Mrs May and Mr Davis’ oft repeated aspiration for ‘frictionless’ trade with the European Union (EU) via a free trade agreement (FTA) and mutual recognition of standards will, in reality, consign the United Kingdom to be a permanent EU vassal state. Brexit will be in name only, with ‘stay, pay, obey without a say’ being the outcome of their mishandling of Brexit negotiations.
The transition agreement, which turns the UK into an EU vassal state and caves in to unreasonable EU demands, is a prelude to worse things to come. The transition deal (partially agreed) is vastly inferior to the deal they could have got, but rejected out of hand (refer Mrs May’s Lancaster House speech 17th January 2017), of retaining membership of the Single Market (and wider European Economic Area, EEA) through re-joining, even temporarily, The European Free Trade Association, EFTA (aka the ‘Norway Option’). This route could have delivered practically ‘frictionless’ trade and a soft border on the isle of Ireland.
At the heart of Mrs May’s and Mr Davis’ highly risky, far-fetched and delusional approach to Brexit is a failure to understand the nature of the EU, the European Economic Area (EEA), EFTA’s working relationship with the EEA including the EEA Agreement, mutual recognition of standards and how world trade works. They make the most basic mistakes and factually incorrect or incomplete statements to support their contradictory proposal to leave the Single Market and get the same level of market access through an FTA. They appear unwilling to take cognisance of readily available facts that rubbish their fatuous mantras.
The evidence of what will happen after the UK leaves the EU (and EEA) is hiding in plain and comprehensive sight on the EU’s dedicated website (in their increasing number of Notices to Stakeholders under Brexit preparedness). It makes somewhat chilling reading. There is nothing equivalent on the Department for (not) Exiting the European Union’s website. Presumably either they haven’t done this vital work or have chosen not to share it – a truth too awful to tell?
Upon leaving the EU and the EEA we become a ‘third’ country. We would then be subject to different requirements by the EU in order to, at best, manage the risks (to consumers and others) of doing business with us (or any other ‘third country’ outside the Single Market or EEA) and, at worst, to erect protectionist trade barriers in favour of domestic EU enterprises. From the EU’s perspective they will not grant concessions (to ‘third’ country suppliers outside their control) that are not enjoyed by EU domestic suppliers, especially when these could increase risks or create an ‘unfair’ competitive advantage. The EU also has to treat the UK the same as any other ‘third’ country in order to comply with World Trade Organisation (WTO) agreed requirements or principles.
The EU’s direction of travel (for the Single Market), is towards harmonised standards, regulations, and enforcement or surveillance within a top–down centralised legalistic and bureaucratic framework under their supervision and control. It is also a long established declared ambition that ‘third’ countries (outside the EU, or wider European Economic Area, EEA) would adopt or follow at least some EU-style measures. The 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 .
For the EU, mutual recognition of standards (which differ from theirs) has limited application, since it is not their preferred choice, where harmonised standards (in their widest context) exist. In any case there is the practical complexity and increased cost of demonstrating equivalence and compatibility, which can be far from straightforward, and be unacceptable to consumers and users. To very simply illustrate, traffic lights using green on top for ‘stop’ and red underneath for ‘go’ certainly provides equivalent functionality but are far from compatible and acceptable. Also test values from subtly different tests may mean a product is (theoretically) less safe, rendering it unacceptable or requiring expensive or impractical re-design (re-design may invalidate other test results and/or existing certification/approvals). (See also the Fallacy of Easy Mutual Recognition of Standards).
The EFTA/EEA option is not perfect but is far more favourable to the UK than the transitional deal on offer and the almost certain outcome of Mrs May’s FTA and ‘deep and special relationship’. Norway participates in the EEA through membership of EFTA. Actually it only implements EU legislation necessary for functioning of the EEA, which at most constitutes around 25% of the total EU acquis or system of laws. More than 90% of these EEA related laws reportedly originate in global bodies, meaning the UK would need to implement them anyway for global trade, unless we leave the World Trade Organisation (WTO), et al. Also 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). And EFTA members make their own trade agreements with other countries.
Contrary to statements by Mr Barnier and Mrs May about the indivisible four freedoms, EFTA/EEA membership contains the facility to control immigration. Various members of EFTA (Liechtenstein for immigration and Iceland for financial controls in particular) have unilaterally invoked Article 112 (the Safeguard Measures) of the EEA Agreement to restrict free movement, just as the UK could do if we retain membership of the EEA by re-joining EFTA. Ironically, Articles 112 and 113 of the EEA agreement, which Mrs May rejects, are reproduced closely by the EU in their draft Withdrawal Agreement, Article 13 (Protocols NI), allowing the EU to unilaterally restrict freedom of movement (including immigration into the EU from the UK).
Continuing membership of the EEA solves the problem of maintaining a soft border in Ireland between the Irish Republic and Northern Ireland, without a hard border between Northern Ireland and the rest of the UK (something Mrs May has ruled out for the moment). It also gives us full control of fishing in our Exclusive Economic Zone. The EEA agreement (for EFTA members) can be adapted to suit their interests. Thus the UK (within EFTA) could get a bespoke version. So we could ‘imitate, adapt and improve’ on the existing EEA agreement to suit our needs rather than follow an insular and amateurish effort to ‘re-invent the FTA wheel in a few months’ that isn’t going anywhere.
From the beginning the EU negotiators have shown complete domination of the Brexit negotiations. It was inevitable then that negotiating concessions (or cave-ins) would flow from weak, dithering and clueless Mrs May and Mr Davis to strong, decisive and professional Mr Barnier and his team. Comparing the EU’s draft Withdrawal Agreement with the text agreed by the UK shows just how much the increasingly uncompromising EU is getting its way. Worse still, the EU is getting away with demands that are over and above those necessary for trade, with more already in the pipeline (such as fishing, defence, defence procurement, locking UK into EU budgets etc.).
If you thought the Transitional Deal was bad, wait until you see the final withdrawal agreement and the FTA.