The World beats a path to our door
Leave.EU reports that many countries have already expressed an interest in setting up new trade deals with a newly-liberated UK. It lists the USA, Canada, Mexico, South Korea, Switzerland, Australia, New Zealand, India, Ghana and Iceland, for a start. This is powerful good news only days after the referendum result.
New Zealand offers help with trade negotiations: A real problem for an independent Britain will be our loss of trade negotiation skills, now that we’ve let the EU negotiate our trade deals (very badly) for 43 years. Rushing to the rescue comes New Zealand, to offer the loan of their top trade negotiators, who would relish the role of helping what they used to call “the Mother Country” to get good trade deals with the EU, and with other countries around the world. Meantime Australia is hinting that a trade deal with the UK might take priority over a trade deal with the EU.
I sense that the world is losing patience with the EU – its preaching, its patronising, its posturing, its virtue-signalling, its persistent attempts to impose its own ideological priorities on its trading partners. There is perhaps a touch of schadenfreude over recent events. There certainly seems to be a healthy appetite to resume positive, practical and pragmatic trade relations with the world’s fifth largest economy, and the first major economy to break free from the EU – a newly liberated UK.
No compromise on free movement
Yesterday we had Cameron’s “ultimatum” that the EU must find ways to control immigration. Today, the big Non from Brussels. No surprise there – that has always been their line. Face it Boris. And Dan Hannan. The one fundamental promise of the Leave campaign was control over our borders. We’ll see your heads on pikes at Tyburn Hill if you renege on that one. And that finally rules out the Norway Plus model (= “membership in all but name”) which you’re contemplating. Brexit means Brexit. Free, independent, but with an EU FTA. That’s what we voted for. That’s what we expect to get.
There seems to be one dissenting voice. The Mail reports that France has said the UK could have a trade deal and also control its borders. We’ll see if Merkel will agree.
Sturgeon woos Brussels
Nicola Sturgeon is using the Brexit result in Scotland to agitate for Scottish independence “within the EU” (as though that were not a contradiction in terms). She was firing off in all directions, threatening to dump the Pound and join the €uro (scarcely a vote winner, even in Scotland). She seemed to imply that Scotland could sashay smoothly from UK status to “independence” in the EU, so Scots could vote for independence secure in the knowledge that the morning after they would wake up as EU citizens again, and all their pounds would magically turn into Euros.
This dream was kyboshed by EU officials, who say that Scotland would have to achieve independence first, and then re-apply for membership. Like other new members, they would have to accept the whole EU acquis – losing the opt-outs that successive British governments have obtained. There is simply no mechanism in the treaties for a part of a member-state to leave the EU, with another part remaining. The period of uncertainty between Scotland leaving the UK, and an independent Scotland joining the EU, would be challenging, and fraught with the very uncertainty that Sturgeon is trying to avoid.
Sturgeon is coming to Brussels this week, and had requested talks with Council President Donald Tusk. He has observed the proprieties and said that he cannot begin discussions with her until the British government triggers the Article 50 process. Parliament President Martin Schulz has agreed to meet her, while Juncker has taken a middle course – he said he was prepared in principle to talk to her, but right now his diary is a bit congested. Then he found her a few minutes. But she will find great resistance to Scottish membership from other member-states fearing their own regional secessionists. Spain and Catalonia spring to mind.
It will not be a very happy position for Brussels to lose the UK, a major budget contributor, and find it replaced by Scotland, which is likely to be a net recipient.
Today’s Telegraph reports that both François Hollande and Mario Rajoy of Spain have said Non to Scottish EU accession. Back to the drawing board, Nicola.
The shibboleth of the Single Market
The Single Market seems to have acquired a special place in the hagiography of the Brexit debate. Everyone (more or less, except UKIP) seems to believe it’s beyond criticism, up there with Motherhood and Apple Pie. Anyone who questions it is committing a dreadful social gaffe, and is really beyond the pale. I remember when I was a very new Tory MEP, around the turn of the century, I would give speeches criticising the EU, and often someone would ask “But isn’t there anything good about the EU?”. And thinking it would be churlish to say “Nothing”, I used to reply with the Central Office mantra: “The Single Market is a great Conservative achievement”. But now I put my hand up. I was wrong.
Not a free trade area: Many people seem to think that the EU is about free trade. Nothing of the kind. The EU is an old-fashioned, 19th century-style Customs Union, modelled on Bismarck’s “Zollverein” which he used to unify the diverse principalities of Germany into a single state (with dire consequences for the 20th century). This is the exact pattern conceived in the EU to unify Europe’s nations. But the Customs Union is an inefficient economic model – so much so, that the EU is the only substantial Customs Union remaining on the planet. Free trade areas work much better. This is part of the reason why the EU is also the only major economic area in the world in long-term relative decline (and the second slowest growing continent – after Antarctica, as BoJo likes to say).
Higher prices: A Customs Union has a “Common External Tariff”. This means that on all goods imported from outside the EU (except from those countries with which the EU has a free trade deal) we pay over the odds. Above world market prices.
Protectionist: The Single Market is (and is designed to be) protectionist. All those lefties who weep crocodile tears over the plight of third world farmers should understand that the EU, and the CAP, are keeping those countries poor. If you care about the third world, forget about “Fair Trade”, which is fiddling at the margin. Instead, campaign against the EU and its protectionist Customs Union.
Over-regulated: The EU’s Single Market is grossly over-regulated. Often its regulations are well-intended, but involve expensive over-kill, undermining competitiveness, and adding enormously to the costs of doing business. This doesn’t mean we want to scrap employment protection, as the Remainers argue. Measures like REACH, the chemicals directive, do little for safety but add massively to costs. The EU bans substances that have been used safely for years – often prompting a switch to alternatives that may be more expensive, less effective and even less safe. EU regulation often blocks innovation, like GM crops. And it has decimated markets like fine art auctions and clinical trials.
“Access to the Single Market” This is one of those phrases which are entirely ambiguous. It’s used by Remainers to mean “Membership of the Single Market” – which we can only retain if we accept free movement, EU budget contributions and EU regulation. I agree that access to the European market matters – but every country in the world, virtually, has access. The biggest three suppliers into the Single Market are the USA, China and Russia. They have access alright – although none has a special trade deal with the EU. Then there are dozens of countries with a free trade deal with the EU. They have duty free access. Finally, there are members of the Single Market, who of course have unfettered access – but are stuck with all the baggage I’ve described.
We in UKIP reject the Norway model which BoJo seems to want. We simply want a free trade deal, which is quite enough access.
This discussion applies to goods. The position is rather different on services – though as even the Remainers admit, the EU doesn’t have a Single Market in services. I have discussed elsewhere how the City’s loss of “passporting” could well be offset by the enhanced global competitiveness of avoiding EU financial regulation. In any case, coming down the track we have TISA, which is a sort of WTO for services, and will be a far better agreement than a narrow regional deal in the EU.
British Commissioner Lord Hill resigns
Lord Hill, perhaps the most important man you’d never heard of, was the British EU Commissioner, and by all accounts was doing a decent job with his financial services brief in the Commission. He has chosen to fall on his sword, which is curious. I should have thought that the one time we really need a Brit in the Commission is when we’re negotiating Brexit – though maybe Lord Hill, as a Remainer, would be the wrong man. At the Parliamentary debate on Brexit on Tuesday, he attended and was warmly applauded, though he seemed actually to be in tears over the turn events have taken. Yesterday we read that despite his short tenure, he is to get a severance package of £250,000. Crying all the way to the bank, no doubt.
Cameron urged to ratify Paris
David Cameron is being urged to ratify the Paris Climate Deal before he leaves office. But if he can’t invoke Article 50 for fear of binding his successor, he certainly shouldn’t ratify the crumbling Paris deal. It’s an expensive nonsense that will undermine our economy while doing nothing for the environment. Vastly expensive gesture politics. Don’t do it, Dave.
BBC: Always looking for the downside
The BBC carries the story of the plight of American ex-pats in London who find that remittances to the USA to meet mortgage payments or student loans have suddenly got more expensive as the Pound has fallen (never mind that it’s on its way back). Nothing about UK companies repatriating foreign dividends and finding they buy more pounds. Or UK ex-pats living abroad who find remittances cheaper. It’s really disgusting the way our national, publicly-funded broadcaster tries to do the country down at every opportunity.
You’ll die of boredom waiting for the BBC to offer good news on Brexit. The Telegraph business pages are a happier hunting ground. Brexit may boost British based insurers, because of freedom from “dreadful” EU regulation. Rolls Royce says poll decision “has no impact” (although it recommended employees to vote Remain). Brexit could boost Ocado’s chance of securing an international tie-up.
Straw in the wind?
Yesterday’s Times carries the following diary piece: “Does the Electoral Commission know something that we don’t? On leaving the referendum count in Kettering, Jonathan Bullock, a UKIP official, asked if he could keep his security pass as a souvenir. He was refused. ‘We might need them for the next referendum’ they said”.
Yesterday’s Matt cartoon:
“Corbyn may have voted Leave, and I hear a rumour he was cheering for Iceland”. And today: “We need migrants to do the jobs Brits can’t or won’t do. Like Prime Minister and Leader of the Opposition”.