Statesmanship, not brinkmanship, is now needed to deliver the right Brexit deal for Northern Ireland

This past week has sadly brought further damaging rhetoric in the Brexit process and some who ought to be statesmanlike have been anything but. This is surely a moment for statesmanship and for finding a way through the current impasse. We must calm things down and focus on developing a common sense solution to Brexit […]

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This past week has sadly brought further damaging rhetoric in the Brexit process and some who ought to be statesmanlike have been anything but.

This is surely a moment for statesmanship and for finding a way through the current impasse. We must calm things down and focus on developing a common sense solution to Brexit and the Irish border question in particular. In this context I welcome the visits of both the Prime Minister and the Taoiseach to Belfast and the meeting between both leaders in Dublin: this is the kind of engagement and leadership that is needed to help find a sensible way forward.

I recognise that the UK and the Irish Republic do not agree on Brexit itself and that many in Ireland feel hurt by the decision of the UK to leave the EU. Nevertheless, it is important we all respect democratic decisions of this nature, even when we don’t agree with them. Undoubtedly, the last two years have seen damage done to the three sets of relationships that formed the core of the Good Friday/Belfast Agreement.

The absence of the political institutions, including the Assembly and the North-South Ministerial Council, has been to the detriment of all of us. Just think how differently we might have handled this very difficult situation if such institutions had been in place to provide a forum within which Belfast and Dublin could engage and take a more considered view on all of this. Instead, the politics of cooperation has been replaced by the old ways of megaphone diplomacy.

However, we are where we are and leaders on both sides of the border have hitherto shown a remarkable capacity to overcome enormous challenges in the peace process to find our way to the common ground. In the remaining weeks leading up to 29th March, we must do so again. Whilst it is London and Brussels who take the lead in negotiations, I believe that Dublin and Belfast can play a constructive role in helping to find the solutions.

We can begin by recognising that we already occupy significant common ground.

We all agree that the need to protect the peace process and the political and institutional arrangements of the Good Friday, St Andrews and Stormont House Agreements is vital.

Secondly, none of us want a hard border on the island of Ireland or the creation of a new border in the Irish Sea. Both the Republic of Ireland and Northern Ireland do a substantial amount of trade with Great Britain as well as with each other. The Common Travel Area ensures the free movement of people across the islands and is accepted by the EU. Now we need to find a sensible solution to ensure a similar approach on the smooth movement of goods. We in the DUP are of the view that a pragmatic approach can deliver an outcome on customs and trade that does not fundamentally undermine the EU single market or the UK single market.

Thirdly, both countries want to avoid a ‘no-deal’ outcome if possible as we recognise this could have significant implications for the short- to medium-term economic stability and prosperity of both parts of the island. Building stability and prosperity goes hand in hand with building peace.

For us, the primary problem with the draft Withdrawal Agreement is the backstop. It is not only the DUP that has concerns about the backstop and our opposition to it has been supported by many from all parties across the House of Commons.

On two occasions now, the House of Commons has voted decisively to reject the backstop in its current form and to call for legally-binding changes to these potentially harmful proposals. Our position on the backstop is also supported by other unionists like Nobel Peace laureate Lord Trimble, who has said that the proposals have the potential to “turn the Belfast Agreement on its head and do serious damage to it.”

Lord Trimble is in the process of taking legal action to challenge the legality of the backstop and his case is supported by leading experts on the Good Friday Agreement such as Professor Lord Bew. For such key architects of the Good Friday Agreement to raise serious concerns about the damaging nature of the proposed backstop must surely encourage the Taoiseach and others to pause and consider other options which are capable of commanding a wider cross-border and cross-community consensus.

If the current impasse between the UK and EU over the backstop results in no-deal then it will further damage relationships between Northern Ireland and the Republic and undermine the prospects for restoring the political institutions. The absence of these institutions over the past two years has seen a re-polarisation of attitudes on both sides in Northern Ireland.

In my opinion, securing a deal on Brexit that is broadly acceptable can only improve the prospects for restoring the institutions. It may suit Sinn Fein to have a chaotic situation, but it surely can’t be in the interests of anyone else. Sinn Fein has tried to exploit the uncertainty over Brexit to raise the border poll issue, hoping to force a referendum in the near term. This is, of course, a party that was fiercely opposed to Ireland’s membership of the EU and sought to vote down each successive European Treaty. Clearly, Sinn Fein is self-serving, and its claim to act in the wider interests of the ‘Irish people, north and south’, is bogus.

The consequences of a no-deal outcome will undoubtedly impact on the economies on both sides of the border, with their heavy dependence on the agri-food sector. InterTrade Ireland commissioned the Economic and Social Research Institute (ESRI), an Irish think-tank, to conduct an analysis of the impact of Brexit on the Irish border. ESRI looked at several different scenarios, including one where trade between Ireland and the UK would be based on WTO rules. The resulting imposition of tariffs and non-tariff barriers in this scenario could result in Irish trade to Great Britain falling by 12%, British trade to Ireland falling by 6%, Irish trade to Northern Ireland falling by 14%, and Northern Irish trade to Ireland falling by 19% – resulting in a total reduction in cross-border trade of 16%.

Agri-food in particular is a sector that has expressed concerns about no-deal. A study of the impact of a no-deal Brexit on the EU’s agri-food industry has claimed that beef and cheese exports from Ireland to the UK could collapse by up to 90% with the loss of over 3,500 jobs. No amount of preparation by any government can nullify the significant economic implications outlined.

Additionally, a further fall in the value of sterling in a no-deal scenario would worsen the outcome for Irish exports to Great Britain and Northern Ireland. In this scenario, Irish trade to Great Britain would fall by 20%, British trade to Ireland would remain broadly similar (at +0.3 %), Irish trade to Northern Ireland would fall 21%, and Northern Irish trade to Ireland would fall 11% – so there would be a total fall in cross-border trade of 17%.

Despite these stark statistics, there are some who seem determined to impose the backstop. Yet the Withdrawal Agreement and backstop in their current form have been roundly rejected in the UK Parliament because they could lock us indefinitely into an arrangement that undermines the economic integrity of the UK. The backstop is designed to prevent a hard border but could ultimately result in no-deal and actually compel the EU to impose a hard border in Ireland.

Having been an MP for over 20 years and in frontline politics since the early 1980s, too many times have I seen politicians become wedded to an idea and intent on implementing it, even when they are aware of the dire consequences. Now is not a time for brinkmanship but for leadership.

I am convinced that there are better solutions than this. Whilst I am not going to be prescriptive in this article about what they may be, I am aware of several ideas, including the ‘Malthouse Compromise’, that are surely worthy of serious consideration. If the political will is there on both sides, I firmly believe we can find a solution.

The people of the United Kingdom voted by a majority to Leave the European Union. Despite this, the leadership of the EU and some in the UK have sought to frustrate the will of the people and to make it as difficult as possible for our country to Leave. The indefinite nature of the backstop would harm the constitutional and economic integrity of the UK.

The EU leaders have asked Parliament to state clearly what we want. That answer is now clear and the EU must address British concerns about the backstop if a no-deal outcome is to be avoided.

If the EU truly want to avoid harm to the peace process and to protect the political arrangements established under the Belfast/Good Friday Agreement, then they need to take account of unionist concerns as well as those of nationalists, otherwise, as Lord Trimble has said, they violate the core principles of the Agreement.

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Deal or no deal, Martin Selmayr told the Brexit Select Committee our divorce bill is £39 billion

The Brexit Select Committee had its first meeting with Martin Selmayr, Secretary General of the European Commission today (4th February). Pleasantries were effusive, but we found just one word of agreement between ourselves. That came in the description of the UK’s departure from the EU without a formal deal – described as ‘suboptimal’. We received […]

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The Brexit Select Committee had its first meeting with Martin Selmayr, Secretary General of the European Commission today (4th February). Pleasantries were effusive, but we found just one word of agreement between ourselves. That came in the description of the UK’s departure from the EU without a formal deal – described as ‘suboptimal’.

We received some castigation for not meekly agreeing, as a country, to the draft Withdrawal Agreement brought back by the Prime Minister. This ignores the significant horse-trading, treaty change and new protocols post-Heads of Government agreement that took place in the Republic of Ireland following the refusal to ratify at the first Treaty of Lisbon referendum in 2008; or in France following its refusal to ratify the European Constitution at a referendum in 2005; or the Danish public’s refusal to approve the Maastricht Treaty in 1992. Going back for change is not new, but then some members are ‘good’ and others are just ‘bad’.

The messages we received from Martin Selmayr were clear. There has been no notification, to date, from the UK Government requesting a re-opening of the Withdrawal Agreement and, in any event, that matter is closed. The EU negotiating team under Monsieur Barnier have finished their work, the EU27 have approved it and that is that.

When it was pointed out that there is the small matter of a 230 majority in the House of Commons against the current deal, the greatest defeat for a UK government in history, this was brushed aside as a mere irritant. When pressed that there is the potential for a deal under terms of the Malthouse Compromise that follows from the Brady Amendment passed on 29th January, but that it must include the ditching of the backstop, the suggestion fell on deaf ears. There can be no change to the Withdrawal Agreement text, but letters of assurance on the backstop: codicils, even a letter signed by all of the EU27 might be provided.

The backstop is advanced as an ‘insurance’, we are told, and it will be unlikely ever to be used. If this not-ever-to-be-used text, unwanted by the Commission and EU27 to have anything beyond a short life, unwanted by the UK Parliament (following Brady), and so it must now be construed unwanted by the Government, and most certainly unwanted by the public – why won’t this dead parrot admit that life has indeed left it?

And then came the kicker. In the event of no deal, which must now have increased in likelihood by several points, the EU will still demand the £39 billion divorce fee, else future relations would be forever soured.

Let’s get this right:

  • No deal – £39 billion
  • Appalling deal with no guarantee of an acceptable future relationship – £39 billion
  • A deal we might swallow (minus the backstop) – £39 billion
  • A good deal and a great future relationship – £39 billion

No wonder the sequencing of the negotiations were insisted upon at the outset. What was the question? The answer is £39 billion.

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As an Irishman, I’m appalled by Leo Varadkar’s antagonism over Brexit

“If things go very wrong it will look like it looked 20 years ago. It would involve customs posts, it would involve people in uniform and it may involve the need, for example, for cameras, physical infrastructure, possibly a police presence, or an army presence to back it up.” So said Irish Taoiseach Leo Varadkar […]

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“If things go very wrong it will look like it looked 20 years ago. It would involve customs posts, it would involve people in uniform and it may involve the need, for example, for cameras, physical infrastructure, possibly a police presence, or an army presence to back it up.”

So said Irish Taoiseach Leo Varadkar on Bloomberg during the recent World Economic Forum in Davos.

Over the past few days, the Irish Government has been scrambling to play down those comments. In fact, our Minister for Foreign Affairs and Deputy Prime Minister, Simon Coveney, attempted to frame these ill-thought words as anecdotal in order to remind people what things were like before the peace process was finalised. But these comments unnecessarily antagonise our neighbours and jeopardise co-operation going forward; there is no explaining them away.

In a time of polarised politics and social upheaval, the leader of our country shouldn’t be making comments in jest about The Troubles in the North which resulted in the death of over 3,500 people. It is not appropriate, nor is it wise, to be smiling and joking on camera while thousands of people on the island of Ireland face an uncertain future.

The Taoiseach should recall the help we get from the UK’s armed forces. When Russian aircraft regularly enter controlled Irish airspace without their transponders on. it is the Royal Air Force that scramble jets to monitor the risk. So, as an avid member of the European Union that claims to be “United in Diversity”, why does Varadkar see it as acceptable to make a call to arms? Is it ironic or moronic?

Furthermore, the draft Withdrawal Agreement currently on the table proposes internal borders that directly contradict and undermine the integrity of the Good Friday Agreement. There is work to be done, and we should work together. The assumption of a “stronger together” EU that works for us, not against us, may not be true in this instance. Let us segue to the story of Sir James Dyson to shed light on why we need to co-operate with our neighbours going forward.

Over the last week or so, the media in Ireland and the UK has been awash with criticism of James Dyson for moving his company’s headquarters to Singapore. In fact, it was met with raucous indignation by most media outlets as it was seen to be in direct contradiction with Dyson’s support of Brexit. This is either a simple assumption or a convenient opinion. Dyson has simply identified the shift in global trade and economic power away from the West – something the UK will soon be free to exploit on their own.

The reality is that the 21st century will see Asia increase in its ascendancy. During the first decade of this century, a rapid shift in the world’s economic centre of gravity showed the wilting power of the West and Europe. Airports such as Addis Ababa International in Ethiopia or Dubai International Airport serve as some of the busiest in the world due to growth in the South and East. It is time Europe adapted to this shift in power.

At present it seems highly unlikely that Ireland will be adopting our own portmanteau and rushing to have a referendum on Irexit, but maybe we can actualise some of the possible benefits the UK will see. With the UK soon to be creating their own trade agreements outside of the EU’s purview, Mr. Varadkar should seek to cooperate with our friends across the Irish Sea rather than antagonise them.

Perhaps the UK could become Ireland’s ‘Gate to the South’ rather than a conflict zone? Our Taoiseach’s salivating lips are anticipating a full plate of opportunity when Big Ben knells 11pm on 29th March; however, perhaps he ought to remember Pavlov’s dogs and be wary of an empty bowl. After all, friends make the worst enemies.

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Time for more courage and a greater sense of the national interest from our political leaders

One can’t help but admire how well Theresa May has defended her indefensible deal and the perseverance, firmness and skill with which she’s done it. If only she’d shown the same skills in negotiation with a tricky eurocrat whose brief was to ensure that Britain suffered from leaving… Instead she’s negotiated on her knees, surrendered […]

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One can’t help but admire how well Theresa May has defended her indefensible deal and the perseverance, firmness and skill with which she’s done it. If only she’d shown the same skills in negotiation with a tricky eurocrat whose brief was to ensure that Britain suffered from leaving…

Instead she’s negotiated on her knees, surrendered her cards and agreed massive payments (without securing anything) and become trapped in a Northern Ireland cage to end up with a deal unacceptable to both Brexiteers and Remainers. Now the Government is committed to the last resort of madness: repeating mistakes in the hope of producing a different answer. It may work, but it probably won’t. In which case it’s “no deal”, which the Cabinet will be scared to face.

That puts Britain in a desperate end game which can only be won by putting the ball back into the EU’s court, testing their unity and ability to negotiate sensibly, and facing up to damaging both Britain and their trade with us. So far, they’ve had the easy job of saying “no”, relying on their Remainer allies in Britain to undermine our government and its case.

Crunch time removes all the evasions and excuses for rejecting the will of the people, makes the pirouetting of Grieve, Benn and Cable irrelevant and forces government to firmness. Who else can now act?

The favourite excuse of those whose soft hearts control soft heads is a second referendum (the so-called “People’s Vote”). Not only would this take a year – and another £185 million – to organise, but it can’t happen unless there’s something to vote on. Which there isn’t until Parliament agrees a deal.

And the new centre party which Chuka Umunna and Mathew Parris prefer would have a gestation period longer than that of a mastodon. It really is wishful non-thinking. So is an agreement negotiated with the opposition, because Labour has no agreed alternative? Even if it had, it’s bound to conceal its disunity by futile demands for an election which ain’t going to happen.

The rising hope that Parliament will seize power from the Executive and impose its own decision, is another impossibility. Parliament can’t agree. Most MPs are Remainers in a nation which voted the other way. It can’t negotiate. Its aim is to give instructions to the Executive and it can’t even agree on what those are.

So, we come back where we started, to a Prime Minister and her divided Cabinet. All the ultra-Brexiteers have been dropped, but the Chancellor and his mates are ready to cancel withdrawal if their weak deal for Brexit without Brexit fails. Another section will resign if there’s a sellout.

So far, they’ve failed to get the EU to agree to any of the usual fudges or accept the essentials from control of immigration to the ability to negotiate new trade deals. Emboldened by the British Remainers with whom they collude, they’ll be as unhelpful to Theresa as they were to David Cameron.

Which leaves only two ways forward: Leave without a deal, relying on the fact that they desperately need our money and can hardly deliberately damage us without arousing the anger of the British public and a world which will be eager to displace their exports on our market; or go back with new proposals for a better deal, which they can hardly refuse to discuss seriously.

Both demand more courage and a greater sense of the national interest than anyone has shown so far. They also require an understanding that the manufactured fears about “no deal” are enormously exaggerated. But either is the only way Britain’s elite can avoid humiliation and alienation by serving the will of the British people.

Photocredit: © UK Parliament/Jessica Taylor

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A ‘Managed No Deal’ WTO option using Article 24 of GATT can avoid raising tariffs or quotas

In the aftermath of Parliament’s rejection of the draft Withdrawal Agreement, there is a way forward for the Government which allows a smooth transition into a No Deal scenario after 29th March, if found necessary, and then allows the UK to negotiate its desired comprehensive Free Trade Agreement with the EU without having to impose […]

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In the aftermath of Parliament’s rejection of the draft Withdrawal Agreement, there is a way forward for the Government which allows a smooth transition into a No Deal scenario after 29th March, if found necessary, and then allows the UK to negotiate its desired comprehensive Free Trade Agreement with the EU without having to impose tariffs or quotas in the interim. There is a mechanism to ‘manage’ a No Deal scenario; one that works within existing WTO rules, and that is not widely known about.

This is essentially an alternate transition or interim period, but within WTO rules without having to levy tariffs or (arguably) pay membership fees to the EU, but requiring some customs forms levied on the 7% of UK businesses (400,000 out of 5.7 million UK private registered businesses) that actually trade with the EU. This is the deal with the EU used by China, the USA, India, Australia and New Zealand for example.

These recommendations are based on my nearly ten years of experience as a member of the European Parliament’s International Trade Committee, working on EU trade deals such as those with Canada, New Zealand, India, South Korea, Japan and Columbia/Peru, and drawing on high level discussions I have had with senior trade representatives for the EU and the World Trade Organisation (WTO).

In the event of No Deal, there is a strong case to maintain preferential tariff and quota rates at zero between the UK and the EU for a limited period – thought to be around two years. There are a number of arguments for exemptions to what are termed ‘Most Favoured Nation’ (MFN) rules, which require the same treatment in terms of tariff rates and treatment between WTO members to avoid discrimination. They are:

1) It is to the advantage of fellow WTO members to minimise disruption between our two large markets, which would reduce knock-on impacts to their imports/exports to the UK or EU markets. WTO members have to show financial harm to justify objections to practices (or tariff schedules). Civitas calculate that £13 billion of tariffs would have to be levied on EU goods entering the UK and £5 billion on UK goods entering the EU Single Market if standard tariffs are levied under No Deal. This is one justification for keeping preferential rates of tariffs for a period whilst a full trade deal is finalised.

2) There are exemptions under National Security grounds such as over the issue of Northern Ireland, which the IEA have argued as a case for an exemption, but this is less appealing given its association with US and Russian cases for exemptions, such as over US tariffs on Chinese steel.

3) Exemptions to ‘Most Favoured Nation’ (MFN) rules under Article 24 of the General Agreement on Tariffs and Trade (GATT) 1947. This appears to be the most substantive argument. WTO rules state that preferential benefits, such as tariffs and quotas for goods which are more favourable than MFN treatment, may only be extended to another country if it is part of a customs union or a free trade area. The ultimate legal authority to grant such preferences is Article 24 of GATT , incorporated into the WTO regime when that body commenced operations in 1995.

Article 24 is helpfully the ultimate basis in international law for the existence of the EU itself as a preferential trading bloc, which grants preferential treatment to its members within the Customs Union.

If the UK accepts Donald Tusk’s offer of a free trade agreement along the lines of CETA+++ or what I propose as ‘SuperCanada’, then the UK and EU will be in the process of moving towards creating a free trade area – Tusk has offered a tariff and quota free deal plus services (whilst leaving the EU Customs Union) – so qualifies under this criterion.

There are two under-appreciated aspects of Article 24 which have direct relevance to our situation, and which provide reassurance.

Firstly, Article 24, para 3 states:

The provisions of this Agreement [i.e. the requirement to extend MFN treatment equally to all] shall not be construed to prevent:

(a) Advantages accorded by any contracting party to adjacent countries in order to facilitate frontier traffic

  • This has direct relevance to the position of Northern Ireland, and our adjacent country of Ireland. Some commentators have claimed that a sensitive and appropriate management of trade which respects and upholds both the letter and the spirit of, for example, the Good Friday Agreement would be in some form an unauthorised infringement of MFN treatment. That claim is clearly untrue.
  • There is also no obligation under WTO rules to erect a so-called “hard border” on 29th March. Government may continue discussions with our counterparts in Dublin to arrive at adequate and effective technological measures for the management of trade with minimal friction. You will have noticed the encouraging signs that the Irish Government already appreciates this fact. (See, for example, “Ireland has no plans for hard border after Brexit, says Varadkar”, from The Guardian of 21st December 2018)
  • We can expect that there will be considerable international sympathy for measures which support the situation in Northern Ireland, and hence a reluctance on the part of third countries to lodge objections. Although given the sensitivities this should not be stressed too heavily, such an exemption falls into ‘National Security’ related actions.

Secondly, Article 24 not only authorises member states to operate lower/zero tariff free trade agreements, it also permits them to offer lower/zero tariffs pre-emptively during the course of negotiations. The relevant provision, Article 24 para 5, is worth quoting at length, with emphasis added to the critical wording:

Accordingly, the provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of… a free-trade area or the adoption of an interim agreement necessary for the formation of… a free-trade area; Provided that:…

(b) with respect to a free-trade area, or an interim agreement leading to the formation of a free-trade area, the duties and other regulations of commerce maintained in each of the constituent territories and applicable at the formation of such free–trade area or the adoption of such interim agreement to the trade of contracting parties not included in such area or not parties to such agreement shall not be higher or more restrictive than the corresponding duties and other regulations of commerce existing in the same constituent territories prior to the formation of the free-trade area, or interim agreement as the case may be; and

(c) any interim agreement referred to in subparagraph… (b) shall include a plan and schedule for the formation of such… a free-trade area within a reasonable length of time.

(A WTO declaration, the Understanding on the Interpretation of Article 24, 1994, clarifies that the ‘reasonable period of time’ in para 5(c) will generally taken to be no more than 10 years.) I estimate based on EU trade deals to date, that a UK-EU comprehensive Free Trade Agreement could take around two years, especially given the unique reality that the UK is starting from a convergent position with the EU, with zero tariffs and quotas and with our laws and standards currently harmonised.

  • If, before 29 March, the UK has reached an ‘interim agreement’ with the EU to pursue negotiations towards a comprehensive free trade deal, both sides would be permitted under WTO rules to continue with the present zero tariff/zero quota trading arrangements. There would be no disruption to the man or woman on the high street. No Deal would mean No Change, as the cost of goods would not go up.
  • In the present situation the ‘interim agreement’ would not have to be an extensive document running to hundreds of pages. The schedule of items covered by the negotiations would be all goods, as already envisaged in our discussions with the EU. The plan which the document sets out would have to amount to little more than a timetable for regular meetings and an ultimate deadline, some years hence, by which point negotiations will have to be concluded.
  • An ‘interim agreement’, then, need be little more than an agreement to continue talks – while also continuing zero-tariff and zero-quota trade on both sides – plus a deadline no later than 29th March 2029. I accept that the EU has so far declined to agree any deadlines (other than 29th March) but since the absence of a final cut-off point has been a major contributing reason for Parliament’s rejection of the Draft Withdrawal Agreement, perhaps the EU will now reassess that stance.
  • Whilst legal challenges at WTO level might be expected from an unhelpful member, the reality is that any such challenge is unlikely to get to the WTO ‘court’ – its appellate body – for at least two years and possibly longer, and only if that body finds the UK non-compliant would any compensating actions be authorised such as tariffs. This is within WTO rules, and if any challenges arise a fully compliant Free Trade Agreement should already be in place by the time any appellate body were to meet. The EU is now under extreme pressure from EU27 industry and commerce who enjoy a £96 billion surplus with the UK.
  • You will recall that the draft Political Declaration indicates the EU want to reach a comprehensive Free Trade Agreement with the UK on the basis of zero tariffs and quotas (see paras 17, page 5, and para 23, page 6) and extending to services (para 29, page 7). Those provisions are fully in line with numerous public statements made since the 2016 referendum by Donald Tusk, President of the European Council, and Michel Barnier, European Chief Negotiator – offering a CETA+++, or what I term a ‘SuperCanada’ trade deal, on 7th March 2018, 30th August and 6th October 2018.

It is significant that Heiko Maas, Foreign Minister of Germany, has already indicated a willingness to continue talks (see “Germany says EU ready to talk if UK rejects Brexit deal” on Reuters, 15th January).

Conclusion

This approach would continue the pre-29th March status quo in trading arrangements and patterns without interruption, justified by an explicit provision of the WTO regime. The possible grounds on which any third country could lodge an objection to this are extremely slight (unlike for schedule changes).

An ‘interim agreement’ would therefore be an important component of a ‘Managed No Deal’ outcome from 29th March. It permits trade between us and the EU to continue without tariffs or quotas under No Deal while creating a space for negotiations to be reset and recommenced on the basis of reaching a SuperCanada or CETA+++ trade treaty.

I urge the Government to now adopt this course of action, as it will mitigate the main impacts of a ‘No Deal’ Brexit and eliminate the task of having to assess and charge tariff rates on 19,753 MFN tariffs under the EU Customs Union, thereby substantially reducing friction at borders.

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A Withdrawal Deal is achievable in principle and executable in practice before Brexit

In light of last night’s developments, as Parliament starts to consider what would make for an executable framework for much of the UK’s economic future, one thing has become clear: the Withdrawal Agreement must be changed – renegotiated. For that to happen, the enduring interests of each party, the UK and the EU, must be […]

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In light of last night’s developments, as Parliament starts to consider what would make for an executable framework for much of the UK’s economic future, one thing has become clear: the Withdrawal Agreement must be changed – renegotiated.

For that to happen, the enduring interests of each party, the UK and the EU, must be recalled so that a politically viable outcome can be reached. For its part, the UK seeks a deal on services which account for 80 per cent of its economy. By contrast the EU seeks a deal on goods, to protect its valuable surplus. Both parties want the benefits of as frictionless trade as possible. Beyond trade, wider collaboration is sought in certain areas, such as security.

But for the UK, the current draft Withdrawal Agreement falls short of what is needed on two key counts: sovereignty and trade.

The Agreement gives away sovereignty, leaving the UK with no say over any of its laws during a transitional period, and then no say at all over chunks of laws thereafter. Restoring constitutional sovereignty was a referendum decision and must be respected if any agreement is to take off.

For trade, the draft Withdrawal Agreement cannot work if EU interests for a quasi-customs union are prioritised along with elements of the Single Market for goods, but only warm words are offered for the UK’s interests in services, including financial services.

In the Political Declaration, which was a simultaneous but non-binding declaration of intent, the parties stated their wishes for a wide-ranging trade deal, involving mutual recognition on services and enhanced equivalence for the financial sector. Yet the current proposal to put services ‘on hold’ to be negotiated in a transitional period, would bring uncertainty and dangers for all. During that time the UK regulators would be without the powers often needed to change rules dynamically to protect taxpayers. Though such a transition period may be workable for goods, it cannot be for services. So though we see good intentions for services trade, the execution falls short.

In fact, a viable overall arrangement in skeletal form can be agreed even now without the need for the alternative of a managed no-deal. Perhaps inevitably, this reflects the EU’s typically last minute way.

How could this be achieved? The concept of Enhanced Equivalence is one which I set out in detailed legislative form in July 2017. This would provide financial businesses with what they need, enabling them to operate across Europe under one set of regulations and subject to one supervisor, replicating the status quo. It would avoid the costs of setting up duplicative regimes which are charged back to consumers, to the detriment of businesses and savings within the EU27.

Under Enhanced Equivalence, when the parties’ laws achieve equivalent outcomes, businesses can provide services in the other market under their home jurisdiction’s regulations and supervision. We already have executable text, providing for exactly that and achieving procedural certainty for the granting and withdrawal of equivalence in each financial sector. Temporary recognitions could tide the parties over for four months to finalise any details. A similar approach would work for mutual recognition in other services. The reality is that each party would be starting with not just equivalent laws, but they often move even now in a similar direction.

In practice, the EU’s artificial mantra that no trade deal can be negotiated until the UK is a third country can be circumvented for services by a mutual recognition agreement rather than a free trade agreement.

There are good reasons for the EU to agree. The eurozone needs the UK to continue to treat its member state government bonds as sovereign for regulatory purposes, ignoring a proper application of international regulatory standards and avoiding crippling costs. To assist, the UK needs full, dynamic control over all other protective regulatory levers. Enhanced Equivalence achieves just that. Also, the UK cannot be expected to agree to every other aspect of the deal so favourable to the EU unless the EU reciprocates.

The practicalities are close to the intended agreed position anyway. In financial services, the EU is already making unilateral declarations of equivalence across key areas such as cleared derivatives, allowing a continuation of current arrangements even on a hard Brexit. More declarations are likely, preserving the competitiveness of continental EU financial institutions and the ability of EU citizens to obtain access to cheap finance.

As the negotiations inch their way towards a system that can work, the UK’s whole economy must be brought to the fore.  That means services must be covered and constitutional essentials recognised. Otherwise, nobody ends up with what they want.

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Juncker and Tusk’s letter to Theresa May changes nothing: we must vote down the draft Withdrawal Agreement

The letter sent from Jean-Claude Juncker and Donald Tusk to Theresa May in the last 24 hours shows more clearly than anything else possibly could why the draft Withdrawal Agreement is fundamentally flawed: not only the lack of substance in the letter, which adds nothing new to the sum of human knowledge, but also the […]

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The letter sent from Jean-Claude Juncker and Donald Tusk to Theresa May in the last 24 hours shows more clearly than anything else possibly could why the draft Withdrawal Agreement is fundamentally flawed: not only the lack of substance in the letter, which adds nothing new to the sum of human knowledge, but also the lack of any form of collegiate kindness or helpfulness to the Prime Minister.

When the Prime Minister addressed the 1922 Committee on 12th December, she assured colleagues that she would secure legally-binding wording to address concerns over the Northern Ireland backstop. Now we learn there will be no end date to the backstop or unilateral exit mechanism for the UK. So, yet again, the EU have let the Prime Minister down.

The lesson is clear: we need to vote down the Withdrawal Agreement by as large a majority as possible. Only then can we move on and either negotiate a new agreement (as David Davis argued at the weekend) or Leave without a deal on World Trade Organisation terms with a view to later negotiating a new relationship.

The Government and the Conservative Party must remain committed to delivering the result of the referendum, as repeated in our 2017 manifesto, which pledged to leave the Customs Union and the Single Market, accompanied by the declaration that No Deal was better than a Bad Deal. Otherwise, the credibility of our democracy will be thrown into chaos.

The draft Withdrawal Agreement does not respect the result of the referendum. The Government should be seeking to unlock the negotiations by returning to the Canada-style option offered by President Tusk, using the tried and trusted techniques and procedures so that rules of origin and customs checks are conducted away from the Northern Ireland border, to make unnecessary the hard border that everyone agrees must be avoided.

The backstop means we will be trapped under the thumb of the EU with no date to escape – and unable to strike trade deals. It means we would be trapped indefinitely as a satellite of the EU, obeying its laws without a say, unless the EU and its Member States gave permission for us to leave. The UK will be paying £39 billion – equivalent to £1,443 per household, or £60 million per constituency – and getting nothing in return. We will not take back control of our money, laws and trade. Remaining in the Customs Union is a breach of the 2017 Conservative Manifesto on which I and all my colleagues stood.

The backstop drives a regulatory barrier down the Irish Sea, severely damaging the Union and moving Great Britain and Northern Ireland further apart. This deal keeps the supremacy of the European Court over our own law and sells out the UK fishing industry, excluding them from any trade deal, and envisaging a deal where the Prime Minister trades away our fish in return for market access.

We remain effectively in the EU for an extendable ‘transition’ period, paying and accepting new laws over which we will have had no say. Unrestricted immigration of EU nationals will still be continuing for years after we leave. This commitment comes with no guarantee of a future trade agreement. Worryingly, this deal will deny the UK an independent trade policy while potentially keeping us out of existing EU trade policy. We would be cut off from the world with our trade and economy regulated from Brussels without any say.

So, let us be honest: the Withdrawal Agreement is a terrible deal – worse than Chequers, less popular than the Poll Tax and only one in five voters think it honours the referendum result. The only way to get a better deal for the UK is for Parliament to reject it and force the Government to renegotiate with the EU.

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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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Despite Brexit, the Government has covertly signed us up to the EU’s defence agenda

We’ve all heard the arguments over how Theresa May’s Withdrawal Agreement and Political Declaration do not respect the referendum result in areas including fishing, trade, financial contributions and our laws. But the public, MPs and even ministers seem to be oblivious to one of the greatest sleights of hand in recent political history: how Theresa […]

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We’ve all heard the arguments over how Theresa May’s Withdrawal Agreement and Political Declaration do not respect the referendum result in areas including fishing, trade, financial contributions and our laws. But the public, MPs and even ministers seem to be oblivious to one of the greatest sleights of hand in recent political history: how Theresa May has covertly given away control over policy, rules and structures which govern the future of our armed forces and foreign affairs.

Up until Chequers, I was blind to any idea of a sell-out over our armed forces, as were most MPs I have spoken to. How could this even be an issue? It wasn’t in the mainstream news, Brexiteer MPs weren’t concerned, we had Boris Johnson as Foreign Secretary – we appeared to be in safe hands.

As it turns out I was completely wrong.

To sum up an extremely complex situation: Theresa May has signed up the UK to EU defence institutions meaning continued vast annual payments to Brussels, giving away control over major aspects of defence and foreign policy and all this has the power to undermine NATO.

I have spent a considerable amount of time researching this issue, and with the help of the excellent campaigning group Veterans for Britain I have produced a detailed documentary into the matter for my YouTube channel.

Let’s start from the beginning.

It’s 24th June 2016 and Brexiteers like me are over the moon. We had finally done it. Now was the time to celebrate, and look forward to our bright future as a sovereign nation. Whilst our heads were full of optimism and likely still drunk with joy (and the booze from the previous night), the EU were already on manoeuvres.

Just five days after the Brexit vote, a secret paper was published in Brussels to EU ambassadors describing the EU’s Global Strategy, which includes its ‘Implementation plan for Security and Defence’. The paper laid out the groundwork for the bloc’s ambitions on centralising defence and security policy, which would eventually lead to an EU army.

Months later in September of that year, the Defence Secretary at the time, Michael Fallon, used tough language against the EU’s defence power grab. He said Britain would “oppose any idea of an EU army, or an EU army headquarters which would simply undermine NATO.” Oh how quickly the mighty fall.

In the following months Fallon and other ministers responsible at the time waved through EU Council proposals for closer military integration including the EU’s Security and Defence Implementation Plan, European Defence Action Plan and the EU’s Global Strategy. These plans boosted the power and remit of organisations such as the European Defence Agency, European Defence Fund and countless other bureaucratic dreams.

Why did Britain allow this to happen? Well, Boris Johnson – then Foreign Secretary – made the now infamous “dog in a manger” speech in December 2016. Johnson said that because Britain was leaving the EU, it was not our place to cause a fuss by vetoing their plans and he said we should “let them get on with it”.

Over the following year, throughout 2017, the EU continued to build up its defence ambitions, all with no objections from the UK. The key point is that it was implied that Britain would have no involvement in any of their plans.

There was a point when I was researching this whole issue when I asked Veterans for Britain researcher David Banks a simple question. When did the UK decide sign up to all these EU military structures? He replied: “12th September 2017”.

This was the date DExEU published a cross-departmental paper entitled Foreign policy, defence and development – a future partnership paper. This meant no one department could take responsibility directly.

It was in this paper Britain decided to sell out its armed forces.

But the EU already knew this was the plan. How? UK civil servant and defence advisor to the Cabinet Office, Alastair Brockbank, revealed later in an LSE speech to EU diplomats that the Government was always planning to have ‘no gap’ in the UK’s subordination to EU foreign and security policy including EU defence policy. He then went on to lay out the UK’s intentions to stay tied to EU defence structures. The only reason we know this is because he was secretly recorded and subsequently exposed in The Sun. To be clear: a UK civil servant told the EU we would sign up to their Common Defence Policy whilst the British Government said publicly we would not be part of it.

Theresa May’s Munich speech, Chequers plan and now the Withdrawal Agreement and Political Declaration slice by slice signed Britain up to more EU mechanisms in defence until we have come to a situation that Major-General Julian Thompson describes as “potentially disastrous” and “a surrender which will make the surrender in Singapore in 1942 look like a minor event”.

Colonel Richard Kemp, who commanded British forces in Afghanistan, told me the Prime Minister has used our armed forces as a “throwaway bargaining chip” in the negotiations.

Worst of all, it seems MPs had no idea about any of this until recent months. Moderate Leaver Crispin Blunt told me: “I think this subject is in urgent need of very close attention by Parliament about what the medium to long term implications are of what we appear to be signing up to.”

Even vocal Brexiteer Andrea Jenkyns, who has sat on the Brexit Select Committee for the last two years said she only found out a few months ago from a briefing with Veterans for Britain.

However the Government claim this is all nonsense, with Rory Stewart tweeting: “I have just been asked by a highly intelligent hard Brexiteer – with two masters degrees – whether the backstop would mean that we have to join the European army. The answer is ‘no’. We would be leaving the EU, the ECJ, EU Parliament, immigration policy and any idea of ‘EU army’”.

But this simply isn’t the case; Britain is signing up to be involved with the European Defence Agency, the European Defence Fund, the European Defence Industrial Development Programme and PESCO. This is in the Withdrawal Agreement and Political Declaration. All of these together are openly described the EU as the beginnings of its military unification project – ‘integration’ which leads to the ultimate creation of ‘a Common Defence’ in just over five years’ time.

Some people ask why it even matters that Britain is signing away control to the EU in defence. After all, we are allies and have similar objectives. The answer to this is in two parts: democratic accountability of defence decisions and the existence of NATO, the fundamental force which has protected the Western world for decades. The European Union is not only leeching on the sovereignty of its member states, it is actively attempting to duplicate and therefore undermine NATO and packages its political moves with reckless rhetoric about the US as an untrustworthy ally or even an enemy. Putin is laughing away at the prospect of an EU army, because he knows that it will weaken his biggest adversary in NATO.

Not only will it make us less safe, but is will also make us less democratic. It means signing away control over major aspects of defence policy and procurement to the unelected European Commission and its numerous agencies, and we will pay a heavy price in monetary and sovereign terms for the giveaway.

Not enough Brexiteer voices are talking about this, partly because they haven’t understood what’s going on, along with most of the public and defence establishment. It is vital MPs and commentators hold the Government to account on this issue. After all, it is the defence of this nation that is at stake.

If they don’t, Britain could sign away its military autonomy, and it will be years before anyone realises.

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The Withdrawal Agreement’s Northern Ireland Protocol is neither a “backstop” nor temporary

Within the draft Withdrawal Agreement (“WA”), 175 pages consists of a Protocol whose formal title is “Protocol on Ireland/Northern Ireland”, together with 10 detailed Annexes which form part of it. Informally it is called the Northern Irish “backstop” protocol. Neither its formal nor its informal title really describes it. It should be called “the whole […]

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Within the draft Withdrawal Agreement (“WA”), 175 pages consists of a Protocol whose formal title is “Protocol on Ireland/Northern Ireland”, together with 10 detailed Annexes which form part of it. Informally it is called the Northern Irish “backstop” protocol. Neither its formal nor its informal title really describes it. It should be called “the whole UK permanent lock-in protocol with extra lock-in for Northern Ireland.”

Most of its provisions do not come into force until the end of the transition period. However, at that point and in the absence of an agreement between the UK and the EU to the contrary, the whole Protocol will come into force and will require the whole of the UK to stay in a Customs Union with the EU – a Customs Union in which the UK has no vote on the tariffs to be charged, or on with whom to do or not do trade deals, but will be obliged to follow the EU’s tariffs at all times. Further, it obliges the UK not to deviate from EU rules on a wide range of so-called “level playing field” areas of policy, including environment, workplace rights, state aids and competition law.

Secondly, it will require Northern Ireland (unlike Great Britain) to be subject to a large number of EU Single Market regulations and directives, and customs and tax rules.

Finally – and this is the most important point – the UK has no right under the treaty either to prevent the Protocol coming into effect or, once it is in force, to leave it, unless the EU agrees. In this regard, the Protocol is unique amongst trade agreements, which invariably contain clauses allowing each party the right to withdraw on notice.

The Protocol can only be stopped from coming into force if the EU agrees with the UK to replace it before the end of the transition period with a trade agreement. If the Protocol comes into force, the UK cannot exit from it without a “joint” decision (meaning the EU has a veto) in the ‘joint committee’ (article 20 of the Protocol). This absence of a clause allowing withdrawal on notice is unprecedented in the EU’s own trade agreements with non-member countries. Under international law, future governments and Parliaments would be locked in and be bound by the treaty concluded by this government.

Because of this lock-in, the Protocol would not operate just as a ”backstop”. In negotiations on the future trade treaty, the EU would have no incentive to offer the UK terms which are any better than the Protocol – since if the UK fails to agree to the EU’s demands, the Protocol automatically comes into effect and lasts indefinitely, giving the EU tariff-free access for its £95bn trade surplus in goods and keeping up the EU’s external tariff wall around the UK market as a barrier against competing goods from non-EU countries.

The Protocol will require the whole UK to remain in a Customs Union at the end of the transition unless there is agreement between the UK and the EU to the contrary.

It will require Northern Ireland (unlike Great Britain) to be subject to a large number of EU single market regulations and directives, and customs and tax rules.

Under the backstop, the UK would have to follow the EU’s external trade policy and apply EU import tariffs. This  would kill stone dead the chances of the UK following an independent trade policy after Brexit. We would not be able to offer tariff concessions to free trade partners, so they would have no incentive to offer us concessions on say services which we would want to export to them.

Further, it will render the theoretical right to negotiate third country trade agreements during the transition period totally meaningless. Since we will be unable to tell prospective free trade partners when we will be free to implement such an agreement, or indeed whether we will ever be free to do so at all, they will have no interest in spending time and effort on serious negotiations with us.

This subordinate relationship also applies to so-called trade remedies, where the EU takes action to impose anti-dumping or countervailing duties under WTO rules on non-EU countries. The EU will take these actions in order to protect its own interests, regardless of any negative impacts on UK consumers, and the UK will be obliged to comply with those measures by imposing higher tariffs – even where this is contrary to the UK’s interests. Under Art.4(3) of Annex 2, we will have merely the right to be consulted.

Where dumping affects UK industries, the UK will have no right to take anti-dumping action to protect its own interests. The UK would be totally  dependent on the EU to take action. If UK industries but no EU industries are affected, why should we expect the EU to do that?

It is quite extraordinary for one of the leading trading nations of the world to be a complete rule taker on its trade policy in this way. This one-sided Customs Union arrangement would destroy the ability of the UK to take advantage of the freedom brought by Brexit to forge a new independent trade policy and would shackle us permanently to being a dependency of the EU.

The above is Martin Howe QC’s  summary of the conclusions of a longer article published by Lawyers for Britain. He will be following up soon with a study of the constitutional consequences of the Northern Ireland Protocol and the way it treats Northern Ireland separately from Great Britain.

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