Thursday, 1 April 2021

Brexit Briefing March 2021

James Gilray The Plumb-pudding in danger; - or - State Epicures taking un Petit Souper


Jane Lambert

The rational argument over Brexit is summarized in this Gilray cartoon from 2 centuries ago. Is it better to be part of a large bloc with enormous bargaining power that has to take account of the interests of all its members some of which are irreconcilable or a medium-size entity with much less bargaining power but more agile in that it has only to take care of its own interests?

Up to now the disadvantages of leaving the EU have been more apparent than the advantages.  Inshore fishermen from certain waters have been unable to export their catch. Exporters of processed foods have been required to pay for health checks even on small consignments.  Hauliers from Ireland have found it more convenient to take a long sea crossing to the Continent than drive overland from Hollyhead to Dover.  British exports to the EU are said to have tailed off dramatically.  That is because The Trade and Cooperation Agreement has prevented tariffs but not non-tariff barriers that apply to all non-member states.

Now that might be a cost worth paying if the United Kingdom were to make up for more than it has lost in the fast-growing, emerging markets of Asia, Latin America and Africa.  That is, after all, the reason for the UK's application to join the Comprehensive and Progressive Trans-Pacific Partnership (see Brexit Briefing for January 2021 6 Feb 2021).  Now it has to be remembered that not all countries in the CPTPP are tiger economies.  Australia, Japan and New Zealand, for example. are mature services based economies not all that different from the member states of the European Union except in so far as they are much further away.

Far from negotiating a bilateral trade agreement with the UK in which former president Donald Trump expressed an interest, the government of the world's largest economy is contemplating the imposition of tariffs on a range of British experts unless the UK resolves its differences with the USA over digital services taxation.  Relations with the world's second-largest economy could hardly be frostier as a result of Brtish representations over the treatment of Uighurs in  Xinjiang and opposition activists in Hong Kong.

There has been one success that suggests that an agile national government can achieve more than a supranational bloc. That has been the procurement and deployment of COVID 19 vaccines.  The speed and efficiency with which the UK has vaccinated over 50% of its population with a first dose and a very large number with a second despite has made the Commission and EU member states appear flat-footed.  The government's performance has been trumpeted as a success of Brexit especially as some controls in the UK are easing just as many continental countries are re-entering lockdown.

Of course, procurement of supplies of vaccine over a very short period is not the same as negotiating trade agreements that are expected to stay in place for decades but it is an example of how agility and good organization can sometimes achieve better results than massive bargaining power.

Anyone wishing to discuss this article or any matter arising from it may call me on +44 (0)20 7404 5252 or send me a message through my contact page.

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