Wednesday, 13 December 2017

Joining EFTA doesn't mean joining Schengen


Occasionally I receive tweets which tell me that EFTA membership would be politically unacceptable because it requires signing up to the Schengen Agreement. This is not true. The inclusions of each of the four EFTA members, Norway, Iceland, Liechtenstein and Switzerland are merely voluntary and entirely separate opt-ins. Membership of the Schengen area and EFTA - whether a country is in the Single Market or not - are not mutually inclusive events. The participation of EFTA states is merely coincidental. 

Schengen, most will by now know, is the borderless zone in Europe which removes the need for passport checks amongst those moving between partied states. At present, the area consists of 26 European countries: 22 are members of the European Union and the remaining four are EFTA. We can see that joining Schengen is not an absolute for EU members, as the entirety of the British Isles is exempt, as well as Cyprus, Croatia, Romania and Bulgaria. 

The purpose of Schengen is to maximise cross-border cooperation between states and facilitate free flow of citizens. At internal borders, member states remove unnecessary barriers to travel, such as ID checks or any obstacles which attack the fluidity of road traffic. The area does not completely eradicate police checks. If there is reason to suspect a possible threat to public security, border checks may be temporarily imposed. 

According to the EU: "A protocol attached to the Treaty of Amsterdam incorporates the developments brought about by the Schengen Agreement into the EU framework. The Schengen area is now within the legal and institutional framework of the EU." Despite not every EU member being a part of it, Schengen is an EU mechanism. EFTA participants retain, in effect, the status of associate membership. 

Each of the four EFTA states became party to the Schengen Agreement at different times and for different reasons. Both Switzerland and Liechtenstein began integration into Schengen in February 2008, after the conclusion of bilateral agreements with the EU. Almost six years ago to the day, Liechtenstein abolished all internal border checks and fully established its membership. In the case of Switzerland, land and airport checks had been removed by March 2009.

Norway and Iceland became immersed into the fabric of Schengen in 2001, after initially agreeing to accede in December 1996. From what I gather, it appears the two countries initially did not enjoy voting rights in the Schengen Executive Committee until their association was extended in May 1999. It is also here worth mentioning that the Nordic Passport Union facilitates the abolition of border checks between Sweden, Finland, Denmark, Norway and Iceland. 

The important deduction from all of this is that EFTA is not a precursor to inclusion into the Schengen Agreement, association or otherwise. It just so happens that each of the four countries joined. Interestingly, each of the countries faces little domestic pressure to reduce immigration and existing arrangements in place before accession ensured it was not a particularly big deal. For the EFTA states, the really important difference was gaining access to information-sharing IT systems. 

Beyond this, the EFTA Convention produces no reference to Schengen. There are eight references to 'free movement', with some pertaining to goods. Joining EFTA requires accepting free movement between bloc members, but this is a relatively small number of people and already existed thanks largely to the Nordic Passport Union and treaty annexes establishing specific movement protocols between Liechtenstein and Switzerland, both of which remain closely geographically and economically interwoven. 

Schengen will never be politically acceptable to Britain and I concede this. Nor do I particularly want us to join it. We have access to the Schengen Information System, an online device relied upon for strengthening internal security in the absence of cross-border checks, and this will have to do. It does, though, mean we cannot issue or access Schengen-wide alerts for refusing entry or stay into the Schengen area. In the event of rejoining EFTA, our opt-out would remain in tact. There is no back door for us to worry about. 

Sunday, 10 December 2017

It's a minus, minus, minus from me


Those of us keeping up to date with Brexit will know by now that our withdrawal options are narrowing at an extraordinary pace. This is now largely because the issue of the Irish border is guiding us towards a much softer, more integrated destination, and I don't necessarily think this is a bad thing. We are headed for a stay in the Single Market one way or another. Our focus should now be on how best to avoid the Customs Union, if at all possible.

This is where the Canada option falls way short. At first glance, it does nothing for the situation in Northern Ireland. Canada, despite its FTA with the EU, is still a registered third country. The EU has no business in its internal affairs, so enforcement and surveillance strategy is focused at the border. In other words, the checks and inspections make for border friction. FTAs steer regulatory regimes towards each other and reduce tariffs. They do not produce frictionless borders.

David Davis created a new term out of thin air this morning on the Andrew Marr show. He claimed that we could have CETA plus, plus, plus 'within minutes' of leaving the EU. I don't mean to take him too literally, but he is living in la-la-land. I always considered CETA plus to be a term completely devoid of any real meaning. CETA plus, plus, plus just takes the cake. I don't think readers should treat it any differently to any other example of vapid Tory sloganeering.

The first point to make about CETA plus, plus, plus is that it is not only favoured by the UK. It is also favoured by Canada and South Korea. This is because embedded within both CETA and the EU-Korea FTA are Most Favoured Nation (MFN) clauses. MFN clauses basically tell the EU: 'if in any other FTA you conclude, you agree to terms which are preferential to ours, we will automatically adopt them too'. Were the EU to agree to CETA +++, therefore, the terms offered would be extended to both South Korea and Canada.

But this is not worth overthinking. CETA +++ is not worth contemplating because the EU will not allow it. This is for the very reason we spoke about the other day at this blog: the EU is a protectionist bloc and must protect the integrity of its market. This is not a difficult concept to grasp, unless you are one of the headbangers who thinks the EU is protectionist when it suits arguments for leaving and at no other time.

Secondly, a bespoke CETA just isn't what we need. It doesn't take into account a sensitive peace agreement. It isn't conducive to the preservation of our intricate and integrated supply chains, which over 40 years have benefited from a widespread removal of non-tariff barriers to trade and a market surveillance programme designed to keep inspection contained to the point of production. It is also not a model for us due to its very limited services coverage.

In general, this is common of FTAs - even those which are modern and considered ambitious. CETA does not cover financial or air services, and those services (such as postal and maritime) which it does cover are accompanied by a large list of reservations. If we look at passporting, we see that in order to take advantage of the EU financial services ‘passport’, Canadian firms will have to establish themselves in the EU and comply completely with EU regulations. No exceptions. 

The short of it is that CETA is not even remotely comparable to the EEA. The terms built into the framework of the Single Market are not to be replicated from the outside and nor should we bother trying. This is perhaps one of the best arguments for the UK's continued participation. We are in large part a services economy and leaving the Single Market will mean throwing much of this expertise and prosperity away.

There will at some point be a Free Trade Agreement between Britain and the EU. Its nature, though, will not be defined by efforts to converge regulatory systems, since they are already harmonised. The challenge in an eventual negotiation for the EU would be how best to make sure it looked completely different to membership. For the UK, it would be a matter of using whatever leverage it can to maintain as large a semblance of membership of possible. It will be a tug of war we are likely to lose.

Saturday, 9 December 2017

There is no regulatory sovereignty


I am happy to see the Article 50 talks move on to phase two. Progress is encouraging even for its own sake. We've had to swallow a lot, particularly on the continued influence of the ECJ, but that was to be expected given the balance of power and restrictive time frame. There is no point in crying and whinging about capitulation. We should just get on with what we have and make the best of it. 

Yesterday I wrote an article for politics.co.uk in response to some of the outrage from the Brexit ultras. They believe the UK has capitulated, but in actual fact the negotiations have merely swung in the direction of reality. We are leaving a well-protected club that is intent on preserving the integrity of its institutions. Belief that both sides are on equal footing in this stand-off is verging on clinical madness. 

It is easy for populist figures in Brexit circles to decry what they call the UK 'being sold down the river'. They are not in the negotiating rooms and their internal narratives are a comfortable distance from real world challenges. If we had negotiated with their demands, we would have crashed out with no deal and would need to rely solely on WTO rules as a basis for our trade, and the country would have endured untold economic and political damage. 

From what I can gather, their anger appears to have stemmed from paragraph 49 of the joint Commission-UK Government report, which states: “The United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union.”

The headbangers are infuriated by this because they believe that Brexit gives the UK regulatory sovereignty. It doesn't. Nothing gives the UK regulatory sovereignty because regulatory sovereignty does not exist in any meaningful sense. At least not at nation state level. Last night on the BBC I raised the point that Single Market membership or not, we'll adopt standards determined at global level anyway. This fact has not been communicated to the public well, possibly because it is dry in nature.

International bodies responsible for a large proportion of standard setting (exact percentages differ when we look sector by sector) include UNECE, the UN Economic Commission for Europe, now the primary European regulator; CODEX Alimentarius, the world's most influential agricultural regulator, based in Rome; International Standards Organisation (ISO); International Maritime Organisation (IMO); World Health Organisation (WHO); World Customs Organisation (WCO) and, of course, the WTO.

These agencies are intergovernmental and are influenced by nation states and, crucially, the European Union itself. Regulatory governance is a two-way street and, quite often, finding the exact source of a regulation is made exponentially more difficult by the fact that these forums will take the core of an EU regulation, amend it, and then send it back down again. What we have is a mixed and very complicated picture.

Even the EU has lost control of a huge portion of its regulatory agenda, despite the influence it maintains at the tables of global forums. That infamous bent banana directive? The only one mentioned during the referendum campaign? It comes from CODEX and can be seen here. We adopt this as a member of the body in accordance with international TBT obligations (see below), regardless of our place in the EU or Single Market.


Harmonising devices are becoming increasingly significant. What makes them so crucial is that they act as impartial mechanisms for bridging regulatory divides between countries and major powers. A quick look at any of the EU's major trade agreements will find countless references to the agencies I refer to above. Find a PDF of any EU FTA at random and search for yourself. The efforts made to use global regulations as guidelines litter these agreements. They are staggeringly important and really capture just how widespread globalisation now is.

But beyond the global element, which I believe is vital, the UK has in front of it a binary choice. It can either remain embedded within European regulatory architecture or it can undertake a transatlantic pivot - effectively prioritising our second largest trading partner over our first. Opting for the latter will have profound consequences for our ease of trade with the EU. This is down to stark differences in product standards, most notably in the automotive industry.

If we twisted to a more Americanised approach to regulation, we would drive a wedge between ourselves and Europe. The more we diverge from the existing European regulatory sphere, the more checks we encounter and the higher the likelihood of our exports finding themselves incompatible with EU markets. Our beef would be checked to a higher frequency in order to ensure it did not come from America. Many of our cars would no longer meet vehicle type approvals.

Of course, the reverse is true also. There are barriers to trade between the UK and US thanks in large part to our current arrangement. The reason for the almost non-existent trade in cars between the EU and US is down to the US' refusal to adopt UNECE vehicle type regulations which forced them to redesign the sides of vehicles, in order to meet new crash standards, and the shape of headlights. Here we can see immediately the impact of a harmonised standard on vehicle type approvals.

Britain isn't going to emerge as a regulatory superpower because it is alleyed in between the two which already exist. We can only work with the reality we have and divergence for the sake of divergence is irresponsible, given the sensitivity and intricacy of most UK-EU supply chains. We can in principle divert where a standard comes solely from the EU, but obstacles like the maintenance of the Good Friday Agreement and the pressures on customs systems will render doing so completely pointless.

And we need to forget about regulatory bonfires. EU membership has for decades meant less and less red tape, at least as far as trade is concerned. Understanding this is vital to directing Britain's post-Brexit trade policy. If Britain wants to carve out its own leadership role, it must apply itself to strengthening global initiatives (like UNECE's Single Window) designed to minimise and eliminate technical barriers to trade. Otherwise, as a medium sized power, it will have very little influence or purpose.

An appearance on the BBC

If you have not already done so, please check out my appearance on BBC News last night, using the video embedded below. I spoke about my reaction to today's deal, EFTA and the source of many of the Single Market's rules. And yes, I slouch. Because it's comfortable. 



Thursday, 7 December 2017

A non-beneficial addition


It is not often that I agree with Mike Galsworthy, but he is right when he describes Martin Schulz' intervention today, calling for a constitutional convention on the formation of a United States of Europe, as helping 'flailing Brexiteers'. Actually, maybe 'flailing' is not the correct term. Some of the ultras are steadfast and know, in their world at least, exactly the way forward. The headbangers are already running with these comments, treating them as if they have effect tomorrow.

It is for this reason that Martin Schulz made a mistake today. He revealed his hand and did so just when Brexit was proving impossible to deliver. Of course, he has not revealed anything extraordinary. Veteran Leavers have been warning against bold steps towards further and irreversible integration for years. Schulz is merely communicating the essence of the EU's raison d'etre. For Leavers, this was always a matter of 'when' and not 'if'.

A few years ago the coalition government legislated to ensure that any updated European constitution is greeted with a domestic referendum in Britain. In the same way that Lisbon was. Or rather, wasn't. I make this point a lot because it signifies that at some point, even very soon, we were going to have to confront the question of our place in Europe. Lisbon propelled the project forcefully in one direction but it could not have been the end. There is still so much to coordinate and harmonise. 

Our handling of the whole withdrawal process has been amateurish. If anything it tells me that this is all happening too quickly and we never conducted sufficient planning. The root of this problem lies with the Cameron government's lazy and arrogant assertion that winning the referendum would be a forgone conclusion.


What we are likely to end up with is exactly what Schulz refers to: a two-tier Europe. Or perhaps a three-tier Europe if we factor in the surrounding EFTA states. It is difficult to predict what the European reaction to Schulz' call for full unity will be. Some states, like those relieved of the chains of communism, are still finding their feet as distinct constitutional entities. Others, like Denmark, are happy simply to pick and choose which aspects of membership suit them most.

I rather admire this obstinate attitude. It mirrors that of my own country. In fact, quite a number of parallels can be drawn between Denmark and Britain, certainly in the context of EU membership. Both countries joined together and have for many years enjoyed substantive opt-outs. Both countries surrendered successful fishing industries upon acceding to the Union. Both countries share a unique distaste for the idea of a European Army.

Eurosceptics at home will be buoyed by this news. I am glad too in that it will help to stave off second thoughts and may act as a reminder as to why we voted out in the first place. What is worth remembering, though, is that often it is the integration by stealth we should be most worried about. At least this pronouncement came publicly and directly, with no room for misinterpretation or a kicking into the long grass.

Of course, despite Schulz' view being widely-held in the corridors of Brussels, turning his ambition into reality will not be easy. In the current climate this new proposal is largely unworkable because there are too many imbalances as far as how interwoven each member is into the fabric of the EU. Ever closer union has taken place at different speeds and for different reasons. There may well come a time where member states face a simple 'stay or go' choice. A test of commitment.

A test, incidentally, I think the UK has failed. We don't want to be in the EU because we don't care for its aims or institutions. This is really the nub of it. We braved the leaving process before anyone else because it was destined to be this way. Even the most ardent Remainers know that we are a little different. Uncaring is perhaps too cold, but out of place certainly paints an accurate picture. I am happy we are on our way out, even if I refuse to believe that Schulz will get exactly what he wants.

Wednesday, 6 December 2017

Hard Brexit has reached a dead end


I am now of the view that David Davis is merely coasting along in his role at Brexit Secretary. He knows that any deviation into a softer and more pragmatic negotiating position will earn him scorn from various cabinet colleagues and national newspapers. He also knows that continuing on his current path of ignoring economic and constitutional alarm bells risks widespread business walkouts and the undermining of the Good Friday Agreement. 

We talk a lot about Theresa May's untenable position as Prime Minister and her complete lack of options, but it seems a hard Brexit has forced almost everybody in positions of power into situations of unforgiving impossibility. Every which way you look, there appears no way forward with the current government. If they attempt the only workable Brexit, namely the EFTA solution, they will succumb to visceral attacks and a revolt from the ultras within. 

I don't often agree with Rafael Behr, but he is correct in his Guardian column today to say that the "great fear of exposing the government’s hand flows from the relative weakness of the cards it holds." It is not because they are Tories, it is because they have always been stoic in two mistaken beliefs: first, that they needed us more than we needed them, and second, that it is in the EU's interest to give Britain preferential trading terms. These assertions, as we have discussed, are fatally flawed.

The real truth is that the Single Market is absolutely central to delivering a stable Brexit and there is no way of cobbling together anything remotely comparable. It protects both our constitutional integrity and our supply chains, provides firms, workers and immigrants with stability and all the while remains a flexible system which will accommodate a range of our interests, including on free movement. The EEA, after all, is simultaneously configured yet configurable. 

There is no more political fuel that can be added to the vehicle driving a hard Brexit. The cards are now on the table and Philip Hammond's admission that no discussions over an eventual Brexit destination have taken place more or less confirm this. Even the government knows we are headed nowhere. This, on top of a growing realisation that the Single Market is crucial right across British industry, might be one of the reasons why they have not bothered to produce any sectoral impact assessments. 

What is more, the drive towards a Single Market exit is completely artificial. There was nothing inevitable about equating the referendum mandate with leaving the EEA. Vote Leave had a non-position on the Single Market, though I accept that Boris and Michael Gove claimed we would be leaving it. My view on this has always been that the Remain campaign forced this stance upon us in order to massage a narrative that leaving would be a leap in the dark. 

Many Leavers also support retaining EEA membership, with a vast array of polls demonstrating an expectation that we would be more like Norway and that our place in the Single Market would not be compromised. Roland Smith has produced a very useful compendium of these opinion polls at his blog. Figures tend to show that about a quarter of Leavers favour staying in it. They are important: they illustrate just how far from the centre the rest of the Brexit club has slid post-referendum (or perhaps during it). 

There is a reason I refer mainly to the Single Market. I consider the Customs Union to have only minor importance. It smooths out a rules of origin hurdle and the Common External Tariff will, irrespective of EEA membership, hit agricultural exports. We leave it when we leave the EU; the only alternative is a bespoke Customs Union agreement. The main issue remains where the customs formalities and physical checks take place. Leaving the Customs Union also has no relevance to market authorisation for domestically-produced chemicals and pharmaceuticals, or to vehicle type approvals outlined by European car manufacturing legislation. 

Chris Grey is right when he says: "Hard Brexit may not quite have died this week, but it was mortally wounded. Some diplomatic manoeuvrings may enable it to stagger on for a bit longer but the real choices that Brexit poses for Britain will have to be faced." I too predict a General Election in 2018. Some time, perhaps, around March's European Council meeting. It now seems plausible that British governance can be revitalised by Keir Starmer, who is beginning to mobilise very effectively on the Norway option, which solves a great deal of our problems. 

Though nobody is publicly admitting it, we are now at a dead end. The only way is to go back and redress the meaning of Brexit. We need to find a new way of balancing the mandate with efforts to protect our economy and constitutional integrity. Labour does not have so many issues with Brexit headbangers. There are no John Redwoods or Iain Duncan Smiths ready to pounce on what is called 'backsliding'. The Tories have tried their version of Brexit (note: not the version) and it has slammed forcefully into a brick wall. It now seems obvious to me that the only people that can save them from themselves are the electorate. 

Tuesday, 5 December 2017

Protectionist when we say so


There are now a number of things we know about the Irish border problem. We know that it's politically sensitive and historically significant. We know that the issue is not the fault of the Irish and not the fault of the EU. We know that the reason for the problem is the UK's decision to leave the EU (and in doing so the Customs Union, agricultural tariff regime, Union Customs Code and VAT Directive) and the Single Market. We also know that at the core of the solution must lie a reliable framework for regulatory harmonisation. And we know that something has to give: this government's pursuit of a hard Brexit, Arlene Foster's insistence that Northern Ireland can weather regulatory divergence from mainland Britain or Ireland's preference for a soft border. 

The thing which surprises me most is how so many still do not seem to comprehend the simple factoids at play here. "Why should there be a border?!", the ultras scream, after campaigning for many months for the entirety of the United Kingdom to leave what they call a protectionist racket. The oddity here is that they now pretend the EU oughtn't be protectionist after all. It's okay to refer to the EU as protectionist when campaigning to leave it, but as soon as we begin to contemplate life on the outside and confront complex realities, all forms of protectionism must be waivered. The hypocrisy here is quite stunning. And what is more, technical knowledge is not necessary in order to understand why the EU does not allow members to walk with whatever they want. This is purely a logical position and one we would take ourselves were the roles reversed. 

Of course, common sense will tell you that any regulatory superpower must establish a protectionist culture and trade policy. In fact, all trade policy has protectionist elements. When a country enters trade negotiations, it must ultimately think about its own interests and whether agreeing to a concession or compromise will lead to an undermining of the integrity of the systems they have developed. In this context the EU is no different. Just like China and the United States, it must stand up for what it has created. Success will depend upon how effectively the EU avoids creating precedents for countries seeking improved access into their markets. Especially in an age where, increasingly, Free Trade Agreements (such as CETA and EU-Korea) have embedded within them MFN clauses, which are slowly building a level playing field amongst countries on FTA-based relationships with Brussels. 

The border issue between the Republic of Ireland and Northern Ireland captures this very problem quite sweetly. Two of our most prominent ultras, Jacob Rees-Mogg and Nigel Farage, seem to think that the solution to the issue is to do nothing with it and leave it to our negotiating opponents. "Unconditionally offer a free trade deal", Farage said on LBC last night. Rees-Mogg appears to be following along a similar line of argument, telling folks at the Adam Smith Institute Christmas party this evening: "We simply say to the EU 'there is no border, we are not patrolling it. You can do what you like." On the face of things, these sound like very appealing solutions to the border conundrum. The problem, though, is that both men are demonstrating a failure to understand how the EU operates as regards its commitment to functional and economic integrity.

It is true that there is nothing stopping the UK from abandoning its border commitments in Northern Ireland. This will have some considerable easing effect. It is often easier to walk away from a problem and pretend that it does not exist. We can drop our tariff walls completely (which will leave us with less leverage for FTAs with emerging markets), we can refuse to build new Border Inspection Posts (BIPs - for the purpose of carrying out SPS checks on agricultural produce) and we can simply sweep aside customs burdens by not implementing technological infrastructure or hiring staff. There is nothing stopping this from happening, so far as my understanding is correct. The WTO would monitor this behaviour closely, but it is unclear whether we would face any equal treatment-relevant complaints.

But this does not solve the border issue. Borders are shared, there are not two of them. There is one, with each country sitting either side of it. Given that the UK is leaving the Single Market, the EU will not be able to reciprocate . I therefore see a level of friction inevitably mounting between Dublin and Brussels. BIPs are uniformly imposed against third countries, which we become on the day of leaving. This is because third countries enjoy different enforcement and surveillance strategies and do not submit themselves to inspection by the Food and Veterinary Office (FVO) to assess compliance with standards. Agricultural consignments will face physical inspection. The question is therefore one of rigour: what percentages of consignments will be checked?

With other goods, much the same picture can be painted. Ordinary customs checks (different from SPS checks, which are separate) will be reintroduced. Documentary inspection will be reimposed regardless of the maturity of the Good Friday Agreement. If they are not, the entire world will see a backdoor into one of the most prosperous and well-protected markets on the planet. This is the point of protectionism. Large markets are weakened when precedents are exploited. I would love to be wrong, but I simply do not see such a gaping precedent being tolerated by Brussels. We cannot rely solely on goodwill and if Northern Ireland does indeed leave the Single Market, something will have to give.

Back on our side of the border, though imports will remain relatively unimpeded, there are still issues. When we leave the EU we leave the aegis of the 2006 Council Directive on VAT. It is possible that some kind of fudge will be worked out during phase two of the Article 50 talks, but Brussels will demand ECJ oversight and we have no leverage at all to work with. We may well end up like Norway, where according to the EU, VAT must be payed in order for a good to be released at the border. There could also be potential problem posed by organised crime, one of the world's major growth industries. My fear with unilateral suspension of checks is that without the same integrated information-sharing systems, we could find ourselves at risk of importing more sub-standard goods.

A border is a hard border if at least one side imposes controls. That is a matter of fact. The lack of customs procedures in the north will not be mirrored in the south, even in spite of Dublin's desire to avoid a hard border. On the Irish side, devices will be suggested as a means of easing pressure on customs protocol and consultative processes measures will take place to allow the island to fudge through its difficulties. But the Commission will not accept an undermining of the preferable structures it has spent decades constructing. There is a reason why we call it a protectionist racket. 

But in truth, many of these hurdles do not need to exist. Even with bespoke and specific solutions for the Irish border we may not completely prevent border friction. And simply abandoning our own patrols is not the silver bullet it may look like. The ultras, I suppose, have a clever way of masking their ignorance and accusing those who frustrate their political ambitions of treachery. From the beginning, they have not appreciated the balance of power and the EU's default advantage and inherent immovability. Yesterday's brick wall should have been the wake up call they were in desperate need of. I fear it has only exacerbated their antics.

Monday, 4 December 2017

Brexit: an unhealthy precedent



The past week (spent mostly meeting university deadlines) has been eventful in the world of Brexit. An agreement in principle over the budgetary settlement has been reached and a "narrowing of positions", according to Mr Juncker, has been established on the Irish border front. I am now confident of two things: that we will avoid a no-deal scenario, and that there will be a General Election in 2018. 

It was always obvious that part of the solution to the Irish border problem was a commitment to maintaining regulatory standards. This has always been merely a matter of minimising - though not eliminating - the need for customs checks and paperwork. But the terms on which regulatory harmonisation is controlled is important, perhaps more so for the DUP, who fear political separation from mainland Britain. 

In a meeting with Jean-Claude Juncker today, Theresa May is reported to have offered to keep Northern Ireland aligned to the EU's regulatory architecture, an enormously profound proposal in and of itself. Given Arlene Foster's reaction to today's press conference, it appears she was not informed prior to May's meeting with Juncker about the offer put on the table by Britain. Her statement earlier this evening read:

"We have been very clear. Northern Ireland must leave the EU on the same terms as the rest of the United Kingdom. We will not accept any form of regulatory divergence which separates Northern Ireland economically or politically from the rest of the United Kingdom. The economic and constitutional integrity of the United Kingdom will not be compromised in any way."

She makes a good point. Her insistence on leaving on equal terms is perfectly valid and understandable, especially given the precedents which not doing so would create. If Northern Ireland is given special status as a participating member of the Single Market and remains within the jurisdiction of the Customs Union, then in principle this could be applicable to other parts of the Kingdom. Nicola Sturgeon and Sadiq Khan, ever the political vultures, have already made efforts to exploit this problem.

The SNP leader tweeted earlier that "if one part of UK can retain regulatory alignment with EU and effectively stay in the single market (which is the right solution for Northern Ireland) there is surely no good practical reason why others can’t. The Mayor of London, perhaps more ridiculously, claimed that the Northern Irish proposal meant "huge ramifications for London. These claims are not, I suppose, technically incorrect, but they do appear to ignore the incomparable sensitivity of the Irish border.

Fortunately, there is a way to keep the Irish border as soft as it can be without encouraging any such constitutional fragmentation. It is exactly the solution I have been banging on about at this blog for months, to the great annoyance of quite a number of my fellow Leave campaigners. The EFTA/EEA solution is now the olive branch the nation must accept. Free movement (with unilateral safeguard
measures) must take a back seat. It is a tertiary issue.

The Norway option, as we call it, simplifies the Irish border problem by doing two important things. Firstly, it allows the entirety of the UK to leave the EU and do so on consistent regulatory terms, and in doing so ensures that we avoid exactly the sort of minefield presented by today's Northern Ireland precedent. Secondly, it keeps almost all checks at the point of production and away from a potentially volatile border. Remember, in the Single Market we do not just have regulatory conformity, we have the assumption of regulatory conformity. There is an important distinction here.

With this in mind, I am fully aware that the Norway option does not facilitate a totally frictionless border. Protocols 10 and 11 of the EEA Agreement make no bones of this, outlining measures for mutual cooperation on residual issues like customs cooperation and the disparity in agricultural tariff regimes. The existing systems in place, such as at the Svinesund Bridge, are based on years of integration, information sharing and technological advance. They were not brought to current operation in 1995, when Sweden acceded to the European Union.

The lack of harmonisaton as regards agricultural tariffs would likely stand as the biggest test for the new Irish border. A substantial proportion of cross-Irish trade is produce of animal origin and live animals. As this document
shows, 37% of the UK's beef exports, for instance, go to Ireland. Sanitary (SPS) checks would not be necessary on these goods as the checks would, thanks to Single Market participation, remain at the point of production.

This surveillance and enforcement arrangement eradicates the need to divert food products through Border Inspection Posts (BIPs), which are erected for use by third countries and at current capacity would not be able to deal effectively with the level of trade flow. The competent authorities both sides of the border would oversee the maintenance of standards and the EU's Food and Veterinary Office (FVO) would provide oversight and further inspection.

Given that EFTA/EEA states are parked just outside of the EU's Customs Union, though, tariff differentials would create a new problem. From the Irish side, payment would need to be confirmed in order to release agricultural goods from the north. This more or less emulates VAT procedures when importing from third countries (VAT is a whole other issue by itself). Again, in the case of beef, the EU-wide tariff is 12.8%. Tariff Rate Quotas (TRQs), where a certain quantity of a product is allowed to be imported in at reduced or zero tariff rates, would only have a limited easing effect.

I have never pretended that the Norway option is perfect. But it is normally criticised by people who do not understand it. I am not idealistic about Brexit and believe in informing readers, but I do know that at this stage, the best argument for pursuing it lies in avoiding an unstoppable constitutional unravelling. The EU may be the master of the fudge, but creating precedents based on bespoke arrangements will not sit well with a United Kingdom in desperate need of stability. It is now a question of swallowing a dose of reality.