DCB’s BLOG

19.1.19

In the aftermath of Parliament’s rejection of the draft Withdrawal Agreement, there is a way forward for the Government which allows a smooth transition into a No Deal scenario after 29th March, if found necessary, and then allows the UK to negotiate its desired comprehensive Free Trade Agreement with the EU without having to impose tariffs or quotas in the interim. There is a mechanism to ‘manage’ a No Deal scenario; one that works within existing WTO rules, and that is not widely known about.

This is essentially an alternate transition or interim period, but within WTO rules without having to levy tariffs or (arguably) pay membership fees to the EU, but requiring some customs forms levied on the 7% of UK businesses (400,000 out of 5.7 million UK private registered businesses) that actually trade with the EU. This is the deal with the EU used by China, the USA, India, Australia and New Zealand for example.

These recommendations are based on my nearly ten years of experience as a member of the European Parliament’s International Trade Committee, working on EU trade deals such as those with Canada, New Zealand, India, South Korea, Japan and Columbia/Peru, and drawing on high level discussions I have had with senior trade representatives for the EU and the World Trade Organisation (WTO).

In the event of No Deal, there is a strong case to maintain preferential tariff and quota rates at zero between the UK and the EU for a limited period – thought to be around two years. There are a number of arguments for exemptions to what are termed ‘Most Favoured Nation’ (MFN) rules, which require the same treatment in terms of tariff rates and treatment between WTO members to avoid discrimination. They are:

1) It is to the advantage of fellow WTO members to minimise disruption between our two large markets, which would reduce knock-on impacts to their imports/exports to the UK or EU markets. WTO members have to show financial harm to justify objections to practices (or tariff schedules). Civitas calculate that £13 billion of tariffs would have to be levied on EU goods entering the UK and £5 billion on UK goods entering the EU Single Market if standard tariffs are levied under No Deal. This is one justification for keeping preferential rates of tariffs for a period whilst a full trade deal is finalised.

2) There are exemptions under National Security grounds such as over the issue of Northern Ireland, which the IEA have argued as a case for an exemption, but this is less appealing given its association with US and Russian cases for exemptions, such as over US tariffs on Chinese steel.

3) Exemptions to ‘Most Favoured Nation’ (MFN) rules under Article 24 of the General Agreement on Tariffs and Trade (GATT) 1947. This appears to be the most substantive argument. WTO rules state that preferential benefits, such as tariffs and quotas for goods which are more favourable than MFN treatment, may only be extended to another country if it is part of a customs union or a free trade area. The ultimate legal authority to grant such preferences is Article 24 of GATT , incorporated into the WTO regime when that body commenced operations in 1995.

Article 24 is helpfully the ultimate basis in international law for the existence of the EU itself as a preferential trading bloc, which grants preferential treatment to its members within the Customs Union.

If the UK accepts Donald Tusk’s offer of a free trade agreement along the lines of CETA+++ or what I propose as ‘SuperCanada’, then the UK and EU will be in the process of moving towards creating a free trade area – Tusk has offered a tariff and quota free deal plus services (whilst leaving the EU Customs Union) – so qualifies under this criterion.

There are two under-appreciated aspects of Article 24 which have direct relevance to our situation, and which provide reassurance.

Firstly, Article 24, para 3 states:

The provisions of this Agreement [i.e. the requirement to extend MFN treatment equally to all] shall not be construed to prevent:

(a) Advantages accorded by any contracting party to adjacent countries in order to facilitate frontier traffic

  • This has direct relevance to the position of Northern Ireland, and our adjacent country of Ireland. Some commentators have claimed that a sensitive and appropriate management of trade which respects and upholds both the letter and the spirit of, for example, the Good Friday Agreement would be in some form an unauthorised infringement of MFN treatment. That claim is clearly untrue.
  • There is also no obligation under WTO rules to erect a so-called “hard border” on 29th March. Government may continue discussions with our counterparts in Dublin to arrive at adequate and effective technological measures for the management of trade with minimal friction. You will have noticed the encouraging signs that the Irish Government already appreciates this fact. (See, for example, “Ireland has no plans for hard border after Brexit, says Varadkar”, from The Guardian of 21st December 2018)
  • We can expect that there will be considerable international sympathy for measures which support the situation in Northern Ireland, and hence a reluctance on the part of third countries to lodge objections. Although given the sensitivities this should not be stressed too heavily, such an exemption falls into ‘National Security’ related actions.

Secondly, Article 24 not only authorises member states to operate lower/zero tariff free trade agreements, it also permits them to offer lower/zero tariffs pre-emptively during the course of negotiations. The relevant provision, Article 24 para 5, is worth quoting at length, with emphasis added to the critical wording:

Accordingly, the provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of… a free-trade area or the adoption of an interim agreement necessary for the formation of… a free-trade area; Provided that:…

(b) with respect to a free-trade area, or an interim agreement leading to the formation of a free-trade area, the duties and other regulations of commerce maintained in each of the constituent territories and applicable at the formation of such free–trade area or the adoption of such interim agreement to the trade of contracting parties not included in such area or not parties to such agreement shall not be higher or more restrictive than the corresponding duties and other regulations of commerce existing in the same constituent territories prior to the formation of the free-trade area, or interim agreement as the case may be; and

(c) any interim agreement referred to in subparagraph… (b) shall include a plan and schedule for the formation of such… a free-trade area within a reasonable length of time.

(A WTO declaration, the Understanding on the Interpretation of Article 24, 1994, clarifies that the ‘reasonable period of time’ in para 5(c) will generally taken to be no more than 10 years.) I estimate based on EU trade deals to date, that a UK-EU comprehensive Free Trade Agreement could take around two years, especially given the unique reality that the UK is starting from a convergent position with the EU, with zero tariffs and quotas and with our laws and standards currently harmonised.

  • If, before 29 March, the UK has reached an ‘interim agreement’ with the EU to pursue negotiations towards a comprehensive free trade deal, both sides would be permitted under WTO rules to continue with the present zero tariff/zero quota trading arrangements. There would be no disruption to the man or woman on the high street. No Deal would mean No Change, as the cost of goods would not go up.
  • In the present situation the ‘interim agreement’ would not have to be an extensive document running to hundreds of pages. The schedule of items covered by the negotiations would be all goods, as already envisaged in our discussions with the EU. The plan which the document sets out would have to amount to little more than a timetable for regular meetings and an ultimate deadline, some years hence, by which point negotiations will have to be concluded.
  • An ‘interim agreement’, then, need be little more than an agreement to continue talks – while also continuing zero-tariff and zero-quota trade on both sides – plus a deadline no later than 29th March 2029. I accept that the EU has so far declined to agree any deadlines (other than 29th March) but since the absence of a final cut-off point has been a major contributing reason for Parliament’s rejection of the Draft Withdrawal Agreement, perhaps the EU will now reassess that stance.
  • Whilst legal challenges at WTO level might be expected from an unhelpful member, the reality is that any such challenge is unlikely to get to the WTO ‘court’ – its appellate body – for at least two years and possibly longer, and only if that body finds the UK non-compliant would any compensating actions be authorised such as tariffs. This is within WTO rules, and if any challenges arise a fully compliant Free Trade Agreement should already be in place by the time any appellate body were to meet. The EU is now under extreme pressure from EU27 industry and commerce who enjoy a £96 billion surplus with the UK.
  • You will recall that the draft Political Declaration indicates the EU want to reach a comprehensive Free Trade Agreement with the UK on the basis of zero tariffs and quotas (see paras 17, page 5, and para 23, page 6) and extending to services (para 29, page 7). Those provisions are fully in line with numerous public statements made since the 2016 referendum by Donald Tusk, President of the European Council, and Michel Barnier, European Chief Negotiator – offering a CETA+++, or what I term a ‘SuperCanada’ trade deal, on 7th March 2018, 30th August and 6th October 2018.

It is significant that Heiko Maas, Foreign Minister of Germany, has already indicated a willingness to continue talks (see “Germany says EU ready to talk if UK rejects Brexit deal” on Reuters, 15th January).

Conclusion

This approach would continue the pre-29th March status quo in trading arrangements and patterns without interruption, justified by an explicit provision of the WTO regime. The possible grounds on which any third country could lodge an objection to this are extremely slight (unlike for schedule changes).

An ‘interim agreement’ would therefore be an important component of a ‘Managed No Deal’ outcome from 29th March. It permits trade between us and the EU to continue without tariffs or quotas under No Deal while creating a space for negotiations to be reset and recommenced on the basis of reaching a SuperCanada or CETA+++ trade treaty.

I urge the Government to now adopt this course of action, as it will mitigate the main impacts of a ‘No Deal’ Brexit and eliminate the task of having to assess and charge tariff rates on 19,753 MFN tariffs under the EU Customs Union, thereby substantially reducing friction at borders.

You can read this piece by David as it originally appears on brexitcentral.com here

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9.12.18

brexitcentral.com

How to get Brexit back on track when the Withdrawal Agreement is rejected by MPs

The current political turmoil and constitutional crisis has so many twists and turns that it makes House of Cards look pedestrian.

Of course the real issue comes down to what happens when – rather than if – the proposed deal is voted down on tomorrow, 11th December (or even dropped).

Here there is a clear gap opening up between media reports and hard legal reality – what the actual effects are of the political manoeuvring of Dominic Grieve, Sir Keir Starmer and their merry conniving bands. There have been desperate media reports that ‘no deal’ is off the table, when it is actually remains the ‘default position’ as Andrea Leadsom told Radio 4 just last week.

Let’s assume Conservative MPs think there is enough turkey on Christmas menus not to be part of the required two-thirds majority needed to vote for a General Election, and that the EU have indeed ruled out any major renegotiation.

The bottom line is that the various options being desperately pushed by those who want ‘anything but a true Brexit’ are just not viable. There is:

  • ‘Norway Plus’ – even worse that the slavish EEA, which adds back membership of the customs union, thereby killing all future UK trade deals, and with no control of immigration, no say over EU laws, and large payments;
  • A ‘Second Referendum’ – with its totally confused offer: ‘tell us if this final 2,000-page deal is better than staying in the EU when we’ve already left. Oh, and by the way you will have to join the euro and lose the rebate’. Pointless too in that Leave is predicted to win again; or
  • Extending Article 50 to allow more muddle time – which will either mess up the EU by landing the Brexit issue right in the middle of European Parliament elections in May or mess up all the groups, chairmanships and procedures of the European Parliament in the farcical situation of British MEPs being elected for a few months.

But all such amendments to the motion are not legally binding anyway – they can only be advisory. They might bring political pressure, but they do not have legal effect. As the Commons Chief Clerk, Sir David Natzler, confirmed: whatever MPs vote on by way of motion “has no statutory significance”, as they do not constitute “a vote on whether to accept or reject no deal.” That requires new legislation. The actual law – in the EU Withdrawal Act – states clearly that we will leave on 29th March 2019.

Given that reality, and bearing in mind how rash it is to try to indicate a way forward in this maelstrom, this is what I propose now as the best next steps:

1) Assuming the vote fails on 11th December, or is put off, I believe the Government should make a statement immediately saying that preparations for a ‘no deal’ option – better called a ‘Clean Global Brexit’ or ‘World Trade Deal’ – will go into SuperDrive. Sorry, but defer Christmas!

Where there’s a will, there’s a way: in the Falklands War, the Ministry of Defence managed to put together a task force of 100 ships in just 48 hours. We can manage this process, and thousands of civil servants have been on the case for years. Like the Millennium Bug, claims of Armageddon and planes falling out the sky gave way to nothing happening on 1st January 2000.

2) The UK should then go back to Brussels, not to renegotiate this current draft Withdrawal Agreement, but to agree a pared-down, bare bones emergency series of bilateral agreements covering only the essential ‘must haves’: aviation, customs, citizens’ rights, medical products, European Investment Bank assets etc. The beauty of this is that if one agreement falls, then the others are not lost. The DUP’s Arlene Foster has proposed bilaterals. These bilaterals could be agreed by Westminster and the EU by March, and would any sane MP or MEP dare to seek to derail any such vital preparation in these circumstances? They should hold all further Westminster business, such as the Immigration and Trade bills, that may be hijacked.

3) The UK should also formally advise the EU that it wishes to accept the offer made not once but three times by the EU: that of a SuperCanada/CETA+++ Free Trade Agreement with 100% tariff- and quota-free access to the EU Single Market plus comprehensive services (first offered by Donald Tusk on 7th March), and which we could start negotiating from the day we become a ‘third country’ – 30th March next year.

We can build on the three pages on trade in the more appealing draft Political Declaration, but drop all notion of a ‘Single Customs Territory’ – the UK must firmly leave the EU’s Customs Union and Single Market. We are in a unique position to negotiate an FTA fast – as all our laws are convergent at present and we don’t have to spend years wrangling over which tariffs to keep or get rid of, as others do.

4) Having initiated moves to agree a SuperCanada FTA, the UK and EU can now jointly notify the World Trade Organisation (WTO) that in the light of working to agree a comprehensive FTA and future Political Declaration, we are invoking Article 24 of GATT (the General Agreement on Tariffs and Trade).

This is important because Article 24 allows us to maintain the same tariff-free access to both our markets without breaching WTO discriminatory Most Favoured Nation (MFN) laws. Article 24 allows “an interim agreement leading to a formation of a free trade area” and allows “a reasonable length of time” – up to 10 years – to negotiate it.

So, we whilst we will need customs declarations under WTO, we will be able to maintain the same zero tariffs as now with the EU – the free trade area will remain. EU exporters to the UK would save £13 billion in tariffs (and our consumers too) and UK exporters £5 billion. We will also be free to lower tariffs for other trading partners as we wish – something specifically excluded in the Backstop. Nor should there be any Non-Tariff Barriers (NTBs) either under WTO agreements.

We can also enact the WTO’s Trade Facilitation Agreement which recently came into force that obliges the EU27 to adopt measures like authorised economic operators (trusted traders), which are part of the solution for the Northern Ireland border issue along with electronic declarations and remote checks away from the border.

5) As a sign of Britain’s free trade intent, we can now immediately initiate full and unfettered negotiations with international trade partners such as the USA, China and India, without these deals being torpedoed by being tied into the EU Customs Union, Chequers or the Backstop. The picture would be clear at last, and not be delayed by unending years of transition. Similarly, we will seek to build on current work to ‘roll over’ the benefits and obligations of existing EU trade deals such as that with South Korea.

6) So, on 30th March the UK can be cleanly out of the European Union and back into the world, with an acceptable and managed World Trade Deal option in place, free of years more wrangling over transitional arrangements, cost demands, alternative models and heightened business uncertainty – and with negotiations underway for a closer SuperCanada trade deal. We can reallocate much of the £39 billion payment lost by the EU to compensate UK-based companies legally in terms of R&D, regional aid and transport infrastructure – helping to stimulate our economy.

Like an operation we know needs doing, let us get on with the surgery quickly and speed up the recovery process.

This is indeed a Clean Global Brexit. Brexit could be over in a few months, rather than drag on for years on end.

And, for all our sakes – both Remainer and Brexiteer – let’s just get it done.

You can see David’s piece as it appears at brexitcentral here.

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8.11.18

‘From Backstop to Breakthrough: a thinkpiece on a way forward’

By David Campbell Bannerman MEP, Joint-Spokesman on International Trade for Conservatives in the European Parliament

So confused has the debate over the ‘Backstop’ – the latest addition being a ‘Backstop to the Backstop’, where Ireland has an additional Backstop on top of a UK-wide customs Backstop if the UK-wide version is not sorted in time – that it is now vital for the success of the Brexit negotiations to get back to the core reasons for such a Backstop. We need to revisit why it was needed and whether events have moved on so much that there is no longer a case for such a device. The Cabinet after all must decide [TODAY Thursday 8.11.18].

This process now seems rather like peeling off layers of surplus paint that have been splashed on top of the original concept, to find the firm base metal underneath.

So to return to first principles: what is the Backstop, what is it actually for, and how do we amend or replace it with something that can lead to a breakthrough on a deal?

The Backstop is contained in the Joint Report made on 8th December 2017. Paragraph 49 basically demands the UK stays in the EU’s Common Union and Single Market if the deal is not delivered: ‘In the absence of agreed solutions, the UK will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement.’

Paragraph 50 is about regulatory barriers: ‘… the UK will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the UK, unless, consistent with the 1998 Agreement, the Northern Ireland Executive and Assembly agree that distinct arrangements are appropriate… In all circumstances, the UK will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the UK internal market.’

Why was such an invention necessary? Well time for that bare metal: because there is such a lack of trust, and the need for ‘legal guarantees’ and an ‘insurance mechanism’ and the Backstop are all to do with that lack of trust.

The Irish Government do not trust the British Government not to backpeddle on avoiding a hard border on the island of Ireland – meaning physical checkpoints, people in peaked caps, and checks on the border.

This despite the UK Government frequently stating that it will not institute a hard border under any circumstances. That means not even if there no trade deal between the UK and the EU and we all have to revert to applying tariffs on goods both ways under World Trade Organisation (WTO) rules, there still will be no hard border.

The EU does not trust the UK to maintain a customs border. Indeed, they are suing the UK for what they say are uncollected duties on Chinese goods for £3 billion. This is a disastrous starting point for the proposed ‘Customs Facilitation Agreement (CFA)’ in Chequers, where the UK becomes a customs collection ‘agent’ for the EU. Nor does the EU trust the UK to honour the legal nature of the agreement – they felt the deal made in December should not have been dismissed as not legally binding.

Unionists, most notably the DUP, don’t trust the British Government not to split Northern Ireland away from its market, and its regulations from the rest of the UK – bearing in mind four times as many exports go to GB than to the Republic of Ireland.

On the British side, our own Brexiteers do not trust the UK Government, never mind the EU, not to capitulate on a deal with the EU and to keep us trapped in the Customs Union forever, under pressure from UK ‘business’. To allow the EU and Irish government to use the backstop provision basically to veto any Brexit deal on the pretext that it does not satisfy a border deal or that the free trade agreement overruns creates a hostage to fortune that the British people would see as abject surrender. They want the backstop to go.

So we have an impasse on the backstop. We seem all to be impaled on a Backstop hook that we are unable to escape, with the clock ticking down and the prospect of a no deal staring at us ever closer in the rear view mirror.

So what could solve the problem? When I was Special Adviser to the Northern Ireland Secretary of State Patrick Mayhew during the start of the Peace Process in 1996 to 1997, I learnt much about the importance of language and creativity, especially in such a sensitive context as Northern Ireland with its linguistic minefields – even use of descriptors such as Derry or Londonderry. I also later suggested a means of decommissioning (putting ‘beyond use’) terrorist weapons by the former terrorist groups destroying their own weapons in front of independent witnesses, which later was adopted. Decommissioning was the hook the Peace Process became impaled on then.

 

What I suggest to get us off the Backstop hook is as follows:

1.) To replace the Backstop – those Paragraphs 49 and 50 – by evolving it into a legal protocol attached to the Withdrawal Agreement. A protocol is what was used to satisfy sovereignty demands for the Irish in the Lisbon Treaty, following the defeat in their first Lisbon Referendum. The three areas protected were military neutrality, tax sovereignty and social issues such as abortion rights. These items weren’t directly related to the Lisbon Treaty’s text itself but were very important to the sovereign concerns of the Irish people and were expressly recognised, and protected, in this way.

2.) The advantage of a protocol is that, if deposited with the United Nations, it becomes an international treaty. It is subject to an independent international court – the UN’s International Court of Justice (ICJ) located in The Hague – not others like the ECJ.

3.) The protocol I propose has some express commitments backed by this international legal procedure which can build this missing trust. This protocol would directly address the unique circumstances on the island of Ireland, avoiding a hard border and protecting the 1998 Good Friday Agreement (the GFA) – language taken from the backstop.

But it also should reassure Unionists and Brexiteers like me that this agreement shall not change or interfere with the sovereignty, territorial status or constitutional integrity of nation states.

4.) It would also help for the avoidance of doubt that any UK-EU free trade agreement (FTA) concluded will apply to the whole of the UK, not just to Great Britain, as has been misleadingly claimed. Furthermore, that Northern Ireland will not to be excluded through its terms or through the application of differing customs or regulatory procedures.

5.) To address the specific issue justifying the Backstop invention – that in the event of the negotiation of this UK-EU FTA going beyond the end of the transition period on 31st December 2020, the Parties agree not to impose any ‘hard border’ in the interim ‘gap’. It could echo the backstop language of all parties agreeing to continue to support North-South cooperation, the all-island economy and to protect the GFA ensuring lasting peace on the island, which is not controversial.

6.) Perhaps what is newest addition would be to spell out exactly how the UK in particular would avoid a hard border, and to do so in this legal international treaty format backed by the ICJ. There is no better paper than that of the ERG written by former Northern Ireland Secretary for Northern Ireland Owen Paterson, and backed by another Theresa Villiers, David Davis, Lord Trimble, who did so much on the Peace Process, Sammy Wilson on the DUP (and myself as a contributor).

I am suggesting the main thrusts of this paper are incorporated into this protocol such as SPS (sanitary or phytosanitary) checks on animal health/plants continuing as now, but be conducted away from the physical border (the EU talks now of ‘market checks’), and the all island Common Biosecurity Zone be maintained – with a veterinary agreement that limits the necessary checks to 40 percent, not 100 percent (up from 10 percent now).

Customs declarations, or country of origin certificate and product compliance checks shall be conducted away from the physical border and be predominantly done electronically, using schemes such as Trusted Trader and Authorised Economic Operators. Other checks including VAT, tax, excise, currencies (GBP/EUR) and security shall again be conducted away from the physical land border, as now, with VAT accounting continuing to record trade with EU Member States.

Other border issues such as the Single Electricity Market (SEM) for the island of Ireland (Northern Ireland and ROI) shall be maintained; and rail services too, jointly run with NI Railways and Iarnród Éireann.

7.) To reassure Unionists and Brexiteers alike enough to clear legislation through Westminster, that in return for the measures above set out as a binding international treaty, the Parties can now accept that no part of the UK shall remain subject to the rules of the internal market nor remain in a Customs Union. No part of the UK would be made part of a ‘common regulatory area’, nor be considered part of the EU’s ‘customs territory’, though all parties would agree to work towards an extremely close and ambitious FTA in a constructive, positive and supportive manner.

8.) Regulatory convergence or divergence shall be agreed to be managed as part of this FTA and not the withdrawal agreement, and the mechanism for managing regulations shall be managed through a Joint Committee in the manner of similar FTAs. The new Business Councils can be at the forefront of this process.

9.) It should be expressly stated that no new regulatory barriers shall be allowed to develop between Northern Ireland and the rest of the UK, unless, consistent with the GFA, the Northern Ireland Executive and Northern Ireland Assembly agree that distinct arrangements are appropriate. In all circumstances, the UK will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the UK single market.

10.) Finally, I am suggesting the creation of a new North-South cross-border body to show goodwill and intent, whose job shall be to avoid any semblance of a ‘hard-border’, within the remit of the UK Government, ROI Government and Northern Ireland Executive. This body shall recommend advanced technological solutions but start from workable existing ones.

Politically, I see this protocol can move us all from a hard, fast and unpopular backstop to an internationally backed protocol and has something in it for everyone.

For the Republic of Ireland Government and Irish citizens there is a precise legal commitment that no hard border will be established if the negotiations of a UK-EU FTA are elongated, or in the absence of a FTA (a ‘no deal/WTO Rules’).

The EU (and the WTO) can be reassured that access to the Single Market and Customs Union is adequately and properly managed. That it is an agreement fulfilling the ‘improved offer’ on the Backstop pledged by the EU’s Chief Negotiator, Michel Barnier. The Protocol can be presented as an alternate ‘de-dramatized’ legally operational Backstop, as necessary.

The UK Government can be reassured an FTA will be delivered whilst the constitutional integrity of the UK is maintained, and that the agreement can be voted through successfully in the UK Parliament.

Eurosceptics such as the European Research Group (ERG), the Unionist community in Northern Ireland, and the Democratic Unionist Party (DUP) are reassured that the UK’s constitutional integrity is not undermined, the UK will not stay in the Customs Union or Single Market indefinitely by default, and the Backstop has been evolved into an acceptable form.

With time now so short I hope this thinkpiece can help unlock a solution.

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5.10.18

westmonster.com

Chequers is on runway, SuperCanada taking off – let’s accept Brexit offer

I was surprised to hear from a UK Ambassador recently that the EU had not put a deal on the table and that the only deal on the table officially was Chequers. Other government briefings and media statements have emphasised that the EU needs to make a ‘counter proposal’ to Chequers. It seems President Tusk just did.

He tweeted: “From the very beginning, the EU offer has been a Canada+++ deal. Much further-reaching on trade, internal security and foreign policy cooperation. This is a true measure of respect. And this offer remains in place.”

I hugely welcome this – it is the SuperCanada Trade deal I have been arguing for for two and a half years plus aspects of the sort of strategic partnership the EU has agreed with Canada, Australia (Framework Agreement) and New Zealand (Parc).

This is not the ‘simple trade deal’ that Theresa May rejected in her Conference speech – it is deeper, wider and broader than Canada’s CETA – Tusk’s “further reaching”. And Tusk makes clear it is still on the table as an offer.

This counts as a ‘counter proposal’ – whether it was there on 7th March, when he said “I propose we aim for a trade agreement covering all sectors and with zero tariffs on goods (that’s one +). Like other free trade agreements, it should address services (a second +; deeper services a third +). I hope that it will be ‘ambitious and advanced’ or not is immaterial now. The offer was restated on 2nd August with public procurement services added as an example of cooperation.

The offer is still there and it’s live. I commend President Tusk and Mr. Barnier for proposing the best ever trade deal they have ever done to date (and I’ve worked on a few over nearly 10 years on the international trade committee including Canada). This is the best basis of a deal and one endorsed by Brexiteers such as Jacob Rees Mogg and Boris Johnson, who I am grateful too for supporting ‘SuperCanada’ at Conference as well as the EU. It therefore has the best chance of support through both the Westminster and European Parliaments.

With the clock ticking and the papers soon to go out for the EU Council meeting I am really optimistic we can get such a deal.

This is an excellent offer. We must now accept Chequers is stuck on the runway, but SuperCanada is lifting off.

See the article as it appears on westmonster.com here

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26.9.18

telegraph.co.uk

Chequers is burying Theresa May. Only Canada can save her from further humiliation

So the Prime Minister would rather have a “no deal” scenario for our country than a “Canada-style” deal, claiming that it would break up the UK, whilst shooting off to New York to talk to President Trump about doing a US free trade deal.

This has become utterly absurd and embarrassing – ‘Yes, Prime Minister’ without the laughs. The Prime Minister is setting herself up for yet another Salzburg-type slap at our party conference, and conceivably from President Trump too. Number 10 has descended into bunker mode and has ceased to act or react rationally. Many of the advisers and ministers responsible are not doing the Prime Minister any favours, they are burying her, just for the sake of saving their own political skins. She does not deserve to be left so exposed.

The clear reality is that Chequers is dead. Only what I call a ‘SuperCanada’ deal will work – a deal based on Canada’s 99% access to the Single Market, with no free movement or access fees, but bigger, better and wider, drawing too on the Japan deal. Like Jacob Rees Mogg, who referred to SuperCanada this week, I don’t mind if you call it “Supercalifragilisticexpialidocious” Canada – but please just use Canada!

For a start, as the trade lawyer and author of the IEA’s PlanA+ alternative report this week Shanker Singham made clear: Chequers effectively takes Britain’s ability to do proper international trade deals off the table. He went on to say the Americans he met there just last week are laughing at Chequers, and that it is even a legal requirement from Congress that goods are included in US free trade agreements – how can we do this when our hands are tied under EU goods regulatory slavery (the so-called ‘EU common rulebook’)? What is the point of discussing a US trade deal that is either half destroyed by Chequers or illegal under US federal law?

I know full well from nearly ten years of working on EU trade deals, including Canada, India, New Zealand, South Korea and Colombia/Peru, that international trading partners regard goods as the core of their free trade deals, and they will not give ground in other areas that we covet, such as services, without those goods basics being on the negotiating table. Chequers blows up half the benefits of every single trade deal we want to negotiate. Goods tariffs are still very real in the world and these unhelpful trade wars are adding to them, not subtracting from them.

Also, if Britain is applying to become a customs assessment and duty collection agent for the EU under this clumsy Facilitated Customs Arrangement (FCA) proposal in Chequers, the omens are not good. The EU is about to demand legally that the UK pays £3 billion in what it claims is incorrectly assessed customs duties by UK customs on Chinese goods. They think we are unable to handle customs duties now let alone when we become independent again.

Let’s be direct, the EU is not actually negotiating when Mr Juncker warned in his State of the Union speech “you cannot be in part of the Single Market” – it is setting out its core, inconvertible principles and beliefs, and they will not change during the negotiations. They will not accept Chequers. The misreading of the EU position by close advisers and diplomatic teams was gross negligence, and they are truly to blame for the terrible way Mrs May was treated.

What has happened since the Prime Minister so effectively achieved her red lines and Lancaster House aims on 7th March this year? After meeting her in Number 10, the EU’s President Tusk graciously accepted those red lines and offered us a great trade deal, the best the EU has ever offered, saying: “I propose that we aim for a trade agreement covering all sectors and with zero tariffs on goods (this is CETA+) Like other free trade agreements, it should address services (that takes it to CETA++, only one extra + short).”

The EU’s negotiator Mr Barnier reiterated this offer and went further as recently as 2nd August saying: “It is possible to respect EU principles and create a new and ambitious partnership… the EU has offered a Free Trade Agreement with zero tariffs and no quantitative restrictions for goods. It proposed close customs and regulatory cooperation and access to public procurements, to name but a few examples.” The EU wants a Canada style deal. It is after all very familiar to them.

So, we were home and dry. Our red lines met, the excellent guidelines laid down in Theresa May’s speeches such as at Lancaster House and Mansion House met. The Government White Paper reflected a Canadian style deal – certainly to Version 9, and the Brexit Department ministers were all content with the general direction.

But just a few months later, we get the disastrous Chequers proposal, leading directly to the resignation of David Davis and Boris Johnson and a succession of other ministers, an approval rating amongst Conservative voters of 17 per cent, turmoil in the party, a bounce from 2 per cent to 7 per cent in the polls for Ukip, and the prospect of a disastrous 1970s Communist tribute government under Mr Corbyn escalated immeasurably. How could this have gone so wrong so quickly?

The reality is that it is UK ‘business’ interests who have caused this chaos, the villains being the Remain Treasury, the Business department and the appallingly contemptuous enemies of democracy and the people, the CBI. They argued strongly for Remain in the Referendum and are doing everything possible now to undermine the result – regardless of the price for democracy. They have conspired with the EU to shamelessly exploit, exaggerate and twist the Irish border issue for their own selfish purposes, seeking to keep the UK entrapped within the Eurosphere of red tape and cosy corporate laws.

It is a giveaway when major corporate business concerns claim to be fighting like saints for trade worth less than £2 billion a year. But ironically now the EU is actively promoting a free trade agreement solution, as Brexiteers like myself are, it is business interests in the UK who threaten a no deal outcome through their own idiocy. They would rather hang on lazily to the business they have now with the EU than lift their eyes to a reality where 90 per cent of the growth in the world in the next 10 to 15 years will come from outside Europe – so says their friends at the IMF.

They and the Number 10 bunker are not interested in finding an actual solution for the Northern Ireland border. Indeed, a reported private briefing by an adviser suggested they weren’t interested in finding a solution. I have helped on four separate papers now on this issue, one of which was presented to the Brexit select committee, and the ERG paper “The Border between Northern Ireland and the Republic of Ireland post Brexit”, was written by one former Secretary of State, Owen Paterson, and supported by another Theresa Villiers, by our former Brexit negotiator David Davis, Lord Trimble, Sammy Wilson of the DUP and many others. How much support does the Chequers cabal want to see demonstrated?

Now even the EU are talking openly of such technological solutions and checks away from the border – Mr Barnier himself – whilst Mr Varadkar has revealed that the EU has told Ireland there is no need for a hard border, which the UK has made clear too. So, what exactly is the problem needing to be solved?

With a border free of any need for tariff and quota checks, with goods checked now in Ireland running at a mere 1 per cent, animal welfare checks in existence anyway, with successful borders in existence for excise duty, VAT, corporate taxes and currency, then a few more checks away from the border, the use of existing technology, and a bit of creativity will do the job. This is hardly the same challenge as the Irish peace process – which I had the privilege of being part of.

There is only a problem if you are determined not to find a solution.

David Campbell Bannerman is a Conservative MEP, spokesman for the ECR group on international trade and author of the ‘SuperCanada’ trade deal proposal

 

12.9.18

How Theresa May can avoid a Brexit bloodbath in seven simple steps

As we approach our party conference, I am fearful we may expect scenes reminiscent of the bloodbath of the Maastricht debates of the early 1990s. I remember Major’s Foreign Secretary Douglas Hurd citing the similarity of that debate to the Corn Laws under Peel, that split the party in two – between pro-protectionism and pro-free trade – and the roar in the Hall as he was shouted down. Here we go again.

This time the debate is Chequers or Canada – Canada defined as a SuperCanada/CETA+++ Free Trade Agreement, that suits not only Canada but our Commonwealth cousins New Zealand and Australia, who are now using Canada as the template for their deals with the EU. SuperCanada has become a Commonwealth deal.

But with the clock showing a few minutes to midnight, the Chequers option is facing a brick wall. A combination of strong party and Westminster opposition – with even former Brexit ministers David Davis and Steve Baker resolutely pledging to vote the deal down – and 80 MPs now willing to put country and principle first. Relying on Labour votes to drive a deal so resolutely unpopular in the Conservative party through risks ‘Corn Laws 2 – the Sequel’. More likely Labour will oppose the Chequers deal and it will fail, ushering in no deal.

The UK polling data is frightening: only 19 per cent Conservative voters (YouGov) think we are doing a good job at the negotiations. Add to this the 29 per cent of voters in 44 Conservative marginal seats would be less likely to support their local Conservative member if that member supported Chequers, and Chequers clearly risks handing Corbyn the keys to Number 10 on a silverplate – complete with a bouquet of red roses.

Then there’s the EU. Monsieur Barnier is very charming and polite in saying he likes ‘parts’ of the White Paper, presumably after desperate urging. It is not clear whether this is the content – or the binding, printing style or phraseology.

Comparing the key Brexit models: Chequers v Canada plus

Chequers Canada +
Control of borders EU citizens will keep their current free movement rights until the end of the transition. The UK has yet to set out what it would have in its place afterwards. The UK would have total freedom over immigration policy, at the price of more limited trading access to the EU market.
Solving the Irish question The UK intends to avoid a hard border by aligning with all EU rules “necessary to provide for frictionless trade”. The UK would be outside the customs union but would have a comprehensive free trade deal with the EU, limiting the need for checks through technology.
Control of rules The UK would follow “a common rulebook”, requiring it to copy EU regulations on goods and agri-food. MPs would have to accept the “consequences” if they want to ignore certain rules The UK would be able to change its rules much more, with smooth cross-border trade ensured by a system of “mutual recognition”
Free-trade greatness The UK could in theory strike deals with countries outside of the EU. But lack of flexibility would limit its attractiveness. The UK would leave the customs union and avoid any common rulebook, so there should be no curbs.
Control of laws The European Court of Justice would no longer have “direct jurisdiction” over the UK, but British judges would have to pay “due regard” to its previous rulings A Joint Committee, inspired by what the EU has in place with Canada and Korea, would make binding decisions to resolve issues

But his original reaction was perhaps more reliable: with him saying that by allowing U.K. to “pick pieces” of the single market, such a deal “would be the end of the single market and the European project”, may not be “legally feasible”, and that he is “strongly opposed” to the proposal. Wishful reports he is being sidelined were met with firm denials in Germany and France.

So it is quite clear the core proposal in Chequers: that of a Facilitated Customs Arrangement and a EU ‘Common Rulebook’ (cunning language for signing up to EU laws with no say) are seen not just to meander over EU red lines but to stamp up and down on them with great force. Barnier fears this Chequers proposal will simply fall apart.

The EU regards the 4 freedoms and the sanctity of the Single Market as its Holy Grail – and does not like us messing with their scriptures. To separate goods laws (one core freedom) from services (another core freedom) is unacceptable, not to mention no free movement (a third) within the Single Market – like the EEA demands.

Nor does the EU want us either to continue to act as one of their customs borders, collecting duties and imposing tariffs and quotas like an agent. Inauspiciously there is a multibillion-pound battle going on with the EU suing our own customs authorities for allegedly failing to collect billions in Chinese duties. So they don’t even trust us not to turn a blind eye to fraud in their view.

If Chequers isn’t going to fly, then the expected November summit will mean no withdrawal agreement, no transition deal and both of us moving to the same relationship the EU has with China, the USA and India – a World Trade Deal (or ‘no deal’) as early as March next year. The Party Conference will be taking place five to six weeks out from that summit.

But we can rescue a deal in that timescale – as, despite denials, there is indeed a credible alternative plan, one that was our official policy only months ago. That is to revert back to Plan A (SuperCanada) with no loss of political face. An indication was the fact the gentlemanly Eurosceptic Mr Jacob Rees Mogg and gentlemanly Euro-gnthusiast Mr Barnier agreed so readily in their Brussels meeting that: Chequers is dead, long live SuperCanada!

So here’s conceivably how we might get a solution:

  1. Everyone – Eurosceptics, the EU and the U.K. Government – acknowledge how clever it was to propose Chequers 1, as it has fast illuminated our respective negotiating positions, shown UK business and industry that a closer position more akin to the Customs Union/EEA is not deliverable, clarified the EU red lines whilst allowing the EU negotiating guidelines to be made more flexible, unlocked a new EU/Irish willingness to find a sensible common sense solution on the Northern Ireland border issue (such as Mr Varadkar announcing that the EU had told him there was no need for a hard border as soon as Chequers was announced), and made it clear a deal can be struck quickly and successfully – but only along the lines of a SuperCanada/CETA+++ style trade deal, with Mr Barnier even astonishing Labour MPs on the Brexit Select Committee by his vehemence in rejecting Chequers and supporting Canada plus.
  2. The U.K. Government then announces that in light of the strength of the EU reaction and Westminster MP concerns against the Chequers proposal – as David Davis said it is merely a proposal not a deal – then the proposal is to be updated and improved – as many white papers in the negotiating process have been – into a ‘Chequers 2’ proposal. Much of Chequers 2 will remain the same other than for the trade deal section that everyone is finding so unpalatable (plus a few tweaks to the defence section).
  3. Chequers 2 will see our Government reverting back immediately to the original Brexit Department White Paper – version 9 I understand – which incorporates the SuperCanada proposal – as the basis of a deal.
  4. Chequers 2 means the Government can immediately inform President Tusk and Michel Barnier that the offer made on 7th March by Tusk and reiterated by Barnier on 2nd August is hereby accepted in principle as the basis of a future relationship for the purposes of the Withdrawal Agreement. This is an offer of 100 per cent tariff and quota-free access (one +, as Canada, Australia and New Zealand are not getting 100 per cent) and services (a second +). Deeper and more complex services (the third +) can be delivered for all via the WTO by pushing its Trade in Services Agreement (TISA) which covers 70 per cent services GDP in 50 countries, which the EU will have to follow.
  5. The EU will publicly rejoice, welcome and agree that the acceptance of the original offer President Tusk made is a breakthrough, and accept in principle to this now being the basis for an agreement at the proposed mid-November special EU Summit.
  6. Cue an outbreak of relief, joy, and celebration across Europe. The pound leaps, investment surges, the Prime Minister’s poll ratings shoot upwards. Westminster opposition parties reluctantly and gallantly declare their alternate plans for remaining in the Customs Union and Single Market are sadly no longer deliverable, and given the EU has now agreed this deal but could not agree Chequers, that in the interests of the country they will support or at least abstain on the Commons vote. (Alternatively, they will be defeated as Conservative rebels and Labour Eurosceptic rebels are ultimately likely to vote for the deal).
  7. Agree with the EU to work constructively together to resolve the Northern Ireland border issue by mid-November based on technological and creative solutions, as proposed in several UK papers (including my own) and referred to by Mr Barnier when addressing the Brexit Select Committee of MPs. Barnier helpfully said: “We need to see how and when and where these controls would take place. They could be dispersed. They could take place in different places, on board vessels, in ports outside Ireland, they could be done using technological means, they could be dispersed, as I said, or simplified in technological terms. Just to make that absolutely clear, we are not talking about a border. We are talking about controls.”

Then we can all gather in the pub, Leavers and Remainers together, to celebrate and ensure that the growth in the U.K. economy recently announced – is duly maintained, despite Brexit!

You can read the article as it appeared in thetelegraph.co.uk here.

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22.7.18

Plan A is still Brexit gold, says DAVID CAMPBELL BANNERMAN MEP  I  thesun.co.uk

SO the Chequers agreement on our future relationship with the EU is holed and sinking. Ten government resignations later, two senior Brexit Cabinet ministers gone, party constituencies angry, UK legislation torpedoing the unworkable future customs arrangement (FCA), even EU officials, polite but damning, saying: “The White Paper is not going to form the basis of the negotiations.”

By David Campbell Bannerman MEP

Boris Johnson said “a fog of self-doubt has descended”, the country “volunteering for economic vassalage” in “the miserable permanent limbo of Chequers… with no way out and no say for the UK”.

Boris also said we have changed tack once and can change again. Brexiteers are attacked for “not having any credible, alternative plan”. This is nonsense. We have a plan and the EU accepted it on March 7. This was Plan A until a cabal in the Cabinet Office led the PM astray, with the unsaleable Plan B of the Chequers agreement. These Rasputins, advisers with unholy influence on the powerful, must go.

So where from here? Our plan was laid out in Mrs May’s Lancaster House speech, a global Britain vision in Boris’s words: “Not just to do a bold, ambitious and comprehensive free trade agreement with the EU, out of the customs union and out of the single market, but also to do new free trade deals around the world.”

For some reason No10 buried this. When I praised government advisers on the best-ever EU trade deal they looked away. The PM too was uncomfortable. Conservative members gasped in disbelief and delight at how far the deal has come.

Courageous Brexit ministers have shown the subterfuge, dishonesty and vested interests. All because Plan A is too good! So we have indulged in months of timewasting and distractions, dead ends such as the EEA or Swiss models, or going back to the customs union and single market.

David Davis felt opponents “believe that being outside the customs union will lead to a precipitate loss of trade and that the loss of the ability to make trade deals matters less than that potential loss of trade… staying inside the customs union favours the shrinking minority of our trade over the expanding, fast-growing majority of that trade… They are trying to defend a false past and giving up a real future.”

Ex-Brexit minister Steve Baker said: “I have been astonished how many colleagues had not noticed that offer which was placed before us, a wide-ranging offer including free trade and no tariffs in all sectors, including services. We have to ask why we have not taken this path.” The governing class “does not believe in Brexit”.

The excuse for abandoning a Canada-style deal was Northern Ireland. The Chequers session started with a claim Plan A would mean the end of the Union. But two weeks later Irish PM Leo Varadkar says the EU will not force a hard border and the UK has ruled one out. So what are we arguing about?

This situation has brought despair to Brexiteers but we are close to realising our free, sovereign, independent nation in control of laws, borders and cash. We can do it. The Government must abandon the Chequers agreement. Accept the EU hates it for messing with its precious four freedoms and single market and that Brexiteers and the Opposition will vote it down. The Government should accept President Tusk’s March 7 offer. We don’t need details, just the framework. Tusk proposed the best deal the EU has offered (what I call Super Canada or CETA++), saying: “I propose we aim for a trade agreement covering all sectors and with zero tariffs on goods [one +]. Like other free trade agreements it should address services [second +].”

The civil servant responsible for the Chequers agreement Olly Robbins must go. Let’s bring in Crawford Falconer, government adviser on non-EU trade deals.

We should prepare for a no deal, better called a world trade deal. This would save £39billion offered to the EU, save £12billion net in EU fees, and gain another £12billion from tariffs on EU goods, less £5billion we would pay in compensation to UK firms.

Even if it’s a no deal we will return to a Super Canada because the UK will be the EU’s largest customer: Japan signed an EU deal and Australia and New Zealand are copying Canada.

We must conclude the Withdrawal Agreement by October’s EU summit or a special November summit to make March 2019. But if we change course we can deliver genuine Brexit. So let’s get back to Plan A – but mean it!

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DEBATE: Should MPs reject each of the 15 House of Lords amendments to the Brexit bill today? | City A.M.

Should MPs reject each of the 15 House of Lords amendments to the Brexit bill today? David Campbell Bannerman, MEP and board member of Leave Means Leave, says YES.

12.6.18

The job of the House of Lords is to amend and improve, not to wreck, sabotage, or unconstitutionally reverse the decision of the British people, nor to undermine the government’s entire policy position right in the midst of delicate and difficult negotiations that could us billions if got wrong.

On the specific amendments, the European Economic Area model does not suit the UK economy (which is far wider and more complex than Norway’s), and surrenders control of our market and borders.

Trying to wrest control of negotiations through a “meaningful vote” is unconstitutional and disgraceful behaviour by this unelected chamber.

The customs union vote means we cannot help our poor (who currently pay far higher prices, such as 60 per cent tariffs on Chinese shoes or 104 per cent on sugar), or the poor in developed nations (who are prevented from selling more into our market on fair terms).

This vote is a chance for elected MPs to take back control from the unelected Lords.

Read more: May will urge Tory backbenchers to unite on Brexit

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Don’t be taken in by the Brexit models being peddled by those backing the Lords’ amendments

11.6.18

I had a teacher at school who played rugby for England. Once. He dropped the ball on the line and a certain try was lost. It was a national humiliation.

Now I fear we are about to do exactly the same this week regarding our future relationship with the EU and the votes to overturn the Lords amendments: drop the ball on the line – if not crazily kick it into touch.

Not the Government – which has the right policy after many well balanced Prime Ministerial speeches. It’s our own Parliament, the Europhile Lords, rebel Conservative MPs and the Labour Opposition (a recent poll shows only 15% people understand their position) – backed by a whole coterie of loud, self-appointed trade experts including certain MPs, MEPs, academics and writers, who threaten a great result.

Forgive my frustration and uncharacteristic bluntness here, but the stakes for our nation’s future global opportunities and economic success are stratospheric. My recommendation is born out of 15 years studying options outside the EU and nearly 10 on the European Parliament’s International Trade Committee working on EU trade deals. I know enough to realise I don’t know it all, but like a good whisky the best final results require years of distillation.

And my conclusion? We actually have the right result already, we just don’t know it.

Look, the EU is now offering us the best and biggest trade deal the EU has ever done – 100% tariff/quota free, plus services. This is essentially ‘CETA++’- or as I call it ‘SuperCanada’- going much further and deeper than Canada’s CETA deal. That CETA deal is the EU’s ‘gold standard’ now. But when I go round speaking about this, everyone asks: why don’t we know this?

On 7th March, after meeting our Prime Minister, EU Council President Donald Tusk stated:

“I propose that we aim for a trade agreement covering all sectors and with zero tariffs on goods [CETA is 99% tariffs removed; only 92% in farming, so a +]. Like other free trade agreements, it should address services [second +].”

Mr Barnier meanwhile accepts our red lines: no Customs Union, no Single Market, no ECJ.

OK, we need to negotiate for deeper services, to add in more financial services and broadcasting as Theresa May requested (a third +) during the transition negotiations, but we have the makings of a fine deal now – congratulations then to May and David Davis.

So for Heaven’s sake, for Britain’s sake, for young and old people’s sake, please don’t let’s screw it up. Let’s not drop the ball on the tryline this week.

To aid the understanding of the Brexit options, including those sought through a number of the Lords amendments to the Withdrawal Bill, here is a simple ‘Idiot’s’ guide to the kind of half-baked solutions being bandied about: please don’t be taken in, and if anyone promotes them, tell them not to be ridiculous:

1) ‘The EFTA model’ (Idiocy level 8/10). For a start, EFTA is not a model, it is an organisation. EFTA negotiates trade agreements for its four members, who then sign those deals individually. But an ‘EFTA model’ doesn’t exist. The Swiss have a model and its other three members – Norway, Iceland and Liechtenstein – have the EEA (European Economic Area) model below. We could though have an EU free trade deal, and be an associate member of EFTA.

2) ‘The Swiss model’ (Idiocy level 8.5/10) is ridiculously complex, does not control borders and the EU will not give us one. The model has 120+ separate bilateral agreements, 20 main ones, and still manages to miss out two of the EU’s four freedoms, capital and services – and financial services in particular, which is why UBS and Credit Suisse are in London. But it keeps free movement, basically. The European Parliament’s Brexit negotiator, Guy Verhofstadt, last week called it “the Swiss catastrophe… with tens and tens of bilaterals”. He thought it might take 20 years to finalise. The EU does not even want the Swiss option for Switzerland! They’re doing everything possible to end it. So it’s a non-starter.

3) ‘The EEA option’ (Idiocy level 9/10) allows the EU to retain control of Single Market laws over 100% of the UK economy – the fifth largest in the world – despite only 12% of our economy being EU exports. It would do this without any British MEPs, Council or Commission officials to stop it. The three EFTA countries do not have our economy’s width; Norway is only big in oil, fish, defence; Iceland in fish, energy and aluminium; and in Liechtenstein, finance. So, hypothetically, the EU could decide to harmonise all EEA car production by insisting all cars made are left-hand drive – overriding Malta and Ireland. We would have no say or vote in the process. All UK cars would then have to be left hand drive. Taking back control?

Nor is there any border control as free movement is non-negotiable – a major referendum issue. The Single Market itself may sound cuddly, but even the EU estimates its costs are twice its benefits – and we’d be at mercy of unhindered red tape and intervention masquerading as market measures. David Cameron and The Guardian both concluded during the referendum it was idiotic, summarising the Norway option as: ‘No say. Still pay. No way!’. The campaign group Nei Til EU which won Norway’s referendum now campaigns for a free trade deal, not the EEA.

Whilst I toyed with ‘EEA Lite’ – (EEA minus free movement, cash payments, out of the Single Market and ECJ ) – the game has changed markedly and a free trade deal has become the simplest and cleanest way forward, particularly as the EU is obsessed with maintaining Single Market purity.

4) A New Customs Partnership (Idiocy level 9/10) is Byzantine, and costly for business, whilst destroying our ability to do our own global trade agreements by default. It will not be an attractive proposition for any other nation to do half deals with us without reducing goods tariffs. The word ‘partnership’ means ‘union’ – as in ‘civil partnership’. Fortunately this proposal is being dropped.

5) Staying in ‘a’ Customs Union (Idiocy level 10/10). This is supremely stupid as we are already being offered the main advantage of a Customs Union now – 100% tariff free and quota free access – through that CETA++/SuperCanada deal, but without the considerable downsides. One downside is we can’t do our own trade deals. So Britain, that created a trading empire equal to one quarter of the world’s surface, is currently reduced to ‘taking notes’ with no voice whilst the protectionist EU negotiates on our behalf at the World Trade Organisation (WTO).

Now we have a chance to lead the WTO – given that of the G7 economies, the USA, China, India, Japan and the EU are basically protectionist. Don’t be fooled by claims Trump’s steel tariffs mean we will not get a US trade deal. The UK has a 2 cents surplus with the USA for every $1 traded, Canada a deficit of 2 cents, but China has a 50 cent+ deficit. Trump is happy to do deals with those in trade balance with the USA.

Totally unhelpful is the sectionable idiocy of business organisations like the CBI and IOD (I’m a member), which should be the champions of Global Britain, but instead are rooted to the failing EU Customs Union, despite the reality that the IMF estimate 90% of economic growth in the world in the next 10-15 years will come from outside the EU. Indeed, the EU’s share of world GDP since we joined the EEC Customs Union has fallen from 36% to under 20%. Well, the CBI backed nationalisation in the 1940s, high taxes in the 1970s and the euro in the 1990s, whilst the IOD originally argued strongly against the (Turkish) Customs Union option they now support.

I was at a presentation at the Port of Rotterdam a fortnight ago and they proudly showed they are the largest port in Europe, twice Antwerp, well ahead of London. But they are only ninth in the world and say Asia will have all 15 top world ports shortly. This is a reflection of where international trade is going.

There is another big downside – nearly 20,000 tariffs. How can the Labour Party, which claims to represent the poor, support 19,753 separate taxes on the poor called tariffs? This is ‘Corn Laws Mark 2’ where Jeremy Corbyn is on the side of capitalism and protectionism, and the Conservatives the poor downtrodden working class consumer. Why keep a 104% tariff on granulated sugar, 70% on (unchlorinated) chicken breasts, 50% on New Zealand lamb, 24% on canned tuna, 12% on men’s T-shirts and women’s dresses, 10% on cars, even 30% on bread? These taxes/tariffs drive up the poor’s cost of living. There are even EU tariffs on food bank items such as breakfast cereal (39.3%) and squash (38.6%). Hypocrisy!

So we come back to the standard free trade agreement approach or we look at WTO rules.

There is more ‘Project Fear’ idiocy here. The HMRC quote that ‘Maximum Facilitation’ (MaxFac) technology supporting a trade deal would cost £20 billion has been found to be as reliable as Diane Abbott’s figurework: IEA analysis finds it is it was a quarter of that and top businessman John Mills and Dr Graham Grudgin put it at one tenth – just £2 billion. So MaxFac does work alongside a free trade deal.

And don’t give me Northern Ireland borders: I was a government Special Adviser during the peace process. A solution has already been found by the EU’s own adviser, Lars Karlsson, who was a World Customs Organisation director. I have myself written two papers on this (see my website), the latter with ex-boss of the British Chambers of Commerce, John Longworth, and former Northern Ireland Secretary, Owen Paterson.

It is shameful to use the Irish people, North and South, as pawns in the EU’s bigger game of keeping the UK bound to EU regulations – because, as the BBC’s Katya Adler revealed, the EU is “terrified” of a “super competitive” country like UK on its border.

If I may, I would propose three proposed steps to the Government:

1) Accelerate WTO rules ‘no deal’ planning – I have private reassurances the Government is working on WTO contingencies, and is advanced in certain areas. But if the Port of Rotterdam is actively hiring up to 900 customs officers and establishing new lorry parks, just in case, and Guy Verhofstadt confirms the EU is also preparing for WTO, we must bring forward our spending plans. But we can continue to shape a SuperCanada deal.

2) Tell Tory rebels if they vote for these idiotic, damaging measures contrary to their manifesto commitments, such as for a Customs Union or the EEA, then the Government should pause the whole Bill, and announce it will go for the WTO rules ‘no deal’, which is automatic under Article 50 of the Lisbon Treaty, two years after it was triggered in March 2019 anyway if no deal is struck. The British Government merely needs to sit back, and watch the clock ticking. The amendments calling for a WTO deal to be agreed by Parliament would only be binding if the Withdrawal Bill gets through Parliament. So park the trade and economic relationship side in EU negotiations and carry on with a narrow customs deal (not Customs Union/Partnership), an aviation deal, security and the other vital cooperation which applies whether we obtain a trade deal or not.

3) In time for the October (not June) EU Council (and still allowing for approval by the time we leave), watch the EU panic, German industry and French/Irish farmers go spare, followed by a SuperCanada deal being thrown at us. Observe the EU pile pressure on UK rebels to back a free trade deal departure. They will score our try for us. At that point bring back the Withdrawal bill and pass it in late 2018.

So, please let’s just drop over the line to score, by seizing hold of this SuperCanada/CETA+++ trade deal and moving on it swiftly. The rest will certainly not be straightforward, but we’ll have far more time and room to play.

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The dangerous folly of pretending Iran’s regime is our friend

8.5.18

Over the past few weeks, we have witnessed chaotic scenes on the streets of Iran which has resulted in the sad loss of protestor’s lives during a series of anti-Government demonstrations. This unrest reportedly stretches across many cities and towns from Mashhad, Iran’s second largest city, to Rasht in the North, Kermanshah in the West, to the capital Tehran itself. Yet the West is reluctant to comment because of the so-called ‘nuclear deal’.

In my view the EU has led the world – through heading up the ‘E3+3’ or ‘P5 + 1’ (the permanent members of the Security Council including the UK, plus Germany) – into a dangerous policy of appeasement on Iran. This is thanks to the EU’s insecure desire to prove itself as a world player, alongside cynical economic reasons: French-led Peugeot, Total oil and Airbus are all benefiting from major Iranian contracts and partnerships.

It is totally hypocritical for the EU enthusiastically to pursue an Iran trade deal, whilst denying China a trade deal on the basis of human rights. This is despite the fact Iran executes more people a year than China, with the ‘reformist’ President Rouhani allegedly executing thousands of political prisoners since coming to power, and at least four major ballistic missile tests conducted since the deal was signed. President Trump is right to deeply question the Iran deal and to propose the return of US sanctions. His recent approval of targeted sanctions against several Iranian government officials for corruption and human rights abuses – some linked to the recent demonstrations – is a welcome move.

The dearest folly has been thinking of Iran now as a ‘friend’ – just because it has agreed to some time limited and ineffective controls on its nuclear programme; ones that merely delay but don’t stop the march towards a nuclear bomb: the ultimate consequence being a major Middle Eastern state wearing a suicide belt of nuclear missiles, and a nuclear arms race between the Saudis, Iran and Israel. Britain has meekly followed this EU-led idiocy and President Obama’s legacy-seeking like a lapdog following a master. Brexit must free itself from this naïve ‘Groupthink’ and fundamentally rethink our own independent foreign policy on Iran.

What is most disgraceful is that the concentration on the ‘nuclear deal’ has come at the price at unfreezing massive Iranian assets – at least $100 billion, maybe $150 billion – that are now being put to malign use right across the Middle East in a way that would have made Libya’s Gadhafi envious. The current Iranian riots are reported to be in part due to dissatisfaction over heavy Iranian involvement in foreign wars; and are also an indicator that sanctions work, and that further economic pain could be enough for the good, intelligent, sophisticated, technologically-minded people of Iran to dispense with their clerical tormentors.

The courageous Kurdish Peshmerga in Iraq, who I visited on their front line fighting ISIS opposite Mosul, have been displaced by senior ‘Quds’ Republican Guard units in oil-rich Kurkistan, who are ostensibly part of Iraqi Government forces, yet replace portraits of former President Barzani of Kurdistan with those of former spiritual leader Ayatollah Khomeini not Iraq’s Masum. The Republican Guards were formed after the demise of the Shah as the clerical government could not trust the Army: they are the paramilitary Brown shirts of the Mullah regime.

Wherever I visit or study in the Middle East, I see Iranian destabilisation, learnt from the Soviets, and often on a massive scale: in Iraq their Shia militias maybe praised for fighting Sunni ISIS, but are as damned for allegations of similar atrocities against Sunni civilians. Increasingly Iran exerts a powerful influence in Baghdad – with the disappointment of some US-trained Iraqi forces abandoning their new equipment to ISIS and fleeing, Iraq has leant too greatly on the battle-hardened Iranian forces to keep ISIS at bay, and at too great a price.

In Syria, Iran funds an army a quarter of a million soldiers in size. In Bahrain, Iran is the malign force behind regular unrest against its rulers, with deaths of policemen and civilians, and unjustified claims on the state as its own. In Gaza, Iran finances Hamas.

I was shown by the Iranian Resistance under Mrs Rajavi (I don’t take sides; but I do take note) a compendium of 30,000 names, ranks, salaries of Republican Guard loyalists sent into Iraq to destabilise it after it was liberated from Saddam Hussein. Weapons of mass destruction? Even there we were played by Iran – the great source of this claim turned out to be an Iranian spy. Iran fears Iraq after years of rivalry and a bitter war fought between them in the 1980s – how convenient to have the West do its dirty work.

In Qatar, relations have worsened with Gulf ally states such as Kuwait and the UAE, over allegations of Qatar supporting terrorism, whilst having cosy relations with Iran. In Lebanon, the Prime Minister Al Hariri was forced to flee as he feared the Iranians would kill him just as they did his father, accusing Iran of spreading “fear and destruction” in several countries.A former Israeli General showed me the Lebanese and Syrian borders near the Golan Hei

ghts, explaining they fear 30,000 more missiles and a reinvigoration of Hezbollah attacks, formerly suspended by the lack of Iranian funding, once they end their intervention in Syria. These are not pipe bombs or some New Year fireworks – the threat is now highly sophisticated and powerful missiles, as donated to the Houthis, and the consequence could be a major new war.

Now as ballistic missiles fall on Saudi Arabia’s main Riyadh airport (what would happen if it had hit a packed aircraft?) and others are intercepted on route to the capital, we have to ask whether the ill-equipped Houthi rebels in Yemen are capable of such technology? The left in the EU and in Britain are zealots in attacking the Saudis and in seeking to deny them military hardware and training to improve accuracy, but are blind to the Iranians playing them as Lenin-like ‘useful idiots’.

Whatever reservations the West has on the regime, the Saudis were strong allies over Saddam’s Kuwait invasion and have not invaded anyone themselves. In Yemen they are supporting the official government and are doing so mainly in self defence against intrusion into Saudi Arabia itself. The Iranian Resistance Movement allege senior left wing figures are in the pay of Iran’s Mullahs.

There are reliable reports too that Iranian scientists stand side by side with North Korean scientists at their ballistic missile tests – how useful to them both to share such technology and to make their missiles more effective. Two rogue states hand in hand – except the Iranians are meant to be our ‘friends’, apparently.

The West has simply been suckered by Iran, time and time again. But the lesson must be if this malicious clerical regime, this septic octopus with tentacles wrapped around the Middle East and beyond, has to beg a lifeline from the West to stay alive, we must resolutely and unhesitantly refuse.

If Mugabe can be toppled in 2017, let’s earnestly hope we can see the end of Iran’s evil Mullah regime in early 2018.