British Exporters Face Brexit Problems

A failure to rollover all existing trade deals plus the prospect of a no-deal Brexit put UK exporters at a significant disadvantage. This is the result of research of UNCTAD, the United Nations Conference on Trade and Develoment who runs a respected and powerful research, based in Geneva. The following was issued on 3 September 2019.

 

Considering its impending departure from the European Union (EU), the United Kingdom (UK) needs to reach its own bilateral agreements with countries that grant preferences to the EU countries in order to maintain preferential market access.

Although roll-over trade deals have been agreed with several countries, about 20 percent of UK non-EU exports are at risk of facing higher tariffs from countries such as Turkey, South Africa, Canada and Mexico.

A new UNCTAD research shows that if these agreements are not concluded by exit day, it would cost the UK economy almost $2 billion in exports. Sectors such as apparel, textiles, motor vehicles and processed food products would face higher tariffs, with losses as high as $750 million in the motor vehicles sector.

This comes at a time when the EU is concluding several agreements with various important partners, like Viet Nam and MERCOSUR countries. These agreements, if not matched by equivalent agreements by the UK, will result in additional losses for UK exporters (Remark: However, the negotiation mpact by one single country, namely UK, is much smaller than by a bloc of 27 countries, especially if one considers that external trade is exclusively a matter of EU legislation and not any more of Member States).

These outcomes pale in comparison to the export losses that the UK will experience in the EU market in the case of a no-deal Brexit. UNCTAD’s research indicates that a no-deal Brexit will result in UK export losses of at least $16 billion, representing an approximate 7 percent loss of overall UK exports to the EU.

Most of the UK losses in the EU market would be concentrated in motor vehicles ($5 billion), animal products ($2 billion) and apparel and textiles (encompassing about $2 billion).

UNCTAD cautions that these losses would be much greater because of non-tariff measures, border controls (Remark: This is exactly the reason why the EU in creating the Single Market abolished border controls – to save approx. 360 mill. EUR between 15 countries only) and consequent disruption of existing UK-EU production Networks (Remark; This will be very likely the case, according to several declarations from Continental industry).

The nearing Brexit deadline, along with increased uncertainty on outcomes, is problematic for UK exporters, and policy solutions are likely needed for at least short-term relief. Ultimately it will require progress on rolling over current deals or finding new relationships with other partners that will be needed for thrive.

(Remarks by EUFAJ)

The Result of Nationalism – Great Britain Might Have to Fear Dissolution

After Tito’s death, Yugoslavia was for a while headed by Milosevic, who was a staunch nationalist. He started with mild and ended with wild attacks against his own peoples. The result: Yugoslavia had been dismantled by themselves, and the historical core is now Serbia. Macedonia, Montenegro, Croatia, Slovenia, Bosnia-Herzegovina split off as independent states, and so did Kosovo, after a particularly bloody and cruel war against them. Still today Serbia claims that Kosovo is a part of its state territory, a more hypothetical claim. Yugoslavia, a country with approx. 25 mill. inhabitants, ended up in seven independent countries, of which Serbia, the ex-Yugoslavian core, has around 8 millions.

There are also many historical examples of secessions, also in Europe, or of intended secessions, at least by a part of the population – like Catalonia or the Basques from Spain, where the will to go for one’s own is already anchored in the center of the political spectrum. This was and is triggered by the impression of lacking dialogue and what is called nationalism by the central state. In turn, it triggered nationaism in the periphery of the country. While Madrid can have hope, as there is a constructive discussion about the role of the state and in the direction of a de-facto-federalism, Yugoslavia ended in wars and armed conflicts and therefore broke in pieces. Now the perspective of the European Union is a kind of federalist vision for the citizens of the Balkan states, identified with peace, freedom, human rights, the rule of law, and a functioning economy.

How Great Britain will develop? For London, there is the big danger that if the British Government stresses national issues too much, then parts of the UK like Scotland or Northern Ireland may be lost. This would have also repercussions on Wales. Why? It became evident with the Brexit referendum that from England there was exercised too much pressure (or power) for the whole country, e.g. by the simplified form of the referendum question. At the same time, this discussion is held, or tolerated, by the Government, in a nationalist mode. Let us remember only the sounds of Lord Howard, a leading Tory, when threatening Spain wit a British Armada comparable to the one to the Falklands many years ago under Mararet Thatcher. Incredibly, he forgot to mention that the latter wa the case as Argentinian dictatorship troops occupied the Falklands, and Gibraltar was never occupied by the Spanish. The Spanish only wanted, with full justification, a clear position of the UK in the Brexit talks, on the issue „Gibraltar and Single Market“, which is for evident reasons of high interest for Spain. Should they re-start with border controls? Gibraltar has voted with more than 95% against Brexit, and it was for decades not part of the EU, as the UK Government determined so, and became a member of the EU (as part of the UK) only after a European Court of Justice decision initiated by ist own government.

History shows us that enlightened, democratic Europeans are well able to replace their home capital by a regional capital (until now) and the European fabric above – a fabric which is neither imperialist nor violent nor nationalist. This fits excellently to the case of Scotland and Northern Ireland, which might break away from Great Britain in the vears after the Brexit. However, it might occur that Brexit won’t happen, as there may be grave economic distortions to the detriment of the UK. I am still full of hope of a kind of peaceful revolution by the people who should know it: scientists, university people, youth, company owners – and if you look at the Brexit results, altogether the open and more intelligent people.

The result of the equation „the more nationalist, the more states at the end“ might be followed at a significant change in the European map, like in Yugoslavia. This is undoubtedly the long-term tendency. If you listen to some Brexiteers, you can express your pity that due to the bloody EU they were not any more able to go tiger-hunting for the weekend to Eshnapur.

On the long term, the overall trend is against the national states in the EU – which all come from a certain period in the past. They will continue to serve as administrative levels – no problem with this. Because who is in an overall love to his respective administrative levels, e.g. the Regierungspräsidium Tübingen (which is one of my administrative levels) …  So in order to prevent the breakup of other countries, we need sound regional competences, a European federalism (with the subsidiarity principle!), and, why not, constitutional and cultural patriotism. But no nationalism at all. In four day, the French people will have defeated these ghosts from the past, after the Austrians, the Dutch, and the next ones will be the Germans in September 2017.

Hans-Jürgen Zahorka (European Union Foreign Affairs Journal)

http://www.eufaj.eu