Dominic Lawson, the son of the former Tory Chancellor and climate change denier Nigel Lawson, writes a regular column in The Sunday Times. Like his father, he's a Brexiteer with some bizarre views. This week's effort is a prime example. See it HERE (no£). The essence of his argument is that by demanding regulatory alignment, the EU are 'cherry picking' in some way. He also thinks Brexit Johnson can safely reject the EU demand. We shall see who needs who the most later this year.
First of all, the seminars on level playing field issues and the earlier one on a free trade agreement do not mention dynamic alignment once. The word 'dynamic' doesn't appear and as for 'alignment', the FTA simply asks for, "substantive rules aligned with EU and international standards". They do talk about non-regression and common standards. Lawson goes a bit further than the EU have suggested in order to set up an Aunt Sally that he can knock down later and claim victory for Brexit Johnson.
He says the free trade agreement with Canada (CETA) does not require “dynamic alignment” or regulatory harmonisation as far as labour or environmental provisions are concerned. On this he's correct but he might be surprised to read the Joint Interpretive Instrument part of CETA which commits both sides to working together and says they, "cannot relax their labour laws in order to encourage trade or attract investment" - in other words, non-regression. It also says:
"CETA will also not lower our respective standards and regulations related to food safety, product safety, consumer protection, health, environment or labour protection. Imported goods, service suppliers and investors must continue to respect domestic requirements, including rules and regulations. The European Union and its Member States and Canada reaffirm the commitments with respect to precaution that they have undertaken in international agreements."
CETA commits both sides to working together in regulatory cooperation. It does NOT allow one side to unilaterally diverge from existing standards. But this is what our declared aim is!
Lawson thinks the EU will demand closer alignment (which they will) because we are so close with the possibility that we "might . . . er . . . compete too much". Diverging from common standards is not competing, it's cheating isn't it? But this is what he wants us to do. The EU will never allow what they would call 'dumping'.
He cites the example of NAFTA (torn up unilaterally by Trump presumably because Canada and Mexico were competing too much) which he claims:
"...is based on “mutual recognition”. This is anathema to the EU, even though it is the way the rest of the global trading system functions".
This is the canard that will not die, mainly because men like Lawson keep it on life-support a bit like WTO Article 24. I recently quoted Sam Lowe, an expert in these matters who tweeted just a few days ago:
"this idea that the rest of the world operates on the basis of equivalence and mutual recognition whereas only the strange EU prefers harmonisation is entirely unsupported by evidence".
This does not prevent Lawson using it to bolster his argument. He also may not realise the US and Canada have a separate agreement on the environment as a side-treaty to NAFTA.
As far as Brexit is concerned, Lawson is at odds with his Sunday Times colleague, John Smith, the long standing and highly respected economics editor who this week looks at the UK's growth record inside the EU and comes up with some surprising data. Between 1973 and the 2016 referendum we grew by 117%. From the launch of the SM and 2016 we grew by 53%. Keep those figures in mind.
"How does that compare with other countries? For France, the rise in per capita GDP since 1973 was 84% and since 1993 29%. The longer-term comparison with Germany is affected by reunification, though it does appear that UK real GDP per capita grew faster than the old West Germany from 1973 to 1993. For Germany as it is now, there has been a rise of 37% since 1993.
"Beating France and Germany is one thing, but the UK has also outpaced America. US real GDP rose by 109% from 1973 to 2016 and by 43% since 1993".
Smith concedes some of it was due to Thatcher's reforms but much was achieved before her reforms had chance to take hold.
"And, as is often forgotten, those reforms were carried out in the context of unfettered access to the EU market. Thatcher pushed the single market because she wanted businesses in Britain’s newly flexible and no longer union-dominated economy to be able to take advantage of a larger home market. That was also the pitch to inward investors, most notably the Japanese car firms. The “Big Bang” reforms in the City were, at least in part, about cementing London’s position as the financial capital of Europe.
"That was then. Now, or on Friday evening, we will go in a new, if bong-free, direction. If you think, given the history, it looks irrational, I would not disagree with you. If you think that the government does not have a coherent plan for Brexit, having done a withdrawal deal that was essentially Theresa May’s but with an added betrayal of Northern Ireland, I would not disagree with you on that either. But let us see what the future brings."
Finally, I note elsewhere in his article he says about "9% of UK exports go to the Commonwealth, a fifth of the EU share, and the Commonwealth share is lower than it was a few years ago". I read this weekend that in 1958 the Commonwealth took 50% of our exports. You might remember that this (falling exports) is often cited by Brexiteers as a reason for leaving the EU. I assume this revelation about the Commonwealth will soon set off calls to leave that organisation too?
