Saturday 27 January 2018

Scapegoat


Overheard in the restaurant when paying the bill:

Landlady: "I'm so sorry about the mussels."

Chairman: "That's OK - it happens. If everything was perfect every time I wouldn't have been married three times...."

Is anyone else getting the distinct impression that Theresa May is fairly safe? Can't see anyone willing to step up to the plate and take on Brexit knowing full well it's impossible to deliver as a success and will turn whoever is in charge into a pariah dog. She's a convenient scapegoat while the poisoned chalice is in her hands - it is a damage limitation exercise at best.

Making British products more expensive through the imposition of tariffs by our largest trading partner will leave the UK in a very weak negotiating position on FTAs with the 'rest of the world'. Whoever ends up as the leader of the Tories will have to conclude desperate trade deals on whatever terms are offered, leaving us at the total mercy of people like Trump and his America First policy.


Even replicating existing 3rd party FTAs achieved through the EU will be fraught by simple virtue of the fact our market is a 10th of the size of the EU, so they will not be as advantageous. Not only that, but we will lose the clout of being able to persuade 3rd party countries we and the EU are not already trading with to accept EU standards, meaning a myriad adaptations to local market regulations - it's not rocket science. The vultures will be circling and that includes the currency speculators.

The only way in which Brexit can possibly be a success is to massively increase our export markets far beyond what we now have and to a level which is physically impossible to achieve in the time allocated - and for sterling to tank, which in itself is a double-edged sword as it would make products reliant on imported parts (which is a lot) more expensive.

Any increase in trade must replace the trade at risk through becoming uncompetitive within the EU, but when at a disadvantage by being the supplicant in any 3rd party negotiations on tariffs. As someone who is intimately familiar with opening up new markets, I can confirm it's a very difficult task in normal times, let alone in desperate times - it's what any exporters worth their salt are doing every day already. The larger market always gets the best deal.

We've successfully painted ourselves into a very unenviable corner. It will be interesting to see, if there is a vote of no confidence, who puts their hat into the ring and who doesn't. I don't anticipate any rush and the leading contenders must be desperately hoping to hell there is no vote of no confidence.


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