Tuesday, 18 April 2017

Brexit: shortening the chain of accountability

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.

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