Media: removing the filters
Wednesday 17 July 2013
 In the egalitarian world of twitter – and to a very great extent facebook – everything is afforded the same weight and prominence. The trivial, the inane and the less important compete with the grave and weighty. Inasmuch as there is more of the former than the latter, the important is being drowned out by the volume of tat. The filters have been removed. And although many people now create their own, few in the media or politics seem to have properly understood what is happening. COMMENT THREAD Richard North 17/07/2013 |
EU politics: that "Brexit" competition
Wednesday 17 July 2013
 To get us started, I have produced a working draft (below), which begins after the first divider and ends before the second. I will keep bumping this post to the top of the blog, as long as it remains a working document, whence we can add to it, change and refine it via the forum and, if preferred, via e-mails. If you make your suggestions, I will look at them and build them into the script.
The target is to produce a completed work of about 2,500 words, for submission to the IEA before 16 September.
UPDATE 1: 10:17, 17 July - minor structural and layout changes.
UPDATE 2: 13:41, 17 July - minor content changes.
UPDATE 3: 16:06, 17 July - complete redraft with additional material.
UPDATE 4: 19:42, 17 July - headings added and some additions.
* * * * *
A blueprint for Britain outside the EU Introduction
To describe an "out" vote in a British referendum, triggering an Article 50 notification – and thus setting us on a course to leave the European Union - as "a major historic geopolitical and economic event" could not be more apposite. Arguably, though, such a vote would be more a political than an economic event, albeit one with considerable economic consequences.
In that spirit, we frame our submission for this "Brexit" competition, in which we are asked to look at the process of withdrawal and how the UK might fit into the fresh geopolitical and economic landscape that would follow. This we do. But it then asks us to identify measures the UK needs to take in the following two years, domestically (within the UK), vis-a-vis the remaining EU and internationally, "in order to promote a free and prosperous economy".
To this, task we take exception. In the main body of our submission, we explain why and then go on to set out how we would handle Article 50 negotiations and the UK's position in a post-EU world.
Defining our response
In defining our response, we confront the task definition, and find difficulty in responding on two grounds. Firstly, we assert that the European Union is a political construct, its objective to achieve political union primarily through the mechanism of gradual economic integration (the Monnet method). Thus, leaving the EU is primarily a political act. We believe it will be initiated for the main purpose of avoiding European political integration, for which there is no democratic mandate in the UK. Secondly, we argue that the referendum will not have been fought, and the "out" vote won, in a vacuum. For the "out" vote to have been successful, it is most likely that promises will have been made on restoring self-government and democracy in the UK. Furthermore, since the domestic political process is acknowledged to be in crisis, it is probable that the opportunity presented by withdrawal will be used to redefine the settlement between the British people and their governments (local and national). Certainly, it seems unlikely that an "out" campaign could have succeeded without having promised fundamental changes to the structure of government, and the distribution of power. Otherwise, there may be insufficient enthusiasm for repatriating powers from the unresponsive, undemocratic EU, if the alternative is to vest them in an unpopular and increasingly remote administration, where the ordinary citizen perceives little difference in effect.
Economic issues in perspective
If we are correct in this analysis, we believe the tempo, if not the content, of any Article 50 negotiations will be driven by political imperatives. Economic issues, although of vital importance, will take second place, having featured in the referendum campaign largely ion terms of the voters needing assurance that their economic interests are protected and any potential damage limited.
Therefore, the short-term economic objectives will need to be framed not so much in terms of promoting "a free and prosperous economy", as limiting the adverse economic consequences of withdrawal.
Here, we take note of the view expressed in a recent House of Commons library research paper, that "the full impact of a UK withdrawal is impossible to predict". We take the view that there are too many "unknown unknowns" to allow for any sensible long-term economic planning.
The more important problem, though, is the sheer longevity of any talks which would be required to conclude any long-term, stable economic agreements. If we look at one possible outcome of a UK withdrawal, adoption of the Swiss model of bilateral agreements with the EU, we note that negotiations between the Swiss government and the EU started in 1994 but it took until 2010 for around 210 trade treaties to be finalised – with many issues still to be agreed.
Given that these talks stretched over a period of 16 years, it is not unreasonable to argue that agreements covering the more complex and larger economy of the United Kingdom might require many more years. Potentially Article 50 negotiations could last two decades or more, before an exit plan was agreed. All that time, our membership and financial contributions would continue. Such a timespan would be politically unsustainable, on which basis we see a fundamental mismatch in timing between the political and economic objectives. An economic settlement requires a slow, measured approach. The political imperative of an exit from the EU requires speed. Thus, we assert that the overall British strategy for any Article 50 negotiations should be to separate the political and economic aspects of the negotiations, and deal with them differently.
A twin-track approach
For the reason, we suggest that no attempt should be made to secure a definitive economic agreement under the aegis of Article 50. Instead, we believe our negotiators should adopt a twin-track approach. Priority should be given to settling the political issue – i.e., our withdrawal from the EU – as fast as possible, allowing for the economic aspects to be "parked", so as not to interfere with the political objective. Such a stratagem would be advantageous to the EU, allowing the remaining Member States to pursue political integration at their own speed, without the drag of countries such as the UK which have no enthusiasm for the process. Within that overall strategy, our short-term economic aim might be merely to protect our position, by way of interim solutions. The best outcome might be an economically neutral transition from EU member state to our new status – whatever that might be. Our safest option is to complete the Article 50 agreement on the basis of a minimum change scenario on economic issues, then allowing for changes to be made over an extended period. To that effect, our longer-term objectives need to be safeguarded by building into the final Article 50 agreement a "sunset" or "break" clause which would permit fundamental renegotiation of the final settlement at five- or ten-year intervals. The final shape of a post-exit Britain should thus emerge from a series of organic changes, rather than from a "big bang" leap into the dark.
An interim settlement
One way of achieving a stable interim settlement might be to secure EFTA membership and, through that, continued membership of the EEA. By this means, we would maintaining our membership of the Single Market and be able to continue trading with EEA member states on current terms. We would stress that EFTA/EEA membership would be seen as an interim measure, a short-term solution that should not prejudice later bilateral agreements with the EU, on the lines of the Swiss arrangements, or other developments. Furthermore, we would not necessarily see EFTA membership as a static position, and nor would we assume that, if the UK decided to leave the EU and join EFTA, that other countries would not follow us – immediately or after a short lapse of time. Even by virtue of UK entry to EFTA, the power, roles and functioning of the organisation would change. One possibility is to expand it, creating an overarching free trade agreement covering all EEA members. EFTA might take over the management of the Single Market from the EU, giving all members a direct stake in rule-making.
An independent Advisory Council
At or before the start of any negotiations, we feel that the Government should appoint an independent Advisory Council – with provision for expert sub-committees – to advise on the negotiation process and to review and advise on options available to us. We would see it retained as a standing body, then to inform further plans and negotiations, as we seek to determine a final position. In particular, we would be keen to see such a body examine the bigger picture – and especially the effect of the increasing globalisation of trade and the effect of international standards-setting bodies working within the WTO framework. Their activities in initiating rules which subsequently become adopted as the trading norms, driving regulation at regional and national level, is blurring the distinction between membership of the EU and world bodies. For instance, much EU financial regulation coming through the system is implementing Basel III – which was agreed at international level by the British government before it was submitted to the EU for processing into actionable regulation. Even out of the EU, we would be adopting similar measures or, within the EEA, still implementing provisions as EU regulations, having previously approved them as quasi-legislation devised by international bodies. On that basis, immediately following our withdrawal from the EU, our position in many fields might be very little different from what it was when we were an EU Member State. Over time, positions might diverge, if we chose not to adopt measures at international level which were adopted by the EU, but generally speaking we would probably tend to keep in line with the EU. What we need, therefore, is a clearer oversight of the role of international bodies, and the formulation of a working framework to guide the British Government in this poorly defined area of governance. This might be an ongoing role for our Advisory Council. As to the formal ending of our membership of the EU, in accordance with the Article 50 procedure we would expect a new treaty between the UK and the remaining EU Member States would be the final stage of the process. Following that, the UK would repeal the European Communities Act – via the medium of a repealing Act. New provisions would we required to ratify the treaty and it seems inconceivable that approval of the terms should not be put to a national referendum.
EU regulation
As to the acquis communautaire as it applies to the UK, the abrogation of the treaties would not affect any EU legislation already transposed into UK law, whether as primary Act or Statutory Instrument. The repeal of an enabling Act does not affect the validity of SIs previously made thereunder. On the other hand, European Regulations have direct effect and gain their authority from the ECA, without having been transposed into UK law. With the repeal of the ECA, those which have not been transposed will cease to have effect. In this context, it is asserted by Minford that, when we leave the EU, only our exporters will have to continue to observe EU regulations but, for everyone else (over 90 percent of GDP) EU regulations will cease to be relevant. This, unfortunately, is not true. In many instances, EU regulation has replaced domestic law, a process often accompanied by modernisation of the regulatory codes. Removal of EU regulations would leave whole areas of economic activity unregulated, while reversion to previous law would not be practical. The entire corpus of food hygiene regulation is one example. Statutory requirements for food premises - ranging from abattoirs to restaurants - are set out in EU regulation. Repealing EU regulation remove enforceable controls over domestic food hygiene standards. There are no longer any regulations of UK origin. Similarly, much of the fisheries (CFP) and agricultural (CAP) regulation is implemented by EU regulation, with their repeal leaving large gaps in important policy areas of considerable economic significance to those affected. It would, however, be difficult and time consuming both to identify and then replace the entire body of EU regulation. The best option, prior to final abrogation of the treaties, would be to re-enact the entire body of law, converting it, en bloc into British law (by a device similar to the ECA). This process of repatriation would then allow for selective repeal and amendment at leisure, to bring regulation into line with specific UK requirements, if thought desirable. That would mean re-enacting policies such as the CFP and CAP, until such time as replacement policies could be devised and implemented. It should be noted that the technical complexities involved in devising such policies de novo would doubtless take many years, extending far beyond any notional Article 50 negotiating period. We would expect our advisory Council to assist with the process, but there is little scope for speedy replacement of many EU policies. In making assessments of the utility of regulations, however, it should not be assumed that regulation is necessarily burdensome. We took evidence from a senior Norwegian official who suggested that strict regulatory standards are a necessary and acceptable price to pay for what he termed "certainty". For instance, companies preparing product for export did not always know from the outset the destination of any particular batch. Therefore, they wanted to be able to produce to generic standards which would be accepted in any and every country to which the product might be despatched. They did not want to be producing different batches to different standards. Much the same applies in domestic trade. Companies supplying to supermarkets find that, in the absence of relevant regulation, they are prey to different contract standards applied by their powerful customers. The availability of a universally recognised statutory code relieves producers of the need to work to different standards, while conformity enables "due diligence" to be satisfied, for insurance and product liability requirements.
EU third country treaties
Regulations, though, are by no means the only issue. Additional complications arise with treaties made between the EU and third countries, of which there are just short of 800 registered on the EU treaty database. Some of these are merely memoranda of understanding, and others are time-expired, but many are substantial agreements, from which the UK gains advantages, but only by virtue of membership of the EU. On the face of it, the UK is excluded from the terms of such treaties, once it leaves the EU. Therefore, each of these treaties will have to be examined and, where necessary, the provisions reframed as new treaties between the UK and the relevant third countries. That would require negotiations with those countries, with replacement treaties agreed and ratified before the UK withdraws from the EU. Doubtless, the need to carry out so many negotiations in a relatively short time would stretch diplomatic resources, and possibly delay British withdrawal from the EU. A possible alternative, to cover us in the short-term, would be the agreement of a limited treaty of association with the EU, which gave us nominal membership status for the strict and exclusive purpose of taking advantage of the treaty provisions. Before the conclusion of any Article 50 agreement, though, there would be many other issues to deal with, such as our participation in co-operative enterprises, such as defence, and the external action services, currently defined by the treaties.
In some aspects, we may want to continue working closely with EU institutions and agencies, as in the European Defence Agency and Europol, or with the framework research programme, or individual projects such as Galileo.
Although we would be outside the EU treaty framework, we note that Norway, which is not an EU member, has been granted an opt-in to participate in EDA programmes on a case-by-case basis, without voting rights. Similarly, Norway is an active member of the European Research Area and participates fully in the framework programme, while Israel, also not an EU member, is amongst the many countries with a stake in Galileo.
The degree of participation would have a bearing on another crucial issue, the financial arrangements in the transitional period, and after the final split. We note that an immediate clean break would be unlikely. Within any multi-annual budgetary period, the EU would expect any forward commitments to be honoured, and any programme participation to be financially supported.
Conclusion
In the event that we are selected to offer a full submission, then these and other issues would be addressed. Within the constraints of this initial submission, though, we can do no more than rest our broad case on the terms stated. * * * * * With the current revision and additions, this brings to just over 2,500 words, and close to the length of a final submission. We are allowed to got to 2,500 words excluding summary, footnotes, title page, figures and tables, references and appendices. Thus, while I think I have taken account of most forum and other comments, absorbing the spirit of the offerings, we now have little space to add more material and rehearse issues more fully, without taking something out. I will now refrain from making any major changes, and confine myself to tinkering, until I have taken note of further comments, and re-read the existing offerings. Then I expect to be redrafting the submission into what I hope will be its final shape. We should be able to dispense with this within a week or so, I should imagine. COMMENT THREAD Richard North 17/07/2013 |
Wednesday 17 July 2013
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