The Future Relationship White Paper was published yesterday (HERE). At 104 pages it’s quite a document and I confess I haven’t read it in detail but I have skimmed quickly through and first impression is that there is an awful lot of repetitive waffle and warm meaningless verbiage. It does not compare favourably with EU Notices to Stakeholders which are generally short, concise and well written. But a year too late, it finally appears.
The WP comes across as an attempt to convince two audiences, the Brexiteers and the EU, but mostly the EU, that it is somehow in their best interests. At times it looks like either Uriah Heep or a really desperate salesman was involved in the drafting.
It is also cherry picking on a gargantuan scale. In fact there are so many EU bodies and agencies that we want to continue to participate in, from the single market for goods to the Horizon 2020 science and research programme. It’s hard to see how Brexiteers could even begin to accept it. On page 86 a diagram shows how the relationship would work with an Overarching Agreement sitting above a Governing Body on which, “Leaders and ministers from the UK and the EU” would “give direction to the development of the future relationship”. This will be a red rag to Jacob Rees-Mogg.
Apart from that, it has the appearance of a Super Swiss model with literally dozens of new economic and regulatory arrangements, for example on financial services, digital services, trusted traders as well as participation in EU technical committees, playing a "leading role" in European Standards Organisation, new arrangements covering continued participation in EASA, REACH, EMA and highly regulated areas, new Geographic Indicators scheme, jointly agreeing accreditation framework for conformity assessment bodies, equivalence arrangements on wider food policy rules and access to many EU databases as a third country. It is simply stunning. On this showing Brexit looks like separating Siamese twins and then trying to partially rejoin them again.
A cynic might be tempted to say all this might take a bit more more than the ten minutes Peter Lilley once told us a free trade deal would take (HERE).
The WP is built on two main pillars, the single market goods only access and the facilitated customs arrangement (FCA). But these are both completely unacceptable to the EU and you have to ask why we should even put the proposal forward knowing the other side will reject it?
It shows, in my opinion, our absolute desperation to get access to the single market. A clear acknowledgement of the calamitous damage that Brexit will cause UK manufacturing industry. I don't believe, when the idea is rejected, the British government will just give up and say we tried but the EU were too inflexible. No, the next compromise will be to take us closer still.
And the reason it will be rejected is written in the WP itself. There are plenty of references to precedents set by special arrangements the EU have negotiated with other third countries like this for example:
"The EU has third country equivalence regimes which provide limited access for some of its third country partners to some areas of EU financial services markets. These regimes are not sufficient to deal with a third country whose financial markets are as deeply interconnected with the EU’s as those of the UK are".
See how an earlier precedent is taken and increased further? Splitting up the four freedoms would create a huge precedent that other third countries will exploit in the same way. It would destroy the single market, the crown jewel of the EU. They will never allow it.
Although Brexiteers see no value in the single market, others do. The EU has about 50 trade deals with other countries while the USA only has 20 (HERE). Countries are queuing up to negotiate FTAs with the EU. If we exit without a deal the UK will be the only European country that has no trading arrangement with Brussels or is not lining up for accession. Makes you think doesn't it? No deal is just ridiculous and plain stupid. We would even be unique with a CETA style free trade deal.
Moreover, I think the EU's preferred outcome is for the UK to remain a member or to rejoin later. This is unlikely to happen if they concede the two pillars on which the WP stands, it would reduce the impact of Brexit So, they won't do it. They will force us to confront the stark choice between remaining in all four freedoms and leaving it completely.
The WP says on page 19:
“Both the UK and the EU will want to ensure that European manufacturing continues to thrive in an increasingly competitive global market”.
This is I think the implicit recognition that Brexit is going to damage European manufacturing and the future relationship is an attempt to minimise the damage. I would be very surprised if there is anything we make or do in the UK that isn’t easily available in the EU. We can’t say the same the other way round. The UK needs EU goods far more than they need UK goods so the damage will be mainly on our side. It goes on:
"To deliver this goal, the Government is proposing the establishment of a free trade area for goods. This free trade area would protect the uniquely integrated supply chains and ‘just-in-time’ processes that have developed across the UK and the EU over the last 40 years, and the jobs and livelihoods dependent on them, ensuring businesses on both sides can continue operating through their current value and supply chains. It would avoid the need for customs and regulatory checks at the border, and mean that businesses would not need to complete costly customs declarations. And it would enable products to only undergo one set of approvals and authorisations in either market, before being sold in both".
This is cleaving one of the four “indivisible” freedoms. It’s just a non starter but the WP claims:
"It would avoid the need for a hard border between Northern Ireland and Ireland, without harming the internal market of the UK – doing so in a way that fully respects the integrity of the EU’s Single Market, Customs Union, and its rules-based framework"
It does not respect the integrity of the single market at all. It gives a third country unique access to the single market without the other three freedoms.
The next impression you get is that the UK government sees itself as on a par with the EU so you get all sorts of references like this one talking about cooperative accords on page 76:
"It is therefore in the shared interest of the UK and the EU to continue this cooperation. The UK proposes to do so through new cooperative accords that provide for a more strategic approach than simply agreeing the UK’s participation in individual EU programmes on a case-by-case basis. This strategic approach would ensure that the UK and the EU could build on existing activity or develop new forms of cooperation, taking advantage of emerging opportunities and responding to global challenges, where it was in both parties’ mutual interest"
We are moving from being one of 28 nations, to being equal to the other 27. This would, as I’ve pointed out before, give the UK a better position than all the other nations in the EU. They sit down and agree a common position and then come and negotiate with us to “develop new forms of cooperation” as if we’re on a different level altogether. This won’t go down well.
And going forward:
"The UK’s vision for how firms, individuals and public authorities will cooperate with their EU counterparts in future, whether related to aviation, pharmaceutical products entering respective markets, or how authorities share data on criminal suspects, will require dialogue between the UK and the EU at a political and technical level. This will ensure that the cooperation that is agreed as part of the relationship is kept up to date, and works not just over the next five years, but beyond".
"In line with the breadth of the relationship and to ensure unforeseen challenges could be dealt with quickly, the Governing Body should meet biannually at leader level, including at least once between the UK Prime Minister and the heads of state and governments of the Member States of the EU as well as the presidents of the EU institutions, with additional ad hoc formal and informal ministerial dialogue as necessary".
What we are seeing is a proposal that goes far beyond a free trade agreement like CETA and on page 11 there is even a suggestion that the future relationship, “could take the form of an Association Agreement, would ensure the new settlement is sustainable – working for the citizens of the UK and the EU now and in the future”. It is as close to membership as it’s possible to get without being a member and in many respects gives us privileged access to both the single market and the Council of Ministers.
Freedom of movement , it confirms, will end in December 2020 but note:
"The UK would seek reciprocal arrangements that would allow UK nationals to visit the EU without a visa for short-term business reasons and equivalent arrangements for EU citizens coming to the UK. This would permit only paid work in limited and clearly defined circumstances, in line with the current business visa policy".
It looks remarkably close to freedom of movement to me. Not sure how this will go down with Migration Watch and the EU will want us to define the circumstances much more clearly.
And finally we are still proposing mutual recognition of standards:
"To fulfil the aims set out in this paper across the economic and security partnerships, the UK should continue to participate in certain EU bodies and agencies. UK participation would be important for different reasons, but could relate to enabling mutual recognition of standards, sharing essential expertise and personnel, and exchanging data and information"
How many times this has been ruled out I really don’t know but it keeps coming back to life. On the plus side, it confirms we intend to remain a member of the ECHR, something that Mrs May has been keen to take us out of in the past.
Henry Newman of Open Europe has an open letter (HERE) to EU ambassadors and diplomats to take it seriously because there won't be any more concessions and otherwise we might walk away (cue laughter).
The EU Parliament's Brexit Steering Group released a statement (HERE) on the WP. It welcomes the white paper setting out the UK government's position but it also warns:
The BSG noted that negotiations on the WA and the framework for the future relationship will continue next week. It recalled its position for the closest trade and economic partnership possible while respecting among others the principles of the non-divisibility of the four freedoms, the integrity of the single market, avoiding a sector-by-sector approach and safeguarding financial stability, the preservation of the autonomy of EU decision-making, the safeguarding of the EU legal order and the balance of rights and obligations which any future EU-UK relationship will need to respect. In this framework there will be, for example, no space for outsourcing EU‘s customs competences.
Note the highlighted parts. It does not bode well for the free trade area in goods or the facilitated customs arrangements which are the absolute centre pieces of the entire White Paper.
James Forsyth has a piece in The Spectator (HERE), written before the WP was released but doubting it will be accepted by parliament. He does not believe the pro Brexit Tories will support it and neither will Labour. The EU will almost certainly demand more concessions anyway and this will make it even less palatable. He quotes a former cabinet minister saying that "the two likeliest outcomes are now ‘no deal or no Brexit’"
I think this article in The Guardian HERE is right. The WP is pitched more or less in between the two sides (the hard Brexiteers and the EU) and because of that it will be unacceptable to both. The problem then is in which direction the necessary compromises will take it. More acceptable to the EU will make it less acceptable to Brexiteers and vice versa.
It may be there cannot ever be an agreement that bridges the two sides, in fact I think this is quite likely. The choice is between an economic disaster (no deal) and a political calamity (no Brexit).
Two problems then arise. Can the PM push ANY agreement through the House of Commons? She has no real majority. Too soft a Brexit and Brexiteers will vote it down, too hard and pro EU rebels will object. If she can't get it approved what options does she have?
Resign and let a new leader try? This wouldn't change the parliamentary arithmetic. Call an election? She might lose it to Corbyn. Or call another referendum? This might be the only way out.
Reuters (HERE) say the WP is Brexit confronting its own contradictions and as a document it is "deeply underwhelming". So, a year late at least, underwhelming, unacceptable and not likely to get through either the UK or the EU parliaments.
Dominic Grieve was on Newsnight last night. He's a former Attorney General and a man I respect a lot. Asked about the prospect of no deal, he dismissed it saying no parliamentarian would support it because of the potential damage to this country. I've always thought this. He said if it looked like it might happen, parliament would step in.
If it came to it then I assume that means no Brexit. It could hardly be better!
