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Single Market Maze Contains Clues to Complex Brexit Puzzle

Yves here. This post gives an idea of how difficult it will be to come up with post-Brexit trade arrangements.

By William Davison, a British freelance journalist based in the UK and Ethiopia. He was the Bloomberg News correspondent in Addis Ababa for 6 years until January 2017 and has also contributed to The Guardian, The Christian Science Monitor, Foreign Policy, Al Jazeera and others. Originally published at OpenDemocracy

In many ways the hi-tech firm just outside Cambridge fits into a vision of an optimistic future for the British economy sketched out by breezy Brexit advocates.

In a leafy business park, highly educated workers dart around a lab fine-tuning the operation of a robot that could soon be performing keyhole surgery across the globe. A technician wearing 3-D goggles grips a surgeon console that looks as if it belongs in a virtual-reality arcade, not an operating theatre, and guides a mechanical arm on his screen so an instrument plucks a suture. Health industry representatives from the UK and Europe are due to arrive later that day to cast their eye over the prototype.

Brexit visionaries like Conservative European parliamentarian Daniel Hannan have argued that when the economy breaks free from the clutches of the European Union’s overbearing bureaucracy, many such value-adding innovators will explore global markets from their newly deregulated, low-tax, UK base.

Others, like Chief Executive Officer of Cambridge Medical Robotics (CMR), Martin Frost, have somewhat more mundane views about impending departure from the EU. Those centre on what the separation will mean for the medical devices regulatory system, which ends in products receiving a CE (European Conformity) mark, allowing them to be sold across the European Single Market without further checks.

“We always built our product to be relevant to Europe and the United States. And that’s when we get concerned about what that regulatory regime will look like in Europe in 2020,” he says.

For a company like CMR, which is developing a complex device, the uncertainty is a problem, as it needs to know, for example, what safety features to design almost a decade in advance. A dramatic change in the regulatory environment could cost the company millions of pounds. Unfortunately for Frost, and thousands of businesses with similar concerns, certainty about what even the outlines of Brexit will amount to is in short supply.

The reason for that is primarily because there has been precious little substantive national debate about the post-separation trade options that the government can pursue. The referendum was fought on political rather than economic grounds and the bitter divisions it exacerbated still very much shape media reporting and public attitudes.

After the referendum, Prime Minister Theresa May’s new government could have decided that, while it had to take the country out of the EU, leaving the Single Market was an unnecessarily daunting and risky challenge. However, May embraced the idea of a clean break in order to focus on controlling immigration and reclaiming sovereignty, which includes ending the jurisdiction of the European Court of Justice (ECJ).

The Single Market

Since the surprise loss of a Conservative majority in the June election, that strategy has come under increased scrutiny. But the discussion of Brexit options in the interests of protecting the economy is poorly defined and ill-informed, partly because of the complexities of the multi-layered single market.

The resulting lack of clarity from a weakened, divided, and distracted political class means even staunch Brexit supporters acknowledge the path to a smooth departure is increasingly strewn with obstacles. And a large proportion of those come from the ending of painstakingly constructed regulatory unions that are key to freeing up trade.

The Single Market has been at the core of the European integration project since its inception. Today’s arrangements stem from the creation of the European Economic Community (EEC) in 1957 which aimed to build a common market according to freedom of movement principles. The UK joined France, Germany and four others in the EEC in 1973 after the existing members had completed a Customs Union in 1968 to abolish internal tariffs. Successful efforts to revitalize integration in the 1980s led to the formal declaration of the Single Market in 1993.

Superficially, the Single Market appears straightforward and finite. It facilitates borderless trade between member states by creating an economic zone for Europe as if it is one country. For example, it gives a printing cartridge manufacturer in Leicester as much right to set up an office and do business in Lyon as it has to do so in Liverpool. Crucially, participating countries have to accept in principle the freedom of movement of goods, people, services and capital.

While that overview is accurate, the Single Market is also an evolving, fragmented, labyrinthine process to set rules and standards across almost all sectors in order to regulate economic interactions and thereby try and facilitate cross-border business in the EU and connected trade blocs. Despite considerable progress at harmonisation, the effort is continuous. For example, the EU Commission is trying to improve internal energy, capital and digital markets and is incorporating international plans to reduce corporate tax avoidance. Many EU standards stem from the work of other multinational bodies.

To ensure the market’s laws are followed there is an accompanying apparatus of organisations to inspect, verify and certify, while the ECJ is the arbitrator of disputes. Leaving means undoing this work and undertaking a laborious effort to replace it, rather than, for example, pushing ahead to try and establish common markets in significantly non-integrated service sectors like healthcare or construction.

Regulatory Union

Although CMR’s robot surgeon is indeed at the frontier of technological advances, the market for medical devices is well established, as is the EU regulatory system for them. The barriers to trade erected by leaving that system are just one example among thousands of the costly disruption that will be caused by leaving the Single Market.

For CMR, the path to the CE mark is complying with the UK’s Medical Devices Regulations, which stem from EU directives with instructions such as: ‘the measurement, monitoring and display scale must be designed in line with ergonomic principles.’ As it’s a high-risk product, it would then apply to one of five EU ‘notified bodies’ in the UK who assess compliance and issue the CE mark.

If Brexit occurs as planned, the UK will no longer have EU notified bodies, which means applying to one based in Europe. Frost would therefore like the status quo maintained, even if the UK exits the Single Market, but that appears to be impossible: ending membership means rupturing the regulatory union. There are comparable dilemmas for the valuable chemicals industry and many other heavily regulated sectors.

One of the organisations responsible for medical devices is the British Standards Institute (BSI), which said it is confident a deal can be struck whereby UK assessors would be treated as equivalent to EU notified bodies. After negotiating trade deals, seven non-EU rich nations have similar arrangements for some industries. But despite the BSI’s bullishness, which echoes the government’s Brexit aspirations, this option has the same downsides as other Single Market alternatives: regardless of the existing convergence, negotiating and then implementing fresh regulatory regimes for all industries simultaneously as part of a UK-EU trade deal will probably take years, and the result will be less smooth trade anyway. It’s also currently unclear what transitional arrangements could be set up in the meantime, especially without May relaxing her stance on the ECJ.

While the BSI position elicits queries, Frost’s notion that medical device regulations can be dealt with separately from the Single Market, which he sees as primarily about eliminating tariffs, is, at best, optimistic. Such views are symptomatic of a muddled debate about Brexit and the global economy, according to Matthew Bishop, a senior lecturer in international politics at Sheffield University.

Bishop argues that modern trade deals are less about tariffs on finished products – it’s estimated, for example, that 80 percent of global trade is within value chains controlled by multinationals – and much more focused on the arcane regulatory arrangements that govern market interactions, including associated issues like labour and environmental rules.

And trade in Europe isn’t shaped solely by Single Market rules. Instead it stems from a “fiendishly complicated cornucopia of bilateral and multilateral agreements”, including the World Trade Organisation (WTO), Bishop said. The Brexiteer idea that deregulating will boost UK exports is therefore largely a fallacy, he believes, as market access through trade deals always means adhering to detailed rules.

Massive Risks

Given this messy, precarious reality, Bishop is bewildered by the blasé approach from nominally pro-business Conservatives to the Single Market, which anchors the UK’s position in the global trading system. “I personally just cannot believe that a Conservative government especially is taking such massive risks with the British economy,” he said.

As the onerous realities of separation loomed after the referendum, there was already uncertainty about the best way forward among Conservatives. Since the election, Treasury minister Philip Hammond has become prominent in stressing the need for a Brexit that protects the economy. But, so far, he has not proposed any tangible deviations from the government’s February position paper.

This lack of clarity among Conservatives is matched by Labour under left-wing leader Jeremy Corbyn. In its election manifesto the party supported ending the freedom of movement of people while retaining the benefits of the Single Market. That is against the principles of the EU project, and nobody is suggesting Brussels will make a positive exception for the UK. Indeed, many people think European leaders want the separation deal to serve as a warning for others tempted to follow the UK’s path.

Still, the Labour leadership may maintain its fuzzy stance and let the Conservatives grapple with Brexit while it focuses on pressing home its domestic advantage by continuing to oppose austerity. A senior party source said the emphasis will be on opposing Conservatives’ efforts to use the excuse of Brexit to slash taxes and regulations in order to maintain competitiveness.

Although Labour attracted many Remain voters, long-term Eurosceptic Corbyn has concerns about some Single Market rules, such as limiting state aid to industry and banning government procurement favouring local firms, the source said. That makes a change in approach unlikely, despite the growing pressure from other factions in the party.

Gradual Decoupling

A long-term EU critic who has a clearer strategy is researcher, author and blogger Richard North. He has been plotting a practical decoupling for over a decade. North, a UK Independence Party candidate in northern England for European elections in 2004, exudes contempt for a London-centric establishment he says is incapable of learning from outsiders.

He believes this elite’s lack of detailed understanding of the EU has led to misconceptions surrounding Brexit snowballing. Some of his research illustrating this point is striking. For example, it became received wisdom that staying in the Customs Union was an option and that exiting it would mean the reintroduction of border checks. These claims are misleading, according to North, despite their being underpinned by research from the Treasury.

Instead, while the Customs Union abolished internal tariffs, it was the development of other elements of the Single Market that eliminated border checks as regulations were standardized. So, if the UK left the Single Market, livestock exports, for example, would need inspecting at the border, unless regulatory harmonization was re-established. A Customs Union would not prevent that and, regardless, leaving it is set to occur automatically upon Brexit. US investment bank J.P. Morgan has arrived at similar conclusions, while the EU lead negotiator’s comments also support this type of view.

Still, despite such confusion, as the process staggers forward, North has at least planned for it. The thrust of his preferred approach is that because the current level of integration took 44 years to achieve, separation should be incremental. For him, this means leaving the EU, but not immediately exiting the Single Market. That can be done by applying to re-join the European Free Trade Area (EFTA). EFTA members Iceland, Liechtenstein and Norway are part of the Single Market through the Agreement on the European Economic Area. If the EU agreed, the UK could re-join the EEA through EFTA. Some commentators think this option could form the basis of a transitional arrangement, but an EFTA source said that was unlikely.

In North’s opinion, other paths are riskier. The government’s plan to negotiate and implement a comprehensive trade deal is likely to take years, despite existing regulatory convergence. Trading on WTO terms means another complex period of haggling as, for example, the UK’s duty-free import quotas are cleaved out of the EU’s. And it would, again, also mean ending regulatory union, which would stifle access to an EU market that accounts for around 45 percent of UK exports, or £222 billion in 2015. Richard North worries that a failure to follow the EFTA/EEA strategy risks derailing Brexit entirely as the process gets bogged down in years of talks.

Negotiating Pain

However, deciding to pursue that option, which has been lurking somewhere on the national agenda since the referendum campaign, would only be a baby step. The government would still have to sell the deal to Conservatives who want a clean break. That would be tough, as remaining part of the Single Market via EFTA/EEA means abiding by relevant EU regulations, contributing to the union’s budget, accepting decisions of a non-British court, and accepting in principle the freedom of movement of people.

Helping the cause would be the fact that once part of the EEA as an EFTA member, the agreement allows the parties to unilaterally take measures that could plausibly be used to control immigration. Uncontrollable movement from the EU, it should not be forgotten, was a significant factor in the referendum.

Amid the fallout from the Grenfell fire tragedy, which highlighted the importance of effective regulation, May’s minority government has begun negotiations with Brussels, but trade is not yet on the table.

Instead, the parties are focusing first on the future rights of UK citizens living in the EU and vice-versa, agreeing the financial accounting of the separation, and the plan for the Irish border, which is currently relatively open, but is set to become the EU and single market frontier. If progress is made in these tricky initial discussions, talks on trade could occur this year, but it’s unclear how much detail the EU is willing to go into before the UK departs. Meanwhile, a group of Labour parliamentarians have broken ranks with Corbyn to say the UK should stay in the Single Market. Included in that faction was Daniel Zeichner, the member for strongly pro-EU Cambridge, who resigned from the shadow cabinet in late June over the issue.

On the fringes of this wealthy, liberal city, in the weeks after the shock election, Frost, an experienced tech entrepreneur, has been hosting busloads of Chinese health industry types, eager to scrutinize CMR’s ground-breaking surgeon-robot. He’s planning to tap into financing to get his device to market within a year or so and is confident the globally focused venture will succeed, whatever Brexit brings. Like many in the UK, he hopes that the hung parliament and a chastened government mean a less economically disruptive deal.

But despite the reassuring noises from ministers and their opposition counterparts about seeking a separation that is in the interests of jobs and business, Frost recognizes that there is still a lack of clarity and lots of unhelpful uncertainty around. “Brexit is just a pain for us,” he said.

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22 comments

  1. Terry Flynn

    Thank you for a very enlightening piece.

    Still, the Labour leadership may maintain its fuzzy stance and let the Conservatives grapple with Brexit while it focuses on pressing home its domestic advantage by continuing to oppose austerity. A senior party source said the emphasis will be on opposing Conservatives’ efforts to use the excuse of Brexit to slash taxes and regulations in order to maintain competitiveness.

    Although Labour attracted many Remain voters, long-term Eurosceptic Corbyn has concerns about some Single Market rules, such as limiting state aid to industry and banning government procurement favouring local firms, the source said. That makes a change in approach unlikely, despite the growing pressure from other factions in the party.

    I do wonder what Corbyn’s game plan is. Part of me thinks he wants to apply a left(ish)-wing version of the shock doctrine – when the chaos ensues under May, let the Tories implode and give Labour an unequivocal majority in the next General Election – and let’s not forget that for quite a few issues these days a party must (also) have a majority of English MPs (for issues devolved to the other countries/principalities of the UK) to govern at its full potential. Get his policies protecting workers’ rights etc enacted at that point. It’s certainly in line with how his party campaigned both nationally and regionally in bell-weather constituencies like my own (Gedling – the top target for May in the East Midlands) – talk about austerity etc and not BREXIT (although I know from conversations that BREXIT, although not THE factor, was still A factor). East Midlands support for BREXIT has ‘maxxed out’ – and for a hard version (free trade area only) at 45% (and indeed has solidified since EUREF2016) – and a lot of this is in fact Labour support. Whilst he can’t afford to backslide in such seat, the huge (5 million) non-referendum voters who would turn out in a rerun are largely younger Labour REMAIN supporters and older ‘small c’ Conservatives who were turned off by May’s campaign and he needs them too.

    That’s a high-risk strategy. Never under-estimate the Conservatives to move quickly to depose leaders and re-align. Furthermore, and paraphrasing points made by commenters to yesterday’s BREXIT piece, comments were made to the effect that the EU has turned from the positive institution of my youth to one of “pay-to-play” and that the neoliberal bias reflects the skew towards neoliberal national governments across the EU. The corollary is that a backlash against austerity (particularly in the southern European countries strangled by the Euro) could “do the job” of reforming the EU. So far, the evidence doesn’t support this. NC has posted eloquent pieces explaining why (for instance) Syriza had to capitulate; whilst a majority of mainland Europeans don’t see the disjoint between membership of the Euro and austerity, it’s hard to imagine them making the changes to national governments that would lead to a fundamental change in European policy. But, as we’ve seen in the UK, change can come suddenly so people could argue this point either way.

    Finally, and returning to the issue of the Single Market vs Customs Union – both tended to be heavily rejected by LEAVE supporters in the March/April survey. My results were very much in line with the great piece from the New Left Review that NC drew attention to – the regional percentages in the referendum heavily reflected the extent to which they felt ‘left behind’. Now, the LEAVE vote around here in the East Midlands has become even stronger, reflecting not a dislike of immigration per se – we have a long history of being the first region to house first waves of people from Poland (WW2), the Caribbean, Indian subcontinent, and now East Europe. But the rage is due to the lack of support for this influx and what’s happened to real wages. ‘Hard’ forms of BREXIT are seen as least likely to give politicians ‘wriggle room’ – of course (just) a free-trade area is not the answer to their concerns….people like me and those at the NLR are merely the messenger trying to provide the context/understanding of the vote. I don’t for one moment under-estimate the complexities of the ‘supply side’ – namely the regulatory issues like those raised here. But angry people out there won’t know or care until the shock hits them….and the cynic that I am makes me wonder if certain politicians wouldn’t mind that, if it enables them to enact their policy agendas.

    1. vlade

      From what I’ve seen, it looks to me like Corbyn’s current plan (ambiguity and vagueness) works, but I’d like to know whether he realises, as you say, that it’s a very high risk strategy.

      Not just politically, where somoeone not as sleazy and clearly elitist as Clegg could revive LibDems and take a large chunk of Labour and soft-centre C party (maybe not enough to win large number of MPs, but enough to deny Labour a majority, creating perma-hung ), but also economically. The economic reality is that the UK must trade. It can’t be an autarky, not even a North Korean type of one. But a train-wreck of Brexit (i.e. April 2019, no agreements at all) would be a war-like devastation for the UK economy, that it could deal with only by a kindness of strangers (for example after a few days of total chaos EU extending the negotiation period and thus the EU membership retrospectively).

      Sorting this trainwreck would be still a very large task, and, if EU and US were not on friendly terms, it would be a much much worse task than WW2 recovery which took over a decade – remember, in a friendly (ish, yes, there was a Cold War on, but the trade links with most of the world were good) and growing world.

      1. Terry Flynn

        Thanks, agreed. Yes ambiguity worked a treat in the General Election but now, of course, Labour is seen as a viable government in waiting and the media will pay a lot more attention to what Labour are proposing. I don’t think he’ll get away with it again – but maybe he has more tricks up his sleeve. As you say, who knows whether he realises the vulnerability of his strategy. I’d love to do a follow-up study to ascertain whether his (apparent) focus on austerity and other ‘non-BREXIT’ issues would dominate among the ‘Corbyn army’ in key seats if these young people realised he is making them give up on REMAIN/quasi-REMAIN in return for a promise of better working conditions etc. Unfortunately I can’t self-fund such a study so I’m as in the dark as anyone else on that….and as you hypothesise, LibDem behaviour could be key to what happens overall. I think Corbyn is still wedded to first-past-the-post and instinctively doesn’t want to work with the LibDems if they do achieve ‘perma-hung’ – deliberately giving this impression might reinforce the (already observed) phenomenon that in England/Wales we’re largely back to two-party politics and cause even a LibDem revival to die at birth…but if he’s deliberately cultivating this view of himself, then that’s another high-risk strategy that could backfire.

        Yes, I agree sorting the trainwreck would be pretty awful, but I find it interesting that Labour increased its number of votes in 1950 over it’s huge win in 1945 and then yet again in 1951 (although of course the electoral system penalised them in both elections in terms of their seats won – decimating their overall majority, then over-turning it) during a period when continuing post-war rationing etc might have been expected to penalise them (even allowing for the new NHS and social reforms). That’s why I wonder if certain politicians are far more sanguine about a train-wreck than we might be….it could spell opportunities for them if they can successfully lay blame for the mess at an assumed Tory opposition’s feet. But we’re back (yet again) to high-risk strategies…..

    2. PlutoniumKun

      I’ve no great insights into Corbyn, but I think his (and his circles) thinking goes something like this:

      1. By not opposing Brexit it allows us to move the political conversation to austerity and other ‘strong’ topics for Labour.
      2. Enacting a genuine socialist policy can only be done in a time of turbulence. Brexit presents us with this opportunity.

      I also think that Corbyn, and his particular brand of English socialism (I say English, because I think its quite distinct from the Scottish strain) is reflexively Eurosceptic and quite nationalistic in many respects so a ‘soft’ Brexit comes quite naturally to his way of thinking. And Corbyn, we know, is a deeply committed socialist – he would rather not be in power than be in power and not be able to implement his policies. He really means it, and that means he is quite prepared to follow a much higher risk strategy than a conventional politician.

      I’m delighted he is doing so well, but I see evidence of hubris already in some of the things he is saying and doing. Movements like his have a tendency to burn out quickly if they don’t get immediate results. And lets not forget that there is plenty of evidence that many people voted for Labour precisely because they believed they had no chance – it was a protest vote. Many of those votes might change again at the prospect of Corbyn as PM.

      My ‘from a distance’ sense is that the Lib Dems and Greens have blown their chance to take on a Remain surge. I think things have moved on, there doesn’t seem room for an alternative to the Cons or Labour. I think that as Brexit gets worse the blame will be pushed onto ‘Europe’ more than the UK political establishment. I would not underestimate the ability of the Conservatives to get their act together politically, and I would not underestimate the potential for a scared and confused electorate to cling to nurse for fear of something worse.

      1. Terry Flynn

        Yeah I was writing my reply to vlade as you posted so have just seen this and I largely agree. I think he’s playing a high-risk game. Whilst I agree totally that you should never under-estimate the Conservative ability to regroup, the very real split between their ‘business wing’ and ‘nationalistic wing’ may finally become irreconcilable – local Tories round here are more vocal and less liable to fall into line than I’ve ever seen. Whilst on balance I think the lack of quick results under a putative Corbyn government would indeed cause the problems you mention, things could get very interesting if the Tory party fails to pull together and end up getting heavily penalised by the FPTP system.

  2. Clive

    The EU’s approach to standards and approvals reminds me of what Baron Harkonnen said in Dune (“He who controls the Spice controls the universe!”)

    Or, to translate, he who controls standards, approvals and enforcement controls the market. And these days, the market is pretty much our existence. And to continue the Dune analogy, the EU’s bureaucracy has been exceptionally clever and learned the lessons of the Bene Gesserit — those who wield power explicitly and overtly get targeted by those who want to seize that power for themselves. Far better, if you have patience and are willing to pass over the chance for short term victories in pursuit of long term strategies, to operate subtly and behind the scenes.

    The Commission’s Directives, which are then fashioned into EU Regulations, give the power of commercial life and death to anyone and anything which strays into its sphere of influence. As noted in the above article, to paraphrase (and to shift analogy to Game of Thrones), pretty much no matter what the industry, it is the EU’s house, the EU’s rules. He who makes the rules calls the shots.

    Of course, if the EU (and I’m referring to the Commission here primarily but also to those in the bureaucracy drafting the Regulations) are altruistic and incorruptible with the highest aims and only ever seeking the best future for EU citizens, there’s no problem. But human nature being what it is, the temptation for indulging in a bit of favourmongering is proving impossible to resist.

    1. PlutoniumKun

      I think you are overstating the power and influence of the Commission. One of the striking things about Brussels is, in comparison to most national capitals, is how few lobbyists there are there. I’m not saying there are none, and that they don’t have an influence (an in-law of mine is a Brussels lobbyist), but the real European action occurs in the most influential national capitals.

      To give one example, its well known that the National Farmers Union in the UK has had a particularly malign influence on EU agricultural policy with its constant insistence on policies that favour big industrial farms and hostility to support for small farmers or organic farms. But the NFU has a relatively small presence in Brussels. Its primary focus is in London, and its HQ is actually next door to the Department of Agriculture (DEFRA). Its influence is via the British presence at the negotiating table. The same applies to the extreme influence German industry has on standards setting (especially with the car industry) and the Spanish fishing fleet on fisheries policy. They influence their domestic policy first, and their government then does the arm-twisting, glad handling, favour swapping needed. Most of the countries have a particular domestic bugbear (i.e. a particularly successful lobby) and is willing to sacrifice its other EU interests to put this forward as a key national interest. Its one of the peculiarities of UK membership that the UK was willing to sacrifice so much influence in other areas in favour of the small but very loud agriculture lobby (the number of Tory landowners in Parliament is I’m sure just a coincidence).

      I just feel that there is a tendency in looking at the influence of EU policies to see Brussels as an all powerful institution. It is I think much more the creature of various national influences and old fashioned horse trading. And inevitably, it is the more powerful members who guide that horse. Lets not forget that the origins of the EU was in agreements forged between very powerful national leaders who saw the EU as an instrument for increasing their national influence and power. No German or French leader would ever tolerate a Brussels that set itself up as more powerful than the Chancellor or President.

      1. Adrian D.

        There are perhaps fewer lobbyists in Europe than in the national capitals, but their numbers are increasing and you can be sure they’re all pushing in the same, neoliberal, direction.

        If you have not come across them before, keep an eye on the Corporate Europe Observatory, who do a lot of good work on this:

        https://corporateeurope.org/

        1. PlutoniumKun

          I’m not sure the term ‘neoliberal’ really applies. They are corporate bodies lobbying for their corporate interests – sometimes those interests are for less regulation, sometimes for more regulation, sometimes for open markets, sometimes for protecting monopoly interests. Some are EU corporations trying to protect themselves from outside competition, sometimes they are non-EU companies trying to weaken protections. The only common factor is that the more money they have, the more influence they have, so this favours corporate interests. But it doesn’t always work, as the restricions on roaming charges shows (it helps that being against telecom companies is a useful populist cause, as MEP’s and Commissioners alike all know).

          I know from experience with environmental groups that in most countries, they’ve found that by far the most cost effective way of succeeding is to lobby at EU level for good protective Directives, and then use the ECJ as a tool to force domestic countries to enforce the directives. This is the great power of the EIA, Habitats and Bathing Water Directives, all of which have been hugely useful. Trade Unions also devote a lot of energy to lobbying in Europe, but its more a case of trying to stymie corporate interests than driving forward new Directives.

      2. Clive

        There’s plenty of examples.

        Here’s a Godzilla vs. Mothra battle between the Commission and member states (and their pet vested interest groups, either manufacturers or consumers) about cheap Chinese solar panels https://www.ft.com/content/6e1979b6-e3e0-11e6-9645-c9357a75844a

        Then here’s the Commission’s go-to outsourcer for drafting Regulations TUV getting into bother by first writing the regulation then telling manufacturers how to get around it https://www.nytimes.com/2015/10/15/business/international/cozy-relations-complicate-europes-bid-for-new-car-tests.html

        Then we have France’s Arkema kvetching to the Commission about how those nasty yanks in Honeywell have the temerity to use technological advances they’d developed to threaten its legacy refrigerant business http://www.arkema.com/en/media/news/news-details/Arkema-files-a-new-complaint-with-the-European-Commission-on-the-use-of-the-refrigerant-1234yf-in-car-air-conditioning/ and it wanted the Commission to take their ball away if they couldn’t win the game

        If the Commission really was such a pussycat and merely bumbled around ineffectually, or was Snow White-like in its purity and ability to rise above the fray of murky government or business nudging, why would so many be beating a path to its door with various special pleadings? The Commission has power without responsibility, which I’ve heard best described as “the dream of the harlot throughout the ages” and preciously little democratic accountability.

        1. vlade

          Re democratic accountability – Commision President is proposed by EU Council, which is the heads of democratically elected governments, and must be approved by the democratically elected European Parliament. The fact that most people ignore EU elections is a different story. But then, quite a few people ignore even national or local elections..

          In my opinion, Supreme Court justices in the US are less democratically selected, if for nothing else because they are selected for life. Which does give them independence, should they wish to exercise it, but there you are.

          1. Clive

            The President has a veneer of democratic appointment but it is not at all correct to say there is anything remotely democratic about the appointment of the Commissioners. They are hand-picked by the member states with zero — none whatsoever — popular vote elected representative mandate.

            1. vlade

              The process is that Comission President is nominated by Council (which consist of heads of elected governments). the President MUST be approved by EU Parliament (Article 17(7) TEU), although in theory the Council can just resubmit on a monthly basis the same person and so keep him/her in power.

              Moreover, from 2014 there is a (admittedly not binding) rule that the candidates should nominated by parties that have MEPs, which was adhered to in the last elections.

        2. paul

          An intriguing example of comissioners is John Dalli.
          It would appear from his still murky dealings, that we will just have to rely on snow white purity, as very little seems to be done about wrongdoing if it occurs.

          An interesting wrinkle is is his directorate, health and consumer policy, has been adamant in its opposition to the marketing of SNUS, a largely benign product which has led to sweden having the lowest smoking rates in Europe.

          The case against the egregious policy is put here by a former director of ASH (Action on Smoking and Health).

          An example of interested parties maintaining their own financial health through the commission over public health throughout the union.

        3. PlutoniumKun

          I’m not sure those examples means anything except that the Commission is doing the job its been given to do – defending (even to the extent of indulging in stupidities) European companies, just as US and Asian countries do. The power of certain industries to get an inside door to influence and write Regulations is a sign of the Commissions weakness, not its power. One factoid that I remember being thrown around in the 1990’s was that the entire Commission employed fewer administrators and technical staff than Birmingham City Council. This makes them heavily dependent on drafted in expertise which is an opportunity corporate lobbyists use to their influence (especially in banking regulations).

          The defence of European solar manufacturers is driven by the Germans, who have invested hugely in trying to take a lead and have largely failed – restricting imports is a major headache for solar energy investors in the smaller EU countries. EU tarrifs on Chinese solar panels is a reflection of two interest groups in Europe fighting things out and one side (hey, surprise surprise, the Germans) winning.

          1. paul

            At least they are examples of the primacy of corporate interests over the populations’ within this structure and of the culture of impunity within these cosseted institutions.

            If the commisioners do not have enough advisers then they should do something about that rather than lean on the generosity of interested parties.

            But you’re right, they are doing the job they’ve been given.

          2. Clive

            If the Commission was merely doing its job and doing it competently and fairly, I wouldn’t have any problem with it at all.

            But as I also cited yesterday, if it ends up with regulations which are based on junk science masquerading as green virtue signalling (like the energy rating with way too simplistic climate zone models that helps high-priced high-tech EU products at the expense of cheaper far-east imports which are slightly but not dramatically less efficient but because they are more affordable would still benefit low income consumers) or “we like these oligarchs better than those oligarchs because they know how to schmooze us (e.g. stiffing Dyson by using bogus methodology appliance energy consumption ratings defined by “independent” “experts” but favouring manufacturers not able to unseat Dyson’s design and patent advantage — the whole thing then being rubber stamped by the Commission) then there’s something rotten in the state of Denmark.

            You put up with a little bit of corruption (because of this-, that- or the other- excuses), I can guarantee you that you’ll get more of it.

      3. Colonel Smithers

        Thank you, PK.

        I worked as a lobbyist, banking and asset management, from 2008 – 14, but was also involved in 2006 – 8 and 2014 – 6 for (bank) employers.

        I often met counterparts from French agriculture and German automotive to discuss issues and tactics. If the French and Germans lay off the City, we’ll ease off on agriculture and automotive. It was clear that we were often speaking for our national governments and there to trade horses.

        It’s not just the NFU that has a malign influence on EU agricultural policy. There are aristocratic landowners in Germany, Italy, Spain and, to a much lesser extent, France profiteering, too. Some French agribiz have invested in Romania, in part to access more EU subsidies. Ukraine is on their radar, but the Soros family snapped up some of the good stuff already.

        Some UK landowners are big landowners overseas, vide the Duke of Westminster in Spain and elsewhere. The Monegasque royals have farms in Provence and Champagne. All are supping at the EU trough.

        Your last paragraph is spot on. However, the EU bureaucracy and parliamentarians and the lobbyists they engage with, including in bed or the side streets around Place Luxembourg on Thursday evenings, are, to use an expression from a famous UK court case two decades ago, “on the make and on the take”, and very happy with the neo-liberal and neo-con state of affairs, even if much of the EU is immiserated and war with Russia is risked. Most people have no idea how scummy, if not dangerous, these people are. I can’t wait for their nemesis.

        1. PlutoniumKun

          Thanks Col., obviously you know much more about what goes on there than I do! Its great to hear of your experiences. I just hear various whispers from some friends and relatives who work or who have worked at various levels in the EU.

          As for Agriculture policy, there was a case a few years back when the Irish Farmers Association actively lobbied the Irish government to support changes that reduced financial supports for smaller beef and arable farmers (and most members of the IFA are relatively small farmers). This was almost entirely due to the disproportionate influence within the organisation by a number of very large and very wealthy east coast dairy farmers who were solely interested in output price supports.

        2. Anonymous2

          Thank you all for a very interesting discussion. Perhaps I can add a couple of thoughts?

          vlade suggests that perhaps there could be readmission for the UK and an extension to the negotiating period after a few days chaos in April 2019. I guess all could depend on circumstances at the time but might it not be equally likely that the EU say ‘ok you can come back but it has to be forever. You can either tell your electorate that you thank them for their advice in the referendum but after due consideration you have decided to reject it, or hold another referendum immediately in which your entire political establishment campaign to remain. Oh, and write a constitution which states that the UK is and will always be a member of the EU’

          On corruption, it is IMO a difficult one. Of course corruption is abhorrent. I am totally opposed to it and regard it as essential that it be fought at all times and in all circumstances. Nevertheless I am mindful of Acton’s observation that power tends to corrupt, so recognise that, like other sins, it will probably always be with us. I guess the question is one of trade-offs for EU member states – at what point does the corruption become so rank that membership is no longer defensible on the grounds that the benefits outweigh the costs? As an aside, I was interested, when reading up on the Hacking trial in the UK, to discover that as a result of the investigations thirty UK public servants had been imprisoned for taking bribes from the newspapers. Funny that the newspapers do not seem to have given this any publicity that I saw. I do wonder whether the UK reputation for being a clean place to do business is fully warranted. Or do the newspapers like to cover up quite a lot of what is going on? I was interested to read recently that Murdoch is most interested in stories which he does not publish. I wonder why that might be?

  3. JTMcPhee

    Do the benefits of “trade” outweigh the costs of that compendious notion and its parts?

    The author chose an interesting key example for his take on “the situation.” Robotic surgery is all golly-wow-gee-whiz, “I saw how well it works on ‘Star Trek'”. “Everybody knows” that it’s the Wave of the Future, all rosy and healthy and profitable. We are supposed to sympathize with Mr. Bishop, the fearful CEO of the “scurrying workers” prepping their new technological wonder to put on a show of progress toward profit for company backers. “Millions of pounds/euros/dollars at stake.”

    But from what I read (if one excludes the selling-their-book pieces by medical providers who are “invested” in one or the other manifold surgical-robotics products) the jury is very much still out on whether robotic surgery produces any improvement in in patient outcomes. Granted, the metric is mostly ignored and meaningless to the people with power and money, but:

    Over the last two years, the Quality and Patient Safety Division (QPSD) has received an increasing number of Safety and Quality Review (SQR) reports of patient complications associated with robot-assisted surgery. This advisory is issued to draw providers’ attention to some of the potential issues involving robot-assisted surgery, to share some of the lessons learned by the reporting health care facilities, and to support health care facilities in the review and development of their systems for safe robotic-surgical practice. While some references are provided, this advisory does not include a comprehensive review of the literature; nor is it intended to provide specific recommendations for evidence-based practice.

    Overview

    Robot-assisted surgery has increased dramatically since its introduction in the mid-2000s. A majority of radical prostatectomies and increasing percentages of other urologic, gynecologic and colorectal surgeries are now performed using robots. While there are numerous single institution, procedure-specific studies describing robotic-surgical outcomes, large-scale, high quality, prospective studies of the risks and benefits of robotic surgery as compared to laparoscopic and open procedures have not been carried out.,

    Robot-assisted surgeries have a number of technical advantages, such as an improved field of view and articulated instruments, but like any surgical procedure, they carry risks of complications and poor outcomes. Clinical studies and reviews of training guidelines discuss variable learning curves for surgeons, the need for significant mentoring, and greater risks associated with pursuing lengthier and more complex cases. http://www.mass.gov/eohhs/docs/borim/physicians/pca-notifications/robot-assisted-surgery.doc

    Granted that was 2013, and as a nurse I can assure all of us that all those problems have been, are being, and will be addressed. /s. There are lots more studies that call into question any “benefits” other than “enhanced revenues” to manufacturers and practitioners of robot surgical technologies. Like this: http://www.hopkinsmedicine.org/news/media/releases/with_the_surgical_robot_similar_outcomes_at_a_higher_cost

    So “we” should all be giving a boost to “cutting edge technology,” so that the virtues and benefits of costly billable procedures can be brought most efficiently “to market.” Because stuff like surgical robotics, and other profit-generating lootable activities like data mining, and filling the environment with ever greater intensity of “bandwidth-generating” non-ionizing electromagnetic radiation, and filling near-space with ever more space junk that will be killing new satellites, http://news.ubc.ca/2016/04/04/space-junk-a-clear-and-present-danger/, and of course marvelous new weapons, is the future of Trade.

    And of course “trade” is the lifeblood of all of us, now isn’t it, living in our “markets”? Since we have populated and consumed ourselves (with the encouragement of our rulers and owners) out of the ability to be autarkic? And building ourselves into this corner, where the “choices” for the future are all bad to worse from the standpoint of the planet and us ordinary mopes, well, that just needs a little complex tinkering with the rules, doesn’t it, or capitulation to the growing Corporate Superstate (maintaining some fig leaves of nominal “democratic accountability and legitimacy,” as long as needed by said CorpState) which capitulation isn’t even an option, we are told. And for the Few, we mopes struggle to feed and “better” ourselves, while working to help the Elite in maintaining their back doors out into residual livable space for themselves, in the residual best bits of this planet or Someplace Else… Eh?

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