Thursday, February 23, 2017

Brexit: completely over their heads

One of the more irritating mantras of the "hard" Brexiteers, defending their stupidity on the "WTO option", is their false claim that countries such as the United States, Australia and China all trade with the EU on WTO terms – on which basis, they aver, such an arrangement should be perfectly adequate for the UK.

This, though, is a mix of ignorance fortified by arrogance – ignorance of the fact that all of these countries have multiple agreements on trade with the EU, and arrogance of the people pushing their canard, in refusing to check their facts. 

We saw this in April of last year when the self-important Charles Moore decided to misinform his readers with the deluded claim that: "The EU has never yet, in its history, had a trade deal with America".

It's very much Moore's style to waft around the high and mighty, sharing gossip and prejudice, looking down his patrician nose at informed sources from the lower orders. Thus, although I had sent himFlexcit in June 2015, whence he wrote to me saying, "I look forward to studying this", he obviously never did. He preferred his own ignorance. 

A more cautious person, I wrote at the time, might have consulted the Europa website to check the veracity of the "no deals" claim. Because there, on the Treaties Office Database, are lists of trade agreements between the US and the EU, 38 in all, of which at least 20 are bilateral. 

Now, ten months after an unrepentant Moore ignored my attempts to correct him, we have Ivan Rogerstelling the Brexit committee something they should already have known – and is their duty to know, insofar as we pay them to keep themselves properly informed. 

Said Rogers to these ignoramuses, "although the EU and the US do not have a free trade agreements, they do have agreements covering trade". There are 20-plus agreements, he said, adding that no major economy traded with the EU solely on World Trade Organisation terms. The Guardian recorded him saying:
No other major player trades with the EU on pure WTO-only terms. It is not true that the Americans do, or the Australians or the Canadians or the Israelis or the Swiss. They strike preferential trade deals where they can. But they also strike more minor equivalence agreements, financial services equivalence agreements, veterinary equivalence agreements, mutual conformity of assessment agreements. The EU has mutual conformity of assessment agreements with the US, with Canada, with Israel, with Switzerland, with Australia, with New Zealand, and more I think.
The determination of the Brexit zombies to buy into the "WTO option", though, is all part of their justification for rejecting the Efta/EEA solution. They reason – if it can be called reason – that if other countries can survive and prosper under a WTO regime, then there is no need to go any further. But Rogers wasn't letting them off that hook either. He told the MPs:
If you had an abrupt cliff edge with real world consequences, you've seen what Mark Carney [governor of the Bank of England] has said about the financial stability risks to the eurozone of an abrupt cliff edge. There are other consequences in other sectors which would make it an insane thing to do.

All I was pointing out was that this is a very legalistic body that we are dealing with and they will say you have transformed yourselves overnight from having been a member of this body to a third country outside the body and in the absence of a new legal agreement everything falls away.

We all know that that's nuts in the real world, because why would you want to stop UK planes flying into European airports on day [one]. We know that this is insanity, but that doesn't mean - we know that stopping carcasses and consignments and saying "your slaughterhouses are no longer approved", we may know that that is a nonsense in the real world. Sadly, that does not stop it necessarily happening.
This is something I was writing four years ago, when I said:
As the law stands, the UK is part of the Single Market. Outwith the EU and the EEA, however, the UK becomes, as far as EU law is concerned, a "third country". And imports from third countries must to subject to a raft of inspections, documentation and physical checks at member state ports (including airports) before they are allowed entry.
That, we need to emphasise, was four years ago. More recently, we pointed out that this was not something the EU did to us, but a status the UK assumed by choosing to withdraw from the EU and the Single Market. 

You must imagine, I wrote, a medieval walled city, inside which the traders happily do business – with the public and between themselves – secure within the fortifications. When a trader (unhappy with the rules and regulations) decides to move his stall outside the walls, he cannot then complain that he is no longer able to trade freely with the people still inside. 

Yet such is the total lack of comprehension of the Daily Mail that it reports Ivan Rogers as saying: "the EU leaders would be 'insane' to push Britain out of the EU without a deal but they might do it anyway".

Rogers, of course, was referring to the "walk away" option, where even the intellectually challengedFinancial Times managed to understand that it was our own government that saw World Trade Organisation rules "as an obvious alternative to negotiating a free-trade agreement with the EU" – and was wrong to do so. 

But what we're getting is a taste of how the zombies are going to rationalise their own failure – blaming their inability to craft a workable settlement on the supposed intransigence of the EU negotiators. 

The Mail, though, was not alone in being out of its depth. John Crace of the Guardian observed that most of the stuff Ivan Rogers offered to MPs on the Brexit committee "went completely over their heads".

These are people who are four years behind the curve, and only because they've been lapped so many times do they look, briefly, as if they are in the lead. Thus, when John Whittingdale, a decent enough cove, tried to argue the point about regulatory convergence making a deal easier, Rogers shot him down in flames. 

If anything, convergence makes things harder. "It's not about what happens on Brexit Day plus one", Rogers said. "It's about what happens further down the line. Because if we were intending to leave everything exactly the same there would have been no point in leaving".

This is the point we've been making, where the EU will want assurances – and some evidence to back it up – that we intend to maintain convergence, and will ensure that there is a system of market surveillance and enforcement in place to ensure a high level compliance. Additionally, the EU will want a bankable promise that we intend in implement new regulation. 

That much detail, though, is down the line. Rogers had opened his commentary by telling MPs that the "Brussels beltway" view was that it could be the early- mid 2020s before we have a ratified deep and comprehensive free trade agreement. 

To me, it seems that what happens in between us leaving and the agreement coming into force is the million dollar question. Moreover, by its very nature, it seems impossible to determine a "bespoke" transitional agreement until we know what the end game is. 

However, Rogers was "on the stand" for nearly two-and-a-half hours and, while I've watched the TV session, I need to read the transcript before I can do full justice to the evidence. 

But what we can already gain from it, as an overall theme, is that we're all flying blind. Anyone who tries to predict how the talks will be structured, said Rogers, is being "foolish". It may be past summer before we even know what it is we will be arguing about. 

For the moment, I'll leave it with the Independent which has Rogers saying that the consequences of the UK securing no deal and relying on WTO rules would be "nuts" and like falling off the "cliff edge" into a "legal void".

It then cites Liberal Democrat MP Alistair Carmichael, who sits on the Brexit Committee, having him say: "It's clear no free trade deal with the EU could ever be better than remaining in the single market". But, as for no deal, well, that's just "nuts".