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No trade deal #brexit will be a damning failure of state craft for both EU and UK but principally the latter Given it is completely irrational in terms of economic wealth I have reflected why over last few days
No one credible disputes result of no deal will be lower GDP for both parties (lose/lose) strategy and a permanently (potentially next decade) divided UK as the Government has not tried to find a solution that worked for 75% @EFTA4UK with EEA was the answer.
UK Government I guess thinks that first past post means 35-40% support fine and that Red Wall protects and who cares re NI, Scotland, Wales
However the losses on inability for unconstrained travel , Erasmus, EHIC, driving, holidays , pets will not be popular at human level then you have farming in despair, disruption to supply chains etc These factors risk Southern seats
but why - Firstly UK Government has not decided if it can accept that UK’s future economic success is dependent on EU being successful as by definition UK economically insignificant in comparison
A successful EU is a great market for UK goods and services but to say this means accepting EU is not going to fail and disintegrate
Secondly UK Ministers don’t seem to understand how trade works, how WTO trading works vs FTA (you need lots of side agreements) or fact all trade deals share sovereignty BUT most of all that non tariff barriers which single market removes are much more significant than tariffs
The effect of tariffs on exports is offset by currency depreciation albeit consumers take a double hit on imports but you cannot trade out of non tariff barriers The single market will always be Thatcher/UK’s lasting legacy for EU
thirdly Ministers have completely ignored business as @NicoleSykes_ has explained. This is partly because of use of NDAs but also because Ministers don’t seem to like twi way dialogue/debate Civil Servants have listened and understood but political masters shown no interest
Fourthly we have fact that Conservative Party split between protectionists and those that claim to want Singapore on Thames @BorisJohnson seems to believe in big Government and hope that state can just spend to offset lost GDP. in fact @michaelgove trumpeting inefficiency and
Bureaucracy in a manner that would have impressed 1980s India Employing people to push unnecessary paperwork is not “success” @ChrisGiles_ and have both said Thatcher’s economic change was only deliverable because of EU membership - this would now be a sweat word forTory Party
Fifthly unwillingness to listen to financial forecasts partly because they sound like Project Fear but also because the message from @OBR_UK @UKandEU not what want to hear
Then we come to UK’s failure of basic negotiating strategy - did it know/decide what opportunities/wins it could offer EU and what it could not agree to fore-sake/lose
Moving to the other 27 - EU’s mistake is not playing long game - it is more powerful but does not need to humiliate UK Personally suspect challenge is that FTAs meant to be about alignment not divergence Remember no country had ever found that > trade barriers sensible
The EU has somehow believed the Tory Party hot air on liberalisation when reality is likely to be the opposite with UK increasing standards as an excuse for protectionism
My final point is on delivery idiocy by UK Government - why go for no deal went it is so patently obvious Government and business will not be ready Food shortages are never forgotten Only logic is (I) Hope disruption less than expected (ii) Hope EU and Covid can be blamed and
(iii) Desperation of ideology which just wants to make divide with EU so wide that it is harder for a future Government to join EFTA/EEA or do an Association Agreement
Will this work NO because clear majority know that Ministers fully responsible for the debacle - if you wanted no deal best solution was extend transition and then give 12 months of preparation notice for no deal
In the end there will be an Association Agreement in the next Parliament In meantime we will see immense turbulence, Johnson/Gove/Frost will lose jobs and credibility, British public will complain re inflation and job losses However before these we will see blame game on EU and
civil Service All in all this is completely dispiriting and no one can say they are enjoying living through a divisive social experiment
The end - thoughts/challenge please
