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The Big EU-UK Question

Does the BREXIT negotiating strategy being taken by our Government stand much chance of success?

The Government is exuding a great deal of confidence about the future outcome of negotiations to leave the European Union (EU). It would be nice to think we can trust the claims, but are they realistic? Or should we be adopting a different, less ambitious, less complex, novel and consequently less risky, approach?  

Whilst predicting the future is always guesswork, we can try to understand what major ‘showstoppers’ or risks to a successful outcome are likely to exist. Put another way: identify some really important underlying assumptions which need to be right or potential disaster is likely. Presumably this has been done by the government already as a preliminary to setting negotiating goals and working out our Prime Minister’s winning strategy.

This list is not necessarily exhaustive but illustrative of significant underlying assumptions upon which is predicated the success or failure of our BREXIT negotiations:

  1. That pragmatic enlightened  flexible mutual self-interest will prevail in the EU hierarchy;
  2. That rational economic considerations override EU political priorities or malice;
  3. That UK’s loss through failure to reach a trading agreement is the EU’s loss as well;
  4. That Mrs May can set the EU’s negotiation strategy;
  5. That The World Trade Organisation (WTO) option for trading with the EU is viable;
  6. That negotiating team and administrative arrangements can be adequately resourced.

Let’s briefly examine these assumptions in order:

(a) – The EU hierarchy does not have much of a history of actions based on pragmatic enlightened flexible mutual self-interest, but rather the opposite. It has its ideological goals (e.g. increasing Super-state centralisation) which are unremittingly pursued whatever the undesirable consequences; it has inflexible, slow bureaucratic processes and procedures; it is somewhat dominated by the German – French duopoly.  The final deal will be further complicated by the Byzantine high level process involving the vote of the (presently somewhat posturing and hostile) European Parliament and unanimous agreement of all the 27 remaining Member States (presumably pursuing their own self-interests, such as Spain over sovereignty of Gibraltar).  

(b) – The EU’s political priorities and ideology have traditionally over-ridden economic considerations.  Consequently, for example, the relentless economic  hardship imposed on the southern EU Member States (in particular Greece) by Monetary Union and the Euro. Imposed austerity (in the case of Portugal) was even reportedly used to send a signal to larger economies (Italy) to toe the German line.  Usually the EU takes years to negotiate free trade agreements (FTAs) largely because their scope extends far beyond purely trade considerations to include ideological and political items.

(c) – The EU could actually profit at the UK’s expense from a failure to agree a free trade agreement. The EU over the years has encouraged (often through financial inducements) the transfer of economic activity from the more advanced Member States to the less developed. The EU’s Customs Union is also inherently protectionist, erecting barriers to imports (from third countries on the outside).  Whilst there are likely to be some business losers, overall EU economic activity could remain the same, and there would be some winners (able to profitably expand in their protected EU home market).

(d) – There is limited scope to influence the EU’s negotiation strategy or priorities in favour of the UK’s interests. Commonly in contractual arrangements money and concessions flow from the weakest (or more desperate) party to the strongest (or more indifferent). Over the years the UK has not had that much influence in the corridors of EU power to protect its interests.  Leaving must inevitably reduce influence rather than strengthen it especially where some malevolence, greedy envy or dishonesty is present towards the UK.

(e) – Trading under WTO rules with the EU is more problematic than closely integrated trading as part of the Single Market, and in some instances impractical or uncompetitive. The EU’s Customs Union operates tariffs and effectively has non-tariff barriers (rules, regulations, inspections, approvals, standards, etc.) to outside imports from third countries, which the UK would become.  WTO rules do not change this situation, and even a free trade agreement may not help much where EU imposed conditions are impractical to follow.

(f) – The resources needed to negotiate in particular (protect our interests and not be ‘taken for an EU ride’) have to be built up quickly and without in-fighting. Also, after leaving the EU (and its Customs Union) and the Single Market, the additional administrative arrangements here and in the EU (such as customs clearance or inspections) have to be in place and running smoothly. Yet over the years the UK has lost expertise and working administrative systems sometimes through transfer of competences to the EU or the operation of the Single Market, whilst the world of intra-EU Member State trade has moved on with increasing volume and complexity.  Additionally, the UK Government has a poor record with large, complex projects especially relating to information technology.

In summary, consideration of these assumptions gives some indication of how risky Mrs May’s planned BREXIT strategy is (taken at face value) and the likelihood of its being ‘derailed’, or at least not turning out as expected.  There are obvious areas for concern.  Assumptions, if incorrect, cannot be changed, but we can change our approach in response before, and hopefully well before, the worst happens.  

There is more than one path for leaving the EU, whilst retaining a satisfactory trading relationship; perhaps our prime minister has some up her sleeve. For example, as an interim solution she may use (temporary) membership of the European Free Trade Association (EFTA).  This would give the UK continuing membership of the European Economic Area (EEA) whilst escaping the political clutches of the EU. This route could include controlling levels of EU migration through unilaterally enacting the Safeguard Provisions in Article 112 of the EEA Agreement.  Remaining within the EEA (UK is currently a member through being in the EU) would retain smooth trading continuity with the EU with the least disruption. Given a choice, negotiating with future friendly EFTA partners is more attractive than negotiating with somewhat disgruntled, soon to be ex-EU partners.

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11 Comments on The Big EU-UK Question

  1. GEOFFREY CHARLES ELLIOTT. // April 9, 2017 at 12:39 am // Reply
    Unfortunately for many writing on here,everything in the garden is rosy,and you then explain how British Industry is going to reinvent itself,sadly that is now almost an
    Impossibility.We have the highest energy costs in the whole World,as well as the highest Diesel prices,on top of that,the past and present. useless traitors who still Govern us,every year allow in 500,000 + so called economic Migrants,who are all unskilled,illiterate,and unneeded,we haven’t got any work forr our very own young people.We are all then expected to work harder,and pay more tax,to house,clothe and feed them,this really is a recipe for disaster.Please see the second link,,and take time to read my 4 comments,and you will see how hard it is to succeed in business in Britain today,See from the last link how unproductive Muslims,who don’t work,are bleeding us dry,with their huge families,they have already started to breed us out of existence.Finally how soon will it be,before the people we have claiming benefit
    actually outnumber the people we have in work,and paying Tax.That day is coming sooner than you think.

  2. Does one assume that the government have carried out a risk assessment for leaving the EU?
    Regarding older workers; Ageism is alive and kicking in the UK. Younger staff are fearful for their own positions, knowing that the older fraternity have higher skills, knowledge and experience.
    HM government should order all our embassies around the world to offer full co-operation to the commercial attaches who should have started making full contacts with their various counterparts to start negotiations. I am under no illusions regarding our coverted civil service in London. How many of them have ever had a real job?
    We need to find out exactly what our prospective and potential clients nees are and start to become ready to supply in two years time.

    Having seen the the Union flag with the EU flag at the top gave me the original idea to note here. Due to my age, over 75, I had to reaspply for a fdriving license. and although the new one still bears the EU logo, it aLSO HAS NOW THE uNION FLAG AS WELL. Roll on two years time then the dreeadful EU logo will be removed with only our Union flag shown.

  3. We have more to offer rEU than rEU has to offer us. Sharia May cannot capitalise on what we have, because she is part of the system which is destroying it.

    What we have is more valuable than trading links, material wealth, or natural resources: it is our people. Our people, and our forebears who built Britain to be Great. Our values of decency are the cornerstone.

    We cannot compromise our values, or we are lost. We must assert our values robustly.

    We will probably need to offer sanctuary to Swedes fleeing from their compromised country, as Citizenkain points out. Yes they brought their troubles upon themselves voluntarily. Nevertheless not all Swedes are brainwashed, we should welcome the sane ones who are not suffering from Stockholm Syndrome. We of course must reverse our own cultural suicide or we will be unable to offer sanctuary to anybody.

  4. We MUST repatriate our Fishing Grounds – UKIP don’t shout enough about this.

    • We have great launch pad for such a campaign post referendum, thanks to Nigel’s flotilla.

      But we chose self destruction instead!

  5. The need for “unanimous agreement of all the 27 remaining Member States ” is an impossible dream; after all the TTIP failed after many years so why should this be any different?
    So agreement is not going to happen, particularly within the Article 50 2 year timescale, hence the emergence of a further disentanglement period which is just another trap.

    The only sure way is a relatively quick exit through repealing the various treaties. UKIP should be shouting from the rooftops; maybe they will waken up in time to fail at the 2020 election having achieved nothing in the intervening 3 years or so.

  6. The management of expectations over immigration has begun by Mrs May and Mr Johnstone. At their core they are “backsliders” who will end up neither pleasing “leavers” nor “remainers”. A great shame that the one party, UKIP to hold these idiots to account is day by day ebbing away. At some stage the rot has to stop

    • Ah yes, but there’s the Conference in September we are assured!
      Top of the agenda is rebranding Ukip!!
      By September 29th there are thousands of women from you know where, who are currently in their 3rd trimester but will be re-tubbed by then. We just amble along with our soporific so called leader on the road to the interminable liberal talk shop.
      But we don’t get called names anymore! No need to!

    We leave the EU under a cloud and with no agreement with the 27 protoEU Regions. We are obliged to operate under WTO rules.
    We are once again a free and democratic Sovereign state. We could reclaim our rights to fishing in UK waters. We could be out of any EU organisation such as europol and other similar systems such as ECHR.
    Our economy does a lurch and sterling falls to parity with the €uro and the $dollar. Our trade outwith the EU is already 65% of our exports by value and this could grow further. We could make deals with the USA Brazil Argentina etc to import foodstuffs from them at zero tariffs in exchange for access to their markets ditto. We could strengthen links with NZ Oz and Canada etc.
    Our unemployment continues to rise so ok we stop all further immigration. We also campaign to buy wherever possible British made goods instead of German and find substitutes for french and Italian food imports.
    We persuade Canada and maybe Australia to allow the open door emigration of British and Irish to their countries given their buoyant economies.
    We retrain and encourage older people to go into jobs such as hotel, catering, market gardening, warehouse and distribution instead of languering unemployed or early retirement. The encouragement includes paying companies a bonus for taking on these staff and stopping some social security payments after 12 months. We adopt a can do spirit of wartime make and mend. We even promote holidays in the UK rather than the Continent until the economy is ship shape.
    We should demand a golden payout from the EU for all the assets left behind which we in the main paid for. I estimate the EU owes us €50 billion. I am prepared to take this as a credit note to buy from them things we need such as German machine tools to help in our transition to number one economic power of Europe.
    To show our humanitarian spirit we should offer unconditional right of abode to native Swedes who become refugees/ asylum seekers/ and even economic migrants.

    • Excellent CK,
      But you forgot to include the repatriation of the contents of our jails in particular and the Religion of Peace in general.

    • I’m not too sure the present Canadian government would cooperate on much.
      Trudeau is a globalist and loves big economic blocs.

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