LeaveHQ, 22/03/2016  

Read The Market Solution pamphlet in full

In this third stage, we address the limitations of the Brussels-centric Single Market, and look to a more permanent way of managing trade in Europe as a whole.

We start with the premise that the UK will be obliged to keep all Single Market regulation in place, comprising approximately 7,000 legislative acts out of the 21,000 currently in force. Since there would be no obligation to retain the remainder, leaving the EU could give relief from around 15,000 acts.

Where laws have to be re-enacted, we should seek to do more than replace the ring of stars with a “Made in Britain” label. Simply changing the origin of laws attaching them to new institutional structures does not tackle over-regulation and increasing complexity. It would be preferable to rethink the regulatory philosophy and come up with more cost-effective regulatory mechanisms. 

There is a belief that, if we leave the EU, only exporters would need to obey “EU regulations”. Domestic firms would benefit from huge savings in regulatory costs. But domestic firms would still be regulated, so the result would be two tiers of regulation – one for use at home and another for exporters. Most companies would avoid this and work to the highest standards.

More to the point, in many instances, the EU no longer makes the rules for the Single Market. More than 80 percent of the EU's Single Market legislation falls within the ambit of international organisations and is potentially amenable to global regulation. We are parties to these international organisations, so would still be adopting their rules. Leaving the EU will have less effect than imagined. 

For a post-exit Britain, this is very important. EFTA/EEA still adopts law processed by Brussels. But the law is made elsewhere. In the EEA but outside the EU, we by-pass the “middle man” and go directly to source.

There is, however, a longer-term alternative to Brussels. This has existed since 1947 as the United Nations Economic Commission Europe (UNECE), one of five UN regional commissions. It is based in Geneva and has 56 members, including most continental European countries, Canada, the Central Asian republics, Israel and the USA. Its key objective is to foster economic integration at sub-regional and regional level.

A pan-European single market based on UNECE as the co-ordinating body (simplified lines of communication shown)

In 1948 it was endorsed by Winston Churchill. With others, he argued for the United Nations to be the “paramount authority” in world affairs, but with regional bodies as part of the structure. They would become “the massive pillars upon which the world organisation would be founded in majesty and calm”. His New World Order would comprise three tiers – national, regional and global. In the European context, this would include all the nations of continental Europe. 

UNECE, not the EU, represents continental Europe. It is now responsible for most of the technical standardisation of transport, including docks, railways and road networks.

With the United Nations Environment Programme (UNEP), it administers pollution and climate change issues, and hosts five environmental conventions covering issues ranging from transboundary air pollution to the Aarhus Convention. Its remit includes “sustainable housing” and agricultural quality standards. It is also a key body in the development of the global harmonised system (GHS) for the classification and labelling of chemicals. 

Of great relevance here, the UNECE provides a secretariat for the World Forum for the Harmonisation of Vehicle Regulations (WP.29). This establishes a regulatory framework for vehicle safety and environmental impact. Its work is based on two agreements, made in 1958 and 1998, creating a legal framework for the “type approval” of vehicles and components. These approvals allow vehicles and parts to be traded internationally. 

There are currently 57 signatories, including the EU. Non-EU countries include the major vehicle manufacturing countries of Japan and South Korea. UNECE now makes the key vehicle regulations for the EU to adopt, which it then passes on to EU member states. 

If UNECE runs the Single Market, it can take advantage of an already welldeveloped hierarchical structure. Doing so removes entirely the idea of a Europe of concentric circles, where the EU is positioned at the centre, with the peripheral nations in a subordinate position. Instead, the market becomes a partnership of equals.

In terms of building the market, new standards may be initiated at any level but typically they might come from global bodies such as the Codex Alimentarius or from non-treaty entities such as the Basel Committee on Banking Supervision. They might have global effect or apply only to continental Europe.

Either way, standards would be processed by UNECE. As “UN regulations”, they would then be adopted by the EU for its Member States and by the UK in accordance with its own national procedures. An EFTA+ secretariat could act as a co-ordinating body for us, perhaps using the consultation structure developed under the EEA Agreement. 

Effectively, UNECE becomes the standard-maker for the wider Single Market, covering the entire continent of Europe, or wider if it keeps all 56 members.

The UK, once outside the EU, can raise new issues and place them on the agenda. In all instances, the UK might best expend its efforts in brokering agreements between equals, to avoid the perception of more wealthy nations seeking to impose their demands on weaker partners. That same provision also applies in relations between the UK and the EU. 

Any arrangement which casts the UK in a subordinate role, in relation to the EU or any of its member states, is simply not sustainable in the longer term.

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