What news now of the last few weeks of negotiation before the end of our transition period on 31 December 2020? Well, all I can say is that there’s a lot of, he said, she said, they said, going on with one side (the UK) saying on Friday (16th), that’s it, no more talks, the country must prepare for a no-deal scenario. Why? Because, apparently, the EU is being intransigent and not changing their position, while the other side (the EU) says talks will continue, but not at any price. And then we have a Johnson spokesman saying there is simply no point in Michael Barnier coming to London next week unless he undertakes the talks on the basis set out by Johnson. And then again, we have the Dutch Prime Minister saying that it is obvious Boris Johnson does want the talks to continue. And indeed, on Sunday the door (again apparently) is ajar, said Michael Gove. Oh, him.
It seems our government playing a dangerous game of chicken, much to the disappointment of the policy chair at the City of London Corporation, Catherine McGuiness, who says that businesses and households on both sides of the Channel stand to be the main losers.
But are they playing chicken? You cannot tell. Basically, the key question is, does our government want a deal? Or do they think they will do far better with no-deal and trading under WTO terms?
Indeed, our great leader has been using some interesting language in that he’s been saying that as we’re obviously not going to get a Canada-style trade agreement we should prepare for the trade arrangements that are more like Australia’s. Yes, well, OK, but as the EU does not actually have a trade deal with Australia that means, in effect, go prepare for a no-deal.
And what exactly is the WTO and what are these ‘rules’ and ‘terms’? The World Trade Organisation is a forum where 164 governments negotiate trade rules between each other. It was at one point an international agreement known as the GATT (the General Agreement on Tariffs and Trade 1947) but after 1994 it is now an international organisation. And if you think that the UK is escaping from a heavily over-bureaucratic organisation to a simpler version where free trade is king, you will get rather a shock when you scrutinise the WTO structure, which consists of numerous councils, committees, bodies and panels.
And the WTO ‘rules’? These encompass all trading relations between the EU and the UK including any form of free trade agreement including a no-deal.
And the ‘terms’? These are the individual commitments that countries have agreed in the WTO, which might include tariffs, agricultural subsidies, and arrangements regarding service markets.
The notion that falling back on the WTO rules gives us more freedom to negotiate as we please, with whomever we please, is partly right, but from January 1st 2021 all trade between the UK and the EU will be based on purely WTO terms and consequently import duties and various controls will be immediately imposed on trade between the UK and all the countries within the EU, especially on agriculture and the components that cross borders to make cars, for instance, and food products.
And then there are the ‘quotas’. These let a country import a limited quantity of a product at a low or duty-free tariff, with anything over the quota being charged a much higher duty. Just one example of this is of lamb, and I quote from a report that,
“The UK currently exports 80,000 tonnes to the EU. After Brexit the EU27s quota available to the UK and others is only a proposed 378 tonnes. The UK currently imports 11,000 tonnes duty free from Ireland, France and other EU members. After Brexit, those EU countries could only export duty free to the UK through a miniscule 22-tonnes UK tariff quota available for all-comers.” *Reference below
I know, I know, we could eat our own home-grown lamb. The butcher near me sells lamb from a local farm, but, oh my word, the eye-watering price of it. I rather think that lamb will be off our shopping list!
Furthermore, after leaving the EU all the free trade agreements that have come via the EU will be lost to the UK. These consist of 35 countries that have an agreed trade deal, 48 that are partly in place, 22 countries that are pending and 21 countries that are suspended. The UK will have to negotiate with each of these countries separately to regain the benefits that it already had. One rather wonders at the capacity of the UK to do this.
The thing is negotiations will probably resume, but to what end, as there is very little time left – another 4 weeks possibly? And remember that if a deal is agreed, do not throw your caps in the air at Johnson’s coup. It will be a thin deal at best with years of negotiations to secure arrangements on (as I wrote in a previous post) mutual recognition of qualifications, financial services, fishing, farming, security, anti-terrorism, aviation (gosh I hope they work that one out quick) data policy – the list could go on and on.
One tiny example from the list is that of border security. Currently police can get fingerprints and DNA information within 15 minutes and police checks via the European Criminal Records Information System are instantaneous. Outside the EU the UK will find that similar checks could take 66 days.
Why do this? Why leave? Yes, I know we voted to leave (with a very small margin do not forget), but what is in the minds of our elders and betters who are taking us out? Almost half our trade is with the EU. What benefits are there, please tell me, do! Surely, they must see some benefit. Actually, forget looking into Johnson’s mind as he’s a will-o-the-wisp when it comes to strategy. He goes where the wind blows – anything and everything is done to service his career. But what does that nice guy, Chancellor, Mr Money-bags, Sunak think? Of course, who knows what is in anyone’s mind, apart from, it is probable that our Chancellor thinks, along with many other, including all the Europhobes, that we will thrive outside the EU. Yes, there will be short term misery (and yet they won’t suffer) but it is the escape from the EU along with its rules and regulations (you know the ones about food hygiene) that they seek. Anything to drive a deal with other countries, the States, for one, that is unencumbered by such regs is a good thing to these types.
I mean what do we know, they are our leaders. I have to say, emphatically, that this is why there should never, ever, have been a referendum on such a complex matter. It was fought over with emotion, it was voted on with emotion. And I include myself here as I voted on a feeling, deep inside, that I did not want to leave this community of countries. But the referendum was so sparse on facts, with so many lies being touted and so lacking in leadership.
Meanwhile, whatever happens over the next four weeks, our economy will be devastated by us leaving the EU. And the poorer parts of the UK currently suffering with increased cases of Covid will suffer even more hardship. Tell you what, if I’m still around in 10 years time (when I’m 84!) let’s see where we are and how the country managed outside the EU. OK! That’s a deal!
Penny Kocher, 21st October 2020
References and further reading:
*Catherine Barnard and Anand Menon. The UK in a Changing Europe. What would ‘trading on WTO terms’ mean for the UK?
Larry Elliot. Boris Johnson’s spilt from Brussel’s echoes Henry VIII’s break with Rome. Guardian, 18 Oct 2020
Daniel Boffey, Peter Walker. Brexit negotiations expected to resume despite UK’s tough rhetoric. Guardian 18 Oct 2020
Dan Sabbagh et al, UK police ‘unable to cope’ if no-deal Brexit cuts EU data sharing. Guardian 20 Oct 2020