BC BREXIT
Saved by @CodyyyGardner

How to make sense of the increasing number of UK-EU trade disruption stories?

In short - outside of a single market product checks and people working restrictions are inevitable. And outside a customs union you will have tariffs and / or rules of origin.

Detail ---> 1/

 The UK decided to leave a Customs Union. Within that Customs Union, no tariffs, just a common external tariff or preferential rates for bilateral deals or developing countries. Hence, distribution hubs in one country for all make a lot of sense. 2/
Outside a Customs Union our choice was tariffs under WTO rules or remove them subject to rules of origin with a deal. We chose the latter, but it means we can't just import from China, rebadge, and get zero tariffs from the EU. As we could until December 31. 3/
Net result of being outside of the Customs Union - it no longer makes sense for the UK to be a distribution hub for the whole of Europe. Particularly when so many neighbouring countries remain in it. No trade deal changes that. 4/
Now, product checks, of the sort causing problems for food exporters (see Scottish seafood). In the single market, we shared regulations, so a safe product in the UK was safe in France. No inspections. We chose to leave that system, as we want to change some regulations. 5/
All developed countries have extensive safety regulations, particularly on food and drink products. They have stringent entry checks. Outside of a single market, you face the full weight of those checks. They take time. 6/ https://t.co/3NY7zgXRet
Countries outside a single market can negotiate with each other to reduce the number of product checks. Agreements usually involve commitments on both sides to build trust, such as not changing regulatory standards. The UK chose not to pursue this on food. 7/
You could be forgiven for wondering why if I knew all of this, the UK government, MPs, and businesses did not. But you recall there was a campaign for the purest possible Brexit. You may recall Brexit central. Not everything written there was true... 8/ https://t.co/PuppVdIHWZ
Individuals who said leaving the single market and customs union meant product checks and rules of origin were told we were biased. We weren't invited to advise government. Business was not encouraged to say this. EU-shills. Code for inconvenient. Anyway, enough Trumpism... 9/
There is a whole category of restrictions we are hardly seeing yet, on services. We aren't travelling to the EU for work right now, because of covid. After covid it will be because of work permit restrictions. Financial services changes are coming. 10/ https://t.co/ankZwPqeUp
For services like goods, it no longer makes sense for London to be the hub serving the EU, when there will be barriers in terms of trade, people, perhaps data. The UK's European HQs are threatened. Hard to know how exactly this might unfold, but there will be change to come/ 11/
But the UK government is not powerless to prevent the erection or maintenance of EU trade barriers. It was a choice not to prioritise easing of regulatory checks. We chose a quick deal, with little regulatory alignment. We could choose differently. 12/
The UK government can choose to prioritise easing checks on food exports to the EU. But it will probably mean less regulatory divergence. We can choose to prioritise a data equivalence agreement, but that might require certain commitments. 13/
The government could argue that global Britain means pursuing deals and regulatory freedom elsewhere. Thus for example a US trade deal to change our food standards. That again is a choice. Can Scottish seafood be sold to the US? Such are the choices. 14/
But this is where we are now. A government supposed committed to free trade has chosen high barriers to £670 billion (approx 50%) of our trade. It can try to reduce them, or accept the consequences. It can try to replace EU trade with further away countries. Tricky. 15/
All of this was known last year and before. What is happening now the inevitable consequence of the decisions taken. But we also need to talk about the future choices. Alignment and reduced checks, divergence and higher barriers. No getting out of it, whatever partisans say. 16/
Goods regulatory checks and to a lesser extent rules of origin also apply to Northern Ireland - Great Britain trade. As widely stated when the Withdrawal Agreement was signed in 2019 but denied by the Prime Minister. 17/
Finally, element of "told you so"? Sure, not denying it. It isn't always easy being told that facts = bias, doors in government being closed because easier to listen to those who are factually wrong but politically right. But more a hope we start dealing in reality. 18/ end
PS a telling little detail. A modern trading relationship is made up of numerous such decisions, and on them will trade and investment depend. https://t.co/1Mt8xjslnf

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The first working day of the new UK-EU relationship. We're going to hear a lot this year from all sides (remain and Brexit in UK, EU, etc) using any possible scrap of evidence. But what we need to look for is trends, over time, so a few to think about in this thread... 1/

Obvious disruption or reduction to UK-EU trade flow. Here we may be thinking e.g. of a permanent 10% fall in traffic, or regular queues, or indeed no change. And apart from goods, the same with individual travel, for work, residence etc... 2/

As a reminder we're not expecting permanent scenes like those of the week before Christmas when borders were closed. But 5-10% reductions in UK-EU traffic would not seem to be out of line with economic forecasts of a hit to the UK economy. 3/

Then we'll need to look at whether UK-EU trade is being substituted by UK-non EU trade. This probably should happen to a degree, and in theory efficiencies could come this way. But its also possible that all UK trade falls, with the UK no longer an EU entry point. 4/

Inward investment is another key post-Brexit indicator. There isn't a single obvious data set here, but the impression of the last four years has been a fall off in manufacturing, but not in services, particularly tech. Continuation would suggest economy tilting to services. 5/
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Ten days in and it seems the government's post-Brexit economic policy is to ignore reality, priority and choice, and just claim with no evidence that everything is going to be great. This, needless to say, is dangerous territory. Exhibit 1... 1/

Here's a good example of what is currently passing for UK economic policy. The theory the UK can be 'nimble' in regulations has been present since 2016. In 5 years nobody has found the detail. We presume others might have a similar idea. And trade needs regulations to align 2/


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So many stories of new barriers to trade between UK and EU, but you might be thinking at some point these will run out. The government is certainly hoping so. Well they may slow down, but trade relations and regulations are not static, and changes will lead to further problems.

The likelihood of continued trade problems for a £650 bn trade relationship is why there should be a huge cross-government effort led by the Foreign Office and Department for International Trade to put in place the necessary resources to seek best results.

There isn't.

So the UK's relationship with the EU currently consists of two not particularly good deals and no consistent effort to manage current problems or prevent future ones. Joint committees are a second order problem to putting in place the right internal structures.

But that's been the consistent UK problem in relations with the EU since 2016. Lack of focus on getting the right internal structures, people, asks, strategy, too much attention on being tough and a single leader.

News just in. This doesn't necessarily mean the right structure being put into UK-EU relations. I suspect Frost's main role is to ensure no renegotiations with the EU.

Also, wonder what this says about the PM's trust in Michael Gove?
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Sorry, the argument is totally bogus. It is a combination of EU hatred and cakeism dressed up in respectable clothing. 1/ n

How do we define sovereignty in trade deals? Complex question, so let's just look at this government. It believes in trade deals and membership of the WTO. These contain binding rules. Therefore for this government sovereignty and binding rules are compatible. 2/

Therefore sovereignty in terms of trade rules for this government is a relative concept either in content or partner terms. So when they say the EU proposals go too far is that because of what is proposed, or who it is proposed with? 3/

We haven't been told the detail. But with regard to the level playing field it is suggested that no country could sign up to a situation where not following the rules leads to tariffs being imposed. However we agree to this in the WTO and FTAs. So that is untrue. 4/

Fish is a slightly different matter, and it is being said that the EU proposal would deny the UK control of our waters. But definitionally that can't be true. We're showing our control through the discussion. We don't have to do a deal. 5/
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On this, I think it’s highly unlikely to occur in the timeframe given. For several reasons, I don’t think it’s realistic for Scotland to secede, and then join the EU, in 9 years.

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Two important dates: March 2016 and January 1st 2021.

Firstly, prior to the 2014 referendum, the Nationalists proposed a date of March 2016 to secede.

Secondly, today - the end completion of Brexit five-and-a-half years after Cameron’s majority in 2015.

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Dividing a unitary state, like the UK, will not be easy. Frankly, it will make Brexit look simple. Questions of debt, currency, defence, and more will need to be resolved ... something not addressed with Brexit.

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