It is ironic that M. Juncker is complaining of “Brexit fatigue”, while the British public are themselves becoming tired of the charade being played out in front of us, just going round and around in circles not getting anywhere.
Theresa May desperately wants to get her Withdrawal Agreement signed off, so she can proudly announce that she has “delivered on the referendum result” and “achieved Brexit”, while at the same time ensuring that the UK never actually leaves the EU.
A number of MPs are demanding that “No-deal” (the WTO arrangement) is “taken off the table”. These same MPs also voted to enact the Article 50 withdrawal notice which set a timeframe of two years to reach a withdrawal agreement, after two years if an agreement hadn’t been reached in the meantime, EU treaties would no longer apply to the UK, ie it would no longer be an EU member.
It seems the problem is the conflation of the words “agreement” and “deal”. And specifically ‘deal’ in the context of “trade deal”.
To the best of my knowledge, Theresa May’s preferred ‘Withdrawal Agreement’ does not even cover trade, only that this is to be discussed as part of the “UK’s future relationship with the EU”. Until a future ‘trading arrangement’ can be agreed (on the EU’s say-so), the UK will not be permitted to leave the EU, hence all the hysteria over the ‘backstop’.
Under this arrangement, as the EU has us exactly where they want us from the start, there would be ‘no rush’ to come to an agreement on any “future relationship” with the UK. The status quo remains, why would they want to change things?
“No-deal” cannot be taken off the table, because of the Article 50 process these same MPs all agreed to undertake. The only way to take ‘no-deal’ off the table is to either:
1) request an extension to the Article 50 deadline – this is possible, but it would require the agreement of all 27 EU members (excluding the UK of course). This has several flaws:
a) a specified date would need to be set, otherwise negotiations could be allowed to continue indefintely – a situation just as bad as Mrs May’s Withdrawal Agreement
b) it would be utterly pointless, as the EU has already demonstrated it is not prepared to offer the UK any “further concessions” or to indeed negotiate any further.
c) there could be ‘conditions attached’, like a ‘requirement’ for a second referendum, or general election, to ‘let the people decide’ (And we all know how that would play out)
2) revoke Article 50 altogether – thanks to Gina Miller this is probably impossible. Government and Parliament has a mandate to ‘carry out the instruction of the British people’, and the Supreme Court ensured that Parliament voted to enact Article 50. There is no mandate to revoke this notification, that would require a second referendum or general election.
So what are our MPs hoping to actually achieve? They won’t agree to Mrs May’s Withdrawal Agreement (which is good), but then they won’t accept leaving “without a deal”.
Labour say it should be up to the people to decide, but now the second referendum mob want to make it a question of:
- Accept the withdrawal agreement (which isn’t really leaving)
- Stay in the EU
The referendum question may as well be “Do you want to stay in the EU, or remain in the EU?”
And oh gosh the histrionics continue, we’ve already heard the usual “crashing out of the EU without a deal”, now the very word “WTO” is being painted as ‘toxic’.
“No-deal” is the “WTO deal”. Or “WTO arrangement” as I prefer to refer to it. The EU is a WTO member, and the UK will once again become an independent WTO member.
Whatever you want to call them, WTO “terms”, “rules” or “arrangements”, the UK, as a member of the EU, does trade with other countries that are not part of the EU under WTO terms.
It is worth pointing out at this time that countries and their governments do not actually trade with each other, but rather individuals and businesses within those countries who do so.
The EU (and thus the UK) does NOT have ‘free-trade deals’ with the USA, China, Russia, Australia, and many more countries around the world, so trade is conducted as per WTO rules, with imported goods being subject to various tariff schedules.
It is worth pointing out again that only imported goods are subject to tariffs, there is no such thing as export tariffs, and it is the importer who pays any taxes due as a result.
True, outside of the EU without a ‘deal’, goods imported from the EU into the UK could be subject to import tariffs, so prices could increase, but the import duties would be paid to our own HM Treasury. UK companies that export to the EU would not incur any additional costs, it would be the recipient who would pay import duties to their own government (then passed on to the EU treasury).
Just have a look around your home, and have a look at where everything you own has been manufactured or produced. Honestly, you might be surprised how much stuff you have bought that was produced in countries outside of the EU, which would have been subject to import tariffs.
And once the UK is outside of the EU, and trading is done under WTO rules, those goods would be subject to the same import tariffs. Granted, anything produced within the EU could also be subject to import tariffs also, but generally WTO tariffs can be pretty low, depending on the product, thanks in no part to the EU lobbying the WTO to reduce tariffs in the first place.
With regards to trade in goods, the UK buys far more from the EU than it does sells them. The UK does not ‘need’ a free-trade deal with the EU, it is the other way around. A ‘free-trade’ deal benefits the EU because its exports would not be subject to import tariffs, thus they are competitively priced compared to products manufactured or produced in the UK, or indeed the ‘rest-of-the-world’.
Reverting to trading with the EU on WTO terms is not the ‘disaster’ or “crashing out”, or any other apocalyptic turn of phrase being bandied about. Businesses that already do trade with countries outside of the EU are already “Brexit-ready”.
And if anything, “leaving without a deal” puts us on a much stronger footing with the EU when it comes to negotiating this mythical “future relationship”. It has taken the EU over fifteen years to agree a free-trade deal with Canada (which is still yet to be ratified), I’m pretty sure they would not be dragging their heels over trying to arrange a suitable free-trade deal with one of their biggest export markets, namely the UK.
So to conclude, there is nothing to be feared from a “no-deal” clean WTO-rules based Brexit, apart from a bit of an adjustment period while certain businesses adapt. Could our politicians just please stop pissing about then over semantics?
