Friday, 8 December 2017

Like an early morning mist over County Down...

Graeme Leach on top form in City AM:

With free trade, the Irish border is an issue for the EU, not the UK

We are told this is a problem with no solution, that it will see us crashing out of the EU with no deal, or that the DUP won’t play ball, leading to the end of the party’s confidence and supply agreement with the Conservatives.

The problem is seen as unfathomable because the solution has to deliver so much: no membership of the Single Market or Customs Union, no physical border crossings, and no red line through the Irish Sea. And just for good measure, it has to avoid the threat of a veto by the Republic of Ireland and the rest of the EU.

All of this can be addressed in one fell swoop. If the UK chose to pursue genuine free trade post-Brexit, the border issue would become an ex-problem. If Britain decided to exercise its sovereign power and implement zero tariff and non-tariff barriers to imports, the border issue would disappear like an early morning mist over County Down*.

* I don't know much about weather systems over the nothern part of Ireland, but I'll take his word for it that the early morning mists disappear quickly.


Lola said...

Some of us have been making that point since 24th June 2016.

jack ketch said...

"If the UK chose to pursue genuine free trade post-Brexit, "

I wish! Ricardo and Adams must rotate in their urns every time PMT.May utters the phrase "Free Trade".

Edward Spalton said...

Free trade and low tariffs were major reasons for the quite rapid relative decline of British industry from the mid nineteenth century onwards. Effectively the policy increased the purchasing power of sterling, sucking in imports whilst the rising economies such as the USA and Germany continued to protect their home markets. There is no reason to expect a different effect today and our export economy is already pitifully weak.

Tariffs however are not the main problem. Even if we had tariff-free trade with the EU we would still have to surmount the non tariff barriers before goods could get as far as the customs post. For food products these are called sanitary and phytosanitary controls. Even though we start with identical standards to the EU, they are no longer recognised there once we become a Third Country. Firms exporting to the EU across the common external border will need evidence of compliance with EU standards, determined by inspection at the border or prior approval of a manufacturers' supply chains by an authority recognised by the EU. In her Florence speech Mrs may recognised that a dispute resolution procedure for this would be required.

The USA would require access to the British market for its chlorinated chicken as part of any free trade deal. This process is not acceptable to the EU, so EU health authorities will need to assure themselves that any chicken products exported by the UK have been produced to EU standards. It can be done but it is not simple or automatic. There are similar problems with pharmaceuticals and chemicals and many other classes of goods.

Furthermore businesses and officialdom will need time to comply with the new requirements. I know from my experience as a director of an animal feed milling firm when we went into the EEC . The government started giving us information from late in 1971 and we had the whole of 1972 to equip and prepare ourselves for joining on 1 January 1973. So the government will have to start giving full, detailed information to,every affected trade.
I have divided my memoir of this process into four episodes under the title ""The Miller's Tale" on

I have been opposed to our EEC/EU membership since 1972 but there is no point in pretending things are simple when they are not

Lola said...

Edward S. Yes. 'Things' are complicated, because of the EU. And it is their problem to solve them. But I agree that our government has been is being useless at providing any back up to business.
Yes, the UK has not had an export surplus in manufacturing since 1822. And we became the richest country in the world. Comparative advantage rules.

Lola said...

Furthermore joining the EEC was adding regulations. Bureaucrats love that. Leaving the EU is reducing regulations and bureaucrats hate that.

jack ketch said...

Leaving the EU is reducing regulations

Oh yes...a veritable bonfire../sarcasm

paulc156 said...

Leach is being a bit of a dick if he thinks zero tariffs on imports negates the need for some border controls.
For that to transpire it would also need full compliance with the whole shebang that are EU 'non tariff' regulations and standards and an acceptance of some EU legal oversight of any such arrangement. You could say 'that's a problem of the EU's own making', but that wouldn't make it any less true.

Edward Spalton said...


Having been in the animal feed and related businesses all my working life, I have had plenty of cause to curse regulation of all sorts - particularly when it changes. However, it is essential for public protection. Here is an example from human health.

When you go to the chemists for a prescription, the pills may come from a different country each time you go but you have assurance of consistency of composition and effect from a highly complex system of supra-national regulation to which we are contracted through the EU. If we "just walk away" none of that applies any more and British pharmaceuticals (one of our most important exports) would be unsaleable internationally. I pointed this out to an internet discussion group of fundamentalist free traders. If they followed their true beliefs, they would be happy to leave it to free competition between pharmaceutical companies - presumably the most efficient company would have the largest number of surviving patients! I had one comment from a leading parliamentary hard brexiteer "Of course, we would have our own regulations!" - which completely missed the point and would not make our products internationally acceptable. I am afraid that is the level of engagement and understanding from many people in positions of considerable influence.

The trouble is that boredom is the EU's biggest secret weapon. Reading half an hour of Brussels prose is enough to sap the will to live! So we rely most of the time on the opinions of others - many of whom rely on commentators whose knowledge leaves much to be desired. If you want a reliable explanation of the situation in comprehensible prose, do Google BREXIT MONOGRAPHS.
I have not heard of any of them being challenged on a matter of fact. The one dealing with non tariff barriers is
I think you will find that quite enough to be going on with.

For a more homely account of recent events, you could try

which also links to an earlier article "The Complexities of Brexit", dealing with specific problems facing the chemical industry, sheep farming and a specialist cheese producer, selling to the USA - presently dependent on an agreement negotiated through the EU.

Lola said...

Edward S. That consumer protection meme is one of the key fallacies around all of tbis.

jack ketch said...

you have assurance of consistency of composition and effect from a highly complex system of supra-national regulation to which we are contracted through the EU.

Which does beg the question why on earth anyone would think dicking around with it was a good idea.

Edward Spalton said...

So you will be content to be in a similar situation to many African countries where thousands die from fake medicines - or you are content to rely on the benevolence and altruism of the pharmaceutical companies.

The product licence numbers etc on the packages of your medicines is the token of a truly massive system of health protection. No system is perfect but there has not been another tragedy like Thalidomide since it came into force.

Jack Ketch
There are plenty of countries signed up to the system who are not EU members - like Switzerland for instance whose pharmaceutical industry is highly reputable.
The point is that the mindless slogan "just walk away" - if acted upon - takes us outside the system which protects us and gives international market acceptability to the products of our own reputable pharmaceutical manufacturers.

This is one reason for the complexity of the EU (Withdrawal) Bill. Back in 1922, the second Act passed by the newly independent Irish Parliament transferred all the existing Acts of the Westminster Parliament onto the Irish statute book, to be enforced by the institutions of the Irish Free State. Otherwise there would have been a legal vacuum. So this is nothing new.

Lola said...

Edward S
The issues in Africa, if I take you at your word, are due to other factors. Mainly the absence of the rule of law, the lack of education, the lack of markets (distribution licences will be sold by corrupt politicians) and so on. And in any event there are far more people in Africa benefiting from western medicines than die from the distribution of fakes.
In the west (broadly speaking) even before all this regulationism, it was perfectly possible for the market to ensure consistent supply of good pharmaceuticals since it was in the self interest of middlemen to supply them. The 'information asymmetry adjustment' was carried out by prescribing chemists.
As far as the manufacture is concerned industry groups come into being and agree common standards. The BSI being a good example.
What then happens is that governments and bureaucrats jump on the bandwagon for their own ends.
(In my trade, financial services) I have watched as regulationism has destroyed standards, jobs, businesses, and the wealth of citizens).

Going back to the international approvals bit, it is the settled practice in international law that these standard setting responsibilities are novated to the seceding nation. The infrastructure of validation is already here in your businesses.

What you are being sucked into is fighting this fight on the ground chosen by the bureaucrats. Consumer protection by bureaucrats is a fantasy. All bureaucrats are interested is their own survival and power.

Edward Spalton said...


From the very beginning the EEC/EU project regarded the Common External Border as one of its basic institutions and is under no obligation to dismantle it because we have decided to become a "Third Country". Originally it was all about the Common External Tariff. John Selwyn Gummer (now Lord Deben) came to address our trade association in 1972. He told us three main things (1) The Commonwealth countries were grown up, independent and wanted nothing more to do with us (2) So we had to look to Europe for our livelihood and (3) once inside that tariff barrier, our exports would boom as those continental chaps would queue up to buy our Rovers, Austins, Morris's etc instead of all those Renaults, BMWs and Volkswagens.
I knew that (1) was a lie as our firm bought milk powder from New Zealand and they were not at all delighted at losing their best customers. So I surmised the rest was probably dodgy too.
My opposition to our membership of the EEC/EU dates from that point.

In those days the public health measures were enforced at the borders of individual member countries: now they are standardised so that compliance of goods is either assured by standards enforced within the whole of the EU or checked at the external border before being admitted from outside for free circulation within the whole of the Single Market.

This system could be loosely called "Prior Approval"

I recommend an article of that name, dated 16 November on the blog
The author, Dr. Richard North, was a highly qualified Environmental Health Officer who became known to me when he was a renowned expert witness for the defence of food and other companies who had fallen foul of the over-zealous enforcement of EU regulations and directives during the Nineties. This gamekeeper turned poacher was very successful and wrote several books such as "The Castle of Lies" and "The Mad Officials". He is also, I guess, the only controversialist in the EU discussion actually to have had experience running a Border Inspection Post.

However much we may dislike the way the EU controls the health status or other technical requirements of products crossing its borders, it is most unlikely that they will change the system built up over more than forty years just to oblige us. So the problem is to make the transition to independent status as problem-free for our manufacturers and shippers as possible.

If you had read my account of joining the EEC, you would have seen that I met two officials at least who were the opposite of your assessment - although I met some of the other type too.
One genuine article was at the very top but I did not get to meet him personally until after he had resigned, having made the transition into the EEC as smooth as practicably possible for our industry. We certainly need somebody like him to do the same office in the opposite direction.
He was the late Sir Emrys Jones and you can Google his impressive obituary if you want.

Mark Wadsworth said...

Ed, thanks for input, consumer safety is of course important, but this all has to be decided on a case by case basis.

Medicines, cars, food, booze, animal feed, financial services, doctors and nurses, lorry drivers, they all need different types or levels of supervision, regulation, licensing etc.

As far as trade between UK and non-EU countries goes, why does anything need to change?

As far as imports from the EU go, why does anything need to change? We can continue to operate on the principle that if it's good enough for them, it's good enough for us.

Clearly, whatever product safety or licensing rules the UK has won't be massively different to EU rules, it's up to the EU what sort of system they want to have for UK exports, how difficult they want to make life for us.

You can't really generalise about stuff like this.

Take your pills example, what's to stop the UK from just signing up to the same international standards/agreements/mutual recognition as the EU has with Switzerland etc?

Lola said...

Ed. I do understand that - I run a financial services business and if anything at all is mis- and over-EU regulated it is FS - but you are missing the point I am making; and as is backed up by what MW is saying.

We are not asking the EU to change anything. We are just leaving. We will then trade with them as other nations do. Where we sell to them we will use their standards. And yes, there may be additional frictions at borders - which is they have any sense (which I concede the EU apparatchiks haven't) - then they will not make these any more onerous than for anyone else. And under international custom and practice the trade conditions and standards agreed between the EU and third party countries will be novated to us. So the problem if there is one is only with EU trade, trade with the rest of the world will continue as is - or more likely get much easier as the SM is a protectionist racket behind a tariff wall.

The general point I am making is that the vast bulk of regulationism is unnecessary. It is usually official codification of what has already happened, often demanded by existing by existing indigenous industries under the Trojan Horse of consumer protection when what is really being sought is protection from foreign competition.

But I do see that there are complexities in your situation. The answer is to adopt the free trade model. Under this industries self regulate and cut out the government to government deals (which are by definition not free trade deals at all but deals to limit free trade as trade would happen without them were it not for prior state intervention).

MW 'Signing up as Switzerland'. Quite.

In truth Brexit is an existential threat to the EU, and they know it. It is not a threat to 'Europe'. Once we go and do free trade they will face a real challenge from within. And that's why they won't play ball.

Of course we have a couple of useless twats at the top of the government in May and Hammond which does not help and will probably make Brexit appallingly painful and expensive.

Mark Wadsworth said...

L, amen to all that.

Are you looking forward to the deluge of data protection shite that will swamp us next May?

paulc156 said...

Oh for the good ole days of yore in the financial services before those pesky regulations...actually the only period in the history of the last few hundred years characterised by a distinct lack of financial crises was the Bretton Woods era which involved highly regulated banking sectors, unusually high levels of state involvement in economic management. It terminated in the 70's and was swiftly followed by deregulation of financial services, big bang etc. Subsequently fonancial scandals rocketed. Coincidence? Maybe...

Lola said...

To be frank that is almost but not quite entirely unlike total bollocks.
Banking was never ever 'regulated' until probably about 1830 ish. And even then the Banking Acts has more to do with trying to stop arbitrary credit expansion than trying to control all the minutiae of the businesses.
Also Bretton Woods was another regulatory failure relying on a fake gold standard. (Well that old fraud Keynes was involved in its draughting so what do you expect?).
And there was no 'deregulation' in the 70's and 80's. Quite the reverse. For example Thatchers 1986 Acts introduced regulation with outfits like the SIB, FIMBRA and Lautro and all their rules foisted on FS. And that is nothing compared to all the EU crap. What was not done and needed to be done was to properly reform the banks.
And every single financial scandal that I have looked into has at its root some failed intervention by some useless bureaucrat or politician.

Lola said...

Yes GDPR is going to be a nightmare. But its not as bad as MiFiDII which is an appalling totalitarian disaster in the making.
MiFiDii has already cost £M's (and probably eventually £Bn's) to develop systems for and it will going on costin £m's into the future. One outfit we deal with has 70 software developers working on its systems. Over the last year 60 of those have been working solely on MiFiDII work. A rough estimate they make is about £10m.

What is more MiFiDII conflicts with GDPR.

And what organisation is behind all this shit? The E fucking U of course.

paulc156 said...

L. Some good old straw man arguments there. Who said there was much in the way of banking regulations prior to 1830? The regulations mushroomed after each panic. In the US it was especially the case after the depression.
Regardless of you pronouncing the (golden) period after the war as one of regulatory failure. That's rather silly. Every period of growth since the industrial revolution has ended in some form of collapse so every collapse can be blamed on government interference or incompetence, (conveniently). It's circular logic and as every schoolboy knows that is a fallacious argument. (bowlocks;).And whether or not it was a regulatory failure it coincided with the lowest number of financial panics in recorded history, before or since.
As for your 'no deregulation in the 80's' comment, that seems a bit pythonesque. What about those regulations that hitherto limited access to mortgages which when removed opened the credit (for houses and consumer goods) floodgates? Maybe it was all just a bad dream...

Lola said...

I'll just tackle the 1986 Acts pro tem.
Without any doubt these introduced regulationism. I was there. I know this.
The other part was the removal of all the special privileges. That latter led to London becoming pre-eminent in financial services.
To repeat, but what is also needed (internationally) is reform of the basic banking structure and no-one will tackle that yet. It is that structure that creates business or more accurately credit cycles.

paulc156 said...

Really? I think not. What you refer to as 'special privileges' once removed wiuld neccessitate a raft of regs to replace the old regs lest the bandits run wild!
The truth is once those old family run partnerships etc were set free to become financial supergiants if they weren't regulated or severely restricted in some way( same thing) they would drag us to armageddon before you could shout 'don't panic'. The fact that the new regs were crap doesn't suggest that 'no regs' would be better! Rather that the old restrictive regs were themselves better!
New technologies might have required changes but the fact is that the period you referred to as one of 'regulatory failure' (Bretton Woods) was outstanding in it's relative absence of financial/banking panics. A feature you seem oblivious to... a link to a chart that stresses the point.

Bayard said...

P156c, there is a basic flaw behind the whole idea of government regulation and it is this: that the human race can be divided into the good guys and the bad guys and that governments have a magic sieve that enables them to recruit only the good guys as regulators so they can then control the bad guys that have fallen through the sieve. In reality the bad guys are just as likely to be the regulators as the regulated.

paulc156 said...

B. In principle I wouldn't argue with that except to say that in practice I want regs in most activities with the potential to do great harm to large numbers of prople. Something other than self regulated pharmaceuticals, industrials,financial services, all of whom are simply too potentially (and actually) harmful to be left to self police.
They can and do frequently buy off the regulators(or write the regs for gov. eg.auditors!)but rather like the way Churchill described democracy; Government led regulations are the worst method of ensuring correct behaviour by commercial enterprises, except for all the others!

Lola said...

P156. It's the policemen that are the problem. They are relative ignorant, stupid and always behind the curve. They are also motivated solely by self interest (as are we all) but as there is no market discipline on any of them (since there is no effective or direct democratic, legal or financial accountability and none of them have any skin in the game) all that they are interested in power and the survival of their bureaucracy. They cannot have any 'responsibility' as there are no consequences for their failures.

What you are suffering from is the 'other person' fallacy. What you want is me over here regulated as you do not trust me. But you are over there and engaged in something about which I know little and therefore by your logic untrustworthy. So if you are clamouring for regulationism then we have to ask, 'How untrustworthy are you?'

paulc156 said...

At the end of the day as I see it. We give up certain individual rights and liberties and invest them in the body politic. One of those rights is the right to produce or sell a good or service to the general public without fulfilling a general maxim of 'do no harm'. If profit is the final arbiter of this then we should expect lead in petrol and paint to remain for far longer than would otherwise be the case. Ditto narcotics in our fizzy drinks, thalidomide in our medicines and I'm not even touching on financial services!

Edward Spalton said...

Missing so far from this interesting correspondence is the fact that since 1994, the EU itself has been treaty-bound to accept globally agreed standards from such bodies as ISO, UNECE, Codex Alimentarius etc.

Although these come to us as EU regulations, they are made elsewhere and Brussels simply transcribes them. The standards for motor vehicles, for instance, come from UNECE in Geneva and are also accepted by many other countries than those in the EU. Codex Alimentarius has a section dealing with fish products globally and Norway presently chairs this and the organisation effectively tells the EU what to do. The Scandinavian countries have a different regulatory outlook to the dominant Franco/German axis of the EU but, like the UK, those states in the EU have no voice on the global bodies where the decisions are actually made. They are bound by the"common position" decided by the EU Commission. Norwegian friends tell me that they often receive unofficial requests from fellow Scandinavian countries in the EU to oppose the official EU line when the global bodies are making their decisions. I have not looked into financial regulation but believe that the BASEL accords set the parameters for EU regulation.

TOYOTA has a car factory near us and the management made a big point of saying the UK must be at " the top table" where regulations are made. I pointed out to a UKIP MEP that the top table was at UNECE in Geneva, not Brussels - so he could easily demolish that argument. He was apparently uncomprehending and replied " But I am campaigning against the EU, nit the UN". As Homer Simpson sometimes remarks " Doh!"

Mark Wadsworth said...

Ed, brilliant examples, thanks, that's the sort of thing I mean.

paulc156 said...

Ed. Points taken. Obviously all the examples given in my last post (coca cola, lead in paint etc)all predate the EU so I am just defending the principle of regulatory structures, health and safety etc rather than let suppliers and producers self police. We can of course continue with (and probably will) broadly the same body of standards and regs as we do now...or else flog N Ire to the Irish ;)

Bayard said...

P156, you make a good case for regulations. However, that is not an equally good case for regulators. Of course we must have regulations. What are laws but regulations and, without the rule of law, as, we know, life becomes considerably more difficult for all except the ruling elite (and even for them, as they live on a knife-edge). However, once you have regulators, you have people (not all, but enough) who are either motivated entirely by self-interest, or believe that you can regulate your way to a perfect world, that, if only their are enough regulations, no wrong can be done. I know, because I was once one of those people.

Edward Spalton said...

" Flog Northern Ireland to the Irish"
Your suggestion brought to mind an unconnected long ago controversy which my father told me about.
In the early Thirties, some members of the Labour Party joined with Ramsey McDonald to form a national government with the Conservatives. One of their number was J H THomas, s railway trade unionist, who came to address a meeting in Derby.

The Labour Party loyalists started a chant. " Jimmy's selling you. Jimmy's selling you" . At which point Thomas delivered
FIND A BLOODY BUYER! " The meeting dissolved into laughter and the point was taken.

In spite of rhetoric to the contrary, I don't think there would be many buyers for Northern Ireland down South at present.
The costs would be very high and the conflicts imported into the fragile stability of the Republic too great
I should add that I am temperamentally a UK ( small u) unionist.

Lola said...

Ed. In the event that our government extracts us properly from the EU - a big ask I concede - I have the feeling that the next leaver could be Eire. The UK and Eire make a sensible trading bloc as we share so much that isn't 'European'. A common law approach for a start. And despite UK antipathy in official Eire I have found the Irish in general to be very pro-UK.

Edward Spalton said...

My good friend, Professor Anthony Coughlan, of the Irish Nationsl Platform entirely agrees with you. Tony has been a staunch friend of the British independence movement for over forty years. He does point out that the establishment in the Republic is overwhelmingly Europhile and in league with Remainers over here.

Ireland did extremely well,out of the Common Agricultural Policy - observing the effects during business visits was like seeing the result of an economic blood transfusion. Ireland was also highly favoured with massive EU structural,grants.

Tony Coughlan points out that the years of the Massive " Celtic Tiger" boom coincided with the devaluation of the Irish pound and that it was frankly potty for Ireland to join the euro unless the UK also did.

He now points out that Ireland is required to contribute to the EU rather than being a recipient of its largesse. Nonetheless pro EU sentiment is still very strong and businessmen like Michael,O'Lesry of Ryan Air think that IREXIT would simply be a matter of cutting themselves off from the EU market.

Doubtless people will watch to,see how the UK fares. I hope I am wrong but do not foresee much satisfactory emerging from the contradictory provisions of what might be termed Mrs May's " Bad Friday Agreement"

Lola said...



Annoying isn't it?