The border which nobody wants

Ar first glance, it seems utterly bizarre. We don’t want to build a hard border fence between Northern Ireland and the Irish Republic and neither do the Irish or the EU. No one wants it but it may nonetheless have to be erected.

The reasons lie with the UK’s change in status. If it leaves not only the EU but also the European Economic Area, it becomes a Third Country. The EU does not permit goods to be transferred across its borders without the necessary customs clearance and the fact that we are going to maintain regulatory convergence with the EU up to Brexit day makes not one iota of difference.

But couldn’t we just agree to treat Ireland differently? In this instance, the rules of the World Trade Organisation wouldn’t allow it. Discrimination in trading arrangements that favour one country over another without any formal trade deal is not permitted – and we can’t strike a bilateral trade deal with the Irish Republic as it has no freedom to negotiate such deals, being a member of the EU. After all, this desire to regain control of trade policy was one of the reasons why we voted to leave.

So it is no surprise that Mrs May came away empty handed from her meeting with Jean-Claude Juncker yesterday. It is hard to read between the lines and fathom out what really went on. Did she really consider a deal which would have seen Northern Ireland end up with separate trading arrangements from the rest of the UK?  Such an arrangement would compromise the constitutional integrity of the UK and thus was never going to be acceptable to the Unionist community in the Province. “Northern Ireland must leave the European Union on the same terms as the rest of the United Kingdom,” insisted Arlene Foster, leader of the Democratic Unionist Party.

On the other hand, the Dublin government insists that EU regulations on issues such as food safety and animal welfare must be maintained in Northern Ireland, to avoid damaging cross-border trade once Britain leaves the EU’s single market and customs union.  However, to repeat, mutual recognition of standards cannot be agreed without a formal trade arrangement and that isn’t going to be on the table any time soon.

Parliament’s Exiting the European Union Committee published a report which  was decidedly pessimistic about the  prospects of a deal given Mrs May’s insistence that we will be leaving the Single Market. “The Committee does not see how it will be possible to reconcile there being no border between Northern Ireland and the Republic of Ireland with the Government’s policy of leaving the Single Market and the Customs Union.”

Quite why the Customs Union has to be dragged into this debate is anyone’s guess. There are seamless borders between non-EU Norway and EU member states Sweden and Finland. This is everything to do with the Single Market but nothing at all to do with the Customs Union, of which Norway is not part.

There can be no doubt about the concern felt in the Irish Republic about the prospect of “no deal”. Comparing the UK to EU-27 as a whole, our country could well end up facing the greater problems in the short term. Some individual countries would not suffer that badly either. Germany, for example, would soon shrug off any decline in trade with one of its major export markets and find others. For the Irish Republic, however, the effect of “no deal” would be devastating. We are the second largest importer of Irish goods and services after the USA, receiving 13% of total Irish exports. We are also the biggest exporter to Ireland, with a 24% share of Irish imports.

Given these figures, you would expect the Irish government to be among the most dovish of EU27. Unfortunately, according to Anthony Coughlan, this is far from being the case. In an e-mail to Edward Spalton, our Chairman, he wrote:

The members of the political Establishment in the Republic of Ireland, dominated as they are by career Euro-federalists, hope fervently that the whole Brexit project can be aborted or made effectively meaningless by doing everything they can to obstruct the EU/UK negotiations and by interacting privately with those cross-party interests that are seeking to test Brexit to destruction in Parliament. Irish policy-makers are doing everything they can these days to encourage this end, egged on by the Brussels people –  while not saying so publicly of course.”

He went on to claim that there was some collusion between Irish Euro-federalists and UK remainiacs: “I have not the least doubt that  key Irish/EU grandees such as Peter Sutherland, John Bruton, Pat Cox  and Alan Dukes are interacting at present with the likes of  Peter Mandelson, Keir Starmer, Tom Tugendhat et al to do all they can to frustrate Brexit in Parliament and that they are being encouraged by Messrs Barnier, Juncker and the Brussels people to do this, with the full support of the Irish Government and Opposition behind the scenes.”

Some eagle-eyed readers will remember that Peter Sutherland, a former European Commissioner, was the person who told the House of Lords that the EU should do its best to undermine the ethnic homogeneity of individual nations by increasing mass immigration. Anyone in this country who is formally associated with this contemptible individual is truly beyond the pale.

Given these serious allegations of troublemaking by Irish politicians, it is unsurprising that Mrs May has been sent a letter signed by a number of Tory MPs, economists and business leaders urging her to take a tough line with the EU, insist on a trade deal and walk away if the EU will not play ball. Add into this potent brew the firm and perfectly understandable stance of the DUP that every part of the UK must leave the EU on the same terms and it is unsurprising that David Davis has found himself having to work hard to find a solution to the impasse. His latest suggestion is that that the whole of the UK, and not just Northern Ireland, should retain regulatory “alignment” – not “convergence”  -with the EU.

Even before any discussion has taken place on what this actually means, however, an un-named EU official has effectively torpedoed the whole idea:-  “The UK will not have any say on the decisions taken in Brussels and will basically implement them without having any influence over them… it makes the UK kind of a regulatory ‘protectorate” of Brussels.‘” Any suggestion that such an abject surrender would be acceptable to the signatories of the letter to Mrs May – or the DUP for that matter – is plainly ridiculous.

It isn’t easy to separate the wood from the trees in the current flurry of activity, but it is looking highly unlikely that the Brexit negotiations will be moving on to the next stage (i.e., trade talks) after the critical European Council meeting later this month. The deadlock over the Irish border issue is raising the stakes higher by the day and it would be a brave man who would place any money on what the eventual outcome is likely to be.

Photo by Michael 1952

Deal or no deal? Some thoughts on last week’s meeting

Last week I, along with about 90 other people, attended a conference entitled Deal or no deal – what are the options? hosted by David Campbell Bannerman MEP.  I was very much hoping to hear something of the government’s current thinking about the progress of the Brexit negotiations with the EU.

The opening speaker, Rt Hon Greg Hands MP, gave a very upbeat assessment of our trading opportunities post-Brexit. His department, he assured us, is ready, come what may. Nine new trade commissioners are to be appointed and our new tariff schedules are being prepared for the World Trade Organisation. At a time when protectionism is on the increase, there is considerable enthusiasm in some quarters (which he did not name) for a new independent UK to re-emerge as a champion of global free trade. He was adamant that all the major countries with whom the EU had signed trade deals were keen to continue a similar arrangement with us on Brexit.

One member of the audience expressed concern about how high standards in agriculture could be maintained if trade was to become freer. Mr Hands insisted that there would be no lowering of standards on food quality and we would not be flooded with poor-quality imports (Presumably a reference to chlorine-washed chickens about which there are currently many worries)

David Campbell Bannerman then introduced what he called the “Super Canada” option which, he claimed, was the Government’s  preferred option. This was no surprise, given that a few days beforehand, the EU was widely reported as considering a deal along the lines of CETA, the EU/Canada deal, with the UK. This has been strongly criticised both by the left and by other informed commentators for its inadequacy. Mr Bannerman said that the EU likes the CETA deal and intends to use it as a template for future trade deals with Australia and New Zealand too, Twelve of the 30 chapters in this deal would need no change, he informed us. The others would not be suitable without re-writing, as we would (presumably) wish to protect the NHS  The EU is worried about the future UK attitude towards regulation, as it doesn’t want to see us becoming the Singapore of the North Atlantic, an option enthusiastically supported by, among others, Owen Paterson, whose piece appeared, perhaps coincidentally, on the same day as this conference.

David Davis gave the keynote speech. He stated that he does not want to end up with no deal and is confident that we will get a deal. He pointed out the areas where progress had been made and insisted that our exit will be conducted in a smooth, orderly way.

There was, nonetheless, a possibility that we may not get a deal, but Whitehall was preparing for every eventuality.

Mrs May has consistently rejected using Norway as a model and Helle Hagenau, a familiar face to our more long-standing members, explained some of the pitfalls. Although advising against our staying in the EEA, however, she felt it was worth our re-joining EFTA as we needed some trading arrangement with the four EFTA countries once we leave. Switzerland is our sixth most important trading partner while bilateral trade with Norway  was worth £18.57 billion in 2015. She did, however, mention that although EFTA courts are not bound to implement the ECJ rulings, , they were in fact doing so, even though the ECJ has no direct power to intervene in EEA matters and the actions of the EFTA court was an encroachment on the original basis of the EEA agreement.  With the alleged indivisibility of the “Four freedoms” of the Single Market mentioned on a couple of occasions during the morning, I was surprised that no one mentioned Liechtenstein’s unilateral restriction on free movement of people at this point.

The final speaker was Rt Hon David Jones, who had formerly worked as a minister in DExEU (the Department for Exiting the European Union)  who informed the meeting that any role for the ECJ in our affairs post-Brexit would be totally unacceptable to him and a number of his colleagues. If this meant we would leave with no deal, then as far as he was concerned, so be it.

Interestingly, little was said about the details of any transitional arrangement, which as we have pointed out, the EU is only prepared to offer us under terms which would see us still under the thumb of the ECJ. We can therefore presume that Mr Jones and a number of his colleagues will be  equally opposed to any such arrangement.

Although only billed as a “comment” rather than a speech, the few words shared by Hans-Olaf Henkel of the BDI, the German equivalent of our CBI, were well received. Although he regretted our vote to leave the EU and still hoped Brexit wouldn’t happen,  he was most unimpressed with the way the EU was handling the negotiations. He referred in particular to the “divorce bill” which  he regarded as unacceptable. He also said that Brexit was the fault of Brussels, although his statement that “you joined an EU of sovereign nations and suddenly someone decided to make a United States of Europe out of it” was a rather naive comment given the United States of Europe was always the destination of the European project, right from the days of Jean Monnet.

It was good to meet up with a number of colleagues from other campaign organisations, quite a few of whom I had not seen since the referendum.  It was worth attending this meeting, although I came away with a clear sense that not everyone in the government is singing from the same songsheet, so perhaps the lack of a clear Brexit strategy is understandable given the balancing act required to avoid a massive rebellion on the back benches.

Among the other attendees was Viscount Matt Ridley, whose rather witty comments on the conference may be of interest. They can be found here.

Risk management of Brexit to date

Politicians generally don’t give much thought to risks and risk management. After all, risks are part of the downside of their policies (or ‘bright ideas’) and they try to airbrush or spin them out of the narrative.  Whilst risks and their effective management are serious concerns across all areas of government from agriculture, through defensive and security, education, international relations, justice, law and order, to the economy, the National Health Service etc., a successful Brexit presents unique challenges. Furthermore, it does not help that the government has had to start from a state of total unpreparedness; Messrs Cameron and Osborne prevented the Civil Service from preparing any viable Brexit plan.  So how well are Mrs May and Mr Davis doing – both in understanding the risks involved and effectively managing them?

‘In-depth’ subject knowledge is obviously essential to being able to ‘tease out’, understand and manage risks. An aircraft pilot who knows nothing (if allowed to fly at all) is potentially dangerous, and so is a clueless politician. Sadly, this government has not given any serious indication that it knows much about how trade deals are negotiated or even how the EU works. There is very little, if any, detail in Mrs May’s and Mr Davis’s pronouncements. We hear predominantly robotic mantras, aspirations and wishful thinking. There also seems to be an unwillingness to acquire that necessary in-depth knowledge.

Subject knowledge is not enough to manage risks. Our Brexit team needs to understand the subtleties of the EU’s approach to risk and its effective control, and hence how these impact on the Article 50 negotiations.  The EU in general – in theory if not in practice – follows something like the Prussian edict ‘everything is forbidden except that which is allowed’. Pre-emptive mandatory standardised (inflexible) regulation controls risks at each stage of activity, with the result that an acceptable outcome is achieved.  Regulation gives rise to surveillance, monitoring, oversight and ultimately centralised control by the EU’s bureaucracy. Anyone with some exposure to this environment in one field should be able to recognise the same general approach, some of the terminology and regulatory or monitoring agencies, and role of the centralised EU bureaucracy, when they encounter it elsewhere.  The EU’s approach also fits in well with extending control into an ever-increasing number of areas, thus fulfilling its mission of creating a superstate.

The traditional alternative to the EU’s approach to risk management is to emphasise accountability. When things go wrong there are the options of civil courts, damages, or even criminal prosecution. In the case of politicians, they will be ejected from office. In English law, everything – in theory – is allowed except that which is expressly forbidden.  In practice, this purity is often replaced by some form of hybrid of ever-expanding regulation and increasingly punitive accountability.  Mrs May and Mr Davis, perhaps because they were schooled outside the EU loop, seem unable to understand or accept the EU’s rigidity, its risk control rationale or the implications for the Brexit negotiations and the resulting risks posed.

Mrs May’s commitment to leave the Single Market and instead negotiate a bespoke free trade agreement supposedly providing equivalent utility appears indicative of poor risk management.  This decision was reportedly made by her alone after consulting her closest advisor and without involving the cabinet or even discussing it with them.  It was a similar story regarding her decision to call a general election in last June, with disastrous results for her party and her reputation.  Mrs May does appear to make decisions based on flimsy advice, ignoring sensible safeguards and risk management tools.

Mrs May has ended up choosing the most difficult and complex Brexit option, requiring the greatest flexibility and cooperation from the EU and the most (competent) resources. We are not told what other options for leaving were considered, what risks were posed and why they were dismissed.  There also appears to be nothing actually in place (or comprehensively planned) to absorb any potential problems or risks.  To date, little or no progress appears to have been made in successfully delivering her ambitions or mitigating the risks. Meanwhile, time is marching on.

The approach to negotiating a free trade agreement with the EU has once again demonstrated a cavalier approach to the management of risk. We are told it will be all right in the end, because at the eleventh hour the EU will cave in and give everything wanted.  It is highly unlikely that it will do so, but even if it does, leaving a significant part of the future economic wellbeing of the country in a state of uncertainty until the last minute is a huge risk. It is a wild gamble based on successfully negotiating a myriad of potentially show-stopping trade (and other) conditions and one which totally ignores the EU’s general approach to risk management, which I have outlined above.

Just suppose that the EU caved in to Mrs May’s demands for an ambitious, innovative, deep and special relationship. It would create a precedent which would cause much concern in Brussels. Granting any exceptions to one country (even if possible) would open up disorderly and uncontrolled challenges elsewhere and could violate the EU’s general risk control philosophy.

Then the European Union (Withdrawal) Bill, spun as providing certainty in the fundamentally changed situation of ‘third country’ status outside the EU and the Single Market contains many undisclosed potential problems and risks. Some pieces of transposed EU legislation may not actually function as intended, because they were designed to operate in an environment of close integration with the EU and its administrative apparatus. The Fisheries regulation 1380/2013 is a good example.

It would be a tragedy if we ended up with a poor Brexit because of poor risk management. Brexit provides us with a tremendous opportunity to escape the clutches of the EU’s political folly with its unaccountable, extravagant agenda to create a superstate regardless of the costs to its subsumed peoples. Effective risk management historically does not form part of the EU’s political agenda or mitigate its actions. By contrast, the return of full responsible government to these shores should mean our elected representatives will once again respond positively to the wishes of the people, accepting responsibility for their actions and – most importantly of all – behaving responsibly.

Straws in the wind

Apart from signs of possible movement in the stalled negotiations with the EU on trade, events are beginning to push into reality those matters which have previously been merely the subject of rhetoric and speculation.

Whatever plans the government has, it will have to start giving practical information to businesses in the early new year about its intentions. In our extended article The Complexities of Brexit, we pointed out the urgency of the situation for chemical manufacturers, farmers, food producers and other businesses which have long production cycles or investment programmes which reach into the post Brexit era.

Whilst trade associations like to avoid publicity which might upset the government and to conduct their negotiations in private, the urgency of the situation is pushing these matters into the public sphere. Two articles from City AM of 22nd November demonstrate this.

EASYJET PLAN COULD SHAKE UP SHAREHOLDINGS by Rebecca Smith

EASYJET yesterday set out plans which could force UK shareholders to sell their stakes after Brexit, as it prepares to comply with foreign ownership rules.

Under EU law, the airline needs to ensure majority control and ownership by EU nationals after Britain leaves in order for it to keep operating intra-EU. Yesterday it unveiled plans to amend its articles of association which currently give directors the power to limit the ownership of the firm’s shares by by non UK nationals. Easyjet intends to change this so they apply to non EU shareholders, which will exclude UK shareholders once the UK has left the EU – giving it the power to force UK shareholders to divest their shares if need be.

The airline will put the changes to shareholders at its annual general meeting in February, saying the switch-up will ensure that Easyjet is able to remain EU-owned and controlled at all times after the UK has left the EU.

The carrier said it has “no current intention” of using the proposed powers……

BREXIT BREAKTHROUGH NEEDED BY EARLY 2018 TO HELP BUSINESSES.

By Jasper Jolly & Alys Key

THE GOVERNMENT must secure a Brexit transition deal by the end of the first quarter of 2018 before businesses implement “no deal” contingency plans, according to the head of the Institute of Directors (IoD).

Speaking at the lobby group’s annual dinner last night, IoD director general Stephen Martin said businesses “are concerned about what happens if a breakthrough is not made at the next round of talks in December”.

He said “It’s as simple as this – we are now only 16 months away from leaving the EU. We need the discussion to move on to our future trading relationship and critically what happens when the Article 50 timeline runs out in early 2019.

But he praise IoD members for their “determination” in preparing for every Brexit eventuality, saying that businesses have upheld their end of the bargain and now need the politicians to “deliver” for them.

IGNORANCE ABOUNDING IN HIGH PLACES

A colleague, who has been quietly lobbying trade associations for months, decided it was time to speak to his MP. During the course of their discussion, he mentioned EFTA (The European Free Trade Association) and was astonished to find that this shadow minister did not know what it was. He had never heard of it. Over many years of campaigning, we have often been surprised at the lack of knowledge by MPs of all parties concerning the European project. A national referendum and over a year’s intense debate on the result appear to have been insufficient to disperse the fog of ignorance on even such a basic matter as this.

It is not just politicians either. At a private meeting of senior business people, not one participant raised a hand when asked if they had ever downloaded and skim-read an EU Free Trade Agreement. Former civil servants at the meeting said that this was also true of ministers they had served.

Mind you, half an hour of reading the sort of leaden prose which the EU produces is enough to sap the will to live! Considering the very definitive statements made by leading spokesmen and media personalities, it would be interesting to know how many of their very emphatic opinions were based on direct acquaintance with the text. The Devil is always in the detail.

A WIND OF CHANGE

Commenting on a report of this meeting, our good friend John Ashworth of Fishing for Leave wrote “I haven’t been home long from three days in London and I too can’t say what I have been up to, but I can confirm there is a wind of change. I have a lot of work to do now, but I am happy with the three days, never satisfied enough. But movement is at last happening, so to all readers, keep the pressure up.

“The two factors which had the most effect on them were, on the one hand, a most extraordinary level of ignorance and, on the other, an almost complete inability to listen. If anything, the stories that have leaked out on these aspects are somewhat under-stated” – yes, spot on”.

 

Half way there, but have we even started?

Last week marked the half way point between 23rd June 2016 – that euphoric day when we voted to leave the EU – and the actual day on which we will actually leave:- March 29th 2019.

On Friday, Mrs May confirmed that she plans to set the date for our departure from the EU into law. There will be no slippage and no turning back. This comes against a background of growing concern that Brexit could be stopped.  Today, Lord Kerr, a former UK ambassador to the EU, insisted that the Article 50 process could be stopped or reversed. No way, replied Mrs May. Her proposed law will make it irreversible.

This is good news for those of us who fought so hard to secure that historic victory in June last year. I have dealt with more than my fair share of correspondence recently from people concerned that the government is going to back track. My views have not changed since writing this article that Mrs May and the Tories, whatever side they supported during the referendum campaign, have no choice but to deliver Brexit because failure to do so would provoke the worst crisis in the party since the repeal of the Corn Laws in 1846.  Backtracking would be suicidal. Thankfully, a lust for power is deeply entrenched into the Conservatives’ psyche and given their shock at last June’s General Election result, they know that delivering a good Brexit is essential if they are to avoid  electoral meltdown in 2022.

Probe a bit deeper, however, and the picture is not quite so rosy.  In spite of the Brexit vote last year, as  Veterans for Britain has been keen to point out, the Government has taken us deeper into the EU’s military integration process, with there being considerable support to signing us up to PESCO, the Permanent Structured Cooperation of the EU’s external action force – set up in reality to undermine and replace NATO. Brexit can only mean Brexit if we are completely detached militarily and we can but hope that even at this 11th hour, Gavin Williamson, the new defence secretary who has little experience of military matters, will listen to those members of our armed forces who know what they are talking about and step back from this process.

Sadly, of our daily newspapers, only the Express  has so far been willing to cover this disturbing development. However, to repeat, even if Williamson’s predecessor Michael Fallon was able to get away with betraying the UK’s armed forces without being subject to too much scrutiny, it will be out of the bag by 2022 and the Tories will reap the whirlwind electorally.

Equally disturbing is this statement from the Prime Minister’s office which was passed to one of our supporters. Note the section he has highlighted in yellow:-  It also means that the existing body of EU law will become British law. So this provides certainty and clarity for all businesses and families across the country from the very moment we leave the EU.”

This is true when it comes to legislation which would only be applied internally. For instance,  the rules governing bathing water have been devised by the EU. It is no great problem for us to continue to use them over the Brexit period. They work satisfactorily so even if they could be improved, there is no urgency until we have settled down as a sovereign, independent country.

It is a different matter, however, when it comes to legislation which involves the relationship of an independent UK with the rest of the EU. We have previously highlighted the fallacy of this approach with regards fisheries, but it also applies to the general question of trade. the PM appears to be repeating the mistake that because our regulations will be aligned with those of the EU up to Brexit day, some sort of seamless trade arrangement should not be a problem,

The transitional arrangement which she seeks is essentially based on this misunderstanding – we can be essentially honorary EU members for two years while a bespoke long-term deal is sorted out. We would obey all the rules and pay into the EU’s coffers without any representation. Such a deal would be unacceptable to many Tory backbenchers, not to mention the wider Brexit-supporting community. Thankfully, although the penny seems not to have dropped in Westminster, the EU has said it is a non-runner.

The European Parliament  set out its position, where, among other things,  it “reaffirms that membership of the internal market and the customs union entails acceptance of the four freedoms, the jurisdiction of the Court of Justice of the European Union, general budgetary contributions and adherence to the European Union’s common commercial policy”  – in other words, you’re either in or you’re out. To repeat, it’s not about regulatory convergence but the legal relationship of a future EU-UK relationship. We will no longer be subject to the EU’s treaties, Article 50 is quite clear about this. We need to seek a new legal basis and any transitional agreement would require almost as complicated a legal ratification process than a long-term bespoke relationship.

The EU’s guidelines also say, “To the extent necessary and legally possible, the negotiations may also seek to determine transitional arrangements which are in the interest of the union and, as appropriate, to provide for bridges towards the foreseeable framework for the future relationship in the light of progress made. Any such transitional arrangements must be clearly defined, limited in time and subject to effective enforcement mechanisms. Should a time-limited prolongation of Union Acquis be considered, this would require existing Union regulatory supervisory, judiciary and enforcement instruments and structures to apply.”

This affirm that the EU will allow us to go ahead with a transitional deal, but it must be on the EU’s terms and subject to the appropriate legal processes being completed in time, which looks very doubtful. In other words, to repeat, it’s a non-starter and a red herring.

So until there is a change in mindset among UK’s negotiators we will continue to go round in circles. Last Friday also saw the usual Barnier/Davis press conference following the latest round of “negotiations” and there is still no indication from the EU side that they feel ready to start trade talks as insufficient progress has been made on the three critical issues of the Irish border, the rights of EU citizens resident in the EU and the “divorce bill.” Agreement must be reached within two weeks or trade talks will not be starting any time soon. Sadly, David Davis’s response was to call for the EU to show “flexibility  and imagination.” Unfortunately, the EU’s legal structure doesn’t allow it to be flexible. Mr Davis can repeat this little phrase as much as he likes. It will not make a shred of difference.

So at this point when we have just reached the half way point to Brexit, it is sobering to think that this milestone has been reached with the two sides so far apart and so little real progress made. Not what any of us expected on that incredible morning when the result of the referendum was announced. A Brexit of sorts will almost certainly happen on 29th March 2019, but unless the government raises its game, we could find ourselves, more by default rather than design, either crashing out following a breakdown of the talks or suffering a Brexit that isn’t really Brexit in any meaningful way.

The complexities of Brexit

Having been opposed to to our EEC/EU membership since the early Seventies when Mr. John Selwyn Gummer (as he then was – now Lord Deben) addressed our grain trade conference and told us that the Commonwealth countries wanted nothing more to do with us, I have picked up one or two things along the way.  Our family firm bought milk powder from New Zealand and we knew that our friends there were not at all pleased to be losing one of their best customers.

From late 1971  the government consulted our trade association and gave  very full, detailed information about what our firm would have to do when we joined the EEC on January 1 1973.

Without that information, we would have been in a total mess. Please see my account in Articles 2 and 3 of “The Miller’s Tale”.

We are due to be out of the  EU by the end of March 2019, so the government will have to start giving full, detailed information to all trades quite early in 2018, if businesses  are to have any chance of being ready.  Government departments such as Customs and Excise will have to be fully informed and equipped  too. There appears to be very small chance of this because of the lackadaisical way the government has approached the negotiations, handing the initiative to M. Barnier.  It always was unrealistic to expect to complete a wholly new style of comprehensive trade agreement within two years but they appear not even to be able to agree in cabinet what they actually want.

We already have three ministers involved – David Davis, Boris Johnson and Liam Fox plus the new unit which has been set up in the cabinet office, in part by transferring staff from David Davis’s department DExEU .

Robert Peston, who  is reckoned to be a very well-informed reporter, wrote in a Facebook post that

 “(Mrs May’s) fatal weakness is that she lacks the authority to settle this argument such that the EU  would have a clear understanding of who actually represents the UK and what we want from Brexit.

In the words of a senior member of the cabinet, it is a scandal that there has never been a cabinet discussion about what kind of access we want to the EU’s market…., what kind of regulatory and supervisory regime should then be in place  to ensure a level playing field for EU and UK businesses….”

As far as I know, no significant country trades with the EU on World Trade Organisation rules alone. They all have additional agreements on things like customs co-operation, approval of manufacturers and their quality standards  etc. All our present arrangements simply cease to exist if we “just walk away”.

To give just one example – British farmers presently export 40% of their lamb to the EU. As an independent country outside the single market without an additional agreement  that would be subject to a “sheep meat” tariff of £2,689 per tonne. The price to British farmers would collapse. But the lamb would not even get as far as customs until it had satisfied the “sanitary and phytosanitary” health controls which apply to all food products. The shippers would also have to appoint official importers on the other side – firms or individuals resident in the EU – to be responsible to the authorities for conformity to EU standards and, of course, the payment of inspection charges and tariff.  This is not the EU “punishing” us but the simple effect of the rules, if there is no other agreement.

With regard to EEA/EFTA, you may recall that Mr. Cameron went on his “hug a husky” trip and gave out quite a bit of unfavourable information which was misleading and not entirely correct but still avidly accepted by many  from UKIP  to extreme Europhiles.

Very few have since taken the trouble to check it. We in CIB have been supporting our fishermen and insisting on the need to assert control over all our fisheries – including the 200 mile Exclusive Economic Zone.  Norway and Iceland reserve all their territorial waters and EEZ for their own boats under article 112 of the EEA agreement. Our government is not guaranteeing that to our own fishermen. Iceland was able to impose capital restrictions during the financial crisis and Liechtenstein imposes strict limits on immigration – all under this arrangement.

Mrs. May is proposing a  transition/implementation period which involves continued subjection to the European Court of Justice (ECJ). The EEA agreement is preferable, being subject to the EFTA court which can only rule on on “EEA-relevant”  matters and has no formal powers of enforcement. If the arrangement does not suit us, we can be out of it by simply giving a year’s notice. Under the ECJ we would be subject not just to the 20% or so of EU legislation affecting trade but to the other 80% which enforces the political project, including things like the European Arrest Warrant..

Given the weakness of the government’s performance, I cannot see it negotiating anything better than the EEA agreement as a basis.  As an interim, it has the advantage of being a known quantity and could be subject to agreed amendments  (off the peg with alterations rather than “bespoke”). It is a least worst option. I have not heard of anything equally practicable and achievable in the limited time available.

Funnily enough, when we started discussing this possibility some  years ago it was fiercely attacked by a man who said it would be enough simply to repeal the European Communities Act 1972. It turned out he was a keen Europhile! I wonder why he was so against it?  Perhaps this article Europhiles for a sovereign Parliament may give us a clue.

When Mrs. May announced the government’s approach to Brexit in her Lancaster House speech in January, I felt that she was biting off much more than she could chew. A free trade agreement of the scope and complexity which she proposed seemed just too much to cram into a maximum negotiating period of two years.

But, on reflection, there was not even two years available. Basing things on my experience in a firm approaching entry into the EEC in 1972, it was obvious that both government departments and businesses would need a substantial lead time to get ready for the changeover to the new system. Farming and other industries with long production cycles would need at least a year’s notice, in full detail, of what the government intended. Businesses contemplating investment projects would need to know too.

In our CIB newsletter of 29 March 2017, (when Article 50 was triggered), I wrote about our chemicals industry which is a very important part of our exports. I had listened to the proceedings of the Environmental Audit Committee of 7 March.

“GREAT REPEAL BILL MAY SECURE BRITISH EXPORT SUCCESS – OR NOT

The chemicals industry is a key British exporter. For years now it has been working to comply with the EU REACH Regulation (Registration, Evaluation and Authorisation of Chemicals). On 7 March DEFRA told MPs that the Great Repeal Bill (Now the European Union (Withdrawal) Bill) would create an identical British version to be called BREACH so that British-manufactured chemicals could continue to circulate freely in the EU market.

REACH requires companies which produce the same chemical to submit joint dossiers on their product with safety data to the European Chemicals Agency. Many such registrations have been filed at very considerable expense.

Next year will be the deadline for registering specialised low-volume chemicals which will affect thousands of companies. This is creating problems. For instance, should a British manufacturer which only sells in the UK go to the expense of registering with REACH when it might have to do the same a year later with BREACH?

The officials appear to be in a muddle and not to know. DEFRA has promised that the UK “will have a functioning scheme from Day One” but this is not good enough. The UK Chemical Industries Association says there is “no clarity at all” and doubts that such a scheme can be put in place within the two year negotiating period. According to a survey of the industry, one fifth of the UK chemical manufacturers are already planning to establish themselves in another EU country as insurance against the muddle. Whether they stay or go depends on their confidence in the British government.

The government has realised that the British chemical industry must be helped over this non tariff barrier, if it is to continue its success as our second largest single exporter. The highest levels of political and official will are needed to secure the confidence of the industry. The Devil, as always, is in the detail and will not be exorcised by vain repetition of mantras about “WTO Rules”. At least it is clear, they know that much!”

Yet now, seven months later the muddle persists. Private Eye reports a setback, even from this unsatisfactory position.-

“MORE on the consequences of Brexit nobody seems to have thought of until now. The European Chemicals Agency has quietly confirmed that more than 6,000 substance registrations filed by UK-based chemical s companies will be “regarded as non-existent” after Brexit.

These registrations are a condition of access to the European Union market, but in the bloc’s overarching REACH chemicals law, there is no legal basis for registrations from countries outside the single market, which the British government is determined to leave.

This puts UK chemicals companies in a bind. As 60 per cent of UK chemicals exports go to the EU, companies will need to switch their registrations to associated companies or agents inside the single market. This will involve new contracts and costs, including payments to the European Chemicals Agency which charges about 1,600 euros to change the identity of a registrant and between 9,000 to 34,000 euros paid for the original registration.

A final deadline for registration of chemicals under REACH falls on 31 May 2018, nine months before Brexit. The deadline applies to low-volume and specialised chemicals. Should UK- based companies bother? Those that sell sufficient volumes into the EU market will need to ensure their registrations continue, but what about UK companies that sell only in the UK or to non EU countries?

In fact, they have no choice. The UK will still be a member of the EU in mid -2018 and companies have a legal obligation to register their substances. Moreover, the British government has said that it will continue after Brexit with a facsimile of REACH, including its registration provisions. So, if UK companies selling only in the UK don’t file their EU registrations, when Brexit comes round they would be on the UK market illegally.

The government says it is “working to ensure a smooth transition for the chemical industry as we leave the EU”. But time is short and there is still little clarity on the many practical details.”

So the authorities have marked time for seven months. I hope that CIB members and supporters – especially those with experience of the industry or living in areas of substantial chemical manufacture – will contact their MPs to pressure DEFRA to get a move on. There are thousands of similar things which will need to be sorted out quite early in the New Year, if affected firms are to have a chance of making a living and paying their workers after Brexit.

As a post script, readers may be interested in an e-mail exchange in which I was involved:-

From: [email protected]

To [email protected]

Sent: 24/10/2017 11:19:06 GMT Summer Time

 Subj: RE: The complexities of Brexit – Campaign for an Independent Britain

THERE  NEED  NOT  BE  ANY  COMPLEXITIES  WHATSOEVER !!!!!!  We have a very good balance of trade and payments surplus with that Mighty Economic Colossus, The  United States of America, the largest economy in the World. Nor do we have a trading agreement!!!  This endless babble with the EU, by the UK Government is just a load   of procrastinating tripe created by a weak leadership who are quaking in their Knickers and Underpants. We also have good trading, and profitable relationships with a good number of other countries around the World.

The  fact the people who would be quaking in their underwear if we simply walked away; would be the likes of Merkel, Macron, Barnier and Juncker. Particularly Merkel who is     already in the cart following the German elections, having caused an election result that has resulted in the Neo NAZIs getting into the Bundestag for the first time since 1945. As we all know this is the direct result of her insane immigration policies. She would also be very worried about the German car industries employees because of the huge number of cars that are currently imported into the UK. 1.3 million German car industry employees rely on exports to the UK, in order to keep their jobs.

As we are seeing with other national elections, the four of the above EU and national leaders, plus a number of others, are between them destroying the EU from within. The USSR was destroyed from within, and in that there is a lesson for Juncker and Barnier; POWER!, without accountability, destroys that which it represents.   Ken.

Dear Sonya and Ken,

I just remembered this article from PRIVATE EYE which includes BREXIT problems with regard to farming, trade with the USA under EU/US trade agreements and the time needed to adjust to any new arrangements.

“BREXIT is less than 18 months way and yet still no post-Brexit transitional arrangements or EU-UK trade deal is even under discussion, let alone agreed. Given that farming is a long-term business and its viability is currently governed by the EU’s international trade arrangements, will UK farmers continue to commit to the financial risks of food production faced with such uncertainty?

A good example of the difficulties ahead concerns the threat to the UK organic cheese Kingdom Cheddar, which is currently exported to the US .

Kingdom is made from organic milk produced by the 265 UK dairy farmers in the Organic Milk Suppliers Co-operative (OMSCo). In 2015, under US-EU trade arrangements, OMSCo qualified to export its premium organic cheese to the US. It took OMSCo eight years to develop the Kingdom brand, its dairy farmer members having substantially altered their farming practices to meet US standards (including using fewer antibiotics and improving animal welfare).

The arrangement that allows Kingdom to be sold in the US however is between the EU and the US. OMSCo points out that unless an “equivalence” agreement on organic farming standards is signed between the UK and the US “in the next three months”, it will stop production of Kingdom at the end of December. OMSCo chairman, Nicholas Saphir says “We cannot take the risk of producing a niche market product that, given its 18 month production(cycle) may not be able to be sold after Brexit”.

OMSCo is unique in the UK in exporting high volume premium organis cheese to the US; but given agriculture’s long production cycle, all UK food exports face the same risk of disruption, as th clock ticks down”.

The article goes on to make the same point about lamb production which I made in “The Complexities of Brexit”, pointing out that farmers will have to decide this Autumn whether to retain millions of ewe lambs for for breeding or send them for slaughter as fat lambs because their progeny will not be brn until Spring 2019, just as Britain leaves the EU which currently takes 40% of British lamb.

I am afraid that neither government nor Brexit campaigners appear to be taking this sort of thing into consideration.  All industries with long lead times will have similar problems.

Regards

Edward