EU Referendum: fighting the good fight
Saturday 22 September 2012
 That, he avers, is because if trade is genuinely free, there are no regulations to follow or tariffs to pay but business people and traders can get on without hindrance or interference in doing business and creating wealth. Thus, in principle, we are told, to create a single market or free trade area is incredibly easy if you know what you are doing and think it through. It merely requires an absence of restriction - most easily achieved by the progressive - or instant - dismantling and removal of all existing barriers and tariffs. Unfortunately, a regulation-free market is neither desirable nor acceptable, and if this presented as UKIP's objective for Britain once we leave the EU, it will simply invite the hostility (and derision) of those who understand why much of the regulation at present in force must remain. One can, or course, make a case of the removal of tariffs and also non-tariff barriers, but it is important to realise how important well-crafted regulation is to international trade. This can be well illustrated addressing the problems of a banana importer, based in London, buying from growers everywhere in the world to supply wholesale and retail customers throughout Europe. In the nature of things, the quality of the product will vary and with it price. It has thus long been the sensible habit of shippers to use grading schemes – a common language between buyer and seller - so that the nature of any transaction is fully understood. This does make sense. Our putative buyer, who might decide to purchase a load from Jamaica, may wish to order Grade A bananas, sight unseen. And, as long as an agreed grading scheme is applied, he will know exactly what to expect for his money. There could be problems, though, if he wished to buy Grade A bananas from Costa Rica and that country operated a different grading scheme. National authorities in some countries could even give their exporters a price advantage by setting more relaxed standards, while still allowing produce to be called Grade A, to the detriment of buyer and consumer. More complications arise if different consumer countries dictate their own specific standards, thus leaving our putative importer being able to buy produce from one country which he can then sell in some countries but not others. Thus, each country having different standards - whether producer or consumer - is a recipe for chaos. Thus, for commodities which are traded internationally, it makes absolute sense to have international standards. For them to work, they must be common standards that are known and recognised by buyers and sellers alike. Such standards are not in any way a restraint on trade – quite the reverse. When properly and sensitively crafted, they facilitate trade and are seen, overall, as beneficial. As such, they are a necessary precursor to free trade. This is clearly the situation here with South African bananas. This being the case, it is unsurprising that many commodity standards pre-date EU regulations. In fact, much of the current EU legislation for agricultural produce is based on a British model developed long before we joined the EEC. Even in the land of the free, the United States, agricultural produce for inter-state commerce was being regulated as early as 1880. Nor is it a surprise that much regulation is actively sought after by the trade itself. Take meat safety, for instance. Few people realise that official inspection did not become compulsory in this country until 1963 yet, for decades before that, producers had voluntarily paid for inspection as a measure to improve consumer confidence in their products. And when, in 1964, the Six in the then EEC imposed mandatory inspection of imported meat, to be carried out at the point of slaughter, the system was based on a regime developed by the British. It had been imposed in response to the Aberdeen typhoid outbreak, which had been linked to Argentinean corned beef, again to promote confidence in international trade. The important thing, therefore, is not the absence of regulation, but the right sort of regulation – sufficient for the purpose and not too onerous – applied only where it is needed. Where the EU most often went wrong was (and is) in applying export standards to internal trade, or – where grading regulations was applied - prohibiting trade in ungraded produce by those who wished to deal in it.  To an extent, this is being addressed, with the EU progressively relaxing standards (allowing misshapen fruit and vegetables), so some of the the issues that Farage raise in his pamphlet have less force anyway. That aside, regulation does not only apply to goods, but also services such as air travel. Here for instance, if we look at requirements for commercial aviation, we see minimum regulations applied to the equipment required by airliners to enable them to land in reduced visibility conditions. Knowing Farage's intimate acquaintance with aviation safety, one suspects he would not want to see such regulations removed or weakened. Would he really be happy with a blank piece of paper when it came to his flying to Strasbourg to pick up his expenses? Thus, the real issue is that, even if reduced, a huge tranche of trade regulation will remain. It cannot be wished away. We thus have to find a way of dealing with the continuing process of adding, modifying and adapting trade regulations, while outside the EU yet still trading with its member states. In this context, to pretend that we can live without trade regulation is not helpful to the cause. We need more sophisticated arguments to carry the doubters, coming up with real world solutions that demonstrate our understanding of the realities of modern international trade. Farage's fluff simply isn't good enough. COMMENT THREAD Richard North 22/09/2012 |
EU referendum: delaying the inevitable
Friday 21 September 2012
 Talking on the BBC Radio 4 Today programme, he said that he would only consider making a deal if it was "written in blood" that there would be a[n in-out] referendum on Britiain's EU membership. What was not raised though – not here or in an earlier programme - is how different the political landscape will look in 2014 when the euro-elections are due to be held. Thus, although Farage consistently claims rising support for his party, he and his followers may be disappointed when it comes to the elections. Not least, the much lauded poll ratings consistently fail to materialise as votes in real elections. For instance, in one recent council by-election, Canterbury City - Blean Fores, the Conservatives took 342, Labour 185, Lib-Dem 121, Green 64, UKIP 38 and Independent 24. Cornwall County - St Keverne and Meneage, had the Tories on 585, Lib-Dems 279, UKIP 141 and Labour increasing to 52 (from 33 in June 2009). Scarborough Borough - Esk Valley gave the Tories 606 votes, Independent 151 (down from 417 in May 2011), Labour 87 and UKIP 35. So consistent is this experience that one can discount the UKIP election hyperbole. And, to make matters worse, there is recently another factor in play. As the Independent reports, in all the recent by-elections, both Labour and Conservatives scored "landslide gains" at the expense of independents. We may thus be seeing precisely that which we have seen in Germany and in the recent Dutch elections – the classic small-party squeeze, which is so often apparent when times are uncertain. And where the UK election is shaping up for a battle between two unpopular personalities, perversely, that tendency might be accentuated. In recent years, however, the euro-elections have obeyed their own rules, and Farage might confidently expect a good showing for UKIP in 2014. But again there is another factor at play: Barroso has committed to publishing proposals for a new treaty before the euro-elections. With the commission president determined to make this an EU election issue, electioneering could be sufficiently transformed to make it mainstream – to the detriment of UKIP. With Cameron planning a major speech on European policy next month, he may well take the opportunity then to commit to a referendum, contingent or renegotiations arising out of the treaty process, essentially marginalising UKIP and its pretender, the "We demand a referendum" party. Here, the Conservatives are in a much stronger position, as polls on EU sentiment tend to show that the renegotiation option (however unrealistic) is popular with the voters, and Cameron can rely on the "referendum lock" to demonstrate his good faith. He does not need to make a promise "written in blood", he may say, when it is written into an Act of Parliament. This does not stop speculation elsewhere about electoral pacts with UKIP, from the usual ill-informedsuspects, who currently don't seem to understand that the chances of a referendum before 2016 are slight. In all probability, we are looking at 2017 or beyond. Those, like Nikki Sinclair's little party - which has dreams of a referendum in 2014 – clearly fail to realise that Cameron can use for an alibi, active engagement in EU negotiations. No sensible person could expect a referendum while negotiations are still in progress. To that extent, also, the Tory europlastics are beginning to outflank the "outers". Knowing that renegotiation is more popular with the public than the straight "out" option, they have concentrated their firepower where success is most likely. That could well leave Farage and his supporters stranded, being faced with fighting a referendum in the distant future for which they are singularly ill-prepared. The "outer" fraternity thus looks doomed to get what it wished for. And unless Farage stopswhingeing about how the contest might be rigged, and starts working out how to win the referendum we're going to get, rather than the one UKIP wants, the wish granted could prove his nemesis. COMMENT THREAD Richard North 21/09/2012 |
EU Regulation: Elefant im Raum
Friday 21 September 2012
 What is especially interesting, though, is that this phenomenon is by no means confined to the UK, as we can see from this article in Die Welt which laments the increased cost of home building due to more rigorous insulation standards. These costs, which are said to be putting houses out of the reach of average earners, are put down to the [Federal] "Energy Saving Ordinance", but in fact owe their origin to the EU's Directive 2002/91/EC of 16 December 2002 on the energy performance of buildings. Yet, despite considerable analysis of this law in the German media, not once do you see any mention of the European Union. The Elefant im Raum is truly invisible. Nor of course, is this phenomenon limited to Germany. It is particularly noticeable in France when, in the ordinary course of events, you would be had put to it even to realised that the Republic was in the EU. It is only Britain, where "euro-elephant" spotting has developed into something of a fine art, that we have a better appreciation of the role of the EU - and even then, the going is often uphill. Whether the populations of the member states are being kept in ignorance deliberately is moot, as it is often the case that journalists and politicians themselves are quite ignorant of the role of the EU. Some of this, though, is undoubtedly "constructive" ignorance. They don't know because they don't want to know. However, as long as the bulk of EU activity is invisible to the people it affects, there will always be difficulty in motivating opposition to the "project". What we know nothing about is never going to bring people out into the streets. COMMENT THREAD Richard North 21/09/2012 |
Politics: another one doesn't get it
Friday 21 September 2012
Lamenting the decline of political parties, a Failygraph hack still believes there is a remedy. "The answer is fairly simple", he writes, "To recover, political leaders need to come up with radical and original ideas that enough people think are worth supporting".
The man simply doesn't get it. If they could have done so, they would already have done so. They cannot, because it is not in their nature. But, if you want radical and original ideas, they are there, in the Harrogate Agenda. And that rather illustrates why political parties must continue declining – together with their cheerleaders in the media. However, not all is lost. The man at least understands that we are now the mainstream. "No matter who wins the next election, it is likely that abstainers will outnumber those voting for the winning party", he writes. But that has been the case for a long time. Why is it taking them so long to realise? COMMENT THREAD Richard North 21/09/2012 |
Eurocrash: banking union could split Europe
Thursday 20 September 2012
 In this case, it is Andrea Enria, chairman of the European Banking Authority (EBA), who warns that forming a united front among eurozone countries to protect their lenders risks seeing one set of rules applied to banks under the ECB's watch and another to those outside. Speaking to MEPs in the EU parliament, he declares that: "We risk a polarisation ... between the euro area, with single rules and supervisory practices, and the rest of the (European) Union, which would operate with a still wide degree of national discretion in ... applying the single rulebook". In fact, though, that is precisely what is intended. Common rules in the eurozone are a precursor to banking union which in turn is a step towards fiscal union and, from there, to political union. And since not all the member states are willing to go down this path, the "colleagues" will go with what they can get and split the EU asunder. This, at least, Minford did understand, noting in his evidence to the foreign affairs committee that, if the UK sought to block this development, the core zone would simply by-pass us. Westerwelle's plan very much takes this on board, arguing for treaty changes without unanimity, which makes you wonder why Andrea Enria is taking the trouble to tell the EU parliament what it already knows. But then, the EBA is London-based and most at risk from the march towards banking union, with plans afoot to close down the London offices and absorb the functions into the ECB in its new offices in Frankfurt. Thus, Andria is reflecting the interests of his institution, and is this likely to be comprehensively ignored. This is more so as, today, the core integration agenda received a huge boost when German opinion polls gave Merkel a massive lead over her SPD rivals in next year's general election. She comes in with 49 percent of voters, compared with Frank-Walter Steinmeier on 26 percent, Peer Steinbrück on 28 percent and SPD leader Sigmar Gabriel on a devastating 16 percent. The Süddeutsche newspaper suggests that, given the numbers, her rivals should not bother to compete. This time next year, Merkel looks set fair to bounce back into power, and by the following spring, the EU commission will have published its proposals for a new treaty. The split is on its way, and Merkel will be in the driving seat. COMMENT THREAD Richard North 20/09/2012 |
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