Brexit: deals and no deals

What is a ‘No Deal’ Brexit? Part of the (sometimes deliberate) confusion around this is that there are, essentially, three deals to be done between the UK and the EU. The decision tree looks something like this:

Chart made with SmartDraw

Deal 1: Article 50 Agreement

This is an agreement on the terms of separation. It includes things like:

  • Liability for pensions for EU staff;
  • Share of the European Investment Bank;
  • Funding commitments made by the UK for projects beyond March 2019;
  • Relocation of EU agencies in the UK;
  • Rights of UK and EU citizens after March 2019.

As Anand Menon says, a failure to agree on these basic terms could happen in two ways; the UK walking away from the negotiations or a timeout where no agreement is reached by  the March 2019 deadline. This is what Professor Menon called the Chaotic Brexit:

There is no Article 50 agreement within the two year period, and no extension. The talks fail, because of disagreement over citizens’ rights, the role of the ECJ, money, or perhaps some other issue we haven’t yet focused on. On Brexit Day, the UK ceases to be a member of the EU – but, politically and legally, all the outstanding issues remain unresolved.

At this point, as Anne Robinson used to say to defeated Weakest Link contestants, we would leave with nothing. The arrangements which apply to 60 percent of our goods trade and the regulatory framework which has governed our economy for the last 25 years would disappear. This would have the effect of increasing, rather than removing, barriers to trade. Rather like a football match or a road traffic system, rules are what enable international trade to take place. The morning after Brexit would not see a new freedom but a new chaos. It would be like waking up on a busy weekday morning and finding that all the road signs, traffic lights and road markings had disappeared. That would leave motorists free to do whatever they liked but good luck with your journey to work. If you ever made it that far.

Would the planes stop flying? Probably, says Professor Menon. Aviation agreements have the status of full diplomatic treaties and they are highly restrictive. Airlines are already warning customers buying tickets beyond March 2019 that they may not be able to fly. Once you put yourself outside the legal framework, life doesn’t get easier, it gets a lot more complicated.

Chaotic Brexit would also leave us in dispute with the EU, potentially leading to court cases and certainly creating an acrimonious atmosphere which would poison the UK’s diplomatic and trade relationships with the EU for decades. It’s really not something either side would want.

Deal 2: Transition Period

Assuming no-one walks away from the table and we do reach a deal on Article 50, we then turn to the terms of our future relationship with the EU.

No serious observers believe that it is possible to hammer out a post-Brexit trade deal with the EU that can be implemented on 30 March 2019. Even if both sides agree the Article 50 settlement, they will need a transition period to work out the detail on tariffs, regulations and dozens of other agreements that currently govern the UK’s relationship with the EU.

This might take the form of a specially negotiated transition period or simply an extension of Article 50. There are potential problems with both options.

Some say that a transition agreement would be as nearly as complicated to agree as a final trade deal, so doing it in the next 18 months would be nigh on impossible. Far better, they say, to extend Article 50 and stay in the EU until the deal is done.

The problem with extending Article 50 is that the UK would remain in the EU beyond March 2019. That would be unacceptable to many of the Leave supporting MPs and their backers in the media who would kick up no end of fuss about it. There would also the embarrassing question of the elections to the European Parliament in 2019. The UK would have to elect MEPs to a parliament from which they were due to resign half-way through the period.

I was at a Resolution Foundation event on Tuesday where both options were debated by the learned panel. The conclusion they came to was that it will be damned difficult either way.

Whatever the complexities, though, if we don’t agree a transition period, it is highly likely that we will leave the EU without trade agreements.

This would lead to what Professor Menon calls the Cliff Edge Brexit:

The Article 50 deal is agreed, but the trade discussions go nowhere: either they break down, or they have made little progress.

So there is nothing to transition to. Meanwhile continuing the UK’s Single Market membership and/or free movement is unacceptable to one or both sides. So on March 29, 2019 the UK becomes a “third country”, with no special relationship of any kind with the EU. WTO rules will apply to the UK’s trade with the EU.

This is better than the Chaotic Brexit because having reached an agreement on Article 50 it at least leaves the door open to a more constructive future relationship. In the meantime, though, the UK’s trade situation would still be difficult.

According to Jo Maugham, a leaked Treasury report on Brexit contains these paragraphs:

There is much talk of trading under World Trade Organisation rules but very few countries trade with the EU under WTO rules alone. As the Institute for Government points out, the EU has bilateral agreements with most of its trading partners:

Do other countries trade with the EU on ‘WTO-only’ terms?

Not many. In 2016, of the top 10 trading partners with the EU by total trade, the US, China, Russia, Japan and India have a substantial number of bilateral agreements that go well beyond the terms of WTO trade. Of the top 20, there are no countries that trade on WTO rules alone with no bilateral agreements and no free trade deals.

If the UK left the EU with no agreements of any kind, then technically its relationship with the EU would be weaker than any of the EU’s main trading partners.

Trading under WTO rules would leave us in a slightly better position than those countries like Iran and Belarus, against which the EU has sanctions, but would have worse trading conditions with the EU than most other major economies. One step up from pariah state isn’t really where we’d want our relationship with our biggest trading partner to start.

Of course, a transition period doesn’t mean that we will definitely achieve a trade deal but it certainly makes it more likely.  It is possible that we might simply delay the Cliff Edge Brexit for a few more years but, having gone to the effort of agreeing a transition it seems unlikely that talks on the final deal would then falter,

Let’s be optimistic and assume we agree a long enough transition to move on to Deal 3.

Deal 3: Trade and Future Relationships

While it might be possible to agree the outline of the future trade agreement before March 2019, it is only with the Article 50 Agreement settled and a transition period in place that we can finally get down to the job of negotiating the detail of what the future relationship between the UK and EU will look like.

The options range from almost no change, where the UK stays in the single market and customs union, to varying degrees of free trade agreement. This table by the Institute for Government gives a succinct summary.

Essentially, the further you go to the right, the more independence the UK would have over things like immigration and trade deals with other countries but the less preferential the trade terms with the EU would be. This is the range of ‘soft’ to ‘hard’ Brexit options, though it is more of a continuum than a binary choice.

If the government is absolutely determined to be outside the EU customs union, something like the agreements made with the Ukraine or Canada look like the most likely options but these have been years in the making. Most of the discussion in the British media about the deal with the EU has focused on Deal 3 but there is a way to go before we are likely to reach an agreement on our future relationship with the EU. We need to do Deals 1 and 2 first.

There are, then, several stages to go through before we agree our future relationship with the EU and a number of points at which it could come to grief. A Cliff Edge Brexit is in no-one’s interest and a Chaotic Brexit would be a disaster. The former ministers who have urged the prime minister to walk away from the talks really should know better. ‘No deal is better than a bad deal’ is the silliest soundbite to come out of the Brexit process. ‘No Deal’ is a bad deal. About as bad as it gets. It’s not something that anyone should be wishing on this country.

 

 

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41 Responses to Brexit: deals and no deals

  1. bill40 says:

    As I have said all and YV reiterated on This Week yesterday just get on with the Norwegian model and take from there. Problems mostly solvers but would need special treatment for NI which, if we weren’t burning political capital so quickly, the EU would be happy to help with. Stop this negotiation farce and leave this way.

    • Blissex says:

      «just get on with the Norwegian model and take from there.»

      That’s a dream, the options acceptable to the kipper government, and over which they are deadlocked, between their mad and their insane wings, are:

      * “Norway-minus” aka “EEA-“: That is the “Norway” option minus free movement of labour and without ECJ, plus no-customs between Eire and Northern Ireland.
      * “Canada-plus” aka “CETA+” That is the “Canada option plus freedom of trade in goods and services and freedom of trade in capital, plus no-customs between Eire and Ireland.

      Neither has customs unions membership, so hard-border as between Norway and Sweden (except between Eire and Ireland), and both include “passporting” rights for the City.

      T May in her Lancaster House speech demanded a “Canada-plus” treaty, starting immediately on exit, or else England would “walk away” from the Article 50 agreement negotiations on a “so sue us” basis, and become a terrorist haven and tax-cheat haven 22 miles from the french and dutch coasts.
      T May in her Florence Speech speech demanded a “Norway-minus” transition phase, followed by a “Canada-plus” permanent treaty, or else England would walk away from the Article 50 agreement negotiations on a “so sue us” basis, and become a tax-cheat haven 22 miles from the french and dutch coasts (she dropped the terrorist haven threat).

      The options acceptable to the EU, because all others are “ultra-vires”, are:

      #1 Article 50 agreement with full payment of past liabilities, full preservation of legacy rights for EU citizens already in the UK, including right of appeal to the ECJ, and receiving an implementable proposal for the Eire-Northern Ireland border.
      #2 The same plus an X years extension of the notice period as empowered by Article 50.
      #3 The same plus a negotiated transition trade treaty to be ratified by members.
      #4 A post-exit trade treaty negotiated starting after exit, as a third-party, which includes all four freedoms without limitations (“Norway option”), without any customs union, not even between Eire and Northern Ireland, has “passporting” rights, and is essentially EEA membership, and has to be ratified by all members.
      #5 A post-exit trade treaty negotiated starting after exit, as a third-party, which includes only limited trade freedoms in goods, much more limited in services and capital, and essentially extremely limited freedom of movement of labour (“Canada option”), has not “passporting” rights, and no customs unions, not even between Eire and Northern Ireland, and has to be ratified by all members.

      The overlap between what is acceptable to the UK and what the EU is empowered to offer is zero. The only way around would be for the EU member states to modify the EU treaties to offer two new types of associate membership that had most of the rights of membership but much smaller commitments.

      • Blissex says:

        «The only way around would be for the EU member states»

        I should have added a 🙂 at the end to indicate that is a joke; because there are other ways around, a “walk away” (no “Article 50 Agreement” treaty) or “no deal” (no “Trade and Future Relationships” treaty), or the UK government revises what it considers acceptable.

        The problem with any of those is that there are 40-100 Conservative MPs in the insane wing of the party, and they consider acceptable “no deal” and even “walk away”, but a betrayal of national honour any downward revision of that the UK government considers acceptable, and they are ready to do their patriotic duty, rising above small-minded party politics, for the glory of England, and to vote no-confidence to a Conservative government that did such a revision, and to trigger new elections.

        «to modify the EU treaties to offer two new types of associate membership that had most of the rights of membership but much smaller commitments.»

        Of course if “have your cake and eat it” associate status that was a better deal than full membership were available for England, large number of EU members would demand the same associate status as England and exit the EU too. That is the long term geopolitical reason why the Conservative government insists on the “Canada-plus” and “Norway-minus” options and wants to negotiate directly with members states and not through the EU institutions: especially the insane “hard exit” wing of the party want to do whatever they can to break up the EU, because now that finally England are leaving it, they consider it a strategic danger, and want to resume the 300 year old english strategy of fostering divisions and hostility among continental power so that they don’t achieve unity. Here is a comment by a random kipper on “The Guardian”:

        «At least half the countries in the EU would rather be in a trading bloc with the UK than with Germany. Boris will be sounding them out on whether the would consider following us out.»

        That is a random person, but I suspect that there are a few dozen Conservative MPs that think the same.

        • Blissex says:

          As to “half the countries in the EU would rather be in a trading bloc with the UK” that trading bloc used to the EFTA, which was founded by the english government precisely as an english-dominated alternative to the EEC.
          I wonder how many countries really would want to leave EFTA/EEA and the EU/EEA to be part of a new “Anglo Free Trade European Region” without regional development funds and without free movement of labour, but with “passporting” rights for the City.

        • gunnerbear says:

          If by walking away from the EU and making the populations of other nations demand similar deals to the UK….that is great because it will smash the EU into pieces….no grandiose vision of a United States of Europe….just a trade bloc…

      • gunnerbear says:

        Nothing less than total and utter control over all immigration by HMG and no power or role for the ECJ is acceptable. We’ll trade with the EU…nothing more…just as other nations seem to.

  2. dazwright says:

    It would be really handy if someone could develop care studies for three key sectors for each scenario. For example a farmer, car manufacturer (assembler) and a company that sells services internationally. These are sectors that account for a significant amount of our exports.

    It would be really interesting, and probably useful for people to start conceptualising the new reality, to see how all this works in practice.

    I’m not suggesting you should do it. It would take ages.

  3. I fully appreciate why trade is the focus of debate at present, but I think we’re in danger of forgetting that the talks with the EU27 may well break down for other reasons altogether. There is scope for compromise on the UK’s financial obligations (it’s just money, after all), and I think we can all see a potential compromise on citizens’s rights that would command majority support (a generous offer to those in situ and a future regime of draconian migration theatre to keep the tabloids happy). The problem remains Northern Ireland.

    While some leavers have asked how the issue of the border can be addressed ahead of trade talks, this misses the point that “the border” is actually a synecdoche of the constitutional dispensation. The Good Friday Agreement, which benefited from a degree of ambiguity because of the UK and the Republic’s membership of the EU, is essentially an exercise in tentative co-sovereignty. Maintaining this post-Brexit will increasingly require NI to be treated exceptionally, which is anathema to the DUP. For example, the rights of Irish citizens who immigrate to NI would have to be substantially different to those of other EU citizens under the post-Brexit regime. Likewise, a repeal of the UK Human Rights Act could not extend to NI without compromising the GFA’s commitment to the formal incorporation of the ECHR into NI law.

    I suspect we’re still talking about money and starting talks about trade talks because those are actually relatively simple issues centred on calculable trade-offs. Brexit looks to be (despite remainer hopes) an unstoppable force, while the GFA is an immovable object (at least outside the DUP and their allies on the Tory right).

    • That some leavers believe that the RoI/NI border should be dealt with during trade talks also indicates how little they know of what third country status would mean to NI. If, during trade talks, the NI border is given some sort of special status it is highly likely this will break those WTO rules those same leavers rely on. That’s why the land border needs to be dealt with during the A50 talks, and most likely settled by the end of them (with some fudge presumably), otherwise it becomes much more complicated if a trade is indeed what the Government wants later on. Not that the GFA does not make things complicated of course.

    • Blissex says:

      «The problem remains Northern Ireland.»

      The real problem is “passporting” rights, that’s the real “have your cake and eat it” issue.
      What matters to the City matters to the Conservative party; what matters to Ireland a lot, a lot less. The essence of the “passporting” rights problems is:

      * The EU, especially the Eurozone members, will never surrender effective domination to even a large chunk of their financial markets to corporate regulated by a non-member. They would be mad to; it would be the english tail wagging the european dog. During the English Empire the City dominated the financial markets of half the world because half the world was an english colony and could not say no. The EU can say no.

      * Without “passporting” rights the Conservative party is far less interested in a post-exit trade treaty, and is not that interested in an exit settlement treaty either; the Conservatives were once mainly the party of landowners, then the party of the CBI, and currently are the party of the City, that is the leverage industry. The mad wing of the Conservatives, the “soft exiters”, are prepared to fight hard the insane wing of the Conservatives, the “hard exiters” for an exit settlement treaty and a post-exit trade treaty only if they contain “passporting” rights. They probably reckon that a mere “Canada option” treaty (as opposed to a “Canda-plus” or “Norway-minus) one is not worth breaking the party over. If Labour were in government things would be quite different.

      • gunnerbear says:

        If Labour were in govt., Corbyn would be in as much s**t as May….stacks of Labour voters want Brexit….that’s why neither May nor Corbyn have talked about the details of any deal…because to do so would smash their parties into pieces.

        • George Carty says:

          Actually more than 60% of 2015 Labour voters voted Remain, as did an even higher proportion of 2017 Labour voters.

          Corbyn’s real problem is that many Labour-held constituencies have Leave majorities (made up of the vast majority of the Tory voters and a large minority of the Labour voters, along with normally-apathetic people who first went to the polls in order to vote Leave). This could potentially make Labour’s Leave-voting minority pivotal in future General Elections, and also means that the Remain-voting majority of Labour voters in these areas have nowhere else to go (as defecting to the Lib Dems would just help the Tories).

          • Blissex says:

            «Labour’s Leave-voting minority pivotal in future General Elections»

            Even more so as UKIP lost 5 million votes in 2017, and the Conservatives picked up 2m kippers, and Labour picked up 3m kippers by switching to support the referendum result:

            2001: Labour 10.72m, Conservatives 08.34m, Liberals 4.81m
            2005: Labour 09.55m, Conservatives 08.78m, Liberals 5.99m
            2010: Labour 08.61m, Conservatives 10.70m, Liberals 6.84m
            2015: Labour 09.35m, Conservatives 11.30m, Others 6.00m
            2017: Labour 12.63m, Conservatives 13.30m, Liberals 2.22m

          • gunnerbear says:

            “This could potentially make Labour’s Leave-voting minority pivotal in future General Elections, and also means that the Remain-voting majority of Labour voters in these areas have nowhere else to go (as defecting to the Lib Dems would just help the Tories).”

            Great..so Corbyn has to make sure Leave means Leave otherwise he’s getting no where near power….

          • gunnerbear says:

            A local Labour MP was very Remain (in a seat that has been Red for decades)…the result of the vote in the area means that the Labour MP is no longer Remain and wants Brexit done….

            ….great stuff….Brexit will finally make the scum in the Great London Talking Shop directly accountable to us for the first time in decades….they won’t be able to hide behind “The EU says anymore…”

    • Blissex says:

      «The Good Friday Agreement, which benefited from a degree of ambiguity because of the UK and the Republic’s membership of the EU, is essentially an exercise in tentative co-sovereignty. Maintaining this post-Brexit will increasingly require NI to be treated exceptionally, which is anathema to the DUP.»

      I really disagree with that argument, from my armchair: the GFA was done solely for the benefit of suspending IRA operations. The government of EIRE and the government of the UK and the the DUP are entirely comfortable with leaving the island partitioned. The people who are prepared to continue to fight are the IRA, because as I understand it their position is:

      * The Irish Republic proclaimed in 1916 is the only legitimate state of all of Ireland, and the IRA is the legitimate armed forces of that state. Both are in hiding because:
      * Eire is a secessionist and thus illegitimate organization.
      * Northern Ireland is not only secessionist and thus illegitimate, it is also occupied by a colonial power.
      * The Irish Republic accepts for the time being, pending a proper organization of the Irish Republic, the government of Eire and the executive of Northern Ireland as democratically elected regional authorities for their respective parts of the Irish Republic, therefore loyal Irish Republic citizens and parties (e.g. Sinn Fein) contest those elections regarding them as elections for the “greater Belfast area” and “greater Dublin and Cork” areas of the Irish Republic.
      * The aim of the legitimate Irish Republic and its loyalist citizens and its armed forces is to end the illegitimate secessions and re-unify the Irish Republic where all irish, regardles of region of birth, religion, etc., are all Irish Republic citizens with the same rights in all the regions of the island of Ireland.

      My guess as to the the role of the GFA and EU citizenship from an Irish Republic loyalist point of view is that largely satisfies the aim of the Irish Republic loyalists not so much by creating a frictionless border: after all there have been customs borders for centuries inside big countries…
      But because shared EU citizenship plus the GFA effectively incorporate enough equal rights for all citizens of the Irish Republic to substantially realize the crucial of having a single status with pretty much the same rights, without discrimination, for all Irish Republic citizens in all of the Irish Republic. The core aim of Irish Republic loyalists, as I understand it, is equality of Irish Republic citizens in status without discrimination, and the re-unification and re-establishment of the Irish Republic is secondary, because the Irish Republic was always a means to the end of equality without discrimination that the irish citizens have had for centuries.

      My reckoning is that from an Irish Republic loyalist point of view the problem with UK exit is that the vote by a majority of english and welsh voters to strip EU citizenship from the Irish Republic citizens resident in Northern Ireland/”greater Belfast regional authority” removes shared EU citizenship as the temporary substitute for equal Irish Republic citizenship, re-creating a discrimination between Irish Republic citizens based on their region of birth, and thus violates the GFA and the substantive reason why the Irish Republic armed forces suspended active operations.

      I wonder whether Irish Republic loyalists actually follow the same arguments that I have guessed…

  4. Blissex says:

    «Deal 2: Transition Period»»

    Our blogger as usual is trying to be optimistic: there cannot be a “Transition Periodtreaty, even if there could be a a transition *phase*, because the EU27 cannot negotiate one even if they wanted, because the crucial problem is that it would have be to be negotiate and ratified before exit so there would be no “limbo” period; while in theory a “Trade and Future Relationships” treaty could be ratified years after exit.
    If there is a transition phase, that must be negotiated as part of the “Deal 1: Article 50 Agreement” treaty, and it is very dubious that Article 50 or some other article empowers the EU institutions to offer a transition phase treaty without ratification from the members.
    As to that M Barnier has said that anyhow most likely any “Article 50 Agreement” treaty including a transition phase would anyhow include non-delegated matters, so regardless would have to be ratified by all members (while the EU treaties empower the EU Council and Parliament to ratify directly a mere “Article 50 Agreement” treaty). What Article 50 almost certainly empowers the EU institutions to do is however to negotiate a transition phase during the “Article 50 Agreement” treaty negotiations.
    The transition phase cannot be part of the “Trade and Future Relationships” treaty because no EU treaty article empowers the EU institutions to even negotiate a treaty with a standing member, even an exiting one (it makes no difference), and the “Trade and Future Relationships” treaty can only negotiated post-exit, and M Barnier has made this point too, and also that since treaty also will probably involve services and other non-delegated matters, it will have to be ratified by all members too.

    The legalistic issue of which EU treaty article empowers the EU institutions and members to do what is of vital importance because:

    * It would be a colossal political error for the EU institutions to be seen to act “ultra-vires” in a “powers grab” from member states especially in the case of UK exit.

    * It would be a colossal legal/negotiating error, because any hint of “ultra-vires” action would get some group with an axe to grind, like “Leave means Leave” on the UK side, or dozen others on the EU side, to take any resulting treaty before the ECJ to have it struck out, which would be a huge mess whichever the outcome.

    Therefore the EU institutions will be acting very formally, very strictly, and refer any complication to ratification by the members; this may take a long time, but as all the EU guys keep repeating, exit is an english (and welsh) decision, and it is all on their heads.

    PS another interesting detail is that the EU treaties specifically give exclusive competence to the EU institutions to negotiate any and all trade treaty, so any trade negotiations the UK government does, with the EU or any other party, before exit are “ultra-vires” too, under UK law as well; now the UK government is not going to be bothered by that, but any interested UK party could sue the government before UK courts to have any such treaty struck out; this is not legal advice, but I would suspect they would have a case, and thus it would be another huge mess.

  5. Dipper says:

    I think, without spending a day in deep analysis of Blissex’s points, that Blissex is basically correct. There isn’t anything the EU can offer for transition or otherwise that isn’t continuity EU. Otherwise there would be a large queue of nations demanding their own particular variant of the EU.

    What Blissex doesn’t answer is where this leaves us. There is common agreement between many Leavers and Remainers on much of the analysis which leads to the conclusion that leaving is very hard. Remainers say that because leaving is hard and in the short term likely to be worse, that means we shouldn’t leave. End of Argument. But for Leavers this is the beginning of the argument. if we are part of an organisation we cannot leave, and which has an agenda which involves significant loss of power for the UK, then how are we going to stop that happening? Why would the EU, knowing we cannot walk away, simply not screw us into the ground and take everything they can get their hands on? At this point Remainers invoke magical thinking about Reforming the EU, or just go off into hand-waving stuff about all being Europeans and being able to go on their holidays easily as if people never go on holiday outside the EU, but ultimately always avoid answering the questions.

    So, Blissex, where does this leave us?

    • Blissex says:

      «if we are part of an organisation we cannot leave»

      Well, the facts prove otherwise — the question is the net benefit or cost of leaving. There are these cases:

      #1 The net political benefit is negative, the net economic benefit is negative: why leave?
      #2 The net political benefit is negative, the net economic benefit is positive: nobody is arguing this.
      #3 The net political benefit is positive, the net economic benefit is positive: just leave.
      #4 The net political benefit is positive, the net economic benefit is negative: “get off our knees” has a price.

      Now for kippers “Leave” was supposed to be case #3, because #3.1 either the economic opportunities outside the EU were better than inside, or because #3.2 the EU27 governments would give an exiting member a better deal than to themselves “because they need us more than we need them”. But for a kipper leaving in case #4, which is happening, is still better than not leaving, because most prices are worth paying to “get off our knees”. So obviously for a kipper leaving is both possible and desirable, if only for the political reasons alone.

      «and which has an agenda which involves significant loss of power for the UK»

      This is the theory that 27 other countries are ganging up on England so that even if England has a huge block of MEPs EU Council votes, and a veto; while “Remainers” think that the EU amplifies english power and independence in the same way that the UK amplifies welsh and scottish power and independence.

      «Why would the EU, knowing we cannot walk away, simply not screw us into the ground and take everything they can get their hands on?»

      Veto? Nuclear weapons? The “finest intelligence services”? The “bravest armed forces”?
      Now try to rewrite it as “Why would the UK, …” from a northern english or scottish perspective: from their perspective the permanent UK parliamentary majority of neoliberal/tory southern MPs means that UK policy is to screw them all the time; and they don’t even have a veto, nuclear weapons, intelligence services or armed forces of their own.

      «At this point Remainers invoke magical thinking about Reforming the EU»

      No, at this point “Remainers” make the political case for the EU: that in an age of continent-size powers who can afford to fund several carrier -groups each, to go it alone like Chile or Thailand means counting for very little, being the vase of clay among the vases of bronze. That case was made powerfully by W Churchill in 1944: «When I was at Teheran I realized for the first time what a very small country this is.» and T Benn in 1965: «In reality the choice lies between Britain as an island and US protectorate, or Britain as a full member of the Six, followed by a wider European federation. I was always against the Common Market but the reality of our isolation is being borne in on me all the time.» Here “protectorate” and “isolation” mean “to be dependent and with weak sovereignty”.

      «So, Blissex, where does this leave us?»

      In practice it turns out that exit has an economic cost, at least in the short term. Not a catastrophic one (I don’t believe in “Project Fear”), but significant. Of you believe that there is a political “get off our knees” benefit, that’s acceptable, if one believes that exit also gives less power, that’s stupid.

      As our blogger says the “Leave” vote should have been followed by at least 5 years of hard work and big spending to prepare for exit, and then giving notice to just wrap up the details; that might have happened if “Leave” has won with 75% of the votes, but with just 52% the insane wing of the Conservatives have chosen a rush for the exit and damn the consequences, before voters change their mind.

      So the kippers leave us in a “wing it” situation, which is rather unpleasant in great affairs of state.

      The other important question is where does this leave the EU? Well, business as usual for most things, and a huge gift to the EU as they want to show that leaving is a bad deal. Their position, which most kippers don’t understand, is:

      * We are under no moral or practical obligation to make huge unilateral gifts to leaving members.
      * We recognize that England and Wales voted democratically to be free of all the advantages of EU membership.
      * We respect that democratic vote, and will implement it to the fullest, ensuring that England and Wales keep none of the advantages of EU membership, which is what they voted for.

      That’s what kippers don’t get: the overall goal of the EU in the exit negotiations is to implement UK-exit to the fullest, to ensure that the UK lose all the benefits of membership, to ensure that it is clear that only members have the benefits of membership, and that the democratic will of the english and welsh voters is respected. The EU negotiating goal is “Leave means Leave”, funnily enough :-).

      • Guano says:

        On a previous thread on this blog, I drew a parallel with the invasion and occupation of Iraq and the complete lack of preparation for the occupation and for the difficulties of building a new regime. I said that, if Bush and Blair’s governments had really planned for this, they would have had to face up to the real difficulties and would probably not have invaded Iraq; the invasion happened because those governments deliberately did not face up to the challenges of what they were advocating. I don’t believe in regime change because it is too risky. However if people really think that we should do something about rulers like Saddam Hussein, I suggest that they spend a few years studying the question of regimes and their institutions and how they work and how they relate to their citizens and how they might be changed or rebuilt; this might still show that regime change is far too risky, or alternatively it may provide some insights into how regimes might be changed. This, though, is very different from wailing about how evil Saddam Hussein was and how anyone who opposed regime change was an apologist.

        I have campaigned on environmental issues for several decades. I haven’t spent all those years just going round saying “nuclear power: no thanks” because nobody would listen to me if I did. The first thing I am asked is “what are the alternatives?” or alternatively I am told that I want the lights to go out or I want people to be poor. So I have had to understand something about the alternatives and understand their weaknesses and actually invest in the alternatives so that they are a real option.

        People have listened to The Sun and the Daily Mail and Johnson and Gove about the EU, because these are powerful institutions and personalities, and people have assumed that they have a plan (an assumption that they don’t make about me if I manage to get a letter published in a newspaper or turn up on my bike to attend a debate). These bodies, however, do not have a plan, they have no idea how to operationalize their promise that the UK would continue to trade with Europe, and they are part of a political tendency that previously had made the UK quite dependent on the Single Market. They seem to be quite happy to let the lights go out or make people poor – and many of us are angry about that.

        If the UK hadn’t attracted inward investment on the basis of it being in the Single Market, if the Leavers had thought previously about a plan for leaving (and had invested their own time and money in researching this) and if the Leavers actually were now facing up to the challenges of leaving, it might be a different story.

  6. Clev says:

    Perhaps you should read this Dipper, particularly the parts where we gained endless opt-outs, or declined to participate in, initiatives from this nasty EU that apparently just wants to screw “us” into the ground.

    http://eulawanalysis.blogspot.co.uk/2017/10/the-irony-of-brexit-for-immigration.html

    You sometimes wonder if any Brexiter understands how the EU works at all. Even the smartest and best-informed seem to have a dystopian picture of it that fails to correspond to reality.

    • Dipper says:

      I’ve read it. I understand that historically we had some opt outs. Nevertheless we ended up paying more than others apart from Germany, having a massive trade deficit, significantly more inward immigration than other nations apart from Sweden, and then there’s the fish. My view was that post referendum we would be less likely to be denied opt-outs.

      Also, the language is revealing. When there are two divergent implementations it isn’t that the EU has two implementations, it is an EU implementation and an opt-out. The UK way is not an alternative EU, it is a deviation from the true EU.

      • George Carty says:

        It wasn’t the EU that wrecked our fishing industry but rather the government of Margaret Thatcher. Unlike pretty much every other EU country (which attached its fishing quotas to its ports) the UK under Thatcher assigned them to boats. This gave boat owners the ability to get rich quick by selling their boats (and the attached quotas) to foreigners.

        Of course the boat owners now blame the EU for the demise of Britain’s fishing communities, because the alternative would be to own up to their own treachery!

        • Guano says:

          I have yet to see a Brexit-supporter say what they would want to do differently with the freedom to devise a fishing policy outside the EU.

          Norway, on the other hand, kept out of the EU so as to set its own fishing policy because it knew exactly what it wanted to do.

          • Blissex says:

            Norway is out of the EU for the same reason as Iceland, Switzerland, Liechtenstein: their voters thought that EU membership means sharing country’s money tree with the poorer countries of the EU, so better keep a distance.
            In the case of Norway it was “Norwegian oil only for norwegian voters”, Iceland the fisheries, Switzerland money laundering, Liechtenstein tax evasion.
            Many “Leave” voters have the same motivation: those in the north don’t want to share jobs in the south with the EU, others don’t want to share the vast and rich English Empire with the EU.

          • George Carty says:

            Blissex,

            All 4 of the EFTA states you mention have a far closer relationship with the EU than the Brexiteers are willing to accept – for example all of them accept freedom of movement.

            I strongly disagree that Leave voters actually believe the Empire still somehow exists (although a lot of them do have an inflated view of Britain’s place in the world, possibly as a result of that imperial past). It is more likely that they just overestimate how “sovereign” a country the size of the UK can be in today’s world (at least if it’s unwilling to accept North Korean level poverty).

            I also strongly disagree that northern Leave voters are concerned about competing with immigrants for southern jobs – most Leavers are very parochial and extremely reluctant to relocate for work anyway! In fact, many older Leave voters may well have been motivated by resentment of their offspring’s relocation.

        • Blissex says:

          «I strongly disagree that Leave voters actually believe the Empire still somehow exists»

          Oh I strongly agree with that — indeed they don’t believe, with their brains, that the English Empire still exists.
          But in their hearts, England is still the rules of a vast empire, and a Great Power bestride the world, and it is a national humiliation that the EU27 behave towards England as if it were a normal country, as if it had really lost the English Empire. Hopefully you have already seen my quotes on this and this post among many:
          http://www.coppolacomment.com/2016/07/grieving-for-lost-empire.html

          But I shall repost this quote, because it seems thoroughly insane on the face of it, but it is at the same time very heartfelt:

          http://www.express.co.uk/news/uk/786788/brexit-passport-design-uk-dark-blue-home-office-project-eu-article-50

          «Conservative MP Andrew Rosindell, chairman of the Flags and Heraldry Committee, said: “It’s a matter of identity. Having the pink European passports has been a source of humiliation. It merged us into one European identity, which isn’t what we are. The old dark blue design was a distinct, clear and bold statement of what it means to be British, which is just what our citizens need as they travel abroad after Brexit.”»

          Obviously the Imperial Blue Passport is a symbol, a symbol of an English Empire that never surrendered to the ECJ :-).

  7. Dipper says:

    So, this business about borders, cross-UK movement of lorries from Ireland, no flights to the EU or even the USA from the UK post Brexit. Let me understand this. From T+1, no flights will be able to route through UK airspace, so all flights between Europe and Ireland will have to go round the UK along with all the other flights coming into UK airspace from the continent or into the continent. And all this ships going up the English Channel, they are all going to have to go on the French side as otherwise they are passing in an out of UK waters? And all lorries from Ireland will have to either pass through two sets of customs, or else go by ferry to France, or somewhere else?

    At first sight it looks like Ireland is going to get comprehensively stuffed if there is no deal. And as Ireland is an integral part of the EU, then it is up to the EU to negotiate an acceptable solution to this problem.

    • Dipper says:

      … just thinking about this, tactically the UK should make clear that the fate of Ireland post departure is entirely down to the EU. Whatever deal the EU grants us will be implemented in full at the border, no matter what the consequences. If that screws Ireland, well, then the EU should have negotiated a better deal on behalf of its citizens who live in Ireland.

  8. Blissex says:

    «tactically the UK should make clear that the fate of Ireland post departure is entirely down to the EU.»

    That is not going to work; it is England and Wales who sovereignly and independently chose to cut loose the EU27 including Eire from the UK and strip Eire and the other 26 EU countries of the shared citizenship and shared customs unions that had made the GFA possible. After all stripping the EU27 including Eire of shared citizenship and customs unions was essential for England and Wales to stop them freely moving to England and Wales and to allow England and Wales to sovereignly and independently negotiate free trade deals for the sole benefit of the UK.

    As far as the EU27 including Eire are concerned it is then i[ to Her Majesty’s sovereign and independent government, as always, to provide direction and civilized enlightenment and suggest a fix 🙂 and that is what is what was agreed at the start of the exit negotiations.

    «Whatever deal the EU grants us will be implemented in full at the border, no matter what the consequences.»

    The issue is the GFA, and the EU was not a party to it. The UK government did it: it was basically a truce deal where the UK government promised the Irish Republic loyalists that a shared citizenship was established across Ireland, in exchange for the armed forces of the Irish Republic suspending operations, with the government of Eire (the “greater Dublin and Cork regional authority” :->) acted as mediator and guarantor.

    • Dipper says:

      The rules of the EU allow nations to leave it, so we are availing ourselves of a facility provided by the EU.

      The fix would be a decent trade deal that keeps trade flowing across the UK/EU border. As for flow of people the UK regards Irish citizens as having full rights in the UK so they will continue to be free to move across the border into the UK.

      • “As for flow of people the UK regards Irish citizens as having full rights in the UK so they will continue to be free to move across the border into the UK.”

        People maybe, but what about goods and services? and how would one distinguish between people and the services or goods they may bring along? Those WTO rules the brexit Taliban often like to fall back on would kind of have a bearing on this if we leave without a negotiated deal come March 2019. Interesting thread from former Vote Leave bag carrier and recent Flexcit convert Oliver Norgrove here: –

      • Blissex says:

        «The rules of the EU allow nations to leave it»

        This is another gigantic misunderstanding that is very popular: every country has always the right to withdraw from a treaty, period. There does not need to be an exit clause in a treaty. What treaty exit clauses do is to agree on how the exit is done, not give the right to withdraw from a treaty.
        In the specific case of TEU Article 50, it exists only for the internal functioning of the EU, as its effects are:
        * A leaving member agrees to give up to two years of notice to the other members, so the remaining members can prepare for the exit.
        * It empowers the EU institutions to negotiate exit issues with the leaving member on behalf of the other members. This is needed because the powers of the EU institutions are strictly enumerated, and having all members participate in the exit details would be a waste of time.

  9. Blissex says:

    Much to my horror I have realized that in my gigantic comments above I have forgotten that there is another issue that makes the Eire-Northern Ireland situation and the transitional exit agreement difficult, a pesky legalistic issue: WTO rules. “Gulliver Foyle” above notes that these apply to the Ireland situation, but they would also apply to any transition arrangements part of an exit treaty.

    The essence of WTO rules means that, with few exceptions, trade deals cannot exclude other WTO members, and trade liberalization is a ratchet. The improved terms of any deal on Ireland and on transition must be given by both UK and EU27 to every other WTO members, unless the few exceptions apply.

    One of the few exceptions is regional trade blocks, but England and Wales have voted to cut off the regional trade block to which they have condescended to extend some of the benefits of Imperial Preference back in 1973.

  10. Blissex says:

    The EU27 are quaking in their boots as they are starting to realize that they are likely to be isolated from the english market, or at best the english government will take several years to grant them generously a modest “Canada option” style trade deal to the english market, with no preferential access to the City financial markets, because of their intransigence about english surrender to the ECJ. 🙂

    https://www.theguardian.com/politics/2017/oct/23/uk-likely-to-end-up-with-canadian-style-deal-warns-michel-barnier
    «A future trade deal, however, would have to be negotiated over “several years” and “will be very different” from the status quo, Barnier told a group of European newspapers. “If we reach an agreement on the orderly withdrawal of the United Kingdom, such a [transition] period, both short and framed, is possible,” he said. “To my mind, it makes sense that it covers the financial period, so until 2020. It would leave us more time to prepare for the future relationship. But I insist on one point: such a period would be possible only if it is framed by the maintenance of all of the regulatory architecture and European supervision, including jurisdictional. It would maintain the economic status quo and all obligations of the UK. From the moment the UK told us that it wants out of the single market and the customs union, we will have to work on a model that is closer to the agreement signed with Canada. The single market is a set of rules and standards and is a shared jurisdiction. Its integrity is non-negotiable, as is the autonomy of decisions of the 27. Either you’re in or you’re out.”»

    Note that Barnier said “if we reach an agreement on the orderly withdrawal”. Clearly a sign of the EU27 being worried about crashing out of the benefits of english membership, without having any way to replace England with an equally generous partner. 🙂

  11. Blissex says:

    As to the “Mauritania option”, there is a tasty bit of information involving the region in which Mauritania is, from a commenter below-the-line on “The Guardian”:

    London is indeed full of oligarchs from the USA to Outer Mongolia,hell bent of out spending and out doing their neighbours,if they even bother to turn up. Running a small cleaning company in the magic areas over the last few years has been insane.The demand for our cleaning services is high and we are able to turn down the so called oligarchs who whine about price but never about the quality, of course it won’t last
    Many of our payments are coming from North African based banks within the Spanish territories ,Morocco, Algeria and most unusual Mali,who seems to issue a huge number of loaded debit cards for payment of services. In very recent years,many of the houses we clean, have been mortgaged to once again Mali based banks,although they have very familiar names, eg Santander.

    I think that this kind of “Mauritania option” or “Mali option” is exactly what the “low pay tax haven” advocates in the Conservative Party want to achieve.

  12. Pingback: Links, 24 October 2017 | illiquid ideas

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