Not from The Onion

The UK government is due to hold emergency talks with industry leaders on Tuesday after discovering that the country doesn’t have the right pallets to continue exporting goods to the European Union if it leaves without a deal next month.

Under strict EU rules, pallets — wooden structures that companies use to transport large volumes of goods — arriving from non-member states are required to meet a series of checks and standards.

Wood pallets must be heat-treated or cleaned to prevent contamination and the spread of pests, and have specific markings to confirm that they legal in EU markets.

Most pallets that British exporters are using do not conform to these rules for non-EU countries, or “third countries,” as EU member states follow a much more relaxed set of regulations.

Here is the full story, via Catherine Rampell.

Comments

I'm sure Brexiters completely thought the situation through.

The Brits have always had 2nd rate pallets, everyone knows that.

2nd rate pallets for 2nd rate trade status with the world's largest trading bloc. How fitting.

How on earth did the U.K. get by until 1997? They must have schlepped everything around on their shoulders, since their pallets were no good.

Schlepping is outlawed by the EU for violating human rights and failing to contain pests. The Brits will just have to storm the shores of Normandy to set the continent right again.

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Apparently, the EU regulators have not completely thought through their regulations on pallets. The same exact pallet with the same exact cleanliness characteristics can be either allowed or prohibited for reasons that have nothing to do with consumer protection.

'that have nothing to do with consumer protection'

Well, the term of art is 'phytosanitary,' as noted in the directive that applies in this case - 'EU requirements for wood packaging material are based on the 2002 FAO International Standard for Phytosanitary Measures (ISPM) n° 15.' https://ec.europa.eu/food/plant/plant_health_biosecurity/non_eu_trade/wood_packaging_dunnage_en

What is clear, if no deal occurs, that on March 30, basically no British pallet manufactured after that date will be able to quickly comply with the following from that EU link - 'All wood packaging material and dunnage from non-EU countries must be:

either heat treated or fumigated in line with ISPM15 procedures;

officially marked with the ISPM15 stamp consisting of 3 codes (country, producer and measure applied) and the IPPC logo;

debarked.'

The really amusing thing is that as an EU country, the UK fully participated in a system that made a distinction between EU and non-EU wood pallets/packaging.

And soon, the UK will be enjoying all the benefits and privileges of being a non-EU member. As noted below, you would think that someone in the UK would have noticed that before.

American trade negotiators have been decrying EU regulations for decades, often saying that the EU 'either allowes or prohibits for reasons that have nothing to do with consumer protection.'

The EU disagrees, of course, and as the U.S. is not a member of the EU, the EU doesn't care what the U.S. thinks about the EU's attitudes. The sort of perspective that comes from having equally sized economies, though the EU is going to shrink a bit. Whereas the UK is going to shrink immensely in comparison to the U.S. - though at least the Brexiters can feel that taking back control is too important to be disturbed by reality.

Well said!

The UK economy is already smaller than California's and that is already with a much bigger population of 66 million to CA's less than 40 million. Shrinking even more is just unthinkable.

Exactly. The EU exists for the benefit of EU members. Sometimes, you gotta play hardball to get what you want.

Trump gets it.

Of course, the same pallets are used today to deliver goods that Europeans want and are happy to pay for, but these mutually beneficial exchanges must come to an end for the greater good of protectionism.

That's exactly how we talk about trade in the USA.

What the heck?

I would say you only "get it" if you actually get it, and not if you just talk a crazy and destructive game.

Trump's trade war and Brexit are similar in that they have both only produced economic costs and loud noises for the protagonists.

https://www.wisfarmer.com/story/news/2019/02/06/trade-war-hurts-wisconsins-slumping-agriculture-economy/2789130002/

https://www.cnbc.com/video/2019/02/25/warren-buffett-trade-wars-hurt-countries-and-economies.html

My comment is about the EU, an unabashedly protectionist outfit to its toes.

Oh, okay.

I'm not really sure about that. A VAT does require a border adjustment, which might look large in comparison to the American definition of free trade (zero tariff).

(I am not saying I disagree when I say I'm not sure, I am literally saying I don't know.)

I'm open to new data here too, but Germany is utterly mercantilist and runs a ginormous trade surplus.

One of the best ways rich countries can help poor countries is by buying stuff from them. America does a lot of this. The EU has stiff-armed neighboring Africa for decades. And why not? The point is to benefit its members, as clockwork explains.

I think a lot of German trade surplus results from a technological advantage starting in the late 19th century.

And to this day people think Porsche engineering has more sublime excellence than Corvette engineering, even though it is probably no longer true.

BTW, the Macan will be electric in 2022. Probably a sweet ride .. maybe even sublime.

'The point is to benefit its members, as clockwork explains.'

Something so basic that it should not require any explanation at all.

In much the same fashion that the citizens of the various states in the U.S. get benefits from being citizens, even if an African does not share the privileges that a Virginian and New Yorker take for granted, such as being able to live and work in the other state without any need for visas.

Which is something that citizens of the UK had a right to throughout the EU, but it appears they have no interest in that. Nor in being a member of the common market, for that matter.

'an unabashedly protectionist outfit to its toes'

Which is something that the Japanese, the Chinese, the South Koreans know something about, by the way. And oddly, all of those countries run trade surpluses too.

To be clear, in the clockwork worldview, America First is to be expected, perhaps celebrated. It's just how the world works, you see.

Like the doctrine of free trade, this view has the virtue of consistency.

'America First is to be expected, perhaps celebrated'

Every country puts itself first - this is so basic that one would have thought it not requiring explaining, but this is the MR comments section.

'this view has the virtue of consistency'

Along with the virtue of being so plainly true that one would have thought there was no need to point it out.

Fine. I happen to believe that it would be best to arrange matters so that person A and person B can freely exchange with one another with as little interference as possible, regardless of where they reside.

You, Trump, the EU, Japan, China, and South Korea see things differently. C'est la vie.

You must find all the hubbub over Chinese tariffs incomprehensible.

'that it would be best to arrange matters so that person A and person B can freely exchange with one another with as little interference as possible'

Well, how would you handle fraud? Or invasive species? The Australians, to give one notable example, are extremely strict when it comes to the idea of person A being able to exchange living plants or animals with anyone in Australia. Oddly enough, though not as strict as Australia, the U.S. is like this too - not to mention a state like California, within the U.S., with its own network of agricultural checkpoints.

'You must find all the hubbub over Chinese tariffs incomprehensible.'

Why? The Chinese have been taking advantage of the U.S. for decades, whereas the Chinese have been much less successful doing this in the EU. Partially, it appears, because Europeans don't have much interest in buying low priced junk - something that Walmart discovered in Germany almost two decades ago, by the way.

The EU regulations exist for the benefit of EU pallet manufacturers. Not so much for the benefit of people in the EU. This stuff is also going to hurt EU companies that import British inputs. Which might force them to find new suppliers in the EU. Net loss to BOTH the EU and the UK.

And neither you nor Trump grasp the distinction.

Wait, if Mini moves its factory and supply chain from the UK to an EU country, BMW will lose out? You do know that if they do that, it will be based on pretty much the same logic motivating Nissan to not produce a new generation of cars in the UK, and for Honda to close up shop in the UK completely.

Basically, how is this a loss for the EU? Or to be more concrete, EU companies?

The loss for the UK is obvious. Along with the death of possibly Thatcher's most successful industrial policy.

BMW is not equal to "people in the EU" either. If they are forced to move the factory and supply chain, that will necessarily increase costs. Otherwise they would have done it already. Increased costs mean Minis get more expensive, which means fewer exports to the US and less global market share.

'Otherwise they would have done it already.'

Why would they move from one EU country to another? The move is based on the UK leaving the common market - or at least based on the UK not being able to offer the sort of certainty that businesses require for longer term planning.

'Increased costs mean Minis get more expensive'

Or the Minis get built in a place like Romania, where Dacia seems to be doing pretty well, actually - 'Automobile Dacia S.A. is a Romanian car manufacturer that takes its name from the historic region that constitutes the present-day Romania. The company was founded in 1966, and has been a subsidiary of the French car manufacturer Renault since 1999. It is Romania's top company by revenue and the largest exporter, constituting 7.3% of the country's total exports in 2014.' https://en.wikipedia.org/wiki/Automobile_Dacia

They could have moved it to Romania already if they wanted to, whether the UK was in the EU or not. The point is that the British leaving the EU will also have a negative effect on the EU common market. It will not be a benefit to the EU for EU companies to suddenly be protected from British imports. Otherwise why have an EU at all. it would be a benefit to everyone in the Eu if they all just split up and didn't have a common market at all, and all became their own individual nationalist merchantilist trading blocks, just like Trump believes.

'They could have moved it to Romania already if they wanted to, whether the UK was in the EU or not.'

Um, you know that BMW bought Mini, right? There was no reason to move an EU based factory to another EU country at the time. https://en.wikipedia.org/wiki/Mini_%28marque%29

'The point is that the British leaving the EU will also have a negative effect on the EU common market.'

Sure - but the EU - or at least major businesses within the EU - seems to have already factored this into their longer term planning. The decision to have a portion of their business leave the common market was not part of any EU business planning in 2009, after all.

'It will not be a benefit to the EU for EU companies to suddenly be protected from British imports.'

Nobody cares about being 'protected' from British exports - after all, right now, British imports are part of the common market. Again, it is the British that decided to leave the EU, not the other way round. It is simply that products produced within the common market are treated differently than products produced outside of it.

Nobody cares about being 'protected' from British exports

Ok, then why apply the EU's rules to the British, after they have decided to leave? If nobody cares about being protected from British exports, then the EU doesn't have an interest in denying the British access to Eu markets.

'Ok, then why apply the EU's rules to the British, after they have decided to leave?'

Because the EU treats members and non-members differently? This includes such things as requiring free movement of EU citizens in exchange for access to the common market. something apparently explicitly rejected by a bare majority of British voters.

'then the EU doesn't have an interest in denying the British access to Eu markets'

Of course it does, as pointed out in terms of free movement. Full access to the common market requires following the rules involving the EU's four freedoms. The British rejected free movement when deciding to leave the EU, with the result that now the UK has all the benefits and privileges of being a non-member of the EU. Including the fact that all UK citizens will lose their right to work and live in any EU country - something oddly lacking in these discussions. Though I personally am pro-Brexit, the cost for a number of people I know both in the UK and in Europe will be quite high, and that is a sadly unfortunate.

As I said below, at 11am, there is a plausible rationale.

Invasive species arriving by pallet is a well-known thing.

https://www.packnetltd.com/export-crating/beetles-are-not-the-only-invasive-species-transported-by-packaging/

Manufacturers may have tried to tweak it, but it is definitely a real thing.

Which explains why this regulation did NOT apply to the British when they were EU members.

Of course. When they drafted the law they recognized that England and France have the same critters. A beetle can easily be blown across the channel anyway. I think a deer can swim that far.

What are *you* demanding, that they should have put extra complexity in the regulations for the remote possibility of Brexit?

How do they know that the wood in the pallets came from the UK ? It's a small Island. I kind of doubt they have a large lumber industry.

That's were environmental scientists and manufacturers' agents may have had some discussions.

As is often the case, there may be a real threat, and then regulatory capture may or may not ensue.

Imported wood may be kilned or otherwise treated to kill insects.

I assumed the Tyler understood environmental risk associated with pallets, and that his post was purely about unintended consequences.

It works as being about unattended consequences.

Sure British pallets are safe for France, but nobody had to write regulations for a Britain outside of EU sending pallets because that was not what they were setting up!

Bureaucrats gotta bureaucratize.

In a world of lower tariff barriers than historical experience, a long list of seemingly trivial non tariff barriers matters a lot.

I am a staunch Spanish remainer in London, but I am sure that this one will be solved by EU relaxing the rules a bit on the first few months, as they seem to be doing with flights and a few other things.
I believe that the trouble will come with everyone changing many processes at the same time, then finding out that their new process does not work with someone else's. While it all gets sorted out, many will be bankrupt and many more will find out that their profits have disappeared. Then other business that depend on them will get disrupted. Round and round until we find an equilibrium. Which will have more parsnips and less tomatoes, more offshore haven and less European banking centre.

Indeed an equilibrium will be achieved, but what does "the first few months" mean? 3, 6, 18, 90?

Clearly, it was madness to consider leaving. I mean, it might take a decade or more to solve the pallet issue.

Actually, it is quite possible that the pallet issue will be sorted out much more quickly - with the only losers actually being the British pallet manufacturers suffering a major hit as only EU manufactured pallets are allowed to make the EU/UK round trip - certainly a straightforward interpretation of the linked EU directive.

But Brexit is worth any cost, in spite of any fears, which are undoubtedly just fantasies anyways.

English pallet makers can still sell their pallets to the EU countries, and also sell the new variety to the UK. Win-win

Sure, after they get IPPC certification. Probably not going to happen in the next month, though.

Yeah, after all EU pallet manufactuers have a direct interest in keeping out those British pallets. Which is the EU's job, according to some of the commenters here - they SHOULD be protecting EU pallet makers from British competition. Right? They're just doing what is in the EU's interest by keeping British products. Right?

The EU protects its interests, and has zero obligation to be concerned about the interests of any non-member of the EU.

It is the British that decided to leave the EU, and not the other way round, a point that seems to be regularly overlooked here. The UK now gets to enjoy all the benefits and privileges of being a non-member of the EU. Quelle horror - except that is the democratically expressed will of the British.

And just wait until the UK discovers what a bunch of free traders the really Americans are - almost as if the Americans are just waiting to give the Brexiters a big hug and handshake, after they sign on the dotted line of a new trade treaty, undoubtedly written to spare the tender mercies of British farmers, for example.

So, you don't grasp the distinction between "the EU" and "EU pallet manufacturers" either. The departure of the UK is not a benefit to EU members. And the loss of access to british markets WILL be a net negative for EU consumers and manufacturers the use British inputs. It's probably less of a loss than the British will suffer, but still a loss.

Um, though the Brexiters seem to still have not grasped the point, the EU is not about economics. There is no question that the UK leaving the EU is a bad thing, but very few Europeans I have talked to about this mention economics in more than a passing fashion.

Business runs in cycles - the recent basic German consensus seems to be yes, some lost sales and reduced profits connected to Brexit, but that is what happens in business. Almost as if the UK really just isn't all that economically important in the end.

Something that the Brexiters have yet to grasp, apparently.

If it's not about economics, just let the British continue to have access to EU markets.

I agree, that Brexiters are stupid for effectively trying to negotiate a trade treaty between themselves and a united block of 31 other countries, and expecting that to be a good deal.

'If it's not about economics, just let the British continue to have access to EU markets. '

There are rules involved in being allowed to participate in the common market, and the British have explicitly rejected playing by those rules. Thus, no access to the common market. It is not about economics in that sense, it is about following the rules - rules that the British have explicitly voted to reject. Again, it is not the EU kicking the British out, it is the British walking away.

Totally. EU trade protectionism is going to start hitting the British. That's what withdrawing from a free trade treaty entails. So they will start seeing up close and personal whether there were more advantages than disadvantages.

This, but non-ironically = British press

Knowing how politics and bureaucracies work, that might be an accurate estimate. I believe the US STILL is not allowing Mexican truckers into the US, despite agreeing to it in 1992.

Remember the happier times when discussing trade with the EU meant talking about prosecco?

Unfortunately, trade is about pallets, smelly ships, dirty trucks and even dirtier truck drivers. Trade is too important to leave in the manicured hands of gentlemen.

Pallet standards are a lowest common denominator thing in that virtually all pallets conform to the strictest standards (same with containers). Pallets are not returned to sender; they are used by the recipient to send off stuff to somewhere else. Pallets travel all over the world.

So if the UK ships to the US or Japan they have pallet fumigation capability.

Maybe this is about a capacity shortfall? But how serious a problem could that be? Just double shift for a few months. This is not a high skills job.

'Pallets are not returned to sender'

Um, that is not really accurate except in the most technical sense. You are familiar with EPAL - European Pallet Association, right? It is very common in this auto manufacturing region, and one reasonably assumes Europe wide (certainly EU industry seems to use it extensively if software from various companies is an indication). This system is based on everybody 'sharing' EUR pallets essentially. It is true that such a pallet may never be returned to its sender, but one assumes that a EUR pallet used in the auto industry shuttles between suppliers and manufacturers are a regular basis.

'Maybe this is about a capacity shortfall?'

More like lack of compliance to the applicable paperwork, and no ability to rapidly ramp up such approval before March 30. as apparently it took this long for someone to notice what it means to enjoy all the benefits and privileges of being a non-member of the EU.

You are familiar with EPAL - European Pallet Association, right?

Surely everyone who posts at Marginal Revolution is well versed in the innards of EU pallet regulation. Who doesn't know about EPAL?

This has nothing to to with pallet regulation - the EUR/EPAL/CHEP pallet is a major element in things like the European car manufacturing industry. An industry which just happens to be the largest industry in the UK too.

I wouldn't be surprised if the EU hasn't laid dozens of such booby traps against non-members.

Well, according to you "playing hardball" by imposing protectionist measures to prevent non-members from selling their products in the EU is just good policy.

Ding ding ding.

Had to go depressingly far in the comments to see the obvious.

Im, they aren't boody traps, they are barbed wire with a loudspeaker repeating NON - NEIN - NO (several times), etc. Just ask any American trade negotiator.

And besides, the British participated in creating a number of them, in things like agricultural policy. The fact that the very government involved as a member of the EU in creating the regulations are just now discovering that they will apply to them is almost comically depressing.

"virtually all pallets conform to the strictest standards"

Noooooo they don't.

*if* a company typically exports, it will have a separate stack of heat treated (HT) pallets that are used for export. HT pallets are almost always new because they have to be stamped with the country of origin. So once a UK HT pallet lands in Mexico it can't be used for an international shipment leaving Mexico.

If the company doesn't typically export, then it will probably not have any HT pallets on hand. So UK companies selling only to the EU will suddenly become exporters and they won't have the right pallets.

So, EU regulations really do inhibit trade and commerce for no actual benefit. (We know the pallet rules don't serve any health or safety purpose in this case because they're the same pallets that the British have been using all along.) But, we're supposed to continue dismissing Brexiters' criticisms of EU over-regulation as meritless.

Somehow, a story about senseless EU regulation turns into a story about the unpreparedness of the victims of that senseless EU regulation.

'So, EU regulations really do inhibit trade and commerce for no actual benefit.'

Absolutely - non-members of the EU are inhibited from the profitable opportunites that members of the EU take for granted within the common market.

'But, we're supposed to continue dismissing Brexiters' criticisms of EU over-regulation as meritless.'

Um, these regulations are only going to apply because the UK is leaving the EU. The regulations are an advantage for EU pallet manufacturers and users, as one would expect from how the EU works - to the benefit of its members, at least from the perspective of a nation that does not enjoy membership in the EU.

'turns into a story about the unpreparedness of the victims'

British pallet manufacturers? They had several years to prepare, and it is not as if the reality that the EU is an explicitly mercantilist trade block should come as a surprise to anyone in a EU member country.

"it is not as if the reality that the EU is an explicitly mercantilist trade block should come as a surprise to anyone in a EU member country"

Apparently does not include all the British Remain twitterati who mocked at length the idea that it would be possible to Brexit in the name of the ideals of freer international trade (paraphrasing something like "Leaving the world's largest international single market in the name of free trade? An oxymoron.").

'British Remain twitterati who mocked at length the idea that it would be possible to Brexit in the name of the ideals of freer international trade'

Well, that is something to observe on a couple of levels. Within the common market, one sees what is basically the 'freest' international trade on the planet, while recognizing that just like in the U.S., there is a federal authority harmonizing the rules, and that one could debate how 'international' intra-common market trade is. Though one should note that several decades ago, much of that common market trade was definitely international. The fact that such trade might be seen as no longer international would seem to be proof of the success of the common market.

However, every trading block is mercantilist, and leaving one block to go out on one's own in the interest of freer international trade is laughably naive (since I don't read much UK remain opinion at all - I think the UK leaving the EU is a good idea, and I fully support it - I am positive that there are laughably naive remain ideas too).

One can see this in relation to the auto industry, as the UK is not part of the trade agreement between the EU and Japan for tariff free importing/exporting. And the Japanese seem considerably less than eager to continue to use the UK as a manufacturing base, particularly in light of the fact that the UK will leave the EU, and thus lose one of its largest advantages in the eyes of Japanese manufacturers.

Basically, the export oriented UK auto industry is already fully aware of what it will mean for them to be subject to ideals of freer international trade. In other words, like UK pallet manufacturers, they are on the wrong side of free trade practicalities.

I mean, they're not really on the wrong side of "Free trade practicalities", they are on the wrong side of a mercantilist bloc. Standards which you do not apply internally, being applied to other nations of the world are decidedly not "the practicalities" of making free trade in a region work. I disagree on whether it is "laughably naive" of course, to try and oppose a system of mercantilist international blocs and push for a different international order of more loosely affiliated states freer to diverge.

But thank you for framing them as what they are, a mercantilist bloc (particularly with Germany at the wheel), rather than what the British Remain press pretends they are - aspirational to world free trade, but finding those darn practicalities of setting shared common market regulation just stop them from realising this dream.

'they are on the wrong side of a mercantilist bloc'

Fair enough - welcome to how international trade works, regardless.

'being applied to other nations of the world are decidedly not "the practicalities" of making free trade in a region work'

Actually, with phytosanitary standards, it pretty much is. And you do know that even within the U.S. there are checkpoints between some states where agricultural goods are checked to make sure they are not bringing in pests or diseases. https://www.cdfa.ca.gov/plant/pe/ExteriorExclusion/borders.html The EU decision to allow free movement to plants and animals was more political than purely scientific, in the sense of creating a single zone where everybody was treated the same. Ironically, the UK made an exemption for itself, based on concerns of rabies, and still follows rules that do not apply to bringing a dog between France and Germany - https://www.gov.uk/take-pet-abroad

'rather than what the British Remain press pretends they are'

Well, as noted, I pay basically no attention to whatever remain writes, but one assumes that the Brexiters were fully aware of what leaving a mercantilist block would mean for the UK. Which was not an extra 350 million pounds for the NHS, obviously. The bizarre thing is, it really does seem that there is a Ministry of Silly Walking Away, and it is staffed by Brexiters seemingly unaware of how silly they actually do look, one month before stepping off the cliff edge.

This is why criticism of the WTO is so massively stupid. The WTO is the only thing eliminating trade restrictions BETWEEN trade blocks. It's mission is to get all nations into one big free trade zone.

It's kind of a "Man bites dog" story though; usually the case is about how being *in* the EU makes states subject to senseless regulation.

This is actually peering into the content of what EU trade regulations are about, and finding that in an instance they are about deregulation within the EU and more regulation outside it.

Which is at odds with the "Being in the EU of course means more regulation for us, but this is OK because it makes us safer and the world needs standards and standards are also needed to make trade efficient and possible" argument often proposed for the EU.

We'd probably find many more examples of this the more we look. It's kind of expected though. The EU's structure and it's pseudo-state aspirations should mean it allows more for the imposition of not particularly protecting rules on outsiders rather than actually regulating the insiders together into a functional and unified market (which could be for better or worse, balancing competing pressures of market diversity and market size, but limited in the EU's competence anyway).

'and finding that in an instance they are about deregulation within the EU and more regulation outside it'

Um, I thought that it would be profoundly easy to find such instances. Basically, this comes under the heading of phytosanitary regulation - or lack thereof within members of the common market.

'We'd probably find many more examples of this the more we look.'

Entire British food producing sectors have been trying to catch anyone's attention about just how many examples there really are when it comes to animals, plants, food, etc. And there is completely separate from the issue of tariffs, by the way.

As reported in the British press, usually the arguments there are about it being the case that even if British producers comply with the same regulations (and that they must to sell to the EU in scale, without having a "voice" in them), certification becomes an issue outside the EU. Not that members are under looser, lower production standards, and that production becomes more onerous.

The argument that the EU actually has much more lax standards on members than it applies to imports from non-members is actually a fairly new one to me. Turkey joining the EU would mean that food products imported to the EU from Turkey would have lower and more deregulated production standards?

'certification becomes an issue outside the EU'

Yes, very much so. France or the Netherlands will have nowhere near the difficulty finding inspectors that meet EU standards that the UK will - starting with the fact that without a transition period, there will simply be no time for such certifications to happen.

'Turkey joining the EU would mean that food products imported to the EU from Turkey would have lower and more deregulated production standards?'

I think there is some confusion here about being in the common market, and various regulatory frameworks. There are members and non-members, but a country like Turkey straddles the sort of position that the UK will likely occupy at some point - not really part of the EU, but more or less part of the common market, though without any say in any common market EU policies or regulations. However, Turkey entered as part of a longer term process - something that a cliff edge Brexit completely short circuits.

Ah, the Voice of Reason. In short supply at MR.

If you don't like the rule then go change it. Oh wait, you can't do that as an outsider.

I don't know, the pallet rule sounds entirely pragmatic to me. Britain and Europe share the same environment and the same native critters. When they drafted EU rules they recognized that, and non-EU meant distant pallets with potentially invasive species.

Now you have an accidental impact, where Britain is considered "not in Europe."

They could have used an environmental map the first time around, but why bother when they had this list of countries that they were binding together?

Now they need a new Special Rule that says Britain is close enough, even if it's not in Europe, not to have dangerous critters.

So it totally had nothing to do with rent-seeking and protectionism in favor of EU pallet manufacturers.

In any case, regardless of whether you think that, now EU pallet makers have an interest in NOT having a Special Rule. Why would the EU make a Special Rule just for the British? They don't care about British interests! The British are not a member! Why the heck would the EU go out of it's way to be nice to the British?

You know, I didn't think you were really the kind of libertarian who disbelieves all environmental threats, in order to justify no government intervention.

Well, surely you realize that a minor threat can be used as a pretext to impose regulations that act in effect as protectionist measures. And those are the ones we should be especially wary of. It is, if anything, *easier* to sneak in a regulation ostensibly to prevent insects from coming into the EU than it is to get the EU to pass a law banning imported pallets.

You did read what Axa wrote in this regard, right? (The thread is getting large.) The U.S., for example, has precisely the same rules as the EU - which means this sentence is also just as accurate - 'if anything, *easier* to sneak in a regulation ostensibly to prevent insects from coming into the US than it is to get the US to pass a law banning imported pallets.'

Those regulations only apply to non-EU members. As an EU member, the British were free to manufacture and use non-conforming pallets. The regulation did NOT apply to them.

I have my doubts - British pallet manufacturers may face problems, but an EUR pallet (the symbol is burned into the cornerpieces) probably remains valid to use in a round trip from the EU to the UK and back under the wording found in the EU directive - 'All wood packaging material and dunnage from non-EU countries must be:....' Obviously a matter of interpretation whether a pallet remains valid for reimportation, but this sounds a bit exaggerated. to be honest.

Unless you are a British pallet manufacturer, in which case you are apparently screwed.

It may not be too obvious, but the system works using an exchange framework - 'Pallets conforming to the standardization are eligible for the European Pallet Pool (EPP) - the system allows for an exchange as "pallet for pallet".' However, it turns out that EUR pallets apparently are not well suited for ISO freight containers, which may explain why EUR pallets are so common to see in this region, as much of the freight between various manufacturing plants is truck based. One assumes this applies to basically all of the EU wide auto industry, most definitely including the UK's.

But it is interesting to see another concrete example of how the EU does not care about non-members of the EU, and follows policies intended to benefit EU members. Quelle surprise - maybe the British should have touched base at some point in the last couple of years with American trade negotiators? After all, Americans have been decrying this fundamental EU reality for decades at this point.

Which one would have thought to be obvious in 2016, but apparently the whole take back control apparatus is so busy disavowing its own policies that they need a deadline to start actually realizing how trading partners outside of the EU are treated.

"(the symbol is burned into the cornerpieces)"

Wow. Better than PGP. That must be impossible to fake. Thanks EU, for my new business in Pallet Certification!

Of course it could be faked - are you saying the UK manufacturers are just waiting for the chance to cheat? Because as noted in the EU directive, this too could be faked too - 'officially marked with the ISPM15 stamp consisting of 3 codes (country, producer and measure applied) and the IPPC logo'

I'm guessing you are not really all that familiar with freight - EU pallets are considerably higher quality, for several reasons, including that they actually belong to EPAL, and are intended for long term use. Plenty of pallets are not marked that way - and are clearly often intended for one time use (one can safely say that the concern of British food producers hinges on this point, as resusing pallets that are used for fresh fruit or vegetables is not really all that efficient), and made out of the cheapest wood possible. One assumes that the largest proportion of pallets used in Britain's largest manufacturing sector are EUR pallets, for example. And in contrast, for fresh agricultural products, basically none.

There are also regulations about EU states negotiating trade agreements outside the EU. The UK isn't allowed to start negotiating until they leave. There are EU rules that are very difficult to change wherever you look.

'There are EU rules that are very difficult to change wherever you look.'

Especially if you are not a member of the EU. Just ask U.S. trade negotiators how things have been working out for them in terms of hormone milk and chlorine chicken.

I always feel the difficulty with Brexit is as follows: in the real world, Brexit would increase some level of domestic sovereignty with some reduction in wealth. Depending on your side, one side has more salience to you. But the rhetoric of Brexit was more akin to: more sovereignty while simultaneously more money. (350 million quid on a bus anyone). This gap between reality and expectation has been where British politics has remained ever since.

The impact of "350 million quid on a bus" is something which has constantly been inflated since the ref. I'm not sure there has ever been a campaign ad that has ever had more inflated importance. There's not much evidence that it was that salient, but the media circus rolls on and on around it, basically because media professionals virtually all support remaining and it's has great delegitimizing utility.

Regarding "Brexit would increase some level of domestic sovereignty with some reduction in wealth", that probably has some level of accuracy. Note that more domestic sovereignty is probably more attractive to those who feel like the international politics of the EU, with its opaque mechanisms, favours insiders, cronyism and the Establishment.

Post-vote analysis found voters for Brexit have been called an alliance "the (financially) insulated and the (politically) excluded" and you can with as much fairness call Remain "the (financially) indebted and the (political) Establishment".

'The impact of "350 million quid on a bus" is something ' that was clearly a lie. How significant that lie's impact was or is continues to be another subject.

'favours insiders, cronyism and the Establishment'

You would think that someone like Grayling would feel right at home in such a setting.

As for being fair to Remain - you left out basically every British industrial/agricultural/financial representative association/organization. And what is happening now, at least in terms of the Japanese car manufacturers in the UK, is not part of project fear, it is part of reality. A reality that many people warned about, attempting to avert it, but as some take back control, others clearly have to lose control. Or not, as it turns out - the Japanese will not require the UK in the future as a good place to do business with the common market, to give one concrete example.

No shit, the number on the bus was not financially correct, Vote Leave knew so at the time, and I never implied or stated anything else than this was the case. How significant it was, and the fact that this is unknown despite how exaggeratedly it is trumped up as the one reason for Remain losing, is actually what I was talking about in the first place! I think it was probably rather irrelevant either way of course (with perhaps more effect to galvanize a few Remain voters against Leave than anything else).

Yes, Grayling probably does feel at home in that environment, and after all he very vocally supported Remain. Also known for denounce the idea of holding a referendum and very publicly and vocally repeated has tried to get it overturned. So, yes, exactly the sort of figure that would be associated with pro-EU membership sentiment?

I'm not sure what you other comment is about. When talking about "The insulated and the excluded" against "The indebted and the Establishment" I'm talking about the broad vote base here, and their demographic characteristics (though are "basically every British industrial/agricultural/financial representative association/organization" something separate to "The Establishment"?).

'and after all he very vocally supported Remain'

Well, lots of people now in charge of Brexit were Remain - which is also bizarre from the outside, actually, and makes most outsiders believe Brexit is mainly a domestic political game that is unaware of the larger framework that it is playing out in.

Depends on how you define Establishment in terms of business groups. They certainly have a major influence on the Conservative Party ... oh wait. And clearly Labour is not really all that friendly to large businesses. It is this fracturing that is so strange to see when looking at over more than 2 years of British (non)activity in terms of planning Brexit. One would almost have the impression that it was the EU kicking the British out, instead of the other way round.

@prior, just to be clear, I thought with Grayling you were taking of AC, not Christopher.

My mistake in the sense I really should have written 'Transport secretary' - the ferry thing is just so comic about how the British government is handling Brexit, that I took for granted that just his name was enough.

"Brexit would increase some level of domestic sovereignty with some reduction in wealth"

Trumpism too, when you get right down to it.

That's why the pro-business party is carefully not totalling running costs of de-globalization.

Dear commenters, the pallets issue is NOT the problem. Don't rush to solve it in your mind. The pallets issue is a only symptom of a much larger problem: very few people prepared for a no-deal Brexit.

The referendum story is being repeated by politicians: people don't agree with the PM, the PM calls to a referendum to use it as leverage to win support. The strategy failed because people believed Brexit was just a tool to defeat opponents and not a possible outcome. Complacency.

Theresa May also faces a lot of people that do not agree with her. She uses the no-deal Brexit scenario as leverage to win support. Once again, politicians believe the no-deal Brexit scenario is just a tool to scare opponents and not a possible outcome. More complacency.

Trade will not stop but a lot of people will feel betrayed and hurt. We will know in 4 weeks. I hope the Brits have stockpiled enough popcorn before the supply chains are disrupted.

'very few people prepared for a no-deal Brexit'

Absolutely - but this is where the matter of scale comes in. Ireland is likely to suffer serious consequences, much like the Baltics did when Russia did its trade restrictions in 2014. However, the Irish will also be aided by the EU in the same fashion as the Baltics were. However, who is going to help out the UK?

Basically, the EU will suffer some significant pain with a no deal exit, and is interested in avoiding it. Without betraying its own position, however.

But the British system seems unable to even agree how much pain it will suffer, much less what to do about it.

More than two years ago, if one was to have pointed out just how utterly incompetent the British government is, people would have accused of being wildly off the mark.

Though sad might not be the right word, the British still think that the only people who decide on an Article 50 extension are themselves. As the EU continues to watch this never ending shambles, there is a growing belief that a one time pain is much better than longer term suffering ending in basically the same amount of pain at the end anyways.

"However, who is going to help out the UK?"

The United States of course. Together we have defeated the Germans a few times already.

'The United States of course'

Well, the British are not amused at the idea that Trump is going to lend them a helping hand out of the bigness of his heart. Nor do they believe it, of course.

Thus, after Brexit, UK will be allowed to accept products from the US, China, and the whole rest of the world (including EU !) delivered on any reasonably safe pallets instead of only pallets submitted to punitive regulations if EU.

If I remember well the Brexit debate, this is precisely an example of what the pro-free-trade side of the brexiters wanted -- to be free from senseless EU regulations and controls to facilitate the commerce between the UK and the rest of the world.

So, this is a "dog bites man" stories. An effect of Brexit (if Brexit happens of the type wanted by the brexiters. And I don't see what's so bad with it.

'to be free from senseless EU regulations'

Good luck, as non-members of the EU are not free from any EU regulations, regardless of how senseless. And non-members have basically zero voice in changing EU regulations anyways. You can ask U.S. trade negotiators how that works, by the way - they have been talking about it for decades.

You really do not understand what people say, don't you? if not in the UE. You still have to abide to UE's regulations (and even stricter ones) if you want to sell stiffs to them, but you don't have anymore to refuse American products if their pallets or containers does not exactly fit some UE's rule. That was the point of Brexit.

Hey, we were fooled by the article linked by Tyler.

The ISPM15 standard is required and followed by 100+ countries around the world, including the UK (until now).

If the UK stops requiring import pallets to comply with the ISPM15 standard fine for them, bravo for liberalization. However, the US will keep asking to the UK exporters to follow the standard. https://www.aphis.usda.gov/aphis/ourfocus/planthealth/import-information/wood-packaging-material

The whole story is not that the EU has some unique and crazy regulation. It's the opposite, the EU countries agreed to make an exemption and not follow an standard regulation for international trade around the world.

'That was the point of Brexit.'

Actually, till now, I thought nobody has understood the point of Brexit, which is why it looks like the UK will jump off the Brexit cliff in a month.

And of course, having taken back control, the UK can now negotiate from a position of strength with the U.S.

Which sounds about as hilariously wrong as the Brexiters that predicted the German car industry would tell Merkel to give the Brexiters whatever they wanted.

"to be free from senseless EU regulations"

Except they are not.

Such is life outside Juncker's Europe.

ribby,
whats with all the brazilian hat hate?
https://abcnews.go.com/US/woman-faces-deportation-allegedly-assaulting-man-maga-hat/story?id=61346171&cid=clicksource_4380645_3_three_posts_card_hed

She is a criminal. The average Brazilian is not like that. In all my life, I have never seen a violent action (except parents disciplining their children). There are not domestic terrosits in Brazil, no incels, no lone wolves.

I suppose the U.K. could just become a French or German province and be done with all the foolish pretense of national sovereignty.

Every sovereign, as a sign of their sovereignty, must decide its own pallet regime and standards, as this is the source of our sovereignty.

If I send you a British pallet, hand crafted by local artisans, meeting our standards of British excellence in manufacturing and design, accept our pallets or die.

You should be lucky to get them.

And, just you wait, Dyson is working on a new pallet design--free of EU restrictions-- and it will amaze and awe you.

Dyson moved to Singapore last month.

Probably because of Brexit.

Here's a link about Dyson and Brexit: https://www.forbes.com/sites/annaschaverien/2019/01/25/dyson-hq-no-deal-brexit/#9d3f1c228060

The King's three bodies: the body politic, the body natural, and the body stevedore.

What happens to all the pallets that the EU ships to the UK. Do they all get sent home in empty ships then?

Somehow, non members find the pallettes to export to the EU. Public discussion is dominated by journalists and professors, who don't seem to realize that people who are not professors and journalists have a store of expertise and actual problem-solving ability (a feature largely absent from the brains of people who work in higher education).

So much for pallets, what about the cows?

From your link - 'Decorated with an EU ear tag, evidently a requirement in the bureaucratic wonderland that is the European Union' - it seems as if somebody has completely forgotten which country was the center of BSE. https://en.wikipedia.org/wiki/Bovine_spongiform_encephalopathy

The EU eartag was on a Bulgarian cow that wandered into non-EU Serbia. Neither of these countries is mentioned in your wikipedia link. Penka didn't cross any body of water. She got through the fence and shuffled off across a national border yards away.

Ah - the reason for the ear tagging was BSE, which the British actually covered up for a while. And considering just how massive an effect BSE had on the EU meat market - particularly exports - the EU is exceedingly serious in saying that they are taking every possible precaution to keep meat safe.

And BSE spread beyond the British Isles, by the way.

I think some comments have touched upon this but I'm still confused.

*Up until this point, has the UK been engaging in trade with the EU that required pallets? If so, what pallets were they using for that, and why were they fine while they're an EU member, but not fine post-Brexit*?

Comments above frame the issue as being a legitimate *physical* difference related to ~cleanliness, but how would the very same pallets suddenly become unsatisfactorily clean immediately upon Brexit?

Or, if the case is that this is "just" a "perk" extended to EU members ("membership has benefits!") and your stance is purely rational and righteous, why not just admit it outright rather than hiding behind bogus "cleanliness standards"?

Am I missing something?

'has the UK been engaging in trade with the EU that required pallets'

The auto parts industry uses a variety of pallets. And the auto industry is the UK's largest employer - some of those people undoubtedly drive forklifts handling all the parts involved in making a car.

'suddenly become unsatisfactorily clean immediately upon Brexit'

They become non-conforming to the rules that all non-members of the EU are subject to.

'why not just admit it outright rather than hiding behind bogus "cleanliness standards"'

It is a bit more complicated than that - standards are followed, or they are not. If you follow the standards, sometimes the results look less than rational, particularly in the case of country leaving the EU. However, there is nothing bogus about this in general, at least in reference to how the U.S. military apparently managed to introduce gypsy moths around Fort Bragg, at least according to one of the last U.S. helicopter pilots in this area, who described how the equipment was plastic wrapped, but apparently not carefully enough. Word of mouth, and an article concerning gypsy moths and Ft Bragg seems to no longer be available - it might have had a bit more detail. Possibly you would have better luck - https://www.advocate-news.com/general-news/20130711/destructive-gypsy-moths-found-in-magalia/1

t-bone, you're right. We're all missing something.

The ISPM15 is wood treatment standard to minimize the transmission risk of plant plagues by wood pallets. It is standard adopted by 100+ countries, among them the USMCA region (ex-NAFTA).

The EU countries agreed the pallets for intra-EU trade do not require the treatment to kill bugs standardized by the norm ISPM15. This means the STRICT EU RULES are in reality an exemption to ISPM15 and simplify trade among the EU countries.

The framing of the article quoted by Tyler distorts the reality that when the UK leaves the EU, it must follow the rules applied to China, Australia, or Mexico. We were completely fooled by the article.

The bug outbreak risk is real, a few years ago (2012) it was discussed if pallets for intra-EU trade should also be treated to comply the ISPM15 standard due to outbreaks in Portugal and Spain. The president of the UK pallet association stated they will lobby against the implementation of the standard for intra-EU trade because the UK is an island and "a significant proportion of the movement of timber pallets and packaging manufactured here remains in the country. They lobbied against the implementation for the standard. 7 years later, they must comply with the standard because they're leaving the EU. http://palletenterprise.com/view_article/3808/EU-Pallet-Industry-Leaders-Consider-New-Phytosanitary-Requirements-

So, as the UK trades with all these countries too, then they have the correct pallets already. Problem solved.

They'll figure it out despite the globalist naysayers. There will be transaction costs but Norway and Switzerland are doing fine, as will Britain.

Norway and Switzerland are part of the common market. After a cliff edge Brexit, the UK won't be. There is actually very little figuring required in this case.

Companies in the EU will still want to trade with the UK.

For some reason, you just want to punish the UK, others will still want to make money.

'Companies in the EU will still want to trade with the UK.'

Well, sure, but since basically half the UK's car industry output is exported to the EU, why would the owners of Vauxhall (a French company, PSA) or Mini (a German company, BMW) not decide to move their plants within the EU before 2027, so as to take advantage of tariff free car trade between the EU and Japan? The same question applies to Japanese car companies too, though the answer from Nissan and Honda is more along the lines of data than speculation, admittedly.

I'm completely pro-Brexit, so am I not sure about the 'punishing' aspect of wanting to see the UK leave the EU.

Why are you pro-Brexit?

Mainly because I think that having the City lose its ability to influence EU policy will be a very good thing. Much as I would applaud Wall Street losing its ability to influence American policy as a good thing. And it is interesting how the two nations with the largest financial centers were formerly the two greatest industrial nations - almost as if one could imagine there is a connection between such rise and decline.

However, I do not expect the City to go gently into that good night. Admittedly, even the City seems to be unable to deal with how incompetently the British government is handling Brexit.

also not from the onion
https://losangeles.cbslocal.com/2019/02/27/whooping-cough-harvard-westlake/
such is life in goopy poutrow&trumps America
rich kids getting preventable whooping cough cough cough cough cough cough cough arrggh

Pallet regulations, under the assumption that the logistics industry is incapable of developing a uniform, serviceable item on which to stack things for easy access by forklift. Are there people out there who still think the EU promotes "free trade?"

The issue is the prevention of invasive species from entering the EU. I assume that the EU does not want to single out Asian countries for WTO reasons, so there is a blanket requirement on countries outside of the bloc.

All species are "invasive species". The idea that humankind can effectively restrict the movement of flora and fauna is the height of pretension. OK, they managed to control lamprey eels in the Great Lakes. Oddly, if some idealist thinks that it's an advantage for the Chinese ring-necked pheasant to live in South Dakota or the steelhead to live in those same Great Lakes or the wood buffalo to be established in Alaska or the Mexican wolf re-introduced in Arizona and New Mexico, then they're not invasive. It's just fine.

"Mercantilist trade bloc". Everyone knows it, aparo.

Why isn't she "The excellent Catherine Rampell"? i think she is.

Forget tariffs -- Trump should have just imposed a big fee on "these terrible, horrible no-good pallets that the Chinese use." Bonus points for citing some bogus environmental reason.

I'm sure all you statists would have heaped tremendous praise upon him!

The EU is doing the Brexiters a favor. Pretty soon everyone in the UK will be happy to be rid of them.

And to think that the reverse of that statement is growing more accurate too - 'The Brexiters are doing the EU a favor. Pretty soon everyone in the EU will be happy to be rid of them.'

That's right. It was a mutual breakup. She didn't break up with me. We just grew apart. I'm better off without her.

You did notice I said 'Brexiters' and not Britons, right?

And most people in the EU do not think the EU will be better off with the UK gone, by the way. However, it is true they find people like Farage (who sponges off the EU for his MEP salary) or Johnson insufferable. And most people have been shocked at how utterly incompetent the UK government is. Particularly in connection with the basically generation long lying about the EU among major portions of the British press, it appears that many Britons were living in a delusional world where it is was easiest to blame the EU for British failings.

I don't know about the Onion -- this seems more like potential Monty Python material. Or Benny Hill if things really get ugly. Or The Avengers, if they start finding prominent politicians' flattened bodies under piles of those pallets.

It occurs to me that this example exposes the internal contradictions of the entire protectionist mindset. If it benefits the US to keep out Chinese products, why does it not benefit Texas to keep out Michigan's products? After all, if they banned auto imports from Michigan, then automakers would be forced to set up manufacturing plants in Texas, which would provide jobs for Texas residents, right? Since Texas's government exists for the benefit of Texas, then why not secede from the US, so they can impose trade barriers that prevent non-Texas products from entering Texas. Surely this would result in a vibrant Texas automotive sector. Right? Your government exists to benefit you, people, which means preventing you from buying things not made by your local unions outfit!

This analogy breaks down somewhat in that Michigan is not, to my knowledge, a vast Communist one party state intent on building its industrial base for military strategic reasons which may ultimate end with the domination and invasion of Texas and the imposition of a centrally planned economy. It may be worth considering this.

The people of Texas may be persuaded that trading with Michigan is worth it, even if key industries transfer to Michigan, the trade will allow them to specialize as well and become better off. They would likely not be persuaded that they have a duty to remove trade barriers to lift the poor people of Michigan out of poverty, even if there's no upside to their personal wealth and significant downsides to the military safety of their state, because it's like, fair, man.

'why does it not benefit Texas to keep out Michigan's products'

Well, there is an actual answer to that in a broad sense, and it is based on the failure of the Articles of Confederation. The Constitution was a second attempt to set up a functioning nation, trying to fix the flaws of the Articles.

'Since Texas's government exists for the benefit of Texas, then why not secede from the US'

They have done that, remember? Well, OK, the first time was from Mexico, and the second time did involve the Confederacy, but the Confederacy was very respectful of state's rights.

Again, you seem to consistently be missing the point that it is the British that are leaving the EU, which is a group of nations that believes its interests (and not just economic interests) are better represented when working together, even if no nation within the EU will ever be completely satisfied by such an arrangement.

That the EU will maintain its standards regardless of what a non-member of the EU thinks about it is not a surprise, is it?

At the risk of being marginalized I am compelled to emphasize that we must not trivialize those who will be traumatized in the effort to monetize when the try to palletize

Love your thighs!

Spoken in MLK voice.

Or Walt "Clyde" Frazier!

Could work with Muhammed Ali, Malcolm X (Denzel version), or my favorite Gil Scott-Heron

Thumbs up for GSH

It appears that some folks did not read to the end.

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