No deal is not an option

Could food, medicines and petrol run out in the event of a no deal scenario? The short answer is yes, absolutely. It only takes a small disruption to sophisticated supply chains for things to grind to a halt.

Leaving the EU without a deal means becoming a third country overnight. The status of having no formal trade relations. The UK would not exist as an entity anywhere inside the EU legal framework. We would be subject to third country customs controls without any of the single market product approvals or valid certification.

If you don’t have the valid paperwork for your goods to circulate freely in the market then you have to find a named importer and have your products re-certified inside the EU – at considerable cost. Some classes of foodstuffs must be diverted to border inspection posts.

So that means if we go from single market members to being a third country then overnight the ports back up, Operation Stack goes into effect and lorries are sat on the motorway for days. That takes trucks and drivers out of circulation. The normal flow of supply chains is interrupted.

Remember this works both ways for trucks coming in and out of the country. Meanwhile companies by law have to file declarations which our current system is not designed to cope with. For some suppliers there will be no point in trucks even leaving the depot.

With roads jammed with trucks, supply chains collapsing very rapidly we see rumours of shortages which leads to panic buying. It happens every time we get even a dusting of snow where Tesco runs out of bread and loo roll even if there is no actual shortage.

Those of you old enough to remember the fuel strikes will remember how perilously close the country came to grinding to a complete halt. This would be the same with fuel lorries trapped in traffic. The way the EU legal system works is that if there is no paperwork and there’s no tick in the box then there is no trade.

All the while keep in mind that we will have been ejected from the treaty system governing airways and flight-plans, and without legally valid flight-plans then aircraft are grounded. All rights in the EU airline market are rescinded.

There is nothing in WTO rules that compels the EU to breach its own rules even in an emergency. Driving licences wouldn’t be valid, nor would qualifications so there would be no mutual recognition of conformity assessment. Veterinary inspectors, drivers and pilots would be disqualified.

This is not “remoaner” speculation. Our own findings at The Leave Alliance paint a pretty grim picture of the WTO Option. This is a simple matter of law. If we have no formal relations with the EU then trade simply does not happen.

Longer term, as a third country, the costs of delays, inspections and re-registration make UK business uncompetitive in the EU. Costs go up, contracts are lost, deadlines are missed, tariffs kick in. This is what it means to be outside the European Economic Area.

All of this has been made clear in the EU’s Notices to Stakeholders. These are formal notifications based on the current law. This is no scaremongering or diplomatic threat. This is the business end of the EU.

We don’t know how long it would take to get the trucks rolling again. We’d have to revert to paper declarations because the current IT is not set to cope with the volumes of declarations nor is it mapped to a third country regime.

There are mid-term fixes in the form of bilateral agreements but these would take time and since the UK will have left without paying, the EU would not be in a rush to do us any favours. It will take years to rebuild a functioning customs and regulatory system.

In the meantime businesses cannot afford to wait. Suppliers to EU assembly lines will have no choice but to relocate. Delays will naturally mean production slowdowns and all the secondary suppliers will take the hit.

Trade is more than just movement of goods and there are far bigger worries than tariffs. By leaving without a deal all the otherwise manageable problems of exit happen overnight without the capacity to cope with them. We would be in very serious trouble.

Frictionless trade does not happen by accident. It is the product of thirty years of technical and regulatory collaboration and the result of several strands of agreements on everything from fishing to aviation. Without formal status in the system then UK trade collapses.

Additionally, it’s not just the immediate effects we must consider. It’s the ripple effect that passes through every supply chain, every regulatory system and anything that depends on licencing, certification and approvals. Nearly all of it has an EU dimension.

Without alternative arrangements a lot of our insurances become invalid, contracts voided and work will grind to a halt an major infrastructure programmes. It will simply be illegal to operate without valid insurances.

So deep and comprehensive is EU integration that there is no escaping the regulatory gravity of the EU without serious and lasting harm. It is therefore not remotely realistic to suggest that things can function without a formal framework for trade. Leaving without a deal simply is not an option.

Who do you think you are kidding, Mr Juncker?

Jean-Claude Juncker, the President of the European Commission, delivered a speech to the European Parliament. on Monday March 12th .When he mentioned that the UK was going to leave the EU on March 29th 2019, some pro-withdrawal UK MEPs started cheering, which led Juncker to add “when you will regret your decision”. It is now over 18 months since the referendum and there is little evidence as yet of any serious voter regret.  Why should things be any different in a year’s time? After all, some of us have spent years, if not decades, campaigning to regain our independence. We’re not going to have second thoughts.

The immediate post-Brexit may be painful at first, particularly if the current muddle in the Government’s Brexit strategy is not resolved, but Brexit is like an operation to remove a malignant tumour – not going through with it would be far worse and lead to certain death.  The pain is a price worth paying.  Mind you, there is no need for the pain to be any greater than necessary. We certainly do not want to find ourselves stuck in a transitional deal on the EU’s current proposed terms which would both cripple our fishing industry  and make it very difficult ever to achieve a full and complete break. Reports that the Government and the EU are close to an agreement are thus a serious cause for concern.

Thankfully, transitional arrangements will only be signed off as part of an overall separation deal and we are still a long way from this being finalised. Our side is still struggling to move beyond soundbytes and wish lists.  Michel Barnier urged Theresa May to speed up the Brexit negotiations and define her vision for the sort of future relationship she wishes our country to have with the EU.  This does beg the question as to whether our team actually realises that the soundbytes and wish lists are nothing more than that. Could it be that, in Mrs May’s eyes, this actually is her vision?

Meanwhile, in spite of the lack of progress, the UK economy continues to defy the doom merchants. There is no question that predictions of economic meltdown before Brexit day have been proved totally and completely wrong. Even Philip Hammond, the Chancellor, was uncharacteristically upbeat  in his 2018 spring statement. Annual GDP growth of  1.5% or less in the coming years is not wonderful but it’s heaven compared with the  nightmare scenario portrayed by George Osborne a couple of years back.

Mind you, economic forecasting at the moment is completely pointless until we know  what the route to Brexit will look like. The better-than-expected performance of the UK economy to date does not in any way mean that we are guaranteed to sail out of the EU’s escape hatch in a blaze of glory. M. Barnier is  right – we really must come up with an exit plan that honours the mandate given by the British people on 23rd June 2016 and yet ensures that our businesses can continue to trade reasonably seamlessly with the EU if not on the same terms as before. So far, regrettably, there has been no sign of any coherent plan and the Brexit clock continues to tick. But regret our decision to leave? NEVER.

 

Photo by UE en Perú

Welcome Intervention from Mr Gove & Ms Davidson Needs Clarity

Fishermen’s organisation Fishing for Leave strongly welcomed Mr Gove and Ms Davidson’s words but say more clarity is needed and the government needs to stop playing semantics.

Michael Gove and Ruth Davidson’s interventions come days after it seemed that senior government figures would fail to rebuff the EUs demand that a condition of a Free Trade Agreement is continuation of; “existing reciprocal access to fishing waters and resources”.

Mr Gove and Mrs Davidson stated their commitment that;

“As we leave the EU, we want the UK to become an independent coastal state, negotiating access annually with our neighbours….. the Prime Minister has been clear: Britain will leave the CFP as of March 2019”.

Fishing for Leave says it is welcome that both have lent their support to this but say where this turns south and these statements can ring hollow is they are impossible to fulfil if fishing is trapped in a transition and clarity is needed on this.

They it is an admission that fishing will be in a transition in the words;

“during the implementation period we will ensure that British fishermen’s interests are properly safeguarded.”

Alan Hastings of FFL said “It’s stating the obvious that the UK will officially “leave” the CFP on March 2019 as our membership ceases under Article 50. However, the transition means re-obeying all EU law after we leave meaning Brexit In Name Only (BRINO)”.

“During a transition the EU can enforce any detrimental legislation to cull the UK fleet which makes the pledge to safeguard British fishermen and a bright future academic and hollow”.

“There’s been well publicised representations to the government and MPs that being trapped in a transition will see a large proportion of the UK fleet culled under forthcoming inept EU policy that is already agreed”.

“This would allow the EU to use international law (Article62.2 of UNCLOS) to claim the “surplus” resources the UK would no longer have the fleet capacity to catch”.

“So why does the government stop playing semantics and clearly state in unequivocal terms not that we ‘leave the CFP’ but that there will be no continuation of it in any way shape or form post 2019?”

“Until that assurance is forthcoming everything else is a PR exercise playing on words that folk are getting sick fed up with regards Brexit”.

WELCOME COMMENT ON RESOURCES MUST BE ACHIEVED

FFL commend sboth Mr Gove and Ms Davidson for reinforcing that “we agree we must deliver a fairer allocation for the British fleet in our own waters”.  This echoes the PMs speech of “fairer allocation of fishing opportunities for the UK fishing industry.”

Fishing for Leave highlighted that under international law and ‘zonal attachment’ a nation is entitled to a proportion of any shared stocks based on the abundance of that stock in its waters.

Alan continued; “We hope and look forward to Mr Gove and Defra publicising that a “fair share” is no less than the 750,000 tons of fish the EU catches in British waters every year that are rightfully ours in exchange for the 90,000 tons we catch in theirs”.

“Anything less than fulfilling the government’s commitment to work under international law and therefore this international premise of zonal attachment would see a token gesture towards fairer shares”.

It’s music to hear senior politicians acknowledge and advocate that “We believe it is vital that we regain control over our own fisheries management…. we both agree that our fishing industry stands to benefit from our departure from the common fisheries policy”

“It is vital that the opportunity of repatriating the 60% of the fish the EU catches in British waters, which could double the British fishing industry’s worth to £6-8bn every year, is achieved”.

“FFL looks forward to the government substantiating the welcome whispers from Defra that new UK policy will give fair opportunity to all fishermen under a more sustainable management system to see the dividend of repatriating our waters help to rejuvenate coastal communities”.

“This is needed to replace the environmentally disastrous CFP which has forced consolidation to ever fewer boats and ports but if it is vital to regain control and they recognise fishing an benefit why trap fishing in a transition for 21months where the EU can move the goal posts?”

STILL NO REBUTTAL OF TRADING FISHING FOR TRADE DEALS

There is still no rebuttal to the PMs speech and Philip Hammond’s suggestion on agreeing shares and access to UK waters as a giveaway for a wider deal.

The PM said;

As part of a new economic partnership we want to continue to work with the EU to manage shared stocks in a sustainable way and to agree reciprocal access to waters

This statement and Hammond’s comments openly state that fishing will be tied and sacrificed as negotiating capital for a new economic partnership.

All this flies in the face of Mr Gove and George Eustice’s earlier comments at an EFRA Select Committee that fishing access and resources wouldn’t be tied to wider trade negotiations.

It’s time for the government to come out fighting to unequivocally succeed on this “acid test” by clearly saying there will be continuation or any ties to the CFP after March 2019 and that we really will take back control.

The Council spells it out – but David Davis doesn’t

The latest draft negotiating guidelines from the European Council on Brexit couldn’t be clearer when it comes to fishing. Section 7 begins as follows:-

“As regards the core of the economic relationship , the European Council confirms its readiness to initiate work towards a free trade agreement (FTA), to be finalised and concluded once the UK is no longer a Member State. Such an agreement cannot offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof.

This agreement would address:

i) trade in goods, with the aim of covering all sectors, which should be subject to zero tariffs and no quantitative restrictions with appropriate accompanying rules of origin. In this context, reciprocal access to fishing waters and resources should be maintained.”

Let us be quite clear:- this document is not discussing a transitional agreement but a long-term trade deal. In other words, unless we allow essentially a continuation of the Common Fisheries Policy in all but name,  there will be no deal on trade.

Will our government  show the necessary resolve to indicate in no uncertain terms that the jobs of our fishermen are not going to be used as bargaining chips?

Given David Davis’ performance at the most recent meeting of the European Scrutiny Committee, it is hard tt feel confident about this. Even when it came ot the transitional arrangements, he was very evasive. Questioned by both Kate Hoey MP and Richard Drax MP, he would not state clearly and unambiguously that our Exclusive Economic Zone will be managed by the UK authorities alone after March 29th 2018. He said “we are not trading away our fishing rights” but he also said “we haven’t begun to discuss fishing”. Well, Mr Davis, the EU has made its position clear. It wants a continuation of the CFP not only in the transitional period (if it happens) but beyond.  There isn’t much to discuss – only one word needs to be uttered: NO.   

Please see also Fishing for Leave’s comments on the draft negotiating guidelines.

The EU’s potential lifeline for Mrs May’s Brexit

The European Union (EU’s) Brexit negotiators from Mr Barnier (chief negotiator) downwards must have long since realised that Mrs May, Mr Davis and the Department for (not) Exiting the European Union are incapable of serious negotiations. Meaningful progress towards leaving the EU in an orderly way including suitable agreements, arrangements and infrastructure is practically non-existent; there is a mountain of detail yet to climb. What, then, can the EU do to rescue the process and Mrs May, since Mr Barnier has previously stated on more than one occasion that he can’t negotiate with himself?

The view from Brussels must be of a weak prime minister leading a fractious, divided party and government, who has a poor grasp of detail and instead relies on spin, wishful thinking and dithering.  Even the output from the Department for (not) Exiting the European Union is poor and vague to the extent of being practically useless. Their website, where comprehensive information and practical guidance on Brexit, and hyperlinks to further sources of information should be available, is more of a case study in superficiality, grandstanding and self-aggrandisement.  There is not even a link to the European Commission’s website on Brexit preparedness.  So whose job is it to help prepare the UK for Mrs May’s decision to leave the Single Market and – by extension – the European Economic Area, EEA?

By contrast, the output from the European Commission, setting out its increasingly uncompromising position, is clear, focused and comprehensive.  Right from the beginning, the EU has been making the running.  Its dedicated website illustrates the impressive (or terrifying) detail of their ‘public’ vision of where Mrs May and Mr Davis’s Brexit is heading and the implications, which appear to look like ‘falling off a cliff edge’ to many UK businesses.  Its advice to stakeholders (available here) repeatedly spell out, in as much detail as possible, what will undoubtedly happen across a wide range of activities and policy areas when the UK becomes a ‘third’ country after leaving the EU (on 29th March 2019) and the EEA.  It is quite likely EU officials often frustratingly ponder the question, “Do our British counterparts and their political leaders understand any of this, and do they actually care what it all means?”  The problem for our team of negotiators is that they do not seem to know and understand EU laws and regulations, their rationale and implementation. This is essential if they are to develop appropriate strategies, negotiating positions and challenges to the EU’s tough, logical and systematic stance.

From the EU’s perspective they have helpfully agreed to a transition period limited to 21 months which is necessary to give Mrs May time to negotiate a free trade agreement. In reality, much longer is probably needed. However, the EU’s terms for this transition period  – which have still not been agreed – would be very unpopular in the UK and thus may never be accepted given Mrs May’s weak position in Parliament.  The EU’s terms would make the UK into a temporary or maybe even permanent EU Vassal State where Brexit means Brexit in name only.  Crashing out of the EU without transition arrangements and not having any form of mitigation of the consequences of ‘third’ country status (the “cliff edge”, in other words) is becoming increasingly likely.

The European Commission is well aware of political developments in the UK and of the consequences of no deal scenarios (given the detail on their website). Its negotiators also have to confront the contradictions in Mrs May’s position.  Frictionless trade (as required by Mrs May and Mr Davis) is not possible as a ‘third’ country outside the Single Market (and the EEA).  Time is running out for businesses both here and in the remaining 27 Member States of the EU to adjust.  Time is also impractically short to put in place new facilities and legislative frameworks needed by a ‘third’ country such as border inspection points, designated entry points and the recruitment and training of staff.  What can the EU do, if it is so disposed or there is some behind-the-scenes collusion going on, to extend Mrs May a lifeline and avoid the ‘cliff edge’?

Any EU-sponsored lifeline needs to protect their interests. It has to operate within the EU’s objectives, legal framework, and established practices. It mustn’t ‘rock their boat’ or set any potentially disadvantageous precedent. It also needs to be sellable across a wide range of opinion in the UK, addressing as far as possible rational fears and aspirations.

The only viable option for an EU-sponsored lifeline is to facilitate the UK re-joining the European Free Trade Association (EFTA) and use this as a basis for retaining membership of the EEA for at least the transition period. It appears that the European Commission may be seriously evaluating the EFTA/EEA route for transitional arrangements for the UK,  as noted by an EFTA Court judge (Mr Carl Baudenbacher) giving evidence to the Commons Committee for Exiting the EU on 7th February 2018 and reported in the Telegraph on-line.

The EFTA/EEA option is not perfect, but as a holding position while something better is negotiated, it is much better than the transitional deal currently on offer. Hard Brexiteers could be won over by the facility to control immigration through unilaterally invoking Article 112 (the Safeguard Measures) of the EEA Agreement.  Further, the EFTA route to EEA membership gives members outside the EU a say in EU legislation affecting the EEA, is largely free (although ‘voluntarily’ Norway does contribute to regional development funds) and is outside the jurisdiction of the European Court of Justice (ECJ). The EEA Acquis or body of law is about a quarter of the total EU Acquis since it only relates to successful functioning of the EEA  in other words, issues relating to trade. And EFTA members can make their own trade agreements with other countries.  Membership of the EEA solves the problem of maintaining a soft border in Ireland between the Irish Republic and Northern Ireland.  It also gives us full control of fishing in our Exclusive Economic Zone.  Those worried about the economic effects of the ‘cliff edge’ could be won over because the EFTA/EEA option prevents this allowing practically frictionless trade to continue. The EEA agreement (for EFTA members) can be adapted to suit their interests.  Thus the UK (within EFTA) could get a customised version.

We cannot know what the European Commission is covertly doing and how far its efforts, if any, have progressed to save Mrs May, the UK and the EU from her folly.  However, given the efforts it has visibly extended to help enterprises both here and in the 27 remaining Member States to understand and adapt to the implications if Mrs May does not change her decision to leave the Single Market, nobody knows better the potential disaster she is determined to inflict and how it can be avoided.

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Legislation for the Great Repeal Bill to be introduced soon

The Brexit secretary, David Davis, has indicated that legislation for the “Great Repeal Bill” – the incorporation of laws passed by the EU onto our statute books so that they take their authority from Westminster rather than Brussels, could be introduced as early as next week.

The objective of this Bill is to enable life in the UK to run as smoothly as possible during the immediate post-Brexit period when, under the rules of Article 50, the EU treaties will cease to apply.

Obviously, it would not be appropriate for all EU legislation to remain on the EU’s statute book lock, stock and barrel. Thankfully, it appears that there is growing awareness that EU fisheries legislation must not apply once we leave. We will no doubt be made aware of other exceptions in due course. They will either need so much re-working that it is best to start from scratch or else they are totally unsuitable.

There are also plenty of other pieces UK legislation which have been put on our books such as the Landfill Directive or the Interoperability Directive, which are far from ideal, but with which we can live for a couple of years. After all, the Government will have its hand full dealing with essential issues, including the complex subject of trade, a subject about which little of substance has been revealed as far as exit strategy is concerned.

Therefore, much as many of us resent the fact that so much of our legislation during the last forty years has originated in Brussels rather than Westminster, we have little choice. Not bringing this legislation across would leave us without any standards and regulation in many crucial areas of our nation’s life, including health standards for bathing water or car exhaust emissions. Some of them are actually quite sensible. After all, even the worst of régimes occasionally come up with some good laws. Only when we have achieved our very challenging objective of leaving the iron grip of the EU will the resources be available for the re-evaluation of these regulations.

Photo by (Mick Baker)rooster