Letter to my MP - Understanding of the EU's trading arrangements

I understand that you will have received a letter from Tim Martin of J D Wetherspoon plc and another in reply from Jim Cornelius. I urge you to read them both.

Mr Martin laments that "some MPs, speaking on behalf of major parties on national television, still don't understand the basic mechanics of the EU's customs union". Mr Cornelius responds that "Mr Martin's claims about EU protectionism and tariffs are wide of the mark, and he seems to be given an inordinate amount of time to espouse them on TV without ever being challenged by experts".

Having worked through much of the information referred to by Mr Cornelius over the last three years (though I wouldn't claim his depth of knowledge) I'm convinced that his criticisms are justified. It is also notable that he provides evidence to support his points, while Mr Martin does not.

I agree with Mr Martin that it's a pity so many people still don't understand the workings of the EU's trading arrangements, but on this occasion he is the one who really falls short. Unfortunately, several MPs and MEPs have taken the same position. I hope you are not among them, and that the information provided in this exchange will inform the debate better in future.


For reference (not included in my email):

Letter from Tim Martin
Letter from Jim Cornelius

A sarcophagus over No Deal Brexit?

The "sarcophagus" covering Chernobyl reactor 4

One day in 1986 I had a phone call about the radioactive clouds heading our way from the Ukrainian Soviet Socialist Republic. "How can we protect our children?" was the gist of the enquiry, and I had a vested interest too - our first son was born three weeks after the explosions in Chernobyl reactor 4.

What could I say? There was a lot of nasty stuff up there, and how much of it we got and where we got it would depend on the vagaries of weather at various levels of the atmosphere. I told my caller that - going by media reports and the scientific reading and discussion I'd managed to do - stoking up fear and lying awake at night was likely to do more harm than the fallout itself.

I don't feel too guilty about my advice. The plume of radioactive particles was widening and dissipating, and the amount which came down in the UK doesn't seem to have caused massive damage. Some British farmers ended up not being able to put sheep meat from upland areas into the market without testing for contamination (the restrictions were lifted on the last few hundred sheep farmers in 2012), I remember herb crops such as thyme being restricted for a while, and there were calls - which I backed - for the issue of iodine tablets.

Why did the question come my way? Being a recent chair of the local anti-nuclear/CND group draws attention, and I'd done a lot of reading over the few years before. But my formal qualifications were limited to an O-level in physics

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What brings this memory back on Christmas Day? Jonathan Lis writes for Prospect on the horrors of a No Deal Brexit: "Hard Brexiteers accuse Remainers of stoking up this worry. The reverse is true: I am doing my best to reassure people that it won’t happen. Because it won’t". This time we're not facing the rudimentary forces of nature - radiation and weather - we're up against human-made institutions trying to deal with a human-made problem, and they will manage to stop themselves before the worst happens. I hope he's right, and I think he could be.

Lis is hard on May, and she deserves it. Her plan is to "blackmail" MPs into voting for the withdrawal package by waving the spectre of No Deal in front of them. "May is literally threatening the country with economic and social devastation in order to win a parliamentary vote. It is the most recklessly irresponsible peacetime act of any prime minister in modern history."

He goes on: "Last week, the car industry released an unprecedented statement asking the government and parliament to take no-deal off the table. The prime minister will not. British employers are openly begging her not to sacrifice them, and she refuses. It doesn’t matter that she is bluffing. Companies have to believe what the government tells them, and many are already preparing to leave. Once they have gone, they will not return. Quite an achievement for the self-proclaimed party of business".

"We can 'take back control' of Britain but not of France" he points out. "Full customs and regulation checks will take place on outbound traffic across the Channel, and that means incoming traffic will grind to a halt. Food and medicine will not arrive. People will die." As a Remainer I'd argue that he's being a bit apocalyptic, and go into the detail, but he tells me that "no-deal is a game to May", and she has approved all these threats.

According to the Guardian, Michael Gove told the Commons environmental audit committee (and I can only say he's playing May's game - note the "will" rather than "would"): "If you have friction and disruption – and we are trying to minimise that – between Dover and Calais, then the ability to get food, particularly perishable items on to the market, will be impeded... That is likely to drive some price increases. It is also the case that some of the alternative routes by which food will reach our shores will add additional costs, for example Spanish produce being rerouted... rather than going through Dover/Calais can increase costs... So I do think there is a real risk in the event of a no deal of price spikes in certain foodstuffs."

And from the evidence session itself (I wish all committees would publish transcripts as quickly as the best): "We would need to apply for third country status in order to be able to export. I'm convinced for a variety of reasons, including informal contacts with European actors, that we will have third country status, but I wouldn't want for a second to suggest that the granting of third country status means that all concerns disappear, because as this committee knows, it is the case that for all products of animal origin they need to go through a border inspection post and there are no border inspection posts yet at Calais... the existence of additional checks will create frictions and of course it is the case that there will also be tariff barriers that will particularly badly hit livestock farmers and food producers." 

The vote on the withdrawal package was scheduled for 11 December, and pulled when May admitted to herself that she couldn't win it. Now it's promised "in the week of 14 January" after another five days of debate (which needs a new timetable motion to be passed in advance, which in turn means a new Dominic Grieve amendment to try to assert Parliament's authority if everything falls apart) and the FT suggests "Tory officials have expressed growing confidence that Mrs May’s Brexit deal will pass the House of Commons next month, although they see it as an attritional struggle that may involve the bill being defeated on the first and even second attempt".

Some MPs still say No Deal is OK, and a campaign on Twitter in recent months tells me that No Deal is all any Leave voter ever wanted (which is demonstrably untrue, but we'll put that aside for now). Lis's case, and our only hope, is that the withdrawal package hits the buffers and dies in a heap, and that Parliament then takes this thing by the scruff of the neck (mixed metaphor overload!): "Many commentators point out that no-deal is the legal default. They are technically correct. But just imagine we get to say, 20^th March, and we are heading for no-deal in nine days’ time. Do we really think that MPs will do nothing? That the cabinet won’t disband? That the government will win a confidence vote? That the EU will kick us over the cliff-edge when neither parliament nor the people want to jump? No-deal may be the default but in reality it is a choice."

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I was talking to my niece's husband this morning. He's a Leaver, and argued that May has come back with such a bad deal because she never believed in it in the first place. She couldn't answer Jeremy Paxman's question "When did you change your mind on the biggest issue of the day?" during last year's election campaign but she does exhibit the enthusiasm of the convert nowadays - must be something to do with her faith giving her confidence she is "doing the right thing".

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And on the subject of Chernobyl, I was lucky enough in 2016 to get into a screening of Birdsong - Stories from Pripyat (with music - live on the occasion - by No 2 son's friend Robin Richards). It might well be one of those art projects which disappears into somebody's archives, but if it does re-emerge, I recommend it.

2018? Don't talk to me about 2018

This year's Christmas card -
printing by raremags.co.uk

Brexit has put my life on hold over the last three years, but it has also enriched it.

For me, Brexit is the wrong thing to do, and it's being done badly. Despite the appalling campaigns, the 2016 vote can't be ignored, and the British establishment - from the most above-it-all civil servant through business and politics to the most poisonous of media outlets - should be forced to face at least some of the motives behind those decisions to vote.

But can Brexit be anything but a distraction from dealing with the respectable reasons people voted to leave the EU? It seems very likely to make it more difficult to do so, though it has forced a lot of those who claim to be in power at least to pretend to be concerned about the issues involved.

I've encountered some amazing people - mostly online because I don't get out much. I've learned a lot - reading treaties and acts of parliament and blog upon blog - and I think I've played a part in passing that information around. And I certainly haven't thanked many of them, but proponents of Brexit are among those who've made me think, educated me, and changed my position.

Just not as much as most of them would like.

So Merry Christmas to fellow travellers and sparring partners alike. Just about none of us likes where we are today, but most of us are still going to be here at the end of next year, so we do have some common interests.

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It's an interim ID card - I'm still working on
a picture which finds my good side.

One of the bright sparks of this year has been the work of the fine people at Able Archer, who are docu-satirising the Brexit negotiations. Yesterday I received an unexpected package which turned out to be a goody bag from their crowdfunding exercise. And now I feel like an insider.

The story so far is here and I look forward to the next three episodes as the drama unfolds.

(@teamablearcher on Twitter, "Able Archer - Negotiations, Brexit Satire." on Facebook)

Labour cake is the best cake

In December 2015, when Daniel Hannan came out with yet another of his smooth but ridiculous  Brexit prescriptions, the only thing to say was, "all we want is the good bits and none of the bad bits". Over the months that became the referendum campaign that formula came out again and again, in a variety of contexts and with various names attached, but the message was the same - we can get everything we want, and we won't have to give anything back.

In early 2017 David Davis, by now DExEU secretary, told us his Brexit would "deliver the exact same benefits as we have" now, and everybody laughed. But Labour decided it was too good a slogan to waste, and stuck it in their collection of six tests. So now we had a Brexit on the opposition side, completely devoid of detail but at least as good as what we have now as an EU member state. After all, there were five other tests. We start with exactly the same. The others must add to that, mustn't they?

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Philip Hammond was rather rude about Labour's tests on Thursday. "Labour calls for a Brexit that delivers the 'exact same benefits' as we currently have. That is called remaining in the European Union and it means being in the single market as well as the customs union, and last time I checked that was not Labour policy. A customs union alone would not deliver those 'exact same benefits'. It would not maintain supply chains, remove regulatory checks and non-tariff barriers, or deliver frictionless borders. So Labour’s policy fails its own test."

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But Corbyn wasn't listening. His Brexit, would bring a "new, comprehensive customs union with the EU, with a British say in future trade deals". The UK would move from being one voice in 28 in a customs union to one voice in two. It would "remove the threat of different parts of the UK being subject to separate regulations" at least as far as customs arrangements go, and "deal with the large majority of problems the backstop is designed to solve". Perhaps it would, perhaps it could, perhaps it might, but Michel Barnier doesn't have the competence to negotiate a permanent, full-featured customs union under Article 50. The temporary, bare-bones affair in the proposed withdrawal agreement was enough of an undesirable stretch.

On top of that would come "a new and strong relationship with the single market that gives us frictionless trade" - why didn't anybody else think of that? - "while setting migration policies to meet the needs of the economy". With a wave of a socialist wand (and a Tory immigration policy) the indivisible four freedoms are divided, and just two adjectives from the Tory motivation bag - "new and strong" - are enough to do the job. There's no need for sordid details like How?

We're told that Labour people find a much better reception in Brussels (perhaps because their hosts only have to be polite when there's no actual negotiation to be done) but we're never told that any of this stuff is acceptable to anybody. And again, it's not something for Article 50.

The bag of rainbow drops is bottomless - "existing EU rights at work, environmental standards and consumer protections will become a benchmark to build on" because after all, "these rights and protections, whether on chlorinated chicken or paid holidays, are what people actually want". This is all for the UK government to decide anyway. The only reason any of it might be in a treaty is to prevent us exploiting a close relationship with the EU and still driving standards down to gain competitive advantage.

And it's for now! "It’s a plan that can be negotiated with the EU, even at this late stage, with most of the building blocks already in place". Which building blocks are those then? The features of EU membership, or what May has put together over the last two years? And (it's that wand again) it will "command a majority in parliament and bring the country together".

Once May's package has been voted down, all we need is a general election, but if the swine on the other side won't cooperate "all options must be on the table", including "Labour's alternative and, as our conference decided in September, the option of campaigning for a public vote to break the deadlock". All options, when there's been no election (let alone a Labour victory), and Corbyn's in no position to do anything about any of them.

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If any of the Labour representatives have broached this "plan" in Brussels I'm sure they've been told that it's all for the future, when Michel Barnier is well out of the way. To have a go at these ideas the UK would first have to leave the EU, preferably with a withdrawal agreement, which might as well be the one they plan to vote down next Tuesday because it would need all the same features. Including a backstop.

Letter to my MP - the "meaningful vote" - the reply

Four days ago I wrote to my MP to ask whether she feels sufficiently "fully informed" to register her vote on 11 December for or against the proposed Brexit withdrawal agreement.  I pointed out that the prime minister had promised to provide MPs with "the appropriate analysis on which to be fully informed, on which to base their judgement", but that she had in fact published an economic analysis which presents no information for the framework for a future relationship agreed on 25 November, but does contain modelling of her "Chequers" proposal.

The reply - as with the previous two I've received - doesn't really address the question as I'd put it, but it does include some of Ms Robinson's own thoughts along with the standard departmental text.

The letter repeats the now-established formula that "The UK will be able to negotiate, sign and ratify free trade agreements with countries from around the world during the implementation period which will come into force after it has concluded". As I noted yesterday, this seems unlikely in the case of new agreements, since sensible countries would want to know the UK's relationship with the EU before deciding what relationship with the UK is appropriate and possible. At least some of the agreements we currently enjoy as an EU member state could be concluded during transition.

One striking line is "In my view, both parties must aim to have all agreements and border issues resolved before 2020". It's not obvious that negotiations will get going in earnest before autumn 2019 when the new EU Parliament has approved the appointment of commissioners and the full Commission, so concluding everything even by the end of 2020 (which I hope she means) looks to be quite a stretch.

Amusingly, the letter ends "This agreement will now be discussed at an EU summit and will be debated by Parliament over the course of the next two weeks". Unless she knows something I don't know about the 13-14 December EU Council meeting, that suggests this text is rather out of date. Oh and, by the way, she intends to vote for the package.

Here, with the single redaction of my address, is the text of the reply.

There is a world beyond Stockport, and a time beyond Monday

Laim Fox - the first time it was a typo; now it's policy

Yesterday morning, Secretary of State for International Trade Laim Fox told an audience at the Port of Bristol: "The IMF has predicted that 90% of global growth in the next 5 years will originate outside the EU".

In February he said: "I often repeat the fact that the IMF estimates that, in the next 10 to 15 years, 90% of global economic growth will originate from outside the European Union".

Fox is not the only one to make some version of this claim or, as you can see, more than one version himself. What are the actual figures, and what do they mean?

A Twitter contact points me to a Q&A session in the EU Parliament.

See Parliamentary questions in European Parliament

18 March 2016
E-014997/2015(ASW)
Answer given by Mr Moscovici on behalf of the Commission
Question reference: E-014997/2015

— Michael Loftus (@newsfrom2) 1 December 2018

The record tells us: "The importance of EU market access to third countries is indicated, among others, by the fact that 90% of future growth will come outside the European Union. This figure was calculated based on GDP data from the IMF World Economic Outlook database (April 2015). These calculations were updated to reflect the latest available IMF data (October 2015). As it can be seen in the table attached, the world GDP is expected to reach USD119 trillion in 2016 and USD149 trillion in 2020. The respective forecasts for the EU GDP are USD20 trillion and USD23 trillion. This means that in 2016 11% of the world GDP growth will come from the EU and 89% from non-EU countries, whereas in 2020 90% of the world GDP growth will come from outside the EU."

The table referred to can be seen in the annex to that question. World GDP and EU GDP are both projected to grow from 2016 to 2020, with the EU growing slightly more slowly, so the EU's share of world growth falls from 11% to 10%. 90% of global economic growth in 2020 will therefore originate from outside the European Union, to borrow some of Fox's words. This is not exactly "global growth in the next 5 years" or indeed "the next 10 to 15 years" as seen from 2018. Has Fox just half-understood a striking figure and misused it, or does he have some other source? Would it not just be simpler to say "about 90% of global growth at the moment comes from the world outside the EU"?

What, if anything, do we take from this? If in the future poorer countries grow faster than rich countries that's neither unexpected nor undesirable, but we don't see anything like that in these aggregate figures. Instead there's a slight shift in activity from the 7% of the world population of which the UK is currently a part to the other 93%. British companies currently buy from and sell to companies and people in the EU and the rest of the world and, at the aggregate level, Brexit doesn't change that. The odd new trade deal might make some of that trade easier and more profitable. The loss - more or less temporary - of agreements we currently have but lose at Brexit will make it harder and less profitable.

A tweet from Fox's verified account comes to mind. I still have no idea what he's trying to prove with this presentation. It shows, for example, that the UK trades successfully outside the EU and that the share of exports to the EU has risen slightly in recent months.

The UK exports more to the rest of the world than the EU, @ONS figures released today confirm.  Total exports outside the EU were £342.8bn in the year to June 2018 #FreeTradeUK pic.twitter.com/4749jX1Kjd

— Dr Liam Fox MP (@LiamFox) September 28, 2018

Yesterday again, BBC Newsnight broadcast an item on Fox's favourite topic, new trade deals. Technology editor David Grossman spoke to a businessman: "At Mould Master in Bristol they make plastic components to ship all over the world. You won't find anyone keener than CEO Martin Betty to find new markets but, he says, it would be foolish to turn away from existing customers".

Mr Betty put it simply: "We have three priorities. Number one priority is to hang on to what we've got, number two priority is, sell more to our existing client base, and number three is to find new markets. But it has to be in that ratio and it has to be at that level, because right now there is a lot of pressure on all British suppliers selling to Europe and we need to maintain our European clients because they are vitally important to our overall volume and our overall business".

This message was reinforced a couple of minutes later by David Henig, who spent nine years as a senior official in Fox's Department of International Trade and its predecessors. "It's going to be years before we know what we can do, tradewise," he said. "All our partners are going to be saying to us, 'what's your relationship with the EU'? We don't know. This deal... is the blind Brexit that people warned us about."

The yellow brick road to new trade agreements with China, the USA and the rest might make Laim Fox's eyes light up, but it's also his job at the moment to prepare all the agreements we currently benefit from for renegotiation after the Brexit transition period during which our trading partners will be asked to pretend that we are still an EU member state. The occasional progress report on this might be reassuring.

Those carefully honed words from yesterday's speech "there is a world beyond Europe, and a time Beyond Brexit" are vacuous and self-evident. There's actual work to do.