Leaving the door wide open

Tweet

I know that I’m not the first to point out that the kerfuffle involving a backbench MP at the Tory conference could have been completely avoided if the security check had been carried out five miles away from the conference venue, or even at his house before he left, and he had been given a clever electronic device to track his movements all the way to the venue and into the room in question.  Under such a system (perhaps we could call it ‘alternative arrangements’) there would have been no need for a security check at the entrance to the room because the check would already have been done elsewhere, and the electronics would tell the security team exactly where he was at any given time.  And with no need for a security presence on the door, there could have been no confrontation and no fuss.

Unfortunately, it also neatly parallels some of the real problems for his proposal in relation to the EU-UK border on the island of Ireland.  Whilst the MP would have been checked and verified, what if his wife had simply gone directly to the room in question?  With no security clearance, she would have no clever device to monitor her, and with no security on the door, no infrastructure to detect her presence and no clever device, she would cross the boundary into the room ‘invisibly’ as far as the security team were concerned.  Without a physical control to ensure that only people who’d gone through the ‘clearance centre’ could reach the entrance to the room, the entrance would, effectively, be unsecured.  Now, one might ask, ‘does it matter if one stray extra individual gains access to the room?’  Maybe not – but if it doesn’t then the security check was irrelevant and unnecessary in the first place.  The point is that the security presence on the door wasn’t there to admire the documents held by the authorised and put a tick in a box somewhere; it was there to prevent access by the unauthorised.

A system which depends on goods and associated documents being presented at a clearance centre (or being checked at the factory) before proceeding but with no means of ensuring that everyone does so is a system which controls the movements only of the honest.  For the dishonest, it’s an open door.  And here’s the thing – the point of checking customs documentation and goods at the border isn’t to admire the beauty of correct documentation, it is to identify, deter and prevent the movement of goods which don’t have the correct documentation or on which the correct duties haven’t been paid.  If the PM had insisted his own party followed the ‘plans’ which he is putting forward, he might begin to understand why they’re not a viable approach for any territory which wants to control what does or does not enter its markets.

Why bother?

Tweet

My initial reaction to the lack of resignations from Brexiteers following Friday’s ‘agreement’ by the UK cabinet was that they were so confident that the plan would be rejected by the EU27 that agreeing to the ‘plan’ was not so much a concession on their part as a prelude to the no-deal crashing out which they crave.  It certainly appeared as though May’s rebadging-with-conditions was putting down a series of conditions to which the EU27 could never agree; and her demand that the EU now start to be flexible sounded like the usual Brexit demand for the EU27 to abandon at least some of the basic tenets of the single market.  But yesterday’s resignation makes me wonder whether at least some of the Brexiteers are starting to realise that the plan does actually contain the outline of a possible deal, if we regard it as a two-year late opening position, rather than a last minute set of immutable demands.

Take the “combined customs territory” for instance.  It sounds a lot like a new name for a customs union, and the chief difference between the two seems to be that the May plan assumes that the UK will have the right to negotiate different tariffs from those set by the EU.  This is obviously fraught with difficulty; apart from being a smugglers’ charter for any goods where EU tariffs and UK tariffs are different, the proposed use of technology which doesn’t yet exist to control where imported goods end up looks like being completely impractical when one considers raw materials turned into components turned into finished goods.  Without a physical border check to determine whether the contents of a lorry are what the electronic ‘paperwork’ says they are, the potential for UK firms to gain an unfair competitive advantage is something that the EU will never allow.  But what if the ‘right’ to negotiate different tariffs was accompanied by an agreement that the ‘right’ would never actually be used?  That’s hardly an unusual approach from the EU, and it would leave the ‘combined customs territory’ different only in name from the customs union.  I can’t see the EU27 being particularly averse to allowing the UK to call it something different.

Or take the proposal to replace freedom of movement with a ‘mobility framework’.  If the only difference between the two is that the UK starts to apply restrictions already allowed for in the EU treaties (or can be negotiated to that point) – something which successive governments have decided not to do – then why would the EU object to the UK simply using a different nomenclature?

Or consider the ‘harmonisation’ of rules instead of membership of the single market for goods.  If the UK is prepared to guarantee that it will follow all relevant EU rules for goods (in which the EU has a trading surplus with the UK) and accept that the interpretation of those rules is down to the ECJ, whilst excluding services (in which the UK has a surplus with the EU), then why, in principle, would the EU27 not be willing to discuss the details of how that compliance is guaranteed and implemented?

The amount of money which the UK will need to pay into the EU budget will be something of a sticking point; it will certainly be higher than the May plan envisages.  But a little bit of creative accounting under which it becomes a series of individual payments for specific services will allow it to be presented as something other than a contribution to the central EU budget – again, as long as the amount they receive is consistent with other deals and meets their requirements, why would the EU 27 be particularly bothered about what the UK decides to call it?

The only way in which May’s plan can be considered to adhere to any of her red lines is by assuming that those red lines apply only to what things are called, not to what they achieve.  The plan, as Brexiteers are coming to realise, not only ignores the substance of all those precious red lines, but might also provide a sound basis for negotiating something which will end up looking an awful lot like the Norway option which Brexiteers correctly characterise as Brexit-in-name-only, and under which the UK would follow the rules whilst having no input into them.

If only we had an alternative government-in-waiting which was prepared to look at all of this and ask one simple question: “Why bother?”

A simple choice - alignment or borders

Tweet

The Irish border issue is at heart a very simple one, albeit often clouded and complicated by the recent past.  That’s not to say that the Good Friday agreement and the long period of violence before it aren’t important, nor that they do not make the situation in Ireland unique; it’s more about saying that they can obscure what is at base a very simple and straightforward question of more general application.  And that is this: where there is a border between two countries, there are only two options – the first is that the two are part of a single customs/regulatory regime, and the other is that there are border controls.  It’s possible, of course, to be part of the same customs/regulatory regime and still maintain border controls, and some countries within the EU choose to do that.  But what is not possible is to have different customs/regulatory regimes and no controls, because in such a scenario it becomes impossible to maintain the integrity of either of the customs/regulatory regimes.  And all of this is as true for a sea border as a land border; land borders are just naturally more ‘porous’.

From that point of view, there is nothing particularly unique about the situation in Ireland; the unique part is the strength of the drivers for seeking to avoid a border with controls.  The Brexiteers know all this, and know that their demand for a different customs/regulatory regime has the inevitable consequence of creating a border with controls.  All the talk about ‘smart’ systems to facilitate border crossings is about minimising the impact of those controls, not about avoiding them.  Their preferred solution, albeit one that only a few of them are prepared to advocate openly, is that the Republic accompanies the UK to the exit door; it’s the only way in which they can both maintain their red lines about regulatory divergence and at the same time avoid border controls completely.  After all, the two countries entered the EU together, and it was that simple fact which enabled the ‘Common Travel Area’ to continue after accession, even if it took the Good Friday agreement to abolish the physical controls at the border.

This is relevant in the context of yesterday’s post about the future of the UK after Brexit.  What is true for the border between the two parts of Ireland is also true for the border between Wales and England.  Ultimately, Wales can either be part of the same customs/regulatory regime as England, or we can have border controls along the Dyke.  As long as both countries are part of the EU’s Customs/regulatory regime, it’s not an issue.  Outside the EU, as long as both countries remain locked in alignment, again, it’s not an issue.  But if Wales were to become ‘independent’, our ability to choose to seek membership of either the EU or the closely-aligned EFTA/EEA would be effectively ruled out by the need to remain in alignment with England - unless we were willing to implement border controls between the two countries.  I can’t foresee a situation in which border controls make any sense for Wales, and given the relative size of England in any conceivable reconfiguration of the UK, that means that we will be ‘rule-takers’ most of the time.

It isn’t that which concerns me most, however; after all, as an advocate of continuing membership of the EU I have to accept that rules are made collectively and that there are some that we might not like (although we’d at least have an input before they were made, unlike at present).  The bigger concern is that if England decides to increasingly cut itself off from mainstream Europe, and try and pretend that the UK is still a great power ruling the waves, then we are going to be part of that, regardless of any nominal ‘independence’, or the precise way in which the UK is reconfigured.  That isn't the sort of 'independence' which I want for Wales.

The EU is not alone

Tweet

According to the Brexiteers, the ability of the UK to sign new ‘free trade’ agreements with other countries across the world is one of the great prizes open to us following Brexit.  Unburdened by the need to act collectively with the other 27 members of the EU, the UK will be able to negotiate directly with a host of other states.  And having what they now admit will necessarily be ‘less free’ trade with the EU27 is, in their view, a price worth paying to get to that position.  (I understand, and have considerable sympathy with, the argument put forward by some of the so-called ‘left-wing’ Brexiteers that the UK could negotiate fairer deals with developing countries, who can at times be subject to exploitative deals by large blocs like the EU.  I somehow doubt, however, that concern for the exploited poor is uppermost in the minds of the Tories who are actually driving Brexit.)

One of the little-discussed flaws in this picture of the world is that the EU is not as unique as is often claimed.  It may be the most developed and integrated free trade area, but it is far from being the only one.  Other common markets and customs unions exist elsewhere.  There are many countries which have recognised the benefit of acting collectively on a regional basis to boost trade amongst themselves and to negotiate collectively with the rest of the world; and they see the EU as an example and are working towards a similar level of economic integration.  It’s also one of the ways in which developing countries can respond more powerfully and collectively to any attempt to impose exploitative deals upon them.  But here’s the thing – when negotiating a trade agreement with any country in relation to products which are covered by the provisions of another customs union or common market, the UK will need to talk to the relevant bloc collectively rather than discuss the deal with the individual states.

It raises a simple enough question.  In a world increasingly coalescing into distinct regional trading blocs, which is the best route to increasing free trade between them rather than purely within them?  (That is, is it not, a key part of what the Brexiteers say that they want?)  Is it, as the Brexiteers claim, for individual states to break free from their existing collective agreements and negotiate directly with each other on a bilateral basis creating a multiplicity of different and unique agreements, or is it for the regional blocs to talk directly to each other leading to a smaller number of more comprehensive deals? 

The answer to that question was blindingly obvious even before it became as clear as it now is that leaving an existing trade bloc introduces more trade barriers than it removes.  That in turn raises a supplementary question – if the Brexiteers know that their approach is going to lead to less free trade overall and a much more complicated set of agreements, why do they persist in arguing that ‘free trade’ is their prime objective?

How long is the horn?

Tweet

Based on his speech yesterday, Jeremy Corbyn has clearly been taking lessons from Theresa May.  And fair play to him, why should it be the exclusive preserve of the Tories to make speeches in which they say very little but which the media portray as some sort of pivotal moment?  For make no mistake about it – despite the media hype, the detail of what Corbyn actually said (full text available here) was essentially the same as what he and the Prime Minister have both been saying for months. 

It’s true that he said that Labour would seek to remain in ‘a’ customs union, something which May has ruled out.  That certainly looks like a difference, but the devil is in the detail.  The Government have ruled out remaining in any sort of customs union on the solid and entirely accurate basis that any such union necessarily precludes individual trade agreements with third party countries.  They are demanding a bespoke agreement instead which provides the benefits of the customs union whilst also allowing the UK to negotiate other trade deals.  What Corbyn said was that he was quite happy for the UK to remain in a new bespoke customs union, but that such an arrangement “would depend on Britain being able to negotiate agreement of new trade deals in our national interest.”  That doesn’t look like a whole lot of difference to me; it’s just semantics.

It is, of course, in the interests of the Tories to pretend that Labour are saying something radically different so that they can portray them as betraying the will of the people.  It is in the interest of the Labour Party to pretend that they are saying something radically different so that they can persuade Remainers to vote for them in the general election which is looking increasingly likely.  And it is in the interests of the media to pretend that Labour are saying something radically different so that they have something to report.  However, none of this actually makes it any different in reality.  Using different terminology to describe a beast of fantasy doesn’t make it any less of a fantasy.

In the epic session at Chequers last week, the Tories managed to unite around the proposition that they want the EU to provide a unicorn.  I’m not sure that they’ve entirely resolved the enormously important theological questions about how long or what colour the horn should be, but they’re absolutely certain that any type of horse would be completely unacceptable, and a betrayal of the will of the people who, whether they knew it or not, demanded a unicorn in the referendum.  And, let me be clear (as the PM might say), the government is getting on with the work of delivering that unicorn in the negotiations with the EU27.  Corbyn and Labour, on the other hand, are now entirely in agreement that they are not going to demand a unicorn at all, oh no.  For them, a horse will be perfectly acceptable, just as long as it has a large single horn growing out of its forehead.  I don’t know whether they’ve got round to discussing the size and colour of the horn yet, but I’m sure that they will in due course.

Meanwhile, the EU27are doing a lot of collective head-scratching, wondering what sort of people can devote so much time and energy to debating the finer points of the appearance of a mythical beast.  For those who follow the true faith of Brexit, this insistence on ascribing the status of myth to their beloved unicorn (or one-horned horse if you prefer that term) is yet another example of the way in which those evil Europeans are determined to punish the UK for leaving the EU.

Now, let’s get down to basics.  Should the horn be smooth or spiralled?

Trade deals and fantasies

Tweet

The reason quoted most frequently for not staying in the European Customs Union – or indeed, any customs union – is that it would prevent the UK negotiating its own trade deals.  And that much is true; what they’re not so good at explaining is why exactly the UK needs or wants to be able to negotiate its own trade deals.  They just present it as an inherently good thing and are rarely challenged for clarification.

The EU already has trade deals with many non-EU countries, and the UK benefits from those.  The plan, insofar as there is one, seems to be that the UK will negotiate with all of those countries to ‘roll over’ those trade deals, so that the UK expends a certain amount of effort to keep exactly the same terms which exist today.  It’s a sensible approach, given the amount of time available and the even greater amount of effort which would be required to do anything different.  It does, though, take us not even the tiniest step forward from today (and if any of those countries were to decline to play ball, there is the possibility of taking a step backwards).  It merely 'rebadges' existing EU deals as independent UK ones.

Then there are the countries with which the EU does not have trade agreements currently.  With some of those, the EU is already in negotiations lasting many years to achieve an agreement.  For it to be worthwhile for the UK to seek to negotiate separate deals with those countries, there has to be a belief that the UK market of 60 million can get a better or faster deal than the EU market of 500 million.  On what basis could that be?

Well, one advantage which the UK’s negotiators would have is that the EU is trying to meet the requirements of 28 states (soon to be 27), all of which potentially have different interests; ensuring that those are all met is time-consuming and complex.  Direct negotiations with only one state could conceivably be quicker and easier (although whether a state in a rush to reach a quick deal would take into account the needs of all its parts rather than just those of the south eastern corner is a danger which we in Wales might like to consider very carefully).  Of course, avoiding one part of a customs union seeking a deal which gives it a relative advantage over another part of the same union is one of the reasons for the EU rule preventing such individual trade deals by its members.  The alternative would be customs and border posts across the EU.

A second route to a quicker deal would be to concede more to the ‘other’ side in any negotiation; indeed, given the much smaller market that we’re talking about here, that might even be essential.  Whether making concessions to Trump’s America for a quick deal would turn out to be a good thing or not is rather a different question, but I can certainly see how an independent UK trade policy might lead to a series of different deals over a (still longer than the Brexiteers are willing to admit) period.  

The underlying question which remains is whether those deals make up for the inevitable loss of trade with our biggest trading partner.  In the fantasy scenario of those leading the UK, this question doesn’t even need to be asked; we’re going to keep ‘frictionless’ trade with the EU alongside the exciting new deals, so it’s not a problem.  It only becomes a problem when they have to face up to the fact that negotiating formal generic trade deals (as opposed to individual sales) and retention of that ‘frictionless’ access are mutually incompatible, for the reasons noted above.  Fox and friends are absolutely right to argue that if the UK wants to do its own separate deals, it has to be outside the customs union; the fantasy is believing that being outside the customs union does not disadvantage trade with the rest of the EU.

Agreement and reality

Tweet
On Saturday, Jacob Rees-Mogg told the world, in all seriousness, that the civil servants who had prepared the document showing that all credible types of Brexit were likely to be be worse, in economic terms, than remaining in the EU, were guilty of ‘fiddling the figures’.  It’s a very serious accusation, but the only ‘evidence’ that he seems to have produced is that he disagrees with the answers.  Personally, I very much doubt whether they have fiddled any figures; but what they have done is to look at a limited range of potential scenarios.  Very specifically, they appear not to have looked at the government’s own preferred scenario – that is, of course, the one that the government have so far found it impossible to articulate.

Yesterday, the Home Secretary told us that the Cabinet was more united on Brexit than people outside understood.  They are, she claimed, completely united on ‘on the need for "frictionless trade", the ability to strike international trade deals and avoid a hard border in Ireland’.  I suspect that she’s right about the degree of unity around those simple objectives; if that’s the level of detail to which they’re working, getting agreement looks like an easy task.  I suspect that it would also be fairly easy to secure cross-party agreement and wide public support for a demand that all taxes be abolished and the NHS budget be doubled.  The question is not whether they can agree about the desirability of the objectives, but about how useful an agreement to demand the impossible is likely to be.

I’m certain that the civil servants could indeed produce a model for Brexit based on the assumption that the EU27 will allow frictionless trade on terms unavailable to members let alone to any other non-member.  And if they did produce such a model, there’s a good chance that it would show that such a scenario would be no worse than remaining a member, and maybe even better.  Even Rees-Mogg would probably be happy to brandish the figures.  But how meaningful would they be?  Making the numbers add up to a total which provides the ‘right’ answer doesn’t make those numbers useful or relevant.

The agreement which the Home Secretary is so sure can be achieved within the Cabinet is based on a convenient suspension of reality, just like her boss’ declaration this morning that we will both have a different customs regime to the EU and avoid having any sort of border with that part of the EU which happens to be to the west of us rather than the east or south.  But who needs reality, when fantasy is so much more comforting?

Delusion and reality

Tweet

One of the problems from which the delusional often suffer is that the real world has a tendency to intervene, and can’t always simply be imagined away. For Brexiteers, the hard reality that they are not going to persuade anyone to give them any new concessions by threatening to simply renege on existing financial obligations has been a long time coming, but there does seem to be an inkling of progress towards a more realistic position.  It’s not agreed yet, of course, and we don’t yet know the final figure.  It will almost certainly be higher than the headline figure being quoted, but a bit of skilful negotiation on both sides might be enough to hide the final total in a plethora of rebates, discounts and conditional payments.

There has also been talk for a while about progress on protecting the rights of EU citizens.  If it weren’t for the innate dislike that some people seem to have of all foreigners, this should have been the easiest of all to resolve.  All they ever had to do was to extend the rights of UK citizens to match those of EU citizens.  Again, progress has been hindered by an unwillingness to give the citizens of the UK more rights.  I think it’s called ‘taking back control’.

That leaves the one that the UK imperialists always thought was going to be the easiest of all to settle, and that’s the question of the border with the Republic of Ireland.  There was never any rational basis for assuming that it would be easy, but a failure to understand that the republic is an independent state, with full membership rights of the EU, rather than some sort of vassal state of the UK has blinded them to the fact that the EU 27 were always going to be more likely to unite behind a loyal continuing member than to abandon that member's interests in pursuit of a deal with a troublesome departing member.  The treatment being meted out to Ireland by some sections of the press well displays the lingering imperialism and exceptionalism which has dogged the UK for generations.

In purely logical terms, I have some sympathy with the position adopted by Liam Fox, which is that the nature of the border required depends on the nature of the trade deal between the EU and the UK, and might therefore be better dealt with in phase 2.  Or rather, I would have more sympathy if the UK government had not, during phase 1, removed from the table all the practical options which would allow an open border to continue, demanding instead that the EU come up with a proposal to avoid the logical consequences of Brexit for the border.

The key word there is practical, and how it is interpreted.  It has long been clear that the real objective of the Brexiteer ideologues isn’t simply to remove the UK from the EU, it is to abolish the EU and replace it with a purely economic relationship based entirely on trade.  How else can anyone interpret the demand for a trade agreement as good – or better – that the one we have, but without membership of the single market or the customs union?  Now if somebody believes – as I suspect that Fox does – that Brexit is just the first step towards that goal, and that the UK crashing out with no agreement on a future relationship will help to bring that about, then the position being adopted actually makes some sort of sense.  But to repeat the opening line, one of the problems from which the delusional often suffer is that the real world has a tendency to intervene, and can’t always simply be imagined away.

Of horses and stable doors

Tweet

Labour’s ‘six tests’ for determining whether they will support the final Brexit deal represents a significant hardening of attitude by the party, but it’s a bit late in the day.  The demand that any deal should ensure that the UK gets the “exact same benefits” as it currently enjoys from the single market and the customs union sounds a lot like arguing that, actually, we are better off staying in; but adding to it the other demand that it should also ensure the “fair management of immigration” makes it sound like another wishy-washy fudge in which we get the benefits but ignore the rules.  I don’t know what else the remaining EU members can do to clarify that membership of the single market necessarily implies acceptance of the rules on freedom of movement, but on this point, it seems that Labour’s ears are made of the same cloth as the Tories’ ears.

The biggest problem with this toughening of the party’s stance, though, is that it is too little too late.  Labour MPs voted overwhelmingly in parliament for a Brexit bill which gave the government carte blanche to take the UK out of the EU, the single market, the customs union, and any other arrangement which has anything to do with being European.  And they accepted an act which fails to include any provision for a meaningful vote on the terms of the deal at the end of the negotiations.  Trying to set conditions retrospectively looks insincere at the least.  It looks more about putting them in a position to criticise whatever the Tories do than about trying to make a real difference; presumably in an attempt to boost their own party’s support. 

The logical outcome of the policy position outlined at the weekend is that the party will oppose Brexit, seek to reverse the decision taken in the referendum, and seek to negotiate a few minor changes to the EU treaties; anything short of that is just playing political games.  They won’t do that, however; there’s no chance.  They’re simply too hogtied by their acceptance that people voting for what is increasingly obviously a false prospectus is an unchallengeable outcome. 

Labour and others can argue all they like about the mandate being only to leave the EU itself, not to leave the single market or the customs union, but the Brexiteers have always wanted a complete break.  They might not have said that quite so explicitly during the referendum campaign, but repatriating full control over all laws and regulations was never going to be compatible with staying in the single market.  That much was obvious last June – anything else which was said was just campaigning.  It was dishonest campaigning, sure, but Labour are hardly in a great position to take the moral high ground on that issue.

If Labour and other opposition parties were to come out and say openly that, actually Brexit isn’t such a good idea at all, they might be credible.  But saying that they support Brexit whilst setting conditions which they know to be impossible is neither credible nor honest.  Aiming for the best of all worlds (for their party at least) in which they get support from leavers and remainers alike is more likely to lead them to the worst of all worlds in which they gain the trust and support of neither.  They’d be better off with a principled stand one way or the other - but then most of them would have difficulty recognising one of those if they saw it.