Brexit Ends as It Begun – In Chaos

From the day a stunned Boris Johnson took the stage to proclaim Brexit was a reality, to today, we have fought an uphill EU exit battle utilising our ill-advised negotiating position of the victim.  That indefensible stance has led to failure and a last-ditch attempt to find common ground, over a dinner, that collapsed into the French Onion Soup.  Was there a splash?  We may never know.  

The UK has always been on the back foot from the day we voted to leave the EU.  As Sir Sean Connery once famously said, don’t bring a knife to a gun fight.  Unfortunately, we didn’t even have a knife, plan, leverage, or any of the other necessary components needed to complete a successful negotiation.  Claiming the other side is ‘unfair’ plays to those bent over the table, but not to those causing the bending.  So, we entered the most important negotiation of our modern era, completely unprepared, and have never recovered ground.  

What did we expect to happen?  We had slapped the collective European States in the face by saying we didn’t want to play anymore and expected they would nod their heads agreeably and immediately launch an effort, regardless of how painful it would be to the EU, to assist us out the door.  For our part, we would point out all the things we didn’t like about the common market and expect them to not apply to us on exit.  “We don’t want to abide by your regulations any longer”, ignoring that all other non-EU nations selling goods and services into the common market must comply with EU regulations and requirements if they are to gain access.

Most in Europe don’t understand the UK decision and many average citizens have taken it personally.  We callously dismiss these feelings to our detriment.  This body of 250 million customers of UK goods and services may decide buying EU is an appropriate way to answer a UK snub.  Our intolerance of Europe will most likely manifest itself in intolerance of us.  The government loves to tout the world is our oyster scenario where we replace the EU market with others more lucrative.  Trade is best practised with those closest to you within efficient and fluid supply chains.  Bear in mind the EU is the world’s largest single market.

If we were the world’s supplier of cuddly toys and offshored assemblers of high-end phones, that would be a different story, but we are not.  Our manufacturing industries have disappeared, and what we are left with is primarily services.  Services require connectivity and trust.  When we bust out of the EU, we will alienate almost 50% of our international trade, £294 billion.  Are EU competitors going to be hounding their governments to repair this break?  No, they will be too busy filling the gap.  There is a high likelihood much of the £294 billion will never be recaptured.  The election of Joe Biden has also cast significant doubt on a US trade deal with the new administration.  Biden is a strong supporter of the EU and has far stronger relationships with EU members than he does with Britain.  It is questionable that he will tarnish his EU ties by fast tracking a UK deal.  That leaves the World Trade Organisation, formed to allow third world countries access to first world markets.  The sophisticated services offering of the UK are not the items Ghana or other emerging markets routinely put in their shopping basket.  Australia?  Fantastic ties as a Commonwealth member, but significant cost implications due to distance even in this era of Zoom calls.  Filling even half of the £294 billion gap is challenging to say the least.  To secure any meaningful restoration of trade lost requires Europe.        

As the saying goes, we are where we are.  That said we need to start treating EU like the customers they will become at the end of this month, and recognise that replacing the EU market is not going to happen and that we need them more than they need us to be successful.