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Assuming European politicians can’t get their act together enough to craft a reasonable Brexit deal that works for both sides by March 29, 2019 Europe will be faced with Brexit on WTO terms which is known colloquially as a ‘Hard Brexit’ where the UK would leave the European Single Market and Common Market mechanisms and other EU agreements and institutions without any subsequent deal in place.
Without further ado, and without boring you with statistics, let’s look at how a Hard Brexit would play-out in the months and years following a WTO-style Brexit.
Will There Be Famine in the Land?
Of all of the dubious claims by the Project Fear campaigners (and they’ve made many!) this must rank in first place.
No. There won’t be famine in the UK on account of Hard Brexit. However, you may notice your favorite brand of cheese may be unavailable for a time and you may find your prescription medications come from UK pharmaceutical companies or American pharmas instead of from continental Europe.
Saying the following words out loud will do you good, dear Britons — so repeat after me;
“The United States of America has come to Britain’s rescue in times past and will do so again in its hour of need.”
Regarding agriculture; The United States agricultural belt is unimaginably massive and its farmers and ranchers are just waiting to fulfill the UK’s orders. There are fields of crops in the United States larger than the entire United Kingdom. It takes 3-hours to overfly them in a jet aircraft flying at 500 miles per hour.
Regarding ranching; There are 93.5 million cattle in the United States (2017) and that number continues to rise at a little better than 1% per year, and significant capacity exists to raise it over a relatively short period of time.
Similar agricultural capacity is available in Canada for grains, corn, soybean, and other crops, and Canada boasts 4.6 million cattle at present (2018) and Canada has more arable land than the United States allowing it to exceed even the mighty U.S. in this regard if sufficient firm orders were placed.
To answer the question: “Where’s the beef?” It’s in the United States and Canada… Just pick up the phone and call us! North American farmers and ranchers would love to take your money — instead of the EU taking your money.
Britons might find their food costs plummet as the huge economies of scale that typify North American food production and the favorable growing conditions combine to produce bumper-crop after bumper-crop which lead inevitably to lower food prices.
Aren’t All American Crops GMO?
Genetically Modified Organisms or GMO crops are grown on every continent, including Europe, which has about the same number of GMO crops as America.
Some Europeans fear that all crops grown in the United States are GMO crops, but except in the case of corn that isn’t true. All corn, no matter where it is grown in the world is GMO and that’s been true for a few decades now. Corn (and maize, which is a type of rough corn that is fed to cattle over the winter months) aren’t commercially viable crops unless the GMO component is added.
Some crops like ‘Yukon Gold’ potatoes, Canola (a seed grain) and every apple sold on the planet have been GMO for many decades.
To alleviate concerns about GMO foods being sold in the UK, Theresa May’s government could simply legislate that any produce or meat that *isn’t* GMO must be identified as non-GMO for UK consumers.
Explainer: Forcing producers to put GMO labels on their produce (if theirs is indeed a GMO variant) is seen as a negative by GMO food producers. But giving non-GMO farmers the right to advertise “Non-GMO produce” or “Non-GMO meat” on their labels would be seen as a positive for their non-GMO produce and meat.
See how easy it is?
Not only won’t there be famine in the land, UK consumers will enjoy a completely new supply chain from which to choose and sufficient labelling for them to make the best choices for their families.
What if the EU Decides to Punish the UK for Leaving?
If the EU wanted to drive the UK directly into America’s arms… the EU would ensure a Hard Brexit and not allow EU goods or produce to be shipped to the UK following Brexit, nor would it allow UK goods or produce to be sold into the EU following Brexit.
If that’s the EU plan, bring it on! Because that plan has a 100% chance of success should the EU choose to make it happen.
And Americans and Canadians are just waiting… “Please, oh God, please, cause the EU to drive the UK into our ever-loving arms!” said every North American farmer, rancher and manufacturer.
To say nothing about the even more fervent prayers being said by North American auto manufacturers in Detroit, U.S.A. and in Windsor, Canada.
For Britain, a WTO Brexit simply means changing suppliers — with a zero-tariff trade deal in effect with North America — combined with the opportunity to sell UK goods into the vast North American market.
The ball, as they say… is in your court, European Union!
View the video where HM North American Trade Commissioner is interviewed by Bloomberg Television on March 26, 2018.
Clicking on the image takes you direct to the relevant Bloomberg webpage.
Only 237 days to go until the official Brexit date of March 29, 2019, and only microscopic progress has been made on crafting a ‘Win-Win’ divorce deal.
Such is the state of affairs that exists (1) within the UK, (2) within the EU, and (3) between the two countries. It is to weep.
But whether the United Kingdom or the European Union are ready for Brexit or not, the Brexit baby will be born — therefore, it’s imperative that both sides stop posturing and get on with creating a deal that works for citizens and industry on both sides of the English Channel.
What Else Is There Besides Brexit?
Although it may be difficult for Europeans to see, there are bigger issues in the world than Brexit which is why a deal needs to get done properly and quickly as there are other, more pressing, and more important matters for European politicians to attend to.
If we liken the geopolitical world to an auto race (a Formula One race) while all the other teams are busy prepping for the race and getting to their startup positions, the UK and the EU have found a muddy part of the infield and are playing ‘bumper cars’ with each other like a couple of overly-exuberant teenagers — getting mud all over their sponsor’s brand names and on their respective drivers’ goggles, they’re damaging the tires and composite body of their race cars, and they’re burning up precious fuel reserved for racing against the ‘big boy teams’ of America, China, Japan, India, Brazil and others.
Either the UK and the EU governments already have a deal and just haven’t announced it to the public, or they don’t realize that other more important geopolitical matters will soon bypass the ‘tempest in a teapot’ happening in Europe.
New and important things sometimes start small. Don’t believe it?
The first streetlights were installed in Cleveland, Ohio in 1879 when electric lights (Brush arc lamps) were placed along major roadways. Thomas Edison (who spent most of his day napping in his workshop only to become extremely productive afterward) was a person who toiled away for years inventing and designing a reliable light bulb, manufacturing one bulb at a time. Yet, the lighting industry in its entirety is a multi-trillion dollar business in our day.
George Eastman, right under everyone’s noses created a company in 1888 (Kodak) that eventually made so much money they weren’t always able to count it. New machines had to be built (computers) to keep track of the astronomical number of transactions happening all over the world, every minute of every day. Over the decades Kodak contributed more than a trillion dollars to the global economy and made the company and its shareholders unbelievably wealthy. Kodak’s patents and knowledge are still with us today.
The Wright Brothers ultralight aircraft first flew on December 17, 1903 near Kitty Hawk, North Carolina. At that time, the two men were thought of as odd, even eccentric people with fantastical ideas wasting precious days that could’ve been better spent. Yet, look at what their great invention has created — a multi-trillion dollar civilian airline industry and military aircraft industry.
From tiny beginnings, the first Model T automobile rolled off the assembly line on October 1, 1908 and see the changes the auto industry has brought to the world. Henry Ford is widely credited with the creation of the American middle class, something that propelled America far ahead of its competitors. Today, the world’s auto industry is also a multi-trillion dollar business, yet everyone thought old Henry was a bit of a dreamer.
King George VI united the modern Commonwealth of Nations under the banner, “Leaders agree that Commonwealth members are free and equal members of the Commonwealth of Nations, freely co-operating in the pursuit of peace, liberty and progress.” The Commonwealth now have 53 members with a total population of over 2.5 billion citizens and ranks near the United States, China, or Japan in GDP and PPP.
Steve Jobs created a company that in relatively few years became a trillion-dollar company, designing a computer operating system that was ahead of his competitors, and designed an astonishing number of world-class products, services and apps that allowed users capabilities they’d never imagined.
All of these great advances slipped completely under the radar at the time of their creation. Governments, industry, and citizens were completely oblivious as to what would follow.
The first flight at Kitty Hawk was seen as a sort of carnival ride item that made you wish you’d live long enough to see it come to your hometown, while Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.” Yes, Henry was that far ahead of his contemporaries.
The point is, all these advances and others haven’t stopped at any time during the 20th century — technological advances are happening right now, right under our noses, just as in the time of Henry Ford — and the next Steve Jobs or Henry Ford aren’t going to stop and wait a few years for the UK and the EU to get their Brexit act together.
For all we know, the next trillion-dollar company or multi-trillion dollar industry might be deciding (this week!) where to set-up their ground-breaking operation and such entrepreneurs are likely to avoid regions of the world where economic instability appears or where regulations aren’t finalized. Dragging-out Brexit = European instability.
It’s not against the UK or the EU… it’s against both.
Both will suffer if a stabilized economy and a finalized regulatory environment are seen to be ‘aspirational’ — which is a word entrepreneurs sometimes encounter in developing nations.
UK and EU leaders should rethink their negotiating ‘strategy’ and factor-in the potential for losing the next start-up, disruptive technology, or multi-trillion dollar industry to a different region of the world, whenever they next meet to discuss Brexit.
Imagine if Europe would’ve ‘had it’s act together’ in previous decades… perhaps Thomas Edison, George Eastman, Orville and Wilbur Wright, Henry Ford or Steve Jobs would’ve started their businesses in Europe instead of America.
Put that in your pipe and smoke it, negotiators.
With financing and instant communications available almost everywhere, the global playing field has levelled since the 19th century, so ‘ease of doing business’ and ‘a transparent regulatory environment’ can make all the difference when today’s entrepreneurs meet to choose a location for the next trillion-dollar business.
We’ll soon know if any of this registers with British and European leaders…
Certain pro-EU commentators paint a picture of either a catastrophic Brexit crash-out (Hard Brexit) or a ‘non-Brexit’ where the UK would retain few of the rights gained by a full Brexit but would still be chained to the responsibilities of EU membership (Soft Brexit) whether via the so-called ‘Norway’ model or the ‘Norway-plus’ model, or via any other model such as the ‘Canada’ model.
Those same commentators excitedly cite potential UK manufacturing job losses in the post-Brexit timeframe even though the UK is primarily a service based economy (80.2% in 2014 and rising) and they forget to factor-in the astonishing changes occurring every day in Britain’s manufacturing sector.
UK Manufacturing = Less Than 10% of GDP
Manufacturing in the UK accounts for less than 10% of GDP (2016) and provides jobs for 3.2 million workers (2016) but a recent PwC report says that by 2030 half of all UK manufacturing jobs could be automated. That’s less than 12-years from now. And it could happen much faster and on a much larger scale than that.
Repeat; Up to half of all UK manufacturing jobs will be lost within 12-years. It’s uncertain whether British workers are aware of these looming changes.
What’s Great for UK Businesses Won’t be Great for Foreign Workers
In 2018, of the 3.1 million UK manufacturing workers (a stat that falls with each passing year as automation increases) we find that over half of manufacturing workers in the UK are citizens of other countries — primarily from eastern Europe, but also western Europe.
So, expect UK-based eastern European workers to be replaced by automation.
Increasing automation and Artificial Intelligence (AI) will cause UK companies to choose between UK-born workers and eastern European workers, and it’s likely that hundreds of thousands (perhaps millions) of eastern Europeans will be returning home with plenty of UK coin in their pocket. (And why not, they earned it)
I hope you didn’t expect the UK to lay-off its own British-born workers in order to protect the jobs of eastern European-born workers as automation proceeds, did you? Would EU companies show that level of courtesy to UK workers in the European Union, were the situation reversed?
Profits for UK manufacturing companies are projected to rise significantly as automation and AI become one with the system, while UK-born manufacturing workers should find themselves at 100% employment.
What’s not to like?
UK Manufacturing Job Losses Due to Automation – Not Brexit
If you’re one of the EU elites who fear that hundreds of thousands of eastern European workers in Britain will lose their UK manufacturing jobs due to Brexit you couldn’t be more wrong.
Let’s be perfectly clear; Half of all UK manufacturing jobs will be lost to automation by 2030 — and it won’t be on account of Brexit!
The narrative that says the UK economy will be severely damaged on account of manufacturing job losses due to a Hard Brexit is a complete and utter fantasy.
Every day from now until 2030, automation and AI will replace eastern European workers, Brexit or no Brexit. Meanwhile, British-born manufacturing workers will find themselves at full employment.
It’s all good!