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Brexit – Is the UK really free from the EU? Part 5 – What we face from the EU post-Brexit

Editor's Note: This series of posts takes a closer look at the Agreement that was arrived at between the UK and the EU and signed on 24th December 2020. The use of the expression, "TCA" in this series of posts refers to the "Trade and Cooperation Agreement" signed between the UK and the EU on December 24th 2020. This series of articles was first written in early 2021, so please bear in mind that some of the content may appear somewhat dated.

[Click here for Part 1]

[Click here for Part 2]

[Click here for Part 3]

[Click here for Part 4]

What we face from the EU post-Brexit

It’s not difficult to see how problems will develop in the trading relations between the UK and the EU, post-Brexit. We only have to look at the struggle Switzerland has had in recent years in maintaining a satisfactory trading relationship with Brussels. The situation is so bad that the Swiss have actually given the UK a friendly warning about trading with the EU as a non-EU country.

As you’ve guessed by now, responsibility for the deteriorating situation here lies exclusively with the EU. This lesson is especially apt for us in relation to Northern Ireland. There is a similarity in that the province has a land border with an EU country – the Irish Republic. Switzerland has a border with several EU countries. It is a non-EU country that trades extensively with the EU (in 2019 it had a trade surplus of nearly 40 billion euros with the bloc).

As a result, the Swiss have found themselves constantly under pressure to abide by Brussels’ rules if they want to continue trading with the EU. These rules relate not just to trade, but to such things as the process of manufacture of products, and impinge more and more on the ability of the Swiss to make their own regulations for the benefit of themselves. More sinisterly, these rules relate also to matters such as immigration control.

It’s not just that. The EU want Switzerland as a “member-state” and to adopt its own insane “free movement of labour” policies. There have been a series of bilateral treaties in recent years that Switzerland has had to agree to as the price of maintaining access to the European Single Market. As a result of these, there has been free movement of people between Switzerland and the EU since 2002.

Each time the EU expands to include more “member states”, Switzerland, which clearly regrets abandoning control of its borders, is pressured to accept the additional influx that inevitably follows. Further bilateral treaties invariably contain clauses forcing the Swiss to do just that. The latest bilateral treaty is the Institutional Agreement between the EU and Switzerland.

The EU covets the unique country’s profitable industries and it’s stock market. It seeks to destroy the noble Swiss culture and way of life by blending it in into the pseudo-culture of multi-racialism, celebrity-worship and materialism endured by the citizens of EU countries. The pressure (i.e. blackmail) brought to bear on this little country has been enormous.

Now the EU is seeking to undermine Switzerland’s financial market. It has been making the same arrogant demand as they are now making of us (see Part 3 – Trade in services). They are refusing to grant “equivalence” to the Swiss, just as they are to us, even though the Swiss have far more expertise in financial trading than any EU country (now that the UK has left).

Can you see, now, why the Withdrawal Agreement was named “Trade and Cooperation Agreement”? A more honest title would be the “Trade and Coercion Agreement”.

This brings us to one of the most important sections of the TCA.

The “Northern Ireland protocol”

This “protocol” was the cause of many sticking points in the negotiations. The EU have used the peculiar geographical location of the province of Northern Ireland to try and weaken the position of the UK both throughout the negotiations and into the future. Their negotiators wrung more concessions out of the UK by seeing problems in the Northern Irish-Republic border that weren’t there in the first place.

Thanks to the TCA the UK now faces the prospect of having the same problems as the Swiss in the future, i.e. more and more erosion of national sovereignty, and millions of man-hours of sheer frustration in trying to do the impossible – to come to mutually beneficial agreements with the EU.

The EU will doubtless continue to use the Northern Ireland “protocol” as a means of separating Northern Ireland from the UK, fostering the break-up of the UK and keeping open the possibility that a future British government, or its regional replacements, will be forced to crawl, cap-in-hand, to be re-admitted, one by one, to the EU.

Their rationale has been that they are afraid of vast volumes of goods coming across the Irish border into the Republic to illegally flood the EU’s Single Market. This “danger” is extremely remote, given the low volume of trade that regularly crosses that border (it totalled about £4.7 billion worth of goods in 2016). Nevertheless, it warranted additional months of “negotiations” and the creation of the “Northern Ireland Protocol”.

Illegal trade (e.g. in red diesel) between the two countries has been the subject matter of regular talks between the UK and the Republic for many years. Overall these have been very satisfactory and productive. But that’s not what the EU wants. It wants total control. It ordered Irish premier (now former premier), Leo Varadkar, to scrap these talks, which, of course, he did.

That left the problem unresolved and ready for the EU’s own “solution”, which, of course, is to leave Northern Ireland effectively stranded inside the Single Market and subject to the rulings of the European Court of Justice (ECJ). It would then be ripe to be handed over to the Republic, and therefore back to the EU, probably by a future Labour government.

Day to day trade through the Irish Sea now faces serious and prolonged disruption. EU red tape ensures that many lorries containing goods for import/export to Northern Ireland are being delayed. Many companies on the UK mainland are refusing to send goods to the province on account of the paperwork and expense.

At least there is Article 16 of the Protocol, which says that if it leads “to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the EU or UK may unilaterally take appropriate safeguard measures”. It looks like this is one part of the TCA that will be of some use.

For now, the province is bound by over 300 EU directives and regulations, which can be amended at any time by the European Commission unilaterally. The good folk of Northern Ireland will have no say in such amendments. The Republic will have more of a say, being still a member of the EU. The only political entity that has any hope of salvaging this situation and preventing the loyal citizens of Northern Ireland from finding themselves under foreign rule is the DUP. Let us hope they do not flinch from the task.

“Classified Information”

Security and intelligence is covered in a separate agreement, the Security of Information Agreement, (“to fulfil the objectives of strengthening the security of each Party in all ways”) running to just eight pages, which seems rather strange. Why not simply have it as part of the main 1,246 page Agreement, which I’m sure could have its title amended to accommodate security and intelligence, or as the EU likes to call it, “classified information”.

Why have an agreement on this topic at all? Twenty one articles commit each party to adopting certain minimum security requirements and to share security related information. Most of this would be done by any two neighbouring powers anyway, as it would be in their joint best interests. But this being the EU, assuming, as it does, that all governments are as mired in corruption as is the EU itself, it all has to be put into writing.

An example of how whole parts of the TCA were not only drafted in Brussels, but in some cases lifted straight from EU documentation, is contained in Annex LAW-1: EXCHANGES OF DNA, FINGERPRINTS AND VEHICLE REGISTRATION DATA, Chapter 1: Exchange of DNA Data > 5.4. Protocols and Standards to be used for encryption mechanism: s/MIME and related packages.

There, on page 921, is an astonishing statement –

“s/MIME functionality is built into the vast majority of modern e-mail software packages including Outlook, Mozilla Mail as well as Netscape Communicator 4.x and inter-operates among all major e-mail software packages.”

Just above that bloomer is the statement that, “the hash algorithm SHA-1 shall be applied” when encrypting messages between the UK and the EU that contain DNA profile information, i.e. highly sensitive information that needs the highest protection against hackers.

SHA-1 as a hash algorithm was deprecated by the National Institute of Standards and Technology as being insecure as far back as 2011 and was disallowed for use in digital signatures in 2013. This part of the agreement was copied word for word from the EU Council decision of June 23, 2008, on “the stepping up of cross-border cooperation, particularly in combating terrorism and cross-border crime”. No-one in either negotiating team bothered to check if it was still up to date – an elementary measure, given the fast moving world of internet and communications technology.

The same goes for the mention, on the same page, of Mozilla Mail and Netscape Communicator 4.x as being “modern email software”. These software packages date back to around 1997 and have long since been defunct.

One form of communication that is more secure than that adopted by the so-called “European Union”.

At least the Agreement “does not constitute a basis to compel the provision or exchange of classified information by the Parties”. This appears to be one concession wringed out of the EU in the closing days as time was running out. Britain, being a nuclear power, has access to a lot more classified information than does the EU. And that brings us to the next agreement.

The Nuclear Cooperation Agreement

The EU-UK Nuclear Cooperation Agreement attempts “to provide a framework for cooperation between the Parties in the peaceful uses of nuclear energy”. Going through this 18-page document, it’s difficult to see what the point of it is. Much of it consists of preambles, objectives, definitions (including of scope), administrative arrangements, etc.

In a way, this Agreement assists the EU in consolidating its power over its member-states, by providing, in Article 18, that any existing “bilateral civil nuclear cooperation agreements in force between the United Kingdom and Member States of the Community ……shall, where appropriate, be superseded by the provisions of this Agreement.”

What about bureaucracy? Ah, yes. Here we are – Article 19. Naturally, a “joint committee is hereby established by the Parties”.

There’s a complicated provision for determining when the Agreement, comes into force (which had to be resolved by exchanging letters on 30th December and publishing that as a separate document). But then it is to remain in force for an initial period of 30 years, automatically renewable for periods of ten years at a time, unless either party gives notice to terminate.

But even if that happens, several parts of the Agreement are to continue indefinitely under the terms of paragraph 3 of Article 24. Finally, in common with other parts of this whole series of Agreements, it is to be drawn up (in duplicate, of course) in all 24 languages (including Irish!) spoken in the EU.

So much for securing the UK’s departure from the EU.

Not a restoration of national sovereignty

The EU’s negotiators went into the withdrawal negotiations fully expecting to get exactly what they wanted from the UK government, without having to make any concessions at all. And while Theresa May was still in 10 Downing Street they very nearly succeeded.

Boris Johnson, career politician that he is, at least got us an agreement that means that, technically, we are free from the worst parts of the numerous treaties that previous treacherous prime ministers had signed us up to without our consent.

But we have to live with some uncomfortable truths. This isn’t a “restoration of national sovereignty”. It’s a recipe for either future enforced subjugation to Brussels or future conflict. Of the two, conflict is, of course, preferable.

The cost of not standing up to the demands from Brussels over Brexit is huge. According to Facts4EU.Org, by late 2020 UK taxpayers had paid the EU “an eye-watering £41 billion since voting to quit the bloc in 2016”.

Year by year, that’s been £5.1 billion in the second half of 2016, £9.3 billion in 2017, £9.1 billion in 2018, £9.4 billion in 2019 and £8.2 billion in 2020.

According to Facts4EU.Org, that’s not the end of it. “Britain faces the prospect of forking out billions more to Brussels with payments scheduled for the next 44 years.”

But there’s one more factor to consider when looking into the future, and it’s an encouraging one for us. The way we as a nation have conducted ourselves over the long drawn out negotiations to leave has been noted by people living in other EU member countries. And the appalling way in which the EU negotiators have behaved has also not gone unnoticed.

Others will follow us

It’s true we’ve had our share of traitorous remainers, well funded and with powerful friends in high places. And that includes the remainers who paid the EU £39 billion of our money at the start of the Brexit negotiations in return for nothing. But we’ve overcome everything that they could do to try and prevent our leaving, and we’ve done it surprisingly peacefully.

This has set a good example to countries such as France, Greece, Italy, Hungary and Poland, and even perhaps Germany as well. Millions of people in those countries yearn to be free from the EU, its restrictions, meddling and bureaucracy. It won’t take much to spark the creation of a new anti-EU political party, or a sub-division of an existing one, that is dynamic and determined enough to copy what Britain has done.

Other encouraging developments include an initiative from Switzerland, a non-EU country that, as we have seen, has been treated appallingly by the EU. This initiative is for closer cooperation between Switzerland and the UK in the realm of financial trading.

Given the volumes of financial trade conducted by both countries, there is potential here to form a financial market/stock exchange powerful and attractive enough to threaten to cripple all the EU financial markets. This would be a further impetus towards the EU countries affected seeking their own version of Brexit.

The European Union is a bloated, corruption-ridden, tyrannical, modern day Tower of Babel run by failed politicians whose only talent is in lining their own pockets. Like the old Soviet Union, it had to expand in order to survive, and when no more expansion is possible it will collapse. The inevitability of this now stares it in the face. All we have to do is keep a good distance and enjoy the spectacle.

Brexit – Is the UK really free from the EU? Part 3 – Nothing “free” about this free trade agreement

This series of posts takes a closer look at the Agreement that was arrived at between the UK and the EU and signed on 24th December 2020.
Editor's Note: The use of the expression, "TCA" in this series of posts refers to the "Trade and Cooperation Agreement" signed between the UK and the EU on December 24th 2020. This series of articles was first written in early 2021, so please bear in mind that some of the content may appear somewhat dated.

Philip Gegan

[Click here for Part 1]

[Click here for Part 2]

In this part I am looking at how the Brexit “Trade and Cooperation Agreement” (“TCA”) affects trade in both goods and services between the UK and the EU.

Trade in goods

In 2019 the UK had a deficit of around £97 billion in trade in goods with the EU. The EU wants to keep it that way, and the agreement provides for just that. The UK negotiators let the EU have its cake and eat it. It gave us the dubious privilege of remaining the dumping ground for surplus EU products, made possible by a gross undervaluation of the Euro. And we’ve paid for this liability by agreeing to obey all EU rules on trade in goods. That includes any changes to those rules, in which we have no say, in perpetuity. So much for regaining our national sovereignty. The EU thereby managed to protect the integrity of their precious Single Market. What did our negotiators secure for us in return?

Very little, it seems. We should not be surprised here, because the UK’s negotiators, like all mainstream politicians of any Western country, believe in the fundamental goodness of free trade. They believe that all forms of protection of the home market – tariffs, preferences, and so on, are bad. Unregulated competition from foreign countries, however, is good. Even though that may mean the decimation of home industries, the closure of factories and mines and the throwing of good working men and women onto the unemployment scrapheap.

In order for us to grasp what the TCA does for trade relations between the two parties, we have to understand what exactly free trade means, both to its proponents and to everyone who has to live with it. In the absence of clear thinking, it means different things to different people.

Any free trade agreement involves an infringement of national sovereignty. It has superficial attractions to naive career politicians, but beyond that it is just a chimera.

An unworkable system

The popular conception of free trade is of goods and services freely moving from one country to another without hindrance in accordance with the laws of supply and demand. Everyone is happy. Consumers because they can purchase goods cheaply from the source with the lowest price, and manufacturers and suppliers because they have a much larger market to sell in. That’s how ignorant politicians, economists and broadcasters see it.

But in reality it’s nowhere like as rosy as that. It’s an unworkable system. Quite aside from the depressive effect on wages, which ultimately keeps most people as poor as the poorest in the free trade area, there are restraints on natural development and progress.

If one party to a free trade agreement is more inventive than the other parties, or becomes more efficient, or less prone to wasteful practices, they thereby acquire an advantage over the others. They become more productive and therefore more prosperous and they are rewarded with a higher standard of living.

But this is at the expense of all the others who are a party to the agreement, whose standards of living, on average, will tend to fall, whose balance of payments will suffer, whose industries will wither and factories close. It causes an imbalance, and this imbalance will increase with time until the cost to the other countries is too high and the whole agreement becomes unworkable. Those other countries, if they wish to survive, will have no choice but to raise tariffs and destroy the agreement.

Further restrictions on our freedoms

But if there are bankers and financiers profiting handsomely from the free trade agreement, as they are bound to do, then there will be pressure to keep the system going artificially by destroying the ability of the successful party to be successful. Everything depends on absolute equality, including equality of poverty and equality of inefficient working practices. This leads to the stifling of any form of inventiveness or enterprise on the part of a more successful signatory to the agreement, and acts as a break on human progress.

This artificial equality is built into modern free trade agreements, and it is right there in the TCA. If a situation such as I’ve just described arises then what’s called “the level playing field” concept kicks in.

This artificial concept provides that no party should have any advantage over any of the other parties, even though such advantage has been obtained honestly and fairly by prudent investment (e.g. government subsidies), technical ability or other such property that any other party could have utilised if they had had the ability and foresight.

Under the rules of free trade, the cry will go up, just like the children in a playground where one of the participants in the game is perceived as having an unfair advantage. “That’s not fair! The playing field isn’t level!”

So it can be no surprise that there are countless restrictions on our freedom to conduct our national affairs in the TCA.

The “level playing field”

For example, any sovereign nation has the right to extend financial support to any section of its economy that is in difficulties. But if we want to do that in the future, for any section of our economy that is involved in trade with the EU, we have to abide by EU rules so as to ensure a “level playing field” and eliminate so-called “unfair competition” (TITLE XI: LEVEL PLAYING FIELD FOR OPEN AND FAIR COMPETITION AND SUSTAINABLE DEVELOPMENT). The sole beneficiary of this arrangement is the EU and its “Single Market”.

The Single Market is the EU’s own incarnation of a free trade area and the preservation of this artificial construct was one of the issues at the forefront of the EU’s considerations during the negotiations. They were desperate to preserve the status quo, so that in the event of the UK becoming more competitive than EU member-states in any area of productive industry, it would be easy for them to use the TCA to reverse the process and make it difficult to impossible for British companies to sell competitively inside the EU.

All kinds of rules, regulations, and mechanisms were therefore embodied in the Agreement to cover such an eventuality (see, for example, Title XI, Chapter two: Competition Policy). Especially in a situation where one side (the EU) is seeking to punish the other side (the UK).

Looking at the Agreement itself, you can see where various “member-states” of the EU have successfully lobbied for the protection of their own important industries during the long-drawn-out negotiations. Hence we have special Annexes dealing with motor vehicles (Germany, France), wine (France), and chemicals (Germany, Italy).

The UK negotiators have agreed on our behalf that neither side can create for itself an advantage over the other. This is the “level playing field”. Moreover, there will be a dispute settlement mechanism on state aid, with both sides able to impose tariffs unilaterally, if the “level playing field” is upset, ostensibly to protect against “unfair competition”.

“Confidentiality”

If there’s one thing the EU is famous for, other than corruption and bureaucracy, it’s secrecy. So under the TCA decisions will be the subject of often-confidential discussions, while dispute resolution and arbitration will be subject to absolute and discretionary rules of confidentiality (See, for example, Article INST.29: Arbitration tribunal decisions and rulings, and Article INST.30: Suspension and termination of the arbitration proceedings).

That’s not part of the British tradition, which places great importance on openness and transparency in all court trials and hearings, and other decisions that impact on our citizenry. Secrecy and “confidentiality” are part and parcel of the doings of the EU. They evidently don’t want the workers and management of British companies put out of business by the decisions of the Partnership Council to know the identity of the individuals responsible for it.

The “level playing field” concept illustrates the hypocrisy of the EU perfectly. It’s all for free market competition when it benefits thereby, but when it has to face the reality of not being able to compete successfully, it resorts to the “level playing field” to keep in the game. This neatly brings us to the next item to consider, which is trade in services.

Trade in services

When it comes to trade in services, in 2019 the UK had a surplus of around £18 billion with the EU. In stark contrast to goods, the EU negotiators refused to come to any agreement on services. Any future agreement would have to be sanctioned by the EU Commission, which is not known for giving consent on these matters easily.

The TCA generally makes trade in services between the UK and the EU much more problematic than it need be. For example, service agreements can no longer be between the UK and the EU. They have to be signed by the UK and each individual “member-state” affected by such trade, i.e. be on a “country-by-country” basis. This adversely affects service companies in the UK more than it does their EU counterparts.

Yes, the EU Commission don’t mind returning a little national sovereignty to each of its members if, thereby, it can gain a little revenge against the UK for its blatant defiance in going through with the result of the 2016 Brexit referendum.

There’s still plenty of scope for contrariness on the part of the EU going into the future. Under the TCA, although the EU cannot impose tariffs it can impose “non-tariff measures” to trade in services. These can be, for example, additional proposed regulations that will have to be followed if a particular service trade is to be allowed to continue. Again, it has to be said – this isn’t what we voted for in 2016.

EU threatens UK services sector

There’s more (you didn’t think that was it, did you?). If the UK government wants to make subsidies to any of its service industries, such as finance, then it will have to follow the rules of Part Two, Title II of the TCA. As we’ve observed earlier, there must be a “level playing field”. So if the EU is behind us, for example, in the field of expert advice on some aspect of concern to the construction industry, and companies and authorities in the EU wish to purchase such expert advice from a UK company, then all parties, including the UK company, will have to follow as yet unwritten rules that will be dreamed up by Eurocrats in Brussels.

The EU is being so obstructive in the matter of service industries that UK service industry chiefs are now talking openly of the need to withdraw from the EU market and seek new markets elsewhere. The resulting loss of foreign earnings will doubtless be put down to “Brexit” by Remainers, using their usual simplistic logic and ever determined to find no fault at all with the EU.

Share trading

A good example of how the EU have outflanked the UK’s negotiators is in the sphere of share trading. London has long been the largest stock exchange in the world. Before this TCA was signed, anyone wanting to trade in European equities would most likely have traded on the London Stock Exchange, regardless of which country they operated from.

Post TCA, a UK investor can choose to trade in either London or one of the EU stock exchanges, but an EU investor can only trade on an EU stock exchange. This gives EU stock exchanges a vital advantage, and investors based in the UK will invariably choose to trade in the EU, where all their portfolios can be managed from the one platform.

Our negotiators were assuming that the EU would grant the UK what is called “equivalence”, i.e. the practice and procedure would be the same as it was when the UK was still a “member state” of the EU. But the EU have refused to grant equivalence. This should have come as no surprise. Switzerland had a disagreement with the European Commission in 2019. Equivalence was withdrawn by the EU and Switzerland, having done their best to compromise, are still waiting for it to be reinstated. Woe betide any independent nation that crosses the European Union.

Professional qualifications

Next is another good example of how the EU works. I’m referring to the Mutual Recognition of Professional Qualifications (MRPQs). It is the mechanism that allows professional people such as doctors, lawyers, engineers and architects to have their qualifications recognized all across the EU.

Such an arrangement shouldn’t be necessary if the EU was run on the basis of common sense. But it can’t allow anything like that to go unhindered by rules and regulations.

So the MRPQ came into existence. It was, surprisingly, an arrangement that worked tolerably well for many years, helping to facilitate trade, mainly in the services sector. In the negotiations this arrangement should have been little more than a formality to agree on. But the EU negotiators refused to agree.

As a result, our services trade with the EU is suffering due to uncertainty over whether professionals who become involved will have their professional qualifications recognized (and therefore their services paid for) in the EU. All the TPA does (in Part Two, Heading One, Title II, Chapter 5, Section 2, Article SERVIN.5.13: Professional qualifications) is to refer the whole matter to the Partnership Council, which can then “within a reasonable time [undefined]…. develop and adopt an arrangement on the conditions for the recognition of professional qualifications” which can then be shoved in as another Annex to the TCA itself.

In the meantime most UK service industries are in limbo as far as supplying services to any country that is a “member-state” of the EU is concerned. It would probably be easier negotiating a trade deal with the Mafia.

In Part 4 I will be looking at how the TCA affects our much maligned fishing industry.

Click here for Part 5 in this series, “What we face from the EU post-Brexit”.