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Dumb greens and unions

The UK (and NI) could become a nightmare trading neighbour by ignoring EU environmental, and labour standards - exploiting the resulting competitive advantage over the EU (and Ireland)

One of the things historians may dwell on is how the key December 2017 and February 2018 eu drafts of the Brexit agreement came to take the forms they did. It is all the more important since the inept UK Government of Theresa May failed to produce its own draft, though it might have been expected to do just that. Of course that suggests a lack of seriousness on the UK’s part about the agreement and perhaps that the EU Drafts may not go as far as we, and the EU, think, but that is a separate matter.

In particular it is interesting that the drafts – the first a draft political agreement, the second a draft legal agreement with the same substance enshrine the EU’s rules for the customs union and single market but not its rules for multifarious other spheres of eu activity that bind the UK while it remains a member of the EU: most notably on the environment, labour and consumer affairs.

The body politic and commentators have missed the following: the UK could become the trading neighbour from hell by ignoring EU environmental, health, labour etc standards – exploiting the competitive advantage over the eu you’d expect from a country saving money by keeping these standards low.

It is interesting is that so many dogs have failed to bark. One might have expected the British trade unions to be shocked at the potential dangers to workers’ rights if EU standards are abolished and they become subject to the whims of a hawkish Tory party. But they didn’t because, like the British Labour party of course, they can only think of the superior standards Jeremy Corbyn will bring to the sphere. This is self- absorbedly naïve. Corbyn will not be in power for ever and the Tories won’t be going anywhere. When they return they will not have to observe the comfort blanket that EU standards provide. We know well the frustrations of the Tory party over the years with what used to be known as the EU’s ‘Social Chapter’. Nothing is as certain as that they will not observe its prescripts on issues like maternity and overtime if they return to power in some post-Brexit outturn. There are occasional insights into this thinking but mostly the protagonists remain mute.

Surprising too that the Irish unions have made so little noise about it but then the Irish Congress of Trades Unions and SIPTU are both challenged by having members and remits both North and South of the border. You’d think they’d be on the warpath.

First meeting between Michel Barnier and DUP… the unmoveable object meets… another unmoveable object

Environmentalists and Green parties have said little perhaps because typically they languish far from the vehicles of power and tend not to be as forensic or aggressive as the circumstances here demand.
Village tried to provoke the establishment media, most of RTÉ’s and the Irish Times’ Europe, Northern Ireland and Environment correspondents etc (by twitter) into recognising their failure to cover this issue but – to a man – they’re too complacent, and probably too immersed in politics and economics, to think about social and environmental rights and rules.

The issue is clouded as terms like “a common regulatory area on the island of Ireland” and “a single regulatory space on the island of Ireland…” in themselves don’t do justice to the fact that there are important areas that will no longer be regulated by the EU.

It’s also a bit difficult for many people to get their heads around as “regulatory alignment” of Northern Ireland with the EU is only envisaged as a ‘backstop’ if the UK can’t strike a more wide- ranging deal with Ireland and if a technological border solution proves impossible. Of course with only a year left to Brexit it’s looking increasingly like neither of the two contingencies will come to pass. The easiest way to avoid the backstop is for the UK as a whole to remain in the customs union and the single market. But the UK government insists this will not happen.

Because the contingencies are uncertain they were left out of the draft Withdrawal Agreement which is a strictly legalistic document, thought they had appeared in the December political draft – and they remain politically possible.

It’s complicating too that the Tories and Brexiteers so vociferously think the common regulatory area described in the EU draft goes too far rather than not far enough – though of course they are referring essentially to economic matters, not to environmental and social matters about which they may care little.

It is clouded because it may well be that no deal is possible. It is important to note that, despite occasional diplomatic pleasantries, there has been little progress on the central conundrum of the negotiations: if the UK leaves the EU trading bloc, then a customs border is needed either on the island of Ireland or in the Irish Sea. One is ruled out by the EU drafts, the other by the UK.

Theresa May asked Brussels if Britain could stay in the bits of the single market that she likes and exit the bits that she does not. The EU doesn’t have to, and won’t, run with that – no matter how self-righteous Brexiteers fume. On this basis it is very possible the EU’s draft terms form no element of the (WTO) arrangement that the UK falls back on.

And it is clouded because confusingly the Draft Withdrawal Agreement refers, in its Article 12, to the Environment.

Most people (not you dear reader) glaze over a little when contemplating the diktats of a customs union and single market. The customs union is an agreement among members to charge the same import duties as each other and usually to allow free trade between themselves. The single market guarantees the free movement of goods, capital, services, and labour – the “four freedoms” – within the European Union.

You couldn’t for example have goods which comprise some material, imported into Britain on the basis of a tariff-free agreement between Britain and eg Singapore, getting into the EU without checks to impose the appropriate tariff between Singapore and the EU. It’s elementary trade-law stuff. And it’s very different from Boris Johnson’s image of cross-London travel where there’s a congestion charge. May is in denial over the border, claiming the US-Canada border could be a model. A paper on customs union that the British produced back in August and Foster gushingly hailed as “innovative” in fact said of its own proposals that they were “an innovative and untested approach that would take time to develop and implement”.

Finally it’s confusing because the structure of this commitment is that the UK will maintain alignment with certain rules of the Internal market and customs union. It will maintain alignment with rules of the internal market and customs union that (in addition) “support North- South cooperation, the all-island economy and the protection of the 1998 Agreement”.

The starting point is that the rules must be rules of the internal market and customs union. Otherwise there’s no obligation on the UK to maintain alignment. It is only such of those rules as support North- South cooperation, the all-island economy and the protection of the 1998 Agreement that the UK is required to align with. In other words essentially only the economic rules. We hear that there are 142 areas of North- South cooperation. But it is only those areas that flow from rules of the internal market and custom union that the UK must continue to comply with.

The 142 areas cover social, environment, consumer and other spheres including economic. This agreement covers only the (essentially economic) areas that flow from the rules of the internal market and customs union. So most of the 142 areas are, legally, irrelevant to this deal.

It’s important in considering the rules of the customs union and single market to note that compliance can by definition be established at the border: what tariff is appropriate on this good; can this person or item cross the border with no visa etc?

On the other hand you cannot readily assess at a border if a good comes from a factory which was built without any environmental impact assessment on an area that was formerly a protected habitat or whose workers are working extra hours. Supervising such issues may – horror for Brexiteers – entail assessment by the European Court of Justice.

If we take the environment, although under Article 7 of the Protocol checks may be made at borders to ensure products that could damage the environment won’t cross the border, that’s not the same as NI embracing the existing EU regime of rules on EIS, Habitats, Waste, Noise and Air Pollution etc. As to labour, the EU Working Time Directive 2003 requires a minimum of 4 weeks paid holidays each year, a minimum of 20-minute paid rest breaks for six-hour work shifts, limits on night work and dangerous work, and a maximum 48-hour working week unless a worker individually consents. The Parental Leave Directive 2010 prescribes four months of unpaid leave for parents to care for children before they turn eight years old, and the Pregnant Workers Directive 1992 creates a right for mothers to a minimum of 14 weeks’ paid leave to care for children.

Less of this

Divining if products crossing the border have been manufactured by workers who could avail of these measures is a non starter. It’s strictly background stuff.

So… there’s a whole body of rules not relating to the customs union and single market that NI will no longer have to follow. Obviously that would create a competitive advantage, that the DUP in particular may be keen to exploit. It may also ultimately lead to lobbying in the Republic to ensure standards here are reduced so Multi-nationals don’t site in NI to avoid eg the Habitats Directive or EU Air Pollution standards, social and other typically non-economic standards.

A little more clarity has been provided by the EU in guidelines it published on 8 March where the Council indicated its line on ‘social and environment’ measures for post-Brexit UK.

The ambivalence is stark: “The aim should be to prevent unfair competitive advantage that the UK could enjoy through undercutting of current levels of protection with respect to competition and state aid, tax, social, environment and regulatory measures and practices. This will require a combination of substantive rules aligned with EU and international standards, adequate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement mechanisms in the agreement as well as union autonomous remedies, that are all commensurate with the depth and breadth of the EU- UK economic connectedness”.

It is notably weak and aspirational by comparison with provisions on the customs union and single market – “the aim” is measures “commensurate with the depth and breadth of the EU-UK economic interconnectedness”.

If the EU was going to require a broader regulatory alignment it needed to do have done it by now. For Ireland or the EU to stand on these standards at a later stage would seem like the bad faith we’re so keen to impute to the UK.

There is no chance the UK will open itself to arguments that these areas need to be addressed at some later stage. The agreement suits the Tories and the DUP, with their visceral predilections for avoiding ‘red tape’, only too well. Northern Ireland (and in the future perhaps the rest of the UK) will not now have to observe EU regulations on social, environmental, labour and (most) consumer affairs.

Tory Britain never liked red tape. In 2007, David Cameron said “It will be a top priority for the next Conservative government to restore social and employment legislation to national control”. John Major first negotiated a UK-opt out from the social chapter of the Maastricht treaty in 1992 (though Labour moved quickly to incorporate it into UK law after coming to power in 1997). This agreement is a Tory dream. Because Northern Ireland and perhaps the rest of Britain could trade into Ireland and the rest of the European while applying lower standards on social, environmental and other issues.

It has always been clear that lobbyists exert a strong influence on EU rules from the time of their conception. It is not clear how much of the EU’s drafts derive from lobbyists, how much from bureaucrats and European leaders and how much from the UK, notably the Tories and DUP. History will record who engineered a situation where the EU momentously proposed that NI (and probably ultimately the UK) could evade rules such as those on the environment and labour provided it only aligned with those on the customs union and single market. It could so easily have been otherwise.

Regulatory alignment should have been across the range of issues covered by the EU. They are listed in the Lisbon Treaty, the Treaty on Functioning of the European Union and include: “Employment, Education, vocational training, youth and sport, Public health, Consumer protection, Environment (climate change) and energy”. Some of these issues have been included in the common regulatory area – because the UK assented to them. Others it hopes to subscribe to various EU bodies, apparently on a voluntary basis.

But on labour, environment and consumer affairs the UK is entering virgin territory.

Prepare for a UK dumping goods and services that flow from its low standards on a high-standard, highly-regulated EU. And profiting from it, at least in the short term.

Prepare then too for a strengthening of voices within the remaining EU countries that the EU too needs to reduce standards to eliminate the new competitive advantage attaching to the low-standard UK.

And even if the drafts go nowhere, whatever agreement or non-agreement emerges ultimately, the – low – standards have been set.

Michael Smith