The now-enacted will of (some of) the people

[HanoiVillan]

Robert Peston:

If you run into Theresa May, could you please put the following to her.

When she decided to create an expensive new department for international trade, and put Liam Fox in charge, did she know she would be seen as announcing that the UK would be leaving the EU's customs union?

You may have heard her say that all our options are open in respect of our future trading relationship with the EU.

But the facts tell a contrary story (I choose my words carefully): once Fox was mandated to prepare the ground for future bilateral trade deals with the likes of China, the US and Australia, it became almost inconceivable that the UK could remain in the customs union.

This is a point of inescapable logic. And I am slightly surprised it has not exploded into a big political controversy (though that probably has something to do with the way Labour MPs are engaged in bashing each other rather than holding the government to account).

Here is why we cannot stay in the customs union, and have an international trade minister.

First of all it is a rule that members of the customs union are prohibited from negotiating free trade deals with countries in the rest of the world (there is relatively trivial flexibility for Turkey, which is a non-EU member of the customs union, but not the degree of flexibility that would be any use to us).

But that prohibition would not matter perhaps if it was irrational - because we could have some expectation of negotiating a way around it.

However EU governments would be nuts - economically suicidal in fact - for them to give customs union members free rein to negotiate their own bilateral deals with third-party countries.

Because that would give those non-EU countries an invaluable backdoor route into the EU's gloriously lucrative market.

Just imagine if the UK as a customs union member did a free trade deal with China. That would allow China to swamp the EU with tariff-free goods, without formal permission from the EU via an EU-China trade deal.

The EU would no longer have any power to negotiate its own trading relationship with China.

So it's overwhelmingly clear that the EU cannot let Liam Fox do his trade-negotiating thing and also allow the UK to stay in the customs union.

But, you will ask, does this matter? Can't we just do a free trade deal with the EU like the one Canada has negotiated (see what I wrote about this over the summer - https://www.facebook.com/pestonitv/posts/1675210406137031).

Well the point about being in the customs union is it makes it easier and cheaper for British-based manufacturers to trade with the rest of the EU than any trade deal would deliver.

In the customs union, they can sell their cars, and missiles and electronic chips to other EU countries without incurring tariffs and without having to prove that the content of those goods is largely made in Britain.

Think for a second about why it is incredibly helpful to British makers that they don't have to prove country of origin, as part of the customs union.

Well, in a typical motor car or aircraft wing or chocolate or pharmaceutical there are loads and loads of ingredients and components that are manufactured outside the UK.

Or to put it another way, a great deal of British manufacturing - and a great deal of manufacturing everywhere - is actually the assembly of parts, kit and compounds actually made all over the world.

So the great advantage for a Ford, or a BAE or a Jaguar LandRover of the UK being in the customs union is they can sell their stuff to the rest of the EU without having to prove that the finished item is truly British, rather than a foreign wolf in British clothes.

But, you may say, when Canada's trade deal with the EU is implemented (and goodness knows when that will be) won't that be as beneficial for Canadian companies as being in the customs union?

Absolutely not.

Because when selling to the EU, Canadian companies will have to prove that their goods really are Canadian, and are not - for instance - Chinese thingummies masquerading as Canadian goods.

And that will be expensive and inconvenient for Canada.

So for British makers being in the customs union is quite a big deal.

And they are deeply concerned that the appointment of Fox means we'll be out of the customs union.

As it happens he broadly acknowledged they were right to be worried when he told a recent meeting of companies hosted at the CBI (which I wrote about here - https://www.facebook.com/pestonitv/posts/1694289837562421) that the bothersome facts about our trade relationship with the EU did rather get in the way of us getting an optimal trading relationship.

So the mere fact that Fox is international trade minister - and is as we speak recruiting a team of highly paid trade negotiators- makes it a fiduciary obligation for Japanese, American, Indian and other multinational manufacturers based in Britain to start thinking about moving investment and jobs to the rest of the EU.

Ouch.

But if Theresa May hears their concerns and sticks to the line that we may be able to stay in the customs union, she would have to concede that Fox is redundant, and she is wasting a ton of public money in creating his department.

So the choice for her is painful: admit either that Fox is as much use as a fish on a bicycle or own up that we're out of the customs union (or perhaps ask Boris Johnson to fess up on this, since one of his great lines during the Brexit campaign is we could have wonderfully lucrative new trade deals all over the world while staying in the customs union).

[OutByEaster?]

There's more info in that article on how the EU works than I saw anywhere during the referendum campaign. 

It still strikes me as a saddening reflection of how the electorate is viewed and manipulated that neither side of the campaign made any effort to explain anything about the EU to anyone. 

But yeah, national economic security or Liam Fox under a bus - tough one.

 

[blandy]

On 24/09/2016 at 23:12, OutByEaster? said:

I like the presumption that free trade deals are about governments exerting their will.

The 'free' in free trade deals means free from government meddling, free from regulation, free from tax, free from competition, free from anything that might have the tiniest effect on the balance sheets of private interest - the nations of Europe are currently in competition with the UK to quickly negotiate on who can open their arsehole widest for world corporations.

 

 

That's one side of it, but there's also the import tariff side of things. I.e the ability for cheese, clothes, medicine, insurance, books, vegetables, food, wine, cars, metal, music and a zillion other things to be sold into the EU, or into the UK without being taxed just for being British.  We all benefit from those things being cheaper because there are no import tariffs. It helps employment, too. 

So as much as TTIP etc  is significantly evil, free trade has more than one side.

[Chindie]

Quote

PARIS – Little more than three months after the United Kingdom’s decision in June to leave the European Union, Brexit politics are careening out of control in the UK. An almost revolutionary – and very un-British – dynamic has taken hold, and, as British Prime Minister Theresa May indicated in her “Little Englander” speech at the Conservative Party conference this month, the UK is heading for a “hard Brexit.”

That outcome would run counter to British public opinion, which remains moderate on the question of fully breaking with the EU. According to a July BBC/ComRes poll, 66% of respondents considered “maintaining access to the single market” to be more important than restricting freedom of movement. In an ICM poll the same month, only 10% of respondents said they would prioritize ending free movement over maintaining access to the single market, while 30% viewed the two as equally important and 38% considered maintaining full access to the single market the priority.

These findings will surprise only those who buy into the narrative that the West is confronting a large-scale xenophobic revolt against the elites. While the “Leave” camp certainly included many hard Brexiteers whose primary motivation was to end free movement, it also comprised people who believed Boris Johnson, the former London mayor and current foreign secretary, when he promised (as he still does) that the UK could have its cake and eat it.

In fact, despite Leave’s large faction of angry white working-class voters, middle-class trade-friendly Brexiteers, together with the “Remain” camp, constitute a clear majority of everyone who voted in the June referendum. Under normal circumstances, one would expect the government’s policy to reflect the majority’s preference, and to aim for a “soft Brexit.” Instead, a classic revolutionary pattern has emerged.

According to the Brexiteers, the people have spoken, and it is the government’s duty to deliver a “true” Brexit. But the government must overcome the spoilers, such as senior civil servants and the Remain majority in the House of Commons, who favor a Brexit in name only – a “false” version that could never deliver the benefits of the real thing.

In this revolutionary narrative, the worst elements of Europe’s political tradition have crowded out British pragmatism. What a majority of British voters want is considered irrelevant. With a hard Brexit, the Leave camp can avoid being seen by voters as the supplicant in negotiations with the EU – which it inevitably would be, no matter how often May denies it.

The EU will have the upper hand in negotiations for two simple reasons. First, the UK has more to lose economically. While other EU countries’ total exports to the UK are double what the UK exports to the rest of the bloc, its exports to the EU amount to three times more as a share of its GDP. Likewise, the UK has a services surplus, which matters far less to the rest of the EU than it does to Britain.

Second, just like the EU’s Comprehensive Economic and Trade Agreement with Canada, any negotiated arrangement between the EU and the UK will have to be unanimously accepted by all EU member states. Thus, the negotiation will not really be between the UK and the EU, but rather among EU members. The UK, without a presence at those talks, will simply have to accept or reject whatever the EU offers. This would be true even if the UK pursued a prepackaged arrangement such as membership in the European Economic Area or the EU Customs Union; it will be all the more true if the UK seeks a “bespoke” deal, as May has indicated she will.

If British voters recognized their country’s weak negotiating position, the Brexiteers, who won the referendum on their promise to “take back control,” would face a political disaster. Walking away from substantive negotiations is the simplest way to avoid such an embarrassing unmasking.

Thus, politically, a hard Brexit is actually the soft option for the government. Economically, however, hard Brexit will come at a high price, which the UK will have to pay for years to come.

The only consolation is that Brexit’s revolutionary momentum may not be sustainable. Shortly after the Leave camp labeled bureaucrats in her Her Majesty’s Civil Service “enemies of the people” – a typical statement in the early stages of a revolution – pro-Brexit Foreign Trade Minister Liam Fox derided British exporters, calling them “too lazy and too fat” to succeed in his brave new free-trading Britain.

Such rhetoric is a symptom of desperation. It carries echoes of the declining years of the Soviet Union under Leonid Brezhnev, when Marxist apologists insisted that there was nothing wrong with communism, except that humanity wasn’t yet mature enough for it. If developments continue at this pace, the revolutionary zeal we see among British politicians may burn itself out before “hard Brexit” is consummated.The only consolation is that Brexit’s revolutionary momentum may not be sustainable. Shortly after the Leave camp labeled bureaucrats in her Her Majesty’s Civil Service “enemies of the people” – a typical statement in the early stages of a revolution – pro-Brexit Foreign Trade Minister Liam Fox derided British exporters, calling them “too lazy and too fat” to succeed in his brave new free-trading Britain.

Former Polish Finance Minister thinks Hard Brexit is the easy political option

I think thats a good article. And worrying.

 

Quote

An autocratic ruler of a one-party state unveils a revolutionary economic plan which ignores the advice of experts. The result is a disaster. That, in brief, is the story of China’s Great Leap Forward, introduced by Mao Zedong in 1958. It could also be the story of the UK’s “quiet revolution”, promised by Prime Minister Theresa May in her Oct. 5 speech at the Conservative Party conference.

Of course, the British revolution will not rival the Chinese in the fatality count. The famine caused by Mao’s futile effort to speed up industrialisation at the same time as introducing harmful agricultural techniques probably cost the lives of 5 percent of the nation’s population.

The UK’s departure from the European Union, which is at the heart of May’s revolution, will be a much tamer affair. Even the hardest imaginable Brexit will not bring starvation. If all trade with the EU stopped totally and foreigners suddenly refused to finance the large British trade deficit, British GDP might still only decline by a survivable 10-15 percent. A far less extreme deterioration is more likely. Some sensible economists expect nothing worse than a half a percentage point drop in the British GDP growth rate.

Still, the May approach has some eerie similarities to the Great Helmsman’s. To start, their approaches are almost equally autocratic. Both Chairman Mao and the prime minister were not elected by the people, but both claim a popular mandate. Both rule through their parties, not through parliamentary votes. Both mistrust traditional elites and are willing to ignore economic experts. Both are prone to ridicule any critics as hopeless pessimists. Neither faces any effective opposition.

Mao and May also have a common taste for nationalist hope. They both see countries whose natural position of global greatness has been diminished by foreign domination and previous weak governments. The answer, for each of the leaders, is for active governments to unleash the hidden potential of the masses. Mao thought Chinese peasants could achieve superhuman gains. May is more modest, but she wants to use the freedom provided by Brexit to help simple working people find a better life. It is an opportunity for the nation to “write a new future upon the page”.

Finally, there is the shared taste for economic nonsense. Mao believed that the mass effort of unskilled workers can build modern economies. He also believed that economies, like armies, work better with almost total central control. He was wrong on both counts. His command to construct of millions of backyard steel furnaces led to tonnes of useless steel. Worse, the labour diverted from farming cut down the production of food, contributing to the massive famine.

May also seems to have a fundamental misunderstanding of how modern economies actually work. She seems to believe that both EU membership and economic migration have slowed down the British economy. At the conference, she said that liberation from the EU’s rules would help “build an outward looking, confident, trading nation”.

But if that is really what she wants, she should abandon Brexit right away. For the complex manufactured products and advanced services which the British want to trade, success requires the intimate integration of regulation, finance and worker training. The EU’s single market provides exactly that, as the Japanese government reminded May at the G20 summit in September.

Also, enterprises export more when they are international in their outlook and hiring. British membership of the EU has bred a new generation of people who feel at home in Europe and the world. Migration from and to the EU has reinforced those gains. The newly freed up xenophobic undertones of British anti-immigration sentiment threaten to erase them.

And nations trade best when they have economic clout. The EU will inevitably strike more favourable trade deals than the UK can on its own.

Despite his absolute control of the Communist Party, Mao could not ignore the disaster of the Great Leap Forward for long. The damage from May’s ignorant economic nationalism is likely to be less dramatic, so she may be able to keep up the fiction that Brexit will increase British prosperity for much longer. But business people would do well to remind her frequently of the Great Helmsman’s famous warning: that a revolution is not a dinner party.

May's Great Leap Forward

Cheering up your Tuesday evening.

Edited October 11, 2016 by Chindie

[Chindie]

Newsnight seems to have stumbled on some discussions in Whitehall that they're mooting just paying for single market access, seemingly because they know it's going to torpedo the economy.

I trust this will sit astoundingly well with the Brexit faithful.

[tonyh29]

6 hours ago, Chindie said:

I think thats a good article. And worrying.

 

I think any article using the phrase "little Englander " can safely be ignored 

which co-incidentally was the point I stopped reading it 

[Chindie]

1 minute ago, tonyh29 said:

I think any article using the phrase "little Englander " can safely be ignored 

which co-incidentally was the point I stopped reading it 

I think you should read the rest of it. It's fairly closed minded to see a phrase you don't like and go 'No'.

Especially as I don't think the 'little Englander' comment is anything more than a nickname for the speech.

And also because I think it's a quite interesting viewpoint from someone at the upper echelons of power looking at the situation as a politician.

[tonyh29]

15 minutes ago, Chindie said:

Newsnight seems to have stumbled on some discussions in Whitehall that they're mooting just paying for single market access, seemingly because they know it's going to torpedo the economy.

I trust this will sit astoundingly well with the Brexit faithful.

Is this something new or just a rehash of Juergen Hardt's comments the other week ? 

 

[tonyh29]

3 minutes ago, Chindie said:

I think you should read the rest of it. It's fairly closed minded to see a phrase you don't like and go 'No'.

closed minded is kinda the order of the day in this thread ...

But I did use the very same phrase against you the other month ( might even have been in this thread ) so fair enough

its getting late I might have a look at it tomorrow and pick up on the article then 

[villakram]

Cable rallying 'cause Theresa just hinted that she'd allow parliament to vote. Brexiters cockblocked by democracy... 

[Awol]

Remaining in the Customs Union ensures the UK cannot do bilateral trade deals with major economies like China, India and the US (+++), requires continuing UK contributions to the EU budget, maintains free movement of people & ensures the primacy of EU law in the UK via the ECJ.

In effect it means remaining in the EU without the ability to vote on its rules (the worst of all outcomes) and does not give effect to what the people actually voted for in the referendum.

By establishing the new department for International Trade (utterly pointless under the dishonestly labeled 'soft' Brexit) the Government tacitly acknowledged that the UK would leave the EU Customs Union.

IMO what we are seeing now is a concerted effort by large parts of the establishment to re-fight the referendum using the false  labels of 'soft' and 'hard' Brexit. It's cobblers. There's Brexit or Remain, & the vote was clear. 

 

[tonyh29]

7 hours ago, villakram said:

Cable rallying 'cause Theresa just hinted that she'd allow parliament to vote. Brexiters cockblocked by democracy... 

Actually it specifically doesn't include the key demand being asked for I.e the vote 

 

[mockingbird_franklin]

This is not an argument against leaving the EU. Would like to point that out from the start before people jump over me as being pro EU.

The people aren't going to get what they voted for anyhow, particularly because the 2 main reasons people voted for Brexit, ones which i fully support, being regaining sovereignty and controlling immigration are not the real reasons behind Brexit, its purely about deregulation, which in itself isn't always a bad idea, just most of the time because it is deregulation for the benefit of big corporations and the tiny minority that benefit when they do well, and its isn't 99% of the population. The regulations that effect the majority will stay in place, Fox is pro TTIP, which is basically about giving sovereignty to big business, its about removing democracy and the will of the people and making the people even more impotent to change anything through voting than they already are, It's about rigging the game even further than it already is in favour of a select few. It's the deregulation of the banks.That worked out so well for the majority of us didn't it?

I've been anti EU most of my adult life, Understandable really as i've gradually realised that fundamentally I'm an anarchist, in so much as i find most elitist hierarchical power structures deplorable. naturally I find the new religion of Statism as unpalatable as most of the old ones, I'm firm in belief that we should have never joined the EU, So saying we shouldn't leave would be hypocritical. Remember though getting divorced is not the same thing and never getting married in the first place. We are leaving at possibly the worst possible time because we have probably the worst type of politicians in control of the process. a mix of the unbelievably incompetent, the morally bankrupt and brazen hypocrites . Politicians with unjustified delusions of competence.  Politicians that don't believe in experts or facts or reason, just blind flawed ideology. Politicians that will sell us out in a heartbeat for a few pieces of silver. They don't give a shit about any of the things they claim to, the things as elected representatives they should, about your Job security, about your standard of living, about controlling immigration, your health, about the environment we the majority of us have live in, about national sovereignty, in which in reality is that of the voice of the people of a nation. About the nation, which in reality are the people that make up a nation. They care about giving away or selling off on the cheap national assets to friends and family,  They will happily lie to you and sacrifice all that you have to secure their and their friends undeserved guaranteed positions of priviledge, wealth and ultimately power..

The public have been mugged off, like all great cons the victims have themselves to blame for various individual reasons.

I've stayed relatively quiet on the whole subject of Brexit because it's one where i feel very conflicting emotions, i 'm anti EU membership but with the people controlling our direction as we leave we all should be very worried were they are taking us.

 

 

 

[Xann]

 

[Davkaus]

9 hours ago, tonyh29 said:

Is this something new or just a rehash of Juergen Hardt's comments the other week ? 

 

An "unnamed cabinet minister". The quotes in bold tickled me, they can't be serious.

Quote

Whitehall officials believe the UK may need to make big payments to the EU to secure preferential trading terms after Brexit, BBC Newsnight has learned.

During the EU referendum, Vote Leave claimed leaving the EU could save the UK £350m a week in contributions.

But an unnamed cabinet minister has told Newsnight that the UK may end up "paying quite a lot" of that money to secure access to the single market.

The government said it would not give a "running commentary" on negotiations.

The UK's contributions to the EU became one of the most contentious issues in the EU referendum campaign after Vote Leave pledged to repatriate £350m a week - its estimate of the UK's gross weekly contributions to the EU.

This is reduced by subsidies paid to the UK and by the UK budget rebate.

What are the Brexit options?

Brexit: All you need to know

Legal fight looms over Brexit powers

Labour renews pressure for Brexit vote

But a leading light in the Brexit campaign said they now expected the UK could still end up paying as much as £5bn a year into EU funds, in return for access to the single market.

This is roughly half of what the UK would have expected to contribute to the EU - estimated by the Office for Budget Responsibility to average around £9.6bn a year from 2015.

A senior official has described the prospect of continuing UK contributions to the EU as the "dog that hasn't barked" after Prime Minister Theresa May made no reference to the issue when she set out her red lines for her forthcoming EU negotiations last week.

Economic risks

Some supporters of Brexit Secretary David Davis have said the UK should no longer make payments to the EU after it leaves.

One senior Whitehall official said the UK would be unlikely to pay into the main EU budget after Brexit.

But the official said the UK may instead pay into special EU funds - possibly including one to help the economic development of new member states in central and Eastern Europe - as a way of securing preferential trading terms.

Officials say this would leave Poland with a dilemma: whether to prioritise its demands for its citizens to be able to continue to work in the UK or whether to accept greater financial contributions.

Andrew Tyrie, the Conservative chairman of the House of Commons Treasury Select Committee, told Newsnight that Britain may have to continue to make financial contributions to the EU to secure access to the single market even after Brexit.

Mr Tyrie, who supported the Remain side in the referendum, said: "We want a high degree of access to the single market, in my view.

"To fall back immediately on WTO (World Trade Organisation) rules would risk an economic shock and certainly an economic downturn given the high degree of trade integration at the moment between Britain and the EU."

'Transition period'

The prime minister sparked speculation at the Conservative party conference last week that she might be prepared to continue making some contributions when she failed to mention Britain's EU budget payments.

Mrs May instead said that the UK would take back control of its borders and take sole responsibility for making its own laws.

One Leave campaigner said that Britain could contribute to the EU for a transitional period after the completion of the Article 50 negotiations - the formal two-year process of leaving the EU - which are due to conclude in 2019.

Kwasi Kwarteng, the Conservative MP for Spelthorne, said: "It may well be the case that we have to contribute, I think, for a transition period to stabilise their budget for three to five years. But the point is that at the end of that five years we can say 'no, we don't want to put a penny more into your kitty'."

Image copyrightAFP/GETTY IMAGES Image captionPrime Minister Theresa May failed to mention Britain's EU budget payments at the Conservative conference

Another prominent Brexit campaigner warned that the prime minister could lose her job if she agreed to continue making payments to the EU.

Suzanne Evans, of UKIP, told Newsnight: "Laws, borders, money - when it comes to taking back control those were the Holy Trinity of the Brexit campaign. You can't have one without the other...

"We have all the bargaining chips. There is no need for Theresa May to capitulate on this and if she does try and capitulate on this I think she might very well soon find herself out of a job because that is not the Brexit the British people voted for."

But John Redwood, the Conservative MP for Wokingham and Brexit campaigner, dismissed suggestions the UK would end up paying for access to the single market.

He said the UK should offer "very generously to carry on trading exactly as we are at the moment".

"There's absolutely no need to pay them money to buy their imports - this is absurd," he added.

It comes ahead of a Commons vote, called by Labour, asking for MPs to be able to "properly scrutinise" the government's Brexit strategy.

Ahead of the debate, the party has asked Brexit Minister David Davis 170 questions, including on trade and migration.

The government has faced calls to set out more detail on what it wants Brexit to look like, with little known so far about its plans for migration and trade with the EU.

A government spokesman told Newsnight: "We will not provide a running commentary on our negotiating position, but we have been very clear that all decisions about taxpayers' money should be made in Britain."

 

[Awol]

@mockingbird_franklin 

When you say it's purely about deregulation and not the things people generally voted Out to achieve, I'm curious what your evidence is to support that? 

I think it's a stretch to conclude the public have been mugged off before we even know what the negotiating position is. Sure the media and opposition politicians are speculating, but neither they nor we yet know what the UK's red lines are, and we won't know prior to the negotiation either. If we did then the EU would know too, meaning we'd be walking into the negotiations with our pants around our ankles. 

[mockingbird_franklin]

I'm not sure what our negotiating position with the EU has to do with my post, I didn't mention it once and it wasn't in my thoughts in the slightest, why should it be, it's just a sideshow really, a necessary process but still a side show.

if you think y post was about our negotiations with the EU, then you need to read it again.

 

[lapal_fan]

41 minutes ago, Xann said:

 

Watched the Video Xann.  And this is my main gripe with most of the "Brexiters", if you keep questioning them and provide arguments to counteract their whimsical opinions, it usually all boils down to immigration, but trust me, none of them have a problem with foreigners.

I couldn't tell you what laws are set by the E.U that we have to abide by in this country.  I couldn't tell you the financial pro's/con's to leaving and staying - I can only trust what "the experts" are telling me and I read about.

There are people in this thread who are very good at dismissing anything put here by XXXX political party, but they offer nothing of substance in return.  It's arguing for arguing sake.

Hence why the vote was stupid, the every man doesn't have a clue what's going on outside of our pitiful existences.  Cameron and his cronies have done this, and have done a runner.   They are no longer accountable.  May has joyfully grabbed the speeding train controls and is making more mistakes. 

I still don't know what they are trying to do, other than fill every speech with "powerful adjectives", which mean nothing frankly.

What a mess.

[mockingbird_franklin]

46 minutes ago, lapal_fan said:

I still don't know what they are trying to do, other than fill every speech with "powerful adjectives", which mean nothing frankly.

What a mess.

Don't worry, they still don't know what they are doing.

[tonyh29]

4 hours ago, lapal_fan said:

And this is my main gripe with most of the "Brexiters", if you keep questioning them and provide arguments to counteract their whimsical opinions, it usually all boils down to immigration, but trust me, none of them have a problem with foreigners.

since you didn't ask ...... my gripe with most remainers is that when you present them with evidence they ignore it don't rebuttal it and then 5 minutes later claim that it's all about race and nobody provides answers