A hundred British negotiators are in Brussels this morning to start the final leg of our unique quest to reach a new inferior trading relationship with the EU. At the end of it, the question of how close or otherwise the UK will be to the EU in regulatory and legal terms will finally be answered. The speculation, fantasies, delusions and procrastination must soon come to an end. The fundamentalist position the government has adopted towards the ECJ means, on the surface, a very distant relationship, by far the worst trading terms of any countries in Europe with the exception of Russia and Belarus.
This damaging and self imposed isolation puts a value on our sovereignty far higher than that of any other European country. Above participation in EU programmes, frictionless trade and prosperity as well as security and almost everything else, but we still want a zero tariff, zero quota FTA. The two sides begin far apart on key issues and there will be need to compromise, but who has the most flexibility?
The EU is much larger, more experienced and hemmed in by a spider's web of hundreds of treaties and agreements with other countries. They cannot offer us the rights of Norway with the obligations of Canada without upsetting both of those countries as just one example. The EU has also consulted widely with the 27 member states and with business groups. The sliders on rights and obligations are riveted together, the fewer obligations you are prepared to accept the fewer rights you can enjoy. The distant relationship which is the government's latest preferred goal is partly a recognition of that.
Moreover, all 27 heads of state must unanimously agree to it plus the European parliament, and if the talks stray into mixed agreement territory, all 30+ national assemblies must also ratify any new trade deal.
The EU Commission, so long portrayed in this country as some sort of all-powerful cabal of dictatorial and unelected bureaucrats, actually have very little room for compromise.
The UK government on the other hand has not consulted the devolved administrations in Scotland, Wales and NI and is actively ignoring business. It is simply following its own rather flexible ideological red lines. Hence, I expect in the end we will have to do most if not all of the compromising. The Tory party is no match for the EU.
In the end it will be business, industry and the millions of people they employ who will decide if the price Brexit Johnson is preparing to pay to regain a notional sovereignty is a fair one or not.
The threats to leave and trade on WTO rules would be even worse than the terms Russia enjoys, which includes 24 bilateral agreements and many more multi-lateral ones. Even Belarus has four bilaterals. Walking out would place us in an almost a unique position in world terms having no legal ties with the EU beyond the Withdrawal Agreement signed last year. I confidently forecast this will not happen.
The government, or certainly David Frost in his Brussels speech, talks about Britain regulating new sectors but this seriously underestimates what life will be like living adjacent to the world's foremost regulatory superpower. Britain will never usurp the EU as the world's regulator. We will have to cleave towards the regulatory standards of one or other of the three great trading blocks, the USA, China or the EU. Having spent 46 years developing EU standards it would seem extraordinary to now reject the very rules which have underpinned life in this country since 1973 in exchange for lower American food standards and imperial measurements. It would look gratuitously stupid to do so simply to avoid the jurisdiction of the EU court.
The government's declared goal is damaging enough, exiting with no trade deal at all would decimate British industry and force the government back to the table. All the EU has to worry about is not looking like a bully.
Which brings me nicely to Priti Patel. Brexit Johnson came out of hiding yeserday to give a statement on covid-19 and the Home Secretary. He defended her from the accusations of being a bully and a liar made by Sir Phillip Rutnam. As a known liar himself it was quite easy although his backing and assurances probably didn't count for very much.
The Times carried an article confirming her behaviour has followed a pattern for some time:
"Priti Patel has a record of bullying behaviour towards senior civil servants dating back over five years, former ministers and officials have claimed.
"Priti Patel has a record of bullying behaviour towards senior civil servants dating back over five years, former ministers and officials have claimed.
"Concerns about the home secretary were raised with Downing Street in 2017 when she was international development secretary. She was also subject to complaints when she was an employment minister in the Department for Work and Pensions between 2015 and 2016.
"Ms Patel is said to have asked for the removal of two officials in her private office, while ministers who worked with her in government have described a “pattern” of unacceptable behaviour spanning her ministerial career."
Press TV, the Iranian news outlet headline their report on Johnson's comments: Johnson backs ‘bullying’ and ‘vicious’ Patel. Iran! I ask you.
Johnson also said coronavirus will 'spread a bit more' - something I think most of us would have been able to predict. He might as well have stayed at Chequers for all the help he was. But the virus has the potential to deliver a massive hit to the world economy.
The best forward looking forecasts are provided by IHS Markitt's Purchasing Managers Index (PMI) a survey carried out in 40 economies worldwide. It shows the health of an economy by a number between 0 and 100. Anything above 50 means expansion and anything below means contraction. Usually the numbers in the UK and EU are invariably in the range 45-55
The latest figure for China is 35.7. For one of the three big economies in the world, one that has been growing at 6% plus for years, this is absolutely devastating. It's lower than the 38.8 reached during the 2008 financial crisis. The Times report it HERE with a claim that last week, Chinese factory output was down to 20% capacity. This is bound to hit global supply chains and threatens to knock weak UK growth back even further.
It will do nothing for Brexit Johnson's plans to increase spending on infrastructure in the red-wall constituencies. It is something for the new Chancellor Rishi Sunak to ponder as The Sunday Times report that $6 Trillion was wiped off global stocks last week.
Brexit may soon be the least of our worries and I never thought I would be saying that.
