Published on The Spectator
The UK government has given the EU a Brexit deadline of four months. No. 10 is threatening to walk away from the negotiating table if a broad outline for a Canada-style trade agreement cannot be reached by the summer.
The UK government has given the EU a Brexit deadline of four months. No. 10 is threatening to walk away from the negotiating table if a broad outline for a Canada-style trade agreement cannot be reached by the summer.
But
the UK isn’t really being as radical as it might first appear. For a
start, the withdrawal agreement already commits the parties to a July
deadline by which point the EU must decide whether to extend the
transition period.
Some might argue that the UK is ripping up the political declaration by imposing such a deadline. But in fact, the UK is only applying a minimalist interpretation of the non-binding political declaration, arguing that ‘regression‘ in
social or environmental policy should only be banned when trade is
distorted. The EU, on the other hand, wants the UK to respect its ‘high
standards’ in return for tariff-free access to the bloc.
The backdrop to this is that the EU — or at least its chief Brexit negotiator, Michel Barnier — thinks that
when the EU has more trade with a country, it justifies more
protectionism. Barnier is using this as a justification to impose more
conditions on the UK than Canada. In reality, this protectionism will of
course damage the EU as well, especially if it’s applied not to prevent
new trade, but to destroy existing trade.
A
key Johnson demand in the negotiations is for the right to set the UK’s
own rules and thereby ‘diverge’ from EU ones. Perhaps it would be a wise thing
to implement this gradually, but ultimately UK concessions on the pace
of implementation will only be possible if Brussels accepts that current
trade flows will not be harmed simply because the UK wants to make
their own rules.
It
doesn’t really look like we are heading that way. In the past, the EU
has been guilty of over-regulation. And it seems like the new EU
Commission, led by Ursula von der Leyen, is keen to double down on its
past over-regulatory behavior. Von der Leyen is pushing hard for her
so-called ‘European green deal’, an approach that is ‘inherently
protectionist’, according to King’s College professor Nick Butler. Butler argues
that ‘the notion of Europe’s competitiveness in the global economy is
absent. It’s also centralized and based on regulatory enforcement.
Innovation is paid little attention.’
In short, the ‘nanny state’ approach is back. From the environment to food, Brussels wants to regulate it all.
Make
no mistake, these initiatives do not always come from eurocrats
themselves. Sometimes, industry’s ideas are taken to Brussels where they
quickly take on a life of their own as prominent nanny-state voices
reveal their eagerness to regulate for the sake of it.
‘Nutri-score’, a color-coded food labelling system, is a good example. The push for an EU-wide food labelling system was actually
an industry initiative, with producers asking the European Commission
to test a labeling system throughout the bloc. Following France’s decision to
be the first to implement Nutri-score in 2017, a coalition of industry,
national nannycrats and Members of European
Parliament began pushing to
make Nutri-score compulsory for all food manufacturers in the EU.
However, in their rush to embrace it, they’re ignoring all of the flaws
with the food labeling system. Not only are there issues with the kinds
of products receiving a quality label but, more fundamentally, this
‘one size fits none’ policy approach weirdly assumes that consumers are
not intelligent enough to make up their own minds. Thankfully,
Nutri-score has not been made compulsory yet, so viable alternative
approaches are still available to food manufacturers.
In
any case, Brexit will probably trigger a process of regulatory
competition, making it much harder for all kinds of uniform EU standards
to emerge from the conglomerate of corporates and national authorities.
At the moment, the UK is obliged to uphold EU regulations, at least
until the end of the year, when the transition arrangement of ‘full
market access in return for full regulatory rule-taking’ lapses.
In
theory, the UK must also carry over new EU rules. Some are rightly
questioning what the point of this is. One example of a new EU rule the
UK needs to adopt is the EU’s incoming ban on tobacco products with ‘characterizing flavors’, which is really a ban on menthol cigarettes. The decision is based on a dubious assumption that minty cigarettes entice young people into starting smoking. At the very least, the UK could decide to only enforce such new EU legislation until the end of the year, after which it would automatically lapse.
Brexit
means the world of regulation is about to face drastic changes, and it
seems not everyone has sufficiently appreciated this. Quangos,
lobbyists, eurocrats and trade negotiators better take notice: we’re
done with ‘business as usual’.