Friday 25 January 2019
As the Remain campaign ramps up its efforts to spread fear about massive tailbacks at Calais and sudden increases in tariffs in the event of No Deal, it emerges the WTO provides the means for an interim trade arrangement retaining preferential access to each other’s markets until a permanent arrangement can be agreed. Meanwhile, the boss of the port of Calais says they “will be ready for no deal”, to believe otherwise (as Remainers persistently do), is “shocking” and “disrespectful” and Jacinda Adern chips in to say it’s “quality not quantity”, a direct riposte to those who lust over the EU’s larger, yet declining market. On top of all that are the usual good news statistics: employment is up, wages are up against low inflation, confidence among hiring managers, also up. Britain remains head and shoulders above the rest of Europe for investment, receiving more than France and Germany combined. Brexit is considered an afterthought against all the huge advantages of doing business in Britain, and the relative weakness of continental Europe.
“No other country in the world has made their market as open to investors,” claims the latest investment report by “big four” financial services firm Deloitte. Citing the English language, the availability of world-class talent, favourability to open trade and an advantageous time zone, Deloitte point to Britain’s utter dominance in attracting major non-European firms to set up operations here (see below). On the subject of the UK’s withdrawal from the EU, the report states: “Brexit is not the only issue! The speed of change more broadly is driving decision making.” It goes on to list firms like Amazon and Lidl that have made major investments since the EU referendum, noting that businesses struggle to pick another location to in Europe offering comparable advantage to set up in.
PWC have discovered 61% of UK business leaders expect to expand their workforce in 2019, up from 54% last year. Recruitment expectations are in line with general optimism. A staggering 82% of CEOs are confident about their revenue prospects…
…So it should come as no surprise that the number of Brits in employment has reached a new record of 32.54 million, the highest since 1971, before Britain joined the Common Market. According to the ONS, the employment rate, which only counts persons aged 16-64 now stands at 75.8%. Only 1.37m of those actively seeking employment are out of work (4%). There was a 141,000 rise in employed people over the period spanning September to November compared to June to August. More importantly perhaps, earnings have increased by 3.3%, adjusted for inflation that figure comes to 1.1%. And to think they said the rise in the cost of imports resulting from a weaker pound would drive up inflation and lower living standards.
“As a very important trading partner for us, at the point the UK is ready to do so, we’re very keen to enter into a free trade agreement,” New Zealand prime minister Jacinda Ardern told the BBC. Asked whether the EU’s larger market was a higher priority than the UK, Adern fired a stinging blow to the Remain argument that Britain must not decouple from the EU to explore greener pastures, saying: “For us, it’s not just the size, it’s the quality,” citing the historic ties between the two countries. The relationship is “deep, it’s long, it’s economic… We’re ready and willing”
New Zealand is “ready and willing” to enter a future trade agreement with the UK post-Brexit, says prime minister @jacindaardern
— Victoria Derbyshire (@VictoriaLIVE) January 21, 2019
Another claim commonly made by the Remain side is that a WTO Brexit will cause 100-mile queues of lorries outside ports on both sides of the Channel as they wait to have their consignments processed by newly installed customs controls. Not so, says the Port of Calais’ chief executive, Jean-Marc Puissesseau. “We will not check the trucks more than we are doing today, with the migrants,” said Mr Puissesseau. “We will only be asking of the drivers that they have their customs declarations, but we will not stop or ask more than we are doing today.” Amusingly, he told Radio 4 listeners transport secretary Chris Grayling should provide him with finance to help him compete with other ports, notably Rotterdam that have invested heavily in expanding customs capacity. Could it be that more competition between Europe’s northern ports brought about by Brexit will, in fact, facilitate more trade?
“We have adapted our infrastructure so that, with or without a deal, traffic flow through the Tunnel will be maintained,” assured Eurotunnel in a press release on January 16. An FT journalist accompanying a British lorry driver on his way from Northern Italy to Birmingham reveals checks for migrants have already exacerbated tailbacks that have long existed, due to the “sheer weight” of commercial traffic on its way into the United Kingdom. Brexit, it seems, will make little difference.
Japan has withdrawn its ban on imports of British lamb and beef brought about by the 1996 BSE crisis. “It is great news that British beef and lamb will be available on supermarket shelves and restaurant menus for the first time in more than 20 years,” said international trade secretary Liam Fox. “The UK and Japan are among the strongest champions of free trade and we look forward to an even closer trading relationship as we leave the European Union.”
Leave.EU looks into Article 24 of GATT, the international agreement underpinning the WTO. The little spoken of text offers a fallback in the event of a No Deal, meaning the UK and the EU can retain tariff-free access to each other’s markets with regulatory barriers kept to a minimum. Given that the EU has a £94bn surplus with the UK, the onus would be on Brussels to eventually secure a long-term deal akin to that with Canada, minus the £39bn bill.
Comment – key quotes
“As a businessman with over 50 years of experience in selling construction and agricultural machinery all over the world and buying components from both EU and non-EU countries, I am used to operating on WTO terms. There is nothing to fear. Tariffs and import duties are simply characteristics of business life that most companies – including JCB – have long since adopted.”
“The greatest pluses are that the UK can gain a competitive advantage by being the bastion of free trade. We in the Commonwealth would love that. We’d open our markets to British companies, to your farmers, your car makers, your whisky distilleries and your finance companies.”
“Exports [of services] to non-EU easily outstripped exports to the EU in all the major categories. These are the growth markets of the future. Moreover, note that exports of both financial services and ‘other’ professional services easily outstrip those of the chemicals sector, important though it is. Finally, note the huge significance of the US for our services exporters. In 2017, there was over £60bn worth of UK exports, by far the largest individual country market.”