Wednesday 20 January 2021

The invisible benefits of the single market become ever clearer

There was an interesting  article on the Politico website yesterday: A Brexit lesson: EU’s benefits, largely invisible, hurt to lose. It is a wonderful exposition of the invisible benefits of living in the single market and the customs union. The writer, John Lichfield, says two things really, one is that the single market isn't a conjuring trick but  rather the result of years of detailed regulatory effort and two, that the British undervalued it or didn't see it at all.

He writes:

"Invisible benefits are easy to forget and hard to sell politically. They are also easy to dismiss and easy to lie about. But the cost of abandoning them can be steep.  Since Britain de facto left the EU on January 1, these invisible advantages have become visible disadvantages — even calamities.

"From the rotting fish on Scottish quaysides to the empty shelves at Marks and Spencer stores in Paris, Dublin and Prague, Britain has discovered what it means to wall yourself off from your nearest and most important market."

Everything we are seeing now - and this is just the very tip of a very large iceberg drifting inexorably our way- the meat industry, complaints of excessive paperwork, loss of rights, musicians unable to tour visa-free in Europe, delays putting supply chains at risk, etc, etc are ALL the result of May's decision to leave the SM and the CU and Johnson's decision to make the break even sharper and clearer.

Lichfield talks about how "British tabloids and right-wing media, including a young correspondent in Brussels called Boris Johnson, mocked the EU laws harmonizing widgets or appealed to xenophobic fears about EU rules on the free movement of people."  He says leave supporting politicians talked of the EU in the referendum,  as if it was “just a free trade area.”  He points to Michael Gove for this one.

Yet this is what we have now - a free trade area without tariffs or quotas, yet we are being crippled by paperwork in the non-tariff barriers, the ones the SM and the CU were designed to avoid.  Most EU politicians understood it but our lot - on both sides didn't.  Brexiteers didn't see the benefits at all and many Remain supporting ones could only vaguely make them out and couldn't articulate the benefits.

Gove was right about the Free trade area - he just didn't realise the difference between it and a single market. We are now paying the price of his stupidity. 

What Gove and Johnson the journalists saw was only the petty bureaucratic details. They were blind to the benefits and the clear thinking of other, cleverer men who were slowly but surely removing barriers to trade and dismantling borders for the benefit of all Europeans.

But don't be disheartened. It took Nigel Farage thirty years to get UK voters to ignore the invisible benefits - not that difficult, eh?  We will only need to get voters to see the all too visible disadvantages and that shouldn't take very long at all. Indeed the shellfish, meat and logistics industry is already seeing huge disruption, which will feed through into shortages, lack of consumer choice and rising inflation. 

A tweet by David Gauke was I thought particularly pointed:

In another bizarre move, MPs voted yesterday to deprive parliament of the power to scrutinise future trade deals:

Jonathan Djanogly, a Tory MP remainer (one of the few) drew attention to the fact that MPs now have less power in regard to free trade deals than when we were EU members:

Amazing.

Brexit's impact on UK exports (and imports) will soon be seen in official figures but The Times have an article by their economics editor David Smith, quoting figures from a paper by the UK in a Changing Europe think tank: Brexit and beyond, which suggests a huge drop is coming over the next few years:

Thomas Sampson, a trade economist based at the London School of Economics, has estimated that after ten years UK exports to the EU will be 36 per cent lower than what they would have been under continued membership, dragging down overall exports by more than 10 per cent. Trade frictions will also reduce imports from the EU, by 30 per cent relative to what they would have been. 

Imports and exports are around £300 billion at the moment so he is looking at £100 billion reduction in both imports and exports at today's prices.  These are huge numbers but support the 25-50% figures that the Halle institute suggested in 2018.

Another academic, Professor Alan Winters also "pours cold water on the idea that trade agreements elsewhere will make up for the loss of EU trade."

The trade deals so far agreed only roll over existing EU agreements and the new Trans-Pacific Partnership, for which Britain has expressed enthusiasm, he says, “would add little in the way of market access,”  while a trade deal with America has become "more difficult and distant."

Smith himself wryly notes, "There is no sign of the trade cavalry coming over the horizon, or of the lost trade with the EU being replaced."

As each day goes by another nail is hammered into Brexit's coffin.

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