Three years ago those who wanted to leave the EU never discussed what is now called a Hard Brexit. That is leaving the EU on World Trade Organisation rules. They discussed Norway. And Switzerland. And Iceland. But never not doing a deal. Owen Patterson, who was always been at the extreme end of the Leave spectrum, dismissed the idea of using WTO rules as absurd, and something no one would want. And yet, now it's apparently what large parts of the country wish for. And they call it a Hard Brexit. And free trade Brexit. And they imply that means there are no rules. But there are. And they are deeply disadvantageous to the people of the UK.
Those rules, that are used by only a handful of small countries around the world, require that the UK set tariff rates. The government has already indicated its preferred rates, which are usually nothing. As a result the protection that UK steel, ceramics, tyres and glass currently enjoy against dumped Chinese products will disappear. And so will jobs, of course.
At the same time exporting will be harder. UK exporters will have to prove the origin of all the goods they sell every time they export. This is costly. And time-consuming. And not necessarily trusted. Buyers will go elsewhere.
And unless we have a border in Northern Ireland where this is checked the UK effectively exits from trade because it will be unable to meet WTO rules.
And buyers will also go elsewhere because EU countries will impose tariffs on imports from the UK to be consistent, and trade law and practice requires consistency, so they'll have to. This is not about being penal. It will be about being fair, and that is required of them.
Exporting services will be much harder to. The single market provides rules to provide consistent quality in service supply, which is vital to the UK where service exports are significant. This is not true under WTO rules. This is going to hit the City and sectors like insurance very hard.
There are other changes. The WTO does not protect employee rights in the way the EU does. Nor does it protect the environment. Whilst WTO rules on state aid provide far less protection on issues like defending the NHS from competition and break up. EU rules to prevent tax abuse would go. As would cooperation on simply enforcing tax law, on which the EU has been a pioneer. And cooperation on crime goes too. Whilst government services would always have to go to the cheapest bidder. There could be no bias towards local suppliers. Or those who offer training, or who protect the environment. Let alone against those who abuse tax havens. Price will be all.
Hard Brexit is then not about giving up rules. It's all about adopting different rules. Rules that cost jobs. And impose cost on business. And harm their cash flows, which could send many under. And which means we breach our legal obligations in Ireland, making new deals with anyone nigh on impossible. Whilst protecting UK public services from abuse will be exceptionally hard. And enforcing the law will be much more difficult. And this summary only scratches the surface of the issues. This is not project fear. It's the reality of a ruinously harmful proposal that only the insane, the uninformed and the stupidly reckless would promote.
So here are then questions for Brexiteers, from wherever they come on the political spectrum:
1) How will you protect UK business from dumping?
2) What will you do for those who lose their jobs because the businesses that employ them are undermined by WTO rules?
3) What will you do on the Northern Ireland border?
4) How will you protect exporters who will have massive increases in their costs?
5) How will you support businesses that suffer cash flow harm from the delays WTO rules will impose?
6) What measures are you taking to ensure the NHS does not come to harm from WTO rules?
7) How will you ensure that the quality of government services is not undermined by WTO rules on government procurement that requires that cheapest products be used?
8) What steps will you take to protect the environment when WTO rules threaten it?
9) How will you stop the tax abuse that EU rules help beat and which WTO rules ignore?
10) How will you support businesses that face crises in the UK, as steel and parts of the railway industry have done, when WTO rules prevent that?
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Am I right in understanding that only five, out of the over 170 countries in the world, trade under solely WTO rules with the rest under various trade alliances which can take many years and a lot of work to agree?. So if it is no real issue to trade on these WTO rules, as hard brexiteers proclaim, then why did these 170 or so countries do it?
Precisely
Geopolitics and neoliberal dogma, mostly, to be quite honest. Free trade Agreements have utterly trivial effects on aggregate growth, in the region of tenths or hundredths of a percent over the long term.
That’s not true, in my opinion
When most have them you try to spot the independent statistical evidence is my suggestion
A hard Brexit is the ultimate fantasy for delusional Brexiteers. Many of them still seem to believe that everything will be fine in a hard Brexit scenario. That the UK can just walk away with no deal, no obligations, no legal requirements and that there will be no price to pay. Part of that fantasy is that they think the UK will then be able to get a super Canada+++++ trade deal, even though the EU has made it clear that without a withdrawal agreement that winds up the UK’s past membership, there are no deals to be had, trade or otherwise. Hard Brexit means that when the new UK PM goes to the EU with a begging bowl looking for a trade deal, he/she will be presented with all the outstanding issues from the withdrawal agreement to sort out first. Even Liam Fox seems to now recognize that all roads to any future relationship with the EU go through clearing up the past relationship. It was never going to be any other way.
I have one theory that the hard Brexiteers now essentially want to force Brexit through. Presently there is still the risk that no Brexit could happen, that Article 50 could still be revoked or a second referendum that reverses the first. However, another WA no vote and getting rid of May will see the next PM as inevitably a Brexiteer. There are no Tory compromise leadership candidates to be seen who have a realistic chance of winning. There certainly aren’t any soft Brexit/remain types let alone a Ken Clarke, Michael Heseltine clone. The election of such a leader would then probably take the wind out of the sails of Farage’s Brexit Party. A snap election may well be called and I wouldn’t be surprised if the tories then got a landslide on the back of a promise to deliver a no compromise Brexit that delivers the referendum vote with no deal while also having our cake and eating it.
We then have a hard Brexit – the UK is out of the EU – followed by chaos and failed talks on a future relationship with the EU. The UK then “reluctantly” agrees to most of what was in the withdrawal agreement in order to move on to a trade agreement. The end goal, leaving the EU has been achieved, and the Brexiteers will do what they always do when questioned about backtracking on the withdrawal “deal”, and election promises, they will blame someone else, the EU, “Johnny Foreigner”, but hey, Brexit has been achived. Political extremists always have someone else to blame and it will be the same with Brexit.
Of course, reality will then strike back…..
You may well be right
I think it’s most unlikely that the Tories could secure a majority on the back of promising No-Deal Brexit; I imagine their vote would be no more than 35% – they might be able to do it if there were a strong Lib Dem revival and the Labour vote went down, but I think the more likely result would be a hung parliament or Labour with a small majority.
Surely the easiest way to ensure a No Deal Brexit for an incoming headbanger Tory PM is simply to let the clock run out on the current deadline of 31st October – if no further legislation is passed and no further extension is negotiated then Britain leaves the EU with no deal. It’s as simple as that. And a Boris Johnson (or whoever) administration could simply refuse to bring any Brexit legislation forward until the deadline. Unless some Tory MPs resign the whip and vote against the govt in a vote of no confidence, thus precipitating a general election (after a 14-day waiting period)…
I think the plan you suggest is exactly what will happen
We get No Deal this way
More likely we’d get a general election. I gather only a handful of the Tories are genuine No Deal Brexiteers, the rest would be horrified by the prospect of this leap into the unknown and would seek to avert it. They can’t all hide behind their money till things settle down a la Johnson or Rees-Mogg or, in Duncan Smith’s case, someone else’s money.
Not with BoJo….
The point about so few countries trading on “WTO terms” seems rather pedantic to me.
The biggest two way trade, despite all the bad news about tariffs, still takes place between China and the United States of America
The biggest individual country the UK trades with ( after ourselves ) is the USA.
What the Brexit party are using is a short hand term to describe trade between countries not in a formal trading bloc and without a formal trade agreement ( or “conspiracy against the public” to use an 18th century term ).
If there’s a better description of such trading relationships then the Brexit party should use it, but what should that be?
All trade between UK and US (and most everywhere else) is currently courtesy of agreements between EU and US (and most everywhere else). If the following is to be believed https://www.bbc.co.uk/news/uk-politics-47251643 (at least some) non-tariff issues between US and UK will be protected after UK leaves EU. But where is progress on non-tariff issues with other countries and tariff issues between UK and everywhere – especially the EU? Where is the ‘free and frictionless’ trade going to come from in the event of No Deal? I don’t think the Brexit party (or the Conservative and Labour parties) want to talk about this or anything else of a practical, factual nature.
The EU has more than a hundred bilateral (trade) agreements with the USA. Such agreements don´t require notification of the WTO.
The Open Skies agreement is one of them. Mutual recognition agreements are another part. Add simplified customs procedures and trusted trader agreements. Right now the UK trades with the USA under those agreements.
It´s the same with China and the EU.
Tariffs are just one obstacle to trade. Non-tariff barriers like regulatory checks are an even larger one. That´s why almost nobody trades just under WTO rules.
Agreed
Can we think of any other nation or country which doesn’t define its own borders, leaving that chore to others, should they be so inclined? Isn’t it an essential to the treaty definition of a nation or a country or a trading area that it clarify its borders and not simply say, “It’s over there aways, ask someone from the EU, they’ll know,” as Farage seems to be proposing?
Don’t fool yourself.
A “hard-brexit” was always what those most vocal about leaving the EU wanted, and still want.
Why would you ever consider that people whose main aim is to get rich and stay rich, would ever care about “little people”.
If there is one thing that this disaster should show us, it is that Big People do not care about Little People (there is always someone else to blame).
Welcome to Hard Brexit.
An event that will prompt a fire-sale of UK assets to enrich the Vulture C[r]apitalists.
This was never about the EU, and always about money.
V.ery interesting and informative, thanks.
Yesterday, I received a letter from my MP (Tracey Crouch) suggesting that a hard Brexit would not be an apocalypse because government ministers had worked hard to avoid any damage. As she had voted for no deal in one of the indicative votes, I had asked her how a no deal Brexit would benefit her constituents, to tgat I received no answer.
I’d like to copy this to her, if that’s OK with you.
Of course
Resident Brexiteer here to answer as best I can. …same caveat.
First we have to get rid of the dichotomy falacy. Politics and trade are dynamic, they change over time. To make conclusions based on a static idea is simply a false dichotomy.
1) Anti-dumping policies are an internationally accepted response. Outside the EU, the UK can not only respond more rapidly to this, but can respond to dumping done by EU countries too.
2) Yes, the UK economy will rebalance. WTO rules will affect imports more than exports. Some prices will rise some drop, some employment will increase some will decrease. The use of work permits means the UK government can mitigate much of this through the control of migrant workers.
3) Already dealt with. Though I acknowledge this explanation will never be accepted by some parties.
4) Why would being in a world free market raise prices? Surely, outside the EU we will have lower prices where the EU impose tariffs.
5) Outside EU state-aid controls, the UK government has a relatively free hand to deal with this. Though it has to be used with care to avoid retaliatory rules.
6) The NHS is already in “freefall” inside the EU. Released from the constraints of EU “could” allow our politicians to fix the problems. IMHO the decision of what to treat and the funding needed is a pure POLITICAL decision, one that our legacy politicians duck, resulting in knee-jerk funding decisions based as much on the front page of Redtops as on rational consideration. I.e. this has nothing to do with EU
7) You have got to be kidding, “quality government procurement” hasn’t ever happened.
8) The environment has been trashed while we have been in the EU, At least outside we can prioritise the issues that affect the UK. The climate, geology, economic activity etc in the UK does not fit the EU one size fits all. E.g. fisheries, river pollution, coastal erosion agricultural activeity are all different in UK.
9) Tax is mainly a global fiddle, rather than an EU fiddle. My understanding of tax abuse is that it has been supervised by key EU politicians and bureaucrats. E.g the role of Luxenbourg under the Juncker.
The EU, being a “compromise” organisation, can never be a disruptive leader in this field.
The state of politics across the EU is dire. IMHO this is because of the structural flaws in the EU, flaws that many in the EU have acknowledged, but have been totally unable to address. It needs destroying in order to rebuild, the UK leaving could catalyse this.
I would not be surprised if, in the future, the Brexit Party, adopts policies that I find totally unacceptable. E.g. Ecosystem collapse denial. However, for the first time in my lifetime, there is a chance that the ossified two party system will collapse. Allowing a re-alignment of politics. In particular, I look forward to finding a “Green” party that isn’t socialist, and unable to make an electoral breakthrough.
Politics is a chess game,
If Richard invites me and if I find time, I’d like to ask 10 questions of Remainers about what they would hypothetically do in situations of dichotomy…Such as… a Euro default by Italy, would the UK fund the rescue of Italy’s banking sector? How would the UK ensure Germany automotive sector doesn’t continue to be “protected” by the power German EU presence?….
This is depressing Peter, because it is so wrong at almost every level.
The biggest falsehood is that Remainers do not understand then docotommy. Brexit ias based wholly on a non-overlapping Venn diagram. That is the reality. We are the people who work with compromise, change, dynamics and possibility. Brexit is about closing all routes to all of those.
Now to the answers
1) Please refer to WTO rules – not fantasy
2) Yes, it will rebalance. I note the Brexit Party us in 30 years and worse off than now.
3) That is not an answer
4) There are no free markets – that’s the Brexit delusion
5) This is wrong: I referred to WTO rules which are harsher than the EU and you have igmored that
6) The NHS is in free fall and the WTO would make that worse. Your claim is wrong
7) Yes, every day. No it always. Just like the private sector there are poor people in it and mistakes. But this is just rude as well as wrong
8) This is absurd – the EU has re3cognised the issue, late, like most people. The WTO is stick in the early 90s and has no way it can deal with it. You think the climate crisis is serious and yet ignore it
9) The EU is the most effective anti tax abuse organisation in the world – in my opinion, but I do know something about this
Sorry – but I will not be posting ten questions for Remainers until you can show that they would be factually based
Peter Dawe
Firstly I appreciate you having the minerals and turning up here to say what you have to say.
Secondly, much of what you says seems based on typical BREXITER mythology.
Richard has answered some of what you say but I’m going to make a few more comments.
Trade Dumping:- what you describe is not trade, rather trade war. It is not clever and unlike perhaps America, the UK on its own using such a stupid response would get itself into serious trouble because we are a very small country whose economy is smaller than France and Germany for example. And please – don’t mention the Commonwealth. If you think they want to trade exclusively with us with our small market when they can have the world and the EU then you are deluded. You description of trade is as a war and it is that sort of trading that helped to cause war.
The Poor Political Climate in the UK being the Fault of the EU: Rhubarb! If anything, it works the other way – the EU is a treaty framework supported by institutions all under control of the membership. EU policy will reflect the domestic complexion of each member state. If the EU has become flawed, YOUR government has something to do with it.
The NHS: Oh – so this domestically made mess is ALSO the EU’s fault I see? I’m incredulous. What’s that word the Lib Dems use – ah yes – Bollocks – yes – in this case Complete Bollocks.
Germany: Ah – yes – Germany………………….look, Germany is not the problem. If UK industrial and financial policy had been carried out properly (like it was in Germany in the post war period) we would be just as powerful in terms of manufacturing and influence. But we weren’t. The politicians and Unions messed it all up for Thatcher to issue the coup de grace from ’79 to ’83. That is a domestic failure OK – nothing to do with Germany.
Stop hiding domestic failure by blaming Germany. The Japanese only built factories here to access the EU market – remember?
Google on badboysofbrexit.com to see the 24 rich and super rich people who are financing the for-brexit campaign. Today around Ipswich I noticed lots of poster boards have appeared supporting Farage. These are expertly done and expertly placed high up and in the most visible places. If this is has happened in many cities this has cost serious money. Why are all these rich folk, many of whom get their income via tax havens, being so generous?
My town ( Ipswich) has been flooded with professionally put up Brexit Party posters. Must have cost a fortune if the same in other towns. To find out where that money has come from, google on badboysofbrexit.com
The Englishman commenting on BBC 5Live made it absolutely clear to me regarding Brexiteers: that aside from the hedge funders and disaster capitalists promoting it who will make a killing, we aren’t actualy dealing with rationality on any level:
“I want a no-deal. We’ll be fine. We have rabbits in our fields and potatoes in our gardens. We managed before and we’ll manage again.”
Needless to say, the last time we survived on the suggested “hunter-gathering” and a “garden” was about seven thousand years ago when the total population of the UK amounted to about the population Torquay.
Yet this kind of attitude is commonplace.
Oh – stuff and nonsense Ken!
When we’ve eaten all the rabbits we can then eat all the hares, badgers and squirrels, voles, polecats and and hedgehogs too. It’ll be great!! Then there’s dogs and cats as well.
And raw turnip will be in vogue again! Yes – we’ll be going back to our glorious past.