Tuesday 21 January 2020

Of level playing field and rules of origin

Brexit will involve compromise. Either now or when the shit really hits the rotary air moving device.

The EU does not want a Singapore on sea 23 miles from Calais, so will prioritise preventing this to happen. With no level playing field, that is no undercutting or corporation tax and/regulation, the EU will stop other things that the UK might want. In other words there will be consequences. There always is, of course.

This bring me back to your regular reminder of the trade/control sliding scale: you have lots of one but little of the other. So in wanting lots of control, there will be very little trade.

It really is very simple.

The UK can want regulatory independence, but it will come at the price of reducing exports to almost nothing.

And that will devastate the UK economy, jobs and many communities.

The UK will have to choose alignment between that of the EU or the US. There is no other way, not aligning with the huge market on the UK's doorstep in favour of one with a trading partner the other side of the Atlantic, some three thousand miles distant is economically illiterate, and in trade terms makes no sense. On top of that, the US is in a protectionist phase, and any trade deal will be a US first one. Trusting Trump or the US on this is just stupid.

Distance matters in trade, the closer the better and the closer the more efficient.

Rules of origin matter because whatever else happens, the EU will want to know where goods entering it's SM came from so that blacklisted goods or sources are identified and blocked. Which is why people saying chlorinated chicken can be labelled so that UK consumers can make a choice is a red herring. Once that and other goods banned in the EU is allowed into the UK, stricter rules of origin checks will be needed. There might be no tafiffs, there might be tax equivalence, but rules of origin will trump (ahem) them all.

The BBC simply repeats Minister's words about trading independence, but without stating the trade offs that would be needed to make this work.

Every choice we make, has a consequence, and knowing that helps us makes informed choices. Without that we are just pissing in the wind.

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