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/

Some compelling evidence at the NI Affairs Committee this morning on Brexit, the risks of smuggling, organised crime, the "soft underbelly" of the Irish border, the loss of the European Arrest Warrant and what might replace it

2/ Giving evidence were Simon Byrne, chief constable of the PSNI, Mark McEwan, assistant chief constable, Steve Rodhouse, of the UK National Crime Agency, and Steve Tracey, of HMRC. Here's the gist of what I've just filed for @rtenews online:

3/ A UK law officer has raised the prospect of intl organised criminals trafficking drugs, people + firearms into the UK via Ireland because of tighter controls at GB ports thanks to Brexit. He also suggested that Ireland may have to tighten security at its ports accordingly.

4/ Steve Rodhouse, DG of Operations with the UK National Crime Agency, said organised criminals would be making a “fundamental choice” as to whether they continue to traffic drugs, people and firearms into the UK via English ports...

5/ ...or whether they might decide to switch routes into the UK through Northern Ireland via the Irish Republic.
Mr Rodhouse told a House of Commons committee that such trafficking was already underway through what could be termed the “soft underbelly” of the Irish border.

The risks that arise from Merkel's departure this year aren't really linked to her succession, but rather the vacuum she leaves behind in Europe. For Brexit/UK watchers, this is an important transitional year for the EU - & one worth paying attention to
Thread 1/

The outcome of Ger elections in Sept is highly likely to be a Black/Green coalition. Positive for Ger & EU. All the contenders to replace Merkel are also mainstream, some just more conservative than others. See @NazMasraff & @COdendahl very good analysis & threads for more 2/

Yet despite this constructive outcome, in short & medium term, Merkel’s departure will leave a large gap in EU no leader can credibly fill. @EmmanuelMacron will try, but without Merkel or strong partnership in Berlin, his more disruptive, abrasive style won't succeed 3/

Merkel's presidency last year is a class example of her deft political skills. Landing deals with UK & China (whose real value is framework & basis for broader political co-operation they provide); on €750bn Recovery Fund & rule of law; & climate 4/

Of course there's a lot of criticism about compromises she brokered. There is some truth to them. But very often these critiques pay little serious attention to the counterfactual, for eg, of leaving Pol & Hu behind. I think the price would have been too high to pay 5/

On March 17, the Netherlands will have general elections.

Two parties - PVV & FVD - want a Nexit, a departure from the EU, in line with Brexit.

As the reality of the EU-UK trade agreement kicks in, let's take a look at what these parties

Firstly, good to note, here is their recent polling,

PVV: 14% - 23 seats (currently 20 seats)
FVD: 2.5% - 4 seats (currently 2 seats)

A government needs 76 seats to govern.

Give or take, these parties appeal to about 20% of the electorate.

/2

FVD wants a so-called "intelligent Nexit" because - arguably - they think the UK's departure was not-so-intelligent.

"Intelligent" Nexit. Lots of nodding

But FVD doesn't want to leave the EU, they want an end to the EU.

/3

They want a "different cooperation model among sovereign states" based around free trade, conveniently assuming that the EU will automatically cease to exist once the Dutch vote 'Leave'.

And EFTA should be the basis for the new model.

/4

It's full-on 'magical thinking'.

If you want to join EFTA, sure, make the case.

But be truthful about what it means.

The FVD decides to disregard the EEA agreement, which governs trade between the EFTA-4 and the EU27, and the EU rules and regs that EFTA countries follow.

/5

1/19

I am pretty annoyed about Starmer's statement about FoM on the Marr Show today, but I'm still not sure what the thinking behind it is. If it's just that this is not the time to talk about EU allignment, fair enough, but it could have been expressed in a more nuanced way.

2/19

Because, rest assured, there will have to be a reallignment with the EU. This will be necessitated not only by the economics but also, most likely, by unfolding events in Scotland and Northern Ireland.

3/19

I am not convinced that complete endorsement of the Tory's Brexit is required to win back the red wall seats; its not what a careful analysis of polling says and it's, frankly, treating red wall voters as idiots while pandering to their supposed idiocy (pretty patronising).

4/19

Given the well-documented harms caused to border trade, UK-based European hub distribution centres, manufacturing (e.g. BASF) and fishing that have emerged just in the first week, it's pretty obvious that THIS Brexit can't be a success.

5/19

Indeed, given that these problems have emerged in a period when cross-border trade has been at a minimum we can bet that things are going to get much worse, as the odious Gove has admitted.

NEW: 🚨🇪🇺🇬🇧🚛🚚🍤🐟🚢🇬🇧🇪🇺🚨 Building of Brexit border posts faces delays via...industry calling for delay to July 1 U.K. #brexit border roll out - my latest via ⁦@FinancialTimes⁩

This goes back to last year, when UK gov got £430m of bids for new Border Control Posts and only funded £194m worth - and those bids that won took a 33pc 'haircut'. Result, everyone unhappy - those that got nothing, and those that won, got not enough

The result is that ports looking to build BCPs to accommodate new border coming in from July 1 say they haven't got enough money. They want either delays to border on July 1, or flexible implementation. /3

So as @timgmorris of @UKMajorPorts group tells me: “We need urgent action from the government to show flexibility either on the July 1 deadline or what is required on that date....or accept potentially serious implications for traffic flows this summer." /4

@timgmorris @UKMajorPorts As @richard_bpa of @britishports says “There is now a real danger that customs infrastructure won’t be ready by July in some ports and we’re urging ministers to take a pragmatic approach to ensure that goods can continue moving at those locations,” /5

As is traditional for this time of year, and more in hope than expectation, my top ten trade / Brexit hopes for 2021...

1 - The UK Government ditches the unnecessary secrecy and engages much more openly with business, NGOs etc about their priorities, and reflects them

2 - Parliament steps up its game on government scrutiny beyond select committee reports and starts expecting answers on why priorities have been chosen, why trade agreements with which countries, what the content should be etc

3 - UK business do their best to keep on exporting and importing, innovating and partnering, to overcome the new barriers in their way, and also to keep shouting for government to remove barriers as they arise

4 - Brexiteers show even the vaguest hint of interest in the views of those who continue to want strong ties with the EU, rather then repeating over and over again, to even the vaguest hint of criticism, "you lost suckers, get over it"

5 - Remainers, rejoiners and the like stop talking quite so much about how the 2016 referendum was stolen from them, which is becoming both history and suggests that 17 odd million people were conned

(NB not confident on the last two)

Small business in particular struggling with new Brexit red tape. Entirely predictable, and a function of a world trade system distorted against smaller traders. Stay with me a short while as Brexit threadmeister and story author @pmdfoster may say... 1/

The nub of the issue is the extra costs for most exports, whether this is paperwork or meeting different regulatory requirements. A fixed cost per exported load inevitably adds a higher percentage cost to small than larger business... and they may lack expertise. 2/

You'll note that in the EU, with virtually no paperwork or differing regulations, the costs of exports are similar for smaller and large companies - though even there there is a big company bias, because who can afford to lobby for friendly regulations? 3/

The same unfortunately typically applies to trade deals. If you are Nissan and threaten to leave the country without the right deal you have more clout than a small cheesemaker. As we see. But is it just the EU that is over-bureaucratic? Sadly not... 4/

One of the best UK business groups on trade policy @BritAmBusiness (and yes you can quote me @EmanueAdam) has a new report out on a UK-US trade deal and SMEs. It shows opportunities. But unfortunately problems unlikely to be solved. 5/

At today's Future Relationship with the European Union Committee - we're hearing from @CSBarnard24 that the deal has a slightly "alice in wonderland quality" about it - nothing really appears quite as it first looks. If you compare to what we had until 1 Jan, it falls short. 1/

For example, there's a statement that the dispute resolution mechanisms doesn’t apply, but if you plough on until the end you see that some chunks of the DSM are actually incorporated over non-regression provisions. @CSBarnard24 2/

From @SamuelMarcLowe: "the premise of this agreement [is] to remove tariffs & do v little to remove barriers to trade and services. If you’re prioritising the economic status quo and economic integration with Europe then of course this deal is going to disappoint you." 3/

"This deal is actually very unstable", says @CSBarnard24. "One of the problems is that this constant contestation of the deal creates quite a lot of difficulties for businesses." 4/

"If you’re a car manufacturer that wants to invest in a new plant, you don’t know whether tariffs are going to be imposed either because the deal is brought to an end or due to potential govt retaliation - this is the main concern of this deal." @CSBarnard24 5/

The UK refusing to give full diplomatic status the EU's mission in London is baffling at at time when @BorisJohnson is trying to connect with @JoeBiden - because it recalls what Trump administration did to the EU ambassador back in 2019. Stay with

@JoeBiden The spat has been going for a while - we reported it in May, when the #Brexit trade talks were getting testy and - I assumed - it was the UK seeking a bit of leverage as the talks progressed. But we have a deal...and still no deal on the EU

@JoeBiden Essentially the UK government wants to treat the @EUdelegationUK as a "international organisation based in London" - and not accord it full diplomatic status, as almost every other country in the world does, including the United States /3

@JoeBiden @EUdelegationUK Indeed when EU formed it's External Action Service (EEAS) the UK supported the idea that EU representatives should be full ambassadors - a fact reflected in the Treaty of Lisbon which we signed - and which reflected on fact EU had a currency, made laws etc. /4

@JoeBiden @EUdelegationUK It took some time for everyone to recognise this, but after @BarackObama came to power in 2016 even the USA did the same....then along came Donald Trump and in 2019 surreptitiously downgraded the status of the EU ambassador @D0Sullivan /4

Breathless accounts of brilliant negotiating are oddly unaccompanied by statements of UK wins.

Twice the PM has signed up to deals he previously said no PM could sign up for. The level of self-deception in turning these into triumphs is off the scale.

A wise man has suggested that Johnson's self delusions are good for the UK in the way he folds under EU pressure but denies it - that this actually delivers the best result.

But it doesn't do much for the country's politcal debate to have such delusions at the heart of the most important economic relationship. And they don't have such delusions in Belfast.

Perhaps it is the way of UK politics that no leader can be seen to be pro-EU, that the UK must be seen to be bigger than the EU, even though the UK is obviously smaller and needs the EU for trade.