Brexit Day 35: Trade banter
Very few people in London talk trade. It’s been outsourced to Brussels for such a long time that nobody has paid the slightest bit of attention to it. Well that’s all changed now. Yesterday’s blog on Fox, the US and the EUCU prompted quite a bit of email traffic and it’s worth sharing some of what people sent.
From a friend who works on international tax issues for a living:
‘Doesn't the very creation of Fox's department signal that international trade deals will be done, i.e. that we must leave EUCU? If we remain in EUCU, we cannot negotiate a single tariff down ourselves, so the entire department would be completely pointless.’
Extremely good point, well made. I personally think Fox’s view totally stands to reason. But in the messy compromises that are bound follow, will there be room for intellectual purity? And, while I deeply hope this is not the case, we’ve had pointless departments before...
Department of Administrative Affairs
Then, from a former DC colleague who points out that perhaps I should pay more attention to what’s going on in the real world:
‘At this point in the election, there isn’t a single person sticking their neck out for trade deals of any sorts. Just look at the signs below from the DNC that were everywhere opening night… Obama’s party has completely chucked his signature pivot to Asia out the window.
And the GOP isn’t nudging much either – McConnell has almost already eliminated the chance of TPP getting passed during a lame duck after the election, and who knows what happens then? Both Clinton and Kaine have flip-flopped on their tacit support of any trade deal, so if they win they’ll want a massive rewrite.
And who knows about The Donald?…at this point he’s more likely to want to get a trade deal with his new BFF’s over in the Kremlin. The GOP – the party of big business and free trade has all of a sudden gone isolationist on trade thanks to Trump. So at this juncture we have both parties completely against them, and their electorates whipped in line. I just don’t see at this juncture how either Clinton or Trump can pivot in January and start new negotiations on anything.
While I’d like to think that a deal with the UK could be in the works, both parties are collectively shooting themselves in the foot over any future YUUUGE deals’
We have managed to time Brexit for the moment when appetite for trade liberalisation in the West is basically in the toilet. This is a formidable challenge for the UK. And as a further reminder of the real world, I was also forwarded Alan Beattie’s FT piece about Britain’s route to WTO membership by a former diplomat who has worked on trade deals with the following comment:
‘Are you aware that the UK is not/not a member of the WTO by itself? But only as part of the EU and so post-Brexit wouldn't even get WTO deal access to the EU/international markets’
I was feeling optimistic yesterday so I replied that I thought we would get sufficient transitional arrangements from the EU to give us time to sort out the WTO stuff. The response:
‘I like your faith in the WTO. It's possibly worse than the EU for useless negotiations that never go anywhere.’
Optimism fading again.