The big Brexit thread - news, updates and discussion

[brogdale]

Now the the UK has 'left' the supra-state, perhaps it's time to move onto a new thread considering the negotiations to establish a new trading relationship with the 27?

Of course, the opening gambits will be negotiating positions, but did we expect the right party of capital to come out so 'no-dealy'?

Here is Chief Sec. to the Treasury, Rishi Sunak, on Sky this morning:



"we don't need to [have a trade deal]"

 

[cupid_stunt]

They are basically keeping 'no deal' on the table as a negotiating tool.

 

[brogdale]

They are basically keeping 'no deal' on the table as a negotiating tool.

The new (no) deal?

 

[SpookyFrank]

The new (no) deal?

Yup, these lot only have one move and it's a fucking stupid one.

Johnson has come straight out of the blocks saying he'll get a free trade deal without any regulatory alignment. Which clearly the EU won't stand for.

 

[brogdale]

According to Johnson:

 

[cupid_stunt]

Johnson has come straight out of the blocks saying he'll get a free trade deal without any regulatory alignment. Which clearly the EU won't stand for.

Why not?

The EU & the UK have both talked about a Canadian style free trade agreement, and that doesn't involve Canada following strict regulatory alignment with the EU.

 

[not-bono-ever]

GghhggggjxjxkxkxjckxkfCg

 

[Smokeandsteam]

Yup, these lot only have one move and it's a fucking stupid one.

Johnson has come straight out of the blocks saying he'll get a free trade deal without any regulatory alignment. Which clearly the EU won't stand for.

The dynamics have changed.

The Tories have got a significant majority and the GE result has 'settled' the issue. This is commonly accepted by all parties and the EU will have no route via the HoC to undermine the British bargaining position. Similarly, the Tory remainers have been purged meaning the internal tensions within the Tory party can be better managed.

The EU will come under pressure from member states that have a trading surplus with Britain (basically all of their key players) to maintain those arrangements and finally - and this is interesting - there will be Tories who actively want a deal not to happen and WTO rules to apply.Even the dogs on the street know this.

I agree with you that for the EU the regulatory alignment circle has to be squared off in a way that doesn't encourage others to break away. But the EU negotiating hand is significantly weaker than it was on the 11th December. Basically, the EU have got some thinking to do.

One other point. If Labour adopts a position indistinguishable from the EU, which I believe is the view of Starmer and Thornberry (I don't know what RLB or Nandy say about this) then it will be a further self-inflicted wound. If not now, when will Labour set out what a social democratic, internationalist Britain could look like?

 

[bimble]

£10 to server fund if we don’t end up with no deal exit at end of the year.

 

[not-bono-ever]

The single market must be maintained

 

[SpookyFrank]

I think the EU's desire not to encourager les autres will win out in any clash of aims at their end. And at our end, well as we've seen over and over again the most reactionary aims always win over anything remotely pragmatic. So to avoid accepting EU standards we'll end up much poorer and also beholden to accept any old shit the Americans or Chinese want to foist upon us.

 

[brogdale]

I think the EU's desire not to encourager les autres will win out in any clash of aims at their end. And at our end, well as we've seen over and over again the most reactionary aims always win over anything remotely pragmatic. So to avoid accepting EU standards we'll end up much poorer and also beholden to accept any old shit the Americans or Chinese want to foist upon us.

Essentially correct, ( & expounded in greater detail here), but Smokeandsteam makes the point, above, that it is the internal dynamics and division of both sides that make the process less predictable.

The negotiating team for supra-state may well focus on the desire not to encourager les autres and protect the single market, but the national forces within the 27 might well have other interests. And the Tory coalition of swivel-eyed fundies and even more swivel-eyed loons might well present Johnson with difficult political positioning.

 

[Smokeandsteam]

I think the EU's desire not to encourager les autres will win out in any clash of aims at their end. And at our end, well as we've seen over and over again the most reactionary aims always win over anything remotely pragmatic. So to avoid accepting EU standards we'll end up much poorer and also beholden to accept any old shit the Americans or Chinese want to foist upon us.

It's a simple question for the EU and its member states- what is the most important the jobs and trade benefit from the trade surplus with Britain or regulatory alignment.

I think we would all agree that it's the latter than will ultimately win out, but that the weight of the former opens up the possibility of a more flexible approach than the technocrats would want. Put simply, would Macron really want to explain to French workers why he's pissed their jobs away on a point of principle.

 

[SpackleFrog]

The dynamics have changed.

The Tories have got a significant majority and the GE result has 'settled' the issue. This is commonly accepted by all parties and the EU will have no route via the HoC to undermine the British bargaining position. Similarly, the Tory remainers have been purged meaning the internal tensions within the Tory party can be better managed.

The EU will come under pressure from member states that have a trading surplus with Britain (basically all of their key players) to maintain those arrangements and finally - and this is interesting - there will be Tories who actively want a deal not to happen and WTO rules to apply.Even the dogs on the street know this.

I agree with you that for the EU the regulatory alignment circle has to be squared off in a way that doesn't encourage others to break away. But the EU negotiating hand is significantly weaker than it was on the 11th December. Basically, the EU have got some thinking to do.

One other point. If Labour adopts a position indistinguishable from the EU, which I believe is the view of Starmer and Thornberry (I don't know what RLB or Nandy say about this) then it will be a further self-inflicted wound. If not now, when will Labour set out what a social democratic, internationalist Britain could look like?

Absolutely true, but worth considering that by far the largest exporter to the UK is Germany.

Netherlands is second but still some way behind. Would Germany and the Netherlands be prepared to accept a degree of economic disadvantage in order to go hard-line? I'm thinking particularly as Germany has been working hard to secure new markets for export goods (no idea about Netherlands).

Totally agree Labour need to get their heads around what they're going to say and can't simply stick with the same plan but I'm not holding my breath.

 

[littlebabyjesus]

It's a simple question for the EU and its member states- what is the most important the jobs and trade benefit from the trade surplus with Britain or regulatory alignment.

I think we would all agree that it's the latter than will ultimately win out, but that the weight of the former opens up the possibility of a more flexible approach than the technocrats would want. Put simply, would Macron want to explain to French workers why he's pissed their jobs away on a point of principle.

And of course the same question applies to Johnson, but moreso cos the UK is far more beholden to the EU wrt trade than vice versa. While the political situation in the UK has clearly changed, power dynamics in play haven't changed. No deal fucks the UK harder than it fucks any single state in the EU.

 

[Flavour]

The internal dynamics have changed in the UK politically but the EU was continuing to offer carrots before the last GE in the hope that a government more friendly to the EU might be formed and thus allow the EU to keep the UK "in line" without having to seem too much like the bad guy. Now Johnson has a majority and the gloves are off, they'll come off for the EU too: there's little danger is them seeming like the hardball arsehole negotiator, and Johnson is making their lives very easy by being such a hardballer himself. It's not difficult to see a "no deal" end to transition period, and while it would be quite damaging for the EU, I think they are more than prepared to accept that rather than back down and, as others have said, encourager les autres

 

[littlebabyjesus]

We should all be hoping the UK is kept as 'in line' as possible, btw. The alternative is really fucking shit. The alternative is worse standards and conditions. Let's not forget that - sticking to EU regulations over goods and services is overwhelmingly a good thing. Johnson isn't trying to break free of EU regulation so that he can initiate socialist policies.

 

[two sheds]

I don't see how the EU could agree to any agricultural trade deal (for example) if the UK has different environmental and H&S standards. Would mean food with increased pesticide levels and the like entering Europe.

 

[Smokeandsteam]

And of course the same question applies to Johnson, but moreso cos the UK is far more beholden to the EU wrt trade than vice versa. While the political situation in the UK has clearly changed, power dynamics in play haven't changed. No deal fucks the UK harder than it fucks any single state in the EU.

Britain's exports have been collapsing for a long time. In terms of EU Countries we only sell more to Ireland and Luxembourg than we buy:

https://researchbriefings.files.parliament.uk/documents/CBP-7851/CBP-7851.pdf

So it's not strictly the case that we are more beholden to the EU than vice versa. Most of their economies benefit from tariff free trade with us than we do with them.

 

[cupid_stunt]

It's a simple question for the EU and its member states- what is the most important the jobs and trade benefit from the trade surplus with Britain or regulatory alignment.

I think we would all agree that it's the latter than will ultimately win out, but that the weight of the former opens up the possibility of a more flexible approach than the technocrats would want. Put simply, would Macron really want to explain to French workers why he's pissed their jobs away on a point of principle.

I think a more flexible approach will win out, the EU proposal is published, and as expected the term 'regulatory alignment' is not used, but what appears to a softer & looser 'regulatory cooperation', which is the sort of thing other countries have in their free trade deals, i.e. not required to follow every single new EU rule, but exports to the EU must remain within an acceptable level of standards and range of conditions.

While preserving the regulatory autonomy of the Parties, the envisaged partnership should include provisions to promote regulatory approaches that are transparent, efficient, compatible to the extent possible, and which promote avoidance of unnecessary regulatory requirements.

https://ec.europa.eu/info/sites/info/files/communication-annex-negotiating-directives.pdf

 

[littlebabyjesus]

Britain's exports have been collapsing for a long time. In terms of EU Countries we only sell more to Ireland and Luxembourg than we buy:

https://researchbriefings.files.parliament.uk/documents/CBP-7851/CBP-7851.pdf

So it's not strictly the case that we are more beholden to the EU than vice versa. Most of their economies benefit from tariff free trade with us than we do with them.

Yeah, it is. 50% of UK exports go to the EU. Less than 10% EU exports go to the UK. The UK is fucked by no deal many times more than any EU country. That hasn't changed, and it won't change.

 

[two sheds]

Will be interesting to see whether EU fishing in UK waters will be traded away. Varadkar has said we may need to make concessions to get a financial services deal.

 

[Smokeandsteam]

The internal dynamics have changed in the UK politically but the EU was continuing to offer carrots before the last GE in the hope that a government more friendly to the EU might be formed and thus allow the EU to keep the UK "in line" without having to seem too much like the bad guy. Now Johnson has a majority and the gloves are off, they'll come off for the EU too: there's little danger is them seeming like the hardball arsehole negotiator, and Johnson is making their lives very easy by being such a hardballer himself. It's not difficult to see a "no deal" end to transition period, and while it would be quite damaging for the EU, I think they are more than prepared to accept that rather than back down and, as others have said, encourager les autres

I think this is a fundamental misreading of the situation. The EU know the dynamics have shifted against them. Before the GE they had their supporters effectively in charge of the HoC. They had all of the parties expect the Tories calling for a second referendum and all calling for Remain. All of this is dead in the water now. The idea that now is the time for the EU to go on the front foot is baseless.

Johnson is not 'hardline' either. He's instinctively pro-EU and a deal. What he does also have to do however is manage and keep bound in as much as possible a constituency that is hardline and does not want a deal on any terms.

 

[Supine]

Will be interesting to see whether EU fishing in UK waters will be traded away. Varadkar has said we may need to make concessions to get a financial services deal.

I'm pretty sure this will be a key moment when Brexiteers realise they won't be getting everything they were promised. It'll be one of the first things on the table and the UK already has more favorable terms than other countries.

 

[Smokeandsteam]

Yeah, it is. 50% of UK exports go to the EU. Less than 10% EU exports go to the UK. The UK is fucked by no deal many times more than any EU country. That hasn't changed, and it won't change.

It's 43% and it's a falling share (down from 55% in 2006). Plus if you take, say, Germany about 7% of everything they make comes here and accounts for 3% of their GDP. The idea that this isn't significant and tariffs would be bump in the road is miles off the mark.

But the wider point is this - a deal that provides flexibility within the broader regulatory framework overwhelmingly suits all parties. Ultras on both sides will want to attack this but the dynamic has sifted against them.

 

[brogdale]

Useful FT piece about the challenges of a UK-US trade deal demonstrating one key driver of Johnson's 2020 deadline.

 

[kabbes]

I think a more flexible approach will win out, the EU proposal is published, and as expected the term 'regulatory alignment' is not used, but what appears to a softer & looser 'regulatory cooperation', which is the sort of thing other countries have in their free trade deals, i.e. not required to follow every single new EU rule, but exports to the EU must remain within an acceptable level of standards and range of conditions.

https://ec.europa.eu/info/sites/info/files/communication-annex-negotiating-directives.pdf

Indeed. For example, in my field, the EU have declared that some other regimes (eg Bermuda, Switzerland) have “equivalence”. It’s a completely different set of regulations to the strict ones we have to abide by, but the EU have pragmatically decided “good enough”

 

[mauvais]

I think a more flexible approach will win out, the EU proposal is published, and as expected the term 'regulatory alignment' is not used, but what appears to a softer & looser 'regulatory cooperation', which is the sort of thing other countries have in their free trade deals, i.e. not required to follow every single new EU rule, but exports to the EU must remain within an acceptable level of standards and range of conditions.

https://ec.europa.eu/info/sites/info/files/communication-annex-negotiating-directives.pdf

How often is this true though? I don't think it's the case for cars, for example.

 

[gosub]

Indeed. For example, in my field, the EU have declared that some other regimes (eg Bermuda, Switzerland) have “equivalence”. It’s a completely different set of regulations to the strict ones we have to abide by, but the EU have pragmatically decided “good enough”

Which field? I'd probably gone with Australia as the equivalence example and the Mutual Recognition Agreement they did with the EU is probably what should be aimed for in the short time frame

 

[Yossarian]

Based on Johnson's previous history as a master statesman, he'll spent most of the year trying to play the EU and US off against each other like rival suitors, then splutter in outrage when they decide to run off together.