Back in the sixties, governments of both colours thought the loss or sharing of some sovereignty was worth exchanging for reduced friction in our trade with Europe. Now Brexit Johnson thinks adding friction to get it back is a price worth paying. Either the price of sovereignty has gone up or the cost of friction has come down in the intervening years. Personally, I think it's obvious that globalisation has had precisely the opposite effect. The question for we remainers is how long it will be before a future government realises the price we are paying for sovereignty is too high?
Not too long I hope. And then we will have come full circle with a new application to rejoin the EU.
At the moment the PM thinks the EU's demands in the draft mandate are ridiculous and unreasonable and don't really give us the degree of sovereignty he wants. The government is insisting it is not asking for a "special, bespoke, or unique deal" with Brussels, but an agreement like those the EU has previously struck with other countries like Canada or Japan.
It's as if free trade deals are off-the-shelf models set out in a shop window with a price tag attached. They are all bespoke because each country is different in the goods or commodities produced, the opportunities and need for defensive measure, size and geographic proximity and so on.
EU trade demands may be 'ridiculous and unreasonable' but it's not like we have an alternative. There is only one EU single market on our doorstep and they control access to it. The price they want to charge is up to them. We wanted to create another option by raising the prospect of a US trade deal but that seems to be slipping away now so TINA comes in to play. There Is No Alternative. We can't play one off against the other and it was unlikely to have worked anyway. Brussels knows the value of the single market.
The sovereignty Brexit Johnson seeks is going to come at a very high price.
Dmitry Grozoubinski, the former Aussie trade negotiator, thinks Brexit Johnson is playing it all wrong with his aggressive rhetoric:
1/ Reminder:— Dmitry Grozoubinski (@DmitryOpines) February 15, 2020
When it comes to public communication during a negotiation, strong language tends to:
- Play well at home
- Increase political cost of backing off for the other side
"I guess we are being a bit ridiculous," is not something EU leaders can afford to publicly say. https://t.co/SzpSG2xj8r
Grozoubinski thinks the PM's sabre rattling interventions are unwise to say the least and only serve to entrench the EU's position. He asks, "even if the Prime Minister is resigned to, or even determined not to reach agreement, why the overheated rhetoric now?" And, "Why not state your red lines calmly, engage constructively for 4 months, and if talks haven't moved by June, THEN call the EU ridiculous and bail?"
Part of it, I think, is the desperation on our side to reach a deal. We can't walk away and we are complaining already because TINA - and we know it.
A former cabinet minister, unnamed, is quoted by The Independent saying that the PM will be forced to choose between close alignment and no-deal:
"But the ex-minister said that many in parliament expect him to back down as the reality of no deal approaches at the end of 2020, setting the scene for a do-or-die decision for Mr Johnson between inflicting serious harm on the economy or splitting his party.
"With the economic shock of departure without a trade deal likely to ramp up pressure for Scottish independence and Irish reunification – and with emboldened Eurosceptics on his own side pushing for the hardest possible Brexit – Mr Johnson may have to rely on opposition votes to land a softer deal if he wants to avoid going down in history as the PM who crashed the economy and broke up the union, said the ex-minister."
I think this is true. Let me make a forecast. Every salesman knows if you ask your sales manager to come to a final negotiation the deal you come back with is invariably worse for you (lower commission) and for the company (lower profit) than if you had gone alone. Imagine last October when an impasse had been reached, if David Frost, BJ's chief negotiator had returned from Brussels saying the only possible deal was one with a border down the Irish sea, Downing Street would have fired him on the spot.
But Johnson was able to accept it and present it as a triumph! I wonder what Frost thought about it?
So, in the autumn or earlier perhaps, when the pressure has ramped up and the needle is bashing against the stop on the gauge, Brexit Johnson will climb down and accept close alignment. If he doesn't parliament will.
On Irish reunification, that other Dominic (Lawson) writes in The Sunday Times (or HERE no£) this week that this has always been the secret Tory dream - to offload responsibility for the six counties to Dublin. This is sour grapes. When Martin Selmayr was alleged to have suggested the price of Brexit was the loss of NI there was absolute outrage in the pro-Brexit press. Selmayr always denied it of course but I'm sure it was true.
Lawson is now claiming not only that it isn't a disaster for the union but it is an anticipated and desirable thing. All part of the Brexit master plan. He claims Churchill suggested it in 1951 and Sir Patrick Mayhew, NI Secretary, again in 1993.
Watch out for similar excuses being presented for the loss of Scotland, Nissan, Airbus et al. Food shortage will be dressed up as a national weight-loss programme.
On the economic front there's a nice article by Chris Johns in The Irish Times about how The UK Treasury is equivalent to the audit committee in a large company and designed to keep a lid on spending. What happened last week is the head of the audit committee (Javid) was removed so that the Chairman and CEO could control it and have nobody applying the brakes or examining spending on a value-for-money basis. I don't believe this is just speculation either. BJ needs to raise spending to survive.
Now as a backdrop to all this, David Smith in The Sunday Times (When a chancellor quits we should all be unsettled) points out that the UK tax take is at a 30 year high, over 38% of GDP. Spending is over 40% which is why borrowing is already on the rise and expected to hit £50 billion this year. I assume, if Johnson-Cummings do what is widely expected of them and crank it up even higher, the extra spending will have to be majorly financed by more borrowing.
If the economy takes a hit from Brexit related uncertainty - and most people don't see a pick up anytime soon - the position could get decidedly worse with borrowing easily topping £75 billion or more. The money markets may then get jittery.
All fine while rates are low. The problems will come when rates go up when a Sterling crisis could engulf us. Politicians who pursue reckless policies invariably need a crisis to stop them. I don't expect anything less from Johnson. In fact policies often don't seem reckless UNTIL a crisis comes along.
Some people will argue that Labour was also planning to raise spending too. The difference was that they were not proposing a hard Brexit - and in the end, the PM will find he can't propose it either.
Some people will argue that Labour was also planning to raise spending too. The difference was that they were not proposing a hard Brexit - and in the end, the PM will find he can't propose it either.
