LeaveHQ, 02/11/2019  
 


When we first looked at the withdrawal agreement we were less than enthused by it. It is a document of labyrinthine complexity not designed to be read or understood by anyone remotely normal. Being that it is so opaque it is easy for opportunists to read into it pretty much anything they want others to believe. This is the game the Brexit Party is playing.


For the most part the provisions within the agreement relate only to the transition which is effectively non-voting membership of the EU. Nothing much much changes. We always anticipated this, recognising that Brexit is a process rather than an event. There are over three hundred areas of technical cooperation which need alternative arrangements and we have long taken the view that crashing out without a deal would lead to chaos and uncertainty.


There are risks associated with such a transition but they are overstated and certainly they do not outweigh the political and economic risks that come with no deal. There is plenty of "project fear" around but there's no disputing the EU's official legal position on the UK's status in their markets should we leave without a deal. It makes for grim reading. No one should be in a hurry to inflict that kind of damage.

Any pragmatist would recognise that our departure from a decades old system of government would require transitional arrangements not only to reassure British business but also to cushion the blow. Furthermore, the UK needs to be a close collaborative partner of the EU. We may not wish to be members but we do wish to be allies and friends. For that to happen we need a managed and amicable departure - not the zero sum game of 'no deal' that the Brexit Party demands.

Cynically they seek to whip up opposition to the deal, pointing to provisions within the withdrawal agreement, particularly those concerned with the "level playing field". As it happens the provisions are a relatively low bar and shouldn't present any major obstacle to the UK pursuing its own destiny. Moreover we do not wish to compete by entering a race to the bottom.  

It should also be noted that these provisions exist in every EU FTA and there is no way the EU would ever enter an agreement without them. It didn't make an exception for Canada and will not do so for the UK. Curious then that Brexit Party individuals continue to make reference to CETA. We wonder if they have ever read it. We also note that similar provisions exist in a number of multilateral WTO agreements - particularly on state aid, subsidy and production standards.  

The Brexit Party position, though, is one based on an outmoded perception of the modern world. There is no such thing as "full independence" when you live next door to a trade and regulatory superpower, unless of course you want to completely isolate yourself from lucrative markets and end all formal cooperation. That certainly isn't what we had in mind when we campaigned to leave the EU.

The fact of the matter is that the EU has enormous clout and has its own regulatory gravity and when nearly half of our exports go to the EU, in any case, the EU will continue to have considerable influence over our regulatory and trade policies. We do not operate in a vacuum. 

The stubborn and intransigent approach by the Brexit Party will get us nowhere. They assert that we can simply waltz out of the EU and then approach them for a rudimentary agreement under GATT24. Though the use of this mechanism is theoretically possible an interim agreement on tariffs comes nowhere close to addressing the mountain of issues created by new non tariff barriers. All the while the EU has repeatedly stated that, should we leave without a deal, it will not enter any further talks without first resolving the customs frontier issues in Ireland and those other areas addressed by the withdrawal agreement. They have emphatically stated there will be no "mini deals".


The Brexit Party is harbouring a number of delusions based on a simplistic understanding of the EU and trade in general. Trade is more than just moving lorry loads of tinned beans from Warrington to Warsaw. The UK depends on its services exports which are facilitated by dozens of legal instruments for which there is no cover under those "WTO rules".


We are of the view that the withdrawal agreement is suboptimal but ultimately that is a consequence of our collective failure as a movement to anticipate the shape of negotiations and our refusal to forward any kind of Brexit plan. There will likely be more uncomfortable compromises and concessions to come. The balance of leverage is definitely on the EU side. We are certain, though, that leaving without a deal hands virtually all of the leverage to the EU.


By taking a wholly absolutist line, the Brexit Party could split the leave vote in marginal constituencies, potentially handing the game to opponents of Brexit. Cynically the Brexit Party argues that the withdrawal agreement "is not Brexit" as a device to excuse their petulance. At this point we have to ask if Mr Farage really does want to leave the EU or whether the publicity, pay and perks of his current position are too much to give up.


The Leave Alliance is no fan of Boris Johnson and our preferred outcome (Efta EEA) now seems improbable, but the withdrawal agreement is the only realistic means of departure and a failure to face reality at this point could well see us lose the prize entirely. What Farage is doing is inexcusable and unforgivable.  







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