I'm sorry folks but we need to talk about no deal, again, because the lies simply won't go away. I'm going to cover three broad issues here, for what I'm sure will not be the final time.

1. The idea that we trade with the rest of the world on WTO terms.
2. Negotiated no deal vs. Chaotic no deal
3. No deal as a negotiating tactic

Let's start with the constantly repeated fabrication, as wonderfully demonstrated above by the unflappably wrong John Redwood, that we trade with the rest of the world on WTO terms. This is such basic stuff, and so far from the truth that I honestly cannot believe we have MPs still saying it. 

​Firstly, the EU has Free Trade Agreements (FTAs) covering around 60 countries - as evidenced in this report by our very own House of Commons (!!). There are many types of trade agreement, but all of them improve upon WTO terms for trade. Below is a map of the EU's Preferential Trade Agreements (PTAs) taken from the WTO website:

And here is a map of the EU's Regional Trade Agreements (RTAs):

So, clearly, the EU has a lot of trade agreements in place. It must be made clear that these are all agreements which the UK currently takes advantage of, and that we will certainly be no longer able to take advantage of if we leave without a deal on trade.

But there is another element to Redwood's kind of thinking: what about all those places where the EU has no FTA? Like the USA and China? This is even highlighted in the Commons Library report linked above:

We trade with them just fine without a deal don't we? No, we don't. This is a misleading and often-repeated oversimplification. Whilst the EU may not have comprehensive FTAs with these places, there are a number of small deals in place all of which improve upon WTO terms and help to facilitate trade. You can check this yourself by visiting the EEA treaties office database here. In the advance search, select the USA and under "nature of agreement" select trade agreement. You will return 24 agreements, as seen below:

Some of these agreements are specific to certain products - such as the ones above for wine or coffee, but some are on matters such as customs cooperation, government procurement and trade in animal products. Even some of the smaller ones provide very important functions and will protect certain domestic standards and industries. Under "nature of agreement", you could also choose to search for "agreement on customs cooperation", or looking beyond just trade, other areas such as data sharing. In total there are 142 agreements between the EU and the USA, all of which would lose access to if we exit with no deal. Search for trade agreements with China and you will find 5 agreements of a total 70. We do not trade with the USA and China on WTO terms alone, we don't even trade with Angola or North Korea on WTO terms alone.

Redwood also seems to assert that the rest of the world trades on WTO terms, which is complete baloney. Every major trading partner we have will also have it's own agreements in place. In fact, the WTO itself recently asserted that no WTO member trades on WTO terms alone:

So, the assertion that the EU (we) trade with the rest of the world on WTO terms is totally false, as is the idea that the rest of the world trades on these terms. No deal would absolutely not be a continuation of the status quo, and the cliff edge is not a myth. Anybody who says otherwise is ignorant or lying, and should not be given a free pass by the media or anyone.

Here we run into the second issue, which is that when most no deal advocates are hyping up no deal, what they actually mean is a bunch of deals.

The majority of no deal advocates come from the free trade angle, and so naturally focus only on the issue of trade. Research carried out recently by the Financial Times however found a total of 759 treaties across 59 different areas of policy that would need to be renegotiated under no deal.

In my eyes there are two types of no deal. First, a negotiated no deal, where we reach the end of talks without an agreement, and so a bunch of small facilitation deals are done and as many treaties as we can are grandfathered to stay in effect. Second, there is the chaotic or true no deal, where we simply walk away and all ties with the EU are severed at midnight March 29th 2019. 

When you dig into the work of no deal advocates, you will generally find that what they are in fact advocating, is a negotiated no deal rather than a true one. Even on trade, they expect there to be some deals in place to maintain movement across borders etc. 

This is dangerous because it leads people to believe that no deal will be fine, or worse, that no deal will not be much different from the status quo. This is compounded by the fact that when the government talks about no deal, it is actually talking about walking away - a true no deal. Therefore, people conflate the two types and are led to the conclusion that what the government is suggesting is reasonable when it is absolutely not. It is just another way in which the language in this debate has been contorted so much as to have lost almost all meaning.

Here we get to the use of no deal as a negotiating tool. The problem with this one is that a bluff only works if at least someone doesn't doesn't realise it's a bluff, but absolutely everyone knows that it is. There is this perpetual idea that we must be prepared to walk away in order to have the upper hand in negotiations, but the logic falls apart so easily that even government officials are basically giving up on making any logical arguments for it.

First of all, what does being "prepared" for a walk-away chaotic no deal actually mean? Phillip Hammond came under massive scrutiny a couple weeks back when he said that no budget would be put aside in preparation for a no deal outcome, but what do his critics actually want here? This piece in the FT highlights the problems that Dover would face under no deal alone. There would need to be completely new infrastructure and computer systems, a new lorry park in Kent, hundreds of new employees, all in a port where there is already no room. That is just dover. What about all the other policy areas? We would need new institutions to replace all the EU ones, they would all need to be staffed, people would need to be trained. We would need completely new systems of governance to be put in place. We would immediately need to have people out there trying to form new relationships for us or grandfather existing ones - aviation, data, science and research etc. etc. Being prepared for a new deal would take countless billions of pounds, and to be ready for 2019 we would have to had started laying the foundations a decade ago. Do people really expect us to do this in preparation for a scenario we are actively seeking to avoid? I actually don't believe they do, but they think we should at least give the impression we are so that we can negotiate effectively. Like I said though, a bluff is pointless if everybody knows it is a bluff, and a man in Calais with binoculars could see that if we say we are prepared, we are telling porky pies.

Even the officials telling us that we must maintain the illusion of being prepared don't believe it. This was revealed most obviously in David Davis' address to the House of Commons last week, in which he gave a progress update on the talks so far. After being repeatedly pushed by Keir Starmer and Anna Soubry to stop talking nonsense on no deal, Davis said this: "we are seeking to get a deal, as that is by far and away the best option. The maintenance of the option of no deal is both for negotiating reasons and for sensible security; any Government doing their job properly will do that".

Does the government and DD not understand that people can hear or read what they say in public discourse? Including people in the EU? Everybody knows it's a bluff, everybody has always known, and now DD basically announces as much in the House of Commons. Could he perhaps explain then, what negotiating reasons there actually are for maintaining this position?

It is telling that following this admission of the obvious, Emmanuel Macron had a few things to say. He told us that not once has May or DD raised no deal as a possibility in negotiations, that the EU commission recognise it as a bluff, and that they are not negotiating with the possibility of a no deal in their minds anyway. In other words, if we held our hands up and said "yeah, it's a bluff", it would not change the EU's negotiating mandate one iota, because they never considered it to be anything else.

But of course, Liam Fox is back from trade negotiation practice to tell us how utterly wrong Macron is to suggest that we are bluffing, deploying the exact same rubbish that Redwood did to start me off on this whole rant, and the Brexit merry-go-round of nonsense continues forever and ever. Fox of course really really wants to be out there signing all these fabulous agreements we need to be a global Britain, whilst simultaneously trying to argue that not having one with our largest trading partner and losing all of the ones we have already would be fine. Nothing makes any sense.

​@GMCC_Alex

Due to me taking some holiday and the rather overwhelming party conference season, it’s been three weeks since the last blog, and a lot has happened. We’ve had Theresa May’s Florence speech in which some progress was arguably made, we’ve had another round of unfruitful negotiations, and we have witnessed the always fascinating and bizarre spectacle of the party conferences in which the Tories started to show some real cracks. Despite many individual headlines around Brexit from these events, there is once again a consistent and unfortunate narrative throughout it all. Things are going very, very badly, and the chances of Brexit being a disaster or not happening at all are creeping up by the day. The government has set us upon a path to self-immolation, and is seeking to absolve itself from responsibility.

Pre-Florence, talks with the EU were at a stalemate. When David Davis agreed to the EU’s proposed sequencing for the talks on day 1, we agreed that substantial progress on the issues of citizen’s rights, the divorce bill and the Irish border must be made before talks could move on to the matter of our ongoing trade relationship with the EU. The speech itself offered very little except overlong platitudes; the detail could have been summarised in a few bullet points. A promise was made that Britain would pay its outstanding financial contributions – a good move, and that we would continue to make payments to the EU budget during a transition period. What May suggested was a transition period of two years following our official exit in March 2019, in which the status-quo relationship would be maintained exactly. We leave, but we continue to pay so that everything remains the same. May also went the extra step of stipulating that we do not seek any kind of existing arrangement – not EEA/EFTA, not CETA, not Switzerland, but something entirely bespoke and just for us.

Quite how the cabinet arrived at the conclusion that this position makes any sense escapes me. First of all, the EU has told us that we cannot retain all the benefits of the single market without also keeping its commitments whilst not being a member of the Union. The government has conceded this point multiple times, but now that is exactly what we ask for. It isn’t just that the EU is playing hardball with this either, it is a position which is legally unprecedented and would create massive problems for the EU, all countries which have agreements with the EU, and the WTO. Secondly, it was reiterated in the speech and again multiple times at the Tory conference that we are still going to leave both the customs union and the single market in March 2019. Yet, May asks for a transition period in which nothing changes. It isn’t going to happen.

Let’s compare what we have asked for to two other strategies: Staying in the EU past 2019, and relying on membership of the EEA and EFTA for a transition period or longer. As members of the EU, nothing would change, like May has asked for, and we would still be able to influence the EU from within. As members of the EEA and EFTA, we would remain members of the single market but would only be accepting around a quarter of the EU’s rules, would no longer be subjected to the political union, would be able strike trade deals with other countries, and would take seats on global trade and regulation bodies, influencing the future of the single market from there. What May is asking for is that we continue to be subjected to all of the EU’s rules, but from outside the EU with no influence whatsoever and nothing gained on the global stage. We have voluntarily asked of the EU that we be put into the most subservient position anybody could imagine. Not only this, it is a position that would have to be completely bespoke, and is thoroughly at odds with the realities of how international law and trade works. We are asking to negotiate from scratch, at enormous expense, a position that is worse in every way than staying in the EU or any of the other options available to us.

Taking a slight step back, the idea of a transition period in itself is problematic for the government, because it implies a transition to a different state. The way the government has approached this is to lock us into two sets of negotiations – one for the transition period itself, and another for whatever it is we will be transitioning to. I’ve addressed the fact that what we are trying to negotiate for the transition itself is impossible and totally unnecessary, but then the plan is to negotiate the most comprehensive bespoke FTA the EU has ever attempted - much more so than the recent deals with Canada or South Korea, and by limiting the length of the transition we are once again making this a time-limited issue with a countdown clock.

Just to summarise what we have so far, we are asking to move to position which is demonstrably worse than being in the EU or any of the other options available, is legally unworkable and crosses the EUs red lines (and arguably our own); and once in this position we are asking to do something which may also be impossible and took something like 9 years the last time the EU did it, and we are setting ourselves a two-year time limit within which to do this or we exit without a deal. We are choosing two time-limited rounds of negotiations, in which to negotiate things that we have been told we cannot have when there are much better options available. As somebody put it on twitter: “this is like somebody dying for a pint at closing time, but refusing to go into the Weatherspoon’s in front of them because it isn’t bespoke enough”.

I have said before that the Article 50 negotiation period is not meant to be used for negotiating anything more than a formal exit from the EU, which could be done in a number of ways with relatively little disruption. Instead, the government is choosing the worst possible position, and is choosing the most difficult possible route to that destination, putting the risk of failure or humiliation as high as it could realistically be. Whatever your thoughts on Brexit, we are handling this about as badly as is possible in absolutely every single dimension.
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Those in charge know this, and they are beginning to squirm. Realising this predicament, there is now an effort by the government and Brexit-at-all-costs leavers to paint the EU as the evil enemy, and in turn to absolve themselves of any blame when this all goes wrong, or any embarrassment if it doesn’t happen at all. This week we hear once again that plans are being made for a no-deal Brexit, leavers like John Redwood are back on the screens telling us there is nothing to fear from no deal, and textbook free-trade advocates are back demonstrating that they have no idea how modern trade works in reality.

Yet again the rhetoric is woven through that any harm caused would be something that the EU has done to us. This is a fundamental and dangerous misapprehension: any tariffs, non-tariff barriers, break down of established systems etc. will be things that we have done to ourselves, entirely of our own volition. The arrogance in ignorance has never been more palpable. I cannot think of a single prominent leave supporter or MP that has come out to criticise how the government is handling this, which is simply astonishing. Any criticism of our strategy, or any implication that we may be at fault rather than them, is “doing Britain down”.

Now we find ourselves in a situation where our government looks on the verge of falling apart over this, and the threat of a general election once again hangs in the air. It is becoming more and more obvious that a significant change in both strategy and approach is needed, and it looks like the only way that this might occur is for something big to happen in Whitehall. Unless something changes, my honest opinion is that we will essentially have to be rescued, Brexit won’t happen at all, Britain will be humiliated on a historic scale, the conservatives damaged beyond repair, and trust in the British political system will fall to crisis levels. If we choose to not do this rather than be forced into the decision some of the damage would be mitigated. If we exit without a deal, it will be our fault and things would be much worse.

I want to finish this by saying that I am not having a go at the people who voted to put us on this ship, I am having a go at the people at the helm. I know that many people who voted leave would agree with everything I have said here, and that what we see of leavers and remainers on TV is far from representative of the range of viewpoints in either camp. Criticism of the government’s approach to Brexit should never be taken as a criticism of somebody’s personal views or reasons for voting, and certainly should not be considered to be “doing Britain down”. The moment that these things are conflated is the moment that democracy will truly be at risk.

Brexit is absolutely possible to achieve without massive disruption, as is remaining in the EU with some of our reputation intact. The path we are currently following however, as dictated by the Conservative government and only pathetically questioned by their opposition, is the worst of all possible worlds, and should be criticised by people all sides of the Brexit spectrum. Unless something big happens and the course is changed, there will be big scary things lurking just over the horizon for many years to come.

@GMCC_Alex