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It looks like the so-called ‘Project Fear’ campaign has failed in its quest to force referendum after referendum until they got the answer they wanted (which to observers, seemed they wanted to stay in the European Union at any cost) and that Brexit will occur on March 30, 2019 as planned.
All that remains to be decided between the UK and the EU is whether future relations will be based on World Trade Organisation rules, or on a bilateral trade agreement that allows both sides to prosper while maintaining a reasonable level of protection for national sovereignty, for their respective economies, and is able to shelter startups or other businesses that may require some form of special treatment or protection.
Either UK and EU leaders are up to the task, or they’re not. We’ll soon know.
And if they aren’t up to the task, every one of them deserves to get the boot at the next election.
First on the Agenda for the UK
Of paramount importance for the UK are free trade agreements with its Commonwealth partners — agreements that automatically come into effect within 24 hours of the official Brexit date.
It’s important to begin with Commonwealth trading partners because if Commonwealth nations aren’t willing to sign bilateral trade agreements with the UK, why would other countries want trade deals with the UK?
(If I represented a non-Commonwealth country and the UK couldn’t get its act together enough to sign worthwhile free trade agreements with its own Commonwealth partners, I wouldn’t be interested in signing with the UK either)
Yesterday, Australia’s Prime Minister generously indicated his country will sign a bilateral trade agreement to automatically come into effect the day after Brexit, and New Zealand, Canada, India, and other Commonwealth nations have indicated they’re open to bilateral trade agreements with the UK too.
Therefore, it isn’t a reach to suggest that such agreements be ready for a signing ceremony the day after Brexit and that UK foreign direct investment (FDI) in those countries will thenceforth take an instant leap forward.
The time to get such negotiations done is NOW so that a simultaneous signing ceremony can be televised across each of the Commonwealth’s 53 capital cities at 00:01 (in the UK timezone) on March 30, 2019.
What a tribute to enduring relations between Commonwealth members. Such a historic moment!
Second on the Agenda for the UK
No later than 24-hours after Brexit (which puts us at March 31, 2019) the UK should have free trade agreements automatically coming into effect with every economy in the world — agreements that work for each country just as well as they work for the UK.
‘Win-Lose’ thinking is no longer an option in the 21st century and anything less than ‘Win-Win’ isn’t worth spit. In fact, unless trade agreements are ‘Win-Win-Win’ these days, their value is questionable.
If the UK offers a ‘Win-Win’ trade agreement to China, but Japan offers a ‘Win-Win-Win’ trade agreement to China; Which of the two countries will be China’s most favoured trading partner?
Obviously, Japan’s offer would win, and the UK offer would simply gather dust as Japan’s relationship with China surged forward.
These negotiations must occur NOW and be led with a high level of urgency by Prime Minister Theresa May and Secretary of State for International Trade Dr. Liam Fox, so that by April 1, 2019 the UK will have bilateral trade deals with every country in the world — that automatically come into effect the day after the official Brexit date.
Anything less than that stellar achievement should be considered by UK voters to be a mediocre performance by the (then) ruling party in the UK House of Commons.
Time is running down on the Brexit clock (399 days and counting!) and the default path seems the only way that will allow a smooth and orderly Brexit in any sort of timeframe that could be construed as reasonable to British voters.
If the UK government chooses to simply photocopy existing EU trade regulations and then change those laws incrementally over a period of years, the UK should rightly expect to be invited by the European Union to continue their mutually beneficial trade relationship.
After all, how could the EU possibly be upset that the UK will voluntarily continue to follow European Union trade regulations in the pre-Brexit period?
However, this implies that until Brexit actually occurs, the UK will be obligated to consult with the EU on every incremental change made on those photocopied laws and regulations from now until the UK officially leaves the European Union on March 29, 2019. It’s not about polite diplomatic behavior, it’s about pragmatic self-interest.
The UK must begin today to re-prove that it intends — in all cases — to be a fair and reliable trading partner with the EU, and other countries are sure to be watching as this process unfolds. No amount of effort can be spared in this regard, because as so goes the UK trading relationship with the EU, so it will go between Britain and every other country in the world, after Brexit.
Trade After Brexit
Once March 29, 2019 has passed and the UK has officially left the European Union there will be no longer be any requirement for lengthy consultations with the EU on changes to British trade laws or regulations far in advance of them coming into effect.
That doesn’t mean that the UK shouldn’t continue to consult with the EU, it means that it doesn’t need to consult with the EU during the entire policy formation period. But once UK policy has been decided, the EU should continue to be the first to know about pending changes due to the bloc’s importance to the British economy.
As above, no effort should be spared in showing the EU every possible courtesy on even the most incremental of trade policy adjustments under consideration in the pre-Brexit timeframe.
And in the post-Brexit timeframe, a high level of communication and consultation must continue to define the relationship between the two sides.
Customs Law After Brexit
Unlike trade, the present customs union will end the day after Brexit which will be a very positive thing for the UK. After Brexit, the UK alone will be fully in charge of who can and can’t enter the country, and it should mount a Herculean effort now to identify and locate every single foreigner in the country, matching them to their home and workplace (or school) address.
Every non-British born resident in the country should be required to pay 100 pounds sterling per year, and also be required to provide their updated home and work/school address as often as it changes, no matter which country they originally hailed from. It’s the 21st century(!) all of this can be done on a UK.gov webform in less than 10 minutes per year.
Especially for those foreigners living in the United Kingdom anytime prior to Brexit day, the UK government should make the entire process as streamlined as possible.
Commonwealth Nations in the post-Brexit Timeframe
As the UK returns to its Commonwealth roots, immigration to the UK should thenceforth be sourced from Commonwealth nations.
Of course, there will always be a number of immigrants from the EU, America, and other countries. But as much as possible, the focus should be on the ‘all for one and one for all’ approach of Commonwealth nations — and one great way to keep that viable is by sourcing 2/3rds of the UK’s immigration requirements from the Commonwealth.
In addition, the UK should continue to spend .7 per cent of GDP on foreign aid — but spend it in Commonwealth nations exclusively.
This means that the British government must find other nations to take over its existing foreign aid commitments in non-Commonwealth nations so that Britain can concentrate on building a better Commonwealth.
Done right, every pound sterling spent in Commonwealth foreign aid should return a minimum of two pounds sterling to the UK, as a rising tide in a finite environment like the Commonwealth will lift all boats, which is quite unlike spending that same amount of foreign aid in the wider world.
One example of how Britain could benefit in the post-Brexit timeframe with a policy that favours Commonwealth nations is that UK universities, colleges and trade schools should see a vast increase in enrollment from the 2 billion citizens of Commonwealth nations.
Time is Tight
Although Brexit once seemed far-off, time is getting a little tight. Much needs to be accomplished in the remaining 399 days until Brexit.
The best way to do that is to harmonize UK trade law with EU trade law and then make incremental changes over time. That’s how not to lose.
How to win is to engage with Commonwealth nations as never before in ways that work to benefit both the United Kingdom and every Commonwealth member nation.
Keeping our EU friendships healthy on the one hand while updating our Commonwealth friendships for the 21st century on the other hand, is irrevocably in Britain’s best interests, thereby creating a new paradigm that will allow the UK to work to its strengths over the next 100 years.
A new report by a prestigious polling firm says that a so-called ‘No-Deal’ WTO-style Brexit will cost one EU country €5.5 billion over the next two years, as opposed to a Brexit with a trade agreement where losses for that country would likely total €1.5 billion over the next two years.
That country is the Republic of Ireland.
“A hard Brexit could cost the Irish economy more than €5.5 billion over the next two years, a government-commissioned report has said.
A “soft” Brexit including a transition arrangement would cost less than €1.5 billion over the period, highlighting the importance to Ireland of the UK’s withdrawal talks with the EU.
The study by Copenhagen Economics, which examined four possible scenarios, also warns that the UK will probably take at least five years to implement new trade agreements, complicating Irish efforts at contingency planning.
[Ireland’s ‘Taoiseach’ which is the official title of the Irish Prime Minister] Leo Varadkar said last night that a comprehensive free-trade deal with the UK would be the best way to avoid a hard border. After a meeting with Theresa May, the UK prime minister, he said: “We both prefer [the option] by which we can avoid a hard border in Ireland, and that is through a comprehensive free trade and customs arrangement.
“That is the best way we can avoid any new barriers — north and south, and also east and west.”” — The Times
Other EU Nations Would Take a Hit in the ‘No-Deal’ Scenario
We can extrapolate that other EU countries would also take an economic hit in a ‘No-Deal’ scenario, but due to their much larger economies when compared to Ireland, such losses would amount to tens or even hundreds of billions over the same two-year period. Just think of all those German cars that wouldn’t be sold in the UK due to the higher tariffs that would automatically be imposed on EU countries in a ‘No-Deal’ Brexit!
Almost every country in the world uses WTO rules as the foundation of their trading relationship with other countries (but important to note) those same countries also diligently pursue bilateral trade deals with their important trading partners that allow both sides to legally sidestep the more costly WTO tariff ruleset in favour of something that works better for both partners. (And that trading relationship/tariff structure can be anything the two sides want in regards to any trade that happens between them)
So if country A and country B decide they want to trade, they’re completely free to build a better tariff structure than the comparatively expensive WTO ruleset, and that agreement will thenceforth supercede the WTO tariff structure. However, it only applies on trade between those two countries — the rest of their trade with the world would still be conducted under the auspices of the WTO.
It’s a pretty basic thing. Countries that do anything more than a smattering of trade between them negotiate bilateral free trade agreements to bypass the more onerous WTO trade rules and tariff regime.
There’s Still Time to Negotiate a Trade Deal with the EU
As of this writing there are 409 days remaining until Brexit and either we will have a trade agreement with the EU, or we won’t. If not, it will be costly for both sides, but more costly for the EU by one order of magnitude!
However, saying that there are 409 days remaining ’til Brexit — isn’t the same as saying there are 409 days left to negotiate a free trade agreement. Far from it!
The two sides have 258 days to arrange a free trade agreement. Let’s hope our politicians (and theirs) are up to the job (and if not, why are we paying them?) otherwise almost everything that citizens and businesses purchase will become much more expensive on both sides of the English Channel in the post-Brexit timeframe.
UK Prime Minister Theresa May has stressed that October 29, 2018 is the last date that both sides can agree a trade and customs deal before the UK must begin readying for the implementation of WTO trade rules. And on that point both sides agree. Even six months (during the period from October 29, 2018 to March 29, 2019) would barely suffice to put in place the necessary measures and standards to allow industry to prepare for life after Brexit.
UK and EU voters should remember who did, and who didn’t, get a free trade agreement signed when they head to the polling booth at the next election.