Tuesday, 13 August 2019

What happens next?

If there is a no deal Brexit, some things will not change.

Like geography.

In trade, you trade most with your closest neighbors. So unless the UK really wants to stop any kind of trade with the EU, then first item will be discussing trade and the relationship with the EU.

It is economically illiterate to think you could replace all trade with the EU with trade to a country the other side of the Atlantic, or the world.

With trade and all else that will stop with no deal, the EU will simply ask for the three things first: citizen's rights, financial settlement and the backstop.

One way or another it will happen.

With no deal, the UK will have no trade deals with anyone.

An FTA does not mean, literally free trade, just an agreement on tariffs and non-tariffs.

Talk is of a trade deal with the US. John Bolton who is nothing to do with trade has promised something. A sector-by-sector series of agreements, but not a FTA.

John Bolton is someone who once banged on his desk in the UN demanding that the US get protectionism, this is not going to end welll. And for now, the US has not said what it wants in return, but it won't be cheese or jam.

No deal is forever.

Well, not forever, but will be for years.

Rejoining the EU is only by the Article 49 route, and that will take years, even if the EU would have us back.

In a no deal, Japanese car plants would close and not reopen. A hard Brexit would mean their supply chains would be compromised, and their outlook would be bleak.

They would not come back.

A no deal Brexit would likely trigger independence referendums in both Scotland and NI, or in the latter's case, reunification. The problem for the EU could be in the medium turn, on how to handle a chaotic break up of the UK and whether to fast-track either countries into the EU, even if that were possible.

Competition rules forbid rival companies in pooling resources to transport food, drinks and medicines. They have asked the Government to relax these rules in the event of no deal.

There is emergency planning for the delivery of essentials, or so the Government tells us. Such things countries usually only do near the outbreak of war. This would be self-inflicted.

No one really knows what will happen in the event of no deal, anyone who says they do is lying. But £6 billion is being spent to prrepare for something that was promised to have no downsides, only considerable upsides, and the end would be a deal better than being a member state.

Only, that is not Brexit.

Just the first part.

What the relationship the UK has with the EU has yet to be agreed within Cabinet or the country. The country is fed up with Brexit, the people are fed up with Brexit. The EU is fed up with Brexit. But Brexit is forever. Even an ordered Brexit with an agreed WA will mean negotiations on trade and other issues for a decade. That was if the UK knew or agreed on what it wants.

That has yet to be decided. Or, will be shaped by May's red lines of Johnson's no deal. As they decide, the country will not burn, but will slowly crumble. Things won't get fixed, there won't be the money, it will be a long slow decline.

As for trade deals with the other 160 members of the WTO. Well, they will want to know first what our relationship with the EU is. I wrote that years ago, and is still true today. The UK neither has the skill or expertese to negotiate trade deals one at a time, let alone up to 60 simultaneously.

It will be brutal.

But we will know the truth.

We will know our place. In the world. At last.

And we can never go back.

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