Sunday 1 November 2020

More illusory 'benefits' of Brexit exposed

I have always believed the real problems of Brexit will start to appear next year. At some point the government is going to have to show some gains, one or two tangible benefits of being out of the EU. This is going to be difficult since there aren't many. I struggle to identify one myself. At the moment, ministers are selling the 'benefit' of the recently signed UK-Japan trade deal. You may have noticed one such benefit in the news about soy sauce being zero tariff after Brexit. It turns out it is zero tariff now and we import most (90%) from the EU not from Japan anyway.

The DIT were comparing the tariff on soy sauce with what it would have been if we hadn't got a trade deal, not with what it is under the EU-Japan trade deal (called CEPA) at the moment. Someone named Jim Cornelius on Twitter has tweeted about it:

The DTI were also trumpeting tariff 'reduction' on various other Japanese food products including udon noodles, a processed snack called Pocky and Blue fin Marlin. Udon noodles are already zero rated, Pocky is made under license in France, from where we import it and most of our Tuna comes from the Atlantic - 99% EU - rather that the endangered Pacific Blue fin tuna that Japan want to export to us.

Japans tariff 'reductions' apply from 1 January but reductions in tariffs on UK beef (38%) is only reduced in stages until it reaches 9% in 2033, the same as CEPA.  Not much in the way of benefits and what benefits there are will be slanted 83 per cent towards Japanese exporters.

Now, from food to bicycles. In November 2017 the boss of Brompton Cycles (they make those expensive folding bikes) said Britain would easily cope with leaving the EU on WTO terms and accuses anti-Brexit protesters of creating a "momentum of fear" according to The Daily Mail.

Well, Mr Will Butler-Adams may not be quite so laid back now.  Note this tweet from Joe Mayes at Bloomberg:

The Department of Trade has decided not to maintain the EU's trade defensive measures (anti-dumping) against Chinese bike makers. This imposes tariffs of up to 48.5% on bikes shipped from China into the EU.

Mayes has an article on Bloomberg where Mr Butler Adams is quoted directly but singing a slightly different tune to the one three years ago:

“We’ve got coronavirus, we’ve got Brexit, we need as a nation to be supporting industries that have potential to grow,” said William Butler-Adams, managing director of Brompton, the maker of the eponymous folding bike favoured by London commuters. “There’s this fantastic opportunity in cycling. You would have thought the government would support it and nurture that industry.”

Talk about being careful what you wish for.

In another twist, the EU have now said that goods produced in NI will not be considered as EU goods for the purpose of the 60 plus trade deals they have with countries around the world. But this is also proving a problem for Irish businesses who import a lot of raw materials, particularly milk for the dairy products industry and grain for whiskey distillers. These materials will no longer be considered as being sourced from the EU and will make exporting cheese, butter and whiskey more difficult after January 1st.

Tony Connelly at RTE says:

In June, the Commission wrote to one Irish export sector: "For the purpose of EU FTAs, goods produced in the UK, including Northern Ireland, will not be considered as being of EU-27 origin as from the end of the transition period."

According to that declaration, Northern Ireland will fall out of some 60 free trade agreements between the EU and trading blocs around the world on January 1. 

I assume this means the Irish industries may need to ship grain from the EU or grow more themselves and this will be a loss to NI along with the livelihoods of hundreds of NI dairy farmers. These are just a smattering of what will almost certainly be hundreds of examples of the dislocations and changes, big and small, coming in just eight short weeks. 

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