Trade

Liam Fox is a slow learner, but he does learn.

Over the past few weeks he has spoken out against Johnson and Hunt, but Johnson in particular, in relation to the infamous GATT 24 and no deal Brexit. But it emerged that his department, The Department of International Trade, has only very recently recruited 12 new trade negotiators.

From November 1st, should Brexit happen, the UK would need to negotiate, or start to, trade deals with up to 75 countries, at the same time.

This requires resources, skilled negotiators, and time. None of which the UK has.

Trade is currently being talked about by people who do not understand trade, and resent being told about trade by people who do actually understand trade. This will not end well.

Of course.

International trade is nothing like poker, buying a house or a car.

If you go to buy a house, and you don't like the price or mortgage, you drop out and lose nothing, except a place to live, but don't have a bad mortgage or bad terms with you for 25 years.

Trade is nothing like poker. For one thing, the EU has been negotiating our trade for years so know more about what the UK economy needs than the UK does. But that it has done our negotiation on trade for us for 45 years, it has experience. The EU know a bluff from the UK when it sees one, and no deal is a bluff.

At the end of the day, the WTO Brexiteers claim to be the UK's salvation at the end of the Brexit road is an unelected, bureaucratic organisation that has set a long sit of rules and tariffs that take an age to challenge in its own courts, that even if the UK were to win, there is little remedy if the other side ignores the ruling. And anyway, the US under Trump hates rules based organisations and is seeking to undermine them, the WTO and NATO at every turn.

Trade is about scale and geography. The bigger economy has more leverage in trade, and the closer two countries are to each other, the more they will trade. This is basic stuff, but Brexiteers say that if people believe in Brexit more, then it will just work.

This, as Douglas Adams would have said, is a pile of fetid dingo's kidneys.

Domestically, the UK needs a Trade Remedies Authority. Current Brexit legislation says we need one, but, it requires legislation, and because the Government is terrified of losing any kind of vote on Brexit lest it lead to no deal being made illegal by Westminster, it was mothballed. It was to be part of the Trade Bill, but that has stalled, and so has the Trade Remedies Authority. So it has to be got round, but setting up Trade Remedies Directorate as part of the Department for International Trade.

This from @IanDunt at policits.co.uk website:

The government's basic plan for trade remedies in the event of no-deal is pretty simple: copy them. Just take the EU's countervailing measures and adopt them wholesale. But they have a problem: you can't actually do it. The calculations about dumping and subsidies which the EU used were made for the EU. The UK needs them to be based on the UK.

So they're doing the only thing they possibly can: keeping the tariffs where they are, then setting up assessments of dumping and subsidies after-the-fact, so that they can justify them in court. All fair enough. There really wasn't another course of action open to them.

But that means that they really need to get these assessments right. There are lots of countries with a very large financial incentive to legally challenge British decisions in this area. They absolutely will take action, and they can do so at two levels: internationally at the WTO and domestically in the upper tax tribunal.

The first isn't too much of a worry. The WTO is slow. But the upper tribunal is here in the UK. It'll be much faster. And it will be able to pay careful attention to the manner in which these decisions were arrived at, because the mechanics for doing so - copied over from the WTO - were in last year's Taxation Act.

This is where you need to start dotting your i's and crossing your t's. If you don't do these assessments right, the ensuing legal challenge will succeed, and that puts British industry in danger.

Unfortunately - but entirely predictably - the government's trade remedy assessments look like they are in complete disarray