Post-Brexit, the UK economy could flourish if it is innovation-led

Recent economic predictions from the Treasury are probably grossly underestimating the potential positive benefits of Brexit, if only our government can seize the initiative.  After all, economists, especially those within the Civil Service don’t usually have extensive, if any, ‘hands on’ business experience. So how do they know the degree to which European Union (EU) legislation and regulation  – along with our government’s gold-plating and inertia – have held back many businesses, especially small and innovative enterprises?  However, loosening the bureaucratic chains is not that easy, especially when we are talking about people who are largely ignorant of their undesirable consequences, or not interested in doing anything.

Access to domestic and export markets for trading purposes are not enough in a highly competitive world.  UK Limited needs to provide goods and services that customers want to buy at prices they can afford in more attractive ‘packages’ than available from elsewhere.   To be able to pay high wages UK Limited needs to produce high value-added goods and services efficiently and continue to stay ahead even as competitors try to catch up. So how well are we, as a nation, doing?

The United Kingdom is a middle size economy with a poor record of productivity improvement. Whilst good at creating new jobs, these are overwhelmingly low wage, low productivity ones.  Major problems are poor labour force skills, under-investment and a ready supply (or over-supply) of low wage labour.  In effect then the UK is losing the ability to create high value-adding productive jobs; the world’s first ‘third world’ country in a cold climate.

The government could kick-start a change with Brexit. Controlling poorly skilled immigration would create an imperative for higher productivity and enable higher wages to be paid; it would stimulate innovation, training and investment.  Tax incentives, grants and risk sharing could also help. Encouraging home-grown start-ups and high value-adding foreign investment would also lead to better paid jobs. Public sector procurement could be a facilitator of wide ranging innovation. Yet the real key to success is the creation of an innovation-led economy for high value-added goods and services; develop, improve, become competitive, become world-leading, export and grow, repeat. However, this needs an understanding both of the nature of successful innovation, particularly low-cost innovation, and of mandatory regulations, including their objectives and implementation, in order to facilitate the former by manipulating the latter.

There is a common misconception that because we have been traditionally good at invention, we must be naturally good at innovation – doing existing things noticeably better. Not so. Many inventions and high or advanced technology products have failed commercially here for a variety of practical reasons including the lack of a viable market, pushing out the bounds of technology too far without sufficient development and politically driven lack of support.  Eric von Hippel in his book Democratizing Innovation identifies users as an important source of innovation; they identify a need and a commercially viable innovative product (for themselves and others) which subsequently moves back along the supply chain to suppliers and producers.

Any form of legally sanctioned regulation, with few exceptions, tends to create and then maintain a mandatory status quo, which may be far from evolving ‘best practice’.  It is difficult and slow, if not impossible to introduce changes, which obviously frustrates innovation.  It has been reported by the European Free Trade Association (EFTA) (reported originally here and recently here) that “more than 90 percent” of the EU’s Single Market rules (and by extension, those of  the European Economic Area, EEA) come from the UN and other global bodies, such as the World Trade Organisation (WTO), OECD, the Food and Agriculture Organisation and the United Nations Economic Commission for Europe (UNECE), all of which have been faithfully transcribed into EU law. The EU also tends to expand the basic requirements into mandatory bureaucratic processes, procedures, approvals, European Court of Justice rulings etc., and then our government, frequently gold-plates the rigidity, often leading to situations more favourable to larger (less innovative) businesses.

After Brexit, as a direct member of global bodies, the UK will be able to exert its influence directly to champion principles and practices in our innovation-led economy’s interests. Current EU membership prevents this. Temporary or permanent EU vassal status, (aka the Transitional deal on offer from the EU) would also prevent this.  The potential is also there, after Brexit, to adapt measures (or the way they are implemented) that don’t suit our interests, or to opt out to some extent.  We can become somewhat more flexible than total EU control-freak rigidity, although exporting does impose conformity with the regulatory framework applicable in the overseas market, which may well follow EU or EEA practices.

Public sector procurement could illustrate what is possible after Brexit.  The public sector (definitions vary) makes up somewhere between 40-50% of the economy and has considerable purchasing power. Procurement is governed in the main by the Public Contracts Regulations, which implement EU Procurement Directive 2014/24/EU, itself an implementation of the Agreement on Government Procurement (GPA) under the auspices of the WTO.  Yet although the preamble to the EU directive pays ‘lip-service’ to the need to encourage small and medium size enterprises (SMEs) and innovation, its implementation in this country often achieves the opposite result, as originally outlined here.

Outside the EU, it is perfectly feasible to rework and streamline the Public Contracts Regulations, to facilitate user-led innovation, and to support local entrepreneurial SMEs, social enterprises and start-ups, whilst maintaining the WTO GPA core. The time-consuming complexity of the procurement process and legislation incorporating ECJ judgments is a real problem at the moment, leading to the awarding mainly of large contracts and a fear of facing a legal challenge by an unsuccessful tenderer. Also the process is poor at managing risk (for example, Carillion) or in including local socio-economic factors. Collaborations between user and supplier (to facilitate innovation) are also discouraged in mainstream procurement. Such reworking of these regulations naturally needs strong governmental commitment and understanding of the ways in which they lead to discrimination. Unfortunately it is likely that Mrs May will retain the EU directive indefinitely, although it is not mandatory outside EU Member States.

Economic forecasts that largely ignore the effects on the economy of innovation are obviously suspect in the real world.  However, they do provide an indictment of government performance and its inability to seize the opportunities to facilitate an innovation-led economy.  If the government understood how innovation could be facilitated by Brexit and its policies adapted accordingly, then the future prosperity of everyone in this country would be considerably greater.

A transition will void all international agreements

Press Release from Fishing for Leave, 20th February 2018

The implications of the transition should be of grave concern. What is proposed is not only an existential threat that could see our fishing industry culled, but a diplomatic and constitutional suicide pill the result of which would be an anathema not only to “taking back control” but to the point of a transition itself.

A transition is not part of leaving the EU under Article 50 – it is part of a new ‘transition’ treaty as both David Davis and Steve Baker have candidly admitted.  This is significant as it means we will not be party to current agreements, but the transition is a new treaty that stands alone.

The EU terms are the UK must adhere to all EU law but as we will no longer be an EU member should have no say. This is the EU sensibly safeguarding its interests – our government is doing the opposite.

The implications of Clause 14 and 15 of the transition terms have a severe impact on all international agreements the UK is party to through the EU.

They defeat the whole raison-d’etre of HM Governments for a transition – trade.  For the fishing industry it means the “transition” could void UK participation in all international fisheries agreements that we were party to as a member of the EU.

TRADE

Clause 14. During the transition period the United Kingdom will remain bound by the obligations stemming from the agreements concluded by the Union…while the United Kingdom should however no longer participate in any bodies set up by those agreements.

The intention is that the UK will still have obligations to the EU to adhere to the consequences of agreements concluded with non-EU countries in respect of the EU vs UK transitional relationship. In doing so this maintains the integrity of the EUs dominions and also appears to placate the UK position of everything continuing as is.

However, since the withdrawal agreement cannot bind non-EU countries, they will no longer have obligations to the UK as we will no longer be an official member of the EU but merely maintaining regulatory alignment in an EU vs UK deal.

The UK would only be able to be recognised within such agreements if other non-EU countries agree to continuing existing obligations in force through another agreement with the UK.

The negotiation of such an agreement between the UK and non-EU ‘third countries’ is the subject of the next transition Clause 15 which seemingly makes that an impossible contradiction.

Clause 15. Any transitional arrangements require the United Kingdom’s continued participation in the Customs Union and the Single Market (with all four freedoms) during the transition. During the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the fields of competence of Union law, unless authorised to do so by the Union.

The UK will be unable to negotiate and sign treaties within the transitional period, even if those treaties only come into force afterward – we will only be able to begin to negotiate treaties AFTER the transition period.

This means that other non-EU nations will have no obligations to recognise the UK being party to agreements signed by the EU as the UK will no longer be an official member but also a ‘third country’ when the ‘treaties shall cease to apply’ under Article 50 and our membership terminates on the 29th March 2019.

However, the catch 22 paradox is that to obey the transition the UK will not be able to enter into any agreements with other non-EU countries to seek recognition that the UK is party to EU arrangements with those countries even if they wanted to.

THIS MEANS WE WILL BE ON WTO TERMS FOR 65% OF OUR TRADE AND UNABLE TO SIGN NEW DEALS…………………..WHICH IS THE WHOLE REASON LOCKING OURSELVES INTO THE EU WAS MEANT TO AVOID! 

In respect of fisheries this could mean any agreements the EU has signed with other coastal states would no longer be binding for the UK as we wouldn’t be officially a member only a vassal state which has agreed to maintain regulatory alignment with the CFP.

This catch 22 between Clause 14 and 15 means the UK could lose agreements on access to Norwegian and Faroese waters for our pelagic and largest whitefish vessels.

The EU can’t be any clearer that this is the case;

As part of the EU Commission document ‘Internal EU27 preparatory discussions on the framework for the future relationship: “International Agreements” 6th February 2018’ the EU makes explicit the consequences regarding international agreements concluded by the EU:

Point 13: “Following the withdrawal, the United Kingdom will no longer be covered by agreements concluded by the Union or by Member States acting on its behalf or by the Union and its Member States acting jointly”.

The EU then continues;

In principle, as a non-Member State, the UK would be able to negotiate international agreements But

  1. the bona fide application of the Withdrawal Agreement prohibits conflicting obligations
  2. duty of sincere cooperation

iii. explicit provisions in the Withdrawal Agreement: “During the transition period, the UK may not become bound by international agreements entered into in its own capacity in the fields of competence of Union law, unless authorised to do so by the Union.”

The Withdrawal Agreement can oblige the UK to respect “the obligations stemming from the agreements” However, the Withdrawal Agreement cannot guarantee the extension of the benefits from those international agreements to the UK!

IT CANNOT BE ANY CLEARER! How will the UK be party to continuing EU deals?

How will the UK be able to seek and agree recognition with other non-EU third countries?

It would be interesting to hear a proper government and DexEU response to how the UK can conclude a future “deep and special” trade deal with the EU under the transition as David Davis professes is required if Clause 15 bars us from concluding agreements… the Government tried (and miserably failed) to do so in;

HM GOVERNMENT – TECHNICAL NOTE: INTERNATIONAL AGREEMENTS DURING THE IMPLEMENTATION PERIOD – 8th February

In this document the Government asserts that

  1. …the implementation (transition) period would be based on the existing structure of EU rules and regulations. In its negotiating directives, the EU has adopted the same position. It has stated that “the Union acquis should apply to and in the United Kingdom [during the implementation period] as if it were a Member State”. This is echoed in the Commission’s paper on Transitional Arrangements in the Withdrawal Agreement, which states that EU law “shall be binding upon and applicable in the United Kingdom” during the implementation period.

EU law and agreements are binding on the UK as agreed in a transition treaty between the UK and EU. Such a treaty cannot bind the other non-EU ‘third country’ nations who the EU has an agreement with.

  1. This would be achieved by agreement of the parties to interpret relevant terms in these international agreements, such as “European Union” or “EU Member State”, to include the UK.
  2. Such an approach could be used both to ensure the UK’s continued participation in mixed EU third country agreements… At present the UK as an EU Member State is bound by obligations, and benefits from the rights… It is proposed, with the agreement of relevant third countries, that those rights and obligations continue to apply to the UK on the EU side of the agreements for the duration of the implementation period.

The UK can’t sign agreements with other parties as Clause 15 of the Transition terms forbid the UK from entering any agreements, deals or treaties with other non-EU ‘third countries’. In addition to this the words ‘proposed’, ‘could’…… would…. should….. mean that the position the government is digging itself into relies on the EU and other countries benevolently recognising the UK to be party to EU agreements.

Rather than leaving cleanly and being free to operate as an independent sovereign nation the transition (by the governments own admission) digs this country into a subservient position with no guarantee of being party to any international agreements through the EU.

The position the government is digging itself into relies on the EU and other countries benevolently recognising the UK to be party to EU agreements.

Rather than leaving cleanly and being free to operate as an independent sovereign nation the transition (by the governments own admission) digs this country into a subservient position with no guarantee of being party to any international agreements through the EU.

WHAT THIS MEANS FOR THE FISHING INDUSTRY

In respect of fisheries all the Clauses above means that although the UK will follow the CFP as a vassal state (through the terms of a transition treaty between the EU and UK) countries such as Norway, Faroe and Iceland have no obligation to recognise the UK being party to EU arrangements and even if they wanted to Clause 15 means the UK can’t sign any deal as an EU satellite.

Yet because the UK will have submitted to an EU vs UK “transition” agreement we will have agreed to re-obey the CFP where we re-agree to give the EU our fishing waters and resources to divide out as the EU see’s fit through relative stability and agreements it reaches internationally.

This would mean the UK would still have the EU catching 60% of the resources from our waters and the EU would be able to use UK whitefish and pelagic quota as negotiating capital but we would be unable to take back control and then use our position of strength as a new independent coastal state to make our own mutually beneficial agreements with our Nordic neighbours.

The UK would continue to lose out in the CFP but also lose access to Norwegian and Faroese waters for the most powerful catchers in the UK fleet. We would lose twice rather than gain twice by walking away. We would be hit 4 times over in a transition where we loose international agreements but are still in the CFP;

We would see some of the most powerful catchers in the UK Whitefish fleet displaced from Faroese and Norwegian sector waters.

 These vessels would be back into an already stretched UK sector with the EU still pocketing half of our whitefish resources.

It would see our pelagic fleet lose access to Norwegian waters for mackerel and atlanto-scandiv herring

The EU can further exploit UK quota (especially pelagic) to make deals to benefit the EU27 fleet due to our compliance with the CFP.

To stick the final nail in the coffin a continuation of the quota system where fishermen have to discard in order to find the species their quota allows them to keep conjoined with a fully enforced discard ban can be used by the EU to finish the UK fleet.

Under the discard ban rather than address the cause of the discard problem, that a quota system does not work in mixed fisheries, the symptom of discards is banned. Under the discard ban a vessel must stop fishing when it exhausts its smallest quota allocation – these “choke species” will bankrupt 60% of the UK fleet as detailed by the governments own figures through Seafish.

This would destroy our catching capacity and allowing the EU to claim the “surplus” of our resources we would no longer be able to catch under terms of UNCLOS Article 62.2 due to such a culling of our fleet.

Signing up to a transition on will see the ruination of what is left of the UK fishing industry when Brexit should be its salvation. Another 2 years of the CFP and a continuation of the quota system will see our fishing industry become yet another British industry consigned to museum and memory.

CONCLUSION

Under the auspices of this proposed transition “deal” (more an edict to obey) the UK will be on WTO with the rest of the world, unable to conclude deals with the rest of the world until after the transition and will be locked into maintaining regulatory alignment whilst obeying the entire Acquis (with continued freedom of movement).

The UK will be trapped in the CFP where our fishing industry will be culled to make way for the EU fleet whilst also losing any access to Faroe and Norway which will diminish fishing opportunities further.

It is nearly unbelievable that the political establishment could contemplate locking the 5th most powerful nation in the world into such a subservient position especially against the expressed wish of the British people to leave the EU in its entirety as voted for in the biggest vote in British history.

A TRANSITION MEANS BRITISH FISHERMEN ARE STARING DOWN THE BARREL OF A GUN!

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.

Photo by thaddselden

The United Kingdom as a third country

Some  people are confused about the meaning of this term with regard to our extrication from the EU and have become needlessly indignant.  It does not mean “third rate” or “Third World”.   In the EU situation  in international law, the phrase means more or less what “third party” does in an ordinary insurance policy or other legal document – but it refers to a country or state which, in this case,  is not a member of the EU or its associated organisations such as the European Economic Area (EEA).

Background

This non-membership is exactly what Mrs. May demanded in her Lancaster House speech of January 2017.  She wishes to replace our EU membership  with a completely new but unspecified “deep and special” relationship which can only come into being after we have left the EU.  The EU does not “give” us third country status.

We acquire it automatically through leaving at our own request.   Yet this seems to have come as a bit of a surprise to David Davis.

I started to take the Daily Express when it was the first national paper to advocate leaving the EU, so I was rather surprised to read this article in its edition of Wednesday 10th January which suggests either that Mr. Davis is ill-informed or that the reporter misunderstood him.

Row over EU giving UK 3rd country status

David Davis has attacked a Brussels threat to punish British business ahead of Brexit trade talks.

The Brexit Secretary has written to Theresa May raising concerns about EU planning for a “no deal” giving Britain “third country status”  in what appears to be an act of bad faith.

Mr. Davis told the Prime Minister he would urge the EU to drop the measures which would require UK firms to relocate to Europe or risk contracts being terminated in the event of no deal.

He said he had sought legal advice but the chances of a successful challenge were “low” and could be “high risk politically and financially”

But he said he would urge the European Commission’s Brexit task force to withdraw the statements in light of the deal reached last month to start trade talks. Mr. Davis said that EU agencies have issued guidance to businesses stating the UK will become a “third country” after March 2019 with no reference to a future Trade deal.

The guidance says “compliance activity” such as quality control of goods “ would need to be based in the EU or European Economic Area.

Other statements on legal services and the transport industry do not take into account a transition period or trade deal, he said.

Mr. Davis called the moves “potential breaches of the UK’s rights as (an EU) member  state” and insisted “we cannot let these actions go unchallenged “. John Longworth of Leave Means Leave added that  the EU’s negotiating team is increasingly out of step with the mood of many of the EU27 national governments who recognise the importance for their own economies  that a free trade deal is reached with the UK…..”

Meaning of Third Country Status

The Department for Exiting the EU employs some 400 highly paid specialists and the expertise of the Foreign Office and our Representation in Brussels are claimed to be world class, so it is surprising that nobody  took the trouble to  look up some elementary rules of international law on the internet and tell Mr. Davis.

oxfordindex.oup.com/view/10.0903/01/authority

Pacta tertiis nec nocunt nec prosunt – Treaties neither harm nor benefit third parties. A maxim meaning that non-parties to a treaty cannot claim benefits under it…   And, once we are out of the EU, we are no longer a party to any of its treaties.

 https://en.oxforddictionaries.com/definition/res_inter-alios-acta

Res inter alios acta – a thing done between others – to which a given person or entity was not (or is no longer) party .

 From “Third Parties and the law of treaties  – Max Planck UNYB 6 (2002)

Basic Classical Rules

 The relationship between third parties and treaties is defined by a general formula pacta tertiis nec nocunt nec prosunt (see above). This principle has been recognised in states’ practice as fundamental and its existence has never been questioned.. For states non-parties to the treaty, the treaty is res inter alios acta (see above). It has been reflected in numerous cases before the World Court. For example in the German Interests in Polish Silesia case the PCIJ *observed that “ (a) treaty only creates law as between states which are party to it; in case of doubt no rights can be deduced from it in favour of third states.

 Lord McNair, in the Law of Treaties (1961, 309 Harvard Research Article 18) ( a) a treaty may not impose obligations upon a state which is no longer party thereto….”

*Permanent Court of international Justice

The UK as a Vassal State

By  demanding a “Hard Brexit”  from March 29 2019, the government has placed itself in the position of a supplicant to the EU for a “transition” or “implementation” period so that Mrs. May’s unspecified “deep and special” relationship may be agreed without disruption of trade.

If what we have been told is correct, all existing  EU laws will continue to apply during this period and new ones could be sprung on us without our having any say at all – complete vassal status.

Conclusion

There are strong economic reasons for both sides to come  to a mutually beneficial agreement.

However there is no good reason to suppose that the EU will abolish its external frontier procedures with a newly independent UK.  If it did that, not only would it breach its own principal trading rules, but also the World Trade Organisation would be overwhelmed with complaints from other third country states.  Every other country in the world would be demanding that the EU did the same for them.

 

Brexit hangs over the port of Dover

This article is copied by kind permission of the author, Mary Kenny. It appeared in The Oldie, edition of March 2018

Without an ingenious deal, the place could be clogged up with thousands of becalmed freight lorries.

As an Irish citizen, I abstained from the Brexit vote, although I sympathise with the argument that a country is entitled to control its own borders and make its own laws. But, living just eight miles from Dover, I am beginning to grasp that entering and leaving Britain’s major port post-Brexit could be a huge headache unless some very clever deal is accomplished.

A well-informed Doverian, Mick Tedder, who has forty years of experience of working at the port, and is a member of the Port and Community Forum, is very “pessimistic” about Dover’s immediate future. The port of Dover can see more than 10,000 freight vehicles pass through daily; he worked there before 1973 when there was only a fraction of such traffic and a truck might have to park up for two or three hours while the paperwork was completed. Mr Tedder, who voted Brexit (as did most of the Dover referendum voters) predicts that if border controls are introduced, there will be “Armageddon” in the garden of England. He envisages the need for a huge parking holding area for vehicles awaiting processing, and congestion spiralling out in all directions.

Supposing everything has to be stopped and checked too, at the Channel Tunnel? Imagine the traffic jams and delays.

The local MP, Charlie Elphicke, seems to place his confidence in electronic scanning, as occurs between Canada and the US, but local lobby groups, such as EU Thinking Deal + Dover are sceptical that this can be done at a huge maritime port such as Dover, which handles 17 per cent of Britain’s imports. There are other issues too, such as the transport of animals – animals can only be confined in lorries for a certain amount of time, and long waiting periods would be disastrous.

The authorities at the Port of Dover have little to say about the situation because it seems still so hazy. Talk about Continent cut off by fog!

Mr Tedder, a Brexit voter, is now keen on a soft Brexit to allow Britain’s major port to function effectively, although he does add, “You’re not just dealing with the EU. You’re dealing with the French!” (French industrial stoppages have been known to cause mayhem.)

On the plus side, there’s a boat in Dover Museum dating from the Bronze Age, witness the fact that there’s been trading across the narrow twenty mile Channel since the time of the Pyramids. Though not at the rate of 10,000 trucks per day.

Photo by ketmonkey

Fishing for Leave’s comments on the proposed transitional arrangements

Below is the EUs recommendations for the transition. Those with the particular detrimental implications for the United Kingdoms trade are Clause 14 and 15 as amended by the Council. Indeed, the implications defeat the whole point of HM Governments raison-d’etre for a transition.

TRADE

14. During the transition period, and in line with the European Council guidelines of 29 April 2017, the United Kingdom will remain bound by the obligations stemming from the agreements concluded by the Union, or by Member States acting on its behalf, or by the Union and its Member States acting jointly; while the United Kingdom should however no longer participate in any bodies set up by those agreements.

The Council replaced the words ‘will no longer benefit from’ with ‘will remain bound by the obligations stemming from’. It also deleted the words Where it is in the interest of the Union, the Union may consider whether and how arrangements can be agreed that would maintain the effects of the agreements as regards the United Kingdom during the transition period’.

The intention seems to be that the UK will still have obligations to the EU to apply agreements concluded with non-EU countries by the EU (or the EU jointly with its Member States).

However, since the withdrawal agreement cannot bind non-EU countries, those non-EU countries will no longer have obligations to the UK as the UK will no longer be an official member of the EU but merely maintaining regulatory alignment.

The UK would only be able to be recognised within such agreements if other non-Eu countries agree to continuing existing obligations in force.

The negotiation of treaties between the UK and non-EU countries is the subject of the next paragraph which seemingly makes that an impossible contradiction. 

15. In line with the European Council guidelines of 15 December 2017, any transitional arrangements require the United Kingdom’s continued participation in the Customs Union and the Single Market (with all four freedoms) during the transition. The United Kingdom should take all necessary measures to preserve the integrity of the Single Market and of the Customs Union. (full regulatory alignment is the only way to do so and this complies with Clause 49 of Phase 1 regards UK vs EU border on island of Ireland)

The United Kingdom should continue to comply with the Union trade policy. It should also in particular ensure that its customs authorities continue to act in accordance with the mission of EU customs authorities including by collecting Common Customs Tariff duties and by performing all checks required under Union law at the border vis-à-vis other third countries. During the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the fields of competence of Union law, unless authorised to do so by the Union.  

The final sentence added by the Council. This paragraph ensures no change in the application of the single market or the customs union to the UK during the transitional period.

This limits the UK’s power to enter into treaties and subjects the UK to more constraints than it would have as a Member State.

The UK will not be free to negotiate and sign treaties within the transitional period, even if those treaties only come into force afterward – we will only be able to begin to negotiate treaties AFTER the transition period.

How will this allow the UK to sign a trade deal with the EU for post-transition as David Davis claims the transition is necessary to facilitate?

One has to ask how under the terms of Clause 15 the UK will be able to respond to Clause 14 where the UK (as a non-EU member) would have to seek recognition by other non-EU counties for the UK being party to agreements they have concluded with the EU.

One struggles to see how we can enable a continuation of any agreements the EU has concluded with the rest of the world as per Clause 14 yet still comply with Clause 15?

This revised text means they have amended Clause 14 to appear a lifeline that doesn’t actually attach to anything.

We take this contradiction to mean we are locked into the single market and customs union but if other non-Eu nations fail to recognize the UK being party to the agreements they concluded with the EU (as we’re no longer a member – merely maintaining regulatory alignment) and we are unable to pursue our own agreement with such other non-EU nation then we are on WTO with the rest of the world which defeats the point of a transition in the first place.

It would be interesting to hear the government and DexEUs response to how Britain can conclude a future “deep and special” trade deal with the EU under the transition as David Davis professes is required if Clause 15 bars us from concluding agreements…?!?

 

FISHING INDUSTRY

Clause 20 obliges the UK to “consult” on fishing opportunities in full respect of the Acquis – i.e. obey the entire CFP!

20. Specific consultations should also be foreseen with regard to for the (interesting change/use of language..?)  fixing of fishing opportunities during the transition period, in full respect of the Union acquis.

Therefore, the UK delegation would possible be allowed to sit in the room yet the UK will still be bound by the ENTIRE ACQUIS and therefore the entire CFP – Equal Access, Relative Stability Shares and Quota system.

A continuation of the quota system where fishermen have to discard in order to find the species their quota allows them to keep conjoined with a fully enforced discard ban will finish the UK fleet.

Under the discard ban rather than address the cause of the discard problem, that a quota system does not work in mixed fisheries, the symptom of discards is banned. Under the discard ban a vessel must stop fishing when it exhausts its smallest quota allocation – these “choke species” will bankrupt 60% of the UK fleet as detailed by the governments own figures through Seafish.

This would destroy our catching capacity and allowing the EU to claim the “surplus” of our resources we would no longer be able to catch under terms of UNCLOS Article 62.2 due to such a culling of our fleet.

Signing up to a transition on will see the ruination of what is left of the UK fishing industry when Brexit should be its salvation. Another 2 years of the CFP and a continuation of the quota system will see our fishing industry become yet another British industry consigned to museum and memory.

CONCLUSION

Under the auspices of this proposed “deal” (more a dictation) the UK will be on WTO with the rest of the world, unable to conclude deals with the rest of the world until after the transition and will be locked into maintaining regulatory alignment whilst obeying the entire Acquis (with continued freedom of movement) and trapped in the CFP where our fishing industry will be culled to make way for the EU fleet. All whilst being subject to the ECJ and ruled by the Commission and Council as some sort of vassal state.

It is nearly unbelievable that the political establishment could contemplate locking the 5th most powerful nation in the world into such a subservient position especially against the expressed wish of the British people to leave the EU in its entirety as voted for in the biggest vote in British history.