Tuesday, 31 December 2019

Brexit trench warfare isn't over

Remainers still don't get Brexit. There are those beyond salvation who think Russian hypnotoads infiltrated our Twitter feeds and told us how to vote (they who are beyond help) and then there are the sceptical types who just don't see the point. They tend to be the ones who keep demanding "tangible" benefits of Brexit. They'll never get it. Not all that's worth having is tangible.

What leaves them feeling cheated is the fact that Vote Leave didn't believe that people would vote for intangible benefits and instead set out an implausible prospectus based on flimsy assertions and cheap populist talking points. They're being told to accept a major economic disruption for nonexistent or intangible benefits all of which are arguable.

This is further provoked by the chameleonic nature of Brexit where it started out as a tub-thumping cry for buccaneering free trade, but now as it transpires we are excluding ourselves (of our own volition) from the single market, causing the EU to once more police its own customs frontiers, it is turning toward a dismal economic nationalism.

As it happens, the latter has more of a plausible foundation than the ERG free trade agenda. Having opened our markets we have transformed our society into a wasteful consumerist society with no regard for anything beyond its next passing fancy.

Notionally liberalised trade means cheaper consumable goods at the cost of domestic production but freeing up money to be directed elsewhere in the economy. We now take cheap food, electronics and clothing for granted. This idea fuelled a decade of globalisation, where it was assumed that treating China as a market economy would see China opening up and liberalising.

That, predictably, didn't happen. Trade is very much an economic weapon for China whereby they've pummelled the global competition with cheap (often counterfeit) goods. Any easement we have extended to China is not reciprocated. Trump is right. The West has been taken for a ride.

For this there are consequences, not least the the pummelling the high street has taken. We know that consumer habits are changing thanks to the internet but we have done everything possible to exacerbate the decline. But it's not just trade in goods either. The same dynamic is true in services and government procurement where the UK is the second most open procurement market in the world. Through the EU and the OJEU system public projects are put to tender to be exploited by Siemens and Dassault and all companies in between where we see train builders in Derby lose out to German manufacturers. The same is true of government software procurement.

Notionally, thanks to the single market this is reciprocal between member states but in practice it isn't. Multinationals can perhaps exploit it but less so SMEs largely for the same reasons there isn't reciprocal utilisation of freedom of movement. The language barrier, though, is just the starter for ten. Navigating the internal bureaucracy of the Polish banking system (for example) and the corruption elsewhere in Eastern Europe, makes it less viable.

There is, therefore, the foundation of a credible case for protectionist policies, ensuring local firms get the first bite of the cherry for local government and quango procurement. That is not to say it can all be blamed on the EU. Both New Labour and the Tories have allow strategic national assets to fall into foreign hands, hollowing out our defence research and aerospace sector - mostly handing it over to the French of our own volition.

In effect, though, our membership of the EU means trade liberalisation is baked in and trade (a key strategic policy tool) is not open for debate. Any strategic decisions we make can be unilaterally overturned by the ECJ. In that regard there isn't much to separate the "fwee twade" ERG and the EU. They both believe the same things (ironically a consequence of Britain's EU membership), only the EU (notionally) negotiates mutual liberalisation while the ERG believes in unilateral trade defence disarmament. The choice is death by a thousand cuts or the Tory nuclear option.

The problem now, though, is that we'll get the populist economic nationalism rhetoric from Johnson while the other hand, guided by the ERG, will be executing an agenda of their own away from the media spotlight. It's not a secret agenda. It's just that the media is even less interested in reporting trade than it was the EU for the last forty years. We get superficial talking points if they touch on it at all. And who can blame them? Hits on this blog certainly reflect the lack of engagement on trade issues and still public understanding has not advanced since 2016.

Typically the debate (such that it is) will split into its binary extremes of protectionism versus trade liberalism where nuance falls through the cracks, failing to note that we need an integrated national trade strategy rather than broad brush ideology, taking into account the threats and opportunities. We won't get that though. The media will distract the public with trivia and parliament will drop the ball. It doesn't especially matter that we don't have much of an opposition since it would likely be of no value anyway. MPs are just as easily led astray, often fixating on the trivia as a point scoring opportunity.

Meanwhile, our policy class (the think tank bubble) is divided. On the one hand we have the Tory sycophants who will simply make excuses for whatever government policy is in fashion, while the remain inclined policy wonks (usually the favoured "moderate" experts in the media) are extremists of another kind, wedded to maximum liberalisation but only within the confines of the EU regulatory ecosystem. Their horizons do not extend beyond Brussels.

This I suspect is the product of deformation professionnelle, seeing the issue only in terms of economic metrics tilted toward the status quo, in isolation of all other concerns, indoctrinated in the globalist groupthinks on everything from trade through to climate. For them trade is a sterile apolitical technical discipline and they don't like intruders. Democracy is a messy and unpredictable fly in the ointment that complicates their little schemes.

That is not to say, though, that meaningful democracy will get a look in. With Brexit as it stands we are merely exchanging one technocratic unaccountable blob in Brussels (in services of both multinationals and global NGOs) for another less competent one in London that largely represents the interests of Tory donors. We are a long way from democracy so, as usual, in what is to be a dismal binary debate, we are all stuck in the middle where you either choose a trench or get mowed down by the crossfire.

In respect of that, Vote Leave never needed the Russian hypnotoads. Activists are more than capable of propagandising themselves and persuading themselves to believe virtually anything according to who it "triggers" on the opposite side. Everything is reduced to ammunition in a culture war.

On the front line of this will be fishing, where we'll see all the classic economic nationalist rhetoric but in the end, the dogma will have to give way to the intergovernmental political realities. If we want access to European services markets then fishing rights are very much on the table (with predictable domestic fallout). Anyone expecting a Grimsby-Lowestoft renaissance is in for a huge let down. Brexit will continue to shape and define our politics for a long time to come.

Therein, though, lies the true Brexit dividend. Though outwardly intangible, the consequences are not. All the while we have been EU members, where economic policy is concerned we have lived under a regime where "the science is settled". Free trade good, protectionism bad. Brexit upends all of that and forces a reappraisal issue by issue, and not before time since we are talking about policy and regulatory systems devised in (and for) the previous century. The next major question is how we truly democratise that process to ensure that this time around, the public has a meaningful say.

So much of what was done to us on the road to European integration was done without public debate and without public consent. There is a danger that whatever replaces that relationship will follow the same pattern in which the true lessons of Brexit are forgotten. Those who do not learn from history are destined to repeat it.

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