Friday, 10 May 2019

Trade Talks

America has increased tariffs on Chinese imports from today [Friday 10-May-2019] to 25% from 10%. This follows a statement by president Trump that he no longer wants the USA to lose billions a year in trade deficits.

One of Donald Trump's campaign messages was connected with trade deficits and as a businessman he was going to deal with it. It is not a new problem, continuous trade negotiations have been going on for over 40 years.

This makes me reflect on Brexit.

One of the big issues for the remain campaign was the fear that the country would suffer after Brexit with poor trading relations with the rest of the world, and presumably they received support form the public in this matter. Obviously it was forecasting as no actual data existed.

That is also true now as we haven't left the EU yet we can only speculate as to what would happen with trade after the departure, but it is looking more likely that the effect will be less than originally predicted.

A no deal Brexit is already illegal as an act was rushed through parliament, however, failure to ratify a new Brexit deal would mean that, we pursue the option authorised by Parliament when it ratified Article 50, leaving the EU with no special trade deal and trading with the EU on standard WTO terms.

This means tariffs, some border checks and a rush of paperwork. It would bring disruption, but it would be temporary. Talk of chaos at Calais needs to be put in the context of French officials saying that, for no-deal, they would need to stop no more than one in every 100 lorries. Talk of air chaos needs to be tempered with the fact that the EU has already made a reciprocal offer to the UK in respect of air traffic rights and the validity of aviation safety certificates in the event of no deal.

Which comes back to the point of how does a no deal Brexit work when it is illegal?

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