Friday, 2 July 2021

Still stuck on the Mobius Strip

David Frost presumably speaks for the whole government in his claim that Britain is “now looking forward”. It can only be presumed, since virtually no other government minister, including the Prime Minister, actually says anything in public about Brexit any more. That in itself is remarkable, as if Brexit was either a triviality or, perhaps more to the point, an embarrassment, like a relative whose drunken rantings are studiously ignored at family parties.

Yet the even more remarkable thing about Brexit is how the government – in the person of Frost – continues to go around precisely the same old loop about what it actually means. Central to this Mobius Strip of Brexiter madness, as I’ve been calling it for some years, are two inter-related false claims. One is that there is a form of trade deal which can largely replicate single market membership but without freedom of movement of people or ECJ involvement. The other is that such a deal would also mean that ‘the Irish border issue’ would substantially disappear. Its generic form is the recurring fantasy that we’ve left the EU, but we shouldn’t be treated as if we’ve left the EU.

It might have been thought that these fantasies had been jettisoned when Boris Johnson agreed both the Withdrawal Agreement which, via the Northern Ireland Protocol (NIP), established the Irish Sea border, and the Trade and Cooperation Agreement (TCA) which created a trade arrangement entirely different (and necessarily inferior) to that of single market membership. The two are linked, in multiple ways, but most importantly because the relative thinness of the TCA entails a relative thickness to the Irish Sea Border.

The enduring fantasies of Brexit

However, as the ongoing disputes over the NIP show, the fantasies still endure. In the latest post on his invariably excellent Europe blog, RTE’s Tony Connelly dissects Frost’s stance on these disputes. At its heart (as per numerous recent posts on this blog) is the idea that ‘regulatory equivalence’, described in the latest version of Frost’s proposals as “equivalence with teeth”, removes the need for regulatory alignment and, supposedly, the need for most border checks. This possibility also means, in Frost’s view, that the whole thinking behind what was originally Theresa May’s backstop was flawed and, in turn, that the frontstop (that he negotiated) was not necessary, and really only an artefact of the concessions that May had already made.

This is now locked-in as the Brexiters’ analysis of why their project has gone so horribly wrong as shown, for example, in a recent article by Bernard Jenkin. Some of this is the boilerplate stuff about obstructive remainers and the nasty EU, but at its core is the claim that what should have been agreed (and still may be!) is “a proper free trade agreement with mutual recognition of product standards, and regulatory equivalence”. This in turn would do away with the need for the NIP which, like Frost, he regards as “the forced inheritance of Mrs May’s backstop” and resulting (of course) from EU and Irish perfidy, with Leo Varadkar painted as the particular villain.

In these assessments, Frost and Jenkin are still stuck in the confusion that has dogged the Brexit process, namely the fundamental difference between a free trade agreement and a single market. It was present during the referendum campaign, expressed later by David Davis in his “exact same benefits” formulation, repeated endlessly in the promises of ‘frictionless trade’, and it lives on in Jenkin’s refusal to understand the failure of Brexit and, most dangerously, in Frost’s continuing attempts to turn a fantasy into a reality.

For it is a fantasy. Commenting on Frost’s proposals on regulatory equivalence, the leading trade expert David Henig points out that “the major problem is this doesn’t exist anywhere in the world”. It simply isn’t true to say, as Jenkin does, that a “proper” trade agreement would or could have the characteristics he claims. Limited agreements on mutual recognition and equivalence do exist, but they fall very far short of the scope that is being proposed and that would be necessary to address the volume and diversity of UK-EU trade. As so often, Brexiters latch on to half-understood concepts to imagine that there is some ‘magic bullet’ that will enable the UK to leave the single market and yet enjoy its benefits.

But we’ve been all round this loop before, endlessly, throughout 2017 and 2018 (for explanation of why Jenkin’s and Frost’s proposals are a non-starter, see, for example, the Institute for Government briefing of September 2017, the UK Trade Policy Observatory article of August 2018 and the EU Law Analysis blog post of March 2018). It’s all old, utterly discredited, ground. The respected Eurasia Group analyst Mujtaba Rahman, in an almost despairing comment on Jenkin’s article puts it this way: “Why can’t Bernard Jenkin and his idiotic Merry Men understand? The full benefits of Single Market are unlocked for those who accept its entire ecosystem: dynamic reg[ulatory] alignment, oversight, 4 freedoms. The terms he is wining [= whining? pining?] for are fantasy; have no basis in reality”.

The corollary of that fantasy is the entirely dishonest notion that the NIP was unnecessary, growing from the dishonest view that the backstop was unnecessary, growing from the dishonest view that the Irish border issue was confected and is nonsense. It is bizarre, and really rather despicable, that even five years on so many Brexiters claim this. It’s not as if it is a particularly difficult idea to grasp: the single market and customs union removed regulatory and customs borders; leaving them reinstates those borders. But, collectively, the Brexiters have persuaded themselves this is not true, egged on by the echo chamber of their think tanks and discussion groups. They don’t understand because they don’t want to understand.

Chilled meat – latest news

The psychological or anthropological peculiarities of Brexit tribalism matter as they are a large part of what got us into this mess and, more importantly, because under Frost they continue to shape post-Brexit policy. The most recent argument over chilled meats has been temporarily dealt with by the EU accepting the UK’s request to extended the grace period for their movement between Great Britain and Northern Ireland (and announcing some relaxations of other rules). But this only postpones the conflict, and in fact itself expresses aspects of the conflict.

The EU have emphasised that this is not a postponement in order to agree a way to keep the movement flowing permanently. It is to allow businesses to re-organize supply chains so that Northern Ireland sells chilled meats sourced there or in the EU (most obviously Ireland), the point being that there is a general ban on third countries sending chilled meat products into the single market. This was accepted by the UK in the NIP, and in the original creation of the grace period last December the government’s declaration also appeared to recognize it was only in order to allow an adjustment. However, now, Frost is saying that the extension is to allow the creation of an agreement whereby chilled meats will continue to go GB>NI permanently.

This is wrapped up with the bigger issue of the UK’s desire for an equivalence regime rather than a dynamic alignment regime for sanitary and phyto-sanitary (SPS) regulations. However, even were there to be an equivalence regime (on the lines of the EU-New Zealand arrangement) it would not prevent the chilled meats ban coming into effect. All this is now set to be the ‘battle of the autumn’, when a variety of grace periods, including those extended by the UK without EU agreement which are the subject of legal action, are set to expire*.

It has become quite common, not just amongst Brexiters, to point out that the chilled meats issue is only a relatively minor one, and to suggest that the EU ought to show flexibility over it. But it is important to recognize why it is so pivotal. The UK has not made any fuss about the fact that the ban already applies to GB>EU trade (there was no grace period, so this has been the case since 1 January); it is its application to GB>NI trade that is contested. So what is at stake is the UK’s more general refusal to accept that Northern Ireland remains effectively within the EU single market for goods. This is at the heart of the NIP and, therefore, the chilled meats dispute is not a triviality because were the EU to be ‘flexible’ about it then, in principle, the entire edifice of the NIP would be threatened.

The fact that the UK sought, and obtained, EU agreement to the latest chilled meats extension, rather than extending it unilaterally, might be read as a sign of a more conciliatory approach, perhaps as a result of the intervention of the Biden administration. However, Tony Connelly’s sources suggest that “the Johnson-Frost hardball approach has survived intact”. I don’t have Connelly’s sources (in fact, I don’t have any sources other then those publicly available to everyone) but this is consistent with what I have been arguing for weeks.  

Without repeating those arguments, there is no doubt in my mind that Johnson and Frost have persuaded themselves that their approach has worked, and I am sure that they interpret the EU’s acceptance of extension, in the face of their threat otherwise to unilaterally extend, as evidence of that. Their ultimate aim is to chip away at the NIP until it becomes meaningless and, if the EU allows that to happen, leaving it, and especially Ireland, with the problems of dealing with potentially non-compliant goods finding their way into the single market, including the possibility of outbreaks of animal or even human diseases.

Dangerous nonsense

All this is obviously much more dangerous than in the earlier iterations of Brexiters’ refusal to understand what Brexit meant. In the past, that was an internal UK matter, shaping the debate about what kind of agreements might be sought with the EU. Now those agreements have been made but, as I noted at the time of the Withdrawal Agreement (December 2019), “many in the ERG will now be thinking that Johnson’s deal was only the bastard offspring of May’s ill-fated premiership and the ‘remainer parliament’, and feel no allegiance to it. They kept quiet during the election campaign, which required them to pledge support for Johnson’s deal, but that won’t necessarily last”.

That proved true as within months Brexiters began agitating to abandon it, including some of those ERG MPs who had voted for it. One outgrowth of this was the legal action launched last February which aimed ultimately at having the NIP declared illegal, which has this week been rejected by the High Court in Belfast (there may be an appeal). The case was brought by Unionist Brexiters, including Ben Habib who, as was drily noted in the judgment, had, when a Brexit Party MEP, voted for the agreement that he now wanted declared illegal. That isn’t a legal flaw in the case, but it does expose its political ludicrousness.

The latest iteration of this nonsense comes from pro-Brexit economist Graham Gudgin who also argues that the NIP was only agreed because in 2019 Parliament, and especially the Benn Act, had deprived the government of the leverage of threatening no deal – itself an absurd proposition. Even more extraordinarily, he then argues that the government may not have really understood what it had agreed to, perhaps because of lack of experience within the civil service. This is really the most tragi-comic of ironies. For whilst constantly bellowing that Britain is a sovereign nation and the sovereign equal of the EU, the Brexiters are also saying we want a new deal because we didn’t understand the one that we signed!

The vain imagination is that if they go once more around the Mobius strip they will end up at the promised land. They won’t, of course, but the process of trying will create yet more instability and yet more deterioration of the UK’s reputation. That will not deter Frost, though, because built in to the ‘hardball’ theory is that you have to live through some ‘turbulence’ in order to achieve victory. Gudgin, meanwhile, recognizes that this might ultimately end in a trade war, but is not concerned as “the imbalance in trade” is to the UK’s advantage. In other words, they are now round to that part of the loop where ‘the EU need us more than we need them’ and, by implication, all the stuff about German car makers.

Sovereignty and reality

As Maros Sefcovic re-iterated this week, a solution to most of the practical problems caused by the NIP is on offer from the EU in the form of a ‘Swiss-style’ regulatory alignment agreement, which could even be temporary were the UK to decide to diverge in the future. This is still rejected by the UK on grounds of ‘sovereignty’ and yet, although the mechanism is very different, this is pretty much the situation which now obtains with data protection. For this week the EU announced that it would treat UK data protection regulations as ‘adequate’ for purposes of commercial and other data sharing activities between the UK and the EU. This is hugely important for both business and security, so is good news (though it wasn’t done out of kindness). But the point is it is predicated upon, and its continuation is contingent upon, the fact that UK law in this area continues to be essentially the same as EU law.

This doesn’t say much for the Brexiters’ concept of sovereignty, since it is entirely in the EU’s gift, and reflects the reality of the UK’s economic and geographical proximity to the EU which makes that concept so silly. Still, it’s true that the UK is free to diverge in the future, if it is willing to take the consequences of losing adequacy approval. So, by the same token, why not do the same over SPS regulations, especially since the government’s avowed policy is not to lower standards? There is no logical difference in terms of sovereignty (and, as someone used to say, would it really be so awful to be like Switzerland?), so I think the answer can only lie in the point made earlier: that it is part of an attempt to resile from the NIP in toto.

It is the reality of economic and geographical proximity, and the limitations of naïve ideas about sovereignty, which tie together many of the latest Brexit events and will go on doing so. For example, this week planned legislation was announced for the UK’s post-Brexit state aid policy. But we have yet to see what it will actually allow us to do that we couldn’t whilst in the EU (£), it will still have to be compliant with the level playing field commitments in the TCA, and also with WTO rules. Far less high profile was the announcement that the British Standards Institute will be accepted as a non-EEA member of various European standards committees (this isn’t an EU decision, per se, but it is relevant to post-Brexit standards alignment).

Then there was the news of Nissan’s investment in electric car and battery production. That is good in itself, though we do not know how much government support was involved, but again it reflects the proximity of the EU market (few, if any, UK-built Nissans will be sold anywhere else, no matter how many trade deals the UK makes on the other side of the world). Bringing battery production to the UK (via a Chinese partner) is part of ensuring that Nissan’s cars will continue to meet the rules of origin requirements of the TCA so that they can be sold tariff-free in the EU. It’s an accommodation to Brexit, rather than a benefit of Brexit. From this point of view it is possible to argue (but impossible to prove) that it wouldn’t have happened but for Brexit, although it’s also bound up with the move to electric vehicles in both the EU and the UK.

Naturally, despite normally being so insistent on proof of causality, Brexiters are crowing that this discredits the warnings of Nissan and remainers, conveniently forgetting that those warnings related mainly to the no-deal Brexit so many of them advocated. In fact, car makers are an important case where the TCA has considerable value, although it has by no means been a panacea for them or for Japanese companies in the UK. Other significant industries have fared less well, such as financial services where it has this week been rather quietly announced that the UK is giving up on seeking a regulatory equivalence deal with the EU.

Accommodation, too, lies behind the extension of Jersey’s ‘amnesty’ on French fishing rights in its waters, avoiding a resumption of the high-profile conflicts earlier this year. As with the NIP grace periods, or the postponement of UK import controls, it seems that Brexit works best when it isn’t actually implemented. No extension, though, to the deadline for EU citizens to apply for settled status which expired this week amidst technological chaos and a huge backlog. None of the ‘flexibility’ or ‘pragmatism’ Frost keeps calling for from the EU for them. For the one thing which Brexiters show no sign of wanting to revisit is their unremitting hostility to foreigners, even if that is not true of the public in general (£) and even if post-Brexit immigration policy is beginning to cause massive problems across multiple sectors. Hence also the continuing refusal to countenance a mobility agreement with the EU, despite the damage to Britain’s touring arts industry which Frost rather sneeringly dismissed this week.

The Danse Macabre

So the Danse Macabre of Brexit continues, with fantasy and reality locked in a grotesque embrace, or what The Sun would perhaps call a ‘steamy clinch’.

On the one hand, there are all these disparate daily attempts across multiple areas of life and commerce to reconcile, accommodate, work round or endure the conflict between a half-baked theory of sovereignty and the practicalities of an interconnected continent – whether they be about regulations and standards, trade, fishing, or individuals and families trying to secure their residency rights. In a sense one might say that, in doing so, people are trying to ‘move on’ from Brexit and to ‘look forward’ as Frost declaims.

On the other hand, even as institutions, companies and individuals try to make workable the mess that Brexit has created for them, the Brexiters themselves, Frost included, can’t move on at all. Hence they remain stuck on the same loop they have been going round since 2016. In that fetid stagnancy, they endlessly revisit the contradictions between their delusions of what Brexit should be, the realities of what it could be, and the facts of what they agreed that it actually would be. There’s no good reason to expect it to end any time soon.


*There is a confusing little legal wrinkle in all this which, to the best of my non-lawyer’s understanding is this: the chilled meats extension announced last December was technically ‘unilateral’ on the part of the UK, but was nevertheless agreed (‘taken note of’) by the EU as a pragmatic way of avoiding a formal treaty change. As such, it was uncontentious. By contrast, the extension of various other grace periods last March was literally done unilaterally by the UK with no EU agreement, hence it is this which has given rise to ongoing legal dispute.

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