Not sure if I made this comment before, but in entering negotiations with the UK Government, the EU need to be assured that any agreement that is made, will be honoured not just by that Government, but by any Government that follows. So, in order to get an agreement, it is essential that the Cabinet, the Government, Parliament and the country as a whole is represented in these negotiations, and will abide by any resulting agreement.
What the last election result brought, when the Prime Minister asked the country for a resounding majority so she had a mandate to enter the negotiations and be firm, or strong and stable, using the Maybot’s often repeated terms. What she got was a hung Parliament, a failure to receive a mandate from the electorate, who clearly said, we do not like your vision, please change.
Having gained support from the DUP after finding an extra £1billion from the magic money tree to increase funding in Northern Ireland, she then doubled down on the hard line, it now looking likely that either a hard Brexit or a no deal is probable. But then she needs agreement from her Ministers in Cabinet, from her Government, from both Houses of Parliament.
And then along comes Boris de Piffel Johnson.
During the referendum campaign, much was made of the statement written on the side of a bus stating, untruthfully that we sent £350 million a week to the EU, let’s spend that on the NHS instead. It was a lie then, and Boris this weekend had a big interview in the Torygraph on Saturday where he repeated this lie. Repeating a lie does not make it a fact, and generally briefed against the rest of the Cabinet and Prime Minster.
Briefing against Government policy would be enough for a Member of Parliament to be suspended from the part, but for the Foreign Secretary to do it is unforgivable, and shows that he is still playing party games when the futures of the country’s finances are at stake. He should have been fired on the spot Saturday morning, but the PM is so weak now, that she cannot, apparently do that as it will further split the Party.
And then the head of the National Statistics Office writes a formal letter to Boris expressing deep concern about the lie being repeated. Boris responds with a letter of his own stating that the content of the interview was cleared with Sir David Norgrove, who then denied it again in a public letter. So, one of them is lying, who do you think. One is a former reporter sacked twice for making up stories and quotes.
But as of Monday morning, he is still in his job, saying he is fully behind the Prime Minister, with backstabbing knife in hand one suspects.
And just a reminder that the EU will decide this month whether any progress has been made on the three initial discussion areas, and if it is decided not, then no parallel talks on trade will be allowed to begin. The Irish Government has already indicated that it does not think sufficient progress has been made on the Irish border issue.
And then there is trade. Below is a thread of tweets for @OliverNorgrove, where he sets of the risks, 140 characters at a time, of the no deal, WTO option, better than I can.
1/ So the Treasury is supposedly planning for a no deal Brexit. As a Leaver, this is terrifying. The WTO option is, bluntly, suicide.
2/ Several things happen when we leave eschewing negotiations with the EU. Firstly, we rely on GATT/WTO rules for facilitating trade.
3/ This has a profound impact upon our tariff arrangements with the EU, which currently are non-existent.
4/ Upon leaving the EU and becoming a 'third country', the EU is LEGALLY OBLIGED to impose on us the same tariffs it does other WTO members
5/ Note that when I say 'other WTO members' I refer to those with whom the EU does not have Free Trade Agreements.
6/ At the heart of the WTO framework is a principle called Most Favoured Nation (MFN). It means members can't discriminate.
7/ If they do onto one they must do uniformly. A tariff here for one country means a tariff here for every other country.
8/ There are certain exemptions to this rule, such as if a member is a CU or has FTAs with members, and slightly different rules apply.
9/ This is how the EU has been able to negotiate preferential tariff schedules over many years. It remains influential and powerful.
10/ So, the EU applies to the UK new tariff schedules, which are inferior to those provided by membership. Prices at home are spiked.
11/ If the U.K. decides to retaliate, then it would need to do so to all other WTO members, as per MFN equal treatment rules.
12/ This is why Patrick Minford says: 'let's go to unilateral free trade'. But this doesn't even begin to fix things.
13/ A good way to spot a fraud or an amateur in Brexit/trade debate is to look for those who talk about trade purely in terms of tariffs.
14/ Tariffs are an issue, but a small one. The real economic minefield that lies behind the WTO door is a web of non-tariff barriers
15/ Tariffs have indeed come down globally, but this drainage has exposed the magnitude of NTB issues we are left to deal with
16/ As an EU member the UK enjoys a harmonised system of regulation. The benefit of this is the removal of technical barriers to trade.
17/ Outside of the EU, conformity (or regulatory convergence) is not enough to smooth trade flow. We need to prove we conform to standards.
18/ This is where customs cooperation comes in (which has nothing whatsoever to do with the Customs Union).
19/ Where there exists large amounts of trade between two trading partners (like EU+China), MRAs or equivalents built into FTAs are useful
20/ MRAs are Mutual Recognition Agreements. MRAs promote trade facilitation by helping to assess conformity to standards.
21/ By eschewing EU negotiations, we will have to rely on WTO mechanisms, such as the TBT and SPS Agreements. This will be arduous.
22/ Unlike the EEA, these provisions aren't effective. No country trades with the EU solely using such terms. There is a reason for this.
23/ There will be clashes at external borders, whereby UK/EU will not be able to assess whether standards have been complied with.
24/ This will cause chaos. We will see delays at shipping ports, lorry queues on motorways stretching miles, wasted/devalued cargo etc.
25/ This may sound minor, but take the perspective of an exporter, or even a consumer expecting a product, and you realise it isn't.
26/ NTBs are more important than tariffs because their externalities cause far more profound (and often unseen) economic problems.
27/ Goods will not reach their destinations. Some may make it but scraping their sell-by or use-by dates. In other words: pandemonium.
28/ This is just a brief picture I am painting. There is a lot I don't know. I am trying to learn in time to warn enough people against it.
29/ So when Nigel Farage speaks of the WTO option by comparing possible EU tariffs with our budgetary contributions, this is LAUGHABLE.
30/ The problem extends far beyond tariffs, which will themselves be painful. The WTO option would be self-harm on an unimaginable scale.
Subscribe to:
Post Comments (Atom)
1 comment:
A thread from @davidallengreen taken from Twitter today explaining why it is all chaos on the UK side:
Of all the decisions taken after the referendum result by the new May government, one was particularly odd.
On paper, it must have looked a very clever idea.
One can almost imagine the boxes and arrows which made the idea seem very clever indeed.
The idea was to create two new Whitehall departments, from scratch and at speed, to deal with Brexit.
They were @DExEUgov and @tradegovuk
The latter was based on a misconception that UK could enter into and conclude substantial trade negotiations while still a EU member.
But the @DExEUgov department was the real problem.
A new department charged with two vast, complex and immediate tasks.
The tasks were (1) prepare for the Brexit negotiations and (2) prepare for domestic side of Brexit ("Great Repeal Bill" as it was called).
Either task would be a challenge for an established, resourced department.
But May decided to hand both to a brand new department.
Idiocy.
And to make things worse, May's stubbornness on fighting the Miller A50 litigation to Supreme Court meant new department had a distraction.
An unforced error.
The @cabinetofficeuk was already preparing for domestic side for Brexit from standing start. No need for a change.
The @foreignoffice and UKRep @ukineu were already well placed and experienced to do the Brexit negotiations
No doubt a cabinet level appointment was needed, like Lord Rippon when UK was joining EEC back in early 1970s.
But not a new department.
And so UK had turf wars and the rush of a new department at the time it needed (to invoke a phrase) to "be getting on with the job".
Add to this the premature notification of A50 and the needless general election, and you can see why @DExEUgov had little chance.
This is not to decry the officials, diplomats and lawyers at the department. They did/do their best.
Problem was elsewhere.
The constant failure of UK political leadership to accept Brexit is complex is key problem.
But still the easy answers and slogans come.
Today, clear @DExEUgov has hit the wall of reality. Will not be the last.
And the fault not with Brexit vote but with May's unforced errors.
The sequence of unforced errors by May on Brexit is now so long, a genuine saboteur could not have done any better or worse.
/ends
Post a Comment