Jeremy Hunt on AEO status post-Brexit

Brexit is a fountain of bad ideas, but sometimes one pops out that is so strikingly stupid I can’t let it pass without comment. So went the appearance of David Davis at a select committee last month. You can watch the whole thing on the rather excellent archive

It was this session where David Davis was asked about what would happen if there was not a deal on the future relationship with the EU within the article 50 timeframe (the clock is ticking) and he rabbited on about how customs clearance is not a big deal as most consignments are cleared within 5 seconds. This is indeed true at the moment, because we are a member of the EU. It isn’t much of a mitigation strategy for not being a member of the EU. It sounded daft, so I checked the details and wrote to my MP.

Friday 17 March 2017

Dear Jeremy Hunt,

my quest to sell the house and get out of the country continues, but whilst I am still here, I note that David Davis said in the exiting the EU select committee on Wednesday that in the event that there is no deal with the EU there are mitigation strategies that could be put in place, one of which would be using and expanding the authorised economic operators scheme down to smaller companies.

in response to Q1383

This scheme is not going to be open to UK companies, it has a base in law under EU regulation 648/2005 and is an EU scheme for companies established in the customs territory of the Union:

Who can become AEO

Any economic operator established in the customs territory of the Union who is part of the international supply chain and is involved in customs-related operations, may apply for the AEO status.”

On Brexit day our economic operators will not be established in the customs territory of the Union. Deal or no deal. It is plausible that we could set up our own scheme and ask for a mutual recognition deal, but it is flat out insane to say that a mitigation strategy of having no deal is to use one of the key benefits that we have that derives from our status as an EU member. 
This is dangerously stupid, someone needs to provide some adult intervention here or we are going to have serious trade disruption and food shortages in our country.

Yours sincerely,

Alan Bell

and today he replied

Dear Mr Bell

Thank you for contacting me about the EU customs area.

You are right that the EU has established its Authorised Economic Status (AEO) concept. This means that the AEO status granted by one member state is recognised by customs authorities across the EU. Although the EU’s AEO concept is only open to countries in the EU customs union, the EU has already agreed the mutual recognition of AEO programmes with third party countries including Switzerland, Japan and the United States. This makes customs clearance easier and more efficient.

As I am sure you can appreciate, I would not want to pre-empt the negotiations by committing to precise details on future trading relationships. I can assure you, however, that the Government will be working to achieve the best possible deal for UK companies to trade with and operate within European markets.

Thank you again for taking the time to contact me.

Best wishes

Jeremy Hunt

So, this means that if we are going for a mutual recognition deal, they are expecting on day 1 of Brexit that the EU will fully recognise a completely untested significant IT system that doesn’t yet exist, and that we have no current plan to build as we are going to see what pops out of the negotiations first before specifying it. This is still in no way whatsoever a reply to the question about what happens in the event of “no deal”.

Some costs of Brexit

Today we see that the European Parliament has passed a resolution saying that the UK must pay for “financial costs arising directly as a result of the United Kingdom’s withdrawal”. We also find out today the unsurprising news that the European Banking Authority and European Medical Agency are going to have to leave London and relocate. Now it is quite possible that this is going to incur a financial cost, that is directly as a result of the stupid decision to leave the EU. No doubt this will be described as a massive unwelcome surprise to the government and press. It will not however actually come as a surprise to Jeremy Hunt or DExEU because I wrote to them in September pointing this out.

Thursday 8 September 2016

Dear Jeremy Hunt,

Could you please ask DExEU which department budget will be called upon
to fund the relocation of the European Banking Authority and the
European Medicine Agency should they have to be moved to a different
country and the UK is found to be liable for relocation costs. I do
hope that as minister for health you would resist the EMA relocation
costs being paid from the NHS budgets.

Yours sincerely,

Alan Bell

I should probably include his reply, hardly seems worth it though:

Many thanks for your email regarding UK withdrawal from the EU. We are about to begin these negotiations and it would be wrong to set out further unilateral positions in advance. At every step of these negotiations we will work to ensure the best possible outcome for the British people.

Thank you once again for writing to me.

Best wishes

Jeremy Hunt

She was warned, she was given an explanation, nevertheless, she persisted

Earlier this month I wrote an email to Lord Bridges of Headley, with some suggestions on how to make Brexit a tiny bit safer. Today, in the post I got a letter in reply (on fancy paper and everything). The reply basically regurgitates stuff we already know from the white paper and speeches, it is the government line. That said, they got my email, someone read it, and they will carry on regardless.

Thursday 2 February 2017

Lord Bridges of Headley House of Lords London SW1A 0PW

Dear Lord Bridges of Headley,

I do want you to make a success of Brexit, but I just don’t think the government is going in the right direction. There are some steps you could take to reassure people that the government has got the capacity to do the work required.

I want the government to present a fully worked example of how they would calculate our external schedule of tariffs and quotas for several interesting products (beef & citrus perhaps as that touches on quantitative tariff breaks and seasonal protectionist tariffs for a product we don’t produce), and a plan on how they intend to complete that work in the two year timescale before starting the clock ticking.

The second thing I want them to do is to present a fully worked example of transposing an EU regulation into UK law, as they intend to do under the great repeal act. This would expose various problems and things that become illegal to do in the UK under UK law because we are not a member state, or it would require our courts to notify EU member state courts in ways that can’t be reciprocated if we are not a member state etc. Plus they should present a plan on how they intend to complete that work in the two year timescale before invoking article 50.

Thirdly I would like the government to explain in detail what a transitional arrangement is. What goes on the front cover of the document it is written in? Who is a party to it? What gives it legal effect? What can and can’t be covered in a transition. Normally transitions are written in the destination treaty, if we are going to WTO rules then there is no destination treaty in which to write them. The government needs to explain how they think this will work before invoking article 50.

None of these in any way whatsoever expose the government’s negotiating strategy or weaken our position. Every one of them strengthens the credibility of our “walk away” option.

Yours sincerely,

Alan Bell

The Somalia Option for Brexit

Everyone is curious to see what our intrepid team of brexiteers will come up with. Will they go for the Norway option, with free market access, but free movement of people budget contributions and no input into regulations (not so much take back control, but give up control). That doesn’t sound like it is what people voted for.

Maybe we want the Switzerland option, with free movement of people and a lack of access for the banking sector and services — well that could screw London quite badly and it isn’t what people voted for.

How about the Canada option? Well CETA was on the way as a comprehensive trade agreement with the EU, but it isn’t in force yet, and it needs completely rewriting because if we leave we would probably want to take our portion of the tonnage of potted shrimp and suchlike with us (this is what the Article 50 negotiations are going to be about, carving out the UK portion of existing trade agreements). CETA doesn’t include services and took years to put together, and now it is all wrong. It isn’t a good template to use to draw up a UK/EU trade agreement.

How about the default, full Brexit to WTO rules? Well that means tariffs and it means the EU must impose tariffs on us or they can’t impose tariffs on other WTO members because they have to give all WTO members the status of their most favoured nation. We can’t be more favoured than Singapore for example or any external tariffs the EU is imposing on Singapore become illegal.

You might think that we have run out of options at this point, but no! There is one left. With the Unilateral Continuity option we just leave the EU but say we want to have informal tariff free trade with the EU, whilst reserving the right to impose tariffs elsewhere if we want to. This is completely contrary to the principals of global trade since the 1948 General Agreement on Tariffs and Trade, and puts us in an extremely exclusive group of countries. I call this the Somalia option.