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David Frost in a bullish mood, despite lack of momentum after Brexit

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The slogan “Get Brexit Done” won a strong vote in 2019 as it promised to shut down the public after three years of harsh national feud.

These three words, and the associated promise to “unleash the potential of Britain,” were on the cover of the Tories manifesto, with a picture of Boris Johnson thumbs up to the public. The message was clear: time to move forward and move up.

But this week, as we approached the end of the first year of British life outside the EU single market, it was difficult to find many senses of post-Brexit momentum promised two years ago.

The situation in Northern Ireland has boiled, This week’s headline It will continue to be a source of boiling tension next year.

Trade Secretary Anne-Marie Trevelian said it was not the government’s intention to invoke Article 16 before Christmas, and EU Brexit negotiator Maroš Šefchovic was tired of it. Confirmed Negotiations are now likely to be dragged into 2022.

This is clearly better than a full-fledged bust-up, but as Sir David Frost himself frequently states, resolving disagreements about Northern Ireland is to normalize relations with the EU. It is a necessary precursor of. It’s still a long way off.

And if the Northern Ireland Protocol needed to prove how infectious it was in relations between the EU and the United Kingdom, it was specifically proved by Germany’s new coalition government agreement. See need To ensure “full compliance” with the agreement signed by the United Kingdom.

However, there was also a much longer-term warning from Frost about the government’s determination not to dilute Brexit’s vision. This is despite pressure from companies facing the problems posed by building high levels of non-tariff barriers in the developed economic and trade bloc at the UK gateway.

The barrier is high. The story of a “zero tariff, zero quota” free trade agreement may have reminded us of the concept of “free-flowing” trade, but the reality is (like this). Excellent easy-to-read paper (Explanation by Catherine Barnard and Emiliya Reinalte of the University of Cambridge Faculty of Law) is much closer to “WTO rules” or “no agreement” than is generally understood.

As they observe, the Trade Cooperation Agreement (TCA) is not brilliantly ambitious. It contains little about services, mutual recognition of each other’s standards, mobility rules for young people and skilled workers, or agreements on agricultural products that cause a significant proportion of headaches at the border.

“As a result, the TCA offers less in terms of eliminating technical barriers to trade than the parties would follow under WTO rules in a’no transaction’situation,” they write. There is.

This has always been a big step for any government. Budget Responsibility Bureau continues to forecast Britain’s exit from the EU will hurt UK gross domestic product by 4% in the long run (twice the pandemic), but the forecast is just a forecast, so for the time being the government recalls a more optimistic vision for the future. Will continue to do.

In him speech At this week’s Margaret Thatcher trade conference, Frost argued that it was right to reject a softer version of Brexit that left Britain “closer to the EU’s orbit.” He then seemed to crush the hopes of some in the business world that a resolution in Northern Ireland could initiate the process of addressing some deficiencies in the UK trade cooperation agreement.

“As far as I know, there are a lot of people … I want to take the time to get us back into the situation. That can’t be right,” he said.

Therefore, there is no setback in Brexit. Instead, Frost has promised to focus on domestic innovation, a more effective regulatory environment, and the building of global trade agreements, while at the same time overcoming “the power of entropy, laziness and vested interests.”

Recalling Margaret Thatcher’s vision of “a country of do-it-yourself, Britain rising up,” Frost said Britain seemed to have lost its spirit during its EU membership. But he said: “Brexit is getting it back.”

This is the fascinating story of Brexiters.Interestingly, Johnson was back in one His infamous “Peppa Pig” speech CBI opened in praise of “kitchen appliances and hair dryer makers” who tried to reinvent medical ventilators in the “dark era” of the pandemic. But in reality, scheme Was much better at providing quick headlines Than a ventilator..

At the ground level, the regulatory autonomy and viable spirit that Frost and Johnson praise in their speeches have gained much more complex acceptance from business. Previous version of the UK after Brexit We have been exploring from chemical manufacturers to medical device manufacturers.

This week Was the building industry Written to warn the government of the outcome of plans to introduce the UKCA Quality Mark to duplicate the EU CE Mark (Key to Providing Net Zero and Level Up Agenda).

As Peter Caplehorn, CEO of the Construction Products Association, said, companies are spending millions of dollars in the short term because there is no UK agency that can test British standards (windows, glass, sealants, etc.). I did. Our concern is that UKCA has curtailed innovation, reduced product range and [put] Over time, there will be upward pressure on costs. “

Beverage industry I wrote it to warn you Labor and truck driver shortages partially caused by Brexit have pushed delivery times five times from 3 to 15 days and extended the Christmas visa scheme to allow more truck drivers. I urged the government to do so.

Perhaps in the government’s view, these complaints (usually overwhelmed as a necessary part of “regaining control”) are simply “vested interests” complaints or too detailed to be bothered. ..

But for on-site businesses, especially small and medium-sized businesses with narrow margins and limited staff, the “spirit of being able” that Brexit says is revitalizing has to spend a lot of energy fighting headwinds on the supply side. not. At least it didn’t help in the decision to build the biggest barrier with the EU.

Politicians are expected to campaign for vision rather than reality, but in the next general election, Boris Johnson (or anyone) said the government actually worked to “unleash the potential of Britain.” You need a voter to feel.

Brexit of numbers

Johnson Government — And Frost Again In his speech to Thatcher Conference — We have consistently pointed out the value of regaining control of international trade policy as a major benefit of Brexit.

This, as it was It pointed out In this week’s International Trade Selection Committee hearing, the long-term increase in UK GDP due to trade agreements is negligible. For New Zealand and Australia, the government’s own estimate is about 0.01 or 0.02 percent. Estimate..

These benefits clearly rarely offset the negative impact of building such a substantial trade barrier with Europe — even the 4% long-term impact OBR forecast is exaggerated. Even if it turns out.

One way to eliminate the effects of Covid-19 and other factors is to measure UK trade with the “doppelgänger” UK, which has not left the EU. It is built around modeling the trade performance of other developed countries such as the United States and Germany. , Greece, New Zealand, Sweden.

It generated the chart above from John Springford of the European Reform Center (CER), the work of which was referenced by the OBR. October update..

Here he shares the latest iteration of the UK model after Brexit. In September 2021, leaving the EU’s Single Market and Customs Union was found to reduce trade in goods between the UK and the world by £ 8.5 billion, or 11.2 percent.

Monthly trade data is very volatile, but since May 2021, the model has hit UK trade by 11-16%. This is similar to the pre-Brexit forecast by the OBR and the Theresa May government.

Springford says it is an inaccurate science to translate that “hit” into an accurate estimate of its impact on GDP per capita (an important measure of living standards). Forecasts range from a 2 to 9 percent reduction in GDP compared to the UK, which remained in the EU.

Prior to the pandemic, CER estimated that GDP had declined by 1-3 percent due to the effects of Sterling’s depreciation and consumption and investment abandonment. Adding to that number, plus the effects of trade cuts after the withdrawal of the single market, Springford has “good reason to be afraid” that the OBR estimates for economies that are 4-5 percent smaller are “almost correct.” Is called.

To date, these economic implications have been largely met by being actually reassured by “achieving Brexit” and shrugging by voters consumed by coping with the pandemic. Springford’s “Doppelganger” No one lives in the UK, so it’s also true that most people theoretically don’t miss the economy they enjoyed.

Whether or not it links economic problems to Brexit, Springford said that 4-5% is a “big deal” that has already hit tax revenues, causing Prime Minister Rishi Sunak to raise taxes more than it would otherwise. I think it is.

Regardless of whether voters attribute poor economic performance to Brexit policy, the government’s risk is ultimately the prime minister’s long-term pressure on living standards (partially driven by Brexit choices). Landing on the door.

Are you working in an industry affected by the UK’s EU Single Market and Customs Union withdrawal? If so, how does change hurt or benefit you and your business?Please give us your feedback brexitbrief@ft.com..

And finally, four must-see stories

Brexit may not seem to be the cause City of London Although seriously injured, Helen Thomas claims that it led to slow bleeding. Early predictions of hundreds of thousands of unemployment have proven to be exaggerated, but she says changes are happening.When There are times when I’m worried..

What happened Michel Barnier?? In his latest column, Investigated by Gideon Rachman Why did the former EU Commissioner make a strange turn, as Barnier is currently running for President of France? But what does his story tell us about European politics?

As you saw above, this week how i UK construction industry The new UKCA safety and quality mark after Brexit warns that it can not only cause a shortage of major building products and materials, but also damage the government’s upgrade agenda. .. Learn more about their concerns, And a letter they addressed to business secretary Kwasi Kwaten.

Germany Valentina Pop, editor of the Europe Express newsletter, has a new government Delve into the new 178-page German coalition agreement.. She explains why it is more evolution than a revolution. You can sign up for Europe Express here..

Europe Express — Your essential guide to what’s important in Europe today.sign up here

Swamp note — Expert insights into the crossroads of money and power in US politics.sign up here



David Frost in a bullish mood, despite lack of momentum after Brexit

Source link David Frost in a bullish mood, despite lack of momentum after Brexit

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