Friday, 18 November 2016

Demagoguery and Ideological Narcissism

I want to quickly reflect on the utter madness of the leading Brexiteers.  They really still don't understand the scope of the challenge that faces them in the coming months and years.  So driven are they by ideology that they appear to have neither the time nor the inclination to pick up any book describing the workings of the modern world.  Is it lies or is it cynical political sloganeering?  It really doesn't matter because right now neither is helpful.

I'm going to look at a few of these common misunderstanding in turn.   Be warned that there are no jokes or pop videos today.  I am pretty much boiling with rage at the crass stupidity of the ideologues running the UK Government.  Honestly, my patience has run out and now I'm just an angry man frothing on the internet armed only with rational argument and facts.

If you're Scottish and read this without thinking independence is now the only path to preserve any base level of constitutional sanity and economic stability you need to see a doctor with high priority.  Just saying.

Article 50


Article 50 is only concerned with our divorce from the EU.  It is absolutely not concerned with our trading relationship with the countries of the  EEA (single market).  The timeline is that we leave the EU and then negotiate any trade deal in a separate round of talks.   While those trade talks are ongoing the UK will need to trade with the EEA under the rules of the WTO.

The only caveat to the above is that our divorce is concluded within the procedural two years of Article 50 and all parties agree to a deferred leave date.  This is simply not going to happen because the EU doesn't want UKIP MEPs in the next European Parliament.  Likewise, the UK Government is being judged on how quickly it concludes its European business. All sides want this concluded before April, 2019. 

Let's summarise this once more.  The UK is going to leave the EU with no specific trade deal with the member nations of the single market. Worse than that, all the trade deals the EU has with third parties will also no longer involve the UK.  These will all need to be separately negotiated after the UK has left the EU.  Almost nobody seems to get this point.  The UK Government doesn't get it,  the Labour Party doesn't get it,  the Liberal Democrats don't get it, the UK press doesn't get it.  Nobody gets it apart from the EU itself.  That's right, the EU understands this perfectly well. 

We are sleepwalking into a very, very bad deal because we haven't bothered to find out anything whatsoever about the EU.

Trade Deals 


Every time I hear a Brexit supporter discuss trade deals they start banging on about tariffs and how the UK can now negotiate lower tariffs to mutual advantage.  This is simply not the case.  Why?  Well, tariff rates are almost immaterial for developed nations because they all trade with historically low rates of import tax.  What, then, is the real barrier to trade?  You won't learn the answer in newspapers or from a "journalist". You definitely won't hear it from the leading politicians responsible for the future of UK trade.  We all know the answer, though, don't we?  That's right, non tariff barriers are the real barrier to free trade.  

A non tariff barrier might be a ban on the addition of specific chemicals used in paint.   Let's imagine two countries A and B have entered into a trade deal.  Country A might have a long-standing ban on a specific paint additive due to health or environmental concerns, while country B might have a more relaxed approach to poisoning the public.  How can paint manufacturers in country B sell their chemically-enhanced paint to country A?  This has all the hallmarks of an investor-state dispute.  It's time to call the lawyers.

Trade deals are complex because legal mechanisms are required to resolve investor-state disputes like the one described above.  If these disputes are not resolved with a formally agreed arbitration process there simply will be no trade whatsoever.  A dispute will occur every time two nations in a trading partnership have differing legislation about what can and cannot be sold in the shops.  A dispute will also occur when they have different regulations for labelling or require different testing regimes.  In fact, almost any divergence in any area of domestic policy from worker's rights to mains water pressure will lead to an investor-state dispute. These disputes can only be resolved with an independent legal process set out in the detail of the trade deal.

The effectiveness of a trade deal is obviously governed by the faith both parties place in the legal process that is used to resolve investor-state disputes.  For that to happen a lot of detail needs to be hammered out and agreed upon: how courts are appointed, the powers they will be given, the procedures and methodologies they will apply, the underlying principles that will guide legal judgements.  It seems that the UK Government doesn't get this point because they bizarrely think multiple trade deals can be completed by the time the UK leaves the EU.  They are also still labouring under the illusion that trade deals don't require the adoption of legal obligations that might run counter to local decisions.   They pretty much reckon you just rock up to the talks with a low tariff rate, open a bottle of imported prosecco and that's that.  With that attitude the chances of completing a meaningful trade deal with will be  close to zero.

The Single Market 


What is the single market? Boris Johnson seems to think it is some kind of enormous flea market where anything can be bought and sold without recourse to a shared understanding of common law.  In his mind, access to this mythical marketplace is all that is required and having picked the lock to the front door the embarrassment of Euro riches will continue to flow Westwards. Well, guess what, it doesn't work like that.  How does it work?  Well, the single market is a relatively successful attempt to unlock the global trade blockage caused by investor-state disputes.  In short, it works through regulatory harmonisation and mutual recognition. Regulatory harmonisation is achieved through EU directives that are absorbed into each nation's legislative framework.  Mutual recognition is achieved by regular checks on the way that each nation implements and applies the directives.  This system encourages free trade by having a single set of manufacturing rules instead of 28 sets of rules.  Even more importantly, however, it lays the foundations for fair trade.  For example, those troublesome investor-state disputes simply vanish because paint legally manufactured in country A can by definition also be legally sold in country B.

The single market is a complete system.  If you don't accept the rules of the club then you're not getting in.  It is that simple.  There can be no cherry-picking or special favours to the UK because, as I already said, the principle of fair trade lies at the heart of the EEA. Undermining the principle of fair trade would undermine the whole of the EEA.

The UK Government seem to think that they can get complete access to the single market without adopting the principle of freedom of movement of people in the EU.  This is but one of those pesky club rules.  At the very least they are aware that this might indeed be a rule, even if they think the rule will either be bent for mighty Britannia or is just not a very important rule.  It's clear, however, that they are completely unaware of all the other rules of the club eg the rules that govern cross-border pension transfers, the rules governing the movement of money and shares, the rules governing the safe disposal of batteries, the rules that tell farmers how they must treat water on their land and so on and so on.  How do I know that?  Four words:  The Great Repeal Bill.  The UK Government are going to mirror all of our EU legal obligations in a single tranche of UK legislation.  They are doing this so that they can modify them in the future as political will dictates.  That is obviously incompatible with membership of the single market, which requires that governments harmonise their regulatory frameworks with a standard set by the EU.  The UK Government clearly don't understand this at all because they are stumbling along the path leading to regulatory divergence.  A simple lack of understanding of the EEA is forcing the UK Government to leave it, whether it wishes to or not.

We can pretty much forget about the row over the freedom of movement of people.  It is a red herring that gets the ideologues hot under the collar but it is actually just one visible symptom of the UK Government's complete lack of understanding of the European single market.  Honestly, they have no clue and that misplaced arrogance is going to see the UK stumble out of the EEA without an economic parachute.

WTO


There is a massive trade vacuum awaiting the UK when it finally splits from the EU.  Perhaps this is too tedious for public debate but I'm prepared to bet it is just another hole in the Brexiteer's bubble world. What's the problem?  At the moment, the EU negotiates with the WTO on behalf of all EU member states.  That will soon end for the UK.  When that happens it will need to renegotiate its WTO position.  Even if the UK Government had formulated a strategic plan for its long-term trading interests it would take some time years to reach a compromise agreement at the WTO.   The problem here is that the WTO works on consensus and cooperation rather than a timetabled vote. While that consensus is being reached, the UK might find a ready consensus that it temporarily adopts its current WTO obligations.  What exactly are those obligations?  For example, how much of the EU quality beef quota will the UK adopt?  How could that value even be measured?  Would an estimation suffice?  Can the EU reduce its beef quota in line with the UK's adoption of its agreed share?  This is already a lot to decide.  It gets worse, though, because we can't start negotiating until we have left the EU.  I call that a trade vacuum because I'm not an economist and don't know the technical term for full-on catastrophe brought about by narcissistic lying demagogues.

The EU Negotiations


The UK Government believe that Brexit is the biggest crisis facing the EU.  It isn't.  The EU has to manage the refugee crisis, the Euro crisis, the democratic crises in Hungary and Poland, then there's Ukraine and Russia.  I could go on but I'm even starting to bore myself.  Brexit is just another problem to add to the list.  The EU is always beset with issues because by definition it deals with problems too difficult for individual nations to solve on their own.  It is well used to managing multiple crises and wouldn't have survived this long without cultivating that ability.  The UK, on the other hand, is genuinely in a crisis of unbelievable magnitude because its ability to trade with anyone at all is under threat. Even the constitutional arrangements that uphold democratic principles in the UK are under threat.  I'd certainly call it a crisis.  In short, Brexit represents insurmountable crisis for the UK but only a significant problem for the EU.

The way the Brexiteers carry on you'd think they had a gun pointed at the head of every EU Commissioner.   This simply isn't the case.  The EU has already begun the job of factoring in the cost of Brexit to their budgets and forecasts.  It could even be said that the EU is relaxed about the prospect of the UK's departure. Why?  Because the UK blocked pretty much all EU reform since Westminster passed the 2011 European Union Act.   How many times have you heard a Leave campaigner moan that the EU needs reform?  Well, the truth is that the UK was the nation that single-handedly blocked all that much-trumpeted reform by insisting on a UK referendum to ratify almost any change.  The EU can now get on with its European Army, tackle the Euro crisis with deeper political integration, and renegotiate the Lisbon Treaty without bothersome Brits getting in the way all the time.

The UK Government's lack of understanding of the EU will present further issues at the divorce proceedings.  The problem here is that the EU understands perfectly well the technical details of membership.  After all, it has just completed the accession of Croatia.  Only a few years ago it was Bulgaria and Romania.  It also has ongoing bi-lateral discussions with Switzerland to ensure that the bi-laterals reflect the rules of single market entry as applicable.  Complex details and their intertwined relationships are fresh in the mind of the EU Commission, the body which oversees all this detail.  Can we say that about the UK?  Certainly not.  Instead of an eye for detail we have chief cheerleader Michael Gove telling the UK to get on with it and why oh why all the fuss and nonsense, this is easy, just get on with it and leave.  This is going to be a problem because the EU will be seeking clarity on details way beyond the UK's knowledge.  The lack of preparation for Brexit is not only going to prolong the divorce talks but also undermine the UK's ability to negotiate the optimum settlement.  If it was a boxing match it would be stopped in the first round.
 
Nobody in the UK Government gets this at all.  They just can't see the reality of the situation.  The reality is that political motivations and the long-term economic gains brought about by preserving the EU's founding principles will override the short-term losses of the UK's departure.   David Davis, if you're listening, car safety standards are global rather than European so German-built BMWs will still be available for sale in the UK after Brexit.  The drop in the value of Sterling will surely be the biggest disincentive to UK buyers because a few % at the border is a relative drop in the ocean.  Does that hurt BMW more than UK consumers or the other way around?  He will never, ever understand this because he is a buffoon driven by his own arrogance.

Over and out,

Terry





12 comments:

  1. An excellent article Terry. If it wasn't for Scotland being stuck with these buffoons it would be hilarious. However I am genuinely concerned that my beloved homeland will get screwed over by the arrogance of the brexiteers and their pathological need to drag Scotland with them.

    Is there an easy way out?

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    1. I don't think there is any way out now. If you're Scottish there is always the option of independence. It will be a scary ride because a set of events is now in motion and the timeline of independence will mean staring some of these events right in the face before a last-minute diversion. If you're not Scottish this is just going to happen to you. There is a momentum to this and it is definitely growing.

      Sorry to be so pessimistic. I've tried to stay positive for so long but I've hit my limits now. The more I read and the more the key players make idiotic announcements, the bleaker everything seems.

      It would indeed all be hilarious if it was an episode of a political comedy like The Thick Of It.

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  2. What happens when the lying bastard Breexiteers house of cards, built on ignorance, bluster, false bravado and a lying press, collapses round their ears in a shambles of economic disaster? I dread to think. I'm finding that I still can't convince independence NO voters of any of this.
    They don't want to believe it and instead abuse the messenger for threatening their world view with reality.
    I'm really worried, and like you, very angry with this bunch of tossers, chancers and proto fascists.
    Any thoughts on the best approach?

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    1. I think the best approach is to remain rational and make sure as many as people know the facts about what lies ahead. That's one of the reasons I started this blog. There are so many common misunderstandings about the EU and the process of leaving it that I wanted to find out for myself and share what I found. What I've found has been that those most vocal about leaving the EU have the least understanding of its powers, its process of making decisions or even the obligations it places on member states. They also have the least understanding of the technical complexity involved in leaving the EU. That is without doubt the scariest part.

      I'm not convinced that leaving the EU is yet a red letter issue for all that many Scots. Having said that, if everyone knew the mess that lies ahead perhaps enough could be convinced that actually we would be better off on our own path. My only advice would be to become as knowledgeable as possible on this topic and share what you know with everyone in your family and social circles. We need to work to make this a red letter issue because it absolutely is one.

      I didn't touch on this in the post but one worry about leaving the EU is that it means the UK gets to chart its own future with more freedom than it did as an EU member. That means workers' rights, environmental protections etc, which were all governed by EU minimum standards. Even the death penalty, the right to a fair trial, or anything whatsoever under the ECHR. The UK now has a long term of Tory rule ahead. They are being very quiet about what they think of the future but I think we can all guess what is in their minds. Basic things like paid time off, maternity leave and sick pay are under threat now. Despite Tory and Labour efforts, the UK still enjoys some of the advantages of the European social model. That will soon be at an end when we leave the EU. Surely this would be a red letter issue for a good chunk of the Scottish population.


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  3. Your best post ever, Terry. Absolutely splendid account of the mess that the UK is in. And the most scary fact is that we have morons in charge; people with no comprehension of the seriousness of the situation.

    Boris Jonson is a joke as Foreign Secretary. Quite literally. I don't think he's taking this seriously at all. To him it's another adventure in the fairytale life of a privileged rich boy who can do whatever he likes becasue his money and privilege will never run out.

    David Davis and Liam Fox, Patel and Grayling, along with those dumped by May (IDS and Gove) appear to have no understanding of the size and complexities of the situation, and I would heartily recommend that they read this blog if I thought for a minute that they were capable of understanding it.

    None of the Civil Servants have a clue. Someone (an ex senior civil servant) on the Today Programme said we will need 3,000+ negotiator and we have around 12 with any kind of ability or taining.

    The whole lot is led by a woman who has already demonstrated her lack of understanding (saying she wanted to stay in the EU but leave the ECHR) of what all of it entails.

    It's scary. Seriously scary.

    Even Donald Trump won't be able to rescue them.

    I seriously hope that Scotland will find a way to remain in the EU despite the best efforts of the Tories, labour the Liberal Democrats, the BBC, The Daily Mail and the Daily Diana.

    Once again, congratulations on a superb post.

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    1. Morons, demagogues, buffoons, narcissists, liars, political opportunists, populists, fools. A wide range of personality traits in charge of the UK end of Brexit but absolutely nobody with any clue of the challenge ahead.

      I've been reading more and more about the EU and I don't believe that Scotland can find a way to remain in the EEA without leaving the UK. The problem is that the EU works by member states taking on obligations at national level. It's that system of harmonisation and mutual recognition that I mentioned in the post. Membership requires Scotland to be responsible for all of its domestic policy so that it can remain harmonised with the EEA and to be subject to checks by the various European courts/institutions/agencies/bodies. The devolved Parliament only has limited power. Just think of all those reserved matters affected by the Great Repeal Bill. That repeal will not only lead to divergence but will also remove the UK from the checks and balances enforced by all the European courts/technical bodies/agencies. As a consequence, EEA membership is not possible for Scotland without full independence. It just isn't possible for any part of the UK to remain as a member of the EEA due to the plans of the current Government. Even devo max would be unlikely to be sufficient, though it is a rather undefined term. There is no malice here on the part of the EEA. We just can't expect it to be something that it isn't or to have powers it doesn't have. It's that lack of understanding at Governmental level that leaves me frothing mad. We are all leaving the EEA whether that is the plan or not.

      Thanks again for your kind words. They really keep me going.

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    2. Oh yes, I understand that.

      Although Europe may be laughing at the buffoonery of the Foreign Secretary and the ineptitude of the other ministers, and although they would have every right to be awkward, given the UK's history of awkwardness, what they are doing is going by the rules/laws.

      Really rather like the judges on the English High Court. They pronounced on the law as it stands. That the UK sovereign parliament must rule on the dissolution of the treaty that was signed back in 1972 (wasn't it) and the subsequent treaties and agreements. (I understand that royal prerogative, a nonsense in itself, couldn't be used at least partly because they are taking away citizenship and the rights that attach thereto.)

      It is interesting that the entire Supreme Court will rule on the appeal, and that they have already ruled that law officers of Scotland and Wales will be allowed to give evidence. Apparently the law officer from Northern Ireland has the right without any ruling!

      The "kind" words are totally justified. I'm very glad I found this blog.

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    3. Obviously nobody knows what the Supreme Court will rule but one thing definitely troubles me: where the law ends and where political power begins. There is much speculation the the UK Government will apply the argument that A50 can be revoked. This point will preface the argument that Parliament is not required to vote on A50. The legal status of A50 is arguable either way but in practice I would imagine this comes down to a question of politics. If the member states of the EU are happy to revoke A50 then it will happen. Conversely, if they aren't happy to revoke it then it won't happen. Sometimes the law moves too slowly to catch up with events on the ground. If they kick us out then we are out and there is no point whatsoever in arguing the legal technicalities for the next 5 years. The worry that I have is that the Supreme Court will adjudicate purely on legal terms. That being the case, they might find in favour of the Government (under the assumption that the appeal is founded on the concept of revocation). Fingers crossed that this doesn't happen and a level of sanity is brought to bear on this unholy mess.

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  4. Terry,
    I agree that the UK (whatever that means at the time) will leave the EU and that a long period of right wing government will ensue, with terrible outcomes for most people and benefits for the rulers.
    People in Scotland face a binary choice between being ruthlessly asset stripped by this cabal or taking the chance to do something different through independence.
    That would be hard road too, faced with the hostility of rUK and the obstacles they will erect, but it would be a chance to take a better road.
    I am, however, very concerned that too many people in Scotland will not see or believe this until it is too late.
    I will continue with my local efforts and hope..
    Your blog, as Tris has said, is a great help, support and source of information for those efforts.

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    1. I set this blog up to communicate information about the EU, speculate wildly about Brexit, and share the ups and downs of the emotional rollercoaster. The sense that any of this is of any use whatsoever keeps me going.

      As you said, this can all be avoided for Scotland but it will take intestinal fortitude and a lot of homework.

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  5. Thanks, great to have discovered your blog from a poster on WoS, just today.

    I will share widely, and try to learn more about the EU, what you say is really interesting. I too am really worried about how things are going, and the fact that many are so blaze about brexit, even in Scotland. We really need to let people know just what is in store should Art50 go ahead, and I believe it will and probably sooner rather than later. There will potentially be a lot of rabidly angry people in england, if Scotland, or Wales, or N.I. did succeed in court. That worries me.

    Will look out for more of your posts.

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    1. Brexit is a huge leap into the void, all to appease the rise of English nationalism. I'm worried too. Properly worried and sometimes angry.

      I really don't want to add to the sense of fearfulness and anxiety over this issue. At the same time, it is really hard to get to the truth of what is going on because it seems almost everyone is using the situation to continue to make political points.

      Be warned that most posts here involve a tortuous link between a Brexit slogan and a pop video with semi appropriate song title. It doesn't help understand the EU whatsoever but a great pop song always brings a smile.

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