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The next general election in the United Kingdom is scheduled for May 5, 2022 and many are beginning to wonder whether Brexit will be completed by that date.
Of course, with a new Prime Minister at the helm starting July 23, 2019 there is the chance that injecting new blood into the ongoing Brexit debacle will finally get the UK over the line and at long last(!) allow the country to become all that it can and should be.
After 3-years of economic uncertainty that’s caused harm to the UK economy and to the other economies depending on a strong British economy (such as the Republic of Ireland) it will be refreshing to know that restoring the UK economy to the roaring lion it once was is on the horizon. And that’s a good thing.
Let’s Talk About the Benefits of Brexit for a Moment
With the passage of time, some Brexit benefits may have faded in the minds of some. Hey, you’re busy people and you’ve got lots on your mind, so let’s refresh, shall we?
- The UK will be able to sign as many free trade deals as it likes. Many countries including the Commonwealth of Nations countries, the USA, the CPTPP countries and more have all said they’d like free trading arrangements with the UK. Also, the African Union, MERCOSUR (an Atlantic Ocean-facing South American trade bloc) and the Pacific Alliance (a South American trade bloc fronting the Pacific Ocean) want trade deals with the UK in the immediate post-Brexit timeframe. GCC countries too, have expressed an interest in improved UK trade. Impressive, as those countries in totality represent about 4.5 billion citizens. And if you’re a moneygrubber like me, you don’t think of those people so much as ‘citizens’ of those countries, you think of them as ‘potential consumers’ of UK products and services. Hehe. (But if ‘we’ don’t fill their orders — then ‘some other country’ will) Consequently, if UK GDP doesn’t subsequently improve by £1 trillion within 5-years, Britain’s business community is doing it all wrong. Get used to seeing UK exporters selling record amounts of goods and services due to the new trade opportunities presented by Brexit.
- The UK will again control who is allowed to enter the country and be able (and allowed!) to properly police its borders in the same way that every normal country in the world polices their borders. At this point, the UK border force and the country’s police and security services have some rather large gaps in their information — as to who’s in or out of the country — due to the EU’s lax (irresponsible?) border and immigration policies. Commonwealth nations stand to gain the most from Brexit as many of them are rapidly developing nations whose young people may enjoy gaining streamlined access to seasonal work visas, returning home at the end of each season with some hard-earned cash in hand and a newfound appreciation for the opportunities the UK affords decent and hardworking Commonwealth citizens.
- The UK will again be in full control of its own laws and its courts. And no longer will a situation exist where the UK surrendered some of its hard-won sovereignty to a foreign power — which is expressly forbidden under the UK’s constitutional framework by the way. What kind of politicians would willingly surrender the sovereignty of their own country to a foreign power, and an economic competitor power at that? None! (Well, none… other than the pollyanna, globalist, snowflake generation of British politicians in power when the UK joined the European Union. And all of it done without the benefit of a referendum until 23-years later) Shameful in the extreme! Heads should roll. They won’t. They should. But as long as it gets straightened out before the next UK general election I’m fine with letting bygones be bygones.
- The UK will no longer pay an average net payment of £10 billion per year to the EU. Over 10-years that’s £100 billion (not £100 million, but billion!) Who could’ve negotiated such a deal? Only British-hating UK negotiators, that’s who.
- Cheaper food for UK consumers and a wider selection of goods from which to choose in the shops. This will occur due to the huge economies of scale of the North American marketplace and via the competition inherent within the EU marketplace, and from goods and services sourced from other continents.
- UK universities full and expanding due to higher enrolment from new free trade partner countries. And increased employment opportunities for British educators at UK universities is just one more benefit of Brexit.
- UK tourism operators will experience record year-on-year numbers as citizens from new trading partners become interested in the UK. For one example, if your Commonwealth son or daughter is working or studying in the UK, chances are you’ll end up in the UK at the holidays for a visit. And that’s good for UK tourism.
- UK hospitals will earn billions as patients from new trade partner countries travel to the UK for treatment. NHS expertise is highly respected around the world and Medical Doctors in other nations that have free trade agreements with the UK may have the option to send their patients to the UK for treatment. Billions that could be earned by the NHS are presently missed because no one is looking at this great cash-cow which could re-energize NHS budgets to a very high degree.
- The UK could dedicate its foreign aid spending to Commonwealth of Nations countries exclusively and keep the money in the family so to speak. The problem with foreign aid spending (as noble as it is for rich countries to help developing nations) is that once it’s spent, the UK will never see any benefit in return from such spending as the number of people who know which foreign aid donor funded this or that project in their nation is very small. Sometimes only a handful of people are in the know. But if the UK decided to spend their entire foreign aid budget in Commonwealth nations exclusively, the UK would become known as a major financier in their projects (projects that create much-needed jobs for citizens in developing nations) and the UK would gain recognition as a force for good in that country. PR like that you can’t buy from a public relations firm! It’s called, ‘Brand Loyalty’. Thenceforth expect UK companies to export more goods to each of those countries as disposable income rises among their population.
- Abolishing the Common Agricultural Policy (CAP) “The CAP costs British taxpayers twice over – once through subsidies paid to farmers and twice by keeping food prices artificially high. OECD data suggests EU farm prices are around 5% above world prices and our estimates based on this data suggest UK consumers pay around £2billion per year in higher prices due to the CAP.” AND: Abolishing the Common Fisheries Policy (CFP) “The UK fishing industry could potentially double in size after Brexit, as the UK takes full control of a natural resource which currently is mostly harvested by EU boats. Estimates by Napier (2018) and others suggest a rise in catch of up to £700m-800m per year which with positive supply chain effects could see a total boost to output of around £3bn per year – already offsetting a third of the possible trade losses.” — BrexitCentral
How’s That For a Few Benefits of the UK’s pending Brexit from the EU?
There are more benefits, of course. But for now, let’s agree that 3-years of Brexit dithering has cost the UK economy plenty and has negatively impacted countries whose economies depend on a healthy UK economy, and that it’s time for UK politicians to get their act together and deliver what ‘The People’ voted for in the June 23, 2016 referendum.
Whether you think ‘The People’ are right or wrong is wholly irrelevant. What matters, is democracy. And either the UK is a democratic nation or it isn’t. You can’t have it both ways.
So, let’s decide right now to make a success of Brexit and just get on with it.
Image courtesy of LondonThamesPort.co.uk
Welcome to London, 2020. You’re in the former Battersea Power Station where the British International Motor Show is being held this week!
Apple Inc’s new UK & Commonwealth HQ is full of Alan Turing-esqe brilliant people glad to be hosting the show in their auric new building — and for the first time anywhere, iDrive (Apple’s shiny new hydrogen powered car) is on public display.
Aside from its obviously stunning design, the best thing about this car is that it can’t be stolen because unless the owner of the car is within a few feet of the car with his/her iPhone on and logged-in to the iDrive app, it is just a piece of aluminum, glass and plastic that can’t go anywhere. There’s no computer or operating system to allow the car do anything at all, save for the iDrive app in your iPhone or iPad.
No iPhone or iPad? Then you’re not the owner of the car. Because a matching serial number iPhone & iPad is provided with each Apple Car, with thumbprint security and as many passwords or login captchas as you want. It’s up to you.
Even if someone steals your iPhone and manages to locate your car, you can always “Log out of all devices and apps” remotely from any computer or smart phone on the planet — including the app that drives your beautiful new Apple Car. (Stolen car coasts to side of road, wholly inactive)
Now, that’s what I call a user-friendly car ownership experience.
And Brexit, You Ask? Pshaw!
Brexit came and went a long time ago. Neither Project Fear or the extreme Brexiteers were right; The UK coasted through 2019, Brexiting on March 29 as scheduled and other than a temporary blip in the markets things continued as normal. Yes, even the Sun rose in the sky the next day. Astonishing!
But not really. For all the hype, compared to other events taking place in the world Brexit turned out to be a sideshow. Only hyperventilating European politicians on both sides of the English Channel noticed Brexit.
After dipping to 1.2% GDP growth in 2019, the UK recovered and is now looking at 2% growth for 2021 — not due to Brexit — but due to the fact that Remainers are no longer sabotaging the UK economy hoping for it to fail so they could get their way.
Since the summer of 2019, the UK joined the USMCA (the new NAFTA agreement) and the CPTPP, and the new Commonwealth of Nations Free Trade Accord (CNFTA). In 2020, the UK has signed trade agreements with countries that have a combined population of 5 billion+ people.
A free trade deal with the EU (based on the excellent CETA agreement the EU has with Canada) is expected to be signed by the end of 2020 and go into effect on January 1, 2021.
Food shortages, rioting, family strife, civil war? Not a bit of it.
Every politician who tried to make a career out of Brexit is gone. Whether extreme Brexiteer, extreme Remainer, whether continental European or Briton; Every politician who held an extreme Brexit position was invited by their respective parties (and voters, hehehe) to leave politics.
Enjoy the day Britons, legal migrants to the UK, and visitors! You’ve earned it.
Oh, and the UK and the EU signed a modified Withdrawal Agreement on the 11th-hour of March 28th, 2019. But you knew that.
Think about it for a second. The thing we call Brexit is being held-up by a tiny item called tariffs. It’s ridiculous. (OK, there are some other things too, but for today let’s talk tariffs)
At the moment, the UK is still a dues-paying member of the European Union and is therefore obligated to charge the same tariffs as any other EU country, and such broad agreement on external tariffs, combined with low or no tariffs between members, or even standardized tariffs between members, is part of what makes up what’s commonly called a Customs Union.
When the UK exits the European Union it’s right to assume that the UK will no longer charge the same tariffs as the EU.
In fact, that difference is part of the problem between the EU and the UK in the post-Brexit timeframe, and businesses near the Republic of Ireland and Northern Ireland border may find themselves affected by this change-up.
How Would a Zero-Tariff UK Economy Work vis-à-vis the European Union post-Brexit?
What if the UK decides to embrace an economy where no tariffs are charged?
There would, of course, be people who complain (on the UK side) about a loss of tariff revenue for UK government budgets, while on the Republic of Ireland (RoI) side, businesses located near the border might worry their customers will drive to Northern Ireland (NI) to save 6.5% worth of tariff value on their purchases.
Which are immensely easy problems to solve!
How to Solve a Disparity in Consumer Prices (Due to Tariffs) Across an Uncontrolled Border
- Offer a rebate to Republic of Ireland businesses located within, say, 100 miles (160 kilometres) of the Irish border and such rebates would be equal to the (tariff portion of the) savings RoI consumers would enjoy by shopping in Northern Ireland. In this way, RoI shoppers won’t bother travelling to NI to save (usually about 6.5%) on the price of imported goods and consequently, RoI businesses won’t lose sales to the (then) zero-tariff regime north of the Irish border. We’re talking about small amounts of money on each transaction — but over the course of a year, especially for small ‘Mom and Pop’ businesses in RoI, it could add up and potentially at least, represent a hardship for those business owners. Who will cover the cost of the rebates? The UK, of course. Why would the UK government want to do that? It’s just one more irritation that the UK government can remove from the negotiating table to simplify Brexit. Such rebates might cost the UK government as little as £1 million per year. Of course, it might cost as much as £20 million per year. But, with so much to gain (a quicker and less hairy Brexit) the UK government could afford to pay the Republic of Ireland those rebates a full 10-years in advance at the beginning of each decade.
- For businesses in the EU that import from other countries and are required to charge tariffs on behalf of their government — all they need to do after March 29, 2019 is add the UK to the list of countries they must charge tariffs.
- For companies that export from the UK in the case where those goods are shipped to the EU or other countries — there’s no hassle with a UK zero-tariff regime because there are no UK tariffs to add to the final price — no matter where those goods land in the EU or wherever in the world they go after that.
- The same is true for goods that originate in America (for example) but are shipped through the UK before being shipped on to the EU. Whatever the price of the item from America + zero tariffs added by the UK = landing in the EU with only the taxes or tariffs that originated in America. The UK adds nothing in the way of tariffs, nor takes anything away from those tariffs. The term for that is revenue-neutral tariffs.
It’s so easy when you know how!
How Could the UK Recover Lost Tariff Revenue and Pay the Proposed Irish Tariff Rebates?
There would be two costs for the Chancellor of the Exchequer to cover:
One would be the loss of tariff revenue which would represent a large annual cost — and the other would be the relatively small cost of rebates to RoI businesses located within 100 miles (for example) of the Irish border.
a. For as long as the UK has been in the EU Customs Union, consumers have unknowingly paid the cost of tariffs on goods imported from outside the EU. In some cases the tariffs involved are quite low, but in other cases EU countries are required to charge up to 18% tariffs on certain goods coming into the EU28. All EU consumers pay an average of 6.5% more for goods imported from outside the EU due to those EU tariffs. But as soon as the UK leaves the EU Customs Union it would no longer charge EU tariffs and the cost of imported goods in the UK would fall by an average of 6.5%. Which is a good thing, except that the Chancellor of the Exchequer would need to cut spending by that total sterling amount or, add 1% (or less) to the national sales tax to make-up for that lost revenue. Most Britons won’t even see the difference. But if you’re a Briton who buys a lot of imported goods you’ll be slightly better off.
b. If you’re a UK business, it’s one less piece of paperwork you have to deal with and one less revenue stream you must collect on behalf of HM government.
c. If you’re the Chancellor of the Exchequer, you’ll lose millions in tariff revenue, but you’ll gain even more from the (less than) 1% addition to the national sales tax. But even more important, you’ll save millions of pounds in spending to oversee, police, and navigate all that tariff collection. Those tariffs don’t get collected by themselves! Nor does every business remember to forward those tariff revenues to the government on time, etc. Nor will the Chancellor be required to keep abreast of competitor nation tariff structures and constantly adjust tariffs for the UK to remain tariff competitive, nor will the Chancellor be required to notify the WTO about tariff changes. Because, no tariffs!
A Word About the WTO
The World Trade Organization (WTO) is a great organization that was created to ensure countries play fair with each other, especially on tariffs and on the dumping of goods at outrageously low prices, thereby harming the country importing their goods. And if you’re a developing country, you definitely want to be a WTO member as the WTO will protect you from larger, more aggressive countries and their powerful transnational corporations.
However, it makes rules in accordance with its membership wishes and some of those rules may surprise you.
WTO rules do not apply to trading partners that charge tariffs lower than the WTO tariff schedule (which was recently increased to an average of 6.55% on a long list of goods) therefore, trade deals can be done more quickly without WTO tariff regulations to complicate things.
The WTO won’t arbitrate between non-WTO members, nor will it intervene where countries charge tariffs that are lower than the WTO tariff schedule. Nor will it involve itself where two countries have a dispute within a free trade agreement previously agreed by both sides — unless requested by one or both parties to mediate disagreements within that free trade agreement.
In short, countries that don’t charge tariffs have no dealings with the WTO, they owe it nothing, and they have no tariff disputes. (Because they have no tariffs to argue about)
Many things come together beautifully for the UK were the government to decide to operate a tariff-free economy.
Not only would Brexit be streamlined, the Irish border situation becomes simpler to settle, relatively small rebates can offset any hardships for RoI businesses located close to the Irish border, CEO’s from other countries would appreciate the ease of doing business in the UK, any losses in tariff revenue for HM government can be offset by a (less than) 1% increase in the national sales tax, and free trade agreements become simpler to negotiate.
The UK wouldn’t need to re-apply to become a WTO member, nor would it fall under WTO jurisdiction in trade matters, nor would the UK need to pay annual dues to the WTO.
And imported goods in the UK would become cheaper by an average of 5.5% roughly speaking (dropping the 6.5% average tariff on imported goods + 1% national sales tax increase on all goods = 5.5% cheaper on imported goods) which can help consumers in regards to their discretionary spending.
The government would save millions of pounds sterling annually because it wouldn’t need thousands of workers to work in the Treasury’s tariff section, adjusting tariffs, comparing tariffs, ensuring tariffs are properly implemented, ensuring that tariff revenue is properly submitted to the government by UK business, dealing with the WTO, and handling lawsuits caused by disagreements over which tariff schedule must be applied on a given product. And many more miles of red tape than that, that the UK government could forget about forever.
Just another list of the benefits of Brexit, my friends! Happy weekend!