BREXIT AGAIN

It seems that much of the media, are as determined as ever to push ministers into revealing their hand prior to the start of negotiations with the EU. Are they too dim to realise that they’re banging their heads against a brick wall?

The imperturbable, the inscrutable, and ever gloomy Philip Hammond, the UK Chancellor, who only recently has startled us all by occasionally showing the merest hint of a smile, gave little away to the popular, but always predictable, BBC interview wonk, Andrew Marr, on his Sunday slot. By now, we should all be well aware of ministers’ standard response on whether the Government will go for a hard/soft exit, ie stay in or leave the customs union and the single market. 

As Hammond pointed out, EU ministers have rightly maintained a very disciplined silence on the tack they might take in their talks with Great Britain. Smart. So where is the advantage to the UK for the British Government to give away its negotiating hand before the talks begin? As part of their thinking, UK ministers will no doubt consider what the basic priorities of the other EU countries are likely to be. One doesn’t need to be an Einstein to realise that its probably the same as ours, the continuation of ongoing free trade between us after Britain leaves the EU. Not to proceed on this basis, despite our differences on the free movement of people, for example, would incur the wrath of their own business community for whom the UK is a major market for their many exports. 

Should everything go pear shaped during the negotiations, EU exporters have much more to lose than Britain. The value of exports from other EU countries to the UK in 2015 was about £290bn, while the export of goods and services to other EU countries from the UK was some £220bn. So the UK runs quite a substantial trade deficit with the rest of the EU. However, these figures differ if you look at EU data which suggests that goods and services exported from the rest of the EU to the UK could actually be valued at some £360bn in 2014, obviously much higher than the £290bn the UK data shows for 2014 and 2015. The UK data is much more conservative.

Is it too much to hope that common sense will prevail at the negotiations? It is obviously to the mutual advantage of both the UK and the other EU countries to not only maintain the current level of trade between them, but to develop it further. Even now, governments in the other EU countries are being lobbied strongly by exporting companies on the importance of maintaining their markets in the UK. At the end of the day, EU negotiators would look pretty stupid to their business community if they allowed certain political considerations to damage strong existing trading links. Also, surely the negotiations will be smoother if they are conducted on the basis of the friendship and mutual regard we have for each other?

UK business leaders are right to be concerned at what has become known as the ‘cliff edge’ scenario and the resultant disruption to trade which an abrupt, or hard, exit from the EU would undoubtedly bring. Because of the complexity of the entire Brexit process, it is now being hinted that some kind of transitional agreement may be sought in order to soften the shock of the break from the EU, for British business. Brexiteers have their fingers crossed that this is not the start of a watering down by PM May of the departure process. 

We all recognise that, despite the term, common sense is a very scarce commodity where national interests come into play, but rational thought should deliver an agreeable outcome for all of us. 

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