The lies and misrepresentations spun by Brexiters (and the UK government) ever since the 2016 Referendum are coming home to roost. While niggles and irritations were expected, they were seen as transitional. But major consequences for the British economy are heaping up.
When it comes to the day-to-day implementation of Brexit, delays in cross-border travel and low-level friction were expected on both sides. However, the misjudgments and the poor preparation in finalising the deal are resulting in serious consequences for the British economy.
The adjustments required following the Trade and Cooperation Agreement (TCA) concluded on the last day of 2020 are being hampered by the pandemic in the UK, which is worsening each day.
That would seem bad enough. But the lack of trust and goodwill is also having an effect. On the British side traders and others are increasingly disappointed about Brexit itself and in the IT systems the government was supposed to put in place to facilitate cross-border traffic. This included for traffic passing from the UK mainland to Northern Ireland – which is now part of the EU internal market for goods and agriculture, subject to the Northern Ireland Protocol pursuant to the earlier Withdrawal Agreement.
For the EU, particularly galling has been the absence of any remorse on the part of the UK in enacting a law to allow it to cancel a key part of the Northern Ireland Protocol (a treaty commitment) should it not suit – a breach of international law in anyone’s language.
The absence of tariffs and quotas was, superficially, attractive to the British people and sold as such, but these benefits are only available if goods and products satisfied the ‘rules of origin test’. This hides a multitude of non-tariff barriers that can negate a trade benefit in the first place.
A product that is the compound of inputs of both home and foreign origin may be assessed as being largely foreign and therefore not eligible for tariff or quota free treatment. The calculation can be complex and a cause of friction for both parties.
Underlying the EU’s lack of trust are assertions that the UK is planning to create ‘a Singapore on the Thames’. That would turn the whole of Britain into a free port without tariffs or quotas, without inconvenient ‘rules of origin’ in the formation of goods, and without constraints on the deregulation of product and labour standards and allow subsidies for some sector. This would give the UK an incompatible competitive advantage over the rest of Europe, a situation that could create enormous divisive pressures within the EU.
Meanwhile, both sides are causing friction at the borders by insisting on compliance with new documentary and health requirements that many long-haul truck drivers either do not understand or cannot handle. Some are therefore refusing to carry goods one way or the other if it means they might find themselves stranded on the wrong side or left with empty or half-filled containers for the return journey.
This particularly affects deliveries of perishable food (especially seafood), checks on chilled meats, household materials, and industrial parts and components integral to supply lines. Cross-border service industries, apart from those that can be accommodated within the digital world, are falling apart.
And tourism, when the virus is defeated, will look very different from before. Any sense of entitlement that Britons may have cause to feel in Europe will have evaporated.
It appears that some economies are becoming less inclined to engage in trade and are withdrawing into their own systems and cultural patterns – a familiar picture to that of the 18th century. A UK ‘Changing Europe’ Report has estimated that in a 10-year period, UK exports to the EU will fall by 36% and imports by 30% compared with the figures before Brexit.
Where and how might these reductions be made up? By the US? By Australia? We might in time be dealing with a different world if the US sought to re-enter the Trans Pacific Partnership Agreement (TPP) on terms acceptable to the existing parties (still a long shot even with President Biden) or if the UK were to seek admission (which might be more likely if it had successfully negotiated an FTA with Australia).
Brexiters are still reluctant to take blame for the negative consequences of Brexit, either blaming the EU for acting unreasonably at every opportunity or blaming Brexit ‘Remainers’ for continuing to sow discord and exaggerating the visible consequences.
Prime Minister Boris Johnson is aware of the suffering of the fisheries and music industries and is offering compensation for both. However. the more that Brexiters call for compensation for adverse consequences, the more they undermine their original argument. How ironic.
The Brexit Agreement (the TCA) is also yet to be ratified by the European Parliament, due by late February but now extended to April, ostensibly to enable it to be translated into all the languages of the EU – distrust could further deepen in this time. The TCA is being applied provisionally with the agreement of the European Council of Ministers.
Further evidence of diminishing goodwill is the graceless refusal of the UK government to grant full diplomatic status to the EU’s First Ambassador to the UK – even when there is still much to negotiate.
As pointed out by Professor Chris Grey in his authoritative blog, now titled “Brexit and Beyond”, the government’s justification was that the EU is not a ‘nation state’ but ‘an international organisation’.
“Yet for years the Brexiters’ core complaint was that the EU had become a super-state, making the UK’s membership sovereignty-sapping in a way that was quite different to its membership of other international organizations. So as the costs of Brexit rip through our country, revealing all the lies told of there being no costs, it is tacitly admitted that this was another lie. Indeed, it was the foundational lie.”
Andrew Farran in his younger days was a diplomat, Commonwealth civil servant and law academic (Monash). His subsequent business interests included international trade, intellectual property and publishing, and wool growing. He was a regular contributor to Pearls & Irritations from 2017 – 2020.
Writes extensively on international affairs and defence, contributing previously to major newspapers (metropolitan and rural). Formerly director of major professional publishing company. Currently apart from writing he directs a registered charitable foundation with links in both Australia and overseas.
Comments
4 responses to “Brexit still not done and dusted?”
With their support for Brexit and a newfound urgency over the impact of Covid, most British newspapers are leaving it to the Guardian to inform the public of what Brexit means in practice since 1 January https://cutt.ly/vj5sOae.
Fishers were keen supporters of Brexit, and despite their small contribution to GDP, their voices were amplified to carry an exaggerated impression of their value to the nation. Now as their exports to Europe lie rotting in transit while customs requirements are met, they have become very vocal victims as they look around to blame someone else for their self-inflicted pain. They, as much as anyone relied on the benefits of being in the single market, yet they took little encouragement to vote to leave it. They were so used to being part of it they have forgotten, or never realised, what it is like to be outside the tent with us.
Now that the right-wing media have had their victory, smaller interests are wailing and pleading their case on Youtube.
And there is still no deal about how financial services are to be handled. These services bring much more to the British economy than fishing.
I’m trying to understand why anyone is surprised at the massive inconvenience to all parties as Brexit unfolds. To me it demonstrates the complexity and bureaucracy surrounding the entire European project, which has caused massive unemployment, social disruption and growing inequality in many nations created by a growing and largely unelected elite. To be blunt, the original concept of the EU project is far removed from the final product, which is only kept afloat by the ever changing rule changes and manipulations of the larger EU members. The EU is not a democratic institution and it is clear that the poorer States are even poorer and more dislocated than they were pre-EU and now so deeply into the EU structure that it would be near impossible for withdrawal. The pain that the UK is experiencing in my view is far less than had they joined the monetary union and became a vassal of Brussels with no controls over their fiscal abilities. The economy is not “damaged” as it’s merely an abstract of thinking as the sovereign UK is a monopoly currency issuer. The UK Government has sufficient monetary capacity to survive the issues arising from Brexit and the long term benefits are well worth the short term pain. That’s not to say that tourists and nation hopping migrants are not going to be miffed, or that business people won’t have their profits clipped for a time or that the City has to pull back from it’s parasitic manipulation of monetary markets. If the Government is prepared to step in and counter the issues that will affect ALL citizens and ignore the free riders and bottom feeders, then the UK will be a far better place for citizens in the future. The dream that some may have liked to retire in France is hardly a reason to suggest the countries will be thrown back to the 18th century.
Fair enough comment. But is it worth practically losing Northern Ireland, and in the medium term, probably Scotland? Not to mention little Gibraltar which is now part of the Schengen zone- which must be the ultimate insult to Empire when EU citizens will be waved through, but Brits subject to visa control!
You can’t achieve the best of British, when you are losing parts of it!
Switzerland has been surrounded by the EU.
It is therefore necessary to make the UK into a tax and banking haven. The large number of Russian oligarchs shows the future.
The trickle down may be rather pungent for some decades