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Generational Dynamics Web Log for 9-May-2018
9-May-18 World View -- Brexit negotiations in crisis as deadlines approach with no agreements

Web Log - May, 2018

9-May-18 World View -- Brexit negotiations in crisis as deadlines approach with no agreements

Theresa May's two delusional proposals - Customs Partnership and Maximum Facilitation

by John J. Xenakis

This morning's key headlines from GenerationalDynamics.com

Brexit negotiations in crisis as deadlines approach with no agreements


Boris Johnson and Theresa May (PA)
Boris Johnson and Theresa May (PA)

Britain's foreign secretary Boris Johnson on Monday declared that the proposal by prime minister Theresa May to resolve Brexit issues was "crazy."

This has caused quite a sensation, because a high level cabinet minister is not supposed to openly criticize a major policy of the prime minister unless he wants to be fired.

The policy in question, called a "Customs Partnership," is indeed delusional, but in today's highly polarized world, where a man can lose his career for saying the wrong thing about whether he supports Trump, then you have to be willing to support even delusional policies if you want to keep your job.

In this case, however, May's spokesman said that the prime minister had "full confidence" in Johnson, and told officials "to do more work" on the proposal.

I've written about Brexit issues many times since the Brexit referendum passed almost two years ago, on June 23 2016, and the intractable, insoluble problem is always the same: Keeping a "frictionless border" between Northern Ireland and (Southern) Republic of Ireland, despite the fact that Northern Ireland will be part of the UK, and Ireland will be part of the EU.

Everyone says that there must be a frictionless border, so that people, trucks and goods can continue to flow freely back and forth between the two. The current open border was the result of the Good Friday agreement of 1999 that ended years of "The Troubles," bloody fighting between the indigenous ethnic Irish Gaelics (the Catholic Republicans) and the descendants of the English and Scottish invaders (the Protestant Unionists).

Today there are a lot of people who genuinely fear that fighting will resume in full force. This is not a trivial concern, in that there's still a great deal of hatred between some Gaelics and some English, and there are still walls separating neighborhoods in the province of Ulster, which spans both Northern Ireland and the Republic of Ireland, and where there are still occasional flashes of violence. (See "23-Jun-11 News -- Sectarian violence in Northern Ireland grows again") (Paragraph corrected, 9-May)

Officially, Britain is scheduled to leave the EU in March 2019. There are huge unsolved problems having to do with trade, migration, citizens' rights, and Ireland for which solutions are nowhere in sight. Ireland and the EU are demanding a proposal on the Ireland "frictionless border" by June, and it will not be met.

Other deadlines are approaching as well. Concerns are widespread that the Brexit process is collapsing into a huge, unmanageable mess.

And why wasn't Boris Johnson fired? For that matter, why hasn't Theresa May lost her job as well. The answer, according to many analysts I hear, is that nobody else wants these jobs, under the current circumstances. BBC and Reuters and Express (London) and RTE (Ireland)

Theresa May's two delusional proposals - Customs Partnership and Maximum Facilitation

Any Brexit proposal by Britain also has to be approved by the EU27, the 27 nations of the EU excluding the UK. Theresa May has two proposals both of which are delusional for many reasons, not the least of which is that there is no chance that the EU27 will approve either of them. But the British politicians and the British press keep talking about them without even considering whether the EU will approve them.

One proposal is called the "Customs Partnership." Businesses shipping goods from foreign countries into Britain will be charged tariffs according to EU rules. The goods will then be tracked, and if they stay in Britain, then the businesses can claim a rebate of any overpayment. If not, then Britain forwards the tariff to the EU.

This leaves the Irish border frictionless, since goods can flow across the border freely, since the tariff has already been paid.

This is the plan that Boris Johnson is calling "crazy," because Britain would still be bound by EU rules that the whole Brexit plan was supposed to free them of:

"Itís totally untried and would make it very, very difficult to do free trade deals.

If you have the new customs partnership, you have a crazy system whereby you end up collecting the tariffs on behalf of the EU at the UK frontier.

If the EU decides to impose punitive tariffs on something the UK wants to bring in cheaply thereís nothing you can do.

Thatís not taking back control of your trade policy, itís not taking back control of your laws, itís not taking back control of your borders and itís actually not taking back control of your money either, because tariffs would get paid centrally back to Brussels."

He said that the plan would create "a whole new web of bureaucracy," and would not meet the key test of Britain "taking back control" from Brussels. In other words, the Customs Partnership would defeat the whole purpose of Brexit.

Theresa May's second proposal is called "Maximum Facilitation."

Shipping firms would operate as "trusted traders" so they can move goods freely as EU tariff is only paid when goods arrive in destination country. Goods would be electronically tracked and pre-cleared with tax authorities. There would be a frictionless border in Ireland, because goods would move freely back and forth, and would be tracked by means of some yet to be developed technology.

The EU has dismissed this proposal as "magical thinking," because it assumes that "trusted traders" can be trusted, and because the required technology is not possible in the foreseeable future. Daily Mail (London) and The Week (UK) and Guardian (London)

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(Comments: For reader comments, questions and discussion, see the 9-May-18 World View -- Brexit negotiations in crisis as deadlines approach with no agreements thread of the Generational Dynamics forum. Comments may be posted anonymously.) (9-May-2018) Permanent Link
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Copyright © 2002-2018 by John J. Xenakis.