Sunday, July 23, 2017

Trade: no easy answers


Warning: this post contains detail for grown-ups. Again I find I am having to repeat the same basic points. As you should know by now, Britain cannot stay in the customs union. The customs union is one of the founding frameworks of the EU. It is the amalgamation of all customs rules, practices and tariffs - where all tariff revenues go to the EU under a single customs code. The EU has a Common External Tariff regime which varies according to product types.

Though we cannot stay in the customs union we can have an agreement on customs harmonisation. Tory Brexiteers have it that we cannot make our own trade deals if we have such an agreement. This is only partially true. It prevents us from diverging from the common external tariff rate. That though does not preclude new deals on removing non-tariff barriers, which are more significant.

The reason we would seek a customs agreement is to avoid Rules of Origin (ROO). If we have a zero tariff agreement with the EU but then started to give preferential access to third countries, goods could be re-exported to the EU at a rate less than the EU's own common external tariff. The EU does not allow this so it has a system of rules where exporters have to prove true origin and where there is a disparity a top up tariff must be paid in order to stop us undercutting member states.

This is condemned widely as bureaucratic and protectionist - which it is, and would lead to tariffs being applied to UK car exports - which could kill tens of thousands of jobs. The workaround for this is to unilaterally mirror the EU's rules of origin and to keep our regime of tariffs the same as the EU's. There is then no lawful basis for the EU to apply ROO.

That means any tariff agreements we look at will effectively have to be cleared with Brussels - which will in all likelihood say no. So here we have to do a value assessment as to whether a truly independent customs regime can provide sufficient economic progress so as to offset the loss of the UK automotive sector. Given that tariffs are complex and difficult to remove politically, there is no guarantee of that - therefore an accord must be struck with the EU. That means the Toryboys don't get to tinker with tariffs. Tory "free trade" ideas have no basis in fact.

This does not stop Toryboys bleating about tariffs on coffee but that little nugget of received wisdom is sufficient proof for them to gamble the entire UK automotive and pharmaceuticals sector. They are never going to grow up - nor are they going to crack open any books on the subject any time soon. This is what it means to be a Tory. Why would you crack open a book when you already know everything?

The hard reality of Brexit is that there are no sweeping unilateral measures the UK can take. UK consumption of goods alone is not sufficient to make an impact on global trade thus any issues we seek to resolve will have to be done on a multilateral basis with patience and skill. The process of reaching these such agreements is time consuming, politically contentious and very often sabotaged by the French looking after their former colonial interests. This is why we have to seek a number of allies across a number of sectors outside of the EU. That means we are going to have to find ways of securing goodwill which will be difficult when we don't have the ability to unilaterally open our markets.

This is why international development must be at the core of our trade policy because it is pretty much the only means at our disposal to enhance market access. We have to invest to ensure that LDCs can overcome the regulatory barriers. This is why our aid budget is so critical. It is an arm of our foreign policy.

As mentioned before, we could diverge from the EU regulatory regime but this would have consequences for EU trade as our risk assessment rating increases. This could lead to more costly border inspections - and it's not something we want to do anyway. Now you can bleat til the cows come home that the EU is protectionist - but it is a fact of life and something with which we must contend simply because we are not the trade superpower in this equation.

It would seem that Brexiteers are imbued with the idea that leaving the EU gives us an entirely free hand in trade. That was never likely. The only means of leaving the EU that will give us complete control of regulation and tariffs is to leave unilaterally - which comes at the expense of most of our trade. It is not a good idea.

This does not mean that we don't have considerable freedoms The UK could still negotiate its own trade agreements with other countries on services, investments, e-commerce, food, and agriculture – i.e. on all the areas that the UK disagrees with the rest of the EU - but again, any policy will have to be made with due consideration for its potential impact on existing trade and our general relations with the EU.

What we need to see is effects based trade policy, seeking to resolve political objectives, not least stemming the flow of counterfeit goods and migration. For that to happen we need multilateral solutions and some innovative thinking. One of the chief benefits of leaving the EU is regaining our right of initiative at the top tables - and that is something we can use to our advantage - not having to clear every decision with Brussels.

The short of it is, we have a very limited toolset at our disposal and no free hand in an ever globalised world of trade. It is going to take time to rebuild our trade instincts and we must pick our battles wisely. Brexit most certainly does open up doors - but we should not walk through those doors just because they are open - and we must not deceive ourselves into thinking there are shortcuts. We cannot expect miracles and we can expect no real progress for a decade or more. That is why safeguarding our trade with the EU is a paramount consideration for Article 50 talks. Too much is at stake to gamble it all on Tory free trade fantasies.

Friday, July 14, 2017

Britain needs to play it smarter


There is some chatter on the web as to whether Brexit can be parked. Personally I don't see that happening. Call it a hunch but I think the process has taken on a life of its own independent of the politicians and they lack the coherence to influence it in either direction. I can, however, see Brexit transmogrifying into something that is neither Brexit nor EU membership.

The repeal bill process is not an afternoon at the photocopier. It's a major feat of legal engineering and it is going to take years. We can pass certain bills that technically mean we have left but the Brexit limbo could be of such a composition where making the final switchover in various sectors, ending EU supremacy, would be viewed as so destructive that it would go into some sort of review, much like TTIP has. There it exists as a concept but it's not actually going anywhere until it's taken off the shelf and dusted down.

We have heard much about the possibility of an accidental Brexit where we crash out without a deal, but there is also a possibility of "accidental remain" where our lack of direction and inability to agree on anything leaves it hanging in the wind.

The only way I see to avoid this fate is for the government to face the reality that the EEA is the fastest and most practical means of leaving the EU. It doesn't matter if the EEA is suboptimal. It has the singular merit of being out of the EU.

We can quibble til the end of time over the various compromises the UK would have to make but in since the advent of the WTO agreement on Technical Barriers to Trade there is little likelihood of reaching that elusive regulatory sovereignty. That issue we can address later. To my mind it is secondary to ending EU political union.

If we do not want to drift into a Brexit limbo then we need to see some decisive action from the government. All we are seeing right now is dithering, pretending it's all there for the taking when what we're actually doing is reinventing the wheel - and a poor copy at that.

The basic mistake is the belief that the Brexit process itself is the opportunity to do everything all at once. This is a classic misnomer. If anything the Article 50 process is a lengthy admin chore we must go through before we can start looking at systemic reforms. The only safe and sensible way to leave is by reverse engineering our membership and that means the first step has to be quite close to EU membership. It wouldn't even matter if post-Brexit absolutely nothing had changed. What matters is that, having completed Article 50, we would have the power to start changing things on our own schedule.

This is the bit where us leavers need to get real. All of us have a strong dislike of the EU, but we cannot say that everything about economic integration is bad. What matters is that we preserve what is worth keeping and build on it. It would be a grave mistake to sacrifice any European trade in the belief that trading with the rest of the world will compensate. It really won't.

That though, is going to require some adaptation to our ideas. Like it or not, the EU has us over a barrel. As the regional regulatory superpower it does call the shots, and since the EU has a number of other countries hooked into regulatory harmonisation by way of FTAs we are going to find their wiggle room for an independent UK regime will be next to nil.

Ultimately we are going to have to change our attitude to the EU in order to make a success of it. The hostile and confrontational tone is not doing us any good and it's dangerous because we will need the EU's extensive assistance in borrowing their third party cooperation agreements and trade deals. Secondly, since we won't be going all out for regulatory sovereignty, our trade policy will have to be a collaborative and complementary policy to that of the EU.

As we have seen the EU likes to get bogged down in deep and comprehensive bundled deals which take a number of years and very often get tied up in technical detail at the last minute over soft cheeses or formaldehyde content in furniture. Despite this method causing a number of hang-ups for CETA and the demise of TTIP, they don't seem to have learned. There are other ways.

What we can do is look at effects based trade policy. As a foreign policy objective we want to reduce the push factors that drive migration. In order to do that we need to get the poorest countries trading. We are told by Suella Fernandes that Brexit means we can reduce tariffs for Lesser Developed Countries. This fails on three counts in that for a long time the UK will maintain the existing tariff schedules, LDC's already have tariff free access under the Anything But Arms agreement - and finally, it's non-tariff barriers which stand in the way.

Ultimately LDCs struggle to meet stringent standards. Jacob Rees-Mogg and the likes would have it that we can trade away our safety standards but that invites a deluge of counterfeit and dangerous goods. Consumers won't wear it. Our mission is to use our aid budget for technical assistance to ensure that they can meet regulatory requirements for export. Not only does that improve their ability to trade with the UK it gives them access to the European market as well.

Effectively we would be improving access to the single market for everyone. The benefit to us is the eventual slowdown in migration but also more trade means more opportunities for UK fintech and business services. Something our economy is geared toward in ways that France and Germany are not.

By acting in this way we have no real need to get bogged down in comprehensive bilateral talks as the EU does. What matters is we are enabling trade and paving the way for the EU to forge deals, to which we can be a party. Sector by sector we can improve the viability of African trade at a speed the EU is incapable of.

As much as this approach is in the cooperative spirit, little by little it removes the EU's excuses for excluding poorer countries and in so doing we make allies and friends with countries with whom we cooperate. From there we can forge sectoral alliances to further pressure the EU into liberalisation and perhaps changing its stagnant trade practices.

All of this is quite futile though if we maintain an adversarial attitude to the EU. If we leave the single market we actually surrender an ace in the hole for our trade strategy while also losing the opportunity to expand and enhance it - and wrest it out of EU control. Moving entirely out of the EU sphere leaves us hobbled in Europe and pecking at scraps elsewhere.

I wish I could report otherwise but it’s time eurosceptics faced facts. The world got complicated while we were in our EU slumber. The beast we helped create is a power in its own right with its own gravitational pull. What is done cannot be undone. What we can do is leverage our position as an agile free trading country to strengthen the global rules based system and drag the EU out of its protectionist instincts. If we can do that we solve a number of problems not only for the UK but Europe as a whole. 

Saturday, July 01, 2017

End austerity and hypocrisy now!

Your humble Devil notes that there has been another Corbyn inspired agitprop march today. Unfortunately, I had something else inconsequential to do, so was unable to make it.

However, in solidarity, I have designed a placard which I will have properly made up for the next march—I do hope that it will help...


Anyone else want one? I reckon that we could make quite an impact...

Sunday, June 25, 2017

Here we stand / In a special place / What will you do here?

Your humble Devil has finally felt the need to refresh his quill for a brief post.

The thing is, you see, that whilst the British people voted the right way in opting for Brexit, the contempt and derision aimed at them—this demos in democracy—has been as depressingly predictable as ever.

As I alluded to before, I have spent a good deal of the last decade wandering up and down the country engaging with housing associations (and their tenants) for work: that means that I have seen a great many of the old industrial heartlands in the kind of close-up that I never dreamed of doing.

And, largely, I make a point of going into pubs to hear people talk—because it is incumbent on any political animal to understand the point of view of those outside their immediate sphere of influence. Especially since my general sphere is middle-class, white, and prosperous-city-centric.

Here is the point, children: there is a colossal rift in this country between the "haves" (London and the Home Counties) and the "have-nots" (everywhere else). Osborne, in his clumsy Oxbridge way, at least recognised this—even if his Northern Powerhouse remains totally undefined—whilst most other people of my acquaintance seem to be living in a fucking fantasy world.

I have significant concerns about how we can progress—and, in any case, to do so, we need to acknowledge the problems. Part of the rank stupidity of Remainers is that they seem to be blissfully unaware that there are any problems—and for that reason Brexit remains the best choice we could have made (even were it not the will of 17.5m British people).

So, without further ado, and via the excellent Tim Newman, let me introduce you to Tucker Carlson. OK. So. I don't know who Tucker Carlson is really (apparently he is currently a Fox presenter), but I don't think that I have ever heard anyone encapsulate all of my personal concerns and beliefs quite so eloquently. Or at all, actually.

You should watch this. And do not think that it is just "all about America"—it isn't. Watch it, and then come back...


Like Carlson, I don't really have to care: like Carlson, I live in the city of our country's federal government so I'm alright, Jack. But I think that we should all care—if only because there is trouble brewing.

Let's look at just a couple of his points:

  • when Carlson talks about those outside Washington DC, think those outside of London;
  • when he talks about the "middle-class" in the US, it is equivalent to the formerly-prosperous working- and middle-classes in the UK;
  • Carlson points out that the Republicans are anti-Obamacare but did not know what they would replace it with—well, I think that we are familiar with that argument from Brexit, no?
  • and whilst the "over-correction" that he talks about regarding Trump has not happened in the USA, it has happened here—with Corbyn.

But note that the difference in the UK, over Carlson's implied scenario, is that the over-correction to Corbyn has not come from the 'neglected classes'—it has come from the affluent classes to whom Corbyn has, essentially, promised cash monies. And these people are, largely, the worst and most affluent people in the country, e.g. students, etc.

Back on the night of the 2015 election, a friend invited me to take part in a debate at the Bethnal Green Working Men's Club: I was introduced as "a man whose views I hope will enrage you..."

The audience was largely composed of students. So, yes, my views did enrage them. Especially when asked if I was pro-tuition fees, I replied "why should a bin man pay for you to sit on your arse 'studying' philosophy for three years?"

They booed me as I left.

And I was glad.

I didn't want to be cheered by those cunts.

But the point is that all of the problems that Carlson identifies are present in our country too. A very early contributor to the Kitchen, Martin Kelly, railed against the wage-lowering potential of low-skilled immigrant labour, for instance.

Like Carlson, it does not mean that I think that—on balance—immigration is a bad thing. But I do think that we—that is, the British people—should be allowed to debate it without being called "bigots", "racists", or "xenophobes". And I do think, if the British people are not convinced by the arguments, that they should be allowed to vote "no" and to have that vote respected.

And I do think that, ultimately, "democracy is the pressure relief valve" that stops countries collapsing. And I do think that this valve has been denied us for a long time.

Luckily, our politicians have not been the most enthusiastic for EU integration: which is why we do not have Marine le Pen or Geert Wilders. But if you think that it was never going to happen here (or that it will not happen in France or the Netherlands), then you are part of the problem.

Actually, you are most of the problem.

WAKE UP, you stupid arsehole—smell some of that delicious coffee*.

*Coffee, by the way, that is tariff free when imported to the EU as raw beans but which carries a massive tariff if processed—a policy that is designed to keep Developing Countries poor, and to protect massively rich EU companies (with equally huge lobbying budgets) from competition.**

** Are you the kind of person who supports the EU, but who then buys Fair Trade coffee? Then you are an unspeakable cunt. Fuck off.

Apologia

Your humble Devil apologises for his lack of posting: it has become increasingly difficult to actually put quill to vellum, as it were.

It's not purely that the political situation is rather uninspiring, it is also that I have become very much out of the habit of writing (about politics, at least). As such, every time that I fire up the blogging screen, I feel an incredible weariness.

I asked Pete to blog here because I thought that contemplating the actual mechanics of leaving the EU was important: I wanted to know, as much as anything. My reasons for voting Leave are actually very similar to Pete's, i.e. the rebooting of democracy and power structures in this country: however, he has a knowledge of the intricacies of the technical aspects that is beyond mine and I thought these worth setting down, here, for the record.

I shall try to post a little more frequently going forward. But, please, be warned that the reasons for eschewing this format haven't really gone away. My postings may be rare.

In the meantime, thanks to those of you that are still here...

Friday, June 23, 2017

The Brexit we deserve


In a few years time, we will see Brexiteers writing enraged little screeds puzzling why we are still adopting EU law by way of statutory instruments and why we do not have sovereignty. They will wonder why we are on an EU leash, parked in a Brexit limbo, probably in a never ending association agreement, implementing ECJ and Council decisions. This is assuming they haven't packed up and moved on to blether about something else - having failed to even recognise that we have been shafted.

There will be a reason for this. None of them ever closely examined the options or explored the many nuances of sovereignty in this ever interconnected world. Mainly because they didn't want to know. They are not interested in details. We could have been out of the EU and in an EEA/Efta deal, evolving our way further out by using the country specific annexes within the two years. But no. That isn't Brexit according to the hard Brexit clan.

Instead we will dither without a plan, ask for an extension, and negotiate a transitional arrangement until a final trade agreement can be reached. This will be EU membership but without the bother of having to send MEPs to Strasbourg. And since it will take years to replicate a comprehensive agreement, the momentum of Brexit will have abated. The Tories will lose and election and a new prime minister will convert the status quo into a "special status" and most people will simply shrug and be glad to get on with something else.

Nobody will call this soft Brexit because we won't be in the EEA and we won't by name be in the EU - but that's what you wanted. But we won't be independent, we won't have sovereignty and in fact will probably have less power of veto than Switzerland or Ukraine.

It won't be popular but in the end the refusal to engage in the details and the realities of our predicament has consequences. They will complain bitterly but from the beginning they wanted no part of the grown up debate. They had no opinion on the shape of the referendum campaign, they opted out of the debate as regards to a plan, and maintained this binary Janet and John narrative that there is only the one true Brexit - all in pursuit of an intellectually stunted view of sovereignty - which exists nowhere in the real world.

The only way we will get a Brexit that satisfies the Brexit-o-mongs is one that sees us absolutely crippled, out on our ear on WTO terms, trashing all of our European exports - and more besides. Grown ups, however, do not want that. That is why there is an extensive debate about the shape of Brexit - which Brexiteers refuse to engage in on any adult level. They might, by accident, get the Brexit they crave, but by then the democratic "will of the people" will be to accept anything we are given to avoid it.

That will be the ultimate consequence of this boneheaded clamour to denounce a more considered Brexit as a "betrayal". You'll hate it, as will I, but ultimately it will be the "Brexit" we deserve. Never in the history of politics has a movement been so deserving of defeat.

Wednesday, June 14, 2017

Brexit: what needs to happen


What our Tory friends have not yet worked out is that you cannot design a replacement for 40 years of evolutionary integration inside two years - or even ten that this rate. Just supposing you could, you would need to spend some considerable time working up a proposal that is not only realistic but also one the EU could agree to. You would want such a proposal in place before triggering Article 50.

This they have not done. As much as there is no vision behind Brexit, there is nothing even approaching a consensus on how we get out. This is largely in thanks to Vote Leave who insisted that we don't need a plan at all. This view is supported by noted thicko, Steve Baker MP, who is salivating at the prospect of walking away without a deal.

In any other circumstances we would point and laugh at them as indeed we did with Ukip when they produced their manifesto. The problem here is that these such people are actually in charge and the wheels are falling off the bus. The supporting cast in this carnival of incompetence is a clueless media unable to make even the most basic distinctions. Only now we're heading over the cliff do they start asking the right questions. All of this, though, is a little too late. To have anything like a sensible approach we should have started the ground work months ago.

As we have said from day one, Brexit is a process, not an event. If you treat it as an event, seeking to tie up all the loose ends and build all the institutional infrastructure in a single hit you will fail.

As much as anything the single market is made up of a number of intricate regulatory systems whereby a transition out of them would require masses of new resources, a re-write of the law and a complete redesign of the IT infrastructure. There are no shortcuts to this and to pull it off we would need a detailed transitional scheme well in advance. IT procurement alone is fraught with problems and delays.

Then there is the matter of the Great Repeal Bill. We are assuming that we would wish to maintain a high degree of harmonisation and free trade, therefore the adoption of EU laws is our starting point. This is a lengthy piece of legal engineering and we cannot copy and paste. EU law gives effect to certain EU institutions.

Speaking of institutions, since we have offloaded a lot of our domestic administration capacity we would have to rebuild it. In the interim we would have to continue using EU systems from food safety to maritime surveillance.

If the aim is to leave the EU that leaves us with two choices. Either write a bespoke transitional deal and a bespoke destination - or use the EEA - the only instrument that comes close to resolving these issues. Since we have opted for the former, we have chosen to open up multiple cans of worms regarding the jurisdiction of a number of EU bodies along with the intractable problems regarding the border in Ireland. From the outset we have made the job ten times more complex than it needs to be with many times the risk.

We would also note that designing a bespoke system is no small undertaking. It will likely take years. All the while we must stay in the EU. As a leaver I would have thought that the EEA agreement presents the fastest way out of the EU with the least complications. But what do I know?

The problem with that approach is that it prompts our Brexiteers to whine that we haven't left the EU if we haven't left the single market. Of course this isn't true. I know that, you know that, they know that. It's just not Brexity enough for them. But this is where they have failed to understand the exam question.

What the Brexiteers want is for the Article 50 process to deliver a substantial practical change to our relationship with the EU. They see Brexit as the ends, not the means. This can only ever deliver disruption and chaos along with a number of legal and political challenges, the ramifications of which will be felt for years. This is entirely the wrong way to go about it.

As we argue in Flexcit, the measure of Article 50 success is for there to be no change on day one of Brexit. We negotiate entry to the EEA, we carry over the CAP/CFP exactly as before but enter a treaty mechanism that allows for our gradual departure. Agriculture alone is a major headache where we will need to take our time and have a think about the direction of travel.

If we have done the job right, all it means on day one is that we have, in name, left the EU as per the instruction of the referendum - having minimised the perturbations, and given ourselves the tools to evolve out at our own pace - avoiding any cliff edges.

We have explored this issue from probably every other angle and we do not see any other way of doing it without self-harm. We would also note that even this is not without complexity and risk, but at least it avoids opening up lengthy discussions that would delay our dilute our departure. Best of all it would give a us breathing space to form a strategy as to how we leave the EEA, if ever.

If we leave the EEA then we will need one hell of a plan and a big idea. We take the view that there are few advantages to leaving the single market and we are better off expanding and enhancing it, moving the regulatory functions to the many international organisations from which the EU inherits its standards. That though is a debate for another time. The purpose of Article 50 more than anything is damage control and achieving the one goal the government actually has a mandate for - leaving the EU.

This though is not good enough for the Brexit headbangers who believe that Brexit of itself is an economic miracle and we should rush to get it all done as fast as is humanly possible. What is more likely to happen is that we will get bogged down in the quagmire to the point where we either crash out without a deal or the process gets kicked into the long grass, an election is called and then who knows?

What we need is a bit of political maturity from our government, accepting the realities of our predicament, coming clean about the many compromises we must make. It requires that the government treat the electorate like adults and start spelling out a few home truths. There is nothing to lose from doing so since at this point Tory fortunes do not look salvageable. The absolute truth is that there is no way to make everybody happy and it is pointless to try. It is therefore incumbent upon the government to take unpopular choices. Preferably ones that do not leave our economy in tatters.

As to how Brexity this approach is, is really in the eye of the beholder. What matters to me is that we are out of the EU with the necessary tools to move forward. We should not seek for the Brexit process to be transformative - only transitory. Leaving the EU was never going to be easy and the referendum was just one battle in a longer war on the road to a truer democracy. It should be viewed as D-Day rather than VE Day - and if we treat it as the latter then we run the risk of throwing it all away. Best if we take the victory for what it is and then start thinking about the next significant battle.

Tuesday, June 13, 2017

Deeper down the Brexit hole


With the appointment of Steve Baker, unless this government collapses, there is now no possibility of a sane Brexit. Worse still I believe that any attempts to campaign for an alternative would be a waste of time since this is a clear message that May does not intend to modify her approach even slightly. This current configuration might actually be worse than just last week.

All that remains now is to the chart the many unforced errors that will bring about the biggest economic calamity in living memory.

I had hoped for a more intelligent Brexit but ultimately I accepted the risks when I voted to leave. It has always been there at the back of my mind that Britain probably needs to fail politically in order to rebuild it into something fit for purpose. The silver lining is that this will, unequivocally, destroy the Tories.

We are now looking at a period of major austerity the likes of which we have not seen since the war. The people in charge of Brexit now have zero idea how trade works - no idea what can be accomplished and they approach this with the worst possible attitude to the EU. Not only do I not think this government capable of succeeding, Baker is one who would quite gladly see it fail - since he believes the WTO option is viable. Combined with David Davies who already has a cavalier attitude - we have the most toxic combination possible.

On the back of this we can also expect for out trade policy to be outsourced to The Legatum Institute. Baker has been lining that up for a while - taking his advice from the utterly clueless Shanker Singham. Our trade policy with the rest of the world will fail at the first exposure to reality. Nobody serious thinks it is credible. Singham is widely thought of as a charlatan and a fraud.

There is now no doubt in my mind that we are totally fucked. The message May has sent to British business today, agriculture especially, is "pack up your shit and leave".

If there is any hope at all it is that the EU will attempt to save us from ourselves. That though is contingent on a government capable of compromise. This one isn't. The one remaining hope is that this government collapses. If then Brexit is halted, Brexiteers only have themselves to blame for their irrationality, juvenility and galactic stupidity.

Specifically, the reason Baker is such a disaster is that he believes Brexit can be concocted by way of a series of Mutual Recognition Agreements (MRAs). MRAs have only ever been used as a precursor to full regulatory harmonisation. It is one thing to establish an MRA but you are then faced with the problem of maintaining and agreed level of convergence which means any new laws have to be put to a joint committee to ensure they fall under the MRA.

What we tend to find is that MRAs are issued in those circumstances where third country regulatory regimes are too alien in culture but of the same standard. In practice this turns out to be unsatisfactory with many annexes and embargoes being added to the agreement where it is found that divergence presents either an unfair commercial advantage or presents a direct threat in terms of product safety. This can be anything from formaldehyde traces on dildos to chlorine wash on chicken carcasses.

Where it is found that there is significant divergence, anything in that product group loses its preferential risk assessment score and is subject to extra testing and customs checks.

In the past the EU has used MRAs to establish lines of supply into the EU, making third country exporters dependent on EU trade and then they shift the goalposts knowing that there will be foreign support for full regulatory harmonisation. While this was previously viewed as an aggressive strategy, the WTO agreement on Technical Barriers to Trade (TBT) compels all parties in an FTA to comply with the agreed global standards which all interested parties have a voice in.

In that respect an FTA with the EU would likely result in us adopting the usual standards, with no capacity for divergence. Standards wise that is no change but by leaving the single market we would likely not get a mutual recognition agreement on conformity assessment meaning we would still have to submit goods for testing and inspection. We could reach an agreement on conformity assessment but that certainly would require a joint committee and the adoption of EU rules on conformity evaluation. Right back where we started.

Now keep in mind that this is just the bare bones on trade in goods. There are three hundred other areas of concern all the way up to aviation safety and phytosanitary measures. We are stripping away forty years of systems development for the free movement of goods only to have to rebuild them one component at a time. In all likelihood the EU is not going to diverge from its own standard requirements or deviate from WTO law so there is no scope to negotiate a special set up that gives us any commercial advantage whatsoever.

By the time we have finished with this we will have pretty much negotiated exactly what Switzerland has only to find we have the exact same barriers to trade they have where we end up trading ECJ jurisdiction for market access. Exactly where we didn't want to be. Switzerland's meat export regime falls almost entirely under ECJ jurisdiction with zero say in the rules. That then ends up with mission creep where you end up with pretty much the same regulatory harmonisation as an EU member but no EEA firewall and no system of co-determination.

So what seems superficially appealing in having a more basic agreement with the EU, ignores the fact that trade deals develop over time and come under constant review. We will prune the single market only to end up rebuilding it through the respective strands of our new relationship but ending up on a tether. So much for ending Brussels influence. We suffer a decade of trade limbo for absolutely nothing.

Meanwhile all this assumes our government is competent and mature enough to be able to negotiate any of this. We have nether the expertise or the intelligence in government and in reinventing the wheel we will probably unwittingly concede to things we presently opt out of. As I keep saying, this nebulous notion of absolute sovereignty does not exist.

The reason Baker is committed to this is because he believes that out of the single market we have the ability to trade away our regulatory standards - lowering ours in exchange for preferential access elsewhere. That would have been a fine strategy twenty years ago before the advent of the TBT agreement and before the hyperglobalisation of regulation - a time when bilateralism was the obvious mode of trade, but it's all different now.

There can be no regulatory race to the bottom because there are global benchmarks. More to the point, British consumers and business does not want to contend with lowering standards and multiple regimes according to their customer bases. Absolutely nobody thinks it's a good idea. By doing so all we would end up doing is losing a lot of our preferential access to the single market.

Ultimately the Brexiteers are dinosaurs. They haven't understood the concept of global trade, they haven't updated their ideas since 1992 and these people are in no position to be preaching the merits of MRAs since they have only just in the last year got their tiny brains round the concept of non-tariff barriers. There are intelligent modes of trading with regulations but only at the top tables and only if you have a collaborative approach. Unilateralism in the modern world is a ticket to isolation as Trump has just discovered. The USA can probably handle it. The UK, as a a small island dependent on food imports cannot.

With this approach, even with the best will in the world, the best we can hope for is a lost decade of trade while we rebuild an inferior relationship and then we are worse off and have gained nothing. That's the best case scenario. The worst case scenario is that Baker and his corrupt Toryboy pals will cause friction by way of their lousy attitude to such an extent that we only get a basic deal if we get one at all. Since these trigger happy Toryboys are just itching to walk away for the most spurious of reasons, there is every reason to believe that we are unequivocally fucked.

Monday, June 12, 2017

Brexit: Corbyn's issue illiteracy


The idiot Corbyn is once again talking about leaving the single market but preserving access to it. For those who need it spelled out, this is pure illiteracy. Everyone has access to the single market. If I'm a dildo producer in Elbonia I can export to the EU but I must pay a tariff and go through the third country customs channels. Because Elbonia does not have a preferential trade agreement with the EU it has a low score on the EU database so a container is 100% likely to be stopped at the docks while goods are sent away for formaldehyde testing at the expense of the producer. Meanwhile the container is taking us space incurring a thumping daily fee for every day it is held - which can be anywhere up to two weeks depending on the workload of labs. Ten times more expensive than tariffs. This is why non-tariff barriers are the greater threat to UK trade.

So say we were to drop out of the EU without a deal we would assume the same status as Elbonia. Having already been a member of the EU we'd have a slightly better risk assessment - but we'd still end up having our containers diverted and inspected. Then if we sign a free trade deal with Elbonia where we don't inspect their goods then our risk assessment score is reduced. That's why we have to be careful about the deals we sign after Brexit. Elbonian dildos have high levels of carcinogenic toxins.

If we want to avoid that scenario then we must have a deal where our own testing houses are approved by the EU. This would be a mutual recognition agreement on conformity assessment. That way any goods cleared for sale here can also be sold in the EU. That though does mean an EU agency will have to perform routine inspections of our testing houses to ensure compliance to the standards they set out. That means adopting their standards not only for the production of goods but also for the testing and the methodologies therein. It's complex for ordinary goods but when it comes to food and animal products it gets highly involved. This is why Norway contributes to the various EU agencies in order to keep the costs down for business.

Now multiply this dynamic to the three hundred or so other policy areas - including medicines and chemicals. We would need a patchwork of agreements covering all these different areas. Technically we would be outside the single market but it means you still import EU procedures, regulations and standards. The short of it being that if the EU council decides on the meaning of a regulation then you adopt it without question. Being outside of the single market you have no means of veto and you are not involved in the decision making process.

The fact is, when the EU accounts for half of our exports and it being the nearest and largest market, there is no escaping EU institutional influence and that nebulous "sovereignty" we seek is not so clear cut. Every shortcut we take has ramifications for our trade with the EU. Every decision has consequences that ripple out.

It's all very well saying we want "tariff free access" but that doesn't come close to what we need. Thanks to the "Anything But Arms" agreement even the r likes of Elbonia have tariff free access but unless it can meet EU standards and prove it then costs of trade are prohibitive. This is what our political class does not understand. It is the regulatory union (the single market) that facilitates trade. Being out of it means more direct costs for business, more delays and substantially less trade - none of which can be easily recouped by way of seeking deals elsewhere.

Since Brussels is a regulatory superpower and the UK being reliant on EU trade it will always have considerable influence on our laws. Even New Zealand and Canada have found cause to rethink their food safety laws so as to trade on more favourable terms with the EU. A well documented phenomenon known as "The Brussels Effect". So as much as there is nothing to be gained by leaving the single market it doesn't actually solve anything.

Moreover, the point of staying in the single market is that it takes all the trade issues out of the Article 50 negotiations and puts them into a different framework which is not time limited thus removing uncertainty and reducing the risk of becoming Elbonia overnight - which would destroy nearly all of our EU trade.

The single market may not be optimal but it is a fact of life. We cannot pretend otherwise and if we really do want to leave the EU it's the safest and fastest way to do it. At least then the political integration is ended and we'd have the Efta firewall. On present trajectory, chasing an illusory perfection, we are likely to crash out with nothing to show for it and will have to rebuild our trade relations over decades only to achieve what we could have had now. We are risking the UK's prosperity on the back of the profound ignorance of our politicians and media. This is the debate that was lacking from the election and it seems to be absent now. There is a wilful refusal to get to grips with it. That will be our undoing.

Saturday, June 03, 2017

That moment when you remember the left are depraved


Corbyn - a man who has no problems speaking on a platform with people more than happy to wave the flags of Hamas, Hezbollah, IRA, Communism, or whatever filth the left ascribes to.

And let's not beat around the bush here. Get into a conversation with a leftist and sooner or later they will bring up Israel. I do have opinions on that subject but my default line is that we have more important things to talk about than an ethno-nationalist spat going back more than half a century. But why do they bring it up?

Well it's simple. They are obsessed with it. Nothing else matters to them. It's a perfect cover. They can shroud their flagrant anti-semitism in quasi-legitimate moral outrage - which is always disproportionately directed at Israel, regardless of the fact that both Egypt and Lebanon treat Palestinians equally abysmally.

Not for nothing can you find leftists sharing platforms with Islamists. They ultimately share the same goal.

The reason I have chilled out in recent years is because I no longer seek out debates with leftists and the memory fades as to just how repellent they really are. But thanks to Corbyn they're all coming back out of the woodwork and it all comes flooding back as to what utter pieces of filth they are. This is when I really lose my shit.

And then there is the sheer economic illiteracy. As tweeter Ciarán McGonagle points out, echoing some of my own sentiments, Labour now appear to reside in non-interconnected world where economic policy can be imposed unilaterally without regard to global context, where increasing tax on upwardly mobile corporates and high earners inevitably leads to increased revenues without risk of relocation. Where the City's hegemony is inevitable and can be squeezed for new revenues as though other nations are incapable of competing for business. Where Government can pick and choose which international laws and regulations it deigns to adhere to without losing global influence in making those laws. Where the Govt can nationalise and subsidise industry at a whim without fear of reprisal or economic consequence.

It's a magic wand fairly land where you can peddle "solutions" from 1945 as though the last seventy years didn't happen - and because of the cult like status of Corbyn they will invent absolutely any mental contortion to justify economy wrecking policies. Not forgetting their insistence on foisting this shitty socialist heath system on us

And this is actually where my heart sinks because apart from the antisemitism and sharing platforms with jew hating terrorists - and giving houseroom to antijewish conspiracy theorists, you can say a lot the same about the Tories. The cowardly drift leftward is ultimately why Britain is in the shit. Time and again conservatives have caved into these scumbags

You know, seriously, so long as you don't mind bringing up vacuous shallow shitbird offspring, if you do have children, raise them as leftists because they will never have to be held to account for the repulsive views they hold, and they will never be expected to act like adults.

They'll be more successful at work because they can effortlessly glide between social scenes spouting the same socially convenient claptrap without being called out on it. Their warped and morally degenerate worldview has somehow become the social currency of the West and conservatives self-censor just to be able to put forth moderately conservative ideas - which are then shrieked down by bunch of leftist harridans.

Worse still is the fucking hypocrisy. The thuggish scum who call themselves "antifascist", only too happy to use violence and subversion to silence opinions they disagree with, using their cultural dominance to have decent people removed from their jobs in academia and public service. And let's not forget their sick "gender is a social construct" bollocks which ultimately lands young people with mental illnesses, often leading to gender reassignment and suicide in later life.

If there is any strand of toxic authoritarianism you can think of you will always finds the left at the front of the queue. The same shitbirds pushing the global warming shit on us as an excuse to close down democracy. Satan is going to have to dig an eighth circle of hell to deal with modern leftists. The worst vermin ever to walk this earth.

This is actually a stark reminder to me that I should step out of my Brexit cave a bit more often because I forgot what shitheads they really are. It reminds me that there is a moral dimension to elections and actually, moronic though the Tories are, two decades of economic oblivion is still preferable to Corbyn and his band of twisted sociopaths. You won't catch me voting Tory but no way can a decent person endorse this depravity. Fuck that. If we further tolerate any of their wickedness then the west does not deserve to survive.

Wednesday, May 17, 2017

We don't need Corbyn. We already have a command and control economy

 
You can tell how debased politics has become by the state of party manifestos. Labour;s being a prime example. In days of yore you would set out your goals but reference papers on how you would achieve it. This would go beyond the fag packet paths we see. These days they spend nothing on research, they don't know how to enact their policies nor are they aware of the many obstacles created by regional and international agreements.

Corbyn being a socialist has decided to say socialist things. Ok, fine. Makes a change. He wants to nationalise utilities. As one might expect. I could be persuaded. But then these people only really know a little bit of history.

As it happens utilities used to be property of local corporations - or as we now call them, councils. Nationalisation was essentially the theft of property. We privatised it because nationalisation had turned it into the unwieldy mess that it was. Corbyn wants to reverse that to a state where it functioned less well than it does now when what we actually want, if we want to bring it back under public control, is re-municipalisation.

In this, you don't have to be a big borrow and spend government. You can simply give councils the power to run their own energy operations. Some councils already act as wholesale gas and electricity buyers and some have reserves large enough to invest in small modular reactors where they could very easily undercut the big power stations by investing in CHP. Using the waste heat water for municipal heating. You then collapse energy demand over time and drive the corporates out of the market. The result is a public controlled hyper efficient energy system that even central government cannot meddle with.

The corporates presently control the market because in effect the grid is still controlled by the government and depends on centrally mandated policy. A genuinely free market wouldn't build Hinkley Point in a million years. This is a government white elephant largely to create jobs. In that respect Tory energy policy is not a million miles away from the socialism Mr Corbyn prefers.

If we adopted municipalisation we could very easily have a mixed market that would ensure genuine competition to the point where central government could be taken out of the picture to a large extent. Energy is presently expensive because of the command and control diktats from central government - largely working to a moonbat climate conspiracy theory. If Corbyn actually wants command and control energy grid that we spunk billions on for the sake of creating jobs he would be just as well leaving it alone.

But this is all so very typical of modern politics. The SNP did very well in the popularity stakes but are now receding because it turns out that they have no idea how to govern. Ukip failed for the same reasons. They had ambitions but no idea what to do when they got there and consequently could not turn popularity into power. The only reason the Tories are deemed competent is because, to a large extent, they are a continuance of the same regime and have no real reform agenda. Better to leave it as it is than hand it over to chimpanzees with no clue at all.

Ultimately, whenever you hear anyone talking about nationalisation you're just hearing sloppy left wing anti-Thatcher grudge politics. Utilities were always local, they were never meant to be nationalised and they suffered because of it. The joke of it being that the hyper-nationalisation of public utilities was driven by the Tories. Despite conservative propaganda, the 1980's and early 1990's saw a great increase in the centralisation of power. Despite privatisation, mythical deregulation and devolution, the government asserted its control over schools, universities, the courts, local government, and the NHS in the same way they had with energy prior to privatisation.

If Corbyn wants to wind back the clock he actually needs to wind it back a lot further than 1970 if he wants workable policies - but he will have to use the methods available in the modern day - by playing the market. No way in hell can we borrow that kind of money and a buy out wouldn't improve matters.

But then in the end, for all that you can say that privatisation failed in its aims to bring down costs and increase efficiency, successive governments have imposed their eco-lunacy and political vanity on the energy industry and taxed the bejesus out of it. Little wonder that bills are eye-watering. If for five minutes markets were allowed to behave as markets do then perhaps we wouldn't have this mess?

But that isn't going to happen is it? Let's get real. Even Brexit won't break our establishment of its vanity and venality. It will remain a command and control system for as long as it can be used to warehouse middle class workers - and as a cash cow to finance the greedy NHS. In that respect you need not vote for Corbyn because May will preside over a modern day model of the centralised state. One way or another we end up paying through the nose. If we're not firehosing money at foreign corporates then we're paying it in interest on the national debt. Wake me up when there's something worth voting for.

Questions to which the answer is "no" #856

From Conservative Woman...
The time has come to execute the outdated NHS and let a more streamlined, functional and sensible reincarnation take its place. Will Theresa May be brave enough to do this and help millions of British citizens suffering pointlessly from such a useless, wasteful and inadequate healthcare system?
Theresa May is a fascist, and is thus not going to remove the state from anything—and certainly not from a system that many British people, inexplicably, see as some sort of religion.