The eternal Brexit

A dog is not just for Christmas, the ads used to say. The same is true for Brexit.

The UK and EU is suffering from Brexexaustion and no wonder.

Most people favour no deal because the think it will stop the endless talking about Brexit. But it won't, of course.

There are a number of reasons for this:

1. Geography. The UK is 23 miles of the French coast, that is never going to change. And in trade, a country (the UK) trades in greater volumes and most efficiency with it's closest neighbours (the EU), that is never going to change. Brexiteers can blather on an on about taking back control, but as ever, reality will be in control.

2. Trade-offs: As I have said before, there is a sliding scale with trade at one end and control at the other. Meaning, you can have lots of control but not a lot of trade, or lots of trade with little control. No both. This is one of the many trade-offs that trade negotiations will bring, and have to be decided upon. If the UK is really taking back control then it is giving up on trade.

3. Lobbying. Most trade deals between countries is based on the premise that trade between the two will be simplified, by either removing barriers and/or tariffs. Brexit will be the first trade talks that start with the objective to put barriers up to trade. It will be a long and painful process. Brexiteers will want a distant relationship with the EU so some kind of deal can be done with the US under Trump, if he is still in power. Meanwhile, domestic business groups and industries will lobby for closer alignment on tariffs and non-tariffs to facilitate trade. This is another trade-off.

4. Resources. The UK has few experienced trade negotiators, and those that we have will have priority in talks with the EU (see point 1), the Conservative Manifesto wants to have multiple trade talks taking place in tandem with completion in three years. Will. Not. Happen. Most trade negotiators will be learning on the job, and will be eaten alive by aggressive potential partners the other side of the table. The UK still has not agreed with itself what it wants at the end of talks with the EU, so cannot set it's negotiators a mandate. Other countries will wait to see what relationship the UK has with the EU before committing to talks. I seem to remember writing this stuff three years ago, or more. It really doesn't change. Nor will it.

5. Services. No trade deal includes services. Which is a shame as the UK economy is a service-based one, and the financial service industry is hard-wired into the EU, leave the EU without a serviced-based deal and those companies will starve, and many will relocate to within the EU.

6. Non-tariff barriers. Non-tariff barriers are anything that can increase friction in trade, from standards, documents or even language. These change all the time, so there will be talks forever between the UK and EU on how each new non-tariff barrier will be implemented and overcome. The UK will have no say and little leverage in each new non-tariff barrier the EU brings in. We will have to accept it or not trade in that area or goods.

7. Rules of Origin. Rules of origin are key in trade talks. They decide what tariffs, tax and barriers are applicable or not. Rules of origin will mean, even in the most friction-less Brexit there will be friction. And possibly a lot of it. And it is unavoidable. Which is why you never hear Brexiteers talk about it, because they don't understand it. And don't want to, as it would destroy any kind of hard Brexit. Quickly. But the pain would be extreme.

8. Ratification. Any trade deal that is negotiated, either with a deal or after a no deal, but a deal will have to be negotiated, will have to be ratified. Ratified by the UK Parliament, by the EU Parliament, by the Parliaments of each of the EU27 and by a number of regional Parliaments, like the Canadian FTA, which Walonia nearly scuppered. These take months to ratify. So any deal needs to be done by July, or there is no time to ratify, so an extension would be needed. And despite all what Johnson says, one would be sought, though it might be called something else, like an implementation period. But will happen. And as any extension would carry talks into the next EU budget round, it would be cripplingly expensive for the UK. Which might just upset some Brexiteers.

So, Brexit will go on forever, unless it is revoked. Which isn't going to happen.

So, Merry Christmas. Now, about that puppy.....