The European Union (Withdrawal) Bill: (1) Why we need it

The European Union (Withdrawal) Bill, which is being debated in Parliament this week, prepares the way for us to abrogate the 1972 Accession Treaty by which we joined what has become the EU and repeal the European Communities Act 1972 which gave the Treaty its force in British law. If there are no delays, we will cease to be a member state of the EU on 29th March 2019.

The campaign to regain our sovereignty has lasted for many years and it is encouraging that Parliament will finally be preparing the way whereby this is to happen. After over 45 years as a member of the European project, however, we are currently in a position whereby many items of legislation on our statute books originated in Brussels and what is more, derive their authority from the EU treaties to which we have been a signatory.

In this regard, the wording or Paragraph 3 of Article 50 of the Lisbon Treaty, which the UK Government invoked last March is particularly important:-

The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

Note the phrase “The Treaties  shall cease to apply.” This means that the current basis for any EU-derived legislation being included in UK law disappears on Brexit Day in March 2019. In other words, if the Government doesn’t take action, a considerable number of laws completely lose their authority.

For the benefit of anyone who has never studied any EU legislative document, you may like to click on this link, which does admittedly take you to one of the most pointless of all regulations, but at least it is short, so you won’t have to plough through pages of technical detail.

It begins by saying:-

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Right from the start, the document makes clear that it derives its authority from the EU treaties, which will cease to apply to the UK once we leave the EU. Therefore this regulation’s authority also ceases for us.

Just to confirm this point, Article 3 of this regulation says:-

This Regulation shall enter into force on the 20th day following its publication in the Official Journal of the European Union

and then the Regulation concludes with these words:-

This Regulation shall be binding in its entirety and directly applicable in all Member States

So to underline the point, we will no longer be a Member State, so it will no longer apply.

The disappearance of this particular Regulation, complete with its picture of a cuddly toy sheep, from our statute books wouldn’t create any anxiety for HM Government or the team of Civil Servants in the Department for Exiting the European Union. There are, however, many far more important pieces of EU legislation which, if they lost their authority overnight without anything else being put in their place, would cause chaos.

For instance, the EU’s Bathing Water Directive 2006/7/EC which deals with the quality of bathing water. Readers may like to study this page of the DEFRA website which tells Councils what they must do to inform bathers at beaches and lakes about the quality of the water in which they will be swimming. If there is no regulation in force to replace the one which the EU has foisted on us, there is an enormous potential for serious problems to ensue. To take an extreme example, someone could pour hundreds of gallons of a highly toxic substance into a lake used for bathing and if the local council failed to put up a notice about it, there would be no mechanism to prosecute it. The legal basis for a court case would have vanished on 29th March 2019.

What the EU (Withdrawal) Bill will do is to “repatriate” EU legislation. In other words, it will remain on our statute books but in an amended form so that its authority will derive not from the EU treaties, which no longer apply, but from our Westminster Parliament.

It may upset some Brexit supporters that we still will be stuck with this legacy of our EU membership, but it was the approach adopted by several newly-independent states in the past as the only way of ensuring life carried on normally after independence. For instance, in 1922, the Irish Free State adopted all laws bequeathed to it by the Westminster Parliament to be effective in the newly-independent country and enforced by its institutions. The alternative would have been an impossible legal vacuum.  India did likewise when the British Raj came to an end in 1947.

While it may go against the grain still to be reliant on laws bequeathed by the authority you have just shaken off, as an independent country you will be in a position to revise or repeal them at a later date if you don’t like them. Even though there is more time to prepare for Brexit than the very hasty British withdrawal from India, however, negotiating independence will be a massive undertaking. As far as the mechanisms for day-to-day administration of the UK are concerned, it is therefore best to let sleeping dogs lie during the period immediately after independence.  The EU (Withdrawal) Bill seeks to do just that. Some EU legislation is actually very sensible. An independent UK would probably have passed a very similar act to the Bathing Water Directive. It is therefore likely that this piece of EU-inspired legislation will continue as UK law more or less unaltered for the foreseeable future.

On the other hand, some EU laws do not suit the UK and would better be replaced by new domestic legislation. Take the Landfill Directive which was brought in because Denmark and Holland, two small flat countries, had run out of holes in which to bury their domestic waste.  The UK, with its quarrying industry, does not suffer from this problem, but the requirement to comply with this directive has resulted in the erection of smelly incinerators.  In due course, we can rid ourselves of unhelpful legislation like this.

Likewise, the Interoperability Directives,  which set the rules for the registration of newly-built railway rolling stock, are unnecessarily complicated for well over 95% of the trains running in the UK because they were designed to make it easy for trains to cross international borders. Given the UK’s island location, the Eurostar services, car, coach and lorry shuttles through the Channel tunnel, international freight trains and the handful of through Belfast-Dublin passenger trains (Currently eight in each direction on weekdays and five on Sundays) are the only rail services ever likely to cross international boundaries. We could replace it with something much simpler for the benefit of most UK domestic rail operators.

At the end of the day, however, if it takes a couple of years before Parliament has the time to look at replacing these less-than-ideal pieces of legislation with something better, the sky is not going to fall in if we still abide by them post-Brexit. What really matters is that on 29th March 2019, we don’t wake up to a huge legal vacuum where areas of our life as a nation are completely unregulated because the EU treaties no longer have any force.

This, then, is the rationale behind the EU (Withdrawal) Bill. In the next article, I will address an obvious concern that sharp-eyed readers may have spotted. Taking again our “Cuddly Toy Sheep” Regulation 1462/2006 as an example, it clearly cannot be transferred onto the UK  statue books verbatim. It is no longer a Regulation deriving its power from the EU treaties so any reference to the Commission or to Council Regulations and other EU legislation will need to be re-worded. Then there is the phrase “Member States”. This again will need to be changed in the “repatriated” version or it won’t make any sense.  You would think that it ought to be a simple job using certain formulae to make the necessary corrections in regulation after regulation without altering the provisions of the original EU law beyond limiting its scope to the UK, but in reality life isn’t quite that simple…………………

 

Re-taking our place in the world

At least a third of voters always planned on leaving the EU and were not going to be persuaded otherwise. This didn’t happen on the back of something written on a bus. This was cumulative. For many the final straw was the Lisbon Treaty which was in effect an EU constitution giving it a legal personality in world affairs.

For something that so radically changed our relationship with what was (and still is) viewed as a trade relationship, it should have been put to a referendum. That our political establishment set about ratifying it, using any means at their disposal to dodge a referendum, was evidence of a political establishment which had long since given up any sense of obligation to seek consent when acting in regard to the EU.

What compounds that act was the fact that those who voted for it had very little idea what they were agreeing to. Remainers often complain that there was no impact assessment for Brexit, yet where was the comprehensive national debate over ratifying Lisbon?

We leavers warned that Lisbon would make EU membership all but impossible to reverse – and to an extent we were right. Brexit is no easy feat – and to do it properly will take more than a decade. Our main concern at the time was that the EU is a long term project which gathers its powers by stealth, creeping ever more toward a federalist entity.

Where possible I have tended to avoid the term “European superstate” largely because that kind of terminology lands you in kipper territory where that kind of hackneyed rhetoric is an instant turn off. But that is exactly what the EU is and though remainers can nominally say that we retain our sovereignty, the question is over what? – and for how much longer?

In that regard you have to look up the chain to see how this affects the UK. As we continue to argue, the centre of the regulatory universe is increasingly Geneva, not Brussels – where the WTO TBT agreement provides the foundation of a global regulatory union.

Critics point out that implementation of this is hotly disputed and that its installation is piecemeal and subject to a number of registered exceptions, but like the EU, it is not the status quo that concerns us, rather it is the direction of travel.

While I have always been opposed to trade being an occupied field, the nature of trade agreements is changing, encompassing ever more regulatory measures extending far beyond what we would traditionally call a trade barrier. In order to eliminate distortions in labour, for example the shipping industry using Filipino slave labour, we increasingly adopt International Labour Organisation conventions in trade agreements.

Superficially there is no reason for alarm but what this means in practice is that for the EU to continue with trade exclusivity it must assume exclusive competence over areas not traditionally concerned with trade. In order to tie up these loose ends and overlaps there will eventually be a need for a new EU treaty which involves another substantial transfer of powers. But in the meantime, the ECJ will be the instrument of integration, confiscating ever more powers by the back door.

The eventual destination in this is the deletion of EU member states as independent actors on any of the global forums, with access to them controlled exclusively by Brussels. We would no longer have a voice in our own right and being bound to the EU customs code we would cease to be an independent country in all the ways that matter. This, to me, is why Brexit is absolutely necessary and the high price is one worth paying.

Remainers would argue that we still maintain significant influence by way of being an EU member. Superficially this is correct and Brexit will, temporarily, lead to a loss of influence. But whose influence is it anyway? We are told that the UK was instrumental in pushing for EU expansion. That remains a bad idea and accession states will remain in a state of limbo until such a point as there is a major political or financial crisis – or they leave of their own accord.

But this goes back to the opening premise. It’s no good to say that we have influence in Europe if we have no influence over our government. What remainers say when they say “we” have influence, they mean our permissive, unaccountable, political élites have influence – but actually only in those instances where their ambitions are in alignment with the ideology of the EU.

As much as Brexit is about severing the political integration of the EU, it is also a slapdown for our political class who have never had any intention of seeking consent – and where the EU is concerned, will tell any lie to that end.

In a lot of respects the classic arguments against the EU are legacy complaints where the damage cannot be undone. Leaving the EU does not reverse or remedy what was done to us and for the most part the UK has adapted to the new paradigm. What concerns us is whether there are the necessary safeguards to prevent yet more sweeping changes in the face of globalisation.

We are told that trade liberalisation is good for us – and on a philosophical and technical level I’m not going to argue, but on the human level, it has consequences that directly impact our lives.  This is something we should have a say in, be it opening our markets to American agriculture or letting market forces eat away at our steel industry. There are strategic concerns as well as the economic – and a dogmatic adherence to the principles of free trade is dangerous.

In recent times we have seen EU trade deals derailed because of concerns like chlorine washed chickens, but one suspects this is largely motivated by an inherent anti-Americanism, and were these topics included in any other trade agreement, nobody would have ever uttered the phrase “chlorinated chicken” – and we’d already be eating it.

The fact is that too much is going on out of sight and out of mind. Brexit is a remedy to that. We have already seen a robust debate on the shape of a future UK-US agreement and I fully expect other deals to come under similar scrutiny. I know the powerful UK agriculture lobby will be watching very closely indeed.

As much as Brexit is necessary as a defensive measure against hyper-globalisation, it is also about restoring the UK as an independent actor. As far as most people are concerned, foreign policy is just who we decide who to drop bombs on and who to dole out humanitarian aid. This is what happens when trade, a crucial element of foreign policy, is broken out of policy making and farmed out to the EU. It leaves all the strands of foreign policy happening in abstract to any coherent agenda while removing one of the more useful leverage tools.

Brexit is a means of reintegrating all of these separate strands so that we can have an effective presence on the world stage without seeking a convoluted compromise through Brussels – assuming we can get permission to act at all. The best part of it is that it does not preclude close cooperation with the EU. Obviously Brexit does not give us a free hand and our legacy ties with the EU will be a constraint, but it opens the way for more imaginative approaches than cumbersome EU FTAs.

One overlooked facet of the Brexit debate is that it gives us the opportunity to reconfigure a lot of the agreements we already have via the EU. In most respects, carrying over EU deals need not be a great headache, not least since we are maintaining existing schedules – but it’s the extras we can reappraise. In the EU-Singapore agreement there is a dedicated section on renewable energy – largely reproducing WTO tract. We could either enhance or delete these sections, establishing new joint ventures and working parities, including a number of sectors not touched on by the EU.

This need not happen in competition with the EU, rather it can be a complimentary strategy where one of Europe’s trading powers is free to explore avenues which could potentially benefit all of the EU. Having a major trading nation not bound by the bureaucratic inertia of the EU could well be a secret weapon for Brussels. That would make future EU-UK relations a strategic partnership rather than a subordinate relationship. There is no reason why Brexit cannot be mutually beneficial. All it takes is a little bit of vision.

Deal or no Deal?

Britain faces some challenging Brexit negotiations. However viewed through the lens of best practice identified in a commercial negotiating manual, there is evidence that Britain will secure a deal with the EU.

Pre-election rhetoric suggests that the tone of the negotiation might be ‘competitive’ (i.e. hostile). Much of it will actually be about co-operation on matters of common interest like trade, travel, security, etc.

Power is more balanced than some would say. We might buy more from the EU than vice-versa, but proportionately have more to lose on trade. However needlessly damaging a major customer will harm supply chains, EU exporters, EU nationals working in the UK and sending money home…

Over 50% of UK shares are now owned by international investors. EU holdings in the UK are worth £496bn.  At the G20 meeting in September, Japanese business and government demanded Single Market-type access be maintained by both sides.

Policy on both sides is for free trade. This is obviously not absolute –  the EU won’t suddenly complete the single market or open up sensitive defence procurement. But it is committed to various international agreements that commit towards trade liberalisation, stability and not raising barriers.

The EU is a keen supporter of the World Trade Organization (WTO) whose rules allow regional unions (such as the EU) as a means of easing trade between members, but not to raise barriers to trade. In fact, they must avoid creating adverse effects upon other WTO members

There is plenty of incentive for both sides to reach an agreement – if just because they will have to live together as neighbours. The UK could be a major ally in defence and security, so long as its economy is not crashed. It could also be a substantial makeweight in future joint trade deals?

The global economy is so interlinked that failure to reach a viable deal will affect wider economic confidence and stock markets. In the EU, exposed economies like the Irish Republic and Spain would take a hit, with likely local backlash against EU interests – just before the 2019 European Parliament elections.

A botched deal could see the Euro and Sterling hit, with safe haven currencies like the Yen suddenly soaring, hitting wider currency and export stability.

Another factor is the view of the EU’s ‘social partners’.

ETUC represents EU-wide trade unions. Employers’ bodies include Business Europe (‘a CBI’), UEAPME (representing SMEs) and CEEP (representing public service providers). Seen as influential stakeholders, they wish to avoid austerity and damage to Europe’s workers and companies.

Although the EU and UK will start negotiations with some diverging and conflicting positions, remember that this is quite normal for negotiations. Demands tend to be padded so that compromises are seen to be made. Spain has already gone back on the EU ‘demand’ over Gibraltar. In practice, there will be a lot of common ground (e.g. on expat rights). Expect positions to converge.

Despite pre-election rhetoric to appear ‘tough’, it has long been seen that May will play safe and trim to a position that can be pushed through Parliament under tight timescales. This indicates arrangements very similar to being in the Single Market (EEA) as a fallback while the ideal of moving to a bespoke Comprehensive Free Trade Agreement (CFTA) is worked on as arrangements stabilise.

In March, Michel Barnier, the EU’s chief negotiator, appeared to be leading the UK in the direction of EEA membership as the Brexit option with the least disruption.

Threatening to walk-away was part of that rhetoric. Neither side wants ‘Mutually Assured Destruction’ that ‘no deal’ would give. You can bet there will be a deal, even if it’s part agreement, part provisionally keeping respective ships afloat while talks continue.

Negotiations are often about saving face, getting a deal that can be sold to key audiences. The UK might, for example, get better trade terms in exchange for saving the EU a budget shortfall before 2021. Except it won’t be billed as a cave-in, at least in the UK. It might be portrayed as a goodwill gesture to have a joint ‘Brexit adjustment fund’?

Other areas of ‘compromise’ short term might be over accepting EU standards and judgments (which the UK might do anyway in ‘nationalising’ EU laws), or free movement of people. Theresa May has refused to guarantee less EU immigration, consistent with keeping EU citizens’ ‘acquired rights’.

Attitudes to paying the EU vary from ‘they’re getting nothing’ (apart from for joining in specific programmes) to ‘£60bn is nothing to pay for winning back our priceless democracy’. The EU is already preparing for economies after 2021 in its budget, which might reveal the real expectation. However with Germany’s election coming, Angela Merkel and the EU will not want to be seen as saddling Germany with extra contributions. We can expect a harder line short-term.

As an alternative to direct payments, the UK might gesture on recycling saved payments into projects of common interest like defence or tackling irregular migration?

A successful negotiation is one where both sides can claim some success at the end, even if some concessions leave bruises!  Experienced negotiators will recognise that the other party will need to maintain its image too, and they will not seek to humiliate.

Earlier perceptions that the EU might want to ‘punish’ the UK to deter it or others from leaving have been overplayed. Its luminaries might have been exorcising tensions immediately after the referendum shock, and the line taken since has typically been more conciliatory as heads cool. In practice, there is little evidence that any other member state currently wants to follow the UK out of the EU.

European Council President Donald Tusk has quipped that Brexit is ‘punishment enough’ as the UK copes with some upheaval.

There are already outline solutions to some identified problems. The EU can give legal exceptions (derogations) on border measures which might ease the Irish situation. The WTO ‘waiver’ might allow provisional preferential trade agreements to run for a couple of years should there be difficulties (e.g. time-wise) in finalising what is necessarily a complex deal.

The Lisbon Treaty focuses the EU towards the vision of ‘an area of prosperity’ marked by cooperation with neighbouring countries.

Lord (Paddy) Ashdown sees the UK getting a tailored Norway-like deal with a work permit system. He’s not just a Lib Dem peer; he’s President of the European Movement federalists in the UK.

http://www.newalliance.org.uk/ref617.htm has references used for this article.

Another nail in the coffin of the Single Market?

Last month, an event occurred which got little fanfare, but is likely to have a significant effect on the future of the UK, especially after Brexit. What happened was that the WTO Trade Facilitation Agreement has now entered into force

Lord Lamont, the former UK Chancellor of the Exchequer wrote in The Telegraph:wto

The single market is open to all advanced economies, in exchange for paying a relatively modest tariff of 3 to 4 per cent, something that evidently does not stop non-EU countries from selling within it.

‘Every developed country has access to the single market. The EU has a relatively low external tariff with the exception of certain goods such as agriculture.’[i]

When taken prima facie, Lord Lamont’s comments are seemingly correct. Only those countries who are essentially rogue states or have violated international agreements don’t have the ability to conduct trade with the EU, and the EU’s external tariffs are fairly low.

But Tariffs are only half of the story.

The problem of tariffs could be easily addressed by the UK signing a goods Free Trade Agreement (FTA) with the EU. Given the high volume of UK- EU 27 trade, this is seemingly a given.

A basic FTA need not take long to complete. The EU’s earlier iteration the European Economic Community (EEC) concluded basic FTAs in the early 70’s that took 6-7 months to agree, sign and come into force.

But the other half of the story relates to non-tariff barriers (NTBs), sometimes called “Non-Tariff Measures (NTMs)”. These comprise everything else that can slow down trade or make it more expensive or complex.

The European Commission describes the Single Market as:

‘…one territory without any internal borders or other regulatory obstacles to the free movement of goods and services. The Commission works to remove or reduce barriers to intra-EU trade and prevent the creation of new ones so enterprises can trade freely in the EU and beyond. It applies Treaty rules prohibiting quantitative restrictions on imports and exports (Articles 34 to 36 TFEU ) and manages the notification procedures on technical regulations (2015/1535) and technical barriers to trade.’[ii]

So the Single Market goes beyond tariff reduction, and encompasses far more than just a Free Trade agreement. This is why the ‘remain’ side in the EU referendum campaign were so concerned about the UK leaving the European Union’s Single Market.

‘Remainers’ believe that after Brexit, even if the UK does get a Free Trade Agreement, our importers and exporters will be deluged with red tape, endless forms, checks and other barriers to entry as we will be operating outside the Single Market.

These are valid concerns, but we believe they are largely exaggerated – and here are the reasons why:

wco

The EU has signed up to the WCO

In July 2007[iii], the EU signed up to the World Customs Organization (WCO) which works to enhance customs co-operation between signatory countries and works to simplify issues such as Rules of Origin (ROO).

From the European Commission’s own press release:

‘On 30 June 2007, the Council of the World Customs Organization (WCO) decided to accept the request of the European Union to join the WCO as of 1st July 2007. This decision grants to the European Union rights and obligations on an interim basis akin to those enjoyed by WCO Members.

‘The WCO plays an important role in promoting international customs co-operation and addressing new challenges for customs and trade. It is deeply involved in designing and implementing policies worldwide that integrate measures, which help ensure supply chain security, combat counterfeiting, promote trade and development, as well as guarantee efficient collection of customs revenues. Membership of the WCO highlights and confirms the central role and competence of the EU in international discussions on customs issues including customs reform. EU involvement in the WCO will focus on the full spectrum of customs issues, in particular the following broad areas:

  • Nomenclature and classification in the framework of the Harmonised system;
  • Origin of goods;
  • Customs value;
  • Simplification and harmonisation of customs procedures and trade facilitation;
  • Development of supply chain security standards;
  • Development of IPR enforcement standards;
  • Capacity building for customs modernisation and reforms, including in the context of development cooperation;
  • Mutual Administrative Assistance for the prevention, investigation and repression of customs offences.

‘The EU is a contracting party to several WCO Conventions, and contributes to the work of this organisation, including by ensuring presence and coordination with the Member States in defining and representing EU positions in the relevant bodies managing these conventions.’

The UK signed up to the WCO in the 1950’s and is a signatory in its own right, so will be able to address customs issues with the EU via this body after Brexit.

Harmonisation with EU rules

The UK’s rules and regulations are already synchronised with EU/EEA (European Economic Area) regulations and standards after decades of membership. This will also be true on the day after Brexit due to the Great Repeal Bill. Hence a strong (if not overwhelming) argument for ‘rules equivalence’ can be made.

The WTO Agreement on Rules of Origin (ROO)

This agreement encourages WTO countries (including all EU countries) to have fair and transparent rules pertaining to Rules of Origin:

 wtostructure

These rules state that:

‘Rules of origin shall not themselves create restrictive, distorting, or disruptive effects on international trade.  They shall not pose unduly strict requirements or require the fulfilment of a certain condition not related to manufacturing or processing, as a prerequisite for the determination of the country of origin….rules of origin are administered in a consistent, uniform, impartial and reasonable manner’.[iv]

Guidelines in the EU treaties

treatylisbon

Article 8 of the Lisbon Treaty states that:

‘The Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on cooperation.[v]

As the UK will become a new ‘neighbouring country’ after Brexit, the EU is compelled to deal with us according to the Article 8 terms.

WTO Technical barriers to trade Agreement

The TBT agreement is key – it means that signatories (again, including the EU) agree to abide by rules about international product and technical standards. From the European Commission’s website:

‘The TBT notification procedure helps prevent the creation of international technical barriers to trade. It was introduced by the Agreement on Technical Barriers to Trade (the TBT Agreement), a multilateral agreement administered by the World Trade Organisation (WTO). It gives participants advanced knowledge of new technical regulations or conformity assessment procedures envisioned by other countries. The EU’s participation in the TBT Agreement helps businesses in EU countries access markets outside the EU.’

Aim of the TBT notification procedure

To avoid any potential technical barriers to trade, WTO Members submit national legislation at draft stage to other members of the TBT Agreement. They can then assess the impact on their exports and identify any provisions breaching the Agreement.

While allowing all WTO Members to maintain their right to adopt regulations, the TBT Agreement aims to:

  • prevent the creation of unnecessary and unjustified technical barriers to international trade;
  • prevent the adoption of protectionist measures;
  • encourage global harmonisation and mutual recognition of technical standards;
  • Enhance transparency.[vi]

The commission somewhat downplays the TBT agreement, however. What it actually states is that:

‘Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.

‘Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade.

‘Where technical regulations are required and relevant international standards exist or their completion is imminent, Members shall use them, or the relevant parts of them, as a basis for their technical regulations. Members shall give positive consideration to accepting as equivalent technical regulations of other Members, even if these regulations differ from their own, provided they are satisfied that these regulations adequately fulfil the objectives of their own regulations.’[vii]

Since UK regulations and standards will be equivalent to their EU counterparts from day one, and will continue to meet international standards going forward, it will be extremely difficult for the EU to reject UK products sold into the EU market.

WTO Trade Facilitation Agreement

The most recent agreement, the WTO Trade Facilitation Agreement (TFA) will further increase trade co-operation.

As the WTO website states:

‘The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.’[viii]

Perhaps especially important for Northern Ireland post-Brexit, the TFA also states that:

‘Each Member shall ensure that its authorities and agencies responsible for border controls and procedures dealing with the importation, exportation, and transit of goods cooperate with one another and coordinate their activities in order to facilitate trade.

‘Each Member shall, to the extent possible and practicable, cooperate on mutually agreed terms with other Members with whom it shares a common border with a view to coordinating procedures at border crossings to facilitate cross-border trade.’

The WCO welcomed the ratification of the TFA agreement in their press release of 22 February 2017, in which they wrote:

‘The World Customs Organization (WCO) congratulates the World Trade Organization (WTO) on the entry into force today of the WTO Trade Facilitation Agreement; an agreement that will expedite the movement, release and clearance of goods, including goods in transit, and which sets out measures for effective cooperation between Customs and other authorities, as well as provisions for technical assistance and capacity building in this area.

‘The WCO takes this opportunity to highlight that it will continue to seek improvements throughout the global supply chain to obtain the highest levels of safety, security and integrity, which will enhance trade facilitation for compliant actors. This will ultimately have a positive effect on the relationship between all border agencies and the Private Sector.

‘The entry into force of the Trade Facilitation Agreement (TFA) is an important milestone for the international trade and Customs community, coming about as a result of the fact that it has been ratified by 110 WTO Members, which pushes it above the threshold needed to take effect, namely ratification by two-thirds of the WTO’s 164 Members.’[ix]

In conclusion:

  • The volume and UK and EU will likely at least sign a basic goods FTA; meaning tariff-free goods trade will continue.
  • The UK’s rules and regulations are already synchronised with EU regulations and standards. This will also be true on the day after Brexit.
  • The UK and EU are signed up to the WCO, which exists to help simplify and resolve customs issues.
  • The WTO TBT agreement prohibits the EU from banning UK goods that meet international standards.
  • The WTO agreement on Rules of Origin means that the EU will have to ensure rules of origin are administered “in a consistent, uniform, impartial and reasonable manner” when dealing with exports from the UK.
  • The WTO Trade Facilitation agreement means the EU must co-operate with the UK on issues around the “movement, release and clearance of goods”.

When we combine these factors together we see that after Brexit, UK trade with the EU will be very similar after Brexit as before Brexit.

The EU has signed up to many agreements and treaties which in effect reduce the uniqueness of the single market.

Britain can therefore essentially have almost duplicate trade relationship by falling back on these international agreements (if necessary) which would mean that the UK could have the majority of the benefits of Single Market membership, but be free to choose which rules to obey when not exporting to the EU 27 countries or for domestic sale.

The TFA might not then be the final nail in the Single Market coffin (it is still useful to EEA members), but it is one substantial step towards reducing the importance of the Single Market to a post-Brexit UK.


[i] http://www.telegraph.co.uk/news/2016/06/13/not-only-can-britain-can-leave-the-eu-and-have-access-to-the-sin/

[ii] https://ec.europa.eu/growth/single-market_en

[iii] https://ec.europa.eu/taxation_customs/business/international-affairs/international-customs-cooperation-mutual-administrative-assistance-agreements/world-customs-organization_en

[iv] https://www.wto.org/english/docs_e/legal_e/22-roo_e.htm

[v] http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-european-union-and-comments/title-1-common-provisions/6-article-8.html

[vi] https://ec.europa.eu/growth/single-market/barriers-to-trade/tbt_en

[vii] https://www.wto.org/english/docs_e/legal_e/17-tbt.pdf

[viii] https://www.wto.org/english/tratop_e/tradfa_e/tradfa_introduction_e.htm

[ix] http://www.wcoomd.org/en/media/newsroom/2017/february/wco-welcomes-entry-into-force-of-the-wto-trade-facilitation-agreement.aspx

This article first appeared on the Bruges Group website and is used with permission.

Brexit and some alternative facts

In a time of universal deceit, telling the truth is a revolutionary act. (anonymous, often misattributed to Eric Blair aka George Orwell)

The truth is usually more complex and subtle than the simplistic soundbyte beloved of politicians and media headline writers. Fake news is not necessarily the problem; misinformation can be spread because the basic assumptions are incorrect, the background has not been thoroughly investigated or it is just speculation masquerading as fact.

The following are a couple of quite significant examples.  However, please don’t take my word and incomplete knowledge of these subjects for granted.  A much better source is Eureferendum.com and the original source documents.

Control of EU Immigration Requires Leaving the Single Market – NOT TRUE

How often have we heard or read this, but it is not actually correct.  The Single Market (aka European Economic Area), created by the European Union (EU) and to which the members of the European Free Trade Association (EFTA) also belong has free movement of goods, persons, services and capital as basic principles (set by the EU). The conditions of access of members of EFTA to the single market are set out in the Agreement on the European Economic Area which also includes free movement as a basic principle.

However, the EEA Agreement also includes an opt-out which can be applied unilaterally by members of EFTA (see Chapter 4, Safeguard Provisions, Article 112), but obviously not by Members States of the EU.  It states:

  1. If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Contracting Party may unilaterally take appropriate measures under the conditions and procedures laid down in Article 113.
  2. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Agreement.

This opt-out is intended to be temporary (until a permanent solution is implemented), but nevertheless can be invoked and maintained in the absence of that permanent solution.  It has been used already by Liechtenstein to control immigration and Iceland to control capital flows in the wake of the financial crisis.

The EU negotiators are already setting terms for the EU-UK negotiations – NOT TRUE

How often has the media reported that this or that person, with an appropriate grand EU-related title, is already laying down tough terms for us? In reality, at the moment there are no negotiators as such – just political nominations by various posturing organisations within the EU set-up and their self-important leaders or other politicians. The small print of the Lisbon Treaty Article 50 states:

  1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
  2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

Article 218(3) of the Treaty on the Functioning of the European Union states:

  1. Without prejudice to the specific provisions laid down in Article 207, agreements between the Union and third countries or international organisations shall be negotiated and concluded in accordance with the following procedure.
  2. The Council shall authorise the opening of negotiations, adopt negotiating directives, authorise the signing of agreements and conclude them.
  3. The Commission, or the High Representative of the Union for Foreign Affairs and Security Policy where the agreement envisaged relates exclusively or principally to the common foreign and security policy, shall submit recommendations to the Council, which shall adopt a decision authorising the opening of negotiations and, depending on the subject of the agreement envisaged, nominating the Union negotiator or the head of the Union’s negotiating team.
  4. The Council may address directives to the negotiator and designate a special committee in consultation with which the negotiations must be conducted.
  5. The Council, on a proposal by the negotiator, shall adopt a decision authorising the signing of the agreement and, if necessary, its provisional application before entry into force.

Clearly negotiations are with the Council (of the European Union) who nominates a negotiator and, at the time of writing, they haven’t done so, officially at least.

To sum up, all is not what is reported or stated to be true facts and because they are repeated so often, if not vehemently, it is easy to be taken in.

Overturning Referendums – it’s the European way.

Sometimes I don’t know how they do it, these politicians. They stand there with straight faces and say things that are not true. They know they are not true, we know that they are not true. And yet still they expect us to believe what they are saying.

Just recently we have seen a great deal of this. One after another pro-EU politicians have queued up to tell us that they are now reformed characters and that they have no intention at all of trying to keep the UK inside the EU. Oh no, of course not.

“There is no serious chance that the House of Lords will block Article 50” Yvette Cooper tells us. Nicola Sturgeon says she is interested only in protecting the rights of the Scottish government. Gina Miller, who launched the Article 50 court case, assures any one who will listen that she is concerned only to establish the proper process for the move.

You can believe them if you wish. Personally, I do not.

Let’s look at how the EU élite have reacted when previous referendums have gone against them.

In 1992 the Danish voted NO to the Maastricht Treaty on European Union. Everyone agreed that democracy was paramount and that the result would stand. Then the EU promised to give Denmark some opt-outs. The slavishly pro-EU Danish government then held a second referendum, which it won.

In 2004 the EU panjandrums agreed the grandly named “Treaty establishing a Constitution for Europe”. This sought to sweep away all previous treaties and replace them with a single, unified constitution. That would be a constitution like any other unified state has.

Ratification got under way with Parliaments in several countries pushing it through with big majorities. Spain held a referendum that approved the treaty. Then France held a referendum, which ended with a vote of 55% NO, followed by the Netherlands which gave a resounding 61% NO. Referendums were promptly cancelled in Poland, Portugal, Ireland the UK and Denmark. EU leaders promsied to “respect” the referendum results and called for a “period of reflection”.

That period of reflection ended with the Lisbon Treaty, which was virtually identical to the failed Constitution. This time it was pushed through the French and Dutch parliaments without a referendum. So much for respecting the results.

Then the Lisbon Treaty ran into trouble when referendum in Ireland saw a 53% NO vote. In June 2008 the EU Parliament held a debate on the Irish result. Speaker after speaker declared that they would “respect the result”. But of course, they did not. Just a year later the slavishly pro-EU Irish government held a second vote. This time the EU leaders issued a series of high sounding promises about legal guarantees. This time the Irish voted YES.

So we can see the pattern. If a referendum produces a result the EU does not like, the élites issue high sounding – but utterly worthless – statements about respecting democracy. They they announce a few cosmetic changes and hold a second vote.

I have no doubt at all that this is what is being planned by the Europhiles who were so aghast at losing the British referendum in June. The key difference is that in Denmark, Ireland and elsewhere the national government was obbsequiously pro-EU and could be relied upon both to hold a second vote and to assure their populace that the vague changes were truly wonderful.

Britain in 2016 is different. We have a Prime Minister who has declared that “Brexit is Brexit”. Like her or not, Mrs May and her pro-Brexit administration is all we’ve got to stand a chance of enssuring that our referendum result is not only “respected” but also implemented.