Brexit can only take off on world trade terms

If you believed the headlines in the last six months, you would be forgiven for thinking that you would be unable to book a city break in Europe or visit loved ones abroad after the UK leaves the European Union. Apparently, planes will not be allowed to fly or – even worse – land on […]

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If you believed the headlines in the last six months, you would be forgiven for thinking that you would be unable to book a city break in Europe or visit loved ones abroad after the UK leaves the European Union. Apparently, planes will not be allowed to fly or – even worse – land on 30th March if we leave without a Withdrawal Agreement.

We are told this is because we are led to believe the UK does not have the right deals in place, because pilot licences will no longer be valid, British aviation companies will have relocated to Paris and we can’t import enough Mars bars to feed the crew on long-haul flights.

As Chief Executive Officer of a global aviation technology company, I can reassure you that this is not the reality. The UK’s world class aviation industry is not going to sit on its hands after Brexit, let down millions of our customers or allow businesses to go bust.

Many of my colleagues and clients have made the same point. Willie Walsh and Johan Lundgren, the chief executives of British Airways and EasyJet respectively, have both dismissed the prospect of there being no flights between the UK and Europe. Meanwhile the Civil Aviation Authority has branded a Sky News report which suggested as many as 35,000 pilots would need to renew their licences as ‘misleading’, reminding us that the UK is a signatory to the International Civil Aviation Organisation Chicago Convention.

And yet, these stories portray Britain as afraid to stand on its own two feet, begging our European counterparts to allow our planes to land and to renew our licences.

Contrary to these myths, such headlines actually reflect the defeatism that underpins the draft Withdrawal Agreement, certainly not the optimism and resilience of our country and industry.

Since forming Vistair almost two decades ago, we have striven to become a global, innovative business that meets the challenges and opportunities offered by the UK and the world.

I believe that by disengaging ourselves from the restraints and bureaucracy of the EU, these opportunities will multiply. For that to happen, we need a real Brexit: one in which we can strike Free Trade Agreements with the biggest and fastest-growing countries (hint: they are not in Europe), we can compete in our rightful place in the global economy and we can channel the innovation that is shown every year at the Farnborough Air Show.

Rather than letting ourselves be backed into a corner, afraid of the opportunities that a global trading platform like the World Trade Organisation presents, the UK needs to once again become the independent, entrepreneurial trading nation that 17.4 million people voted to see.

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Two arrested over Gatwick drone disruption

Draft drone bill delayed as civil servants focus on Brexit, the Times reports.

British police Saturday said they have detained two suspects following drone interference at Gatwick airport that let to partial shutdowns of the U.K.’s second-largest airport.

Sussex police said the arrests, made just after 10 p.m. Friday, form part of an “ongoing investigations into the criminal use of drones which has severely disrupted flights in and out of Gatwick Airport.”

Authorities did not release further details on the two persons arrested.

Drone sightings Wednesday night saw severe disruption to the airport’s activities as flights were suspended for security reasons. Flights resumed Friday morning but were suspended again that afternoon, restarting around 7 p.m. Friday, police said.

The Times Saturday reported that U.K. Transport Secretary Chris Grayling this year ditched plans for a draft bill to regulate drone use and develop technology to prevent them from being used near airports.

The outlet reported the legislation “had been due for publication in the spring, [but] was dropped amid pressures on the department, with civil servants diverted to work on Brexit.”

The British Airline Pilots’ Association said Friday it “remains extremely concerned at the risk of a drone collision,” and had issued advice to pilots on how to respond to a drone sighting.

Gatwick airport said Saturday: “Our runway is open. Passengers are advised to check with their airline before travelling to the airport.”


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Gatwick reopens after airport implements anti-drone measures

Britain’s Gatwick airport reopened this morning after rogue drones prompted it to ground all flights since Wednesday night, disrupting the travel plans of 120,000 passengers. Just under 700 flights are expected to take off today and over 100 have been canceled, Gatwick Chief Operating Officer Chris Woodroofe told the BBC’s Today program. Woodroofe said 120,000 passengers who were due […]

Britain’s Gatwick airport reopened this morning after rogue drones prompted it to ground all flights since Wednesday night, disrupting the travel plans of 120,000 passengers.

Just under 700 flights are expected to take off today and over 100 have been canceled, Gatwick Chief Operating Officer Chris Woodroofe told the BBC’s Today program. Woodroofe said 120,000 passengers who were due to fly in or out of Gatwick had their flights delayed or canceled.

Woodroofe said the airport had put in place unspecified “additional mitigating measures,” provided by military and government agencies, which enabled it to reopen. He wouldn’t specify what the measures entailed or say whether the airport would be forced to shut down again if more drones were sighted.

The Gatwick chief said the airport had been working for a year to resolve the challenges posed by drones, but that more needed to be done to deal with such an “unprecedented event.”

“What the last 36 hours have demonstrated is that an awful lot more work has to be done both in the U.K. and internationally to address the risk of drones to airports,” Woodroofe said. “We need to work with both technology providers and government to address this risk.”

Woodroofe said police have not yet found those responsible for the rogue drones.

The Gatwick chief advised passengers to check with airlines to confirm whether their flights have been canceled before coming to the airport today.

Irish government prepares for no-deal Brexit with ‘sobering’ contingency plan

Dublin’s Plan B makes for ‘stark reading,’ Ireland’s Minister for Foreign Affairs and Trade Simon Coveney warns.

Ireland will need to pass 45 emergency laws ahead of Brexit Day if U.K. MPs fail to back Theresa May’s Withdrawal Agreement next month, according to the government’s contingency plans.

In its 131-page “Getting Ireland Brexit Ready” report published late Wednesday, the Irish government says the country’s domestic legislative program will require significant legal changes before March 29, 2019 in areas such as agriculture, the single electricity market, housing, health care and cross-border trade, among others.

Speaking to media in Dublin Wednesday night, Ireland’s Minister for Foreign Affairs and Trade Simon Coveney said the report was worrying for the trading relationship between Northern Ireland and the Republic.

Dublin’s “contingency plans for a no-deal Brexit make for sobering and stark reading,” Coveney said. “The report would require an immediate focus on crisis management and possible temporary solutions.”

The contingency plan notes that as England is the land bridge between Ireland and the European Continent, severe traffic delays in the aftermath of a no-deal Brexit are likely on the Dover-Calais shipping route, and adds that Ireland’s transport department is working with companies to identify alternatives.

The paper says the government’s main focus is to prevent the emergence of a hard border between Northern Ireland and the Republic.

Extra land will be needed at Dublin and Rosslare ports and at airports to deal with the “significant increase” in checks that will be needed if the U.K. crashes out of the EU, according to the report.

The additional facilities required at Dublin port will include 33 inspection bays for trucks coming off ships, 270 parking spaces to prevent logjams of trucks awaiting inspection, a dedicated border control post for the movement of live animals and new office space. Similar facilities will be required at Rosslare port in the southeast of the country, which is a major passenger and freight route to northern France.

Extra inspection rooms and a border control post for animals will also have to be constructed at Dublin airport.

Legislation is currently being prepared to address the issue of medicine supply and cross-border medical services, according to the report.

Vehicles cross the border between Ireland and Northern Ireland | Paul Faith/AFP via Getty Images

The paper says the government’s main focus is to prevent the emergence of a hard border between Northern Ireland and the Republic, though it doesn’t specify how that will be prevented if Westminster rejects the U.K.-EU Withdrawal Agreement.

The Republic of Ireland has an open land border with Northern Ireland, which is in the U.K. If the U.K. leaves the EU without a Brexit deal, the dividing line separating the two jurisdictions will become the frontier between the two.

Coveney said the plan is an “evolving document” and will be subject to change as talks continue between London, Brussels and Dublin.

The Irish Cabinet will meet on January 3 to discuss further contingency planning.


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EU unveils minimal Brexit safety net for no deal

A no-deal Brexit would mean disruption for the economy and citizens, said Commission vice president.

A no-deal Brexit will be no picnic — especially for Britain’s lucrative financial services industry.

That was the warning from the European Commission Wednesday, laid out in its emergency contingency plans for a no-deal scenario, 100 days before the U.K. is due to leave the EU.

Commission officials said they had made only the most basic provisions for business-as-usual to continue in the financial sector — as regards the central clearing of derivatives, certain over-the-counter derivatives contracts, and central depository services.

For everybody else, it’s potentially lights out — a message that Brussels wants banks, insurance companies, asset managers, and the rest to hear loud and clear.

“We are mitigating against no deal” — Vice President Valdis Dombrovskis

The EU’s contingency measures, covering 14 policy areas, illustrate that there are indeed ways to mitigate some of the potentially disastrous effects of the U.K. crashing out without a Withdrawal Treaty on March 29. But Commission officials stressed that they could not prevent all of the negative fallout and they warned against any suggestions — already circulating among some hardline Brexiters — that simply walking away would be better than the deal negotiated by Prime Minister Theresa May.

“We are mitigating against no deal,” Commission Vice President Valdis Dombrovskis said at a news conference. “But in terms of disruption to the economy, disruption to the citizens, I think it’s clear what the order of preference is — and clearly remain is better than leave and deal is better than no-deal.”

Dombrovskis also warned that a no-deal scenario could present obstacles to the U.K. achieving the optimum future economic relationship with the EU. “Should it come to no deal, yes there are certain mitigating measures,” he said. “But they are still not allowing the advantages of a proper Brexit with a deal and then of course moving to the proper work on our future economic relations.”

However, officials who described the no-deal package notably declined to address the politically sensitive question of what would happen along the border between Ireland and Northern Ireland. The Commission punted that question to Dublin, warning that all EU countries would be obligated to reinstate customs regimes with the U.K. in the event of a no-deal departure.

“Contingency measures cannot reproduce a Withdrawal Agreement and a transition period” — EU official

They also sidestepped discussion of the impact on the EU’s own budget, which would potentially face large shortfalls in 2019 and 2020 if the U.K. refuses to pay its share of the bloc’s seven-year financial plan which began in 2014. Though one EU diplomat said such a move by the U.K. would rapidly poison the situation. “It’s going to get nasty,” the diplomat said.

Despite those omissions, the Commission’s presentation on Wednesday was a clear air-raid siren for Brexiteers who are urging Theresa May and her government to stop trying to convince the U.K. parliament to ratify the 585-page Withdrawal Treaty that was agreed last month and instead just walk away.

“Contingency measures cannot reproduce a Withdrawal Agreement and a transition period,” an EU official said. “Contingency cannot equal membership of the European Union.”

The measures would be “by definition and, by a rule, temporary in time and unilateral in nature,” the official said, adding: “This is very much a damage limitation exercise. If we were to come to a no-deal scenario, a hard Brexit, there will be negative consequences. We cannot mitigate all of those by contingency measures.”

By some analysis, the measures announced by the Commission were softer on the U.K. than had been expected — allowing, for instance, the central clearing of derivatives in the U.K. to continue for 12 months, for central depository services to continue for 24 months and, in the aviation sector, for flights between the U.K. and EU to continue for a year. The contingency plan also appears to give U.K. hauliers somewhat greater allowances for trucking cargo on EU roads.

But overall, the emphasis by Brussels was on its one-sided approach to the emergency planning. In some cases, such as the provisions on the derivatives industry, the measures look as though they would facilitate a large-scale shift of financial services business to the European Continent from Britain.

The Commission, in its presentation, also pointedly noted that the mitigation of some potential problems — such as the provision of residency rights for U.K. citizens living in the remaining 27 EU countries — would have to be handled by national capitals, and that Brussels could offer limited, if any, guarantees.

Valdis Dombrovskis, vice president of the European commission | Stephanie LeCocq/EPA-EFE

“There are limits to what we can do from an EU perspective,” one official said. “What we can do is encourage all member states to deal with this matter in as clear and efficient and as citizen-friendly fashion as possible.”

In response to questions, Commission officials waved off any suggestion that some sectors of U.K. society might find the contingency provisions more appealing that the Withdrawal Treaty, saying life would be worse for almost everyone.

“The EU single market will fall away on the 30th of March and we will fall back on much more basic, international conventions, some of them many many decades old,” an official said. “So, I think, all-in-all: no.”

EU’s hard Brexit is going to hurt — a lot

Brussels prepares its disaster planning.

The EU is planning hard for a no-deal Brexit — and especially to make sure that if everyone goes over the cliff, the U.K. will land hardest of all.

The European Commission on Wednesday is set to approve a series of legislative initiatives to avoid the most disastrous outcomes of a no-deal scenario. It has described the preparations as “a limited number of contingency measures to mitigate significant disruptions in some narrowly defined areas.”

But while the EU’s disaster planning is intended to avert all-out catastrophe in the days immediately following Britain’s crash-out on March 29, Brussels also wants to be clear that its contingency operations won’t make no-deal a walk in the park. It will neither allow the U.K. to continue enjoying the benefits of EU membership, nor will it replicate the soft landing of the 21-month stand-in-place transition period envisioned in the draft Withdrawal Treaty agreed last month.

Generally speaking, contingency measures are expected to expire at the end of 2019 — giving the U.K. nine months to try to replicate the regulatory and policy infrastructure assembled over its more than 40 years in the EU.

What will the measures entail?

On road transport, the consequences of a no-deal scenario will be even harsher for the U.K., as British hauliers would face sharp restrictions to traffic allowed to operate on the Continent.

An example of one measure the Commission will propose on Wednesday is to guarantee that British airlines can fly over EU territory, make technical stops, such as for refueling, without passengers disembarking, and will be able to apply to fly between the U.K. and EU. Without new legislation, such stops would not be allowed because the U.K. will be a third country.

But even with the contingency plans, British airlines would no longer be able to operate flights between cities in the EU27 — ending lucrative routes for U.K.-owned carriers such as easyJet unless they have taken their own Brexit preparedness measures. In addition, the EU will propose measures that will ensure the continued validity of “safety certificates” that allow planes to keep flying — but only for a limited amount of time.

On road transport, the consequences of a no-deal scenario will be even harsher for the U.K., as British hauliers would face sharp restrictions to traffic allowed to operate on the Continent.

The measures to be proposed by the Commission on Wednesday were largely outlined in a communication issued on November 13, which received relatively little attention amid the noise of the final stages of the Brexit negotiations.

But with a majority of the House of Commons currently opposing the Withdrawal Treaty and Prime Minister Theresa May struggling to win over votes, the preparedness initiatives are now likely to move center-stage, as all sides contemplate the increased risks of a no-deal outcome.

Britain’s Prime Minister Theresa May, center, and EU leaders at the summit in Brussels | Dan Kitwood/Getty Images

In the November 13 communication, the Commission warned again that there is no such thing as a smooth Brexit. “Irrespective of the scenario envisaged, the United Kingdom’s choice will cause significant disruption,” the Commission warned.

But there was an even starker warning for Britain: contingency planning, unlike the negotiations on a withdrawal deal, is a one-sided affair. “Contingency measures will only be taken where strictly necessary and in the interest of the European Union and its citizens.”

It also noted that even in areas where contingency measures are taken there could be serious disruption or delays based on a lack of preparedness by national governments, businesses or citizens.

The measures proposed on Wednesday will add to a list of eight other legislative initiatives that the Commission has already put forward, including one that would exempt British travellers from visa requirements for short stays in the EU.

In addition, the EU has published dozens of preparedness notices warning of the consequences of a disorderly departure of the U.K. Among the little-noticed impacts: U.K. citizens and businesses will no longer be able to register internet sites using the .eu domain, and any U.K. entities that currently have such sites will not be able to renew them.

Bottom line: the landing at the bottom of the Brexit cliff is going to hurt — a lot — even with careful preparation.

This insight is from POLITICO‘s Brexit Files newsletter, a daily afternoon digest of the best coverage and analysis of Britain’s decision to leave the EU available to Brexit Pro subscribers. Sign up here.


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Chris Grayling: Here at Transport, we’re getting ready for Brexit – whatever happens. But here’s why I’m backing May’s deal.

If I had been offered this before the referendum in 2016, I would have seen it as a much better alternative to the status quo inside the EU,

Chris Grayling is Secretary of State for Transport, and MP for Epsom and Ewell.

Last week, the UK and the US signed a new aviation agreement which will cement the air links between us once the UK leaves the EU. The agreement secures the existing air links, and sets out the ways in which new operators can enter the market in future. We have worked closely with airlines on both sides of the Atlantic to make sure we get this deal right.

Then at the weekend, we also concluded our agreement with Canada, sorting out the last significant one of our non-EU aviation links after Brexit. Within Europe, both the European Commission and other member states have been clear that there will be an aviation agreement regardless of the broader agreement – so people can feel free to book their holidays next year without any concern to countries both inside and outside the European Union.

We’re also carrying on with detailed preparation for all eventualities after Brexit. We are making provision to ease the pressure on Dover and Calais if there are customs hold ups after we leave. We are making sure British motorists have easy access to international driving licences if they are needed.

But none of us want that to happen – and certainly not the thousands of small businesses who operate in the transport field. They want a deal, and a smooth transition to the world outside the EU.

So now the focus is on delivering that broader EU exit agreement. I campaigned for Brexit in 2016, and I have not changed my view that Britain is better outside the EU, but remaining good friends and neighbours with our current EU partners. My reason for campaigning to leave was that I believe further EU integration to be necessary and inevitable if the Eurozone is to survive in the long term, and I do not believe that it is right for the UK to give up more and more of our national sovereignty.

But I am absolutely clear that the country did not vote to sever ties with our neighbours or to leave on bad terms. I believe that virtually everyone would wish to continue good relations with those countries.

For centuries, Britain has been an outward-facing, global, trading nation. In the post-Brexit world that is particularly important for all of us. Our goal is to remain good friends and neighbours with our EU partners, but also to ensure that we build and deepen ties around the world.

Good aviation links are vital if we are to achieve that. It’s why we are moving ahead with the expansion of Heathrow. It’s why we have given regional airports greater freedom to develop expanded links. And it’s why we have made sorting out updated aviation agreements to cover life outside the EU a priority.

A lot of the focus right now is on the Prime Minister, and her work to secure backing for the deal. But the British public, and Conservative MPs, should not forget the disgraceful behaviour of the Labour Party over all of this.

When I campaigned round the country for Leave, I was as warmly welcomed in Labour heartlands as in traditional Conservative areas.

Jeremy Corbyn is letting those people down, trapped as he is in a bubble of fellow travellers within the champagne socialism of a certain clique in Islington. They will not forgive him if he votes to keep free movement of people and unlimited immigration. They will not forgive him if he leaves the UK obliged to sign up to new EU laws in future. They will not forgive him if he leaves our fisheries open to all comers.

The Labour leader was always a Leaver. He claims to be a man of principle. But he’s abandoning Brexit for Party political reasons. And it will also be the final sign for millions of traditional Labour voters that their party has once and for all abandoned them.

I believe that we now need to get on with leaving the EU in March, but also to make sure we do so on good terms.

The main challenge from opponents of the current deal is focused on the backstop in it. This is a temporary arrangement that could be used if there was a delay to the final trade deal after 2020. But it is not intended to be a permanent arrangement, and both we and the EU have been clear about that. It would also be unworkable for the EU for any length of time – it would mean every time they wanted to change their laws, they would do so in the knowledge that we had no obligation to do the same, and that our business might be more competitive as a result. That is not a position that they could accept for any length of time.

The agreement which we are being asked to consider as MPs ends the free movement of people, ends the role of the European Court in the UK, leaves the Common Agricultural Policy and the Common Fisheries Policy, and means that we are no longer required to adopt EU laws. We have agreed to maintain, for example, high environmental and social standards – but that’s something we would want to do anyway. If I had been offered this before the referendum in 2016, I would have seen it as a much better alternative to the status quo inside the EU, where we have little control over many of these things and where more and more integration is inevitable. So we need to get behind the Prime Minister.

Those scare-mongering about trading with the EU on WTO terms misunderstand how modern factories operate

There is no cliff edge when we leave the EU. There will be no economic cataclysm as Remain forecast. How many more absurd scare stories are they going to run? They have suggested Airbus will be selling planes without wings as they will not be able use the ones we supply; that planes will be […]

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There is no cliff edge when we leave the EU. There will be no economic cataclysm as Remain forecast. How many more absurd scare stories are they going to run? They have suggested Airbus will be selling planes without wings as they will not be able use the ones we supply; that planes will be grounded on the continent without permits to fly to the UK; and that all factories requiring imported components from the continent will suffer from some unspecified blockade which will stop the parts getting through.

All of these are based on some foolish misunderstandings of how trade functions and how modern factories operate. UK suppliers of Airbus wings are locked in by contract to carry on supplying, and every plane Airbus delivers after March 2019 will need those same UK wings, already certified as good to fly. It was particularly odd to read that they might switch to Chinese ones, as China still has not become a member of the EU – even though they say we have to be in order to sell such products. Continental airlines are busy selling tickets to fly to the UK after March in the knowledge that arrangements will be made to allow them to continue to use UK airspace and to land at UK airports. Their wish to do this ensures the continental countries will make reciprocal arrangements for UK airlines going to France or Germany.

Just-in-time supply chains currently use both EU and non-EU components without special problems if they come from outside the EU. I do not expect the UK authorities to create extra delays at our ports for such imports, but if they did the factory ordering the parts would just require the supplier to send the parts by an earlier truck or train to combat the longer transit time.

It is time the Treasury and the wider government swept aside its stupid gloom about Brexit, and set out just how it will use the new freedoms and the extra money it will have to spend as soon as we leave the EU. If we leave next March without signing the penal Withdrawal Agreement we could give a welcome boost to UK factories. Why not announce zero tariffs on all imported components for assembly, cutting the cost of non-EU items currently taxed? Why not take control of our fish, and more fish in UK ports and build a bigger fish processing industry at home? Why not promote more home-grown food, imposing some tariffs on the continental competition where they pay no such tax at the moment? We could at the same time cut tariffs on non-EU food to limit price rises.

Stopping large contributions to the EU budget will immediately improve our balance of payments account, as all that money has to be sent abroad as if we were paying for imports, though we get nothing for it. It would also release large sums to spend at home. Let’s have tax cuts to boost home ownership, help the car industry, and encourage work and enterprise. Let’s also boost the economy by hiring more teachers, doctors and nurses, and improving our transport systems with new investment.

The overall impact would be to boost national income and output by 1% next year and 1% the year after if we spent the £39 billion over the time period.

Could they blockade our exports? Under WTO rules, as they are and we will be, they are not allowed to charge tariffs on us which they do not impose on others, or impose new non-tariff barriers to trade. I don’t believe the stories that Calais will go slow to damage our exports, as our trade through Calais is crucial to that port’s jobs and success. Were they to do so, Rotterdam, Antwerp and other Dutch and Belgian ports would love to take the business off them.

It is time the Government moved on from seeing Brexit as some problem to be managed, to seeing it as full of opportunity for more jobs, more growth and more prosperity. That is why many of us voted Leave. The Treasury should back us and go for growth based on new freedoms we will win on departure.

John Redwood’s How to Take Back Control: Trading Globally Through the WTO is published today by Politeia

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Draft text aims for ‘ambitious, wide-ranging’ post-Brexit partnership

Political declaration document considered by EU27 ambassadors.

The U.K.’s future relationship with the EU post-Brexit will be an “ambitious, wide-ranging and balanced economic partnership,” according to a draft copy of the political declaration document seen by POLITICO that will accompany the Brexit divorce treaty.

European Council President Donald Tusk tweeted that the text had been “agreed at negotiators’ level and agreed in principle at political level, subject to the endorsement of the [EU] Leaders.”

The text has grown from a seven-page summary published last week alongside the 585-page draft Withdrawal Agreement, but negotiations on its content are expected to continue right up to the eve of an EU leaders summit on Sunday. After their meeting last night, the Theresa May said she would return Saturday for further talks with Commission President Jean-Claude Juncker.

Provisions in the political declaration include:

— A commitment on goods trade for the EU and U.K. to negotiate “a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition.” That is a nod to the “near-frictionless” trade promised by May, but appears to fall short of her proposal for a common rule book that would mean the U.K. effectively remaining within the EU Single Market for goods.

— On the Northern Ireland backstop, the document says “The Parties recall their determination to replace the backstop solution on Northern Ireland by a subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.” That is likely designed to help Theresa May sell the deal to her MPs, many of whom are deeply unhappy about the backstop.

— A plan to “build and improve on the single customs territory provided for in the Withdrawal Agreement.” That will be controversial with U.K. Brexiteers because it suggests that customs arrangements included in the Northern Ireland backstop will form the basis for the future relationship — providing severe restrictions on any future trade deals. But, the draft agreement states that the future customs union will “build and improve on the single customs territory provided for in the Withdrawal Agreement which obviates the need for checks on rules of origin.”

— A commitment to “explore the possibility of cooperation of United Kingdom authorities with Union agencies such as the European Medicines Agency (EMA), the European Chemicals Agency (ECHA), and the European Aviation Safety Agency (EASA).” The EU has been resistant to the idea of associate membership for the U.K. of EU agencies. This looks like a softening of that line.

— On customs, the document says that “facilitative arrangements and technologies will also be considered in developing any alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.” This leaves open the possibility of using new technology to prevent a hard border in Northern Ireland in future.

— On financial services, both parties pledge to begin proceedings to assess “equivalence” of each others rules immediately after Brexit day.

— On services, the EU and U.K. want to “conclude ambitious, comprehensive and balanced arrangements on trade in services and investment in services and non-services sectors, respecting each Party’s right to regulate.”

— On movement of people, there is a commitment to “establish mobility arrangements … based on non-discrimination between the Union’s Member States and full reciprocity.” These would allow visa-free travel or short-term visits and both sides “agree to consider conditions for entry and stay for purposes such as research, study, training and youth exchanges.”

— On fisheries, there is a no clear mention of an EU demand that access to EU markets for U.K. fishermen in a future trade deal should be contingent on access to U.K. waters. The text is pretty vague and says that “within the context of the overall economic partnership the Parties should establish a new fisheries agreement on, inter alia, access to waters and quota shares” adding that “the Parties will use their best endeavours to conclude and ratify their new fisheries agreement by 1 July 2020 in order for it to be in place in time to be used for determining fishing opportunities for the first year after the transition period.”

— On security, the document envisages a “broad, comprehensive and balanced security partnership” including data sharing of Passenger Name Record data and DNA, fingerprints and vehicle registration data for combatting crime.

— On data, the document envisages a deal by 2020: “In view of the importance of data flows and exchanges across the future relationship, the Parties are committed to ensuring a high level of personal data protection to facilitate such flows between them. The Union’s data protection rules provide for a framework allowing the European Commission to recognise a third country’s data protection standards as providing an adequate level of protection, thereby facilitating transfers of personal data to that third country.”

— On the European Investment Bank the two sides say they will “explore options for a future relationship with the European Investment Bank (EIB) Group.”

— The document does not mention Gibraltar.

Why Dover can handle a ‘no-deal’ Brexit

It is often claimed that a no-deal Brexit would cause chaos at UK ports, with long delays at critical bottlenecks such as Dover and motorways turned into vast lorry parks. Indeed, we are told that any weakening of our ties with the EU would inevitably disrupt supplies of time-sensitive goods, such as fresh foods and medicines, […]

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It is often claimed that a no-deal Brexit would cause chaos at UK ports, with long delays at critical bottlenecks such as Dover and motorways turned into vast lorry parks. Indeed, we are told that any weakening of our ties with the EU would inevitably disrupt supplies of time-sensitive goods, such as fresh foods and medicines, and cripple businesses that rely on complicated cross-border supply chains. Fortunately, all these warnings have more than a dash of ‘Project Fear’.

Let’s start, though, with the element of truth. There are some potentially valid concerns about the non-tariff barriers (NTBs) that would be erected if the UK exits in March 2019 without a deal. These include logistical barriers, such as delays caused by physical customs and regulatory checks, and additional administrative hurdles, including the need to comply with ‘rules of origin’ and new licensing requirements for vehicles and drivers.

Most attention has focused on Dover, which handles 17% of all UK trade in goods worldwide. According to evidence compiled by the House of Commons library, Dover processes up to 10,000 incoming and outgoing freight vehicles a day. Currently, 99% of these originate in the EU and are processed in around two minutes, but checks on non-EU trucks typically take 20 minutes. The UK Freight Transport Association has estimated that an additional two-minute delay, on average, could cause a 17-mile queue on both sides of the Channel.     

These risks obviously need to be taken seriously. Indeed, the Government is already beefing up contingency plans to keep the M20 flowing in the event of any future problems at Dover, and recommending that suppliers add to precautionary stocks of critical goods, including medicines. Car makers have also suggested that they might reschedule planned maintenance shutdowns to coincide with the period of maximum risk.

Nonetheless, fears that ‘no deal’ would result in substantial disruption at ports (or Eurotunnel) are exaggerated. The key point is that they assume a significant proportion of lorries crossing the Channel would be subject straightaway to the same checks as those from non-EU countries. This is very unlikely, for three reasons.

The first is legal. It has been argued (notably by Economists for Free Trade) that new UK-EU NTBs would be unnecessary, and even illegal under WTO rules, given that exports from both sides will still be made to the same standards immediately after the UK’s departure from the EU. Others have countered that some additional checks would still be required, or else the parties would be in breach of the WTO’s Most Favoured Nation principle. But there is at least broad agreement that checks could be limited. There is certainly no legal requirement to inspect every vehicle, or to carry out every check at the border itself. It is also not as if there are currently no checks at all.

The second is economic. Even French officials have stressed that it would be in their country’s own economic interests to minimise any additional delays. In particular, they have dismissed fears of a Calais ‘go-slow and suggested that as few as 1% of UK lorries would be subject to a physical check (my own crude calculation is that an additional two-minute delay, on average, would require at least 10% of UK lorries to be subject to a 20-minute check).

The third reason is practical, and may well be decisive. Put simply, neither the UK nor the EU has the physical infrastructure, or enough officials, to check every vehicle anyway, or even a significant proportion. In this respect at least, the lack of preparedness could actually be a blessing in disguise.

A more pragmatic approach could also help solve other problems. For example, in the absence of any alternative arrangements, UK haulage companies would no longer be able to operate in EU countries under existing EU rules. This is much the same as the problem facing the aviation industry: if no mitigating action is taken, ‘lorries cannot be driven’, in the same way that ‘planes won’t fly’.

However, the EU has already made a reciprocal offer to the UK in respect of air traffic rights and the validity of aviation safety certificates in the event of ‘no deal’. The EU has continued to take a tough line on road transport, but an important precedent has been set. A similar solution could presumably be found if existing rules on road transport would significantly disrupt trade from which both parties derive large economic benefits.

What’s more, any initial disruption should be short-lived. For example, border delays could be reduced in future by the sort of ‘maximum facilitation’ (MaxFac) proposals that many have already suggested as a means of reducing the costs of customs clearance. The recent parliamentary testimony from customs experts Hans Maessen and Lars Karlsson should be required reading here (and for those who still believe membership of a customs union is the only way to avoid a hard border in Ireland).

Crucially, too, any problems created by a ‘no deal’ in March 2019 do not have to be permanent. Leaving on WTO terms could simply be an alternative stepping stone to a comprehensive free trade agreement that would keep any additional frictions to a minimum, rather than the standstill ‘transition period’ and Irish backstop proposed in the current Withdrawal Agreement.

Of course, I’m not suggesting we should dismiss the concerns of UK businesses entirely. Leaving the EU in March without a deal would clearly create a lot of challenges. But there are also many good reasons why even the initial disruption at ports should be much less than feared.

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