Reflections on recent events, plus the occasional fact
free rant unfiltered by rational argument.
The UK is in a pickle. Six months to go. 759 treaties need resolving, with no closure in sight. The EU is playing hardball, and who can blame them. After all, the Brits initiated the whole thing. Moreover, the UK can’t agree on how it wants to exit the EU. Theresa May’s Chequers’s proposal is toast, whereas her cabinet is fighting themselves.
Outside the cabinet, in the broader conservative party, it's open warfare. The only thing stopping a leadership challenge to Prime Minister May is the possibility of triggering a general election. Fear that the conservatives may lose to Labour is putting the brakes on her opponents.
Meanwhile, Labour is holding their annual conference. Calls are coming in thick and fast for a referendum on the final EU deal. In the past, Corbyn has ruled such a vote out but is now leaning that way. At the same time, Labour is also beset by internal strife. It's far from a cohesive body, with fault lines developing in various directions.
I agree that you can't go back to the public to ratify the deal. I suspect any such vote may amount to another de-facto rerun referendum on membership. Such a move would be divisive. Anyway, what if the public rejects the deal. Then what?
Unfortunately, this week we saw the stark reality of Britains position in the world. In Salzburg, at a gathering of EU leaders, May’s humiliation could not be more public. She’s given 10 minutes to present her Chequers’s plan before being shown the door. She’s had to beg for respect, which is never a dignified look for a prime minister. I’m surprised she’s still there. I’d predicted her departure some time ago.
The EU signalled for weeks that Chequers was unacceptable. Nonetheless, May pressed on regardless. She’s like a driver stuck up a dead end, who can’t turn or reverse. Now she’s stuck.
The options for resolving this mess are all looking risky. A no deal exit from the EU is possible. How that plays out depends on who you speak with. To understand the scale of the issue, visit the Brexit treaty renegotiation checklist on the FT website. What happens when all those treaties suddenly stop?
On immigration, the UK would immediately have control over its borders. It sets its own migration policy. At the same time, UK nationals would lose their right to live and work in the EU. Depending on how the EU wishes that to evolve it's going to cause upheaval on a personal level for many.
The UK would exit the Common Agricultural Policy, which gives farmers £3-billion in subsidies. This would stop. Likewise, the UK will leave the single market immediately. This may result in chaotic customs checks on cross-Channel freight and at airports. Some suggest food and other supplies could face disruption although, again, it depends on how the EU responds.
The EU has the option to charge import tariffs averaging 2-3 per cent on goods. Yet up to 60 per cent for some agricultural produce. This would damage UK exporters. In turn, these tariffs would lead to price inflation on goods, hitting citizens the most.
In some sense, there is no crashing out because the UK could go to WTO trading terms. That may prove workable, although it will take a period to settle down. In the meantime, the trade will likely be disrupted.
The optimists see all the current noise as the final huffing and puffing before a deal emerges. That deal could take the form of the Norwegian or Canadian approach.
Norway almost joined the EU in the 1970s, but at the last minute opted against membership. Since then they’ve developed a close relationship with the EU through Sweden. That’s not without its downsides. They have full access to the single market, yet must follow specific EU laws but have no say in how those laws are made.
Importantly, they must allow free movement of people. Also, Norway pays money to various EU budgets. Thus, Norway gets some of the benefits of the EU on trade while relinquishing a degree of border control. I don’t suppose that will please the ardent leavers.
Canada’s deal with the EU is the Comprehensive Economic and Trade Agreement (CETA). In effect, this has eliminated 98% of trade tariffs. Parts of CETA remain in dispute as the EU has yet to endorse it wholeheartedly. The appeal of a CETA type deals is that it maintains much of the current trade without having the UK too engaged with others aspects of the EU.
Again, the devil is in the detail, and it's not clear that a Canada style deal would be accepted by all EU nations. Plus, it took Canada eight years to negotiate its deal. The UK doesn’t have that time.
A last minute deal may yet pull the UK back from the brink. Although trust in politicians, which was never high, will dive to a new low if that deal is an unwelcome compromise. The merits of democracy itself will be on trial in that scenario.
The leavers are pinning their hopes on trade with the broader world. They cite the fact that about 95% of the world is outside the EU. Here are some other facts - there are over 195 countries in the UN. Of those countries, 35 are seen as 'advanced economies' by the IMF - 20 are 'emerging', and the rest are ‘developing’ (Zimbabwe, Nigeria etc.).
The reality is of those 35 advanced countries 27 are within the EU. Thus the “world is your oyster narrative” is untrue when the world is not as rich as you would like it to be. The bottom line is Britain needs a deal with the EU, either through WTO rules or some other arrangement.
Unless someone compromises, I foresee the UK crashing out. Besides trade and immigration, that may have significant political consequences as regards Scotland. The Scots voted to remain in the EU. Their independence voices will grow louder if the economic implications of Brexit are severe.
When and if that scenario arises, all bets are off as regards the outcome. The very existence of the British nation state will be at risk. Anyone seen David Cameron?
Walter De Havilland is one of the last of the colonial coppers. He served 35 years in the Hong Kong Police.