Opinions & Ideas

Tag: BREXIT

REES MOGG APPOINTMENT COULD  MAKE PROTOCOL DIFFICULTIES MORE ACUTE

 Jacob Rees Mogg has been appointed as UK  Minister for Brexit Opportunities, with a mandate from Boris Johnson  to  change 1000 regulations, now in force , which the UK adopted as an EU member.  

This mandate, if acted upon, makes a settlement of the EU/UK dispute over the Protocol  next to impossible.

The more  EU inherited  UK regulations in respect of goods, which Minister Rees Mogg changes, the more will be the frequency and intrusiveness of checks on goods entering Northern Ireland from Britain.

 This because, under the Protocol Minister Rees Mogg and his colleagues signed , Northern Ireland will continue to apply  EU regulations for goods, including food products.  

 Any new and different UK rules , sponsored by Minister Rees Mogg, will not apply in Northern Ireland .  This will mean even more checks on British goods entering Northern Ireland to ensure that the goods comply with the EU rules. 

 New and different UK rules for goods, will also mean more things to check at British ports facing continental Europe, and more traffic jams on the roads approaching these ports.

Of course, this applies only to goods. In the case of services, the UK can make whatever rules it likes without any impact on customs checks at ports.

But as far as goods are concerned, it is almost as if the Rees Mogg appointment is designed to sabotage any possibility of his colleague Liz Truss finding an agreement with Vice President Sefcovic on a lightening the Protocol. 

 If he does the job he has been given , Mr Rees Mogg’s real title should  perhaps be “Minister for Extra Trade Barriers”.  Of course this applies only to goods. 

A recent UK paper  on the “Benefits of Brexit” suggested that scrapping EU rules could bring £1 billion worth of benefits to the UK economy. This seems like a figure plucked out of the sky.  There is no detail of what rules might be changed, even though the UK has been preparing for the suppose benefits of Brexit for the past six years.

 Indeed separate and different  UK rules might actually increase costs, because of the duplication involved.

But there are strong suspicions that the “benefits of Brexit”  paper is  just for show, and that Rees Mogg will not actually be able to diverge much from EU standards at all, because UK businesses will not want  to lose markets in the EU.. 

In a way, his appointment is an expression of the confused expectations about Brexit within the Conservative Party……members want a bonfire of EU rules.   But they also want to be able to have their exports accepted in the countries of the EU as being compliant with the very  EU rules they have just scrapped!

 Businesses which trade internationally know the importance of regulations for both goods and services, and may not be so keen on unilateral UK regulatory changes that put the UK out of line with its neighbours to whom they want to export.

Whether it is product safety, or the transfer of cross-border data, domestic regulations and international agreements are a crucial element in making access to markets easier, or  making  them more difficult. Having different rules is a way of keeping imports out and making consumers pay more. 

Under Prime Minister Theresa May there was some openness in the UK government to aligning with EU rules, particularly in the area of goods, in order to facilitate trade and resolve issues around  Northern Ireland .

The arrival of Boris Johnson as Prime Minister in July 2019 ended this openness.   His view was  that UK regulatory sovereignty is crucial, or at least must be made to appear to be so. 

Boris Johnson’s present political difficulties weaken his ability to reach compromises with the EU on the Protocol.

 His party is, in fact, a coalition between those who want more spending and those who want less spending, between those who want more protectionism and those who want less, and between those who want more regulation and those who want less. 

 Some problems have already arisen. The new UKCA conformity assessment mark to replace the EU’s CE mark, means greater internal regulatory inconsistency between Northern Ireland and the rest of the UK, and hence more bureaucracy at Northern Ireland ports.

 The more Rees Mogg does  his job, the more will be the differences between Northern Ireland standards and those in the rest of the UK.

Trade Agreements may be an added complication.

 For example there are suggestions that Canada will challenge the UK’s ban on hormone treated beef, as part of the accession process for the UK to the  new Pacific Trade Agreement. 

If this were to happen, it would mean extra controls on beef products from Britain coming into either part of Ireland. It would also place beef exports from either part of Ireland to Britain  at a competitive disadvantage vis a vis hormone treated beef imported from Canada. 

 But would British consumers want to eat hormone treated beef?

Whether the UK actually diverges all that much from its existing EU standards or not, the fact that the UK is SAYING now  it  intends to diverge a lot , means that the EU has to maintain tight customs controls of British goods .

  That means insisting that the Protocol is respected to the full in Northern Ireland ports,  and continuing delays on British good going to continental Europe

 So the Protocol row may go on and on, until the UK finally settles on what EU rules it wants to change, and what EU  rules it intends to keep. 

Given how slow progress on making these decisions has been in the six years since Brexit , the Protocol  dispute could drag on for years.

 This does not  augur well for stability in Northern Ireland,  or for Anglo Irish relations.

BREXIT CRISIS LOOMS OVER PROTOCOL

Notwithstanding the positive sounds emanating from Monday’s meeting between Liz Truss and Maros Sefcovic, the talks between the European Commission and the UK government over the Protocol on Northern Ireland are probably heading to a major crisis in the next month. There has been no movement of the UK side, and immovable deadlines are approaching.


The UK agreed to the Protocol as part of their Withdrawal Treaty with the EU. The Protocol was an intrinsic part of the Treaty. The UK Parliament ratified the Treaty, including the Protocol, but now the UK government is trying to scrap it altogether, under a this pretence of “renegotiating “ it.


The fundamental problem is that the British negotiating strategy is being driven by old fashioned, populist, and simplistic notions about trade. The EU strategy, on the other hand, is driven by a legal imperative to protect the most advanced form of economic and commercial integration between sovereign nations that has ever been achieved. The clash is a clash of mind sets. The arguments of either side are based on fundamentally incompatible assumptions.


There is the added complication that the negotiations between Liz Truss and Maros Sefcovic are taking place in the midst of a political crisis in Britain, in which any compromise is liable to be used as a political weapon in a struggle to lead the Conservative Party.
Conservative Britain always pretended to see the EU as simple free trade area. But the rest of the EU members realized one could not have truly free trade, unless there were four other things

  • common rules on the quality of products
  • freedom for people and money to move from country to country,
  • common trade policies vis a vis the rest of the world, and
  • a shared set of political goals that facilitated day to day compromise.

A big segment of English opinion never accepted this latter concept of the EU. This makes it difficult for them to even to understand the necessary implications of the Protocol .


The Protocol makes Northern Ireland part of the EU Single market for goods produced in Northern Ireland. Meanwhile Britain has left the EU Single Market. Britain has no more than a bare bones trade agreement with the EU. This makes a big difference. But it is what the UK government and Parliament agreed.
Goods produced in Northern Ireland (NI) are being treated as EU goods, whereas goods produced in Britain are non EU goods.


In the case of goods made up of parts, ingredients or components coming from different countries, The parts, ingredients or components produced in Northern Ireland qualify, for rules of origin purposes, as “European”. Meanwhile parts, ingredients or components originating in Britain are of non EU origin.


This distinction can be very important in deciding whether a final product is sufficiently “European” to benefit from duty free access to the EU market. If one wants to ensure that a sufficient percentage of a final product is “European”, it makes sense to source ingredients or parts in NI rather than in another part of the UK.


Goods coming into NI will be subject to EU Customs rules and tariffs, whereas goods coming into Britain will be subject to (potentially very different) UK Customs rules and tariffs.


This gap has to be policed, if there is not to be abuse. In the Protocol the EU and the UK agreed how this gap is to be policed.
The gap will become progressively wider, if the UK seeks to exploit the freedom it won by Brexit by making new (and different) British standards to replace the old standards that it might claim had been “imposed by Brussels”.


The more the standards diverge, the more will checks be needed on goods entering the EU market through NI, to ensure that they comply with EU requirements.


Then there is the question of the European Court interpreting EU rules as they apply to NI goods circulating freely in the EU Single Market . The UK agreed to this but now is objecting to it.
For NI businesses to be free to export their products within the EU Single Market under the Protocol they have to be able to convince their competitors and customers in France and Germany that NI goods are fully compliant with EU rules. These rules are interpreted, in final analysis, by the European Court of Justice. That ensures consistency.
The rules must be interpreted in the same way for NI goods, as they are for goods produced in France or Germany. The role of the ECJ in the Protocol is the passport for NI goods into Europe, one of the biggest markets in the world.


The role of the ECJ is, of course, confined to EU rules applying to goods. It will have no general jurisdiction in NI on other matters. There the final arbiter will be the UK Supreme Court.


There is a logjam in the negotiations because the UK side keeps repeating the same talking points , pocketing EU concessions without reciprocity, and withholding cooperation with the EU authorities on access to data. It is also stalling on building installations in Belfast Port that would allow customs officials there to do their work safely and conveniently. The UK is using “grace periods” to defer indefinitely controls it agreed to. It is almost as if the UK does not want to face up to the implications of Brexit.


The UK, and some unionists, talk about using Article 16 as if this would allow the ending of checks in Belfast port. That is not legally possible. Article 16 only allows limited and temporary derogations. To use it to go beyond that would be a straightforward breach on international law.
We are facing a moment of truth.

EACCNY Pulse: Transatlantic Business Insights

Listen to this final “Brexit Musing” episode with John Bruton, the former Irish Prime Minister (Taoiseach) and former EU Ambassador to the United States who will share his wisdom on what Brexit means and his thoughts moving forward with regard to not only the UK and EU, but also the U.S.

CAN THE BREXIT IMPASSE BE RESOLVED?


This week I am speaking in the Sciences Po University in Paris at the invitation of the Dean, Enrico Letta, a former Italian Prime Minister .

A member of the Scottish Government, Fiona Hyslop will also speak and we will be discussing the dilemmas posed by Brexit with a number of academics and their students.

Later this week, I will attend the Ideas Lab, organized by the Centre for European Policy Studies (CEPS),  in Brussels. I am a member of the board of CEPS.

This meeting will consider the possibility of the trade war between China and the US going global, integrating climate and trade policies, and the vision for the EU for the next 5 years. Brexit, as such, is not on the agenda.

Interesting ideas on resolving the Brexit impasse have been put forward by Andrew Duff, a former MEP, and by Professor Kenneth Armstrong of Cambridge University.

Andrew Duff suggests a series of detailed amendments to the Political Declaration that would bring the UK closer to the EU in some respects.

Professor Armstrong suggests a new protocol that would give greater legal force to the Political Declaration.

His core idea is that there would be that a set of criteria be negotiated, as to how and when the backstop might  be implemented, or be modified or replaced.

Procedurally, his proposal would de dramatize and postpone the issue. But it would not solve it.

It remains to be seen how it could avoid a hard border,  either in Ireland or on the Irish Sea, if, at the end of the day, the UK insists on pursuing an independent trade policy.

It is also unclear whether a majority could be obtained in the House of Commons for any of this.

Until that is clearer, it is hard to say whether the EU has a credible interlocutor in London with whom it can negotiate. The UK Parliament has yet to reconcile its desires, with the essential needs of the European Union. It has to accept the tradeoffs involved.

Professor Armstrong’s approach would avoid a No Deal crash out on 29 March.

I have no doubt that customs controls will have to be introduced by Ireland, as a continuing EU member, in the event of a No Deal crash out.

I feel that public opinion has not been prepared for that legal reality.

Being in the EU has been very advantageous for Ireland in every way, especially in attracting investment and jobs.

So Ireland must implement EU law. The EU is a system of rules, and if its rules are not respected, it ceases to exist.

A “GROSS BETRAYAL OF DEMOCRACY” ?

The UK Prime Minister, Mrs May, writes today that to have a second Referendum in the UK on Brexit would be “a gross betrayal of democracy”.

If she believes that, she does not understand democracy very well.

She seems to suggest that democrats, having made a decision, should not ever change their minds. In fact, democracy is all about creating mechanisms whereby voters CAN change their minds.

Democracy allows voters to change their minds, usually through parliamentary elections.

Totalitarian or dictatorial regimes, who do not hold regular elections, do not a have an inbuilt mechanism for changing their minds. This makes them brittle. Democracy, in contrast, is flexible.

There may be practical arguments against holding a second Referendum on Brexit, at this stage.

One could ask questions like

“What alternative to Brexit would be offered to voters, and by whom would it be offered….by the UK alone or by the UK and the EU?”

“ Might it be wiser to allow UK voters to actually experience Brexit in practice before asking them if they like it or not and want to change their minds?”

But for Theresa May to argue that reconsidering a referendum decision, by means of a second referendum,  is “ a betrayal of democracy” is just nonsensical.

“El Reino Unido ha puesto a Irlanda en una situación casi imposible”

El Mundo correspondent, Carlos Freneda, interviewed John Bruton for Spanish Newspaper. 

“El Brexit dañará más a la economía irlandesa que a la británica”, afirma el ex primer ministro irlandés John Bruton

Londres abonará entre 45.000 y 55.000 millones de euros como factura por el Brexit

John Bruton (Dunboyne, 1947) fue primer ministro irlandés en los “felices” 90: del mercado único que suprimió las barreras físicas entre las dos Irlandas, al Acuerdo del Viernes Santo que allanó el camino al proceso de paz. Bruton advierte ahora que los avances logrados en los últimos veinte años pueden saltar por los aires con el Brexit, que tendrá un mayor impacto económico y social en la vecina Irlanda que en el propio Reino Unido.

¿Hay alguna manera de soluciona el “problema irlandés”? ¿Se puede quedar una parte de isla dentro de la UE y la otra fuera?
El obstáculo está en la mente cerrada de la facción pro-Brexit del Partido Conservador. No entienden que los mercados abiertos requieren normas comunes, decididas democráticamente entre los países e interpretadas de un modo uniforme. Eso es lo que facilita la UE. La permanencia en el mercado único y en la unión aduanera podría ser una solución, pero los brexiteros (y los unionistas) no ven nigún valor en ello… El Reino Unido ha puesto a Irlanda en una posición casi imposible, tanto para preservar el proceso de paz como para asegurar el libre comercio entre las dos partes de la isla. Una vuelta a la frontera dura seriviría para aislar los nacionalistas del norte de una manera peligrosa… El Brexit dañará potencialmente más a la economía irlandesa que a la británica. El Reino Unido puede haber votado a favor de este acto de autolesión económica, pero los ciudadanos de la República de Irlanda no han votado, y los de Irlanda del Norte han votado por la permanencia.
El Gobierno británico ha llegado a sugerir una frontera “virtual” y sin fricciones, sin necesidad de volver a instalar aduanas y con los últimos avances tecnológicos…
Eso no es posible. Dos terceras partes de los cargamentos que atravesarán la frontera tendrían que ser inspeccionados en algún lugar, y eso crearía poblemas.
Usted ha llegado a decir que Irlanda debe hacer cuanto esté en su mano para evitar el Brexit ¿Lo cree aún posible?
Lo que creo que debería hacerse en prolongar el tiempo límite que fija el Artículo 50 y tener un margen de dos a seis años para intentar resolver las complejidades a las que nos enfrentamos. Así se daría tiempo a los británicos para cambiar de opinión si lo consideran, y eso haría innecesario un acuerdo de transición. El Reino Unido debería seguir siendo un miembro con derecho a voto durante ese tiempo.
¿Qué pasaría en Irlanda si el Reino Unido opta por marcharse de un portazo y sin un acuerdo con la UE?
Eso sería desastroso para nosotros a medio plazo, y a largo plazo dañaría considerablemente las relaciones entre Irlanda y el Reino Unido. En ese caso, Irlanda tendería los puentes económicos y culturas hacia otros países como Francia y España, como ocurrió durante los conflictos del siglo XVI y XVII (en la batalla de Kinsale, sin ir más lejos).
¿Reconocerá el Reino Unido el daño que el Brexit puede causar a sus vecinos más próximos?
Hay muy pocas señales de que quieran reconocer el daño, o que les importe lo más mínimo. En lo único que piensan es en sí mismos y en “recuperar el control”. El Brexit es un proceso más “psicológico” que económico, sobre el papel de Inglaterra en el mundo. No olvidemos que el Reino Unido es una idea puesta en marcha para asegurar y preservar los intereses estratégicos y militares de Inglaterra.
¿Qué sectores de la economía irlandesa se verían afectados por el Brexit?
El sector manufacturero sobre todo: las mercancías que no pueden ser transportadas fácilmente por avión para evitar el Reino Unido. Y también la producción de carne y de lana. La agricultura sufriría mucho si tenemos normas distintas en el norte y en el sur. El sector energético lo notará también.
¿Piensa que el Brexit puede en última instancia dar impulso a la unificación de Irlanda?
El principal obstáculo a la unificación es la hostilidad por una parte muy importante de la población en Irlanda del Norte. Las actividades en el pasado del IRA y el papel que juega ahora Sinn Féin refuerza esa falta de voluntad. Tampoco creo que la población en la República de Irlanda esté dispuesta a aceptar el peso de forzar a un millón de personas a integrarse contra su voluntad en una Irlanda unida. El coste no sería solo económico, sino en términos de sociales y de sectarismo. Por supuesto que habría mucho menos problemas si ese millón de personas cambiara de opinión, pero hay pocas señales de que eso sea posible.

WHY I BELIEVE THE UK SHOULD STAY IN THE EU

IMG_3745

Stonyhurst College

THE EU IS A VOLUNTARY UNION

The fact that the British voters are free to have a referendum, and free to decide to leave the
European Union shows that the European Union is a voluntary Union.
It is not an Empire, which something a country would not be free to leave.
Nor is it a Federal Union like the United States, which does not permit its member states to leave either.
The EU’s voluntary character is one of the reasons why a number of states are still looking to join the EU.

THE FIRST TIME IN 60 YEARS ANY COUNTRY HAS CONSIDERED LEAVING

The 23 rd of June 2016 will, however, be the first time in the EU’s 60 year history, that any state has contemplated leaving.
This is a serious matter not just for Britain, but for all the countries of the EU.
So British voters, acting as as citizen legislators on 23 June, ought to think of the risks, that a British decision to leave might create for neighbouring countries in the EU, like Ireland. Voters here in Lancashire need to think about the consequences for peace in Ireland of the deepening of the border in Ireland that would flow from a Brexit decision on 23 June.

They also should consider the risk that Britain deciding to leave would create a precedent that would weaken the bonds that hold the remaining 27 countries together. The Parliament in Westminster has passed to voters the responsibility for deciding if a possible breakup of the EU would really be good for Britain, and for Europe too. It is a big responsibility.

STABILITY IN EUROPE HAS ALWAYS BEEN IMPORTANT TO BRITAIN

Stability in Europe has been a long term British goal.
Edmund Burke in the 1790’s favoured a Commonwealth of Europe.
Castlereagh worked for a Concert of Europe, with regular Summit meetings like the EU now has, after the end of the Napoleonic Wars.
Winston Churchill, in 1930,advocated a United States of Europe.
These statesmen did not advocate these ideas out of some sort of dewy eyed sentimentalism. No, they had a hard headed appreciation of the fact that stability on the continent meant greater security for Britain, and they made their suggestions to achieve that end.

Now it is British voters, not British statesmen, who must decide what is best for Europe,

+ a Union with Britain on the inside, or
+ a fractured Union, which Britain has left of its own free will.

BREXIT COULD DOUBLE THE REGULATORY BURDEN

We hear much about EU Regulations and the burdens they impose. But even if Britain left the EU, it would still have regulations of its own on things like the environment, financial services and product safety.

In fact, to the extent that a Britain that had left the EU wanted to sell goods or services to Europe, it would have to comply with TWO sets of regulations,

+ British regulations for the British market, and
+ EU regulations for the EU market, including Ireland.

Arguably the duplicated post Brexit regulatory burden on British business would be greater than the present one.

A UK/EU TRADE DEAL COULD TAKE YEARS TO NEGOTIATE

Some believe that the UK could leave the EU, and then quickly negotiate a free trade agreement which would allow British firms to go on selling in Ireland and the other EU countries.
I am sure an agreement of some kind could eventually be worked out, but it would not be quick.
Switzerland negotiated trade agreements with the EU, but that took 9 years.
Canada negotiated a Free Trade agreement too, but that took 7 years.
The British Agreement would be much more complicated than either of these, because it would involve new issues like financial services, and freedom of movement ,and access to health services, for example for Britons in Spain. It would have to cover agriculture.
Even with maximum goodwill from the European Commission, a post Brexit EU trade agreement with Britain would become prey to the domestic politics of the 27 remaining EU countries, each of whom would have their own axes to grind.
There would be a lot of uncertainty, over a long period.

STAY IN, AND MAKE EU BETTER

I believe British people should accept that entities like the EU, which provide a structure, within which the forces of globalisation, can be governed politically are essential, if the prosperity that flows from globalisation is to be shared fairly.
Rather than leave, Britons should consider how they can make the EU better than it is, and there is plenty of scope for that.

Speech by John Bruton, former Taoiseach of Ireland, in Stonyhurst College, near Clitheroe in
Lancashire on Sunday 29 May at 5pm

OVERCONFIDENCE CAN LEAD TO POLITICAL, AS WELL AS FINANCIAL, MISTAKES

The-UK-and-EU-flags-010A ballooning current account (or balance of payments) deficit, and an explosion in household borrowing.

These were the two signs of impending difficulty, that Ireland ignored between 2005 and 2008.

 In 2008, Irish public opinion was so optimistic that it felt it could afford to reject an EU Treaty in a referendum, notwithstanding the disproportionate benefits Ireland got from EU membership. It reversed this decision in a subsequent referendum in 2009.

The UK is exhibiting some of the same symptoms of overconfidence at the moment.

The UK current account or balance of payments deficit for the last quarter of 2015 was 7% of GDP – the deepest deficit since 1955.

The UK is spending more abroad than it is earning there.

It is making up the difference with borrowing. A country that is borrowing more abroad must be particularly sensitive to the volatile opinions of foreigners.

UK households now owe almost £1.5 trillion overall, up 4% on a year ago. The vast majority of that debt is in the form of mortgages, where lending growth has been climbing steadily since the start of 2015. Much of that has been driven by the buy-to-let sector.

And now the UK is about to have a referendum on whether it should leave the EU altogether. And in the UK case, unlike Ireland, the government has said firmly that there will be no second referendum

UK voters should be wary of overconfidence. They should remember what happened in Ireland.

The UK needs its neighbours to prosper, just as its neighbours need the UK to prosper.

Powered by WordPress & Theme by Anders Norén