The Brexit White Paper is strong on aspirations but weak on the detail of how to achieve them. The paper refers repeatedly to “cooperation” (226 times) and to “new” arrangements (153). There’s a long shopping list of fields of activity which will require specific negotiation. The main proposal for mechanisms is to create an institutional framework, a governing body, a joint committee, and then sub-branches dealing with the specifics such as fishing, security, data protection and so forth.
While it’s fine to propose cooperation, every one of the areas considered is going to need negotiation and agreement of terms. In most cases, the document does not say what those terms should be, only that the issue has to be discussed. For example,
the Government’s vision is for an economic partnership that includes:
- … a new Facilitated Customs Arrangement
- … new arrangements on services and digital
- … new economic and regulatory arrangements for financial services
- … a new framework that respects the UK’s control of its borders …
The White Paper is blunt, however, on at least two points. One concerns mobility, and the civil rights of EU citizens. The UK is happy enough for Brits to live abroad but EU citizens will be restricted, with the main exception of easy-going tourist visas. The other is fisheries, where the document states baldly that access to UK waters will have to be licensed and negotiated annually.
There is of course hardly anything the issues that matter most to ordinary people, such as residence or family law, where the most that is said is that something will have to be agreed.
There is very little practical difference between the position recently agreed by the UK Cabinet and the position adopted by the EU. Putting the positions side by side, we find this. (Everything in the table is a quotation from a public statement.)
|UK Government position
||EU negotiating position
|A common rulebook for all goods including agri-food, with the UK making an upfront choice to commit by treaty to ongoing harmonisation with EU rules on goods
||A framework for voluntary regulatory cooperation to encourage convergence of rules
|Different arrangements for services, where it is in our interests to have regulatory flexibility, recognising the UK and the EU will not have current levels of access to each other’s markets.
||An open market for services, where companies from the other party have the right of establishment and market access to provide services under host state rules
|A common rulebook on state aid, and establish cooperative arrangements between regulators on competition.
||Common ground on competition and state aid.
|A joint institutional framework to provide for the consistent interpretation and application of UK-EU agreements by both parties. This would be done in the UK by UK courts, and in the EU by EU courts
||Adequate enforcement and dispute settlement mechanisms.
|The phased introduction of a new Facilitated Customs Arrangement that would remove the need for customs checks and controls between the UK and the EU as if a combined customs territory
||Customs cooperation to facilitate goods crossing the border
The main area of disagreement in that list concerns access for services, where it is almost certain that the UK government will give way – they cannot get UK access for financial services otherwise.
The high level of agreement does not, however, imply an easy resolution of the issues, because – yet again – the UK has largely failed to engage with the issues. The recent statement from the EU’s negotiating team identifies a host of priority issues where the UK has still not identified a position. They include:
- access to public procurement markets
- intellectual property rights
- coordination of social security
- recognition of professional qualifications
- guarantees against tax dumping
- an air transport agreement, combined with aviation safety and security agreements.
- participation in EU programmes, for instance in the field of research and innovation
- rules on data protection and
- social and environmental standards.
One might hope that the forthcoming White Paper will have something to say about these issues; but frankly, it should all have been laid out two years ago.
From reports in the British press, it would be possible to imagine that the EU is being obstructive in its negotiations with the UK. The UK is not permitted to “cherry pick”, but cherry picking – agreement point by point – is the root and essence of every trade agreement. The Irish Taoseach has also been reported as saying, provocatively, that the UK cannot be permitted to destroy the EU – how is that supposed to work? – and that the UK cannot expect to be treated as an equal partner in negotiations. Did anyone say that to Canada?
The real substance of the negotiation is rather different. This is from a speech given at the end of April by Michel Barnier.
Even with the UK’s current red lines, our intention is to reach an ambitious and wide-ranging free trade agreement with:
- Zero tariffs and no quantitative restrictions on goods;
- Customs cooperation to facilitate goods crossing the border;
- Rules to limit technical barriers to trade and protect food safety [sanitary and phytosanitary
- A framework for voluntary regulatory cooperation to encourage convergence of rules;
- An open market for services, where companies from the other party have the right of establishment and market access to provide services under host state rules – I repeat, under host state rules;
- Access to public procurement markets, investments and protection of intellectual property rights.
This comprehensive offer already reflects our high level of ambition for an FTA with the UK. But we believe that our future economic relationship should go even further. Let me mention four points.
- First, in our future partnership we would like ambitious provisions on the movement of people, including related areas such as coordination of social security and the recognition of professional qualifications.
- Secondly, in addition to trade, we offer a socio-economic cooperation. For instance, we propose an air transport agreement, combined with aviation safety and security agreements. The UK could also participate in certain EU programmes, for instance in the field of research and innovation, where participation of third countries is allowed. That said, it would be on a different financial and legal base than today.
- Thirdly, since data flows will be important for several components of the future relationship, it should include rules on data.As already made clear by the European Council, for personal data, it will be for the EU to take adequacy decisions, where the level of protection in the UK is equivalent to that of the EU.
- Finally, given the UK’s geographic proximity and economic ties with the EU, the future relationship must be based on a strong level playing field. It is in our economic interest – in your businesses’ interest – not to be undercut by unfair competition. So there will be no ambitious partnership without common ground on competition and state aid, social and environmental standards, and guarantees against tax dumping. This will require adequate enforcement and dispute settlement mechanisms.
It is a ‘comprehensive offer’, and a good one. The press has suggested that Theresa May favours an option with frictionless trade for goods, special terms for services and protection of UK interests in areas such as data sharing, security and air traffic. And that, more or less, is what the EU is offering.
There are two main criticisms I’d make of it. The first is the requirement for common ground on economic management, competition and state aid; that would require the UK to follow the EU’s worst economic policies. The second is that the EU has other commitments that it is duty bound to recognise. It was the EU, not the UK, that promised British citizens that their fundamental rights would be protected. Europe has to do more about this, regardless of the British position.
My work in Poland is coming to an end. As I write, the University where I’ve been is engaged in a dispute with the Polish government about new legislation which will change the way that universities are organised. The constitution guarantees the autonomy of universities, and so does the disputed bill; but the three references to autonomy in principle are somewhat outweighed by more than 200 substantive references powers being given to the Minister. They range from relatively minor powers (for example, that the Minister can direct a university to appoint someone to teach sports) to rather more important ones. “Law 2.0” is framed in the belief that it is up to government and the parliament to determine how universities are run. The constitution and operation of universities is subject to the government, including how the university should be organised and run, whether the university can undertake research (the classification of universities as vocational is explicitly subject to the administrative power of the minister in article 15) and who they can appoint to be their professors. As I read it – I have to rely on my computer for detailed translations – the Minister determines what is a university and what is not (art 35), and art 40 suggests he can refuse if a university is ‘grossly in violation of the law’. The Minister apparently has the power to order a university to close (art 36), as well as the power to dispose of any remaining assets (art 37). There are clauses governing what subjects can be taught and even what the curriculum should be.
The context in which this is taking place is one where the government has been determinedly taking power to itself. The European Commission has expressed concern in strong terms:
the constitutionality of Polish laws can no longer be effectively guaranteed. This situation is particularly worrying for the respect of the rule of law since, as explained in the Commission’s Recommendations, a number of particularly sensitive new legislative acts have been adopted by the Polish Parliament, such as a new Civil Service Act, a law amending the law on the Police and certain other laws, laws on the Public Prosecution Office, a law on the Ombudsman and amending certain other laws, a law on the National Council of Media and an anti-terrorism law.
The central problem, as far as I can make it out, is not that the government is determined to undermine the rule of law; it’s that they don’t believe the Constitution really matters that much, that all it offers is a series of principles, that it’s open to the Sejm (parliament) to pass whatever laws they think fit, and that as a government they’re the people in charge. In the case of the universities, they think that universities are public institutions and that public institutions have to be kept under public control. There’s a very fundamental misunderstanding there. A constitution is a ‘basic’ law, not a set of guidelines, and it underpins everything that follows.
Development economist Bill Easterly has posted a new paper arguing that the “Washington Consensus” and structural adjustment might have worked after all. These were the basis for the liberal market policies forced on developing countries by the IMF and the World Bank in the 80s and 90s. The argument is that although most of the measures failed to show any consistent benefits at the time, subsequent improvements in development might not have happened without it.
There are three core problems with that position. The first problem is evidential: showing that something happens over a long period of time does not show that a policy near the beginning is what started it. If structural adjustment really did work, there should be evidence of it starting to work at the time, and evidence that countries which did it more faithfully had better results. There really isn’t. Second, the ‘policy outcomes’ Easterley uses as a test – currency value, inflation rates, trade shares and so on – are not necessarily the outcomes of policy at all; they are indicators that economies have avoided some of the problems that impede growth. Third, over that length of time, there have been lots of other influences. The massive improvements in recent years might just be attributable to poverty reduction strategies, the growth of democracy, improved governance, basic health care, the internet and the cellphone, the advancement of education, cash transfers, women’s rights and many other things. The more influence we attribute to any of those – and I’d argue that they all matter – the less we attribute to structural adjustment.
Something remarkable happened yesterday. The House of Commons passed this motion:
this House supports the maintenance of European Union citizenship rights for Welsh, Scottish, Northern Irish and English citizens, notes that the range of rights and protections afforded to individuals as European Union citizens are integral to a person’s European identity; further notes that many of those rights are closely linked to the UK’s membership of the Single Market; and calls on the UK Government to ensure that the UK’s membership of the Single Market and UK citizens’ right to European Union citizenship are retained in the event that the UK leaves the EU.
That argument (and indeed many of the arguments made in Parliament) has been the subject of several entries on this blog, the petition I have raised to the European Parliament (0922/2016, here), and a legal case currently being considered by the Dutch courts. The position to date has been that the British Government has signally failed to protect the rights of British citizens, probably because they fear that if they make the attempt, they will have to make reciprocal concessions to the EU. That would be worth doing, but the central argument is not one about protecting the interests of the UK; it is to require the EU to live up to the commitments that it has made to its citizens.
The government of President Macron has proposed a series of changes to unemployment benefits. The context is very different to the UK. Unemployment benefits are not run by the government, but by Unédic, a formal consortium of employers and trades unions. The benefits are contributory and related to previous income (which makes them generous by comparison with UK benefits); they get reduced for longer periods of unemployment.
The proposed reform makes three substantial changes. First, it will extend unemployment benefits for the first time to the self-employed. Second, employees will not longer be excluded from claiming if they have given up their previous work voluntarily. The government is justifying this by suggesting that it offers people the opportunity to start a business. At this stage, it’s not clear whether that will be a formal condition; if it’s not, there are others who may find different uses for it. (The Thatcher government in the UK used to have a separate system of support for small business start ups, and one person I knew at the time was funded to become a successful writer of comedy.)
Third, there will be new sanctions; a person who refuses two reasonable offers of employment will have benefits halved. That’s a little more leeway than claimants in the UK get, where claimants are driven to destitution for missing an appointment. A report yesterday gives two examples of people having benefits stopped for the serious offence of being in hospital at the wrong time.
I’ve done a few things this week that I probably won’t be able to do in the same way in a little more than a year from now. They include:
- driving through three European countries without an international driving licence or extra insurance
- taking up employment without a work permit
- using my mobile phone on UK rates (if you imagine that UK phone companies will stick to European rules when they don’t have to, think again; there are still penal rates applying to phones used on the sea crossing).
Theresa May has called for the UK to ‘come back together’ and promises to take account of “the views of everyone who cares about this issue”. All the government’s attention has been focused on trade and migration. Those of us who care about having existing rights taken away have been offered no thought or consideration at all.
I have always read reports from the Institute of Economic Affairs with some interest, even if I rarely agree with them. I was disappointed by the report released last Monday about the wonders of a trade agreement with the USA. It covers little more than the sort of objection one might find discussed in the Daily Mail: US firms will invade the NHS, they’ll want private justice and they’ll lower our health standards.
Those objections are all real, but there are other concerns, too. The USA is a federation of states each of which has its own laws. The States of the USA strictly license occupations, and 30% of all of its employment is restricted by this kind of licence. A licence to operate in the USA is not a licence to operate in each state – as universities, bankers, and even the likes of florists and barbers can attest. This is critically important for services; and services, not manufacturing or agriculture, now represent the core of the UK economy.
TThe UK is not without its own restrictions of course; nearly 20% of all UK occupations are now restricted. My source for that statement is the Institute of Economic Affairs, in a comment they released on Thursday. But the UK is a unitary state with its own unified market, so one licence generally serves for all the UK. To get parity, UK services would have to negotiate not just with the US federal government, but separately with each of the 50 states. Any trade agreement with the USA will be one-sided.
I’m supporting the attempt to mount a legal case in the Dutch courts to protect the fundamental status of EU citizens who happen to be British. The detailed legal argument is given in this article, which cites the ECJ’s view that “citizenship of the Union is intended to be the fundamental status of nationals of the Member States. ”
The substance of the crowdfunded case is based on a similar argument to the one I’ve made in my petition to the EU Parliament, which is still active. If EU citizenship is a fundamental right, it can’t be taken away. Do please support the petition, even if you can’t pledge to support the legal case.