What really happened with negotiations and how we can still get a deal now. Listen to the interview on TalkRadio with David Campbell Bannerman here:
Tag Archives: Brexit
BBC host forced to intervene as huge row erupts between MEPs – ‘you said Brits are a mess’
A HUGE row erupted between Labour MEP Seb Dance and Brexiteer MEP David Campbell Bannerman after the Remainer blamed Britain’s Leave supporters for creating a “mess” out of Brexit.
Speaking on David’s last day in Brussels as an MEP (having packed up his flat and office!) he debates a Labour MEP arguing strongly that MEP elections are wrong and shouldn’t be held
You can listen to the BBC Radio 4 clip recording here:
express.co.uk
The heated debate began when Tory MEP David Campbell Bannerman called for Britain to leave the European Union with no deal and then do a full comprehensive free trade agreement, often referred to as a “Super Canada” deal, with the Brussels bloc. BBC host John Humphrys then pointed out how the Labour MEP was “turning his nose up” and “sneering” at the prospect of a so-called super-Canada deal.
Mr Campbell Bannerman attempted to defend calls for a comprehensive free trade agreement and insisted it was “entirely doable” and “what the EU wants”.
But the Labour MEP hit back and said: “It’s not what businesses are calling for either.”
The Tory MEP blasted: “You want frictionless trade. That’s the problem all along.”
Mr Dance insisted he does was frictionless trade in the same way Britain has it as an EU member. But the Tory Brexiteer fired back and said: “That’s created the political crisis, Seb. You are responsible for it.
“You and Labour, you made that.”
The Labour MEP replied: “Don’t blame us for this mess. This is your programme and not mine.”
Mr Bannerman Campbell blasted: “Sorry but do you think the British people are a mess too? You know that nearly 60 percent of Labour constituencies back Leave. You don’t actually respect that result.”
The pair continued to shout over each other and the BBC host was forced to intervene. Mr Humphrys said: “Hang on a second and let him finish his point.”
Mr Dance added: “The Brexit that was sold in 2016, the prospectus that was sold in 2016 is so markedly different from all of the options that are now on the table, including what you now appear to be advocating, i.e. a no deal.
“The idea that there is somehow a mandate for no deal on the basis of the campaign in 2016 is clearly wrong.
“So, the idea that you shouldn’t check now that what the deliverable options are is what the British people would want is, I think, profoundly democratic.”
The UK has until April 10 to come up with a new Brexit plan – or may face leaving the union without a deal two days later on April 12.
EU leaders are due to meet at a summit on April 10, where Mrs May will be expected to present her new deal. But last week, European Commission president Donald Tusk offered the UK a lengthy delay to Brexit, of up to one year.
Where do MPs want to take Brexit?
What justification for an Article 50 extension can the Commons provide?
MPs are almost certain to vote on Thursday for the Article 50 process to be extended so that the UK does not crash out of the EU on March 29. But what do MPs want an extension for? This is the central question hanging over the Commons — and in many ways the only one that now matters. We know what the Commons does not want. Last night MPs voted for the second time to reject Theresa May’s Brexit deal.
We know, too, that the Commons does not want no deal, at least on March 29. A motion to that effect is pretty certain to be passed this evening — even if the text of the government motion is not quite the resounding rejection of no deal that many in business would like to see. The problem for the UK is that if it wants an extension, this needs to be agreed by all 27 EU member states, probably at next week’s EU heads of government meeting. And securing that agreement will not be straightforward. As Michel Barnier, the EU’s chief Brexit negotiator, said on Wednesday: “[The British] have to tell us what it is they want for their future relationship. What will their choice be, what will be the line they will take? That is the question we need a clear answer to now. That is the question that has to be answered before a decision on a possible further extension.”
So what justification for an extension can the Commons provide? And how will it reach that decision? One possibility is that the Commons decides to hold what are called “indicative votes” on alternatives to Mrs May’s deal. This would mean that MPs vote on the three main options available: the Norway-style membership of the European Economic Area; the Corbyn plan for a customs union; or a second referendum. An amendment to hold these indicative votes could well be tabled on Thursday when MPs vote on an extension. But even if indicative votes are held as early as next week, the process might not be conclusive. It is not certain that any of the three proposals outlined above enjoys a majority in the Commons — so the deadlock might continue. What then? It’s hard to believe the EU would withhold an extension altogether.
Instead, at its summit next week, it might at least allow an extension of six weeks to mid-May to allow the UK and EU to finalise their no-deal planning. That might set the scene for Mrs May to put her deal to the Commons one more time (as Robert Shrimsley argues) before March 29 — on the grounds that there really is no alternative to what she is offering. Perhaps the Brexit hardliners would decide to back her then after all. But if Mrs May were to lose a third time, the only course of action might well be for parliament to revoke Article 50 altogether, asking for a much longer extension and possibly moving to a second referendum.
Further reading
THERESA MAY’S BREXIT DEAL IS DEAD — MPS MUST NOW TAKE OVER “After two years of tortuous negotiations, Theresa May’s strategy for taking the UK out of the EU lies in ruins. From the moment the stentorian attorney-general, Geoffrey Cox, pronounced that late legal changes won by the prime minister did not remove the risk of the UK being ‘trapped’ in the so-called Irish backstop hated by Eurosceptics, her withdrawal agreement was headed for another crushing Commons defeat. The priority now must be to avoid chaos — chaos in parliament that could be exploited by extremists of left and right, and the chaos of a no-deal exit. MPs must stabilise the political situation and create the space for a Brexit rethink.” (The FT View)
PAUSE IT AND RETHINK “A pause is required because a pivot to a new arrangement is easier said than done. Most of the proposed alternatives to our membership of the EU have, under Mrs May, seemed unattainable, unappealing or both. For the UK to be in a better place politically will require a different, better politics. That will take time, and Mrs May needs to ask Europe for it.” (Editorial, The Guardian)
FORGET ABOUT ABSURD VOTES ON NO DEAL — MPS OUGHT TO BE INVOKING GATT ARTICLE 24 “The 164 member WTO offers Britain a remarkable opportunity to leave the EU cleanly, avoiding all of the apocalyptic predictions set out by the likes of the CBI, Bank of England or chancellor. Because through GATT Article 24, the EU and UK are able to agree a very basic Free Trade Agreement that would keep tariffs at zero for the duration of the period the two sides negotiate a comprehensive Free Trade Agreement.” (David Campbell Bannerman, MEP, BrexitCentral) Hard numbers
BRUSSELS BRIEFING — LOSING CONTROL OF BREXIT By Theresa May’s standards, it was not that bad. But the still breathtaking 149-vote margin of defeat over her Brexit deal has sailed the UK into uncharted waters. The options for reviving this treaty look almost completely exhausted. A dark mood has gripped both sides.
DCB Calls for Clean Brexit, Govt to Slash Tariffs in No Deal
David Campbell-Bannerman has called for the Government to forget about the “absurd” vote to take no-deal off the table, and use World Trade Organization (WTO) Article 24 to continue trading with the EU tariff-free until a good deal is made.
Writing for BrexitCentral on Wednesday, the Conservative Party MEP and board member of Leave Means Leave said that the General Agreement on Tariffs and Trade (GATT) Article 24 “offers Britain a remarkable opportunity to leave the EU cleanly” by allowing the UK and EU to “agree a very basic Free Trade Agreement that would keep tariffs at zero for the duration of the period the two sides negotiate a comprehensive Free Trade Agreement.”
The Brexiteer argues that it would provide a trade negotiation “stop gap” and still allow the UK to leave the EU as scheduled on March 29th, “while at the same time, avoiding any uncertainty that could negatively impact our economy or that of the EU” and save businesses from calculating tariffs.
After Prime Minister Theresa May lost her second vote on her Withdrawal Agreement Tuesday night, the House of Commons is set to vote today on whether to leave the EU with a No Deal — a proposition Mr Campbell-Bannerman labelled “absurd,” urging instead for a “meaningful vote” on GATT Article 24 “as a safe, alternative Brexit deal that would get Britain out of the EU with minimal drama” and which “deliver[s] on the result of the referendum.”
Meanwhile, the Government has announced that around 87 per cent of import tariffs could be slashed if the UK leaves the EU without a deal, The Times reported Wednesday, and there would be no controls at the Irish border, with all goods crossing into Northern Ireland doing so without checks for a “strictly temporary” period.
Levies will remain on some items coming from abroad including cars as well as fertiliser, fuel, certain ceramics, beef, lamb, poultry, and some dairy products to protect British producers from “unfair global trading practices.” The move may also bring down the price of goods in shops for British consumers.
In an attempt to stop the mass resignation of Cabinets Remainers, Mrs May last month offered the House the opportunity to vote to take a no-deal off the table should she lose her second vote, and if a clean break is voted against, allow MPs to vote to extend Article 50, thereby delaying the country’s exit from the EU.
After the prime minister lost her vote last night, May told Parliament that she would not be whipping Conservative Party MPs to back a no-deal — holding out that the only acceptable option is for the UK to leave with a deal — and the Europhile-dominated lower house is likely to vote against a WTO exit.
However, the European Research Group’s chairman Jacob Rees-Mogg told the BBC after the vote, “The default legal position remains, as the Prime Minister pointed out, that we still leave on March 29th.
“The House of Commons voted twice for bills that became Acts of Parliament that mean that they leave on the 29th of March. They voted for the Article 50 Act, and the Withdrawal Act. The Article 50 Act paved the way for the 29th of March and the Withdrawal Act specifically mentions it.”
“It would have to be changed by law, and the law is not easy to change,” he added.
The ERG chairman noted that the only way to extend Article 50 could be to ask of an extension of the EU; however, Brussels bureaucrats immediately responded to the news of the vote and Mrs May allowing MPs to potentially vote for a Brexit delay by saying that instead the UK should prepare for a No Deal exit.
Chief Brexit negotiator Michel Barnier, in comments to the European Parliament this morning, said that “This treaty is and will remain the only available treaty” and extending Article 50 would only be granted if there were a “clear plan.”
“We are at a critical point — the risk of no deal has never been higher,” Mr Barnier added.
You can read the aritcle as it appears on www.breitbart.com here.
Steve Baker explains Malthouse B option
Steve Baker MP on BBC Today Programme (13.03.19) explains the Malthouse B option.
There is no such thing as ‘No Deal’
On March 13th, if the meaningful vote on the deal fails again in spite of Geoffrey Cox’s legal acrobatics, there will be an MP vote on something that doesn’t actually exist: the so called ‘no deal’ exit.
It doesn’t exist because even what people call ‘no deal’ involves some negotiated deals. They may be smaller, bilateral, sector specific deals, often termed ‘standstill’ agreements, but are nevertheless important.
As an MEP I have already voted for four such mini deals – an arrangement for British car certifications to continue under ‘no deal’, permission for the EU to sell us their goods as a third country (!), an aviation deal to allow flights to continue to fly and a road haulage deal to allow trucks to continue to roll. The Strasbourg European Parliament next week will see hours of voting on more ‘no deal’ measures under (emergency) ‘simplified procedure’.
The EU’s chart of recommended ‘no deal’ measures runs from reciprocal fishing rights and shipping inspections to nuclear energy to continuing the Northern Ireland PEACE and Erasmus Plus student programmes. The Mayor of Calais is actually offended the U.K. thinks there will be any holdups.
In the UK meanwhile the port of Dover says it is ‘prepared’ for ‘no deal’. Eurotunnel say “with or without a deal, traffic flow through the Tunnel will be maintained”. The City of London is ready too – Lord Mayor Mr Estlin says Brexit has been a “pain in the backside” but “businesses have prepared already”.
The Bank of England and the European Securities and Markets Authority have signed baffling Memorandums of Understanding on things like the Central Securities Depository, and EU regulators continue to recognise U.K. clearing houses.
Brexit Minister Chris Heaton Harris lists what is ready from citizens’ rights, such as the welcome Spanish deal for U.K. residents, to chemicals to food labelling to holidays to archives. BMW is moving its summer shutdown to April and Toyota stockpiling parts. The U.K. car industry managed to survive 211 days over 20 years of ‘Operation Stack’ where lorries couldn’t get to/from Europe.
There is even an outbreak of naughty bilateral deals behind the EU’s back such as Italy’s bid to stabilise financial services and trade.
All of this is being done by professionals with no sign of the hysterics of extreme politicised Remainers in the U.K. The relentless ‘no deal’ silly stories from the BBC are a case in point, from food shortages being like “walking off a cliff in the dark without a torch” (we do actually import food from outside the EU) and Eurostar’s ‘one mile queues’, when passport checks exist now.
There is further confusion over what the deal in ‘no deal’ is. It isn’t a ‘no trade deal’ or ‘a no Future Relationship deal’ – we haven’t even started negotiating those yet. It is a ‘no Withdrawal Agreement deal’.
Let’s be clear. Up until now we have been dancing to the EU’s tune. The Withdrawal Agreement is specified under EU law – Article 50 of the Lisbon Treaty – and went wrong from the start. Without one, all the EU treaties stop applying as of 29th March.
But trade deals are done under the global trade rules of the 164 member World Trade Organisation (WTO) that the U.K. helped establish.
The WTO gives us a way out of the EU under Article XXIV/24 of the General Agreement on Tariffs and Trade (GATT) which preceded it. A GATT Article 24 compliant standstill trading arrangement forms one of the three ‘safety nets’ within the Malthouse Compromise Plan B, along with continuing to offer Plan A (a changed WA deal) and seeking to purchase the Implementation Period (IP) via funding.
GATT Article 24 means the EU and U.K. agree a very basic free trade agreement (FTA) that allows us to keep tariffs at zero whilst negotiating a comprehensive U.K.-wide Free Trade Agreement, the sort of ‘SuperCanada’ FTA I have long advocated (bigger, better and wider than the EU-Canada CETA deal), and which the EU has offered to us three times starting a year ago (7th March).
Article 24 is just a bridge – an alternative transition. It only needs literally a one page Free Trade Agreement to be signed. The neutral Cambridge law expert Dr Lorand Bartels has helpfully written one.
This protects you from discrimination claims by other WTO members. Even if there were legal challenges, these would take at least two years, and the FTA would in place before any verdict was reached.
Yes it will need other small deals such as interim regulatory recognition of goods and services, but the core remains Article 24. Its feasibility has been confirmed to me by top WTO and EU trade experts.
Article 24 also takes away the hassle of businesses having to calculate nearly 20,000 tariffs. Tariff rates are very complex and vary enormously even within one category such as lamb meat.
OK so businesses will have to fill in customs declaration forms, as they do for non-EU suppliers, but no tariffs mean the processes are simple. HMRC have helpfully enacted Transitional Simplified Procedures (TSP) for the 145,000 VAT-registered businesses who trade with EU (only 7% of U.K. businesses and 12% U.K. economy do) to remove need for full customs declarations at Borders and import duty payments.
The objection that the EU would refuse to agree Article 24 if the WA deal fails because of a lack of goodwill is patently absurd. The Eurozone is again implementing emergency measures as it falls into serious recession, whilst it would save the EU £13 billion in tariffs with their largest single customer. The U.K. would agree to pay a contribution too as per Malthouse (for 2019 budget, maybe 2020 too, but not the £39 billion).
The objection it does not address ‘non tariff barriers’ is equally silly. It’s not its job – the comprehensive FTA will address non tariff barriers, services and the whole shooting match.
So my earnest request to Government is this: if the favoured deal is not passed on 12th March, then please let’s have a meaningful vote on something that does exist and is deliverable.
Let’s amend the so called ‘no deal’ vote on 13th March to incorporate GATT Article 24, and Plan B of Malthouse, as this is a sensible alternative basic deal. Also, if necessary, let’s allow a strictly temporary extension of Article 50 of three months to 29th June, appealing to those who would favour an extension in a possible third vote. This extension will not be to renegotiate the Withdrawal Agreement, but to prepare to enact Article 24 and its happy band of mini deals.
With only an 8 MP majority for the Spelman amendment, just 5 MPs need persuading.
It might just pass.
David Campbell Bannerman MEP
Conservative MEP for the East England and Joint UK Spokesman on the International Trade Committee.
You can also read David’s article above, as it appears online at thetelegraph.co.uk
Five levers to tackle the economic shock of no-deal Brexit
10.2.19
www.politico.eu
Five levers to tackle the economic shock of no-deal Brexit
None of the weapons at the UK’s disposal comes without downsides.
It’s 11:01 p.m. in London on Friday, March 29 and it’s no deal. Britain will need to take immediate action to try to shield the economy from shocks, probably before markets open, on April Fools’ Day.
Here we take a look at some of the emergency levers that U.K. policymakers can pull.
Britain’s import-dependent economy has never looked so vulnerable in peacetime. An inflation bomb is set to explode. A diving pound and tariffs on key products from the EU such as food would hit consumers hard. Britain runs a hefty trade-in-goods deficit (of about £130 billion in 2016 and 2017), and sources about half of its food from abroad.
Policymakers will have to make hard choices on how to manage the currency — particularly on whether to hike or cut interest rates — when core elements of the economic model will be under fire. Markets have traditionally been tolerant of U.K. debt and deficit levels because the country was a prime venue for foreign direct investment from big companies such as Airbus and Nissan, but these are now in question.
As Bank of England Governor Mark Carney put it, Britain relies on the “kindness of strangers.” This has been drying up because the U.K. is becoming a less attractive investment destination outside the EU single market. Foreign direct investment more than halved to $15.1 billion in 2017, from $32.7 billion in 2015, according to U.N. figures.
Here’s our look at the five responses that the U.K. will need to consider. All have disadvantages.
1. Drop import tariffs to avoid big price hikes
If Britain leaves the EU without a deal, tariffs would be imposed on imports that used to come in freely from the EU. For example, Britain’s tariff on beef purchases would be around 40 percent.
To avoid food price inflation, Britain could lower or completely scrap tariffs on things such as food, car parts or medicines.
Catch No. 1: The World Trade Organization’s “most favored nation” principle dictates that these tariffs must be the same for all WTO members, unless you’re in a trade deal or in a regional bloc like the EU. This means not only French but also South American beef or cheese would come to Britain tariff-free.
Farmers would lose out, as cheap imports undercut their products. The government’s brutal calculation would have to be that farmers are far less important to the economy than supermarket prices for the whole population.
Trade Secretary Liam Fox told the U.K. parliament’s international trade committee on Wednesday that waiving tariffs to stimulate trade is a “possibility.” But the “full liberalization of tariffs … would certainly expose the U.K. to sudden competition in sectors to which it’s not currently,” Fox said.
Catch No. 2: By slashing tariffs, you have effectively gifted away your leverage in trade negotiations with other partners. They will already be shipping their goods tariff-free, they don’t need a deal. British tariffs may be down, but those of trade partners won’t be — putting British exporters in a difficult spot.
2. Use the Article 21 ‘nuclear option’
A hard-line solution would be to only lower tariffs to EU imports and ignore the WTO rules. Other countries would probably complain and launch WTO disputes, but Britain could fend them off by calling on Article 21 of the WTO rulebook, the infamous “national security” exemption, favorite of Donald Trump.
British Conservative MEP David Campbell Bannerman suggested this option in a Telegraph op-ed last month, saying the “national security” justification is possible because Britain would be “seeking to avoid security issues at the Northern Ireland border.”
Article 21 has long been a taboo in the trade world, but over the past one and a half years it has gained some dubious popularity as the United States, Russia and the United Arab Emirates invoked the exemption to justify questionable actions such as protective tariffs and border restrictions. The EU is a sharp critic of such steps and has warned that abusive use of Article 21 risks undermining the entire multilateral trading system.
Triggering this “nuclear option” would be risky for Britain too: “It would be an incredibly damaging way for the U.K. to start its new role as an independent member of the World Trade Organization,” said Dmitry Grozoubinski, a former Australian WTO negotiator. He warned that using such an “excuse for breaching most-favored nation rules” could backfire as Britain would likely use all the goodwill it would need in other talks, both bilaterally as well as at the multilateral WTO level.
3. Rates. Should I cut or should I hike?
Money is Britain’s supreme challenge. Many economists think the Bank of England will probably inject the markets with fresh money to try to prevent a meltdown. But this will also come at a cost for consumers, who will have to face higher prices.
Those looking to give the economy a shot in arm also reckon that the Bank of England would likely slash the base rate from the current 0.75 percent, accepting that this will exacerbate inflation.
Such a cut is not guaranteed, however. The Bank of England’s Carney has warned that businesses should not rule out an increase in the base rate. While this would help bolster the pound, a hike poses big challenges in the U.K., where mortgage debt is high and higher rates could create a housing crisis and sap household spending.
According to the Bank of England, Britain’s economic activity would fall by as much as 8 percent in the case of no-deal. The bank warned that in this scenario “output falls by more than it did in the financial crisis.”
One of the biggest immediate risks on Brexit day is that banks stop lending money to businesses or even to each other, out of fears that they won’t get their money back.
“Like at the moment when Lehman Brothers collapsed or 9/11, the central bank would certainly respond by injecting short-term liquidity,” said ING Chief Economist Carsten Brzeski.
In order to stimulate growth, the BoE may then want to use quantitative easing. “You will have to ask yourself how much you can stimulate without driving up inflation,” Brzeski said. “The pound will be weaker, so there will already be what we call imported inflation.” Further monetary loosening would make this worse.
Another of Britain’s vulnerabilities is that economists caution that a weak pound is not unadulterated good news for exporters. Many manufacturers insist they would prefer a stable to a weak currency because they are so dependent on imported raw materials and components.
4. Stop customs checks
Slashing tariffs will help soften the blow of higher food prices on consumers. But it won’t help businesses whose shipments are stuck in ports. Customs checks could lead to kilometers of trucks at highways and at the entrance to the Channel tunnel.
That will be one of the main costs of a hard Brexit, some economists say, in that it disrupts supply chains and ruins businesses that rely on just-in-time production. That’s why some businesses and pharmacies have started stockpiling supplies.
To avoid such a mayhem, the U.K. government could decide to wave through imports at its ports. It has already announced that it would do so for EU goods.
The risk of that is obvious: Suspend customs checks for too long, and Britain could become a smugglers’ paradise.
The EU may not do the same for U.K. exports coming in, meaning British exporters will struggle to get their merchandise into their biggest market.
The longer this situation persists, the more manufacturers would move their factories into the EU, meaning the U.K.’s trade deficit could widen.
5. Deregulate to become a fiscal paradise
This is the dream of hard-line Brexiteers like Jacob Rees-Mogg and Daniel Hannan. Once Britain leaves the EU without a deal, it could become a fiscal paradise, dropping taxes and deregulating its industry. This could attract investors as France and Germany show signs of pursuing a more protectionist model.
This is a longer-term solution, however, and will do little to resolve instant shocks.
The political risk is that deregulation could mean lowering standards on things like food safety, scrapping checks on dangerous chemicals, environmental protection, unemployment, or health benefits and consumer rights.
You can read the article as it originally appears by clicking here.
How to get Brexit back on track when the Withdrawal Agreement is rejected by MPs
The current political turmoil and constitutional crisis has so many twists and turns that it makes House of Cards look pedestrian.
Of course the real issue comes down to what happens when – rather than if – the proposed deal is voted down on tomorrow, 11th December (or even dropped).
Here there is a clear gap opening up between media reports and hard legal reality – what the actual effects are of the political manoeuvring of Dominic Grieve, Sir Keir Starmer and their merry conniving bands. There have been desperate media reports that ‘no deal’ is off the table, when it is actually remains the ‘default position’ as Andrea Leadsom told Radio 4 just last week.
Let’s assume Conservative MPs think there is enough turkey on Christmas menus not to be part of the required two-thirds majority needed to vote for a General Election, and that the EU have indeed ruled out any major renegotiation.
The bottom line is that the various options being desperately pushed by those who want ‘anything but a true Brexit’ are just not viable. There is:
- ‘Norway Plus’ – even worse that the slavish EEA, which adds back membership of the customs union, thereby killing all future UK trade deals, and with no control of immigration, no say over EU laws, and large payments;
- A ‘Second Referendum’ – with its totally confused offer: ‘tell us if this final 2,000-page deal is better than staying in the EU when we’ve already left. Oh, and by the way you will have to join the euro and lose the rebate’. Pointless too in that Leave is predicted to win again; or
- Extending Article 50 to allow more muddle time – which will either mess up the EU by landing the Brexit issue right in the middle of European Parliament elections in May or mess up all the groups, chairmanships and procedures of the European Parliament in the farcical situation of British MEPs being elected for a few months.
But all such amendments to the motion are not legally binding anyway – they can only be advisory. They might bring political pressure, but they do not have legal effect. As the Commons Chief Clerk, Sir David Natzler, confirmed: whatever MPs vote on by way of motion “has no statutory significance”, as they do not constitute “a vote on whether to accept or reject no deal.” That requires new legislation. The actual law – in the EU Withdrawal Act – states clearly that we will leave on 29th March 2019.
Given that reality, and bearing in mind how rash it is to try to indicate a way forward in this maelstrom, this is what I propose now as the best next steps:
1) Assuming the vote fails on 11th December, or is put off, I believe the Government should make a statement immediately saying that preparations for a ‘no deal’ option – better called a ‘Clean Global Brexit’ or ‘World Trade Deal’ – will go into SuperDrive. Sorry, but defer Christmas!
Where there’s a will, there’s a way: in the Falklands War, the Ministry of Defence managed to put together a task force of 100 ships in just 48 hours. We can manage this process, and thousands of civil servants have been on the case for years. Like the Millennium Bug, claims of Armageddon and planes falling out the sky gave way to nothing happening on 1st January 2000.
2) The UK should then go back to Brussels, not to renegotiate this current draft Withdrawal Agreement, but to agree a pared-down, bare bones emergency series of bilateral agreements covering only the essential ‘must haves’: aviation, customs, citizens’ rights, medical products, European Investment Bank assets etc. The beauty of this is that if one agreement falls, then the others are not lost. The DUP’s Arlene Foster has proposed bilaterals. These bilaterals could be agreed by Westminster and the EU by March, and would any sane MP or MEP dare to seek to derail any such vital preparation in these circumstances? They should hold all further Westminster business, such as the Immigration and Trade bills, that may be hijacked.
3) The UK should also formally advise the EU that it wishes to accept the offer made not once but three times by the EU: that of a SuperCanada/CETA+++ Free Trade Agreement with 100% tariff- and quota-free access to the EU Single Market plus comprehensive services (first offered by Donald Tusk on 7th March), and which we could start negotiating from the day we become a ‘third country’ – 30th March next year.
We can build on the three pages on trade in the more appealing draft Political Declaration, but drop all notion of a ‘Single Customs Territory’ – the UK must firmly leave the EU’s Customs Union and Single Market. We are in a unique position to negotiate an FTA fast – as all our laws are convergent at present and we don’t have to spend years wrangling over which tariffs to keep or get rid of, as others do.
4) Having initiated moves to agree a SuperCanada FTA, the UK and EU can now jointly notify the World Trade Organisation (WTO) that in the light of working to agree a comprehensive FTA and future Political Declaration, we are invoking Article 24 of GATT (the General Agreement on Tariffs and Trade).
This is important because Article 24 allows us to maintain the same tariff-free access to both our markets without breaching WTO discriminatory Most Favoured Nation (MFN) laws. Article 24 allows “an interim agreement leading to a formation of a free trade area” and allows “a reasonable length of time” – up to 10 years – to negotiate it.
So, we whilst we will need customs declarations under WTO, we will be able to maintain the same zero tariffs as now with the EU – the free trade area will remain. EU exporters to the UK would save £13 billion in tariffs (and our consumers too) and UK exporters £5 billion. We will also be free to lower tariffs for other trading partners as we wish – something specifically excluded in the Backstop. Nor should there be any Non-Tariff Barriers (NTBs) either under WTO agreements.
We can also enact the WTO’s Trade Facilitation Agreement which recently came into force that obliges the EU27 to adopt measures like authorised economic operators (trusted traders), which are part of the solution for the Northern Ireland border issue along with electronic declarations and remote checks away from the border.
5) As a sign of Britain’s free trade intent, we can now immediately initiate full and unfettered negotiations with international trade partners such as the USA, China and India, without these deals being torpedoed by being tied into the EU Customs Union, Chequers or the Backstop. The picture would be clear at last, and not be delayed by unending years of transition. Similarly, we will seek to build on current work to ‘roll over’ the benefits and obligations of existing EU trade deals such as that with South Korea.
6) So, on 30th March the UK can be cleanly out of the European Union and back into the world, with an acceptable and managed World Trade Deal option in place, free of years more wrangling over transitional arrangements, cost demands, alternative models and heightened business uncertainty – and with negotiations underway for a closer SuperCanada trade deal. We can reallocate much of the £39 billion payment lost by the EU to compensate UK-based companies legally in terms of R&D, regional aid and transport infrastructure – helping to stimulate our economy.
Like an operation we know needs doing, let us get on with the surgery quickly and speed up the recovery process.
This is indeed a Clean Global Brexit. Brexit could be over in a few months, rather than drag on for years on end.
And, for all our sakes – both Remainer and Brexiteer – let’s just get it done.
You can see David’s piece as it appears at brexitcentral here.
Chequers is on runway, SuperCanada taking off – let’s accept Brexit offer
I was surprised to hear from a UK Ambassador recently that the EU had not put a deal on the table and that the only deal on the table officially was Chequers. Other government briefings and media statements have emphasised that the EU needs to make a ‘counter proposal’ to Chequers. It seems President Tusk just did.
He tweeted: “From the very beginning, the EU offer has been a Canada+++ deal. Much further-reaching on trade, internal security and foreign policy cooperation. This is a true measure of respect. And this offer remains in place.”
I hugely welcome this – it is the SuperCanada Trade deal I have been arguing for for two and a half years plus aspects of the sort of strategic partnership the EU has agreed with Canada, Australia (Framework Agreement) and New Zealand (Parc).
This is not the ‘simple trade deal’ that Theresa May rejected in her Conference speech – it is deeper, wider and broader than Canada’s CETA – Tusk’s “further reaching”. And Tusk makes clear it is still on the table as an offer.
This counts as a ‘counter proposal’ – whether it was there on 7th March, when he said “I propose we aim for a trade agreement covering all sectors and with zero tariffs on goods (that’s one +). Like other free trade agreements, it should address services (a second +; deeper services a third +). I hope that it will be ‘ambitious and advanced’ or not is immaterial now. The offer was restated on 2nd August with public procurement services added as an example of cooperation.
The offer is still there and it’s live. I commend President Tusk and Mr. Barnier for proposing the best ever trade deal they have ever done to date (and I’ve worked on a few over nearly 10 years on the international trade committee including Canada). This is the best basis of a deal and one endorsed by Brexiteers such as Jacob Rees Mogg and Boris Johnson, who I am grateful too for supporting ‘SuperCanada’ at Conference as well as the EU. It therefore has the best chance of support through both the Westminster and European Parliaments.
With the clock ticking and the papers soon to go out for the EU Council meeting I am really optimistic we can get such a deal.
This is an excellent offer. We must now accept Chequers is stuck on the runway, but SuperCanada is lifting off.
How Theresa May can avoid a Brexit bloodbath in seven simple steps
As we approach our party conference, I am fearful we may expect scenes reminiscent of the bloodbath of the Maastricht debates of the early 1990s. I remember Major’s Foreign Secretary Douglas Hurd citing the similarity of that debate to the Corn Laws under Peel, that split the party in two – between pro-protectionism and pro-free trade – and the roar in the Hall as he was shouted down. Here we go again.
This time the debate is Chequers or Canada – Canada defined as a SuperCanada/CETA+++ Free Trade Agreement, that suits not only Canada but our Commonwealth cousins New Zealand and Australia, who are now using Canada as the template for their deals with the EU. SuperCanada has become a Commonwealth deal.
But with the clock showing a few minutes to midnight, the Chequers option is facing a brick wall. A combination of strong party and Westminster opposition – with even former Brexit ministers David Davis and Steve Baker resolutely pledging to vote the deal down – and 80 MPs now willing to put country and principle first. Relying on Labour votes to drive a deal so resolutely unpopular in the Conservative party through risks ‘Corn Laws 2 – the Sequel’. More likely Labour will oppose the Chequers deal and it will fail, ushering in no deal.
The UK polling data is frightening: only 19 per cent Conservative voters (YouGov) think we are doing a good job at the negotiations. Add to this the 29 per cent of voters in 44 Conservative marginal seats would be less likely to support their local Conservative member if that member supported Chequers, and Chequers clearly risks handing Corbyn the keys to Number 10 on a silverplate – complete with a bouquet of red roses.
Then there’s the EU. Monsieur Barnier is very charming and polite in saying he likes ‘parts’ of the White Paper, presumably after desperate urging. It is not clear whether this is the content – or the binding, printing style or phraseology.
Comparing the key Brexit models: Chequers v Canada plus
| Chequers | Canada + | |
|---|---|---|
| Control of borders | EU citizens will keep their current free movement rights until the end of the transition. The UK has yet to set out what it would have in its place afterwards. | The UK would have total freedom over immigration policy, at the price of more limited trading access to the EU market. |
| Solving the Irish question | The UK intends to avoid a hard border by aligning with all EU rules “necessary to provide for frictionless trade”. | The UK would be outside the customs union but would have a comprehensive free trade deal with the EU, limiting the need for checks through technology. |
| Control of rules | The UK would follow “a common rulebook”, requiring it to copy EU regulations on goods and agri-food. MPs would have to accept the “consequences” if they want to ignore certain rules | The UK would be able to change its rules much more, with smooth cross-border trade ensured by a system of “mutual recognition” |
| Free-trade greatness | The UK could in theory strike deals with countries outside of the EU. But lack of flexibility would limit its attractiveness. | The UK would leave the customs union and avoid any common rulebook, so there should be no curbs. |
| Control of laws | The European Court of Justice would no longer have “direct jurisdiction” over the UK, but British judges would have to pay “due regard” to its previous rulings | A Joint Committee, inspired by what the EU has in place with Canada and Korea, would make binding decisions to resolve issues |
But his original reaction was perhaps more reliable: with him saying that by allowing U.K. to “pick pieces” of the single market, such a deal “would be the end of the single market and the European project”, may not be “legally feasible”, and that he is “strongly opposed” to the proposal. Wishful reports he is being sidelined were met with firm denials in Germany and France.
So it is quite clear the core proposal in Chequers: that of a Facilitated Customs Arrangement and a EU ‘Common Rulebook’ (cunning language for signing up to EU laws with no say) are seen not just to meander over EU red lines but to stamp up and down on them with great force. Barnier fears this Chequers proposal will simply fall apart.
The EU regards the 4 freedoms and the sanctity of the Single Market as its Holy Grail – and does not like us messing with their scriptures. To separate goods laws (one core freedom) from services (another core freedom) is unacceptable, not to mention no free movement (a third) within the Single Market – like the EEA demands.
Nor does the EU want us either to continue to act as one of their customs borders, collecting duties and imposing tariffs and quotas like an agent. Inauspiciously there is a multibillion-pound battle going on with the EU suing our own customs authorities for allegedly failing to collect billions in Chinese duties. So they don’t even trust us not to turn a blind eye to fraud in their view.
If Chequers isn’t going to fly, then the expected November summit will mean no withdrawal agreement, no transition deal and both of us moving to the same relationship the EU has with China, the USA and India – a World Trade Deal (or ‘no deal’) as early as March next year. The Party Conference will be taking place five to six weeks out from that summit.
But we can rescue a deal in that timescale – as, despite denials, there is indeed a credible alternative plan, one that was our official policy only months ago. That is to revert back to Plan A (SuperCanada) with no loss of political face. An indication was the fact the gentlemanly Eurosceptic Mr Jacob Rees Mogg and gentlemanly Euro-gnthusiast Mr Barnier agreed so readily in their Brussels meeting that: Chequers is dead, long live SuperCanada!
So here’s conceivably how we might get a solution:
- Everyone – Eurosceptics, the EU and the U.K. Government – acknowledge how clever it was to propose Chequers 1, as it has fast illuminated our respective negotiating positions, shown UK business and industry that a closer position more akin to the Customs Union/EEA is not deliverable, clarified the EU red lines whilst allowing the EU negotiating guidelines to be made more flexible, unlocked a new EU/Irish willingness to find a sensible common sense solution on the Northern Ireland border issue (such as Mr Varadkar announcing that the EU had told him there was no need for a hard border as soon as Chequers was announced), and made it clear a deal can be struck quickly and successfully – but only along the lines of a SuperCanada/CETA+++ style trade deal, with Mr Barnier even astonishing Labour MPs on the Brexit Select Committee by his vehemence in rejecting Chequers and supporting Canada plus.
- The U.K. Government then announces that in light of the strength of the EU reaction and Westminster MP concerns against the Chequers proposal – as David Davis said it is merely a proposal not a deal – then the proposal is to be updated and improved – as many white papers in the negotiating process have been – into a ‘Chequers 2’ proposal. Much of Chequers 2 will remain the same other than for the trade deal section that everyone is finding so unpalatable (plus a few tweaks to the defence section).
- Chequers 2 will see our Government reverting back immediately to the original Brexit Department White Paper – version 9 I understand – which incorporates the SuperCanada proposal – as the basis of a deal.
- Chequers 2 means the Government can immediately inform President Tusk and Michel Barnier that the offer made on 7th March by Tusk and reiterated by Barnier on 2nd August is hereby accepted in principle as the basis of a future relationship for the purposes of the Withdrawal Agreement. This is an offer of 100 per cent tariff and quota-free access (one +, as Canada, Australia and New Zealand are not getting 100 per cent) and services (a second +). Deeper and more complex services (the third +) can be delivered for all via the WTO by pushing its Trade in Services Agreement (TISA) which covers 70 per cent services GDP in 50 countries, which the EU will have to follow.
- The EU will publicly rejoice, welcome and agree that the acceptance of the original offer President Tusk made is a breakthrough, and accept in principle to this now being the basis for an agreement at the proposed mid-November special EU Summit.
- Cue an outbreak of relief, joy, and celebration across Europe. The pound leaps, investment surges, the Prime Minister’s poll ratings shoot upwards. Westminster opposition parties reluctantly and gallantly declare their alternate plans for remaining in the Customs Union and Single Market are sadly no longer deliverable, and given the EU has now agreed this deal but could not agree Chequers, that in the interests of the country they will support or at least abstain on the Commons vote. (Alternatively, they will be defeated as Conservative rebels and Labour Eurosceptic rebels are ultimately likely to vote for the deal).
- Agree with the EU to work constructively together to resolve the Northern Ireland border issue by mid-November based on technological and creative solutions, as proposed in several UK papers (including my own) and referred to by Mr Barnier when addressing the Brexit Select Committee of MPs. Barnier helpfully said: “We need to see how and when and where these controls would take place. They could be dispersed. They could take place in different places, on board vessels, in ports outside Ireland, they could be done using technological means, they could be dispersed, as I said, or simplified in technological terms. Just to make that absolutely clear, we are not talking about a border. We are talking about controls.”
Then we can all gather in the pub, Leavers and Remainers together, to celebrate and ensure that the growth in the U.K. economy recently announced – is duly maintained, despite Brexit!
You can read the article as it appeared in the telegraph.co.uk here.