairs have never begun to understand the technical realities of what we were up against.

That sums up the Booker view, but it is clearly not one shared by his own newspaper. The Telegraph view is that Brexit needs to be "urgently renegotiated" and, if the EU refuses, the Government has other options at its disposal.

One of the few positives to emerge from the Chequers meeting, the paper says, was a commitment to step up plans for "no deal". These, it says, must be accelerated massively. The Government should be publicly preparing to inject billions into the economy to mitigate any short-term economic uncertainty.

Then, according to the Telegraph, the government should make it clear that "bizarre threats" to, for example, "cut off electricity supplies to Northern Ireland or prevent British planes from landing in European airports are insulting and unacceptable, and will receive a resolute response".

And this is as far as it gets although, symbolically, the clown Hannan would vote for Mrs May's Brexit plan – not that he would get a chance, being a lowly MEP.

Taking on the Telegraph's response to the "bizarre threats", though, it should be aware that there are laws made by the EU, with the active participation of the UK, which prohibit the sale of electricity to third countries via an interconnector, unless there are specific agreements in place to manage the transfer. Equally, no third country airliner may land at an EU/EEA airport unless it conforms with the Third Country Operator safety checks, as administered by EASA.

These are laws which, to date, the UK has been entirely content to have applied. Yet it appears that, when those same laws apply to the UK as a third country, they become "insulting and unacceptable".

Nevertheless, the chances are that the UK will not get a chance to decide whether it wants to be "insulted" by "unacceptable" laws. Mrs May has to resolve the "backstop" and, if it is anything close to being acceptable to the EU, the DUP will most certainly reject it.

There are those who say that, for the DUP to stand its ground would bring down the Conservatives and thus, also, deprive the DUP of its influence. But we are not looking at rational behaviour here. The DUP is the scorpion to Mrs May's frog. It will sting her to death midstream, and drown itself – because "that's what it does".



Richard North 15/07/2018 link

Brexit: the Irish conundrum

Saturday 14 July 2018  



It was inevitable that the Trump visit was going to distract the media from the detail of Mrs May's White Paper. But then, it takes very little to distract the legacy media. But when it comes down to it, Trump is just noise. We are not negotiating Brexit with the United States. What its president says, in the short-term really doesn't matter.

What does matter, and really matter, is Ireland. Whether we like it or not, the outcome of Brexit depends on resolving the Irish border question. And upon that depends the fate of the United Kingdom. For, despite the fatuous, malign ignorance of the likes of Liam Halligan, "no deal" is not a walk in the park.

In fact, Halligan, in asserting that Britain "already conducts most of its trade outside the EU, largely under WTO rules", is lying. And he must know he's lying. Furthermore, what he's doing is irresponsible. It's equivalent to shouting "fire" in a crowded cinema auditorium – dangerous public misinformation on an industrial scale.

What we really need to know is whether our Government is going to do enough, in the words of the White Paper, thereby "preserving the constitutional and economic integrity of the UK and honouring the letter and the spirit of the Belfast ('Good Friday') Agreement" (GFA).

But therein lies the essence of the Irish conundrum. Honouring the letter and the sprit of the GFA means avoiding a hard border between Ireland and Northern Ireland. On the other hand, "preserving the constitutional and economic integrity of the UK" effectively prevents the establishment of a "wet" border, which is the necessary outcome of adopting the so-called "backstop" solution.

As far as Mrs May is concerned, the "partnership" outlined in the White Paper "would see the UK and the EU meet their commitments to Northern Ireland and Ireland through the overall future relationship". Yet, despite that, the UK is prepared to accept the "operational legal text the UK will agree with the EU on the 'backstop' solution as part of the Withdrawal Agreement will not have to be used".

This convoluted wording is to be found in the Chequers statement and it is repeated verbatim in the White Paper. And, to say it is ambiguous is not an overstatement. On the face of it, it could mean that Mrs May is prepared to accept the protocol on Ireland/Northern Ireland, something to which, she has said, "no British prime minister could ever agree".

That she might be prepared to backtrack was certainly something that concerned Nigel Dodds, MP for Belfast North and deputy leader of the Democratic Unionist Party. Last Monday, in questions following her statement on the Chequers cabinet meeting, he tackled the prime minister on "the continuing obligation of the Government to the so-called backstop arrangement".

Dodds asked her to "make it clear that as far as the backstop is concerned she stands by her rejection of the EU's legal interpretation and there will be no constitutional, political or regulatory differences between Northern Ireland and the rest of the UK".

The prime minister's response was unequivocal. "I am happy to say", she told Dodds, "that I continue to reject the protocol proposal of the so-called backstop put forward by the European Commission earlier this year". Continuing, she said: "The fact that it would have effectively carved Northern Ireland away from the rest of the UK and kept it in the customs union and most of the single market would have meant that border down the Irish sea - that is completely unacceptable to the Government of the UK".

This was picked up by the Irish Times but scarcely, if at all, by the UK press. Even then, the significance was not explored and, since then, reportage on Brexit has been swamped by the rush of resignations, followed by the Trump visit.

But what Mrs May has affirmed is that the "operational legal text" in the protocol has been junked by the UK government. The text to which it "will agree" is something that has yet to be tabled and, if it is ever agreed, the UK expects that it will not be used.

From our partial evaluation of the UK's proposed partnership agreement, however, it is manifestly clear that it does not offer a solution to the Irish border – not least because the "Single Market in goods" does not have the slightest chance of being accepted by the EU.

The net effect of the Chequers cabinet meeting, the statement and then the White Paper, is to put us back to a position before the draft withdrawal agreement was published – on 15 March. To think that we were back to square one would be optimistic. We have landed on the "go to jail" square, and don't even get to pass "go".

So far though, we can see Barnier and the "colleagues" playing this low key. This is entirely as expected, and very much accords with what we were led to believe was the way it would be played. Even Leo Varadkar is restrained in his response. He describes the White Paper on Brexit as an "evolution" of the UK's position, but does not see it as a solution to Brexit.

Understandably, the EU collective has no interest in pulling the plug on the talks until preparations for the UK crashing out are very much more advanced. And then, it will be tactically more appropriate for the UK to be seen as jumping, rather than being pushed. We need not, therefore, expect much drama over the next few months.

An indication of the way things will be played comes here with a report that the European Commission's "preparedness unit" has given Member States "strongly worded guidelines" on stepping up contingency planning to cope with a "no deal" scenario. This, it is understood, was drafted after the publication of the Chequers statement.

The guidelines warn Member States to make preparations across a range of areas, including customs, aviation and controls on food, animal and plant products, and financial services.

"Although the withdrawal of the United Kingdom may appear to be playing out at a very high and rather abstract level between the United Kingdom and the EU,” they say, "its consequences will be very real for citizens, professionals and business operators".

Under the "no-deal" scenario, the guidelines advise Member States that, "the EU must apply its regulation at all borders with the United Kingdom as a third country, including checks and controls for customs, sanitary and phytosanitary standards and norms verification, movement of persons (potentially including visa requirements) purposes".

Thus, while the absurd UK legacy media frets over how the Conservatives are reacting to their leader's White Paper, and whether it might be acceptable to Parliament, the real world focus is elsewhere, on how to cope with practical problems of considerable magnitude.

Here, though, there has been what could have been taken as a flash of realism, with The Sun reporting that ministers have drawn up "secret plans" to stockpile processed food in the event of Brexit talks collapsing. Similarly, there is some recognition that supplies of electricity might be at risk, through loss of the interconnectors.

However, rather than examples of sensible planning, responses are being cast as gesture politics, to show Brussels that "no deal" is not a bluff. Yet, Brussels is way ahead of the game. With the White Paper being framed by some as the last and best "offer" from the UK government, the Commission is taking it as the most explicit confirmation that the Brexit negotiations are on the rocks.

And, as if we needed reminding, we are all conscious of the sequence: if there is no settlement of the Irish border question, there is no withdrawal agreement. And if there is no withdrawal agreement, there is no transition period. We crash out of the EU on 29 March next year.



Richard North 14/07/2018 link

Brexit: porcine aviation

Friday 13 July 2018  



The Government, says Mrs May's White Paper, "is determined to build a new relationship that works for both the UK and the EU". This is a relationship, the paper says, "which sees the UK leave the Single Market and the Customs Union to seize new opportunities and forge a new role in the world, while protecting jobs, supporting growth and maintaining security cooperation".

It goes on to say that the Government "believes this new relationship needs to be broader in scope than any other that exists between the EU and a third country". It should, it says, "reflect the UK's and the EU's deep history, close ties, and unique starting point".

Before the White Paper had been completed and signed off, though, it might have been a good idea if Mrs May had reviewed the EU position a little more carefully. A good start might have been Michel Barnier's speech to the Committee of the Regions in Brussels on 22 March 2017, only a week before the UK was to deposit formally its Article 50 notification with the European Council.

This speech was of special significance as it was entitled: "The Conditions for Reaching an Agreement in the Negotiations with the United Kingdom". And, as described by the label on the tin, that is precisely what Barnier did.

The challenge, he said, was "to build a new partnership between the European Union and the United Kingdom on a solid foundation, based on mutual confidence". That meant "putting things in the right order: finding an agreement first on the principles of the orderly withdrawal of the United Kingdom, in order to discuss subsequently – in confidence – our future relationship".

As to the partnership, Barnier readily conceded that there would be a free-trade agreement at its centre. This, he said, we will negotiate with the United Kingdom in due course. But, he added: it "cannot be equivalent to what exists today. And we should all prepare ourselves for that situation".

Re-stating the obvious, to give emphasis to the position, he noted that the UK "chooses to leave the Single Market and the Customs Union. It will be a third country in two years from now". And, by making this choice, the UK "will naturally find itself in a less favourable situation than that of a Member State". It will not be possible, Barnier said, "to cherry-pick and be a participant in parts of the Single Market".

If there was any doubt about the sincerity of this statement, and whether it represented EU policy with the full backing of the Member States, this was dispelled by the European Council's negotiating guidelines, published on 29 April 2017 – a month after the Article 50 notification.

This was M. Barnier's negotiating mandate, which remains in force right up to today. And right up front, it is "core principles", it stated:
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. In this context, the European Council welcomes the recognition by the British Government that the four freedoms of the Single Market are indivisible and that there can be no "cherry picking".
These principles were to be repeated and emphasised many times by many different speakers, and M. Barnier remained true to them, throughout. In Berlin, on 29 November 2017, Barnier was saying: "A third country, however close it may be to the Union, may not lay claim to a status that is equivalent or superior to that of a Member of the Union". And, on 13 March of this year, Commission President Jean-Claude Juncker reminded us that cherry-picking was not possible.

This was followed up by supplemental guidelines published by the European Council on 23 March. Here, it is stated:
… the European Council has to take into account the repeatedly stated positions of the UK, which limit the depth of such a future partnership. Being outside the Customs Union and the Single Market will inevitably lead to frictions in trade. Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU Single Market as well as of the UK market. This unfortunately will have negative economic consequences, in particular in the United Kingdom.
The thing is, these are not just words. It is a serious weakness on the part of generations of English politicians to dismiss statements of continental politicians as rhetoric, devoid of meaning. But even if one wants to ignore the speeches, there is no getting round the negotiating guidelines. These are immovable.

Thus, when Mrs May expresses via her White Paper that she believes the "new relationship" that the UK wants to negotiate "needs to be broader in scope than any other that exists between the EU and a third country", she is tilting at windmills. She will get a "bog standard" FTA, the so-called Canada-dry deal – no more, no less.

Yet this has not percolated Mrs May's brain. She does not seem to be able to cope with the idea that Brexit means Brexit. It means we leave the EU and, when we do, we become a third country.

In this context, I have written many times about the EU's system for type approval of vehicles. Any and all third countries that want to sell cars within the territories have to submit their products forEU approval to a certification authority. After Brexit. UK certification will no longer be valid.

Yet, we see the White Paper blithely prattle about this subject, offering an "example" of mutual recognition of Vehicle Type Approvals. With the proposed "common rulebook", it says, the UK and the EU would continue recognising the activities of one another's type approval authorities, including whole vehicle type approval certificates, assessments of conformity of production procedures and other associated activities.

Furthermore, it says, "Member State approval authorities would continue to be permitted to designate technical service providers in the UK for the purpose of EC approvals and vice versa", and "Both the UK and the EU would continue to permit vehicles to enter into service on the basis of a valid certificate of conformity".

This is pure, unmitigated fantasy. There is not a single country outside the Single Market that is permitted this facility. And, at the very least, if the EU permitted the UK to certify vehicles, it would be forced under WTO non-discrimination rules to permit every other nation the same rights – driving a massive hole in the Single Market.

There are no possible circumstances, therefore, where this is going to happen. Mrs May and her government are deluded in even suggesting this as a possibility.

But the delusion does not stop there. The UK is also proposing a "common rulebook on agri-food", which "encompasses those rules that must be checked at the border". Its adoption, it says, "would remove the need to undertake additional regulatory checks at the border – avoiding the need for any physical infrastructure, such as Border Inspection Posts (BIP), at the border between Northern Ireland and Ireland".

Again, this is fantasy. Outside the Single Market, with the one very special exception of Switzerland - which adopts in its entirety the food-related Single Market acquis and has all its imported goods run through BIPs – there is not a single country anywhere in the world that is permitted to by-pass the border inspection system.

There is an outside possibility that, if the UK adopted the entire acquis, plus the surveillance and enforcement systems, and opened up his premises and government agencies to EU inspection, and also undertook only to import foods which conformed with EU law, inspecting them at the border through BIPs at it does now, then the EU might waive border inspection.

However, that would trash the idea of "taking back control" and also any idea of separate trade deals on agri-foods with the United States and other potential partners. Already in trouble with the "Ultras", Mrs May would be torn apart if she conceded such a scheme.

The trouble is, it doesn't stop there. Pharmaceuticals get the same delusional treatment. So do chemicals under the REACH regime, and aviation safety is treated as if Brexit will not exist. The UK government blithely assumes that it can continue to certify those functions it already does, while EASA will retain its current functions and third country provisions will not apply.

Here, the very special case of Switzerland is cited, which again requires the adoption of the whole acquis and regulatory oversight implemented via a formal agreement with the EU, which comes under the jurisdiction of the ECJ.

Even if the UK could accept this, and thereby breach its own red lines, it is unlikely that this agreement would be repeated for the UK, as there are new legislative provisions which set out the parameters for international cooperation.

In short, this White Paper is a litany of delusion – and we haven't even looked at the Irish issue, much less the other matters. We'll attend to this tomorrow, but already we see the porcine aviation out in force. There is not the slightest chance of this being accepted by the EU.



Richard North 13/07/2018 link

Brexit: debating the future

Thursday 12 July 2018  



Picking up on the oaf Johnson's resignation, Channel 4 "fact check" has reheated its earlier 2016 piece on his comments about cyclists, reproducing almost verbatim their assertions about his lack of grasp on EU vehicle safety issues.

Since then, the authors have learned nothing – and as a result add nothing to the debate. Even in 2016, to discuss vehicle safety in the EU context without also bringing in UNECE and WP.29 was a mistake. To repeat it more than two years later is more than a mistake. It is negligence of the first degree.

If Channel 4 was really interested in facts, rather than cheap-shot polemics, it would have found out more. After all, it had a good steer from the prime minister. But when she knows about UNECE and one of the supposedly premier "fact check" services doesn't, there is something seriously amiss.

What we've got, therefore, is an illustration of why the Brexit debate isn't progressing. Not only do we have in the media a level of ignorance so profound that you could cut it with a knife, there is no movement. It is as if the information they have is preserved in aspic, never to change for all time. Once a factoid is lodged, it is with us forever. It cannot be altered and it cannot be removed.

Not only is the knowledge base static, though, it is – as we have remarked before – determinedly Brit-centric. Even now, six days after the cabinet Chequers meeting, most of the press coverage on Brexit is so tediously Brit-centric that it is almost as boringly predictable as the world cup - although chess has never really been a spectator sport, even if the final went to a tie break.

However, when the debate is allowed to break out of the bubble, we get some interesting results which benefit both writer and readers. I certainly know more about WP.29 and UNECE than I ever did, and we're building here a constituency of knowledge which clearly outstrips anything the politico-media nexus has to offer. Between us, there is probably more understanding of key issues than you will see anywhere else.

Some of the details we confront are challenging. Looking at WP.29, for instance, the insight which comes with prolonged exploration of the detail takes us out of our comfort zones and in areas where conventional wisdom (if it actually exists on such arcane issues) no longer holds.

In summary, one has to say that the World Forum for Harmonization of Vehicle Regulations, stemming from an agreement in 1958, could be considered a failure or, at the very least, work in progress – either of which has important implications for us in a post-Brexit environment.

The thing about this blog though, is that I don't have to set myself up on high, talking down to the lower orders from a position of unreachable superiority, where I cannot be wrong and therefore never have to correct anything of substance. In an incredibly complex field, this is a learning process which means that we (myself and my readers) are stumbling through a maze of information finding out things as we go.

The relevance and particular interest of this issue is that the first WP.29 agreement, signed on 20 March 1958 was an attempt to create a common market for vehicle equipment and parts – an instrument which came into force just as the 1957 Treaty of Rome establishing the EEC was coming into play.

The focus of the EEC and its common market, of course, was the elimination of tariffs and "quantitative restrictions" (quotas). The Single Market wasn't to be established until 1993 yet here, 35 years earlier, we had a UN organisation based in Geneva, setting of a system "concerning the adoption of uniform conditions of approval and reciprocal recognition of approval for motor vehicle equipment and parts".

This, therefore, was an attempt to tackle the non-tariff barriers which the EEC and then EU was not to focus on for many decades. The first agreement was a relatively modest affair of 17 pages, written in French and English. The actual English text runs only to five pages.

The way that it worked was to set up a standard system for approving motor vehicle parts, on which basis regulations were drawn up, which were then recognised by all the parties to the agreement. There was no compulsion involved. Merely a system whereby, if equipment and parts were produced to a common standard and approved by any one party to the agreement, all the other parties would recognise the approvals.

It is worth noting here the terminology applied. This was not "mutual recognition", where parties recognised each other's standards. It was "reciprocal recognition", where uniform standards applied in any one country were recognised in all the others which were party to the agreement. The distinction is quite important, especially as UNECE now confuses the issue by using the terms interchangeably.

As to the 1958 agreement, was not a fixed document. Unlike the EU, which agreed a succession of new treaties, this one was constantly revised, growing in scope. By 1995, just after the completion of the EU's Single Market, we had Revision 2, which had grown to 12 pages of English text.

It is in this document that we see references to the concept of "type approval", formalising an administrative procedure "by which the competent authorities of one Contracting Party declare, after carrying out the required verifications, that a vehicle, equipment or parts submitted by the manufacturer conform to the requirements of the given Regulation".

What then gets really interesting is Revision 3 bringing us right up to 20 October 2017, the agreement having grown to a massive 43 pages of English text (including the header sheets).

Of the many developments, we see the Agreement breaking out of its earlier limits, where it applied only to equipment and parts. Writ large is a commitment to establish an International Whole Vehicle Type Approval scheme (IWVTA). No longer content with just the bits, UNECE, via its WP.29, was moving into the whole vehicle business.

As far as I can make out, though, this was actually a Japanese initiative. The concept was introduced to WP.29 in November 2007 and the proposal for the scheme was unanimously approved in November 2009. An informal group was established in March 2010 co-chaired by Japan and the EU.

The IWVTA scheme has since been formalised as Regulation No.0 (Regulation Zero) but, eleven years after the concept was introduced, it is still nowhere near fruition. The latest development is that we now have a "Phase 2 Informal Group" and it will "come up with a roadmap toward a full IWVTA by November 2018". There is no date set for completion.

It is to that extent that WP.29 can be considered a failure. But one also bears in mind that the original title, adopted in June 1952, was the "Working Party of experts on technical requirement of vehicles". Its current "World Forum" title was not adopted until 2000.

It is that which cements a second level of failure, where the objective is clearly global harmonisation. The Holy Grail is a system whereby any vehicle approved in any one country will be accepted in any other, throughout the world. But, where UNECE has manifestly failed to engage the United States or Canada (or Brazil for that matter), it can be regarded as a global system in name only.

However, alongside this, the European Union decided to align EU legislation to UN Regulations and UN GTRs, formalising a direct link in its own legislation to UN Regulations via Regulation (EC) No 661/2009 (see page 85). With the EU highly active on WP.29 technical committees, and the voting strength of the EU bloc, this has had the unfortunate side effect of transforming WP.29 into the tame "house regulator" for the EU.

As an option for the post-Brexit UK, therefore, involvement in WP.29 is not optimal, as it still keeps the UK within the regulatory orbit of the EU. Nevertheless, as I outlined yesterday, direct involvement of an independent UK does give us more control than we have at present.

The optimal outcome, though, is the completion of the IWVTA scheme, so that the UK is no longer dependent on the EU's type approval system before it can market vehicles in the territories of the EU Member States (or elsewhere in the world). And, in pursuing this, we would have in Japan a natural ally, which has the same objective and must be frustrated at the slowness of the progress.

Then, as also mentioned yesterday, a successful WP.29 could provide a model for other global harmonisation ventures, with the prospect of considerable economic dividends. And it is such issues that should now be front and centre in the Brexit debate, instead of sterile, repetitive tedium to which the politicians and media have condemned us. There is life outside the EU, and there is more to global engagement than the tired concept of the bilateral free trade agreement.

That we are still stuck in a rut is an indictment of the entire system in the UK, from the politicians and media, to the think tanks, academics, policy wonks and industry groups. None of them are contributing anything constructive to the debate and it as a sad reflection that it is left to the blogs to do their work for them.

It is fair to say though, that until we break out of this rut, the Brexit debate is going nowhere.



Richard North 12/07/2018 link

Brexit: the key to prosperity

Wednesday 11 July 2018  



For over a decade I have been using the UN Economic Commission Europe (UNECE) as an example of a producer of global standards, illustrating how rule-making has gone up a level, turning the EU into a rule-taker.

This is particularly the case with the World Forum for Harmonization of Vehicle Regulations (WP.29), a working party which is administered by UNECE. It produces regulations for vehicle construction which the EU then adopts as harmonising measures, covering all aspects of vehicle safety, including crash testing standards.

This then means that vehicle manufacturers which want to trade in the EU (and the Efta states) must comply with regulations. Only then can they gain the coveted "type approval" which is their license to sell their products in the territories of the EU/Efta Member States.

There are actually two levels of regulation. There are those produced under the 1958 Agreement, to which there are 52 contracting parties. Currently, there are 127 regulations (termed UN Regulations) appended to the Agreement. Under the separate 1998 Agreement, to which there are only 33 contracting parties, procedures are laid down for producing what are known as Global Technical Regulations (GTRs), currently eleven in number.

The EU, which is a contracting party to both these agreements, adopts both types of regulation, giving preference to them in its law, having replaced their own. Yet, within the narrow constraints of the Brexit debate, the idea of the EU being afforded the status of a rule-taker rather rains on the parade of those who seek to cast the UK in a similar role.

This has special relevance in respect of the argument about the UK remaining in the EEA. The claims made by the opponents of this option is that, from having the ability to participate in the making of law while we are in the EU, we drop out and end up having to accept EU law with no say in their making.

However, as illustrated by the UNECE WP.29 example, far from becoming a passive rule-taker, we take back our independent vote in the working party and thus have a direct say in what regulations are adopted at the global level. Their position, therefore, is reversed. The UK becomes one of the rule-makers and the EU becomes the rule-taker.

This is the scenario which I had sketched out yesterday, representing uncomfortable reading for those who want to insist that the UK is weakened by staying in the EEA. And one of those is former Labour activist, now turned vehicle safety campaigner, David Ward. He has recently banging the drum about UNECE, asserting that our post-Brexit position will be substantially weakened.

With that in mind, on his own blog, in a post dated 7 June of this year, he confronts one of the central claims of the leave campaign - taking back control. Interestingly, Ward cites Mrs May's Mansion House speech.

In that speech, he states, Mrs May argues that many EU product rules "are underpinned by international standards set by non-EU bodies of which we will remain a member – such as the UN Economic Commission for Europe (UNECE), which sets vehicle safety standards". This, according to Mr Ward means that Mrs May is implying that, by going global, Britain has nothing to lose.

Enter then the heroic David Ward, who grandly declares that Mrs May's argument "displays woeful ignorance of the reality of rule setting in the UNECE which is dominated by one large block of nations – you've guessed it, the EU".

Ward acknowledges that WP.29 is an important global standard setting body, claiming 54 rather than 52 parties to the 1958 Agreement. At its meetings in Geneva, he says, about 38 governments usually attend including EU Member States but with a crucial difference; the EU vote together as a block of 28 countries.

Then, according to Ward. decisions in the World Forum require a four-fifths majority but this is easily achieved by the EU. So, he says, "Therese May got it backwards; it is EU decision-making that underpins the adoption of UNECE regulations and not the other way around".

The most neutral way one might couch a response to these assertions is to say that some of the facts are not correct. For a start, the "four-fifths majority" figure that Ward cites does not apply to the approval of regulations. According to the 1958 Agreement this applies only to the proceedings of the administrative committee when they consider whether to admit a draft regulation (or amendment) for consideration.

Then, according to the so-called "Blue Book", new UN Regulations and amendments to existing UN Regulations are established by a vote of two-thirds majority of Contracting Parties present and voting. But it does not enter into force if then one third of the contracting parties object within six month of the vote. In other words, 18 members can block a regulation.

On the other hand, to establish a new UN Global Technical Regulation, there must be a consensus vote. Thus, if any contracting party votes against a recommended UN Global Technical Regulation, it would not be established.

However, crucially, the book goes on to inform us that UN Regulations, UN GTRs and UN Rules developed under WP.29 are "optional". They do not carry the force of law until they are adopted and implemented by contracting parties to an Agreement into their national laws.

A separate document confirms that once a UN Regulation comes into force, it only binds legally those contracting parties which sign it. But it is not an obligation. They do not even have to adopt any of the UN Regulations. Furthermore, a Contracting Party can cease applying any Regulation at any time giving one year's notice.

On this basis, once it has left the EU and resumed an independent role in WP.29, the UK can participate in the production of UN Regulations which the EU, by its own rules, must adopt. But there will be no obligation on the part of the UK to adopt them, if it wishes not to do so (unless, of course, we stay in the EEA). Working with other countries, it can also block the EU's attempts to create UN Regulations – something which it could not possibly do as an EU member. And it can apply an absolute veto on GTRs.

This is a very different picture to that painted by David Ward, but it did not stop him on 12 June getting an article published in Auto Express lobbing in assertions similar to those he makes on his blog.

The latest "mark" for the Ward treatment, though, is Open Democracy, which ramps up the rhetoric, purporting to tell us: "How the UK is set to become a second-hand dealer in EU automotive regulation". Referring back to Mrs May's speech, Ward tells us that "it is time that reality and a hard-headed assessment of the UK's national interest should take precedence over the vague assurances offered by Theresa May".

To retain a strong influence in global automotive policy-making, he claims, "we need to remain in the Customs Union and the Single Market". This, he then says, "should be negotiated with a specific agreement to maintain UK participation in motor vehicle policy-making both in Brussels at the EU and in Geneva at the UNECE".

That, he asserts, "is the way for us to keep some ownership over a rule-making process that is vital for our vehicle manufacturing industry, environmental protection, and the safety of millions of us using our roads".

To make such assertions is so easy to do when you have gullible publishers who do not force you prove your claims. But the fact is that leaving the EU gives us a direct voice in the making of EU vehicle safety regulation, without us being in any way obligated to adopt them nationally if we're outside the EEA.

Of course, if we do not, we will not be able to export vehicles to EU/Efta states. But that would apply with or without UNECE involvement. But, in any event, where we would score significantly is in the ability to align ourselves with the United States and Canada (which are UNECE members) and address what amounts to an abuse of the voting system by the EU.

Although Ward feels it is an advantage, the EU is rather like the Soviet Union which in the bad old days kept the UN votes for its "autonomous republic", so that it could vote multiple times on the General Assembly. Thus, although it is a single bloc, the EU has 28 votes (soon to become 27), while the United States and Canada have but one vote.

This is one of the reasons why these two countries do not participate actively in WP.29 but, until they do, it can never really be regarded as a global system, even though Japan and Korea are part of it. The UK leaving the EU could be treated as a first step in redressing the balance, reducing its voting power which must be diminished still further.

In this context, the EU does us no favours. The stronger it is on UNECE, the less likely it is that we will get full engagement by the North Americans. In effect, a strong EU makes for a weak WP.29. And here, the penalty is not just confined to vehicle production. WP.29 could provide the model for harmonisation of the rules on medicines – the Holy Grail of global regulation.

The benefits of such global harmonisation far outstrip the relatively modest gains we could get from forging new bilateral trade agreements, so there is everything to play for. A newly energised UK, with a voice of its own, could help kick-start the process, adding untold wealth to the global economy.

And in that sense, greater participation in UNECE is not an arcane, theoretical concept. It could actually be the key to our post-Brexit prosperity. And the chance to turn the EU into a rule-taker is simply not one we could let pass by. The irony is too delicious.



Richard North 11/07/2018 link

Brexit: goodbye to the oaf

Tuesday 10 July 2018  



Considerably fewer tears than might have been expected have been shed over the loss of the Conservative's once favourite son, as Alexander (aka "Boris") Johnson departs from the Foreign Office in a typically shambolic fashion.

Self-important as always, Johnson penned a resignation letter claiming that the Brexit dream "is dying, suffocated by needless self-doubt", with large parts of the economy still locked in the EU system, but with no UK control over that system.

Like so many, including David Davis who had only resigned hours before, Johnson is obsessed with what he sees as the "rule taker" status of the EU, complaining "it now seems that the opening bid of our negotiations involves accepting that we are not actually going to be able to make our own laws".

Indeed, he writes, we seem to have gone backwards since the last Chequers meeting in February". It was then, he asserts, that he described his frustrations, as Mayor of London, in trying to protect cyclists from juggernauts.

In this, he claims that TfL had wanted to lower the cabin windows of heavy goods vehicles to improve visibility. And even though such designs were already on the market, and even though there had been a horrific spate of deaths, mainly of female cyclists, he asserts: "we were told that we had to wait for the EU to legislate on the matter".

Clearly, it was things like this which he had in mind when, at the previous Chequers session, "we thrashed out an elaborate procedure for divergence from EU rules". But, he whinges, "even that seems to have been taken off the table and there is in fact no easy UK right of initiative".

If Brexit is to mean anything, he avers, it must surely give ministers and Parliament the chance to do things differently to protect the public, then adding: "If a country cannot pass a law to save the lives of female cyclists – when that proposal is supported at every level of UK Government – then I don't see how that country can truly be called independent".

The cycle story, however, is one that Johnson has used before, is his Telegraph column in March 2016 (a few months before the EU referendum). Then he claimed to have discovered in 2013 that "that there was nothing we could do to bring in better-designed cab windows for trucks, to stop cyclists being crushed". It had, he said, "to be done at a European level, and the French were opposed".

This was picked up by Channel 4's Fact Check (dated the previous month) which observed that this sounded like Boris, as London's cycling-friendly mayor, wanted to redesign lorries to make them safer, only to be thwarted by the EU, and the French in particular.

Needless to say, Channel 4 decided that this story didn't fit the facts. In 2014, it asserted, citing a BBC source, the European Parliament had voted "overwhelmingly" to change the shape of lorry cabs to cut cyclist deaths, despite initial opposition from some national governments, including that of the UK.

This Channel 4 knew from the BBC article which identified "one B Johnson was a big cheerleader for the EU-wide changes, and a critic of the Conservative-led government's stance at the time". He was quoted as saying: "If these amendments, supported by dozens of cities across Europe, can succeed, we can save literally hundreds of lives across the EU in years to come. I am deeply concerned at the position of the British government and urge them to embrace this vital issue".

According to this narrative, the French and Swedish governments had tried to delay implementing the changes for ten years, but they failed, and new regulations would come into force in 2019. Thus, Channel 4 asserted, "it's not true that 'there was nothing we could do'. The European Parliament actually implemented the changes backed at the time by Boris himself". It’s hard to see, it concluded, "why he's criticising the EU over this now".

One thing Channel 4 does not seem to have done, however, is actually read the resultant legislation, Directive (EU) 2015/719 or the subsequent proposal for implementing legislation set out in COM(2018) 286 final on "type-approval requirements for motor vehicles and their trailers, and systems, components and separate technical units intended for such vehicles, as regards their general safety and the protection of vehicle occupants and vulnerable road users".

Had they done so – and understood what they were reading - they might have reported differently, in a manner which goes to the very heart of the "rule taker" meme.

The reasons for this is that the Directive makes the desired changes contingent on "the necessary amendments to the technical requirements for type approval of the aerodynamic devices are transposed or applied and the Commission has adopted implementing acts laying down the operational rules…".

This is but one of several references to "type approval", carried over to 2018 proposal, currently going through the European Parliament, where reference is made to the standard harmonisation process at international level, through the United Nations Economic Commission for Europe (UNECE), and the need "to repeal several EU Regulations … and to replace them by equivalent UN Regulations".

To cut a very long story short, Johnson's appreciation of the situation puts him where we were in 2006 when Owen Paterson was shadow transport secretary and we were complaining about delays to road safety measures.

But even then, we were discovering what I called a "fatal confusion" which had the then current (Labour) transport secretary telling us that, "because of obligations under United Nations Economic Commission for Europe", we were "unable to make any unilateral requirement of vehicles in this country".

Around that time (September 2006), we were finding that many journalists had an extremely hazy idea of the role of the EU in road safety (which was a shared competence). By then,I was able to write a long piece setting out in detail EU involvement in this field, and in particular on what was to become a long-running saga on fitting reflective tape markings to the sides of HGVs in order to reduce side collisions. It was there again that I referenced the role of UNECE.

A couple of years later, on 17 December 2008, the Telegraph's David Millward> (their transport editor) was complaining that "EU laws" were stopping the UK Government from making foreign lorries carry safety mirrors. They were, he wrote, preventing the British Government from compelling foreign lorries to fit mirrors which would radically cut road accidents in the UK.

Then, I was able to write a comprehensive piece explaining the role of UNECE, pointing out that even the EU had to wait for this body to act before it could proceed to the legislative stage on safety modifications to vehicles.

In 2013, Johnson and his cycling commissioner Andrew Gilligan were planning on going to Brussels "to push the EU on safer designs of new lorries with better sightlines and fewer blindspots". A year later Johnson popped up again with his concerns about blindspots in lorries, stating that a forthcoming debate in the European Parliament was "a once-in-a-decade opportunity for the EU to remove some of the blockages which prevent us from making lorries safer in our cities".

When the European Parliament approved new rules though, this wasn't the end of the matter. In September 2014, I was making it very clear that UNECE played a pivotal role in any vehicle improvements. And, although Johnson has not then (or ever) mentioned UNECE, I suggested that he got on the next jet to Geneva, home of the UN body.

Another piece in December 2014, I wrote of delays in getting new standards approved, calling again for Brussels again to be by-passed, suggesting that Mr Johnson's successor should go straight to Geneva to lobby for new or additional laws.

Coming right up to date, this is precisely the option that would have been available to us if Mrs May had elected to keep us in the Single Market via Efta/EEA. It is through UNECE and other global bodies that an "independent" UK can best seek changes which largely have to happen at an international level.  

The greater point, though, is that Johnson, in complaining about having to abide by EU rules, has clearly learned nothing from his tenure as London Mayor (or foreign secretary), and does not realise that the laws he complains of most often have origins at a level higher than the EU. And, since it is the Member State which are involved in making framing the standards that become laws, it is the EU that become the "rule taker".

His bitter condemnation of Mrs May for leaving the UK with no control over the system betrays a fundamental ignorance about how the system works. It thus has Johnson and his allies fighting the wrong battles for the wrong reasons – effectively resigning because he has no idea of how the world really works.

Of course the current situation is unsatisfactory, but even at its worst, it is not as bad as Johnson paints it. And had he not objected to the Efta/EEA option, we would be so much better off – yet still adopting the same laws. Thus, as we bid farewell to the oaf, we lose someone who was unfit to make any useful contribution to the Brexit process. We are far better off without him.



Richard North 10/07/2018 link

Brexit: plunged into the dark

Monday 9 July 2018  



On the very day when I really could have used a written record of the Gove-Marr interview, the BBC decides not to do a transcript. Only very much later in the day did we get to hear of the resignation of "reluctant conscript" David Davis (with Steve Baker and maybe Braveman following him). And, while the impact of that is tremendous, Gove still remains very much in the frame for his comments.

I could, of course, write up my own narrative from the recording of Gove, but certain things are above and beyond the call of duty. Wading through 18 minutes of his interview to write up a transcript is one of them. For the key excerpt, therefore, I'll have to rely on the highly unsatisfactory rendition from the Telegraph. While not offering a verbatim transcript, it at least gets the gist of things.

What we get is Gove telling Marr that the UK was " generous to the EU", with the addition that "we're showing flexibility". Thus said Gove, "If the EU is ungenerous and inflexible, then we may have to contemplate walking away without a deal".

Gove further asserts that: "One of the things that we agreed at Chequers is that we should step up preparations for that outcome", then making what can only be regarded as the quite staggering claim that: "We will be in a position in March 2019, if we don't get the deal we want, to be able to walk away".

Ministers, he said, had agreed on Friday to step up planning in their respective departments. They were now hiring "a significant number of people" to ensure that the UK was prepared to crash out of the bloc.

Taking first things first, I noted on Twitter that there were definitely elements of a cunning plan in Gove's approach. You confront the EU with impossible demands, calling for things that they have already rejected, demand that they show "flexibility" and then have an almighty strop when they don't roll over.

The Defra secretary is a politician who is supposed to be brighter than average – although as a Conservative MP, that sets the bar pretty low. But then, this is the man who, according to friends, had to be stopped from using an ordinary household vacuum cleaner to unblock the toilet in his London flat.

But, if the Chequers statement is his idea of the "flexibility" that should motivate the EU towards a Brexit deal acceptable to the UK, then clearly he is struggling to demonstrate that his IQ is anywhere near approaching three figures.

Where the man gets especially dangerous, though, is in claiming that we will be in a position in March 2019, to be able to walk away if we don't get the deal we want. No one who has the first inkling of what a "no deal" Brexit involves could possibly assert that we could ever be prepared, much less be ready by the coming March, less than nine months away.

I suppose that, if we wanted a historic parallel, we could look at the despatch of the BEF to France in 1939, a force so ill-equipped that tanks were being loaded at the docks fitted with makeshift wooden turrets instead of steel, their most formidable weapons being the service revolvers of the officers riding inside them.

Had our politicians at the time realised how badly equipped and trained their "army" was, one wonders whether they would have been so keen to send it into the fray against the most modern and experienced military machine of the age. Similarly, if our politicians really understood the potential impact of a "no deal" Brexit, would they be so keen to expose us to the peril?

For some little time now, I've been arguing that we should have a coherent report, pointing out what is involved. The cabinet ministers before they attended Chequers on Friday last are said to have been furnished with one, but clearly it has failed to have much effect on Gove. Perhaps he should stick to unblocking toilets with vacuum cleaners.

Nevertheless, from his unregarded ghetto in an obscure corner of the Telegraph, Booker at least is trying his best, this week in yesterday's column writing about the possibility of our lights going out if we leave the EU without a deal.

He starts by observing that when future historians seek to explain "why Britain made such a disastrous shambles of its bid to leave the EU", nothing may surprise them more than to discover how little the British seemed to understand the basic workings of the organisation they wanted to leave.

Few things define better the nature of the EU, Booker writes, than its rigorously rules-based "internal market", which allows its members to enjoy "frictionless" trade with each other. Yet, however often this was pointed out to the British, they seemed incapable of recognising the inevitable consequences of their decision to leave the entire European Economic Area (EEA), to become what is termed a "third country".

Yet another example of this inability to grasp the relevant facts relates to our increasingly precarious energy policy. The more we close down our reliable fossil-fuel-based sources of electricity, to depend instead on unreliable wind and solar energy, the more our ability to keep our lights on relies on importing power from abroad via interconnector cables.

The previous Wednesday evening, for instance, when only one percent of our power had been coming from wind and none from solar, 60 percent had come from gas and 26 percent from nuclear.

As often happens, to keep our grid functioning, we also have to import 11 percent of our power from France and the Netherlands. And over the next 12 years, according to National Grid, we plan to more than quadruple the current 4 gigawatt (GW) capacity of our interconnectors (to 18.5GW) via new cables from France, Belgium, Norway and Iceland.

These new power supplies will be vitally necessary to keep the grid functioning when it is planned that 68 percent of our generating capacity will derive from weather-dependent wind and solar, which can plummet towards zero at any time. However, the ability to buy power from our neighbours relies on the fact that we are part of the "European Energy Market", which sets the complex rules that allow it to operate.

This is something I wrote about in my blogpost of 3 July, drawing attention to the European Commission's Notice to Stakeholders on cross-border trade in electricity. This makes it clear that, once we become a "third country", the EU could refuse to certify us as continuing participants. Once again, if we had chosen to remain, like Norway and Iceland, in the wider EEA, our dependence on imported electricity would have been assured.

However, neither I nor Booker are the only ones to have written about this. On 11 June, the specialist website Energy Voice ran an article written by Bloomberg, headlined "No Brexit for energy as UK set to draw more power from EU".

The article notes the planned increase in dependence on imported power but then observes that the Brexit process may undermine the economic and logistical case for using interconnectors. To maintain flows after 29 March next year, it says – in a caution later echoed by Booker, the UK must agree to remain part of the EU internal energy market.

That, the Article says, must be written into Britain’s agreement with the EU on Brexit, and that hasn’t happened so far. What happens to electricity if there’s a "no-deal" Brexit, it adds, "would add so much friction to the system that utilities think it's unthinkable".

Much the same is suggested in a long report (128 pages) on the EU energy system for the European Parliament. It is even less concerned than Energy Voice, suggesting that "it is reasonable to expect the UK's and neighbouring countries' transmission system operators to continue their long-lasting cooperation on the basis of their respective regulatory frameworks". This is aided by the fact that the UK is connected only though asynchronous interconnectors, which means they do not fall under the EU regulatory regime.

However, as national regulators are involved in negotiating arrangements for cross-border transmission of electricity, even the European Parliament does not rule out the framework coming under "additional examination" after Brexit.

Its whole case for suggesting continuity of supply, though, rests on all sides continuing to speak with one another, on which basis it argues that, "Brexit does not seem likely to have any noteworthy negative impact on either UK or EU electricity energy security".

On the other hand, it concedes that Brexit is increasing market uncertainty. In the event of a "no deal" scenario, where parties no longer are allowed to communicate directly, disruptions in supply cannot be ruled out. And that is without factoring in any unilateral changes made by the EU to the regulatory system, following Brexit.

Even if the risks of outright disruption are slight, they nevertheless cannot be entirely discounted. Given the way coal-based power stations are being wound down, with the increasing unreliability of our nuclear fleet and the intermittent nature of wind and solar, the loss of power from our interconnectors could be significant.

Thus, concludes Booker, to add to all the other risks we run by deciding to leave our largest single export market, we must contemplate the possibility of our lights going out. Truly may we be about to take a[nother] leap in the dark, one also taken by David Davis, in deciding to resign after telling the prime minister he could not support her Brexit plan.

This, with nearly the entire Brexit ministerial team quitting, has plunged the May administration into the dark – one not caused by the absence of electricity. It is precipitating a crisis the extent of which we know not yet.

And just to add to Mrs May's joy, Simon Coveney, Ireland's foreign minister has warned that Barnier will find it "difficult" to accept her Chequers plan. "The EU has never been keen to facilitate a breaking up of an approach toward the single market in terms of keeping all of the elements of the single market intact and consistent", he says, "so I think Britain will find it difficult to persuade the EU to support the approach they're now proposing".

Coveney adds that Barnier "will be a very, very strong defender of the EU interests here, in terms of protecting the integrity of the single market and the integrity of the EU customs union".  With that, it's almost as it the lights are going out in Downing Street. The light at the end of the tunnel was a train coming the other way.



Richard North 09/07/2018 link

Brexit: a dog's breakfast

Sunday 8 July 2018  



Brussels will say no. If this dog's breakfast is all Mrs May has to offer when she writes her Chequers proposal into the White Paper and sends it to the European Council, the outcome will be a "no deal".

That, of course, has not stopped the vitriol flowing, with over 4,000 comments on the Telegraph. Many are whingeing mightily about betrayal and worse while the ERG storms about the creation of a "worst-of-all worlds 'black hole Brexit' where the UK is stuck permanently as a 'vassal state' in the EU's legal and regulatory tarpit".

There are those, however, who would have it that this represents tactical genius on the part of Mrs May, who has confronted her "Ultras" and forced them to back down. She has, according to this version of reality, taken them part of the way towards a compromise which will eventually see us reaching a negotiated deal with the EU.

Such a scenario would, of course, require that the "Ultras", having been manoeuvred into accepting more than they are comfortable with, are going to concede still more ground.

But, if the UK's commitment to adopt just part of the Single Market acquis is seen by them as a permanent "vassal state", one wonders what how they will react to the additional concessions Mrs May will be forced to make before a deal could be finalised.

How much more "vassal" will they tolerate, one wonders, when at the meeting – according to the Sunday Times, the oaf Johnson declared his leader's plans a "big turd" and said that anyone defending them would be "polishing a turd". For political convenience, he may have backed down on the day and put his name to the three-page statement but the Telegraph is already talking in terms of "furious backlash".

Given this background it is my view that the only realistic conclusion one can draw from Friday's events is that Mrs May went as far as she could go politically, judging that she could go as far as she did without tearing her party apart – and even then she may have misjudged the intensity of the mood.

But whatever the domestic political calculus, in terms of the Brexit negotiations, the outcome represents a massive failure. For Friday's cabinet meeting to have been a success, the prime minister needed to have done two things. Firstly, she needed to come up with a proposal which had a reasonable chance of being accepted by Brussels. Then she had to get her cabinet behind her, to agree that she could make this the UK position.

However, she abandoned the former in order to improve her chances of achieving the latter. And although she has come away with the agreement of her colleagues – which may not even hold – there is no way that Brussels could accept what is to be proposed.

Having taken such a public position, though, it is hard to see how, on a domestic front, she can go any further. She has locked the stable door on herself before she has been able to bolt.

My guess is that Mrs May, far from being the political "genius" that some will aver, has misjudged the situation on all fronts. If we go back to last December, one will recall that there was another crisis looming, with the refusal of the EU to move to discussion of our future relationship until the Irish border question had been resolved.

At the last minute though, the Council relented, motivated – it is said – by concern that refusal to concede some ground to Mrs May would bring her down, delaying proceedings while there was another leadership contest. In the event, Brussels, concerned that a successor might be even worse, offered just enough to allow Mrs May to claim a victory of sorts, and stay in the game.

Based on that experience, one could make the case that Mrs May believes that Brussels – understanding that she has gone as far as she can go – will make similar concessions and accept most of her current proposals. And if that is the case, she has not realised that she us up against the EU's "red lines" from which they cannot and will not budge. The "bloody difficult woman" has reached the end of the road.

As to the immediate reaction from Brussels (and Dublin for that matter), this has been entirely in line with what we expected. There has been no outright condemnation – merely a lukewarm, reserved "wait and see" welcome. Barnier says he will wait for the White Paper, due next week, with negotiations due to resume on 16 July.

We get a similar story from Varadkar, who spoke with Mrs May by telephone yesterday. He "looks forward" to seeing greater detail on her proposals over the coming days and hopes they would be a "helpful input" to the negotiation process.

If I've assessed things correctly, then M. Barnier will play the long game, leaving it to the October Council to be the bearer of bad news. And even then, this does not rule out the EU making unilateral concessions, while it gets its house in order to deal with the UK crashing out of the EU.

Amongst other things, the Commission will have a considerable legislative burden to regularise the position, and to prevent damage to commercial enterprises in Member States, while countries such as France will need the time to get the ports infrastructure in place. The UK could even get some sort of transition period – but entirely to suit the convenience of the EU and its Member States.

Meanwhile, the UK media has almost completely lost it. As a collective, it has never been good at dealing with EU affairs. Confronted with the need to report Brussels stories, it will invariably resort to its normal formula of personality politics and engineer a confrontation between the parties. But since so few Brussels politicians are known to their audiences, the media will invariably seek to "plant a flag" on their stories, giving then a domestic spin.

This tendency has been very much to the fore over the weekend, with all the elements in play. The whole drama has been played out against the backdrop of Conservative Party politics, cabinet personalities have been prominent and the confrontation has the dominant theme. Brussels merges into the background and only the tiniest fraction of media resource has gone into assessing whether Mrs May will bring the negotiations to a successful conclusion.

What we have to confront is the reality that the media are no longer capable of delivering sensible reportage. Obsessed with domestic party politics, and without the resource or interest to find out what is going on in Brussels and the Member States, they are no longer even bothering to broaden their horizons and tell us what is really going on. As to their analyses, these are superficial beyond measure.

Any properly grounded evaluation of recent events would have to conclude that we have not been brought any closer to achieving a negotiated Brexit. The only sane conclusion to be drawn from the government's statement is that Mrs May has been unable to construct a formula which would satisfy Brussels, while the domestic political situation is such that she could hardly get support for something that would satisfy them.

That puts us in a crisis situation, whence the past sins of the media are catching up with us. Neither print nor broadcast media have made any serious attempt to bring home how extraordinarily damaging a "no deal" Brexit might be. Variously trivialising or understating the issues, and never pulling the strands together, they have allowed the widespread impression to prevail that "no deal" is a tenable option.

Oddly, this is where the legacy of the referendum campaign is now casting a deadly shadow. Where "project fear" sought to dissuade voters from leaving the EU – vastly overstating the case – many of same arguments are valid when applied to a "no deal" Brexit.

But tarnished by their association with the "remain" campaign – and those who are currently exploiting the turmoil in order to reverse the referendum result – the arguments have lost much of their force. The little boy cried "wolf" once too often.

The moral of the "cry wolf" story, though, is that eventually the wolf did come – and no one heeded the boy's genuine cries. The wolf, in the form of a "no deal", is now stalking the land. What the results might be, none of us want to find out. But Mrs May seems determined to give us the experience and, whether deliberate or not, the media seems to be doing their best to help her.

Perhaps only a concerted effort to bring home to people exactly what "no deal" entails might turn the political tide. But I see no sign of that coming. Until the "psychic fever" has broken, sense will struggle to prevail.



Richard North 08/07/2018 link

Brexit: Mrs May's kiss of death

Saturday 7 July 2018  



There is only one thing remarkable about the statement released by the government in the wake of yesterday's cabinet meeting. And that is – compared to what we were led to expect – that it is completely unremarkable. It is exactly as predicted.

What went on at Chequers, in terms of the arm-twisting or whatever else was needed to get agreement to the statement, is of absolutely no interest. If this sets the terms for the UK's proposal for a formal agreement with the EU, covering also the Irish border question, then it spells the end of any expectation that we might have had of a negotiated settlement.

Who will pull the plug, and when and under precisely what conditions it will be pulled is a matter of detail. Like as not, the European Commission – which holds the front line position – will play the long game. This would involve it passing the decision as to whether to reject the expected White Paper on to the European Council in October.

In the meantime, the odds are that it will not say yes and it will not say no. It will keep the talks grumbling along at officer level, keeping statements as anodyne as possible and not making any statements that can be regarded as definitive.

The precise reasons for the EU's rejection, when it comes, will not be at all difficult to work out. Firstly, at the core of the proposal is "the establishment by the UK and the EU of a free trade area for goods". This supposedly entails the UK and the EU maintaining a "common rulebook" for all goods including agri-food, but it will cover only those areas "necessary to provide for frictionless trade at the border".

The government, says the statement, would then "strike different arrangements for services", the criterion being that it is "in our interests to have regulatory flexibility". And, on that basis, the government recognises that "the UK and the EU will not have current levels of access to each other's markets".

This, as I have already pointed out, is cherry-picking at two levels. At one level, the UK is retaining the option to extract service provisions from the Single Market and, at the second level, the UK is deciding to apply only part of the acquis, on grounds of its own choosing.

Yesterday, even as the cabinet was meeting, Michel Barnier was speaking at the Institute of International and European Affairs, declaring that the Single Market was the EU's "main economic public good".

Said Barnier, "We will not damage it. We will not reverse what we achieved with the UK". Thus, he said, "we must find solutions that respect the integrity of the Single Market".

Yet, right up front, in attempting to split off services from goods, and then cherry-picking the goods, the UK is challenging the integrity of the Market. If this was to proceed, the acquis would become precisely the à la carte menu that the EU has refused to entertain.

The next objection will be found in a sleight of hand by the UK government, on the way EU law is to be adopted. The statement says that the UK will make "an upfront choice to commit by treaty to ongoing harmonisation with EU rules on goods" – something which would be essential in any agreement.

But this apparent commitment is then substantially watered down by the assertion that, where the UK had chosen to apply a common rulebook, "Parliament would still have a lock on incorporating rules into the UK legal order". It could choose not to pass the relevant legislation, accepting that this "would lead to consequences for market access, security cooperation or the frictionless border".

What this means is that the UK is planning to put to the EU a proposition that it will select those parts of the Single Market acquis that it wants, but even then will reserve the right to refuse to adopt individual measures within the groups that it chosen.

This could be couched in terms of "safeguard measures", with a defined procedure as in the manner of Article 112 of the EEA Agreement, but the more likely response of the EU – in the unlikely event that it was still on board – would be to demand a guillotine provision, similar to that adopted by the Swiss.

Any such provision would mean that a refusal to adopt a measure would effectively terminate the agreement, thereby – to all intents and purposes – negating the Parliamentary lock. What might be just acceptable to the EU would surely by overturned by Parliament.

The next major – and probably insurmountable – hurdle is that proposal that the UK and the EU "would also agree to maintain high regulatory standards for the environment, climate change, social and employment, and consumer protection – meaning we would not let standards fall below their current levels".

Here, one has to read between the lines, although deciphering is not too difficult. What has to be appreciated is that a significant (and increasing) part of the Single Market is law on environment, climate change, social and employment, and consumer protection.

Taking that at face value, the UK is proposing to set a further level of cherry picking and, although not directly stated, is rejecting regulatory alignment and going for equivalence. This is yet another departure from the Single Market ethos and one which is probably so significant that the EU would almost certainly reject market access over a whole range of goods.

Then we have the statement glibly asserting that the UK and the EU "would work together on the phased introduction of a new Facilitated Customs Arrangement". This, the government says, "would remove the need for customs checks and controls between the UK and the EU as if a combined customs territory".

But the point here is that, at a pinch, it might just remove the need for customs checks, but would not eliminate other border controls – in particular the sanitary and phytosanitary checks that apply to third country goods. A "facilitated customs arrangement", therefore, would not deliver frictionless trade and thereby avoid a hard border between Northern Ireland and the Republic.

There is also an assumption that only goods might need to be checked at the border, allowing services to be controlled at the point of delivery. But this is a false assumption, based on the government's limited view of the nature of services.

Imagine, for instance, that an aero engine is removed from an aircraft at Dublin airport and then sent by road to Belfast for servicing. Barring any parts used, this would be a services transaction, with the return of the engine to the Republic entirely dependent on conformity with EU law.

At a more pedestrian level, we might see ordinary cars driven across the border for servicing, as well as tractors and other agricultural machinery, and even small marine craft, to say nothing of electrical appliances and the like. Without an agreement on the provision of services, customs officials might even find themselves examining the maintenance books of ordinary cars, turning back those where work has not been done in accordance with EU law.

The accumulation of checks, not allowed for in this statement, means that the requirement to avoid a hard border would not be satisfied. The "backstop" would have to apply. However, in the statement, there is the confident assertion that the "backstop" solution as part of the Withdrawal Agreement "would not need to be brought into effect".

This would doubtless constitute yet another insurmountable hurdle, as there seems an absolute certainty that the EU would demand the application of the "backstop". Especially, it would refuse to allow the remaining Withdrawal Agreement issues to be rolled into the wider, post-Brexit trade agreement.

Without going into more detail, and – for example – assessing the dispute resolution proposals, and the nature of the institutional framework, there are already more than enough serious impediments for the EU to reject this proposal out of hand.

The indications from Brussels, though, is that the EU will play the long game. It is said to have given up any hope of reaching an agreed Brexit settlement, and has already discounted this latest mad endeavour on the part of Mrs May.

But there are many arrangements to be sorted out, to minimise the potential damage caused by the UK crashing out of the EU, so the Commission and Member States will want to take their time, only pulling the plug at the last possible minute, if they are forced to do so.

We can, therefore, expect a fairly muted response to the UK White Paper, when it finally appears. If it follows the form of this proposal, M. Barnier will not say yes, but he will not say no, either. Instead, after low-level talks through the summer, it will be left to the October European Council to do the deed – which may even delay the final rejection to the New Year.

Either way, it is at this point that we must consider any meaningful negotiations to be over. Mrs May, in pandering to her cabinet, has ignored the only parties that matter in these talks – the EU institutions and the Member States. Whether wittingly or otherwise, she has given a rational Brexit the kiss of death. Chaos will necessarily ensue.



Richard North 07/07/2018 link

Brexit: lost souls

Friday 6 July 2018  



When I used to work with Owen Paterson as his confidential political advisor – which I did for well over a decade, until just after the EU referendum – part of my job was to talk him down from some of the more stupid positions he would occasionally adopt.

Sometimes I had to get quite stroppy, as when we were preparing this speech on his "optimistic vision of a post-EU United Kingdom", which he delivered to Business for Britain on 24 November 2014.

After I'd written the first draft. Owen – unbeknown to me – gave it to Dan Hannan to "improve". He produced a draft so riddled with factual errors that I refused to have anything to do with it, threatening to resign if he went ahead with it. Only later did I find out that Hannan had been responsible for the new draft but, at the time, I warned Owen that his reputation would suffer irreparable damage if he went ahead with it.

That time round, Owen relented and almost all of Hannan's input was removed. As a result, I think we produced a pretty good speech, one which advanced the idea that we should "grasp the opportunity" to leave the EU and its "current political arrangements". But this we would do, "while keeping our vital position in the single market".

In all, Owen mentioned Norway 13 times in the speech, and the EEA 14 times, telling us that membership of the EEA allowed "full participation in the Single Market without being in the EU, as enjoyed by Norway, Iceland and Lichtenstein". To "those such as the CBI, who confuse the memberships of the Single Market and the EU", Owen's message was simple and direct. They were "making a basic error and misleading the British people".

It was thus Owen's view that we could "leave the political project and enter into a truly economic project with Europe via the European Free Trade Association (EFTA) and the EEA". We would, he said, "still enjoy the trading benefits of the EU, without the huge cost of the political baggage".

Needless to say, the speech was panned by the Guardian's John Crace, which is as good an endorsement as one could hope to get at the time.

What none of those reporting the speech bothered with, though, was Owen's comments on the "all-important car industry". Showing a remarkable level of knowledge for a British politician, he took on board the claim that "Norway's position is abusively dismissed as simply submitting to EU law by fax machine", and referred to the range of international standards which were shaping the Single Market acquis. This, he said, was "staggering".

In the car industry, he said, the regulatory focus had moved from Brussels to Geneva. There, he told us, the EU's Single Market standards start as "UN Regulations" produced by the World Forum for the Harmonisation of Vehicle Regulations. Known as WP.29, it is hosted by the United Nations Economic Commission for Europe (UNECE). Then, Owen declared:
European vehicle production is extraordinarily integrated; the UK produces 1.6 million cars but produces 2.6 million engines. Most of these engines are exported to Europe. As we move to world standards of vehicle production we would be at a massive advantage if we were directly represented, on the body influencing standards, in our industry's interest.
Those particular nuggets of information Owen would have done well to recall when yesterday he went on to BBC Radio 4's Today programme. His task then was to set the world to right about Jaguar Land Rover's (JLR) fears on the impact of a "hard" Brexit, the company having claimed that the combined effect of tariffs and non-tariff barriers could cost it more than £1.2 billion.

However, it was a very different Owen who stepped up to the mike, telling the world that leaving the customs union, the Single Market and European Court of Justice (ECJ) would put JLR in a "wonderful position to compete world-wide because they would be able to buy components cheaper around the world".

This harps back to a piece Owen had done the previous day in the "ultra central" Telegraph, reasserting his new-found belief that we should go for the WTO option and use our "new freedom" to remove all tariffs. Producers, he wrote, would benefit because removing tariffs would "reduce the cost of raw materials". Furthermore, he asserted, "We can free them from over-burdensome regulation and allow them to embrace the innovations they need to compete".

This, at least, had the merit of allowing the Independent to observe that the BBC had been able to come up with "someone other than loopy economics prof Patrick Minford to go on the Today programme".

With his enthusiasm for removing tariffs, though, Paterson might have reminded himself that, while we are free to do this unilaterally (as long as we remove them from all nations and not just the EU Members), the EU will doubtless apply tariffs to UK goods, which indeed it must once we become a third country without a trade agreement.

Therefore, while we might (for the sake of argument) benefit from cheaper components from the rest of the world, our exports to the EU will suddenly become considerably less competitive.

But reverting to his 2014 speech, Owen would also know that automotive parts are heavily regulated – the origins, as he told us, in Geneva though UNECE. And while the UK industry might be able to source cheaper components from the rest of the world (as if it didn't already), there will be a limited suppliers who can produce the volume that also conforms with UNECE WP.29 standards.

Without the type approvals that require conformity with these standards, companies such as JLR will not be able to sell their products to the EU at any price. Removing this "over-burdensome regulation" will ensure that car manufacturers will be unable to trade in huge areas of the international market, as those countries which rely on EU standards will also refuse UK goods.

This transformation of Owen Paterson from sensible, considered commentator to rabid, "ultra" zealot thus has to be one of the stranger phenomena to tarnish this Brexit debate, but one can see why the born-again "ultra" felt the need to intervene, given a sudden upsurge in business interventions over the last weeks.

Nicole Sykes, CBI Head of EU Negotiations, agrees that it's "undeniable" that there's been a big shift in businesses coming out to warn against the dangers of a "no deal" or "hard" Brexit.

The reason why businesses are speaking out now, she explains, is because firms are now at the point of having to implement their contingency plans. Having made their "no regrets" decisions, they are now having to make expensive "regretful" decisions, spending money on things like warehouses and customs staff.

Furthermore, Brexit is no longer just pausing pre-ref investment decisions but putting off new ones. And, since both sides of the political divide have failed to guarantee sensible transition in case of a "no deal", there is no longer any trust that the interests of businesses will be secured.

As to why firms didn't speak before, Sykes says that they are wary of the concerns of investors, employers, suppliers and customers. "It's a big decision to be political", she says. "It's not a world CEOs are comfortable with. There are hundreds of firms not speaking out for these reasons".

The trouble is, as I have remarked before, when business does intervene, it tends to do it badly, with the car industry calling for the UK to remain in the customs union with a deal that "maintains the benefits of the single market".

This is exactly the sort of "cakeism" of which we accuse the politicians, but when push comes to shove, business is no better at defining a realistic outcome. Tariff-free trading would come with our continued participation in the EEA, so the customs union is an irrelevance for the likes of JLR. And there is no possibility of enjoying the benefits of the Single Market outside the EU without being in the EEA.

Thus, while we have lost souls like Owen Paterson making a complete fool of himself, businesses are failing to step up to the mark with sensible alternatives. To deal with his particular brand of stupidity, they need to be much more focused.

CEOs need to be where Paterson was in 2014, not just playing catch-up with all the derivative wonks who are finally beginning to get to grips with the scale of the problems we confront. They get the big bucks – it's time they earned their money and stepped outside their comfort zones. We don't need more lost souls, struggling to find their voice.

And if they think Mrs May's pyjama party is going to deliver any useful results, they need to think again. If the outcome includes proposals for a Single Market in goods, it will be rejected by Brussels and we will be headed for the chaos of a "no deal" Brexit.



Richard North 06/07/2018 link
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