Brexit: the grown-ups hit town – by Dr. Richard North.

Today’s article is a “copy and paste” from today’s EU Referendum blog post. Herewith:
In the comments recently, I told of an illustrated book I’d seen as a boy. It was about a town where the children had been misbehaving at school and refusing to obey the grown-ups.
Then, one day, the children woke to find that all the adults had gone. In the whole town there were only children. And, at first, they all thought this was a splendid situation – no school, no constraints. They were free to do anything they wanted.
But then reality crept in. As the day went on, they got hungry. There was no-one to cook the meals. There were no busses and no cars, to go to the shops and, as it got dark, they needed light, and there was no-one to operate the power station. One of the children felt ill, but there was no comforting parent, no doctor. And so, as the situation deteriorated, the children agreed that grown-ups weren’t such a bad thing after all.
At that point, in the story, the adults re-appeared, telling the children that they had learned exactly the lesson intended, and everyone lived happily ever after. What reminded me of the story was the response of the “Ultras” to Mrs May invoking Article 50 – redolent of the phase when the children were still having fun in the absence of the grown-ups.
But now, in response to Mrs May’s letter, we see European Council President Donald Tusk talking about the next steps following the UK notification. The grown-ups are back in town.
Speaking from Malta, alongside Prime Minister Muscat (pictured), he told the assembly that his task was to propose the draft negotiating guidelines on Brexit to the 27 EU leaders. And this he did, with the copy finding its way to the press, even though it was marked limité.
The main elements and principles of his proposal, he said, were to be treated as fundamental. We will firmly stand by them, he said. Our duty is to minimise the uncertainty and disruption caused by the UK decision to withdraw from the EU for our citizens, businesses and Member States. This was, he said, about damage control.
We need to think of people first, he then said. Citizens from all over the EU live, work and study in the UK. And as long as the UK remains a member, their rights are fully protected. But we need to settle their status and situations after the withdrawal with reciprocal, enforceable and non-discriminatory guarantees.
Second, he said, we must prevent a legal vacuum for our companies that stems from the fact that after Brexit the EU laws will no longer apply to the UK.
Third, we will also need to make sure that the UK honours all financial commitments and liabilities it has taken as a Member State. It is only fair towards all those people, communities, scientists, farmers and so on to whom we, all the 28, promised and owe this money. I can guarantee that the EU, on our part, will honour all our commitments.
Fourth, we will seek flexible and creative solutions aiming at avoiding a hard border between Northern Ireland and Ireland. It is of crucial importance to support the peace process in Northern Ireland.
But then, in words that cannot have been of any comfort to Mrs May, Tusk grouped these four issues as “all part of the first phase of our negotiations”. And only once sufficient progress been achieved could the framework for “our future relationship” be discussed.
Starting parallel talks on all issues at the same time, as suggested by some in the UK, said Tusk, will not happen. The talks, he said, will be difficult, complex and sometimes even confrontational. There is no way around it.
Then he added, EU27 does not and will not pursue a punitive approach. Brexit in itself is already punitive enough. After more than forty years of being united, we owe it to each other to do everything we can to make this divorce as smooth as possible.
In the proposal itself, which will be submitted to the full European Council for approval on 29 April, several important points are re-iterated.
Preserving the integrity of the Single Market excludes participation based on a sector-by-sector approach, it says, adding that a non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member.
In this context, the European Council welcomes the recognition by the British Government that the four freedoms of the Single Market are indivisible and that there can be no “cherry picking”.
Negotiations, we are told, will be conducted as a single package. And, in accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately.
This alone spells doom for the UK. In going for a comprehensive agreement “of greater scope and ambition” than any ever tackled, Mrs May risks overloading the agenda and running out of time before everything is agreed. And she should have known this. The “nothing is agreed until everything is agreed” principle is one to which the EU always has been committed.
And in another unwelcome development, the proposal says that agreement on a future relationship between the Union and the United Kingdom as such can only be concluded once the United Kingdom has become a “third country”. Thus, there will be no free trade agreement until the UK has left the EU.
All we can expect is “an overall understanding on the framework for the future relationship”, and that will only come during a second phase of the negotiations. That means, inevitably, that there must be transitional arrangements.
Here, the proposal is uncompromising. The arrangements “must be clearly defined, limited in time, and subject to effective enforcement mechanisms”. And should a time-limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply.
This effectively means that, following the Article 50 settlement, all Mrs May can hope for is an agreement in principle as to what will then be negotiated. To that effect, the European Council stands ready to initiate work towards an ambitious free trade agreement, but “it cannot amount to participation in the Single Market or parts thereof”.
Furthermore, any deal “must ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through, inter alia, fiscal, social and environmental dumping”.
What this all amounts to is the UK remaining subject to the jurisdiction of the Commission and the ECJ for the period while the free trade agreement is negotiated, with a pistol to our head as we confront yet another make-or-break timetable.
On top of this, we will be required to continue making contributions to the EU budget – with another ticking time-bomb also buried in the text. The European Council, it says, expects the United Kingdom to honour its share of international commitments contracted in the context of its EU membership. This means we continue aid payments and other support to third country partners and international organisations. And that alone has to cost in excess of £1 billion a year. We can’t claw it back.
Beyond trade, the EU also has some unpleasant surprises. It stands ready to consider establishing a partnership in other areas, in particular the fight against terrorism and international crime as well as security and defence. But, it says, future partnership must include appropriate enforcement and dispute settlement mechanisms that do not affect the Union’s autonomy, in particular its decision-making procedures.
And, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom.
That little point, along with the Irish border question, are set to soak up no end of time, so it is perhaps just as well that the EU is not prepared to entertain full-blown free trade talks within the two-year Article 50 period.
One can only observe, of the generality though, that an Efta/EEA deal as an interim option begins to look extremely attractive compared to what we’re actually going to get. All those clever-dicks were so keen to point out the pitfalls of such an option, they forgot to take in our observations about it being the “least worst” option – meaning that everything else was going to be worse.
By that measure, the very few people with brains enough to realise what Mrs May has done in rejecting the Single Market will realise that Flexcit held the promise of something far better than she is set to achieve.
In fact, as we observed many times, joining Efta and staying in the EEA was the only secure way of ensuring that we leave the EU and still have access to Member State markets.
Now, she is to bring us the worst of all possible worlds. At the end of two years, we wont be properly out of the EU, we’ll still be subject to its laws and paying it money, and we’ll still be answerable to the ECJ. We won’t have a trade deal and the only certainty we will have in that area is that, compared with whatever we have now, what we will get will be inferior.
The thing is, no-one can complain that the options – and possible consequences were not set out. They were, and in great detail. We have consistently argued, right from the beginning, that a finished deal could not be struck inside two years, and that is exactly what is coming to pass.
We consistently argued that we would need an interim deal – the only one to argue thus in the IEA Brexit competition – and again that is exactly what is coming to pass.
But instead of a scenario where the UK regained some control, and the best possible chance of making a clean break inside two years – with the legally guaranteed ability to control EU migration – Mrs May has thrown it all away.
How the “Ultras” will respond to all this, when the implications have fully sunk in, we cannot yet say, but “ten minute” Lilley and John Redwood, even now are looking pretty silly.
Maybe they will now argue for the “WTO option” – maybe they will have to, if they are to retain any of their credibility, which is draining away by the hour. Their toxic mix of ideology and stupidity has driven us into a cul-de-sac, putting us exactly where we didn’t want to be.
‘We told you so’, doesn’t even begin to cover it, even if it is a start. With Easter coming up, we recall Jesus on the Cross and his prayer “Father, forgive them, for they know not what they do”. But I doubt that we can be as forgiving.
British Gazette comment: This is one of the best critiques delivered on the UK’s parlous situation yet.
For the original, GOTO: http://eureferendum.com/blogview.aspx?blogno=86429