Wednesday 21 August 2019

DELUSION, REALITY AND BLACK SWANS

Johnson was roundly rebuffed by the EU yesterday. But his reaction to it was surprising even by his standards. He carried on as if nothing had happened. It was rather reminiscent of the scene in Pride and Prejudice where Mr Collins makes an offer of marriage to Elizabeth Bennett. No matter how emphatically she turns him down he thinks no actually means yes.  So it was with Boris. It's probably an Eton thing. After being taught effortless superiority for years I assume you can't actually believe anybody could ever refuse you.

It's completely delusional of course. He's off to Berlin today to see Angela Merkel where she is expected to appear as Elizabeth to his Mr Collins.  I await the reviews with interest.

Earlier, the Commission had officially rejected his plea to junk the backstop saying the proposal did not "provide a legal operational solution to prevent the return of a hard border on the island of Ireland" and "It does not set out what any alternative arrangements could be". All pretty foreseeable I think, everywhere except upstairs in the Johnson persona.

He is claiming that these elusive alternative arrangements haven't even been explored. You might like to see this interview Johnson gave to Paul Brand at ITV (below) where he says they were never 'properly offered' by Britain. It's an eye opener for its total rejection of history not to mention reality itself.

I understand he will also tell the EU leaders that they shouldn't expect our parliament to save them from a no-deal Brexit. I would have thought they might have difficulty following the thread on this one. They think it's us who need saving.

Before we move on, let's just remember the reason the backstop is needed. Theresa May's original  red lines about leaving the single market. the customs union, the ECJ, etc, made the Irish border, wittingly or otherwise, a pivotal issue, even perhaps THE pivotal issue. Instead of compromising a little, Boris set another red line. This time about not having the backstop in any Withdrawal Agreement. More than that, he makes it clear we want regulatory divergence which makes 'alternative arrangements' to replace the backstop even harder to find than they were under Mrs May.  More on this below.

The EU's flat, immediate and utterly implacable rejection was then described by the simple minded imbecile and occupant of No 10 as the EU being "a bit negative". He added that he thought we would "get there" and that there was "a real sense now that something needs to be done with this backstop".  

Cue a lot of eye rolling and face palming right across European capitals.

The Institute for Government produced an explainer yesterday on his begging letter, part of which covered his reference to our post-Brexit environmental, product and labour standards, where "the laws and regulations to deliver them will potentially diverge from those of the EU". I mentioned yesterday this would come back to haunt him and the IfG agree. This is their assessment:

"Johnson has given the clearest indication yet of his vision for a future UK–EU relationship. It involves a free trade agreement but without the ‘level playing field’ commitments around environment and labour standards. This is likely to be a major stumbling block in talks with the EU, which sees these commitments as necessary conditions for any tariff-free trade relationship".

The EU will not allow an economy the size of Britain's to become a low tax, low regulation Singapore-on-Thames and an easy gateway into the single market at the same time. This will never happen.

Following on from that, the Constitution unit at UCL published a note: Negotiating after no deal about what is likely to happen if we exit without a deal on October 31st. It should not make comfortable reading for No 10 because it concludes:

  • We will still need to have a trade deal of some sort
  • The backstop, money and citizens rights will still be a pre-requisite for any future talks
  • The Article 50 process (qualified majority voting) will end and cannot be reopened
  • Brexit will be disruptive and will create a lot of ill-feeling
  • Any urgency on the EU side to resolve the problem will no longer be there
  • We will need to use Article 218 (unanimous voting)
  • Any one of the EU 27 will be able to block a deal

It's obvious we would be in a much weaker position, negotiating perhaps the most complex FTA ever attempted. And this does not even take account that our main objective is regulatory divergence, something never even tried before by any two countries in trade history. Let's cross off the 2020s as another wasted decade.

For the life of me I cannot understand why we need to have different laws and regulations on the environment, product and labour standards anyway.

Johnson says he will go the meet Merkel and Macron and enter talks 'with a lot of oomph' and he 'will be making progress in the next few weeks'. I fear it will take a bit more than some oomph.

The Sunday Times article last weekend about Operation Yellowhammer also mention another bird, a Black Swan. This apparently represents unforeseen events in government planning which, obviously, we have not foreseen but which no doubt will come out as Brexit proceeds. One such event may well have been fuel shortages which started out as a black swan event but has now morphed into a mere Yellowhammer. I cannot remember anyone suggesting we might see refineries closed and shortages of refined products during the campaign or indeed at any time in the last three and a half years.

But this is precisely what The Sunday Times and now a BBC report are claiming as a result of quite modest (5%) tariff changes.

My question is this:  How may Black Swans are waiting for us in the trade negotiations?