Anniversary Thoughts

Exactly 365 days after the Referendum decision to leave the European Union the Prime Minister offered to let EU immigrants who’ve been in the UK for five years remain and enjoy all the rights of British citizens. Apparently that’s not good enough, according to Jean-Claude Junker, however, it’s infinitely better than the EU’s offer to British citizens living in the EU – what offer? How can Remainers tolerate this clown presiding over their lives any longer than necessary? The EU has to do everything “by the book”, or so it says. This constipated monster has all the laxatives it needs in its bottom drawer, it actually breaks the rules anytime a powerful-enough voice demands it (Chancellor Merkel’s for instance). Angela Merkel said of the proposal that it was “a good start … but it was not a breakthrough”. Given the ascendant position of Germany, and especially Mrs Merkel, in the EU we will take this as an indication of how the EU will respond to this and other matters under negotiation.May-Merkel There is a major shortcoming in Mrs May’s proposal, in which the legal arbiter would be the UK Supreme Court rather than the ECJ, which means the EU would lose control of the UK’s borders. The European Commission will not accept that. Obviously the crazy woman still thinks Brexit means Brexit.

We expect that, given that the EU Directives or “negotiation mandate” is fixed, the British team will offer proposals and will then be expected to detail these. The response will be that the proposal is insufficient, accompanied by snide and provocative remarks from the EU sidelines. This will continue while, bit-by-bit, a proposal is adapted until it matches the relevant Directive, at which point it will be approved. So far – it is early days – the British team does not seem to be up to dealing with absolute stubborn resistance to compromise. Barnier-DavisAccepting without argument that “sufficient progress” on the exit agreement has to be reached before any discussion on a trade agreement can start, gives a first indication of how things may continue. If this is so, there will be no negotiation, just compromise on one side until agreement is reached to implement the Directives, or until the UK team withdraws because it will not offer sufficient ‘compromise’ and has to accept the blame for sabotaging the ‘negotiations’. The EU has set itself up to avoid delegating any authority to compromise, in order to avoid having to negotiate an outcome that may seem attractive to citizens, or even governments, in other member states.

A free trade agreement between China and Switzerland took effect in July 2014. Talks began with a joint feasibility study in 2010, followed by nine rounds of negotiations between 2011-13. The agreement, in addition to removing bilateral tariffs and trade barriers on goods and services, also provides for intellectual property protection which would be vitally important to Britain too. FTAWhilst the EU has free-trade deals with countries whose economies represent about 10% of the world’s GDP, Switzerland’s deals cover four times that amount. Australia now has ten FTAs currently in force with China, Japan, Republic of Korea (these three all signed in the same year), New Zealand, Singapore, Thailand, US, Chile, the Association of South East Asian Nations (ASEAN) and Malaysia. Why couldn’t we do the same and why should it take forever as Remainers frequently claim? 

The EU is a dreamland for corporate lobbyists (see The Single Market and the Four Freedoms). If Brexit negotiations fail and WTO tariffs are introduced both sides will become poorer but the pain will be focused in particular areas, none more than the German car industry. UK-EU flagsDeloitte has done an analysis suggesting that the impact could cost 18,000 German jobs from lost exports to the UK, and that’s without considering non-tariff barriers such as customs delays that are also threatened. Imagine the clamour in Merkel’s ears (assuming she’s still in office). Meanwhile UK manufacturers are making rapid progress in sourcing parts locally. Other powerful interests will be banging on doors (and desks) in Brussels and at home, such as French farmers. Perhaps the chances of a transition agreement are quite high after all. 

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Does anyone have a clue what Labour’s position is on Brexit? Its election manifesto said it would end freedom of movement, which is tantamount to saying we’ll leave the Single Market (since we can’t pick what cherries we prefer). Corbyn-McDonnellWhile Corbyn and McDonnell agree, many in the Shadow Cabinet and Parliamentary Party want to remain in the SM, or somehow retain all its benefits. The Tories have their own differences but seem a bit clearer, even Europhile Phil (Hammond) says we will leave the SM and CU. Probably Labour will oppose anything the Conservatives put to Parliament or its committees while claiming to be following its (vague) manifesto promises. After all, they have little or nothing to gain by supporting the government. 

Chatham House, a reliably pro-EU think tank, has published the results of a survey across ten EU member states, distinguishing the views of what they call “elite individuals in positions of influence” (1,800 of them) from the views of “a representative sample of 10,000 members of the public”. They conclude that “there is a divide between elites and the public”. The results show that only 34% of the public feel they have benefited from the EU, while some 71% of the elite believe they have benefited. There is no consensus in either group about the federalist agenda of the EU, which illustrates a shift in perceptions from a time when ‘elites’ were more uniformly accepting of the integrationist agenda; the wider public have never had a majority supporting ever closer union. Chatham House-2A substantial number in both elite and public groups want to see more powers repatriated to the governments of member states. The authors of the Chatham House survey argue that “Genuine political renewal in Europe will require a more open, imaginative and even conflictual debate.” It is possible that by “genuine political renewal” the authors mean getting more people to be enthusiastic about the EU. We believe this to be unlikely, given the deep disdain for public opinion among EU leaders (and indeed among elites in member states) and the lack of democracy that is the result of this disdain. We believe that it is more likely that the EU will continue stubbornly on its current course, further alienating public opinion and thus bringing about its own demise in the not-too-distant future.

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