Brexit White Paper July 2018 fails to deliver frictionless trade

Unworkable, risky wishful thinking on frictionless Single Market trade

The Government’s recent White Paper entitled The Future Relationship between the United Kingdom and the European Union is unworkable, risky wishful thinking as far as frictionless trade with the Single Market (and wider European Economic Area, EEA) is concerned. The White Paper also fails to take cognisance of how the European Union (EU) and Single Market functions, and its direction of travel, which makes it unlikely that the EU can accept it. If the EU did accept these insubstantial, ‘cherry picking’ proposals, businesses and regulatory authorities, etc. would struggle to make them work.

This short examination does not consider Facilitated Customs Arrangements etc. It is difficult to work out exactly what is being proposed and how it will operate. However, it appears to be unproven and to increase the complexity and costs of importing and exporting goods and services.

Vague unreality without any practical solutions

A major shortcoming of the White Paper is the lack of detail.  It is unclear what the various terms used and their proposals actually mean in practice, what they cover and what they omit. There is also no recognition of any problems or limiting issues that need to be addressed, and no consideration of timescales or resources needed to turn the theory into reality.  Important terms not explained include: goods, services, Common Rulebook, Free Trade Area for goods, approvals and authorisations, ‘sit alongside’, ‘open and fair’ and ‘participation in EU agencies’.  These are critical to understanding and avoiding impracticalities, ambiguities, arguments (with the EU) and confusion.

Whilst goods and services are to be treated differently, there is no analysis about how they can be separated, which could often be very impractical.  The only example of a product, vaguely and briefly considered, is mutual recognition of type approval of motor vehicles, which is itself unlikely to be acceptable to the EU.

The EU’s legal basis for Frictionless Trade in Goods is ignored

The White Paper’s aspiration is for frictionless access for goods – a free trade area part in and part outside the Single Market. There would then be one set of approvals and authorisations for goods to be sold in both markets (UK and Single Market). How this will work is unclear given that EU Directives (the EU Acquis) relating to the Single Market governs how it functions.

The EU’s direction of travel (for the Single Market), is towards harmonised standards, regulations, and enforcement or surveillance through a top-down centralised legalistic and bureaucratic framework. This gives the European Commission and agencies ultimate control inside the Single Market.  This is the basis for frictionless trade. The European Free Trade Association (EFTA) incorporates relevant EU Directives into their own body of EFTA/EEA law in order for them to participate in the wider EEA.

Generally there are no deviations from the EU Directives except those permitted within the existing legal regulatory framework.  Any change must be incorporated into EU law first.  Countries outside the Single Market (and wider EEA) are ‘third’ countries effectively outside EU control or surveillance necessitating appropriate measures regarding imports.  The White Paper effectively ignores this and assumes the EU will agree to the changes and the UK exceptionalism being proposed.

The EU’s Directives for Products are ignored

The White Paper does not mention any actual EU/EEA legislation and how it will be affected, nor does it discuss practicalities. There is also no acknowledgement of the EU’s position on trade in goods with ‘third’ countries.  The EU’s legally mandated arrangements to control diseases and parasites etc. in imported livestock, products, plants, packaging etc. from ‘third’ countries are largely glossed over.

Note:    EU’s approach (to products) is outlined in principle in COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Enhancing the Implementation of the New Approach Directives , in more detail in the EU’s Guide to the implementation of directives based on the New Approach and the Global Approach and encapsulated in EU law in REGULATION (EC) No 765/2008 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93. The EU has also recently spelt out its position, which is consistent with their New and Global Approach Directives, in Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of industrial products.   The adverse effect of Mrs May’s Brexit on a frequently essential part of this product jigsaw (the work of Notified Bodies for mandatory conformity assessment of products) is explained here.

According to EU law, products of animal origin (meat and meat products) imported into the EU must be inspected (sanitary checks) at Border Inspection Posts (BIPs). For products of plant origin (for plants and plant-derived foods) phytosanitary checks are required at Community Entry Points (CEPs, Designated Points of Entry, DPE).

The White Paper adds a new level of complexity to the Single Market and EEA

The White Paper’s advocacy of regulatory alignment and mutual recognition adds further complexity.  It would inevitably require considerable amendment to existing EU Directives covering a wide range of products and associated production, regulatory and conformity assessment and market surveillance. This is far from straightforward or quick given that requirements are effectively intertwined; change one here and there can be a knock-on effect elsewhere. Then there is the creation of new precedents that produce anomalies elsewhere and situations that can be exploited by others to gain an unfair or unreasonable advantage.

Also, more errors and anomalies are likely to occur when time is short to develop revised legislation, standards, conformity assessments, accreditations and market surveillance processes etc. Obviously it is far from certain that the EU will agree to this in any instances.  If it did, this would impose new uncertainties and risks where before matters were fairly settled and predictable.

No Go Chaos for Nobos and their Conformity Assessments of Products

Notified Bodies need accreditation for carrying out mandatory independent conformity assessment on a wide range of products to be placed on the market in the EEA. They need separate accreditation (Designated Body, Debo) when carrying out assessments relating to national specific or special cases covered by EU/EEA legislation.  The White Paper proposes a Common Rulebook (harmonisation with EU rules) applying to goods to be exported to the Single Market but not to services.  Clearly the work of Nobos and Debos are services falling outside any compliance with the EU Rulebook whatever that vague term is supposed to mean in this context; for example, EU Directives with or with European specifications, mandatory conformity assessment, market surveillance etc.

Under the White Paper’s proposals, a new product could be assessed by a Debo and then exported to the EEA where the Debo’s accreditation and product conformity assessment is currently not recognised. Obtaining this recognition raises a host of practical problems, such as who gives the Debo accreditation, how is the Debo assessed, who keeps the register of accredited Debos and test houses, and what should the Debo now include in its product conformity assessment and certification?  Where an existing product undergoes a material change requiring further or updated assessment, more difficulties will inevitably result in determining whether this is Debo or Nobo work or a combination and who does what.  This complexity and vagueness needs to be resolved or a wide range of UK goods would become non-compliant and could not be exported to the EEA.

The Practical Alternative

Mrs May’s Government is proposing an unworkable Brexit in name only. However, instead it could have opted for a workable real Brexit by remaining temporarily in the Single Market (or wider European Economic Area, EEA) under much more favourable and flexible conditions by re-joining the European Free Trade Association (EFTA). (Further information see The EFTA/EEA Solution to the Current Brexit Impasse, Brexit Reset, Eureferendum.com, various posts on Campaign for an Independent Britain and affiliates )

The Devil is in the Missing Detail

So far there is little indication that the UK’s negotiators actually understand much, if anything, about the minutiae of the EU Directives and how the EU/EEA functions.  Even if the EU agreed to this White Paper (and this is avery  big ‘If’), the resulting outcome is most likely to be more, largely avoidable confusion all round carrying on for years among customers, suppliers, regulators, conformity assessors (e.g. Notified Bodies) and organisations involved in market surveillance.  The frequent questions would be “Where do we find the requirements?”, “Must we comply with this requirement?”, “What does this requirement actually mean?”, and “How much is this going to cost us?”

In short, the whole document is seriously deficient and likely to be rejected by the EU.

Brexit Academics Believe White Paper to be ‘Brexit in Name Only’

A university-based research facility has described yesterday’s White Paper to be ‘Brexit, but in name only.’

Academics at Birmingham City University’s Centre for Brexit Studies have been examining May’s long awaited Brexit blueprint, in order to understand the Prime Minister’s plan for Britain’s exit from the European Union.

The most notable points being the common rules for goods covering only those rules necessary to enable frictionless trade at the border and no tariffs on any goods.

Professor Alex de Ruyter, Director of the Centre for Brexit Studies states: “Like the rest of the country and indeed the EU, we have long awaited the publication of the Brexit White Paper.

“The controversy of the last few days following the Chequers Summit has only added to the worry over the long awaited document.

“Today we learn that the plan appears to be exiting the European Union, whilst maintaining many of the same rules and freedoms that we currently subscribe to.

“The plan envisions that we will still participate in EU agencies that provide authorisations for goods in highly regulated sectors – namely the European Chemicals Agency, the European Aviation Safety Agency and the European Medicines Agency – accepting the rules of these agencies and contributing to their costs.

“We also note continued cooperation in terms of transport and energy and the exploration of reciprocal arrangements for road hauliers.  This is an issue that we have regularly raised at the Centre and it is interesting and encouraging to see the Government seeking to address it.

“The one change we do see, is the end of freedom of movement, but with several exceptions, for example, in the case of companies wanting movement of staff.

“So we want to continue to enjoy ease of travelling, whilst imposing restrictions on movement into the UK.  Crucially, the White Paper envisages that these will be, ‘in line with the arrangements that the UK might want to offer to other close trading partners in the future’.

“Will the EU agree to keeping almost everything the same, whilst rescinding on freedom of movement and losing the UK as part of the EU27?  I doubt it and I suspect that many Conservative backbenchers will be unhappy to commit to ‘binding provisions’ around future trading arrangements. Similarly, Jeremy Corbyn’s opposition may well oppose the envisioned rules over state aid and competition.  As such there is a very real possibility that the government’s proposals may fail to secure parliamentary approval in addition to the EU’s potential qualms over ‘cherry picking.’

“We await the EU’s response with bated breath and I believe we’re in for an interesting few months following that.”

The Centre continues to analyse all government outputs and to research the public perceptions and impact of Brexit on both a regional and national scale.

The Fisheries white paper – Where the Government has got it wrong.

The Fisheries White Paper was better than I was expecting and certainly a lot of thought has gone into the wording, but – and there is always a but – the whole paper has been written on the assumption that there will be an implementation/transitional period, which is far from guaranteed.

I was also surprised to see in the Executive Summary the following two statements:

1) We do not yet know the outcome of the UK’s negotiations to withdraw from the EU or on a future economic partnership.

2) Access to markets for fisheries products will be agreed as part of our future economic partnership, just as with other goods and food products. This is separate to the question of fishing opportunities and access to waters, which consequently will be addressed separately, founded on the UK’s legal status as an independent coastal state.

Those two statements by DEFRA are an honest assessment firstly because the withdrawal agreement which includes the implementation period, is not complete, so whatever the White Paper proposes, there is no guarantee that will happen, especially given we are a long way from securing any sort of trade deal. Secondly, we know full well that the EU will demand present levels of access into UK waters as part of a trade deal. Having sacrificed fishing during the Implementation period –  and those 21 months could be crucial for the survival of the UK’s fishing industry – will the same happen for a trade deal whereby the EU refuses to separate access to market and access to UK waters?. No one knows until that crunch point arrives.

The White paper, in my opinion, places too much emphasis on flawed the quota system. In this, it copies Norway and New Zealand. Neither of their fisheries management systems would rejuvenate our coastal communities. However it is admitted other management systems are available and HMG would be prepared to trial such systems, which I passionately believe would dramatically increase our scientific data, as every fishing vessel should­ become a scientific data point.

Throughout Brexit the UK has made the serious mistake of not understanding the functioning of the EU, and has therefore put forward proposals that were inevitably going to be rejected. It will be interesting to see what today’s White paper states, and if it in turn is expecting policy that the EU can’t provide.

Statement by Barry Legg, Chairman of the Bruges Group

Theresa May has decided to pursue a policy of Brexit in name only (BRINO). This arrangement will be worse than our current membership of the European Union as we will then be a vassal state.

If this policy is implemented the electoral consequences for the Conservative Party will be dire. I urge all members of the Bruges Group to contact their Conservative Member of Parliament if they are represented by one to explain that this is unacceptable. The decision of the British people to leave the European Union must be honoured. In many cases an appeal to a Member of Parliament`s self-interest is the most effective way of influencing him or her.

Next week on Wednesday evening we have a meeting at 7 o`clock at the ROSL with Nigel Dodds, leader of the DUP in the House of Commons, and Professor Patrick Minford. Patrick has an unapparelled knowledge and understanding of the huge economic benefits that are to be gained by leaving the European Union. Nigel Dodds, as Leader of the DUP, is the most influential figure at Westminster as his Party holds the balance of power. I hope that you will be able to attend this meeting to hear these outstanding speakers and give your views at this critical time for our country.

Barry Legg

Chairman of the Bruges Group

Small teacup, big storm?

The agreement hammered out at Chequers last Friday went down like a lead balloon among Tory Brexit supporters. Here is the text of the final statement.  Martin Howe QC, from Lawyers for Britain, produced a briefing which expressed grave concern that it would leave us tied in perpetuity to EU law and forced to accept binding rulings by the European Court of Justice.

The EU laws in question were those relating to goods, their composition, their packaging, how they are tested, etc etc, in order to enable goods to cross the UK/EU border without controls. This does, of course, raise the question as to how aware critics like Mr Howe actually are that many rules governing standards within the Single Market are not actually set by Brussels. The EU merely acts as a conduit for laws originating with global standards bodies to which we would have to be subject regardless of the Brexit model adopted.

Note the word “goods” rather than “trade”. Mrs May’s proposals would have seen the UK essentially remain in the single market for goods but not for services.  This was never going to wash with the EU. as some commentators were warning within hours of the statement being released.

Its pie-in-the-sky nature did not stop a deluge of negative comment. A majority of Conservative Party members regarded it as a bad deal, so said Paul Goodman after conducting a snap poll for Conservative Home.  More ominously, a poll commissioned by Change Britain suggested that a deal along the lines of that proposed by Mrs May would cost the Tories a lot of votes. For example, 32% of voters would be less likely to vote Conservative if the Government agreed a deal which results in UK laws being subject to rulings by EU courts and More than a quarter would be less likely to support the Conservative Party if a deal meant that the EU retained some or substantial control of the UK’s ability to negotiate our own free trade agreements.

Still, if the EU’s spokesmen had acted quickly to reject the deal out of hand, it would have been a storm in a teacup for the Tories, which would have blown over. Simon Coveney, the Irish Republic’s Foreign Minister, said that Michel Barnier would find it “difficult ” to accept the  proposals. It is now quite probable that he won’t have to do so as a crisis has erupted at the very heart of Mrs May’s government. On Sunday night, David Davis resigned. Effectively sidelined by Olly Robbins for many months, the most surprising aspect of Mr Davis’ announcement is that it has taken so long in coming. With him went his deputy Steve Baker. Mrs May reacted speedily and appointed Dominic Raab, a prominent Brexit supporter, to replace Mr Davis. However, within hours of Mr Davis going, Boris Johnson resigned as Foreign Secretary.

This means that a small teacup is producing what could turn out to be a considerable storm. Mrs May is due to meet her backbenchers later this evening and especially given her decision to brief Labour and Lib Dem MPs on her Brexit proposals, the mood is likely to be sombre if not angry.

One Labour source said of this meeting, “It’s an opportunity to tell the PM’s chief of staff why the Government has got it so wrong.”  With that, we would agree.  Almost every government publication on the subject of Brexit is, at best muddled.  The fisheries white paper also appeared last week – its publication somewhat overshadowed by the dramatic events following the Chequers meeting.  We will provide some further comment oin this later this week, but suffice it to say it seems very optimistic, ignoring the determination of the EU to preserve its access to our waters and to control the allocation of quota if it gets half a chance.

With events happening so quickly, it is impossible to predict whether Mrs May will face a leadership challenge or indeed whether the Brexit talks will break down. However, we have been saying for some time that a crisis is essential if the disastrous Brexit plans hatched by Mrs May, including the fatally flawed transitional arrangements, are to be jettisoned. At long last, it looks like the crisis has arrived.

 

Report from Glasgow

Having travelled up to visit relatives who were not well, it was a surprise to find that the ORANGE WALK had been routed past our hotel, so we heard many, many flute and accordion bands, from Scotland, England and Northern Ireland – drums under the window – the rattle of the drums and the deep booming thud of the bass drums against the shrill flutes – on their way to Bellahouston Park where their leaders were to demand that the SNP Scottish government should STOP TRYING TO OVERTURN THE REFERENDUM which  resulted in a vote for Scotland to remain part of the UK.

 “The best-laid schemes of mice and men gang aft agley” – Robert Burns

I reflected how the Labour planners of devolution had congratulated themselves that their scheme was ingeniously clever. It gave so much power to the Scottish Parliament that it would surely take the wind from the nationalist sails and the electoral system was such that no single party would ever be able to command a majority. They were wrong on both counts!

Flute bands are a bit samey and I lost count of them. We had been told to expect twenty six but press reports said there were over sixty. Tunes varied from “When the Saints Go Marching In” and “Onward Christian Soldiers” to the more traditional Irish tunes, including the oft-repeated strains of “The Sash” with which I had become familiar on other occasions-

“Sure it’s old but it is beautiful and its colours they are fine.

It was worn at Derry, Aughrim, Enniskillen and the Boyne.

My father wore it when a youth in bygone days of yore,

And on the Twelfth I’ll always wear the sash my father wore”.

Many of the Scottish and English bands would be with their Northern Ireland brethren on that day. Brethren and sisters too. Ladies were playing in many of the bands. Lodges were often headed not just by a drum major but by a young person carrying an open bible, ahead of the lodge banner and other colours – a symbol of the sole claimed source of authority, freely available to all without the intervention of a church hierarchy.

It was a sweltering day. We decided to seek a quieter quarter of the town. If there was going to be any trouble, it would be when the lodges returned from their meeting in the park, having drunk deep. I believe there were four arrests that day which, considering the thousands of marchers and spectators, was insignificant.

So we adjourned to a quiet bar parlour where the television was showing the England v Sweden football match. Not being a sporting enthusiast, I had not watched a match from start to finish before. I found the skill quite gripping. The crowd in the pub was certainly not anti-English, cheering the English goals scored and getting equally excited when Sweden came close.

It’s never difficult to distinguish between a Scotsman with a grievance and a ray of sunshine” – P.G. Wodehouse

As a (small u) unionist I sometimes get fed up with the incessant aggressive whingeing tone of Scottish and other nationalists but find this site to be frequently businesslike and objective. The distance between the author, James Kelly, and his subject, Theresa May has lent an accurate perspective and sharp focus to the author’s view. His latest post is reproduced in full.

The Brexit Delusion over who calls the shots

I don’t know about anyone else but I’ve been rubbing my eyes in disbelief over the last few hours. If you’ve been listening to the mainstream media’s verdict about what was agreed a Chequers, you’d be forgiven for thinking that the fabled Brexit deal that Theresa May has been tasked with striking needed only to be a deal with the rest of her own cabinet, and not with the European Union. By that rather lower standard, what has just happened might be seen as a stunning personal triumph for the Prime Minister and a guarantee of a (somewhat) softer Brexit, exactly as Stormfront Life is claiming tonight. The agreement will only be subject to a few modifications if Brussels raises any objections, reveals The Guardian, which apparently believes that the EU has only a limited consultative role in the whole process.. It’s the old imperial delusion – decisions are things that happen in London. The same commentators who complacently tell us that an indyref is a non-starter because Theresa May will say “no” also apparently believe that it’s a mere point of trivia that the EU have already ruled out many elements of May’s Brexit proposal. Back in the real world, without the EU’s assent there is no deal at all, and that would mean the hardest of hard Brexits.

A rare injection of realism was provided by Sam Coates of The Times, who acknowledged that the EU may well still insist on a straight choice between a looser Canada-type deal and the Norway model that would entail the retention of the single market. But he argued that the Chequers proposal was about 80% of the way towards the Norway model, thus making it that much easier for the Prime Minister to jump towards Norway if forced to choose. What he didn’t expand on is the consequence of such a decision. It’s highly debatable whether the government really are now 80% of the way towards Norway, but even assuming for the sake of argument that they are, the reason they haven’t travelled the remaining 20% of the distance is that doing so would completely breach the red lines on formally leaving the single market and ending freedom of movement. Some may say that a Soft Brexit is inevitable because there is a natural parliamentary majority for it – but that majority is cross-party in nature and neither the government nor the Prime Minister are sustained in office on a cross-party basis. I find it in conceivable that a Tory government led by Theresa May could keep Britain in the European Economic Area or retain freedom of movement, even if they wanted to.

And if that proves correct, there are really only four alternatives –

  1. The EU backs down and accepts British cherry-picking of the most desirable aspects of the single market and customs union. This is almost unimaginable because it would create a precedent that Eurosceptics in other countries would try to follow, thus risking the unravelling of the EU.
  2. A Canada-type deal is negotiated after all. This is possible but it would require turning the super-tanker around, because it’s clearly not close to what Theresa May has in mind at the moment. It would mean a very hard Brexit in any case.
  3. There is no deal at all
  4. The Prime Minister’s failure to strike a deal (or a deal that is consistent with her red lines) triggers a political crisis that results in a change of leadership and/or a general election.

I can recall at least two previous occasions when we’ve been told that the PM has made a decisive move towards a soft Brexit, only for us to realise weeks later that there had been no change of any real significance. I fully expect the same to prove true on this occasion. “

(My emphasis because I remember exactly the same thing – Edward)