Obsession for ‘sovereignty’ wrecks Brexit progress

Vince Cable, The Independent

One of the more baffling features of the negotiations between the EU and the UK is that negotiators from countries which long-prided themselves on their practical, worldly, ability to compromise and strike deals have become so preoccupied with abstract, almost religious, principles.

There is an obsession with pure, theoretical concepts like “sovereignty” and “level playing fields” which are barriers rather than bridges to compromise. We seem to be witnessing a version of the theological debates which underlay the wars of religion centuries ago. At the time of writing it isn’t clear whether we are going down the “no deal” track of doctrinal purity, with heretics set to be burnt at the stake.

Were we negotiating in practical terms, it seems clear to an outsider where the deals would be struck. For example, if there were genuine anxiety that the UK might cut labour and environmental standards to enhance the “competitiveness” of UK exporters, there is an obvious solution. The UK could agree that its firms will not be able to cut standards, but that the government could raise them unilaterally should it wish.

Likewise, if there were a genuine wish to secure a deal on fish there is an obvious trade-off between the degree of freedom for EU fleets to operate in British territorial waters and the degree of freedom for British fishermen to sell their catch (however voluminous) in Europe. There is little point being able to catch more fish if you are unable to sell them.

The fact that intelligent people are going round and round in circles unable to solve solvable problems suggests that there is a deeper problem than a lack of intelligence. In the case of the UK, the issue is “sovereignty”: the modern equivalent of arguing over trans-substantiation or the infallibility of the Pope.

Pure sovereignty is a nonsensical concept in the real world. The only country that approximates to the ideal is North Korea whose regime’s control over its borders is near-absolute and whose freedom to abuse its population and threaten others is unfettered. But that isn’t, I think, what the Brexiteers in government mean; they believe that Britain can secure trade deals with other governments without conceding control. But that is a myth. All agreements, bilateral or multilateral, involve a surrender of sovereignty.

A preferential agreement with the US would involve some combination of: accepting American food and animal welfare standards; desisting from taxing or otherwise penalising US companies; or doing nothing to damage the interests of the Republic of Ireland. An agreement with China would certainly involve accepting the need to desist from public criticism or discriminating against Chinese companies. The extent to which national sovereignty has to be surrendered in each case depends not on high principle but on relative power. As an isolated, middle-sized, country, Britain can no doubt secure highly advantageous deals with the Faroe Islands or North Macedonia but is less well-placed to call the shots with the US, China or the EU.

The way out of the sordid business of bullying or being bullied through bilateral agreements is to have strong global rules through the World Trade Organisation. It may surprise Iain Duncan Smith and Andrew Bridgen to discover that I am with them 100 per cent in support of WTO rules. I would go so far as to say that a powerful WTO with enforced rules would be much preferable to the plethora of regional and special deals favoured by the EU. But the advocates of WTO rules should be careful what they wish for. Serious multilateral rules involve a serious surrender of national sovereignty.

The core principle of the WTO – “most favoured nation” (MFN) – prohibits all discrimination in trade policy, and places restrictions on the use of subsidies (“state aid”). All manner of things that a sovereign, independent country might want to do is forbidden. And if a country breaks the rules, leading to a dispute with other nations, the WTO has panels of foreign judges to resolve the issue, and impose penalties, just like the European Court of Justice – except that the judges could be from China or Brazil.

The problem with the WTO, at present, is that its bite is a lot weaker than its bark. The US in particular has emasculated it, thanks to Donald Trump.  WTO rules, which is what we would be subject to in a no-deal scenario, currently have little force. If the overriding aim of Brexit is “to take back control” and avoid the surrender of sovereignty then presumably the government would welcome a weak WTO. But we need to be clear what that means: the law of the jungle where the big beasts – the US, China and the EU – boss their more diminutive prey around.

Since we are firmly in that latter category, it is clearly in the UK’s interest to push for a return to more of a “rules-based order” in which the WTO has as much authority as, say, the IMF. But such a shift would be sure to precipitate yet more squeals of protest over “loss of national sovereignty”. The issue, then, for the UK is not “regaining sovereignty” – which is a meaningless negotiating objective – but to whom we choose to cede sovereignty.

If sovereignty is a quasi-religious fetish preventing the British negotiating rationally, the EU has its own fetish: “level playing fields”. Pro-Europeans, unfortunately, give this questionable concept far more respect than it deserves.

There are two reasons why the notion has crept into European theology. One occurred during the negotiation on the detail of implementing the single market, designed to remove regulatory barriers. The Commission often wanted “harmonisation” to create absolutely uniform standards when mutual recognition of different national standards (each of them adequate enough) would have been preferable. The notorious Boris Johnson articles about straight bananas and square tomatoes were bogus and dishonest but there was an underlying truth: that there was too much emphasis on harmonisation for its own sake.

Then there was the – mainly French – objection to “social dumping”, an alibi for protectionism whereby parts of the European establishment wanted to restrict external trade which relied on workers from poorer non-European countries with low wages and inferior conditions. They argued that such imports were “undercutting” workers in the rich world with “cheap labour”, and tried – for example – to keep clothes from developing countries in Asia out of the European market. In the event, the more free trading approach of Britain, Germany and Sweden prevailed to the benefit of developing and European economies alike.

Successful political systems have a combination of priests who pronounce doctrine and principle and plumbers who solve practical problems. Yet all pragmatism and good sense seems to be sacrificed at the altar of “sovereignty” we probably never had, and certainly cannot regain.  It is the unfortunate fate of the United Kingdom that Brexit negotiations are in the hands of squabbling, intolerant, priests and that there are no good, competent, plumbers when we need them.