Saturday 26 October 2019

Duplicity and divergence: How we plan to deregulate from the EU and avoid sanctions

Johnson is well known for duplicity, for saying and agreeing to one thing then doing another. We can see how this is reflected in his government's thinking by a document leaked to the Financial Times from DEXEU, which is the subject of this report in today's issue.  Moving the level playing field (LPF) commitments from the legally binding Withdrawal Agreement to the political declaration was more than a trivial exercise.  It was calculated and deliberate and it is clear we intend to try and undercut EU companies by reducing social, employment and environmental rights.

While we wait for the EU27 to confirm the length of the extension, which has apparently been agreed "in principle",  the draft policy document leak is embarrassing for the government and may influence Labour MPs who voted for his deal last week.  I can see amendments being drafted to force a more legally binding alignment.  It will certainly help Labour focus their election campaign.

The document, marked "Official Sensitive - Not to be forwarded with the author's permission - draft policy thinking - this is not government policy" says that in the new WA,  the drafting of workers’ rights and environmental protection commitments “leaves room for interpretation”.

The paper appears to contradict comments made by Mr Johnson on Wednesday when he said the UK was committed to “the highest possible standards” for workers’ rights and environmental standards.  But since we can already enjoy higher standards if we wish, because the EU only sets minimum ones, it is obvious the government is pursuing a policy of lowering them.

The document is self congratulatory and says  that “UK negotiators successfully resisted the inclusion of all UK-wide LPF rules” which were in the previous Theresa May deal.

"The PD text provides us with a framework for negotiating FTA-style commitments on LPF.  However, it is clear that UK and EU interpretation of these [level playing field] commitments will be very different. This underlines the importance of continuing to develop a clear negotiating strategy which allows for a range of landing zones that can lead to a successful conclusion to the negotiations"

Another part of the document talks about dispute settlement mechanisms and how these too have been watered down:

"This leaves a broader landing zone for the enforcement of the commitments  as it should be possible to argue that binding arbitration (or indeed any mechanism which is not consistent with standard FTAs) is inappropriate for the future UK-EU relationship

The document also suggests there are dispute settlement mechanisms that "do not involve sanctions" as if they are pushing at the envelope as far as it will go.  One can see the beginnings of the next big stumbling block in the future trade talks.  What might be appropriate for Canada or Japan, thousands of miles from European shores, will never be seen by the EU27 or the Commission as appropriate for the UK, just 26 miles away with far more closely intertwined markets.

The Financial Times says that the EU have already made it clear that the prospects of getting an ambitious trade deal with Brussels depend on it continuing to uphold robust rules.  The government has said it wants a "best in class" FTA but if we are not prepared to match the EU's obligations on social and environmental policies access to the single market will be restricted.  We will probably end up with a worst in class agreement.  As usual we want to have our cake and eat it too.

UK manufacturers and suppliers will be horrified by the report. They have been pleading for the UK to align with EU rules, something they say is "vital" but we see behind the scenes the government is seeking to misalign us as far as they possibly can.

The difficulty with moving too far (or indeed at all) is that if ones own standards are too high you are increasing your own costs unnecessarily and too low brings the risk of sanctions for illegal dumping. It is just another headache for our already struggling manufacturing sector.

But now, back to Johnson himself for a moment. I noticed this truly magnifient article in The New Yorker magazine about how Brexit will end (badly) and in it I find this:

"But Johnson’s political career has been marked by lies and evasions. “He is genuinely a bad person. Not an unlikable person but a bad person, as in he has no morals, no principles and beliefs,” a former close colleague told me. “He would be whatever Prime Minister was necessary to maximize the chances of gaining and then maintaining power.” Between 2008 and 2016, Johnson was a liberal mayor of London. During his campaign, earlier this year, to become the leader of the Conservative Party, he veered between promises to leave the E.U. on October 31st, “do or die,” and strange, chummy disquisitions on his hobby of making model buses and painting the passengers inside.!

There are also wonderful insights into the Tory party, Rees-Mogg, Cummings and all sorts. It's a longish read but you will be rewarded.  Trust me.