There is no cliff edge. We can trade with the EU as we trade today with the rest of the world under the WTO umbrella we share with the EU.
— John Redwood (@johnredwood) October 20, 2017
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:
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:
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:
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
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
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