The simultaneous push for post-Brexit regulatory alignment from the CBI and Michel Barnier is shameless – and wrong, of course

CBI

The level of concert in the actions of those seeking to undermine the democratic will of the British people is breathtaking in its utter, could-not-give-a-damn, transparency. I suppose it must be expected that the CBI – which should be re-named the Confederation of Brussels Influence – would choose to publish a report just before the Brexit technical talks commence in earnest, seeking to undermine our government’s negotiating position and thus damage the nation’s prospects, in order to feed the narrow, vested interests of multi-nationals. The bare faced gall of it is astonishing, with the IoD leading the way a few days ago and then Michel Barnier’s statement that he wants Britain to sign up to a “non-regression clause” timed for the evening before the CBI report is published. Not at all co-ordinated then! A united front between the CBI and our adversaries in Brussels, those whose stated intent is to do us harm; there is no shame, no patriotism in the corridors of the fat cats.

The irony that Barnier has termed regulatory alignment a “non-regression clause” should not be lost, for it would be highly regressive in its effect on the post-Brexit UK economy and we would have to be regressed to be fool enough to sign up to it. Just 13% of UK GDP is associated with exports to the EU, 17% with the rest of the world and the balance, 70%, is domestic. Why on earth should multi-nationals dictate that 87% of the economy should follow the EU slavishly in order to make their lives a little easier? Why not, for example, follow US standards in order to facilitate exports to a market with which we have a large trade surplus? The answer is that producers in the UK need to align their production standards to whichever market they are exporting to, for those products they export.

The benefits of smarter regulation and flexible standards have been estimated variously at between 0.7% and 1.4% of GDP depending on how much is changed – a considerable boost. Who wouldn’t want to get rid of MIFID II, the ridiculously bureaucratic parts of data protection, the tick box and counter-productive safety stuff coming out of Luxembourg, or the label on packets of smoked salmon which say “may contain fish” – not to mention the multitude of other requirements which add nothing to safety but which prevent us importing perfectly safe components and raw materials, tariff-free, from around the world.

The people who wouldn’t want this are the large corporations with burgeoning compliance departments, who are happy with stiff barriers to entry and want to stifle competition. And, of course, the EU want to maintain their protectionist fortress at the expense of its citizens, for it is they who are paying for it. Beyond the direct boost from smarter standards, there lies the vital ability to do trade deals around the world and import tariff-free goods: competition for the Eurocrats and the corporate bureaucrats. There is so much misinformation on these matters. Let us take two causes célèbres as an example: Firstly, chlorinated chicken. Every day everyone drinks chlorinated water in their tea, coffee or straight from the tap.

It is there to protect people from bad bacteria. Every time someone eats a bagged salad it will have been washed in chlorinated water. In Britain each year hundreds of people are made ill and some die from contaminated meat, E coli, campylobacter and salmonella. If chlorination helps prevent this, what is the problem with chlorinated chicken other than the EU trying to prevent competition from overseas? In any event, as it is, most chicken meat in ready meals is imported from Thailand or Brazil, pre-cooked and chilled. So much misinformation, so much hypocrisy. Secondly, GM products. The citizens of the US have been consuming GM foods for decades and I haven’t seen many people in America with two heads as a consequence; in fact they look pretty healthy to me.

Most animal feed in the UK, which is soya, is GM as there is no restriction or labelling requirement on feedstuffs and the world ran out of places to produce non-GM, sufficient for feedstuffs, years ago. Has the World Health Organisation declared this a health hazard? Of course not. Britain used to be in the forefront of developing better crops to feed the world, but the EU wants to restrict competition to fortress Europe, deny the developing world a market and make its citizens poorer, so that its wealthy landowners and corporations can become richer.

When you read the CBI report below and listen to Michel Barnier https://youtu.be/y3TA9aXKu2k , it is worth reflecting on the true motivations of the authors.

 

Greater costs than opportunities if UK moves away from EU rules and regulations
New CBI report seeks to inform Brexit negotiations by outlining where British businesses want to stay close to EU rules and where they want divergence

‘The task of unpicking 40 years of economic and regulatory integration is complex and colossal’, CBI Director-General Carolyn Fairbairn warns at the launch of a new CBI report on the EU rules that matter for the UK economy and jobs.
The report, Smooth operations, is based on thousands of conversations with UK businesses, as well as dozens of trade associations, and provides an A to Z of the rules that will matter after the transition period. From architects to zoos, it outlines the regulatory needs of 23 industry and service sectors, of which 18 prefer convergence or alignment for the majority of regulation that matters.
The CBI study, compiled over a six-month period, says Brexit presents opportunities for rule changes in sectors such as agriculture, shipping and tourism that could benefit the British economy and consumers.
However, the report adds that these opportunities for divergence are vastly outweighed by the costs of deviating from rules necessary to ensure smooth access to the EU, the UK’s largest trading partner.
Another important finding is that changes to rules in one sector have significant knock on effects for companies in other sectors and throughout supply chains.
Where rules are fundamental to the trade or transport of goods, such as in the automotive, chemicals and life sciences sectors, remaining in lockstep with the EU is essential. The Brexit deal should set a new international precedent for liberalising trade in services and digital products, the report says. It also outlines opportunities to improve how EU rules are implemented in the UK, such as procurement processes for the defence and construction industries, which would allow the UK to do things differently and better without diverging from EU rules.
While Smooth operations acknowledges the UK will no longer have the same say in EU rule-making as member states, new mechanisms will be needed to manage alignment and for the UK to influence rules that affect it.
Introducing the report, Carolyn Fairbairn, CBI Director-General, said:
“This report comes from the heart of British business. It provides unparalleled evidence to inform good decisions that will protect jobs, investment and living standards across the UK.
“The experience of companies across the country will be essential in the months ahead. A major acceleration in the partnership between business and the UK Government is needed to make a success of Brexit and to ensure this experience is heard.
“It’s vitally important that negotiators understand the complexity of rules and the effects that even the smallest of changes can have. Deviation from rules in one sector will have a knock-on effect on businesses in others, and divergence from rules in one part of a production process will have consequences for market access throughout entire supply chains.
“It’s hard to overstate the importance of the decisions that will be taken over the next six months. Put simply, for the majority of businesses, diverging from EU rules and regulations will make them less globally competitive, and so should only be done where the evidence is clear that the benefits outweigh the costs.”
The CBI has devised three principles that should guide both UK and EU negotiators:
Where rules are fundamental to the trade or transport of goods, the UK and EU must negotiate ongoing convergence. The range and type of products available is only set to grow, and the complexity of, and need for, cross-border supply chains will increase. Convergence is essential for frictionless trade in goods in almost every sector. Both sides should find a way of keeping the trade in goods frictionless.
In the negotiation of the new relationship, both sides should look to set a new international precedent in the trade of services and digital products. The industries of the future will be cross-border, and alignment globally and regionally will be essential.
Alignment will need to come with mechanisms for influence and enforcement that benefit both sides. Cooperation will be vital to ensure that regulatory systems match sufficiently to enable frictionless trade. This is a priority for a majority of industries, particularly those where the EU’s regulations are technical and detailed – such as in energy and financial services – as well on cross-cutting areas like employment rules. There is precedent for this, and both sides must be flexible to meet the other’s legitimate concerns about trust or sovereignty.

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