But there is a plan

Theresa May has been accused by a powerful parliamentary committee of putting the national interest at risk by failing to prepare for the “real prospect” that two years of Brexit negotiations could end with no deal.

The worst that can happen is a reversion to WTO terms. This makes us richer – as long as we do the other half of the Minford plan, unilateral free trade.

Thus the worst no deal result is a good one. Which means that the only deals we should even consider are ones that produce a better result than that. Over to you Brussels.

42 comments on “But there is a plan

  1. But how can they collect bribes and distribute favours without a deal that is full of loop holes?

  2. I am still baffled as to why the Remainers and the EU are so blind to this point. I don’t know whether EU or EEC membership ever made economic sense for the UK, but it is clear now that with current EU membership costs and WTO tariffs and UK trade figures that it doesn’t make sense any more. The fact that various European politicians talk about wanting to punish the UK for leaving the EU shows the extent of their ignorance. The UK doesn’t need a deal to be better off after Brexit.

  3. “as long as we do the other half of the Minford plan, unilateral free trade”

    That’s a mighty big assumption. This is the public sector we’re talking about.

    1) Tariffs = more tax now, less in the long run.
    2) Free trade = less tax now, more in the long run.

    I’d expect public sector greed and short-sightedness to take over, given they already tax in ways that are too high and sub-optimal. Sorry to be pessimistic.

    Is there a good reason to believe the tax-leeches will see sense in this case, if we do resort to WTO rules? I hope so.

  4. It’s not so much reverting to WTO tariffs- although if all your nearest competitors don’t have to pay them then it’s still a problem but its all the paperwork and border checks.
    I’ve said i’m pessimistic on Britain coming out well because firtstly i don’t think May and Hammond are prepared to go for all out free trade, and secondly the potential for being buggered about with by the EU bureaucracy.
    Yes this is a received opinion http://eureferendum.blogspot.co.uk/ – talks about being buggered about with at Dover just to go to a trade show in Brussels or wherever.

  5. I would bet money they will offer a dirisory hours before the deadline expires. It’s just two years free money for the eu. Walk away. Make them come to us.

  6. Lets assume that WTO terms has all the benefits you say, maybe they do in the long term.
    When we walk away from the single market without a trade deal, we will voluntarily become a “Third Country” under the EU’s rules. How will we cope with the sudden transition from the current system to “Third Country” status?
    Under WTO rules, the EU will have to treat us the same as any other Third Country and we will go overnight from unimpeded transit of goods to customs gridlock. Even if we remove all customs requirement for incoming traffic (which, under WTO rules, we would have to do for all countries – not just the EU) the system will grind to a halt on the return journey.
    It’s been said that civilization is three food-less days away from riot and anarchy. Do we really want to test this? Wouldn’t a managed transition via EFTA be better than an “Event”?
    And yes, I did vote to “Leave the EU”. But we were “only supposed to blow the bloody doors off” 😉

  7. So “customs gridlock” is the norm for international trade is it? Outside the paradise that is the ESpew?

    The only way gridlock will happen–cos the goods are going to them after all–is if French/EU trash start playing games. Games which will hurt those who have bought and paid for our goods and want to take delivery. They have no real excuse either as the flow of illegals runs in the opposite direction.

    They go out of their way to cause us trouble we do the same.

    We could be the free-market Hong Kong of the West. Do they want to find out how competition at that level will affect their bureaucrat’s paradise?

  8. Gareth,
    Right, however, one must remember that the EU exports much more to the UK than vice versa.

    The EU may well want to punish the UK and for all sorts of reasons. I can’t see German auto makers and French farmers agreeing to pay the cost though, can you?

  9. “. . . .firtstly i don’t think May and Hammond . . . ”

    Everytime someone mentions these two the gears in my head creak as the first thing that pops into mind is ‘what do the Top Gear guys have to do with this?’

  10. Mr Ecks: Agreed – Customs gridlock is not the norm in established systems, where the customs infrastructure is matched to the trade volume. That won’t be the case here as a large chunk of traffic suddenly goes from free movement in the internal market to the customs procedures for third countries without the infrastructure to support it. Just look at the problems with trying to upgrade our own CHIEF customs system. And how long will it take to build all the new Border Inspection Post facilities? And who will pay – the EU?
    Jack C: The auto manufacturers, etc. might not like it, but in order to allow continued free inward trade movement the EU would have to set aside the rule of law (it is existing EU law that sets these rules – nothing to do with punishing the Brits). By making an exception for us they would also have to disregard WTO rules which require them to treat all third countries equally. If the situation were reversed, would we be willing to break our own laws to help out some bunch of foreigners who, by their own actions, had got themselves in a bit of a pickle?

  11. If the situation were reversed, would we be willing to break our own laws to help out some bunch of foreigners who, by their own actions, had got themselves in a bit of a pickle?

    Except it is them that are in the pickle and we (well Cameron) gave them plenty of chances to get themselves out of it. A bit of being reasonable (which is, admittedly, the Berlaymont equivalent of rocking horse shit) and the vote would likely have gone the other way.

    But, no. Ever more Europe, ever more bureaucracy, no bending to the perfidious English and, well, BREXIT.

  12. Of course, because who needs actual dirty, polluting, nasty production of goods and services, when you can instead continue to meet that trade deficit by selling the remaining bits of the country you haven’t already sold to Gulf Arab billionaires?

    And to think it’s self-identifying conservatives and liberals (rightpondian definition) who think that’s a great economic and social plan!

  13. The first argument I saw for a European Common Market was Sir Oswald Mosley’s in his Union Movement days (1961)” A home market of 300 million people will be large enough for all requirements of industry, as well as being secure from dumping, under-cutting, cheap labour competition.”
    At a time when Trump is trying to get American-sponsored production back within his borders , it is amazing that our present corrupt Tory administration cannot even deal with the basics like dealing with dumping, under-cutting, and cheap labour competition.
    What has the mighty Tim to say about these tiresomely prosaic problems ?

  14. And is Germany being sold Biggie?

    Or just handed over to those who are establishing a caliphate on benefits.

  15. Gareth,
    Or we could continue to have free movement of goods between the EU and the UK. This would be as-is, which by definition is acceptable under WTO rules (though, of course, I may be missing some factor that changes things post-Brexit).

    The point I’m making is that EU employers and employees will be on the UK’s side here, and will want a deal to be done. EU politicians will be out on a limb here.

  16. Reed,
    What should May be doing about “dumping, under-cutting, and cheap labour competition”?

    I have no idea what your point is.

  17. Jack,

    Once the UK has left without a deal, and reverts to WTO rules, the EU27 must treat the UK as a “third country”. It is allowed – as an established Regional Trade Agreement (RTA) – to impose discriminatory access rules to its members’ markets.

    Those are WTO rules, not the EU27 being unreasonable or illogical.

    On the other hand. the UK can impose barriers on trade with the EU27, but under WTO rules these cannot be harsher than those it imposes on other countries.

    In other words, it is likely that the EU27 will enjoy far easier exports to the UK after a no deal-Brexit, than the UK to the EU27.

  18. Robert,
    Thanks, I assumed it would be something like that.

    “It is likely” seems a stretch though. EU buyers are buying British goods for a reason, and may not look kindly on their rulers slapping on an extra tax.

    Meanwhile, what would be the reason for the UK NOT treating all other nations in the same way? Discrimination based on nationality is supposed to be verbotten surely.

  19. Interesting point about discrimination.

    Just to point to this, though:

    Regional trade agreements and the WTO
    https://www.wto.org/english/tratop_e/region_e/scope_rta_e.htm

    WTO rules on RTAs

    Non-discrimination is a core principle of the WTO. Members have committed, in general, not to favour one trading partner over another. An exception to this rule is RTAs. These deals, by their very nature, are discriminatory as only their signatories enjoy more favourable market-access conditions. WTO members recognize the legitimate role of RTAs which aim at facilitating trade between its parties but which do not raise trade barriers vis-à-vis third-parties.

    WTO members are permitted to enter into RTAs under specific conditions which are spelled out in three sets of rules. These rules cover the formation and operation of customs unions and free-trade areas covering trade in goods (Article XXIV of the General Agreement on Tariffs and Trade 1994), regional or global arrangements for trade in goods between developing country members (Enabling Clause), as well as agreements covering trade in services (Article V of the General Agreement on Trade in Services). Generally speaking, RTAs must cover substantially all trade – unless they are under the Enabling Clause – and help trade flow more freely among the countries in the RTA without raising barriers to trade with the outside world.

    The two bits I’ve put in italics are pertinent, I think. I guess the question is how onerous could EU barriers be and still stay inside WTO rules?

    Mind you, hasn’t the EU had barriers up against African imports?

  20. “The UK doesn’t need a deal to be better off after Brexit.”

    Perhaps not, but it will be spun as the greatest disaster of our times if there is no deal, no matter what happens afterwards.

    A deal is expected, the public is already being told to believe that no deal will be a disaster.

  21. Mr X
    I am no fan of Mosley: the point is that the supersophisticated Phil and his Pal Trese don’t get as far as the bonehead fascist in thinking through the problems of international trade.
    Not a word from the Oracle to nitwit public schoolboys and their rough trade associates.
    PS it gives me the greatest pleasure to use the rhetoric of a past right-wing tosser against modern right -wing losers (determined to take everybody else down with them).

  22. AlexM,

    “I don’t know whether EU or EEC membership ever made economic sense for the UK, but it is clear now that with current EU membership costs and WTO tariffs and UK trade figures that it doesn’t make sense any more.”

    I think the EEC made sense at one time. Faster roads, better trucks and RO-RO ferries facilitated more trade with the continent. And with that, we needed things like standards for many goods. And to some extent, you needed government to manage things like trade standards. And nearly all trade was with those countries.

    But when the world changes, you need to change your organisations to mirror that.

    People who support it today don’t realise that they’re now the old fogies, the establishment. They look at Brexiters as old fashioned little Englanders, but they’re the people not looking at how much our trade is now growing outside of the EU, how much the world is decentralising to individual power rather than state power, how cheap telecoms have changed everything. Try imagining the sentence “we’re buying software from a team in Hanoi” in 1973 or even 1992. So, why do people think we need government structures that suit that world still?

  23. As usual, the idea that the previous policy of binding the UK to a political project we wanted no part of might itself have been a bit foolish is not even entertained.

    Remaining in the EU would have been entirely neutral in all respects. Up is down, left is right, Joanne hates Chachi etc.

  24. Reedy:”PS it gives me the greatest pleasure to use the rhetoric of a past right-wing tosser against modern right -wing losers (determined to take everybody else down with them).”

    And you’re such a success at it to.

    No really–it has taken a millenia for others to murder as many as socialism has killed in a mere century.

    Truly you are progressives.

  25. By my reckoning, the EU has no hope of organising themselves to negotiate the exit agreement within 2 years of triggering article 50, even with the 6 months notice they’ve had. Just remember how they stalled & delayed over the Euro crisis, always missing their self-imposed deadlines.

    My bet is they don’t manage to agree anything within the timeframe so to avoid embarrassment we agree to carry on as-is until some time in the future when a deal is finalised.

    For all their talk, I just don’t see that they can go against their form and act in time.

  26. I think the EEC made sense at one time.

    I think the EEC would still make sense today. Had the organisation that we joined in 1973 (and voted to remain within in 1975) stuck to its commercial remit, I doubt there would have been a referendum in 2016, let alone a vote to leave.

    But no, we had to have all this superstate-building, ever-closer-union crap, with it’s associated passports, currency, army, justice system and supranational governmental bodies. With the result we now see.

  27. Thats a bit like saying Ms May has a plan to hit the ground having thrown us off the cliff . Well….that’s one way of looking at it but I was hoping to have a slightly better relationship with our largest trading partner than Belize
    As for Worstalls Singapore model… it is, shall we say, unproven and , call me an old fuddy duddy but I`d rather not risk the wellbeing of every family in the country on some crack pot theory.

  28. ” call me an old fuddy duddy but I`d rather not risk the wellbeing of every family in the country on some crack pot theory.”

    Me too. After all, the only way Europe has ever been united these past two millennia is by fire and sword. So that’s an experiment I’m entirely happy to avoid.

  29. If we and the rEU “revert” to WTO rules, then we are forced to reduce external tariffs to less than 5%. So, what we say is “We’re complying with WTO by reducing our import tariffs to 0%. Your move, EU”.

  30. NewRemainia: But you are quite happy to have every family in the country stay under the ever more destructive tyranny of unelected Eurotrash .

    Because it suits well-off, middle-class, cultural Marxist, London Bubble, I’m-Alright-Jackal-Heart scum like you and yours. And that is all that matters to the Remain gang.

  31. The Oracle has less idea than Oswald Mosley about how to deal with dumping and cheap labour competition, it transpires .As he sometimes thinks banks don’t create money out of thin air and sometimes does , this is less than a complete surprise.
    At least he knows more than spreadshit Phil whose CV shows, far from accountancy , he specialised as a state school Essex geezer , in cars (“motors” where he comes from) and privatising land value uplift which Tim knows is rightly the source of local and national taxation .

  32. “Motors”? Ever the snob Reedy. The 1950s truly is your decade.

    And as for Mosley, well for you reality is always what you want it to be rather than what it is. Or was Mosley NOT a labour minister? And the Fabians not advocates of eugenics? And GBS not an advocate of the murder of “defectives” by means of “some humane gas”? A policy his fellow socialist Adolf carried out for him only a few years later.

  33. @Chris Miller
    “I think the EEC would still make sense today.”

    Not so sure about that. Assume all the money for development etc wasn’t there and EU budgets/contributions were much smaller, then all we have to consider is whether the amount we save on tariffs on our exported (mostly manufactured) goods is worth the extra price we pay for (mostly food) EU sourced goods that we otherwise would have bought on world markets at lower prices. My guess is that with the high proportion of services in our exports to the EU, the generally lower tariffs on the sorts of goods we do still make and the higher tariffs on the commodities we import from the EU, that even the old EEC sums wouldn’t add up.

  34. jgh- “We’re complying with WTO by reducing our import tariffs to 0%. Your move, EU”.

    That’s what i mean when i say i am pessimistic that Theresa and Philip* are even the slightest bit prepared to do this.

    They should not be tactical about it even for negotiations sake. Just say:

    “zero tariffs for all UK imports, the more the merrier, what?. Well that saved some time didn’t it? Item B. UK- EU imports. Shall we just say 3%? Up to you. What about this 10% on cars. I wouldn’t have thought your consumers want to pay 10% more for all these cars we’re making for them? Charge them more you say? So that production gets moved to the EU? Ah the long game. Clever fellows. Any of you elected are you? No? just wondering. OK, i didn’t want to have to say this but you’ve forced our hand. We’re prepared to send Prince Andrew to China you know, Queen says its ok. Yes i thought so, no its quite alright, make it 3 % fair enough for now.. we can look at it again when Prince Andrew gets back.”

    *Agamemnon- good point.

  35. Ecksy: “Motors”? Ever the snob Reedy. The 1950s truly is your decade.

    I’d agree that DNR Reed is a wonderful throw-back but this time I was reminded more of Arthur (Arfur) Daley in Minder.

    Does DNR have a lock-up south of the river where he can park stuff till it’s all cushty?

  36. @Alex

    I agree. I was just trying to say that, if the EEC had simply stuck to their last, the irritation would have been insufficient to provoke a referendum, let alone a vote to leave.

  37. It’s the non-tariff barriers that worry me.

    And yes, I caught my pessimism off EUReferendum too…

  38. “It’s the non-tariff barriers that worry me.

    And yes, I caught my pessimism off EUReferendum too…”

    The EuReferendum guy(whose name escapes me) is one of those people who imagine that ‘the rules’ stay the same when some big event upsets the equilibrium, so you can easily predict A follows B follows C even in the midst of a catastrophe. When what actually happens is that ‘the rules’ get put aside until the situation is stabilised and sorted, then new rules are put in place to manage the new reality on an ongoing basis. Constantly banging on about ‘We won’t be able to do X, Y and Z because the rules don’t allow it’ ignore the fact that the rules are about to be rewritten.

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