To List The Merits Of A Hard Brexit

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The Senior Lecturer at Islington Technical College has asked us to list the merits of a Hard Brexit. One that is a default to World Trade Organisation rules.

Thus, here goes:

1) How will you protect UK business from dumping?

We won’t. The aim, purpose and intention of trade is to gain access to those things which Johnny Foreigner makes better, cheaper, faster – pick any two of three – than our own domestic producers do. Given that the aim of an economy is to make the people, consumers, as well off as the constraints of the real world allow, we wouldn’t protect domestic producers from anything. Shape up or go bust.

As even the Treasury’s briefing on the costs and benefits of Brexit said, competition from trade is exactly what incentivises domestic producers to become more productive.

So, we don’t protect from dumping and the people of Britain become richer. The problem with this is?

2) What will you do for those who lose their jobs because the businesses that employ them are undermined by WTO rules?

Exactly the same as we do for anyone else who loses their job for any other reason. The economy destroys some 10% of all jobs every year – some 3 million – and another 10% are generated newly as well. That’s just what labour market churn is. We have a welfare system for the interim and people who lose jobs because of Brexit or WTO do exactly as everyone else, get another job with the welfare state as the backstop.

And it’s important to note how new job creation works. It isn’t that we must plan what those jobs are before the old disappear. It’s the availability of the newly employable labour which generates the testing of what should be done next.

3) What will you do on the Northern Ireland border?

Lie.

We have pointed this out before:

Our answer should be “Yes.” We agree that we are leaving, that we have put in place that hard border. Then we do absolutely nothing above what we already do. People come and go as they wish, carrying what goods they can, and we do nothing. Except, as we already do, we keep an eye on those moving things on an industrial scale and have our little customs and tax chats with them away from that line on the map.

What other people wish to do on their side of that line is entirely up to them. We will do, as we’ve always done when in our right minds, what is useful and beneficial to us. It’s somewhat unfashionable these days to talk of the empire but it’s still true that we had it. Often because we’re rather good at this lying, cheating and dissembling. We should carry on. So, there’s the border, as it is today. And?

4) How will you protect exporters who will have massive increases in their costs?

When the terms of trade of a country or economy change then the currency value of that country or economy changes. That is, raising tariffs against British exports means sterling declines in value. You have noted that every time a Hard Brexit looks more likely then sterling drops in value? Good, you have? Excellent. The solution is already there then, isn’t it.

5) How will you support businesses that suffer cash flow harm from the delays WTO rules will impose?

Care to quantify this? Are we talking about people needing a little more of an overdraft? Or a massive infusion of funds? Given that invoice factoring companies exist we don’t think it will be all that much of a problem, to be honest.

6) What measures are you taking to ensure the NHS does not come to harm from WTO rules?

There is no manner in which WTO rules can or will harm the NHS.

7) How will you ensure that the quality of government services is not undermined by WTO rules on government procurement that requires that cheapest products be used?

WTO rules don’t. It’s EU rules that insist upon open tendering to foreign firms.

8) What steps will you take to protect the environment when WTO rules threaten it?

WTO rules don’t in fact forbid about the environment. That’s left to domestic politics. As an example, recall when China decided to limit rare earth exports? That resulted in a WTO case. China’s defence was that they were doing it for environmental protection reasons. The US alleged it was to be discriminatory against foreign firms, that it was protection in favour of Chinese domestic consumers of rare earths.

Now, China lost. But that was because the arbitration court decided that China hadn’t done it for environmental reasons. If it had that would have been a perfect and complete defence.

WTO rules specifically allow “environment” to lead to discrimination in trade.

9) How will you stop the tax abuse that EU rules help beat and which WTO rules ignore?

If we’re worried about tax then we can go worry about tax. The WTO/EU question being asked here is about trade. Trade and tax are not the same subject. Of course, neither WTO nor EU rules prevent Julian Richer from selling his company without paying capital gains tax.

10) How will you support businesses that face crises in the UK, as steel and parts of the railway industry have done, when WTO rules prevent that?

WTO rules on state aid are actually rather more relaxed than EU rules on state aid. We’re freeing up room for action by moving to WTO.

But then, you know, the Senior Lecturer and knowledge, never the twain shall meet, eh?

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Leo SavanttQuentin Volechiguy31Jonathan Harstonthammond Recent comment authors
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Dodgy Geezer
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Dodgy Geezer

Question: What support will you offer for the Establishment who have a nice little earner from the complex rules and arrangements currently existing?

Answer: None.

Corollary: Your proposal is not acceptable to those who will have to implement it, and will therefore not succeed .

Leo Savantt
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Leo Savantt

Only question 3 is problematic or will become so.

When Ireland joins Schengen, which they will have to sooner than later, it is going to be very difficult not to have some sort of infrastructure; without it the UK would have no control over who comes in, whether that be economic migrant, terrorist, or simply day-tripper.

Of course this is not today’s problem, but it will be tomorrow’s and solving it won’t be easy.

Quentin Vole
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Quentin Vole

Why would Eire have to join? Schengen is simply a recognition of the reality that it’s impossible to secure a significant land border (unless you’re prepared to go to the lengths of Israel or the Soviet bloc – and even then …). During the troubles, we couldn’t stop illicit movements across the Irish border, even when half the British Army was stationed in N Ireland.

The UK and Eire have a natural border in the form of the sea, which makes it inappropriate for either of us to join Schengen.

Leo Savantt
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Leo Savantt

Why will the Republic have to join Schengen? The answer is simple, their opt out is temporary and under the provisions of the Treaty of Lisbon all member states will have to be in the Schengen zone, just as all EU member states will have to adopt the Euro, eventually. Of course Schengen is bigger than the EU, but all member states are committed to participation, non member states participate voluntarily. There a six EU member states not yet in Schengen, two with temporary opt outs (which qualified majority voting can remove) the RoI and the UK. There are three… Read more »

thammond
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thammond

Why would exporters have “massive increases” in their costs?

Lots of these Remainer loons have no concept of “costs”. A lorry might be carrying £500k of goods and yet they think £50 of extra form-filling is a huge increase.

Jonathan Harston
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Jonathan Harston

Why would *exporters* have an increase in costs. The costs of importing goods falls upon, well, importers, those chosing to do the action, those paying for the action. It’s like asking fathers how they cope with the pain of vaginal childbirth.

chiguy31
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chiguy31

And the ultimate merit – the voters get what they voted for.