Friday, 7 April 2017

Brexit - a no score draw

I am feeling somewhat resigned this week. It would appear that we have won the intellectual argument that a no deal scenario with the EU is not viable. The WTO option nonsense appears to have been crushed and I think EUReferendum takes some small credit for that. It is, though, a pretty dismal outlook.

As we wrote last week, looking at the enormity of the issues to be covered, the only workable solution here is for the UK to opt for the status quo - continued implementation of the acquis communautaire under the jurisdiction of the Commission and the ECJ. But from outside formal membership of the EU, and bereft of the institutional architecture of the EEA, we will have no direct representation, nor facility to influence the rules, or their implementation.

We have always argued that we can deal directly with the international organisations in terms of the substance of the technical rules and that Brexit would (eventually) give us greater influence. That though says nothing of the joint EU programmes which facilitate the development of further economic integration which is why we were advocates of an EEA solution. We took the view that Efta with the UK would be a large enough bloc to stand up to the EU. Without Efta it is more than likely we will take an association agreement akin with that of Ukraine whereby we are for the transitional period a non voting member of the EU.

As hideous as that might sound to remainers it's not all that big a deal to me since I fully understand the futility of voting in the EU, and since our political establishment has never given a solitary fig about the outcome of EU votes I don't see that it matters. In other words, for a long time to come, we remain in the EU in a more convoluted form.

What is probable now is that as it becomes apparent over the next few years what we stand to lose, having lost key bodies like the European Medicines Agency, while having considerable difficulty developing systems to repatriate policy (not least customs IT systems), we will likely see a new administration change that interim into something more permanent.

Though we will regain the ability to make our own trade agreements, the scope will be limited since we definitely will maintain the EU regulatory regime now and forever. What we need is fundamental rethink of trade but it doesn't look like that is going to happen. Trade as Tories understand it is bickering over tariffs which doesn't really ask the right question of whether partner nations are even capable of supplying our demands let alone delivering in a timely way. Too many physical obstacles stand in the way.

One might have hope that Brexit would trigger a rethink of DfID but that doesn't look like it is going to happen either. More than likely we will continue to see it as a state run NGO much like Oxfam.

The good news is that we probably will avert a major economic catastrophe but only by a slim margin and we will still take a serious hit to trade. The bad news is that we won't be anything near as independent as we hoped to be. Like Switzerland, our red lines will gradually be eroded through economic pressure.

From my perspective, this is pretty much where the Brexiteers deserve to be having fought the campaign on a pack of lies without anything even approaching a plan or an adequate understanding of the issues. Through short-sightedness we will have thrown away at least a quarter of our exports. There will be some compensatory market movements thanks to trade substitution but it will not be the economic miracle as promised by the Tory right.

The saddest part of this is that those who should be most angry at this will be cock-a-hoop as the Daily Express etc tell them that bumper deals are rolling in thick and fast when in reality they are facsimiles of those we already held with the EU on the proviso that we continue to align with EU regulatory codes. We will have thrown away the single market only to have to rebuild that trade over the next decade - for the sake of controlling immigration which is unlikely to fall at all.

I suppose though, so long as people think we have left the EU, why should it matter if we actually have or not? It's not like the public take any real interest in the issues, nor indeed do our political class - including those most vocal about leaving the EU. I suppose it is really just a gesture to the international community that we are not to be treated as a member of the EU - for whatever that is worth.

Economically it doesn't look like Brexit solves very much and taking back control will not be as simple as anyone imagined. Certainly it is not what I envisaged when I started on this path. More depressingly though it does not look like it will resolve anything politically. Anyone expecting a renaissance of democracy is in for a disappointment. The best we can hope for is that the next generation will come to understand that the EU is not something we can ever again be part of but will be sufficiently motivated enough to correct the folly of this administration. Perhaps when people realise that Brexit does not deliver what was promised they will start asking the right questions.

In a lot of ways we left it far too late to leave the EU. It already had us by the balls and we should never have ratified Lisbon. Lisbon is pretty much a licence for the EU to asset strip any member state leaving the EU and that is exactly what will happen. We'll take a big hit to be out of the EU in name only.

Over the last few months I have come to understand a lot more about the EU and how trade works. It's one thing to learn the theory but now I am starting to see it all in practice. On balance I do not think there are many advantages to leaving save for those cultural aspects where there are no metrics to be pored over. There has been a sea change in the political tides and that should not be discounted. The fundamentals may not change all that much but finally we are having a debate worth having. Where it goes from there is anyone's guess.

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