Friday, 10 April 2020

Brexit: Britain must mutate to survive

Anneliese Dodds, the new shadow chancellor, has warned against a "chaotic" no deal outcome.This presumably being the chaotic outcome where aeroplanes stop flying and supply chains collapse and thousands of businesses cease trading. Comical though it may be she's not the only one having trouble assimilating Corona. The Brexit trade debate is still talking as though enforcement of border controls after Brexit will play out as anticipated, failing to note that it's all going to hell in a handcart.

Earlier in the week the EU announced a series of relaxations to customs controls, now joined by the USA and Canada with food regulation taking a back seat along with trading standards. As to product standards, fuhgeddaboudit. Emergency shipments have made their way into the EU with zero quality control and nothing even approaching compliance testing. Some PPE is arriving at hospitals in an unusable state.

As to the behind the border enforcement capabilities we are seeing a shortage of labs and qualified personnel. The regulatory machinery is in lockdown same as everyone else. When it does get back to work its primary concern from here on in will be Corona related issues. As to front line enforcement, the priorities will shift as the black market moves to exploit weaknesses in the system. The functioning of the single market may never return to a pre-Corona normal.

As regards to Brexit, neither side can especially spare the intellectual energy on constructing a new customs frontier down the Irish Sea. Our own civil service has bigger fish to fry and I'm quite sure EU agencies will have more important things to do. Pretty much the entire EU apparatus is devoted to firefighting on several fronts where the future relationship with the UK seems like an indulgent distraction.

This could prove a weakness for the EU in that its ability to enforce its own controls are part of its soft power. With member states now cautious about maintaining their own supplies of food and medicines, the EU may struggle to assert its authority as member states relax controls far further than the temporary measures.

At this point Commission trade wonks can push their imaginary divisions around on the map, but reality is not likely to conform to their outdated assumptions. The same goes for the Tories whose "free trade" agenda is likely scuppered entirely by Corona. US-UK talks have gone on hold indefinitely.

This, though, does not enter into it for the Brexiteers who insist that we should stick to the existing schedule. They would still have us leave either with a threadbare FTA or no deal at all, making recovery all the more difficult. It's easy to scoff at the current terrain arguing that there's nothing no deal could do to us that Corna hasn't done to us already, but with the mood of electorates turning more protectionist it would be foolish to slam the door on an open process with a view to restarting it down the line.

As it happens, nobody on the EU side thinks a deal is achievable. Face to face time isn't possible and the notions we can negotiate a comprehensive FTA over video conferencing is laughable. To insist that talks continue is in pretty poor taste. When people are dying by the tens of thousands, it's a bit much to ask of the EU just to placate the Brexit fetishists. If the EU is pressed to continue then they will more than likely make a take it or leave offer of a heavily one sided FTA, not especially caring what the British choose to do. If then there is a deal then there is the question of scrutiny which may prove difficult when our parliament is running on a skeleton crew and the media is distracted by more urgent events.

Ultimately the Brexiteers don't care about a deal and Corona just doesn't feature in their estimations. The argument is pretty feeble - that we would be asked to pony up another payment to the EU and would be subject to new EU laws. On both counts this is something of a moot point since fiscal prudence has left the building and the EU is not in a position to create new laws let alone enforce them. If needs be the UK can drag its heels over implementation for as long as it takes.

The real fear, though, is that the transition would somehow end up a semi-permanent arrangement, particularly if there's a change of government, which is not altogether unjustified, but with everything now in flux, the last thing anybody needs right now is more uncertainty. Responding to Corona will require a high level of collaboration and cooperation where the UK needs eyes in EU institutions. At the very least we should hold off any divergence until there is a vaccine.

It has been the view of this blog that Brexit has up to press has lacked a credible destination, with future prosperity pegged on spurious "global Britain" rhetoric. After Corona we simply don't know what the trade and geostrategic landscape looks like. There are already moves to divest from China and shorten supply chains, and those arguing for continued global supply chains are fighting a losing battle The trend was already going toward near-shoring making our EU trade links all the more important.

Beyond that we may see quarantines stay in place with food safety regulation being at the top of the trade agenda for a long time to come. We are likely to see more stringent controls on foodstuffs from around the world, and a drive to reduce our dependence on food imports. With a major unemployment problem, there may be a drive to ensure agricultural jobs are available for British youths. Post-Corona politics will reshape attitudes to trade. Our list of strategic trade defences will grow long. What I suspect is the Brexit fetishists want to get in with their unilateral trade liberalisation agenda before politics wakes up to the new world settlement.

Before Corona we could afford a little radicalism in that there was at least a degree of stability, but now more than ever we have to look before we leap. Moreover, Corona would substantially weaken the EU both as a regulatory and trade power where simply waiting it out could put the UK in a far stronger position. 

Free trade was never a credible argument for Brexit. It always was going to leave the UK blooded. I accepted that risk when I voted to leave because some principles take precedence. The beef I always had with Brexiteers was less the reasons to leave as the manner of our departure. There was always a requirement for a planned orderly withdrawal from a half century of EU rule, but now, with the world in turmoil, severing all formal relations with the EU really is a leap into the dark at a time when we can least afford it.

I can understand why many Brexiteers struggle to assimilate the new reality. When you've spent decades fighting for a particular outcome it's hard to let go - but we cannot pander to that kind of obstinacy. The pre-Corona world settlement is gone for good. Everything we have based our assumptions on has changed and we must mutate to survive.

The Brexiteers have convinced themselves that Corona will finish the EU. They've been predicting its demise for decades. It's a cottage industry in the comment pages of the Telegraph and Spectator, but the EU will survive because the political will services. We'll hear the usual sabre rattling but we've been here before. It's quite clear the EU will have to adapt and mutate too, and going forward may be a very different animal, but irrespective of the fortunes of the EU, it is still the number one regional concern for the UK and not something we can isolate ourselves from.

I remain convinced that Brexit was the right choice for the UK. Corona demonstrates better the Brexit the folly of rigging our economy to become dependent on fragile supply chains, especially to prop up an even more fragile economic model largely contingent on exploitation and informal labour. It;s now proving a threat the the health and prosperity of the nation and could even be considered a national security issue. We've long needed to redress the balance and if Brexit did not precipitate necessary changes the Corona most certainly will. But that's always what this was about - restoring balance. To go from one extreme of economic integration to the other in a single bound - at a moment of international crisis, is not just ideological despotism. It's suicidal.  

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