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BrexitCentral: A personal appeal to the Cabinet: Do not swallow Whitehall’s Euromush

Date: 06 07 2018

A personal appeal to the Cabinet: Do not swallow Whitehall’s Euromush

Written by

On Friday you will make one of the most vital decisions for our country, for our party, and for you personally in your entire lives.

I write this appeal now as I fear you may have been misled about the facts. The consequences of this could be disastrous.

I urge you please to challenge everything you are being presented with as fact. The assertions and forecasts made by a host of economic organisations in ‘Project Fear’ during the referendum have been proven to be wildly wrong and grossly pessimistic. More can be expected at Chequers. Please don’t buy this.

Do start by asking Olly Robbins to leave the room, so you can decide for yourselves about his pet project.

The Times has reported that Robbins has “told ministers that they have no chance of striking a bespoke trade deal with the European Union”. This assertion is totally wrong. As an MEP with nearly ten years on the European Parliament’s International Trade Committee, I have had many conversations with senior EU trade representatives, and can confirm that the EU are happy to offer what I call ‘SuperCanada’ – a deal bigger, better and wider than Canada’s.

The EU is doing Canadian-style free trade agreements (FTAs) now with Australia, New Zealand and Japan. These agreements are how the world does trade under World Trade Organisation (WTO) guidelines.

Please ask why Japan, whose deal should be signed next week, is not asking to collect duties for the EU or itching to join a New Customs Partnership (NCP)? Nor will Mexico, India or the USA, who are all in the pipeline. So why trust an unproven, muddled and conflicted alternative?

Critically, on 7th March, following a meeting with our Prime Minister, the EU’s President Tusk offered the best, biggest and most ambitious FTA the EU has ever done. OK, it is missing a plus in terms of deeper services, but it is a Comprehensive Economic and Trade Agreement (CETA++).

The EU had accepted our red lines: out of the Single Market, Customs Union and no subservience to the European Court of Justice. We were there. Right on policy. In our desired position.

Since then, we have done nothing but slide backwards: reopening dead end positions on a Norwegian-style EEA option, which was panned as ‘no say and still pay’ by David Cameron; or the complex and patchy Swiss model; or on the Customs Union with its 19,753 taxes called tariffs, all thanks to Europhile Lords and MPs putting loyalty to the EU first.

We’ve had the farce of the NCP with its very un-Conservative red tape. The EU have made clear repeatedly that they do not want the UK messing with their four freedoms or Single Market – as they see it as a threat to members. If NCP is pushed, we will end up with no deal and WTO rules.

So please ask why we have gone backwards from that successful position since 7th March? Why did the Government not champion and celebrate the breakthrough then and subsequently? Party members are amazed and delighted when told how far we’ve come.

Is it because darker forces within the Government are determined not to honour the Brexit vote and are working in league with the EU to serve up a far worse deal – a ‘Euromush’ offer muddling the Single Market, Customs Union and ECJ jurisdiction, so as to justify a second referendum?

Sadly, it is just such ‘Euromush’ that is being presented at Chequers.

Robert Peston of ITV News describes the offer as “the softest possible Brexit… the NCP rebranded… namely that the UK would at its borders collect duties on imports at the rate of the EU’s common customs tariff. The UK would in that sense be the EU’s tax collector” – all to avoid border checks in Ireland.

He goes on to warn that the Government’s latest plan would also require alignment of product standards for goods and agricultural produce.

This is an utter and unmitigated disaster. It totally and humiliatingly abandons core British red lines and much of what the Prime Minister has laid down in her excellent speeches. It must be comprehensively and totally rejected.

A SuperCanada/CETA+++ deal – an FTA based on Canada’s CETA – is entirely achievable because it is what the EU is doing with other nations around the world. I know because I have worked on these deals, involving Canada, India, New Zealand, Colombia/Peru, South Korea and others.

You will be told too that an FTA is not doable for a host of reasons – such as rules of origin (ROO), the cost of customs, non-tariff barriers (NTBs). But all these issues are handled entirely successfully day in, day out in global trade deals.

Then of course there is the issue of the Irish border and the claim made that this is the only solution for that.

On these technical issues, on ROOs, just look up the protocol attached to the Canadian trade deal, CETA. Canada is a broad and sophisticated economy like ours with pharmaceuticals, cars, chemicals, aircraft and financial services. We can simply cut and paste this.

The cost of customs is another ‘Project Fear’ myth. Whilst HMRC Head Jon Thompson estimates it at £20 billion, a study by Dr Graham Gudgin of Economists for Free Trade and JML’s John Mills demolishes this, suggesting only £2 billion.

On NTBs and service barriers such as licences, ask how complete the EU Single Market in services is now? Some studies put it at just 5 per cent complete.

Northern Ireland’s border issue has been elevated to biblical proportions in order to trap the UK in this Euromush scheme, with close regulatory alignment and staying in the Customs Union. Ask how creative Ireland and the EU would become on border solutions if this became the only obstacle between us and a trade deal?

So a free trade agreement like SuperCanada is entirely deliverable and the claimed associated problems are all solvable. We want a free trade agreement with maximum facilitation and a simple, pragmatic customs deal.

In contrast the untried, untested and unfamiliar ‘Euromush’ proposals will have a disastrous impact:

  1. Since you will have destroyed Britain’s ability to do global trade deals by trapping the UK within a Customs Union, and a mass of red tape on tariffs, and humiliated the UK in the eyes of a full slate of global trading partners already expressing a firm interest in doing a UK trade deal, then Liam Fox may as well resign – as all the great work he has done setting up these deals around the world will be lost. You will be thought of as one of the most short-sighted, feeble and destructive Cabinets in British history, who have not had the vision or courage to embrace the global opportunities Brexit provides but rather lamely and naively sought to hold on to what the EU provides now, despite the EU’s share of world wealth declining from 36 per cent in 1980 to just 20 per cent today.
  2. If you want to know what’s wrong with the EEA option, that would mean signing up to all Single Market legislation without a say. It would also mean abandoning the pledge to control borders, which would put UKIP back in business and lose the Conservatives many seats.
  3. Adopting this unproven and damaging model now will require the renegotiation of the entire UK-EU new relationship in a few years’ time, with more uncertainty for business.
  4. Polling shows that 70 per cent of Conservatives want to see Brexit delivered. Your actions by definition could dismay two thirds of our voters.
  5. The immediate result of bulldozing through such a betrayal of Government red lines could well be a leadership election. Only 48 letters are required to trigger a contest, which would plunge the party into a period of infighting just as EU negotiations are coming down to the wire – a Grand National of 15 possible runners and riders, with the Prime Minister willing to confront them.

I implore you not to make a disastrous mistake. 

You do not want the responsibility for inflicting such damage on our country, party and economy. I urge you to get global and to embrace the proven means of an FTA plus negotiated add-ons. Canada has done well with CETA; Britain can really motor with SuperCanada.

July 5th, 2018: BrexitCentral