Sunday, 23 April 2017
The book I'm reading at the moment, The Emergence of Private Authority in Global Governance by Thomas J Biersteker, has it that the state is effectively legitimised organised crime. This to me is civics 101, ie the state has the monopoly on violence and uses the implied threat of it to ensure obedience. Anything not sanctioned by it is crime.
In a well governed state rules exist for the equal distribution of liberty to ensure that the externalities of commerce do not infringe on the rights of the individual. Very often such rules defend freedoms and extend liberties.
There are though, as Biersteker has it, a multiplicity of authorities. There are some within the structures of the state and some external to it. There are private authorities of varying constitutions like sports governing bodies, religions, private regulators and NGOs, and then there can be other types of authority be it terrorist entities like Hezbollah or ISIS, running a state within a state, or even organised crime.
The modern state is increasingly a model of devolved authorities where licence is granted to recognised authorities to perform the function of governance. Regulation is often a devolved or outsourced function, allowing the core body of government to focus on more general concerns.
The purpose of regulation is to regularise and legitimise disruptive practices. This is done according to risk assessment and assessment of harm - or where such practices are at odds with the morality of the primary authority. One example of a disruptive practice is Uber which utilises a number of different trade practices using new technologies which, while considered to be useful innovation, has externalities to consider and decisions to be made over the classification of their activities. For instance is a driver an employee or contractor?
Uber is cause célèbre of libertarians and is held aloft as an example of the free market in action. They very often overlook the necessity for social provision of public transport and when it comes to vehicles adapted for the needs of the disabled, the market does not always provide and the subsequent saturation of the market reduces slim provision to none at all as regulated taxi firms struggle to compete.
Uber is one of the disruptive practices which are initially tolerated and then brought into the fold through the process of gradual regulation and judicial decision making. They eventually become part of the great ossified machine. But then you have those markets that the core state cannot touch with a barge pole like drugs and gun running. This is effectively the prohibition of markets deemed haram. They remain outside of legitimate authority and those participating lose the protections of it.
What's interesting is that they then become authorities in their own right with their own system of rules, underpinned by the threat of violence. Certainly the drugs trade has its own codes, processes and procedures albeit unwritten. Gang culture has its own social hierarchy and a code of ethics.
In Western cultures the drug problem is not so prevalent that it cannot be managed albeit at a huge cost. Narco-states however lack the resources or indeed the means to incentivise public cooperation. Drug lords can exert power in equal measure to governments not least because of the implied threat of violence but very often because the drugs trade is one of the more lucrative sectors.
This leads to the situation we have today where power struggles are between concentric circles of legitimate authority (with prestige and pedigree) in ongoing struggles against criminal authority. As to what constitutes legitimate is largely up to the people by way of their consent. This is why Hezbollah remains a power within Lebanon and it is why the Central American states cannot tackle the drug lords head-on. They can bring equal violence to bear and have popular backing from those whose livelihoods depend on it.
Many of these problems could be resolved by way of regulation and decriminalisation of narcotics. Since the trade is seemingly unstoppable and governments are increasingly unable to offer their populaces more lucrative work it would a great many conflicts of authority and be a source of revenue rather than a net cost. This though is unlikely to ever happen as those in power are at the mercy of their electorates where religious authorities hold influence. The consequence of this stalemate is corruption and war where the only winners are criminals and tyrants.
Then if we look at Africa and across the middle east we find the balance of power is considerably more tribal. Or at least more overtly tribal. The West is equally so but liberal democracy, to a point, removes the worst excesses of it. Promoting good governance has been the holy grail of the West but such efforts are undermined by the aggressive trade policies of China, India, the EU and the USA. Very often African authorities are bought off in order to look the other way when corporations move in to exploit natural resources from fish to rare minerals.
The lack of good governance then has a knock-on effect worldwide. As much as the illicit trade in drugs has its own well documented effects, one of the lesser acknowledged but massively significant issues is food and medicine fraud. This is why the West, the EU in particular has an elaborate system of standards. Fake medicines found in the EU is around ten per cent whereas in Africa it can be anywhere between thirty and seventy per cent.
Standards and inspection practices form the frontiers of the EU, freezing out unwanted goods but at the same time freezing out lesser developed states from participating in trade. This is one of the core concerns of the WTO and UNCTAD. The latter being especially geared toward economic assistance while the WTO is increasingly focussed on the removal of unnecessary barriers, where it seeks the promotion of global standards.
Due to the global nature of trade and consequently counterfeiting, we see an increasing effort to link up and integrate legitimate authorities. Europol and Interpol as just as much part of the trade infrastructure as the WTO. Meanwhile when it comes to standards setting we see increasingly active private and global institutions exerting their authority. Where global governance is concerned we find knowledge authorities where states without the means or the knowledge to regulate will outsource to them.
In this, the West is fighting an uphill battle against vast criminal enterprises who are always one step ahead of the game, often utilising disruptive technologies to thwart regulatory systems. This is why we are seeing ever more moves to control the internet and promote standards in e-commerce. Good markets function on trust and trust is essential to trade. This is why we also see global standards in consumer rights emerging. All of this is key to the digital economy and this is set to be where the most lucrative tech opportunities lie.
As this blog has outlined, trade normalisation has caused global trade to peak and growth has been stubborn. The challenge therefore is to enhance the profitability of existing supply chains. This blog is a big advocate of trade facilitation and aid investment to that end however, tackling illegitimate trade still remains a priority. As much as fraud hits the margins of legitimate trade it also damages brand reputations and reduces trust in the system.
Tackling this is going to require ever more regulation, standardisation, integration, more globalisation of governance and huge investments. And that is going to be a problem. Certainly we saw from Brexit that there is little appetite for ceding more control and spending more as a electorates do not trust global institutions nor do they see the benefit to spending internationally. The right wing press in the UK has given aid a bad name and it is widely believed that contributions to the EU are a market entry fee rather than the running cost of an elaborate governance system.
Quite rightly, the public suspect that there is an agenda they are not in control of, have very little say in and no real means of holding it to account. The EU as a supranantional authority is one which wields a great deal of power but offers the people of Europe very little control. The irony being that any moves to full democratise the EU to establish it as a legitimate authority would be fiercely resisted. People tend to prefer the nation state as the more visible and accountable vehicle of government. It is tied up in their identity and traditions. It means something to them spiritually - a human need often neglected and disparaged.
Part of the reason the EU despised is because those proponents of this new EU utopia view national allegiances and regional identities as somehow backward. Globalists tend to be metropolitan types who will celebrate any culture other than their own, often treating backward practices abroad as diversity that must be respected. A recent misty-eyed BBC Radio 4 romanticisation of Spanish bull torture is one such example. The finger wagging liberals are the ones most responsible for Brexit. As vile as populists like Nigel Farage are, the condescending (and whiny) metropolitans are worse.
Ultimately at the heart of Brexit is a question of consent. We all recognise the need for authority but if democracy means anything the it is the right to choose. In that regard, some Central American drug lords have more democratic legitimacy than the EU. The creation of the EU is very much a project of the political elites who have concealed their agenda over many years, repeatedly distorting the truth about the nature of EU ambitions.
Essentially the problem with our EU relationship is that it is a wholesale dumping of legitimate authority onto a body that has little legitimacy. The consent it enjoys is by way of its potemkin village in Strasbourg where people foolishly believe the present of a toy parliament and voting rituals in some way constitutes democracy. Most of the major decisions regarding governance of key industries are outsourced wholesale by our own government and are subsequently beyond the reach of democratic reform. A bad compromise remains in place because too many vested interests have a stake in the status quo.
But this is the ultimate challenge of our age. How do we go about the process of globalisation while maintaining democratic process and informed consent? The European Union is clearly not the answer. A regional solution may well have been adequate for the last century but what of the internet world?
On the European Union, Tony Benn said "I can think of no body of men outside the Kremlin who have so much power without a shred of accountability for what they do". Except of course, that is no longer true. There are several entities globally with unprecedented decision making powers, most of which never see the light of day. I would venture than most have never heard of the ITU, Codex or UNECE. As we move ever more toward seamless borders and globalised internet trade, the producers of quasi-legislation are set to become some of the most powerful forums on earth.
In this regard Brexit solves very little. The holy grail of the Brexiteers is absolute sovereignty but this is no longer within our grasp if ever it was. We will find as we leave the EU that we are still compelled align with the EU, if not in law then voluntarily. Authorities can exert power beyond their own borders as we are about to find out. The EU can make rulings on products and services within its own borders and if we wish to trade with the EU then that decision must be observed. This is why we should have given more consideration to Efta.
This is where the remainers strongest argument lies in that our exit from the European Union in some respects reduces our power to influence decisions. What we find though is that the EU is increasingly making decisions not on the content of rules, rather their implementation. As regular readers will know, the trend is toward more decision making at the global level.
This is where the traditional model of governance begins to fall apart. The global trade ecosystem is a nexus of authorities. In setting the standards and rules there are a number of influential forums, but also treaty constructs between private authorities which governments and blocs have agreed to recognise. The removal of the EU as an authority in the UK does not remove its influence and even if it did there are several global accords which have significant influence over our energy, agriculture and banking rules. To name a few.
The players in this are NGOs, corporate alliances, super unions, regulators and nation states. In this we find anonymous subcommittees both in and out of the UN system have considerable power. It is of mind-boggling complexity and is awesome in its scale. This is why people prefer the simplistic narrative of Brussels bureaucrats because it's a more easily digestible world view and presents people with an easily understood bogeyman.
What we find instead of this simplistic, but widely believed, narrative is that sovereignty is massively diluted and authority is distributed to the most competent entity. It is assumed by many that the buck stops with the EU in terms of the transfer of powers but in actuality the EU is just as likely to surrender powers to private authority. Its influence in European law is not fully understood but if you read technical regulations it is there for all to see. It is for this reason I view the EU as an anachronistic middleman.
Increasingly we see that coalitions of the interested are the best way to establish common rules for the whole world, and compulsory allegiance to geographic blocs prevents nations from playing to their strengths in accordance with their lead industries. In this, it is likely that we will never reach the desirable state where technocracy is subordinate to democracy and so we must be active and independent participants, cutting out the many barriers to participation - the EU being one of them.
Out of concern for its own territorial integrity the EU would like nothing more than to remove the participation of member states form global forums and the longer we stayed in the EU the more likely that was to happen. It has made a number of attempts at the International Maritime Organisation to take control. Our interests lie in keeping these such organisations as multilateral forums.
At the very least, while we do not restore absolute sovereignty, we do regain the right to say no and the right to propose initiatives. Even smaller states like Norway can have a dramatic influence on major sectors by way of launching initiatives. They may not have the market size but they have soft power and expertise which is increasingly what matters in the new order.
What the EU seeks above all is uniformity of regulation and to expand that uniformity beyond its own borders. That it has achieved as much as it has is to its credit but I think we are reaching the limits of the possible. Democracy will always be a thorn in the side of the technocrat. There never will be a perfect order. We can only ever hope to bring a level of compatibility to individual sectors - and this will not be defined by geographic boundaries.
For as long as humans continue to evolve and as technology plays a larger part in our world there will always be a fluidity in authority and that which is legitimate does not necessarily stay legitimate. The one construct that continues to serve us well is the nation state. It is the means by which people can exert power over events. Nation states are as much as anything cultural authorities, having their own media and their own distinct conversations and debates. Only through this can there ever be a coherent manifestation of public will.
At the heart of the EU, though, is an anti-human ideology. It sees democracy as inconvenient to its ambitions. You can kinda see their point. Some of the finest minds in the world have spent years devising complex agreements designed to enhance trade only for it to be swatted by a regional assembly somewhere in the Belgium. It would be unfair to say that the EU has not responded to criticisms as to its status as a democracy. Only reluctantly has it allowed for member states to ratify comprehensive trade deals and look where that got it.
Ordinary people are suspicious of these trade deals not least because they don't understand them. They are shrouded in mystery. This is only to be expected as people have been encouraged not to participate and their only input not politics is the occasional election. Informed consent is not likely in these such conditions. We need more direct democracy if only to get people used to participating in bigger decisions.
For as long as the EU exists it will be an unwelcome decoy distracting us from the many devolved authorities and distancing our own government from them. Without our politicians and peoples being tasked with participating in these global entities it is unlikely there will ever to be a national debate about their existence let alone their output. Brexit at the very least begins that conversation. Or it would do if we had a half way competent media. They are only just getting to grips with the WTO.
In the round there are no immediate economic advantages to Brexit. Even in the longer term whatever compensatory or corrective measures we take will only go some way toward restoring our trade to its present levels. This is as much to do with the ineptitude of those tasked with Brexit as Brexit itself. What matters more though is that Britain continues to set the benchmark for democracy. It cannot do this while it is a passenger inside the EU. Britain must have the right to refuse laws and it must be at liberty to take those measures necessary to adapt to globalisation.
Brexiteers have assumed that the EU is unique in being a heavily regulated sphere and that out of the EU we shed that entire mentality, moving toward a more anarchic arena of trade. This hasn't been the case for nearly three decades and the advancement of global regulation has ballooned since the establishment of the single market. Probably the EU's biggest export is regulation. There has been a realisation of its social utility and its value in reducing barriers to trade. This very realisation has transformed trade worldwide and it is here to stay.
The question is now one of how the UK interacts with the world and making the best of the opportunities afforded by leaving the EU. Before we can speak to that we need to move past the dismal narrative of Brussels being at the centre of the universe. Increasingly we find Geneva should be the focus of our attention - and we are late to the party.
Saturday, 22 April 2017
Wherever you look in those places where leavers gather online you will see that Brexit has become a wishing well where everybody has bold expectations of what will happen and what is possible. The assumption is that Brexit brings about absolute sovereignty and that we are stepping out of a regulated sphere and into an unregulated sphere where we can do what we want. I wish it were true but it isn't.
There is no scenario I envisage where there will be substantial deregulation save for a catastrophic crash out. In the modern world the very essence of trade is a trade-off between sovereignty and the common good. The EU is only one arena among many where we have ceded some degree of absolute control. We retain the theoretical sovereignty to withdraw but as Brexit demonstrates, withdrawal from complex systems is no simple undertaking.
We are told that Brexit is a rejection of meddlesome Brussels bureaucrats interfering with our lives. This is a deep seated narrative as old as euroscepticism itself. What we discover, though, on closer inspection is that the EU is only one part of the puzzle in a far larger nexus of international organisations and private authorities - none of which has ever seen a hint of democracy and their role is largely obscured by the focus on the EU.
Part of the reason it escapes scrutiny is that the media is not interested in it. There is political drama and the subject matter is just not sexy enough. International standards on dehydrated garlic or vehicle wing mirrors is not going to raise pulses. Insofar as anything is newsworthy from this shop it is usually corruption but then the news that government is corrupt is akin with the sky being blue.
The other reason it escapes our attention is that a lot of it is quite worthwhile and not especially controversial. Do we really need an extensive public debate about every last detail of governance?
Without much scrutiny from the outside world, nerds sitting in windowless rooms in Geneva have done more to improve quality of life and enhance trade than anything since containerisation. These can be small innovations to reduce workload or safety enhancements that extend and preserve life. This though is lost on the general public. Regulation is perceived petty interference rather than the lubrication of complex societies. We may complain that it exists but we would miss it were it gone.
Take the traffic light for instance. It's there to tell you what to do and it stops you doing things. We all hate waiting at traffic lights. The presence of them though is why we have free flowing traffic most of the time without gridlock lasting twelve hours as happens in many African cities. Think of all the time it saves.
The assumption is that regulation is designed to limit human activity whereas if you look at virtually everything the WTO does, and in more recent years even the EU, the effort has been to harmonise regulation, eliminate red tape and increase the efficiency of supply chains. Rather than being risk averse as some have it, the system simply acknowledges risk and designs systems to mitigate them. Quite a good idea if you don't want baby formula mixed with floor cleaner.
But then regulation goes much further than that. There are realms of standards setting and regulation that border on exciting when you consider the potential. Some of the regulatory conventions to bring about a global single market in digital services are set to be transformational. These really are major innovations that will bring about the next revolution in consumption and will change the face of work as we know it.
Meanwhile the self driving car and improvements in the internal combustion engine, along with electric motor efficiency have been driven by standards and regulatory demands. None of this would have happened without it. Given the choice manufactures very often would carry on making the same inefficient junk they have always made.
In energy, demand side management is a regulatory innovation which removes the need to build power-stations and eliminates many of the negative externalities of power generation. It gets the Ukippers riled because they can't have pointlessly energy hungry hoovers but just one system of standards has radically altered energy production and enhanced technological progress. Regulation adds value and eliminates costs. The downside that people moan about is the upfront costs. That's actually systemic investment which everybody always says they want to see more of!
The question is who is driving this and to whom is it accountable? There is nothing wrong with technocracy just so long as it is subordinate to politics. We have it the other way around. Politics responds to the technocracy.
This is fundamentally what is wrong with the EU. Policy agendas in the EU start deep in the bowels of the commission, often at least ten years before they get to be rubber stamped by the toy parliament. One does not vote in a government. The agenda is a constant regardless of who is returned to the European Parliament or indeed who is running member states. Ever closer union is the root command.
All the demand side management stuff was an ISO concept, adopted and improved by EU, gold plated, formulated then submitted for faux scrutiny in the parliament where MEP inputs are largely ignored or removed. The people are most certainly not in charge of the agenda nor do they get to change it. It might have been an idea to put this on pause slap bang in the middle of a financial crisis when energy bills were sky rocketing. As much as the system is not democratic, it is not responsive or self-aware.
The big question for our generation is how introduce any kind of legitimacy to it, and secondly how do you do it without destroying its many worthwhile accomplishments. It is interesting that less than a hundred days into the Trump administration that the President has rowed back on a number of pledges to drive a horse and cart through the globalist order. Somebody has patiently explained the value of it.
Then there's the real question of why leaving the EU doesn't get close to resolving this very conundrum. This is a question not yet being asked because people on both sides of the debate assume the EU is the centre of the regulatory universe. So far as most people are concerned, the media especially, Brussels is the engine of regulation and the rest of the world just does as it pleases having ultimate sovereignty.
As per the diagram above there are any number of anonymous functions in global governance, some considerably larger and more influential than the illustration implies. Not least UNECE and the WTO. To my mind these represent not only the future of trade but effectively make the EU redundant by creating the foundation of a genuinely multilateral global single market. That then begs the question as to whether the EU still serves a function.
I take the view that so long as the EU exists it will continue to exploit public ignorance of global governance taking all the credit and the blame to establish itself as the de-facto authority. It obscures the rest of it from sight while at the same time being the biggest obstacle to achieving global free trade. It is by nature a protectionist entity as Britain is about to discover first hand from the outside.
This is why as Britain leaves the EU there must be a concerted effort to raise the profile of the many international organisations that produce much of the rules we live by. Over the last two years this blog has explored the extent to which even the EU is a law taker subject to what is known as "fax democracy". Very often even the EU is not fully aware of those rules it adopts via standards bodies. For a long time we have been dealing with the middleman when in fact Geneva, not Brussels is the hellmouth of regulation.
In order to steer and speed up the creation of a global single market the UK needs to be a full and active participant and in so doing attract the attention of a largely dormant and ignorant media which for too long has been obsessed with Brussels should it even bother to report on these affairs at all.
Much noise has been made over the last year over the issue of sovereignty. Pure unadulterated sovereignty no longer exists and I rather suspect it hasn't for a long time. Nations have been bound by their agreements for as long as there have been nations. By leaving the EU we, at the very least, retake the right to say no and the right to refuse and propose regulations. We are about to enter a completely different universe of governance.
In this we need to formulate new ideas and new strategies, some of which I have outlined here, with a view to increasing our soft power and steering the agenda. In this we cannot expect that Britannia will once again rule the waves in that Brussels will still remain a regulatory superpower but by enhancing and promoting the international rules based trade system we can weaken the EU's protectionist barriers not just for our own needs but for the world as a whole. This has been done before by Australia by forging ad hoc alliances at the WTO. Helpfully, the EU is of its own volition handing ever more of the regulatory agenda to these bodies which is why we are, in the long run, better off out.
When we look at the more technical aspects of Brexit we find that the World Customs Organisation is now the lead body on a number of issues from intellectual property to seamless customs. There are WTO rules and UNECE systems all of which supersede the EU and, if expanded to become the global benchmark will ultimately (eventually) mitigate the self-imposed harm we do by leaving the single market.
Once we are outside of the EU will find we are part of a very large club of nations excluded from participating in European markets with EU member states being powerless to correct that. By forging sectoral alliances, in services especially, there is every possibility of being king maker - and the deciding vote in the establishment of new global conventions and standards.
Ultimately I am working on the assumption that the EU is life limited. Some predict imminent implosion but we see precisely that kind of speculation every single week. I think it will be with us for a while yet. What is a near certainty though is that the EU will not survive as a meaningful entity and will eventually be dismantled. Now is the time to be building a viable and non exclusive alternative to the EU.
This is, incidentally, why I do not favour ideas like CANZUK in that it's old fashioned thinking. Static unions of nations in the modern trade environment are far too rigid and with diverse economies serving different regulatory superpowers, commonality and integration is very often undesirable, implausible and ultimately pointless. Britain must retain and exploit its agility to the maximum, being able to switch alliances according to the forum and the subject matter. If we are leaving one rigid bloc there is little sense in creating another.
Britain should be working with the international community to build a genuine community of equals without a central authority promoting a technocratic agenda. Technocracy and democracy must travel hand in hand. The dismal europhile vision of a Fortress Europe is no more desirable than the shrinking vision of Britain throwing regulations on the bonfire. The WTO gives us a blueprint toward a fairer more inclusive system of trade which allows for national sovereignty - the right to say no.
One of the global initiatives presently under way is the establishment of global rules for e-commerce. Some of the key obstacles to e-commerce in the developing world include weak internet infrastructure, a lack of legal and regulatory frameworks in many countries, cyber-security, trade barriers, and a need for payment solutions.
As the linked article notes "To help ensure that developing countries can benefit from e-commerce, they need to retain the right to create trade barriers to allow new digital industries to develop inside their own borders and become more competitive, said Kwa, just as they have done in the past to protect manufacturing industries. As digital commerce grows, developing countries must be free to "help their companies deal with it." Adopting global trade rules now could take away their ability to do that, she suggested".
This is a important facet of international development where in other circumstances we see the EU using its might to force LDCs into liberalising their trade before they are ready to compete. This is often a driver of migration - which ultimately means the EU has a hand in drowning thousands of people in the Mediterranean. For a supposedly liberal and progressive entity it sure does have a lot of blood on its hands.
When we examine the history and the ideology behind the EU we find that it is built on a number of deceptions and is generally phobic of democracy. Its modus operandi is to abolish the nation state and in so doing abolish any kind of democracy and accountability. It is an anachronism. In an ever globalised world with and ever more complex and elaborate web of regulators and private authorities the nation state and that right to say no becomes ever more vital. The EU as we find it is a tyrants dream in that agendas can be injected, by NGOs and corporates alike without ever having to win the backing of the people.
This is why climate change dogma exists in every tier of the EU. This is also why the EU issue is the fault line of a culture war as a "liberal" progressive agenda, and the morality that goes with it, is imposed on peoples without their consent and without the means of redress. Voting certainly achieved little until we had our referendum.
Ultimately the debate needs to refocus on what matters. Brexiteers should cast off their phobia of regulation and embrace it for its social and commercial utility. There is nothing in wrong in principle with adopting evidence based rules for the smooth running of trade. Even the obscure and seemingly absurd regulations still serve a function. The complaint has always been an inadequate means of veto and the lack of transparency and democracy. Brexit goes some way toward restoring that balance, but as illustrated above, there is still much work to do and the fight for democracy and genuine free trade is only just beginning.
Friday, 21 April 2017
I can't really come out strong for anybody in this election because I am faced with two equally depressing choices. On the one hand we have the left who want to drag us back into a stagnant status quo and keep us under the dead hand of Brussels, and on the other we have demented Tories intent on severing important ties with the EU for absolutely no good reason to no commercial or diplomatic advantage.
For all that is said about the insanity of Jeremy Corbyn's economics there is nothing all that sane about present Conservative policy either.
Politically, I am in a very weird place. I'm very much down with the whole reinvention and renewal vibe of Brexit - and I will fight the remain crowd to the death to make sure it happens, but at the same time I find myself at odds with Brexiteers who are going off half cocked with some very silly and damaging notions. They seem to think absolutely everything is up for grabs and we are free to do as we please.
The latest fad among Brexiteers in CANZUK which is one of those unflushable turds. It bares no relation to anything going on in the real world even if it were technically achievable and economically worthwhile. Which is isn't. The EU is our neighbour, our largest single trading partner and a regulatory superpower. Leaving the EU does not mean escaping its gravitational pull and erecting barriers in order to do so serves no advantage since EU agreements with third countries ties them into EU rules as well. They are unable to tinker with their regulatory regimes in order to accommodate us and more to the point, unwilling.
What we can safely assume is that the UK will retain most regulations forever and will probably carry over most EU directives for at least a decade. I don't really expect much deviation from the current regime in fishing and the only immediate changes we are likely to see is in agriculture. That is going to be a stone cold mess. Agriculture reform is never done well.
What this means is that any free trade agreements will be limited to those presently geared toward serving the EU market and since regulation isn't up for trade that restricts the nature of such deals to commercial cooperation and tariffs which are already low. The latter makes little difference and will be eaten by currency fluctuations and the former was never prohibited while we were in the EU.
The main focus beyond trade agreement with the EU will largely be replicating those deals we already had via the EU. This is when tedious little Toryboys will be gloating pointing at all the "bumper deals" we have rolling through the door, when in fact they will be worthless bits of paper that we didn't really utilise even as EU members. Certainly any deal with China is likely to be asymmetrical and impossible to exploit. You need serious investment capital to overcome Chinese trade barriers. It's barely worth the bother. SMEs can't really take advantage of them - and if trade is not geared for SMEs then they are unlikely to be beneficial so far as you or I are concerned.
When it comes to Brexit we are told this means a global Britain flying the flag for free trade yet bizarrely the Brexiteers can't put up barriers to trade fast enough. It doesn't matter how many times you patiently explain the system it doesn't seem to sink in. They regress.
The ultimate silliness of all this is that if you want a good reason to leave the EU then it is that this bilateral approach takes years and very often falls flat. The only reason many of them succeed at all is simply because of the EU's economic might. Singapore made significant concessions in order to obtain an agreement with the EU. Out of the EU we don't have that so the very last thing you would want to do outside of the EU is adopt the exact same approach to trade. You need entirely different approaches using an entirely new methodology.
When we first started to examine the process of leaving the EU it rapidly became apparent that in the best case scenario the best we could hope for was an economically neutral Brexit deal and only by seeking to keep as much of the single market as possible. The strategy we proposed was to use the EEA agreement which has its own system of waivers, safeguards and opt outs where we could gradually discard the elements we did not want. Instead the Tories are going to sever the whole lot all at once meaning that we will end up begging for single market readmission when we face the consequences. Obviously we will pay a price for that.
It was never a good idea to campaign for Brexit on economic grounds. Trade wise there are no silver bullets and there are no sunlit uplands. At best we will see a re-ordering of trade and some market movements by way of trade substitution which at least restores a degree of dynamism to the domestic market but in net GDP terms this still comes at a loss.
As far as I see it, Brexit is more a cultural and social revolution than an economic one. From that perspective I just don't see a downside to it at all. The consensus establishment had run out of ideas and is on borrowed time. As soon as Brexit is wrapped up the Tories are as dead as Labour. This for me cannot come soon enough. When that happens we will start to ask serious and long overdue questions about the viability of the party system. Perhaps an utterly botched Brexit makes this more likely.
My only cause for hope in all this is that the EU has doubled down on its stance that the integrity of the single market is not up for debate. One by one the EU is closing down the options. May is faced with a long transition under EU jurisdiction and a weak deal at the end if she insists on keeping her red lines. She will have to crack eventually in which case she will be faced with an ultimatum. An EEA style agreement with guest membership of Efta or ejection without a deal. More than likely May will have realised by then that walking away is not an option. I think that penny might have dropped already. A no deal scenario is too horrible to even contemplate.
Hard Brexiteers would have it that without a deal we would be totally free to do as we please, slash regulation ans taxes and become a tax haven. Shock doctrine. Historically this has never worked and results in authoritarian oligarchies. More to the point we would have to break with a number of global treaties to make this happen in which case we would lose a good deal of soft power and international trust. The "freedom" we would gain from dropping out without a deal is the same freedom you have when you are evicted and all your belongings are thrown into the street.
Presently I am not placing any bets as to the outcome. I do not have a good track record when it comes to political predictions. May keeps her cards close to her chest and she is prone to u-turns. That makes the success or failure of Brexit a fifty fifty split. There is still a high risk of accidental Brexit and if the EU plays hardball all the way and doesn't play it well then May could conclude there is nothing in it either way and go for broke.
In the end the EU cannot flex too much. For all the issue illiterate grunting we have heard from Tories about the German auto industry being keen to do a deal the reality is turning out to be different. German firms value the single market more than they value trade with the UK and can easily find ways to sell their overpriced unreliable barges.
With all that in mind I cannot in good conscience support the Conservative Party without a clear indication of intent. The empty mantras and sloganeering is not enough to go on. I have zero confidence that they have understood the issues and they are extremely lacking in competence. Since they are set to win regardless in the absence of an alternative I think I will vote for an independent candidate if I bother to vote at all. The fullest extent of my efforts over the next few weeks will be to highlight the incompetence and stupidity of May's Brexit approach, if for no other reason than historical record.
The one good thing that will eventually come from this is that it will finally expose Tories as shallow, ignorant, anti-knowledge tribalists. If it wasn't already abundantly clear, that is.
Theresa May has moved to quash speculation that the government could drop its pledge to spend 0.7% of national income a year on foreign aid, saying the commitment “remains and will remain”.
After days of speculation that the policy would be watered down, the prime minister said Britain should be proud of meeting the UN-backed target, but stressed the need to spend the money more effectively.
Many on the right would call this "virtue signalling" and gesture politics. I probably wouldn't disagree in ordinary times. I did oppose an arbitrary target when it was announced. That said, what is done is done. Right now the UK is committed to possible one of the most radical foreign policy moves ever - to leave a peacetime alliance. More than ever political gestures and signals count.
To Mrs May's credit and in defiance of her back benchers she has been keen to talk up the global rules based trade system and has resisted sweeping moves to disengage from various climate accords. While I remain a climate sceptic this is good politics. Underpinning the Paris agreement is an unspoken economic accord carefully hammered out over time and whether it be good or bad is neither here nor there. Maintaining some degree of order when we have Brexit on our plate is a smart move. We do not want to position ourselves as the global pariah.
What needs to follow now is a debate about how we use that aid spending to our advantage. There have been some suggestions that some of the budget be diverted to defence which is not entirely our of order. Since our navy is committed very often to humanitarian efforts there is no reason by the defence budget should take the hit. Moreover, in terms of global operations a Royal Feel Auxiliary ship is a far more useful base of operations than a frigate and given the functions they can perform we could easily justify expanding the RFA fleet from our aid budget.
As it happens the UK is exploring selling of HMS Ocean, a helicopter landing amphibious assault ship. It performs a particular function which cannot be adequately replicated by the new QE carriers and there is no better platform for humanitarian relief efforts. I see no reason why some of the aid budget could not go toward plugging the capability gap.
As to our other aid endeavours, this week the WHO reminds us of the humanitarian and economic value in seeking cured for neglected tropical diseases in which the UK is a leading contributor. Britain being a world leader in medical research is never going to be a bad thing.
Meanwhile I learn that the Department for International Development (DFID) and the Government of Kenya signed a USD 30 Million agreement to support the dualling and improvement of the existing Port Reitz and Moi International Airport access roads. This will reduce time to enter/exit Mombasa port by two hours. This is exactly the sort of spending this blog has argued for more of. All the bureaucrats in the world hammering out paper agreements is of no use of there are physical barriers to trade.
The right wing are most vocal in denouncing foreign aid as wasteful and corrupt. It is certainly true that much is lost to waste and corruption and we will never no precisely how much. We can't even be sure of the value of our more successful ventures. That said it would be a mistake to draw down on our foreign aid spending. It has certain propaganda and soft power uses and it should not be forgotten that much of our spending is experimental. We take risks that the private sector likely would not.
In this, a degree of waste is to be expected. It goes with the territory. We could say the same of UK aerospace which has a long and proud history of waste and failure - the legacy of which is the UK as a knowledge centre for aviation. The value of this cannot be understated. Moving forward one would hope that Brexit will lead to greater accountability as we will eventually be spending directly rather than via the EU and subsequently NGOs.
As to future spending I see no reason why we should not meet or even surpass the aid spending target. By leaving the EU and the single market UK trade is certain to take a hit and we will likely lose some of the trade we enjoy via EU third party agreements. Not all of these will be carried over as before. The UK will need a substantial budget to commit to trade facilitation. There isn't much standing in the way of getting agreements on paper but if we want agreements to be properly utilised then we need to ensure physical and bureaucratic barriers are removed.
The justification for this should be obvious. The UK is keen to curb immigration and that means removing a number of push factors. Boosting trade and connecting more customers to the internet has obvious value. If we remove a number of push factors that then justifies the UK in taking a harder line on illegal immigration.
A crucial part of this is running projects to assist in meeting global and European export standards. This is something the WTO Standards and Trade Development Facility is geared toward. The STDF is a global partnership that supports developing countries in building their capacity to implement international sanitary and phytosanitary (SPS) standards, guidelines and recommendations as a means to improve their human, animal, and plant health status and ability to gain or maintain access to markets.
So far as I can see it does some incredibly good work but not nearly enough of it. If Britain wants to fly the flag for multilateralism then that is where the investment must go. STDF is underfunded and a hugely overlooked aspect of trade policy. If Britain wants to boost trade then trade facilitation via the STDF and DfID is absolutely critical.
Further to this more research is required in terms of standardisation on any number of things from food colouring to e-commerce. All of this is geared toward reducing barriers to trade. The WTO is presently geared toward making trade work for SMEs and increasing access to the internet.
For a long time now the debate around aid has stagnated with those on the left seeing aid as a slush fund to advance the climate change agenda while those on the right see virtually no value in it at all and would rather it be spent on domestic concerns. To reshape the debate we have to get past the idea that aid is a charitable endeavour. It is and should be a central pillar of our foreign and trade policy. We are committed to spending to a target but nowhere does it say we cannot spend it in the direct national interest.
One of the main criticism of aid is that it undermines good governance and creates a culture of dependency. There is strong evidence even from the NGO community that confirms this. Humanitarian aid very often is counter productive. It is long past the time to answer those critics and ensure that we spend the money on eliminating the causes of poverty. Trade is central to that.
Further to this one of the bigger barriers to trade is corruption and counterfeiting eating into value chains. This is where economic assistance along with technical assistance with the uptake of new tracking technologies can enhance and streamline trade. This along with port automation removes many of the opportunities for corruption. There is nothing preventing us investing in exactly that kind of work.
Right now Britain is vulnerable. Our reputation as a global player in on the line. UK aid spending is more critical than ever. What we need though are ideas on how to turn it to our advantage. Aid policy has been rudderless in recent years, in part thanks to being in the EU and outsourcing our trade policy. We are beginners at this. That should make this an exciting time as the UK is geared toward trade innovations.
What we will likely find is that the "bumper deals" as promised by the leave campaign are non-existent. Central to all modern trade agreements now is a commitment to regulatory harmonisation. In this, India is already working toward the implementation of Codex standards and the EU as a global regulatory superpower dictates much of the direction. There isn't the wiggle room for trading off standards and regulations as described by prominent Brexiteers.
What we can do though is enhance the utilisation of existing trade agreements by spending on trade facilitation. That more than anything will put the UK at the front of the queue by way of being the most visible and the most committed.
It is often said that the UK is not big enough to wield "clout" in the global arena. This is a misnomer. At the top end of international relations influence is proportionate to the expertise and commitment that nations bring to the table. Norway chairs a number of committees on everything from human rights to fishing. It is that level of commitment that puts is in an advantageous position to exploit emerging markets and steer their development.
Much of the post-Brexit debate on trade is still bogged down in partisan referendum era bickering. Remainers are keen to point out that UK efforts to obtain free trade deals will likely be of little avail. This comes as no surprise. The EU model works if you have a size advantage which we obviously do not. Consequently we have to play the game a different way. In this, without having to seek prior approval from other EU member states we are free to launch our own initiatives. We can be more agile. If we carry over the same old thinking then we cannot expect different results.
To this end we should be looking at making DfID central to our trade efforts rather than it being a fringe department functioning only as a means to meet an arbitrary target. We need to be funding research on trade enhancing technologies and looking for multilateral solutions to streamline customs worldwide. There is still much to be done in terms of data sharing, market surveillance, e-commerce and customs processes.
I take the view that we should not have signed up for a target on aid spending but now that we have there is little to be gained diplomatically by rowing back on that. It's one of those hypocritical international games we play in the arena of global politics. Much of it is narcissism and political vanity but the gestures and signals still have political utility. The challenge for the rest of us is how to make good on it and to do something useful with it.
When we look at the more egregious failings of aid it is tempting to retreat from aid entirely. This is something Britain cannot afford to do. An active and independent trade and foreign policy to my mind was one of the key incentives to leave the EU. For as long as euroscepticism has existed we have spoken of a "global Britain" and now that we are leaving it has become a core government policy and a political slogan. We have to ensure that our actions speak to that rhetoric.
The very last thing we want to see is a race to the bottom in standards and regulations. There can be no bonfire of regulations. Our aim should be to lift up standards for everybody and use our aid policy to increase participation in global trade. Adopting a hostile footing and turning our backs on aid would make us everything we said we wouldn't be when we campaigned to leave the EU; inward looking, protectionist and isolated.
Global Britain as a concept, if it means anything at all, means taking a full and active role in all of the global bodies working toward the elimination of poverty worldwide, if not out of charity then out of enlightened self-interest.
Despite the relentless negativity of remainers, the UK is not without friends and being a prosperous, first world independent state is not beyond our grasp. We can still be a respected and influential country if we tap into those same instincts that shaped the EU into what it is today. There are obvious advantages to economic integration as we have demonstrated and so now we must deliver that to the rest of the world. We cannot do that if we cave in to right wing populists and certainly not if we listen to the "remoaners" who think the UK is finished. There is life beyond the European Union and we can still show the world a thing or two.
Thursday, 20 April 2017
This election tells us a few things. It tells us that Mrs May expects talks to drag on for a long time and she is not confident of winning a 2020 election. She is buying herself time. Most of all it keeps the media distracted. The media being the brainless pack animals that they are will follow every last utterance of the campaign while paying scant regard to what is happening in Brussels.
Already the EU has said that no serious negotiations will be undertaken until the election but the EU will be sending a number of signals, reaffirming and confirming certain points.
The core message we are getting is that there will be no special concessions for the UK. The EU has a system and it will not bend or break the rules to accommodate the UK. More than likely the WTO would not permit that anyway. The UK does not get a free ride, it does not get to run wild with deregulation and it cannot expect seamless trade with the EU unless EU rules are followed. Since the EU does not want to build a new court system or arbitration system for the sole benefit of the UK it will treat us as a third country and expect us to follow the conditions of market entry like any other third country.
The UK will demand certain rights are preserved, not least free passage of goods and continued participation in EU aviation markets. Customs cooperation and air traffic management does not come for free. We will be expected to pay.
This much has not yet sunk in with the leave crowd, or the Tory party who have made a manifesto pledge to end freedom of movement, end the ECJ influence and to leave the single market. Since the EU will not be minded to offer selective membership (and has already confirmed this) it can only offer us a rudimentary deal.
It is possible that May has already learned this much and is simply campaigning on a pack of lies in the full knowledge she will have to make major concessions to protect UK trade. This is perhaps why she is seeking to avoid a 2020 election.
Meanwhile it is now clear that the negotiation of a trade agreement will not fall under Article 50 and that we will have to use the process to negotiate a transition which effectively means we stay in the EU for the duration - for however long it takes to dismantle our means of participating in the single market. That might well linger on just longer than 2022 giving a future government a chance to reverse it.
Unless there is by some miracle a complete u-turn to an EEA agreement we'll be lingering in the EU for years then dropping into an association agreement where we sit by the fax awaiting Brussels diktats. Course this is what the Tory right wanted. Out of the single market. Only then will they realise that there is a little more to the discipline of trade than tariffs. Once we have lost 40% of our trade that is. This is why anyone telling me how wonderful Gisela Stuart and her Vote Leave cronies are will get a very cold glare from me.
To explain the modern trade environment I would describe it as thus. Imagine you were a small business and you found that there were bureaucratic barriers between you and your customer. You bring this up with your trade association and they go to the government. In theory the government then acts as your business lawyer to intercede on your behalf. It looks at any barriers it has which is can remove in exchange for the removal of the barrier that affects you.
Big comprehensive trade pacts like TTIP are when several issues have been highlighted and the government seeks a comprehensive package of reforms. Modern trade agreements though are considerably more than just a series of agreements on non tariff barriers. Very often what is worked out in negotiations does not work in practice. You may be able to sell to a market or import certain goods but if by doing so you radically alter other deals you have with other countries then you cannot trade under those terms. This is why we have a system of waivers built into most modern trade agreements along with dispute resolution systems. Usually a court of some kind.
A recent example of this was when Canadian beef producers found that if they sold beef produced to EU standards then it raised the risk profile for food poisoning with the Americans and subjected them to more expensive border inspections. Naturally there needs to be a system to resolve these disputes otherwise these trade agreements cannot be fully utilised.
One thing that could resolve these such issues in future is a global standard on food safety risk assessments which is why we have global bodies for standards and practices. What you will also find in modern comprehensive trade deals are boilerplate statements to the effect of further cooperation toward regulatory harmonisation. Usually the text is a copy and paste from the WTO agreement on technical barriers to trade. More often than not, these such deals establish working groups or joint committees where our own trade ministry will have an office dedicated to serving that exact trade deal. We have one that deals only in cooperation with China. Very often these offices have certain unilateral powers to make temporary concessions and these are brought up for periodic review. Where you have insoluble disputes we have the WTO courts.
Given that any given country can have multiple comprehensive trade deals, each committed to regulatory harmonisation you find the difficulty is in trying to ride two or more horses. More often than not you are forced to align with your largest and nearest trading partner. In this there are three regulatory superpowers. China, the EU and the USA. TTIP was the most ambitious deal ever in that it sought to iron out the many disparities between the systems. Where harmonisation could not be achieved we would seek out mutual recognition.
Unfortunately due to the secrecy and complexity TTIP failed to pass, and also because certain vested interests really don't want to open up to competition. When it comes to trade deals, the bigger they are the harder they fall.
This is why I voted for Brexit. The EU likes big flagship gestures like TTIP and what that means is we spend seven years or more in complex negotiations to achieve, well, fuck all basically. Moreover it is unlikely that there will ever be a properly comprehensive trade deal with the USA. As much as anything the USA doesn't really want one and is big enough and diverse enough not to need one.
What remains though is a system of automatic adoption of global standards where over time we remove the disparities between the regulatory regimes. This is where the UK needs to be an active player in setting the agenda, to bring the resources to focus on those standards that would most benefit UK trade. As an EU member, what we find is that we lack the ability to launch such initiatives. Any initiatives have to be cleared with Brussels first and if EU member states object then we are prevented from acting. In this regard it would be like hiring a lawyer to work your case who then outsourced it without telling you and nothing is done.
For the EU the priority is not lubricating trade, rather it is focussed on preserving the integrity of its own regulatory system and the uniformity within the single market. All other concerns come secondary to that. We don't call it "fortress Europe" for nothing.
The real game changer is the WTO agreement on technical barriers to trade where the EU of its own volition has surrendered the regulatory agenda to those global bodies and adopts the findings of standards bodies outside of its own control. Outside of the EU we are able to participate fully in all of those bodies without first asking permission from the EU commission and without having our vote or veto overturned. That way we still get to influence the rules of the single market even if we are not in it.
As I outlined over on my last blog the purpose of Brexit is to shorten the chain of accountability and ensure that our trade representative is actually our own government. Britain is increasingly a services economy where we need to focus on niche financial services and internet services where the regulatory systems are still in their infancy. If all our trade activity is tied up in bundled deals where manufacturing is included we can end up losing out on services liberalisation because of German manufacturing concerns.
The view is that we can achieve more incrementally than waiting year after year for the EU's next miracle cure. By going in at the very top end and influencing standards and practices we can edit the DNA of trade deals that already exist and any future ones even if we are not a party to them. The future of trade is mulitlateralism.
The other issue we have is utilisation rates. Most of the deals we achieve in the next few years will be replicas of the deals we already had via the EU. That though does not improve or enhance our position. Unless partner nations are capable of meeting the standards we set then they cannot participate. This is where we need a concentration of aid efforts to promote good governance and assist in the implementation of standards. This does not immediately boost UK trade. All it means is that other countries can trade more and sell more goods. It does not necessary mean we can export to them. What it does mean though is that globally trade volumes increase and as a supplier of business services, the more trade there is in the world the better we do.
Jetting off round the world securing free trade agreements doesn't really accomplish very much if the infrastructure and capacity is not there. To boost trade we must invest. That is why DfID must be central to our trade policy. Trade utilisation rates have remained pretty static. If we make internet connectivity our focus in lesser developed countries then we are connecting more customers.
We can have all the officials and bureaucrats in the world working on hammering out agreements and they may make marginal improvements but ultimately we need to be out there making trade possible.
There are plenty of Brexit naysayers out there saying Britain can't be a player. I couldn't disagree more. Free to build our own sectoral alliances and without having to clear everything with Brussels we can be a more agile actor. We can act incrementally and we can act globally and we can steer the agenda by way of what we bring to the table in terms of knowledge, finance and governance. Norway is far more influential than is given credit and there is no reason why we cannot play the game the same way.
Brexit of itself does not do anything. It gives us the tools to succeed should we promote new ways of acting on the world stage. International development is absolutely crucial and ensuring British unions, business associations and trade guilds are up front and participating in global bodies is an absolute priority. This is how Germany manages to set the agenda. We must replicate that experience. We must invest in the best possible research to ensure we are leading the field in knowledge driven standards and we must fly the flag for multlateralism.
Brexit of itself does not do anything. It gives us the tools to succeed should we promote new ways of acting on the world stage. International development is absolutely crucial and ensuring British unions, business associations and trade guilds are up front and participating in global bodies is an absolute priority. This is how Germany manages to set the agenda. We must replicate that experience. We must invest in the best possible research to ensure we are leading the field in knowledge driven standards and we must fly the flag for multlateralism.
All the Brexiteer talk of a free trade bonanza is pure gibberish. There will be no bonfire of regulations. There is a system, we are committed to it and there is a game to be played. Free of the EU we are free to redefine how we approach trade and we can re-write the rule book. Literally. But making a success of Brexit requires that we ditch the Tory free trade dogma and work with the WTO rather than against it. If we play it smart there is no reason why Britain cannot be at the forefront of regulatory innovation and in so doing be the shot in the arm global trade has needed for a very long time.
Tuesday, 18 April 2017
One of the absolute best things about Brexit thus far has been to expose many of our politicians as absolutely gormless. That goes for both sides. I have written at length on how Brexiteers hold some pretty dumb ideas but even the dumb ones can offer a halfway cogent critique of the single market. What we've seen from the remain side is MPs lecturing us on how the EU is essential to our prosperity when they can barely define the single market let alone critique it.
What Brexit has done is task these clowns with complex issues they are not used to having to deal with. All the while we have been in the EU the complex issues are largely the domain of Brussels officials and their decisions are adopted by way of statutory instruments without any parliamentary scrutiny. Our politicians, until now, have had the luxury of indolence.
In this we have allowed decisions on GM foods, pesticides, nuclear safety, medical testing and labour law to be made on our behalf by an entity not understood or properly monitored by the media. The whole thing is taken on misplaced trust.
What is not understood is that in order to secure trade agreements, many of the standards that we would normally uphold are weakened in exchange for market access. Much of this is negotiated in secret by unelected officials, none of whom are directly unaccountable to MEPs and MEPs can be summarily overruled by the Commission and the ECJ.
There are some egregious examples of this which is why TTIP was torpedoed - but that is only the thin end of the wedge - and these such deals are never truly killed off. They only ever go into hibernation. TTIP will re-emerge eventually.
This is not to say that there is not a good deal of gain to be had from these such deals. The problem is that the nature of these deals has now changed to a model of regulatory harmonisation where both sides effectively reaffirm their commitment to recognise each-others standards or adopt new ones from the most recognised international organisations.
Again there is nothing in principle that is so bad about regulatory cooperation - except in those instances like China where any such deals are asymmetrical and conformity assessment is not nearly so rigorous, allowing dangerous and fraudulent goods onto our markets.
As much as that requires an ever more expensive and elaborate system to ensure standards are maintained it also makes for a further degree of separation between the governors and the governed.
Regular readers will be well aware that the EU has, of its own volition, surrendered control of the regulatory agenda to many of the global institutions. In most cases these are benign entities like ITU and Codex. The problem is that they operate off the radar, out of the public eye and very much in hock to eco-populism and the usual meddlesome virtue signalling. The well intentioned NGOcracy has major influence in these such bodies and the results are often catastrophic.
Where it gets more murky is when these organisations themselves reach the limits of their own competence where they themselves will defer to either international unions or corporate regulators. Private authority and corporate standards bodies are increasingly setting the agenda and findings are taken wholesale in the absence of any publicly backed research. Governments are all too keen to avoid domestic expenditure on regulatory research and will often have downscaled their own ability to scrutinise.
Corporates are now increasingly wise to this, often forming their own coalitions and private standards bodies simply to fill the void whenever there is a new market or new technology to exploit. This is the much vaunted "self regulation" that we hear so much about. Very often alliances between nation states and corporate coalitions are formed specifically to control the shape of regulation, knowing that whatever is decided will end up on the statute books of other nations without them ever knowing - and before they have a chance to change anything.
In my own studies I have found that MEPs and functionaries are barely aware of how their own institutions work let alone what is going on inside private standards bodies and this has been the backdoor by which corporates can write their own rules or circumvent regulation altogether. Very often if the Commission is in a hurry to get regulation in place then it will rig the adoption process so that MEPs do not get the chance to amend rules and if any amendments are at odds with the Commission's own agenda, they are unilaterally stripped out.
On the more visible global forums EU member states are allowed a presence but when it comes to a vote, as you should know by now, member states are forced to vote for the common EU position regardless of the damage that may do to their own domestic markets. Entire sectors can be destroyed at the stroke of a pen without any legal recourse.
So what we have in effect is a whole universe of rule making and standard setting outside of anything that you or I would regard as a democratic process, simply rubber-stamped by the EU for expedience and automatically grafted onto our statue book without our own MPs having the first idea where the rules even come from.
It should be noted that Brexit of itself does not make any of this go away. There is no "bonfire of regulation". Also, for as long as there have been contracts between nations there have been restraints on what you and I would define as sovereignty. That much is what we trade off in the process of agreeing such arrangements. It goes with the territory.
What should be of serious concern is that through its desire to become a superstate, the EU has gradually sought to replace the member states on all the international bodies of note, happily removing national governments and removing their right of veto. It started with issues purely pertaining to trade and increasingly has grabbed more powers. Sooner or later as members of the EU we find ourselves entirely without a voice in the creation of the rules, where the EU controls who gets to contribute and on what terms.
Most assume that the EU is a benevolent entity in Brussels churning out laws to keep us safe. This is a most infantile understanding. The EU is effectively the unwitting sock puppet of vast corporate alliances seeking to remove any democratic barriers to their activities.
As far as that goes, the removal of government from systems and processes is very often no bad thing and things tend to work better when they are not political footballs. This is why conservatives would like to offload the NHS albatross. For the most part this system of global trade governance ticks over without very much public input or consultation and for as long as it continues to create wealth nobody really minds it.
Occasionally we hear the likes of Ukip making noises about what they perceive as crazy regulations but as we often find, these such regulations have a commercial or social utility. Effectively Ukip has been in the game so long it has forgotten why it is opposed to the EU. It's not so much the product as the process and its complete lack of accountability.
Now that we are moving ever further toward global markets in everything it follows that we should have global regulation and that the EU cannot remain a garden walled regulatory sphere of its own making. The issues have moved beyond regionalism and the internet has overtaken efforts to create the perfect regulatory union in Europe. What we now commit ourselves to obeying is now the product of a vast global nexus in rule-making in which it is more necessary than ever that we have our own voice, our own vote and crucially the right to say no. If we do not have that then we are neither a nation state nor a democracy.
Moreover, as EU members we have no right of proposal when it comes to new regulation which means if the UK is ever at the forefront of an innovation, before it can propose regulation in order to lead the field it must submit to the EU and wait for a common EU position. Very often this is subject to the protectionist whims of other members who may wish to stifle any new innovations that threaten their established industries. We lose the first mover advantage, meaning non EU states can out manoeuvre us.
Whether we like it or not, the success of our industries very much depends on having a major role in the regulation of products and services - not least so that we can defend against inferior but more influential standards.
More to the point, it is unlikely that we are going to find any miracle cures for trade normalisation. The focus must be in increasing the productivity and profitability of existing supply chains and that means looking for regulatory innovations to remove barriers to trade. If we do not have the right of proposal then we lose the initiative and very often no progress is made at all.
There are no guarantees that the UK can master this system and nothing we propose will ever happen without building alliances and choosing our allies carefully. What matters is that we have that right to choose our alliances and that we can ultimately veto any proposals that put us at a commercial or democratic disadvantage.
While leaving the EU certainly presents questions as to how we maintain our current level of commerce with the EU, what we are talking about here is the configuration of trade in the future, and whether the UK has a voice at all. I would prefer it if we stayed aligned with the single market for the time being until the global system is more developed, but ultimately almost any price is worth paying to be out of the EU to ensure that we shorten the chain of accountability and have a say in the rules.
If we are subsumed further into the EU then we lose any and all control along with all of our ability to shape the global regulatory agenda while in paperwork terms we cease to be a country at all. We cannot allow this.
Globalised markets need to be balanced by accountable democracy - which means more nation state, not less. In a world of private authority, corporate regulation and global governance we need genuinely democratic institutions and direct representation without the ideological filter of the EU. We can either be a voice in our own right in a global community of equals or a province that only has a say for as long as the EU allows it. That cannot by any definition be democracy. If we fail to correct this now then we never will.