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Friday, 06 April 2018 06:28

Our man in Europe

Dear Friends,

This week has been, by the standards of Brexit events, relatively quiet as the negotiations carry on behind closed doors. I want to take advantage of this to run through why the Northern Irish border is proving so challenging. There has been a lot of ink spilt on this but most of it is assertion rather than an actual explanation of the issues we face.

The problem starts with Brexiters demanding that we leave the Single Market and have no Customs union with the EU. Without this, there would be no issue.

They want to leave the Customs Union so that the UK can make its own (apparently fabulous) trade deals, but they have demanded to leave the Single Market without justifying why this is necessary. After all there are a number of countries that have this type of relationship with the EU yet aren’t members. The Single Market is focussed on standards and regulations. Negotiating common standards to remove so called ‘non-tariff barriers is central to the majority of modern trade deals. This is because outside of certain sectors (such as agriculture) tariffs are relatively low across the board and non-tariff barriers are the major impediment to trade.

Regulatory equivalence is not the same as integrated structures of the Single Market. The Single Market sets minimum (not maximum) standards for products and services. The inevitability of the UK’s new worldwide trade deals, if they happen, is that there will be divergence below the standards of the Single Market. It’s the only way such deals would add any value. This will mean that there must be some way of keeping the regulatory frameworks of the EU27 and UK separate, i.e. a border.

This will have to be enforced - it cannot simply be ignored as some have asserted.

This is not out of spite but because the rules of world trade must be respected. From the perspective of the UK it will have made a variety of new obligations, both to the EU and to other nations, regarding a huge range of issues. This will be far beyond trade and includes things like environmental safety and protecting industrial and commercial property. If the UK does not enforce these then ‘Global Britain’ will be seen as an irresponsible global citizen whose word is irrelevant. Hardly the best basis for signing trade deals around the world!

The impact of leaving the customs union also has an impact. A tariff-free trade deal with the EU27 would clearly be a welcome start but is not the same as the customs union we currently enjoy. If we leave this, even if we have no tariffs with the EU, then goods that enter the UK will have to be checked because we will have different tariffs rates with other countries around the world (otherwise what would be the point of having different trade deals?).

Again, enforcing this is not a choice for the EU - or the UK, for that matter. World Trade Organization rules mean that you simply cannot leave a border open if there are tariff implications. If we remained in the Single Market but not the Customs Union, such a border could operate along the lines of that between Norway and Sweden. This border is a relatively light touch affair, but it is still real and requires infrastructure. Even the lightest of borders could have major implications for the peace process.

These problems are why the border issues in Northern Ireland have not been resolved, simply kicked down the road. The bottom line is simple: a hard Brexit is not compatible with an open border on the island of Ireland.

There is a solution though. The UK could (and should) remain in the Single Market and Customs Union even if they were to leave the EU. This is a reasonable political compromise that respects the UK vote. It will also solve the issues of the border in Northern Ireland and mean that the economy will not suffer massive damage.

I hope this explainer has been useful. It is a little dry and technical but these are the realities we now face. Rhetoric is simply not enough to solve this!

Yours aye,

Alyn

As the Australians made clear, if Brexit Britain wants a trade deal then it will have to accept hormone treated beef from the other side of the world.

www.thetimes.co.uk/article...

The Indian Government has said that it isn’t in a rush to secure a trade deal with Britain.

www.politico.eu/article...

Steve Bullock, a former negotiator for the UK in the EU, has argued the Brexit can still be stopped. (Transparency caveat: Steve is the newest member of my team.)

www.theguardian.com/commentisfree...

The House of Commons Exiting the European Union Committee has agreed with the Scottish Government that remaining in the Single Market should be an option.

publications.parliament.uk/pa...

A senior civil servant has said that the UK’s post-Brexit trade strategy “is basically tweeting out flag emojis."

www.telegraph.co.uk/business...

The Irish Times has put together this handy guide to the team guiding Ireland’s Brexit policy. It stands in stark contrast to Davis, Johnson and Gove.

www.irishtimes.com/news...

A number of companies are increasing their direct freight routes between Dublin, Zeebrugge and Rotterdam.

www.ft.com/content...

Auke Willems, a fellow in EU Law at the LSE’s European Institute, has argued that the UK’s security and justice cherry picking cannot survive Brexit.

blogs.lse.ac.uk/brexit...

A new survey has shown that 20% of manufacturers plan cuts and 58% plan to increase prices because of leaving the EU.

www.theguardian.com/politics...

A YouGov poll has revealed that a majority of people in the UK regret the Brexit vote.

uk.businessinsider.com...

The National Union of Students is now supporting a second EU Referendum.

leftfootforward.org/2018...

Former Foreign Secretary David Miliband has urged the Labour Party to do the same.

www.newstatesman.com/politics...

Meanwhile, Brexit has resulted in a surge in support for remaining in the EU from the Danes!

www.bloombergquint.com/politics...

The House of Lords European Union Committee has demanded clarity from the UK Government regarding the European Health Insurance Card.

publications.parliament.uk...

And finally, the best April Fool of the year was the European Parliament announcing that the EU will start using dark blue passports.

twitter.com/EPinUK...

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