Tag Archives: GATT

Where do MPs want to take Brexit?

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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.

There is no such thing as ‘No Deal’

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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