We always knew that the negotiations were going to be tough, and any reasonable person understood that involves compromise. We’ve already climbed down from the best alternatives we had (EFTA, EEA, Canada+), and what Theresa May offered the country, her Chequers proposal was disappointing but acceptable.
Whatever you thought of the way the negotiations were handled up until now, the Withdrawal Agreement on the table is a whole new level of submission and capitulation. The supposed ‘backstop’ agreement which is said to be temporary, in effect keeps us locked up as a vassalage inside the customs union, with a dynamic alignment on competition and state aid with the EU, and non-regression rules on environmental, social and labor laws, and full regulatory alignment on goods for Northern Ireland, with no unilateral ability to withdraw from the arrangement.
Even in the most obscured parts of Brussels, Eurocrats no longer talk about a second referendum. They’ve accepted that the United Kingdom is leaving the European Union. What they talk of now is keeping the UK out of the political institutions of the EU but remaining as a colony of Europe, to be dangled in negotiations with third countries who get unfettered access to UK markets but with no obligation to reciprocate access to their markets for the UK, or voting rights for thre UK to veto further EU laws.
The backstop kicks-in if an extenion to the transition period can’t be agreed and the UK doesn’t negotiate a trade deal by 2021, but why would the EU meet any demand from the UK with anything other than a wall of intransigence? Why would they continue to negotiate if the backstop is to take effect? The Withdrawal agreement has put us in an impossible position.
It’s not just that we can’t sign our own trade deals as members of a customs union, and it’s not just that we lose our lawmakers in Europe "taxation without representation" that stuff would be bad enough as it is. It’s the fact that to leave the backstop we need the consent of all twenty-seven continuing EU members. So say for argument's sake that there’s a dispute on the future arrangement that holds up the negotiation, taking just one issue as an example, customs facilitation.
It’s not just that we can’t sign our own trade deals as members of a customs union, and it’s not just that we lose our lawmakers in Europe "taxation without representation" that stuff would be bad enough as it is. It’s the fact that to leave the backstop we need the consent of all twenty-seven continuing EU members. So say for argument's sake that there’s a dispute on the future arrangement that holds up the negotiation, taking just one issue as an example, customs facilitation.
Theresa May’s preference for a customs agreement with the EU would involve a partnership, that aligns our regime on imports precisely with the EU’s external border, even if it’s part of a complex supply chain that initiated in the UK. The government is proposing that we collect the EU’s tariff on goods directed toward the EU that enter the UK, effectively enforcing the EU’s customs border ourselves and supposedly allowing us to import into the EU without customs checks.
Suppose the UK and EU want different tariffs on the same goods. How we track an item beyond our border isn’t clear, especially when that item doesn’t stay whole, take sugar for example. When someone bakes it in a cake and sells it across the border, what tariff do we apply? Or, taking their other suggestion, we apply the higher tariff on our border and refund the difference. It’s not feasible, not just because of the possibility of fraud but expecting every item sold over the border, to then collect a receipt and send back to the UK requires staggering amounts of regulation.
No EU negotiator is going to accept an arrangement like that, and while the government continues to back an unfeasible position, all while the clock ticks down, we become vulnerable to being stuck in the backstop or extending the transition period, indefinitely. For the first time in these negotiations, I've come to believe that we'll drop out of the EU without an agreement.
No EU negotiator is going to accept an arrangement like that, and while the government continues to back an unfeasible position, all while the clock ticks down, we become vulnerable to being stuck in the backstop or extending the transition period, indefinitely. For the first time in these negotiations, I've come to believe that we'll drop out of the EU without an agreement.
It was never inevitable that negotiations had to be this way, there was an alternative, MaxFac and the Malthouse compromise. These involve technological solutions and trusted trader schemes to the Irish border. A person carrying goods across the border could file a customs declaration online and in advance, it would generate a specific bar code and HGV would identify a container by the number plate of the vehicle crossing the border. If it was greenlighted it would pass, and the whole process would be virtually frictionless. The only checks at the border would be for haulier whose vehicles aren’t recognised, or which didn’t fill out the proper paper work.
Regulatory checks needn’t have been an issue of major concern either, they could have been solved through mutual recognition of standards (the way Americans do trade) in the context of a free trade agreement. But prior to negotiations we already agreed to the EU’s time table, this was an unparalleled failure on the part of our government.
We’re not in a position now were all of this can be undone. What seems inevitable, a no deal Brexit was something I always argued should be avoided, at almost any cost but which one had to plan for if the only deal on the table didn’t deliver on the promises of the referendum. After all, if trading through WTO terms with some of our largest trading partners was ideal, what would’ve been the point of Brexit in the first place?
So should MPs vote down the withdrawal agreement? Absolutely, what happens next doesn’t have to be a no deal Brexit. What could happen is that both sides agree on a minimal relationship, which includes the uncontentious stuff, like citizens rights, extradition, aviation and similar bilateral treaties that essentially all countries agree on. In no way did I ever want to accept a no deal scenario but at this point it's starting to look like the best option.
That would by itself not be enough, and requires other reforms, in a time of national crisis most people will accept reforms they otherwise would be against, bringing corporation tax down to its OECD minimum, scrapping fuel duty and other taxes that impede economic activity.
Privatising assets, cutting public spending projects, deregulating anti-competitive EU regulations, like the ban on GMOs, rules on art sales, workers directive, bonus caps, and so on. All of this could theoretically be done and passed through Parliament if the withdrawal agreement is rejected. But leading us through this period of the negotiations would have to be a different Prime Minster.
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