Friday, October 26, 2018

Yes, Liam, international trade is much more complex than you thought...

The news that Russia has formally objected to United Kingdom proposals to divide the current quotas between the two according to the historical flows of trade in each product comes, sadly, as little surprise to anyone who has been paying attention all along.

In any negotiation where you seek to alter existing arrangements as a supplicant with a ticking clock, you start at a disadvantage. The other side can simply wait it out, knowing that, as your cliff edge gets closer, you’ll get more desperate, thus more likely to offer a good deal. Now under normal circumstances, that’s not a good place to be, but when you’ve put your entire economy on the line, it’s a pretty desperate affair.

Now, if you’ve got something great to offer, and demand is high, you might get away with it. Alternatively, if your negotiators are very good, and have a firm grasp of the potential options, the damage might be restricted.

We do make some pretty good stuff, but it isn’t unique, and it can for the most part be made elsewhere. As for negotiators, we have Liam Fox. You might suggest that we’re utterly screwed. I might not necessarily disagree with you.

Incompetence, combined with an astonishingly high level of ignorance and entitlement, has brought us to this state of affairs whereby, on 29 March, we will  possibly leave the European Union without any agreements on tariffs or access to markets. We have insulted some potential partners, i.e. Moldova, we’ve taken others for granted, such as Canada, New Zealand and Australia, and we’ve placed our faith in the likes of Donald Trump who will unhesitatingly shaft any potential trading partners for votes in Wisconsin or Indiana.

I take no joy in this, have no grim sense of “you get what you deserve”, for the worst affected will not be those whose idea this was, but too many of those who were persuaded to vote for it. Asking people simplistic questions on hugely complex subjects is seldom productive, but you should reasonably be able to assume that those asking the question, and particularly those espousing a particular answer, would have an understanding of the issues themselves.

As it turned out, neither of those assumptions could be relied upon. The Brexiteers have demonstrated that they really didn’t understand how the European Union worked, possibly because that might have caused them to think a bit harder, but worse still they had, and seem to still have, an astonishingly naive sense of Britain’s place in the world and a complete disregard for how Britain’s reputation abroad has become degraded since June 2016.

You can hardly blame the Great British Voter for what happened next.

And now we see the rush from accountability. An EEA option has emerged, already ruled out by Theresa May’s red lines, lines drawn to keep the Brexiteers onside and her in power. Ruling out a role for the European Court of Justice, ruling out freedom of movement, even with the provisions available for use, disregarding the Good Friday Agreement as an issue, despite it being a binding international treaty.

Alternatively, it’s the fault of those pesky Remainers, despite the fact that the European Union is negotiating with the United Kingdom Government, and nobody else.

There’s an irony here. I’d taken the view after the referendum that, whilst hating the outcome, you couldn’t really tell how bad it was going to be. Sensible people start off with a negotiating position which evolves as facts emerge and compromises become necessary. And, whilst the Brexiteers were wrong, they weren’t stupid.

Unfortunately, as time passed and the likes of Boris Johnson and David Davis exposed their lack of skill and knowledge, as the significance of the red lines became more and more apparent, as Theresa May painted herself, and the country, into a smaller and smaller corner, it dawned on me that they believed their own hype and that, unless they were stopped, we were screwed.

It’s going to take an series of acts of astonishing altruism on the part of our trading partners to salvage something. And that ain’t going to happen, because such things only happen in fairy tales, or in Liam Fox’s dreams...

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