Van Rompuy still has lessons to learn

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You remember Hermann van Rompuy?  He’s the one that some people (including myself) referred to rather discourteously as Rumpy Pumpy (incongruous, that), and of whom our leader Nigel Farage once had some choice words to say.  I myself once compared him to the character Dr. Coppélius in Délibes’ ballet Coppélia.

Van Rompuy, a previous Belgian Prime Minister, became “President of the European Council” in 2009, and remained so until 2014.  He’s a harmless and inoffensive looking chap – though looking at his pictures, I struggle to believe that he’s nearly four years younger then me.

I bumped into him after a recent event we both attended, and I asked him why, when discussing Brexit, he always talked in terms of the comparison with Norway.   Why does he say: “You still have to obey the rules – but you have no say in making them.  And you still have to pay for market access”.  Well of course, he replied.  “But we don’t want the Norway option”, quoth I.  We simply want to be an independent country, like the USA, or Canada, or (South) Korea.  And of course we want a free trade deal”.

Rumpy looked at me with a marvellous mixture of incredulity and derision.  “You expect a free trade deal with the EU?  You’ll be lucky!”.  I only had time to reply “You’d better ask those guys at Mercedes” before he was off and starting another conversation.

Van Rompuy needs to think again — indeed I suspect that he understands this situation very well, and his instant dismissal of a post-Brexit FTA is a calculated and cynical negotiating and campaigning position, rather than a reflection of reality.

The first point to bear in mind is that item “You won’t have any say in making EU regulations”.  In my sixteen-year experience as an MEP, I’d say we had precious little say as it is – our current UK voting share in the EU is about 8%.  But take a global view.  We don’t have any say in American or Chinese regulation – but no one agonises about it.  The assumption HVR makes is that we’d still accept EU rules after Brexit.  We won’t (that’s quite separate from the issue that exports to any overseas destinations must meet the specs and regulations of that market for that product – but that remains true whether or not we’re in the EU).

We’re not looking for a semi-detached, peripheral Norway option.  We’re looking for plain vanilla independence, such as most other countries in the world enjoy.

But the key issue is the FTA.  First point: let’s get it in perspective.  If we left without any trade deal at all, and were treated simply as an arm’s length country outside the EU’s Common External Tariff, then the total duty liability under that tariff on UK exports to the EU would be around £3½ billion — but we’d be saving £12 billion on contributions (and arguably tens of billions on regulatory costs).  Even in those simple terms, we’d be better off.  The UK government could offer to reimburse those duties to exporters, and still be ahead of the game.

But then we import nearly double the amount by value from the EU that we sell to them.  That’s a bad thing — but the silver lining is, it gives us massive clout in negotiating trade terms.  The balance of trade in the automotive sector (which we hear so much about) is much the same.  If they want us to offer market access to their BMWs and Mercs and Audis, they’re going to have to reciprocate for our Nissans and Toyotas and Jaguars.  Hence my “Ask the guys from Mercedes” retort.  Major EU businesses, including the vital automotive sector, will bring irresistible pressure to bear on the Commission for an instant free trade deal.  We will, after all, be the largest gross and net customer of the rump-EU (sorry Rumpy).  Bar none.

I’m happy to trust former CBI top man Lord Digby Jones, who has said that when we leave the EU “We’ll have a free trade deal in place within 24 hours”.  He knows whereof he speaks.

 

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12 Responses to Van Rompuy still has lessons to learn

  1. Flyinthesky says:

    That’s the issue with the 3 million jobs meme. If we stand to lose 3 million they stand to lose 5 or 6.
    It’s just not going to happen. I’m with Digby-Jones, however we leave there would be rudimentary trade arrangements made in very short order.

    The absolute bottom line is, despite inference to the contrary, we don’t have to be governed by it to trade with it.

    On the Norway situation what HVR will never admit is Norway has it’s own independent seats on regulatory bodies that decide legislation. The eu takes our seats so we have no direct input at all.

    Roger, you’ve double posted some of your comment.

    • Jane Davies says:

      Yes you have double posted Roger…..but repeating common sense is never a bad thing!

      It still leaves me shaking my head when I read about how blinkered some people are, but is it because you and Nigel and UKIP have the interests of a once great country at heart and the others, who refuse to see the truth, are only interested in their own personal agenda? I suspect the answer would be yes.

  2. Ian Terry says:

    I would expect nothing diferent from Digby Jones. He is an ex member of the grey funnel line!!

    just returned from a weeks break in Scotland. It seemed that every other car was German, I do not think that they would want to rock the boat when we leave. They get too much money from us.

    In two weeks time we are going to Vancover Island in a few weeks time and I will be interested to see how many “European” cars they have.

    • Jane Davies says:

      Here on Vancouver Island we have a good number of European cars Ian….although I’m not sure how many are actually built in the EU. We have Volvo’s Mercedes Fiat Jaguar VW’s and Range Rovers. Fords are made in the USA as are, I think Range Rovers.

      • Ian Terry says:

        Jane.

        There you go, you have spoilt the dream, there is me thinking along with 75% of the country that Range Rovers are built over here. Off topic. How far are you from Qualicum Beach?

      • Jane Davies says:

        Campbell River about about 69 miles, or one hours drive away. Come and visit….we could meet up for a coffee!

  3. lasancmt says:

    You are starting to repeat yourself Roger! Maybe too many red wines at that last Brussels restaurant? Cut and paste becomes risky then….

    “You’d better ask those guys at Mercedes”, is that really how the EU works Roger? Is that because ukip would take its orders from UK captains of industry Roger? ‘Hon y soit qui mal y pense’ and all that millarky Roger?

    People like you keep repeating the myth that running a trade deficit puts Britain in some sort of negotiating power vis a vis the EU. You guys, egged on by wannabee econists like Ruth Lea with her “They’ll trade” nonsense, repeat this balony so often you start to believe it’s true.

    The truth is that running a structural trade deficit is the sure tell sign of an imbalanced economy.

    That is because the Tories have run UK manufacturing down. If the UK had opted for the Euro and had favoured a manufacturing policy besides favouring the City of London, then the UK would have been a manufacturing powerhouse like Germany and it would be the British products filling those empty return containers loaded at Felixstowe.

    As it stands, once all the family silver has been sold, with all the prime London real estate in Chinese hands, all the utilities in French hands, there is only one way for ukip’s precious pound sterling and that is the way of the Drachma and Lira before the Euro saved them from that inflationary spiral.

    • I think you’re being deliberately obtuse, lasancmt, if you’ll forgive me for saying so. Any sane legislator (and there are too few about) would want to consider what decisions various economic actors might take in response to some piece of legislation or other policy action they were contemplating. That’s not at all the same as “taking orders from Captains of Industry”. But if (for example) we tax banks to destruction, they’ll go elsewhere, so we would be well advised not to take that course of action. The main intellectual failing of socialism is that it does what it thinks may be right (or expedient) but totally fails to realise that its decisions change incentives, and therefore change behaviour, in a way that undermines the original objectives.

      Of course the EU could take actions following Brexit that would damage continental businesses, but there will be huge political pressure from industry (and trade unions and pension funds) to be rational.

    • I’ve just read your last two paragraphs lasancmt — and your vast failure to understand the basics of economics renders me breathless!

      • lasancmt says:

        Hey Roger, I have a degree in Business from Rotterdam School of Management, part of the famous Erasmus University. Then I built a company in Britain which I sold for millions to the Germans. What qualification do you have to lecture me on economics or business? I am not alone in saying the UK would have done much better in the Eurozone, just google the subject on Financial Times.

        http://www.ft.com/cms/s/0/9323e120-387d-11e0-959c-00144feabdc0.html#axzz3mXt0s3uH

        The thing is Cameron and your boss Farage only favour financial services for their mates in the City of London. They pay only lip service to manufacturing. It’s a credit to British ingenuity that we still have some manufacturing left in the North of England. Within the Eurozone Britain would have been a manufacturing powerhouse like Germany as well as being top in Financial Services. Now how is that for ‘believe in Britan?’

        That may be an opinion only, but you have no way of disproving it?

  4. Ex-expat Colin says:

    Damp Rag, who are you edition. Rompuy the 49th PM of Belgium serving under 1 year and the 47th is Verhofstadt for about 9 years.

    Think his bread has been well buttered and continues into generous pension, and likely continues as a damp obstacle along with Barosso. Unelected by most of us and mismanaging on most every front. Well, we only see the spill over stuff like the european southern states and invasions from the south and east. The rest of it appears to be a festering money black hole that appears as a honeypot to the politicians here. Thats another job for life I think, so you probably could not expect the likes of Clegg, Blair etc. to resist the EU in any way. Heaven knows what Corbyn is or will be, but looks like a blast from the very awkward long past?

    Negotiators? President (in waiting) Trump says they have been/are useless in the US and its the same here largely. Or that there are some good trade folk here, but are squashed out of useful existence.

    If anybody saw the HoC Select on the BBC’s business behaviour last week (Parliament Ch) I think like me they would truly be shocked…just start with salaries! Very high salary is truly synonymous with failure and weakness.

  5. Pingback: Why the Single Market is a Bad Idea | John Poynton

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