Brexit Still Not Done, Boris Buckles Again

So, the Tories artificial Brexit deadline came and went, and Brexit still isn't done, whilst Boris again failed to die in a ditch or walk away whistling and singing No Deal is Better Than A Bad Deal. Instead, as on every previous occasion, Boris buckled, making yet another inglorious capitulation to the EU and reality. The reality is that Britain needs the EU far more than the EU needs Britain, and all the cards are in the hands of the EU, when it comes to these negotiations. The end result will be that, at the end of the process, Britain will have less sovereignty than it did as a member of the EU, and has been greatly depreciated in its power and influence in the world, just as Boris's inevitable capitulation again leaves him looking weak and powerless, and quite frankly a bit of a blow-hard, much as is Britain itself. 

The reality is that if Britain wants a trade deal with the EU, and it does, because the EU accounts for the vast majority of Britain's trade, and will do forever more, simply on the basis of its proximity, Britain will have to comply with EU rules and regulations, because the EU is seven times bigger than Britain, and is, therefore, able to dictate the terms. If Britain wanted a trade deal with the US or China, the same would apply, because neither the US nor China will allow goods into their economies that do not comply with their rules and regulations, otherwise they would be putting their own producers at a competitive disadvantage. Similarly, the US and China would insist that Britain accept into its market US or Chinese goods that comply only with their standards, not with any that the UK wants to impose, otherwise there would be no advantage for those large economies in striking any such deal. They may not bother in relation to any goods that are not important to them, but for every type of production that is significant to their economy they will insist on their rules, regulations and standards being the ones that have to be complied with. That is the subordinate position that Brexit has put Britain in. It no longer has any leverage to determine those rules, regulations and standards, and no say in their determination, as it did as a member of the EU. 

Tory politicians keep banging on about it being unfair that the EU will not give them a Canada style free trade deal. Welcome to the real world where what happens has nothing to do with “fairness” or morality, but is instead determined by power relations, and those with more power get to set the terms. The Tories, of course, have always been used to sitting in the bosses' seat which has power in relation to workers, and where they have been able to negotiate on that basis. Now they are in the position of a group of weak workers, badly organised and facing a powerful employer. They can bleat all they like about unfairness, but in the real world determined by capitalist relations, cold hard cash and power, negotiations take place on the basis of power not morality. In these relations and any other Britain undertakes with bigger economies, it has no power. It is the subordinate, and will have to take what it is given. That is the reality of the extent to which Brexit has diminished national sovereignty and British power and influence in the world. 

The only way that the EU would give Britain a Canada style free trade agreement is if Britain agreed to stay within the Single Market, or to abide by the rules of the Single Market, including in relation to free movement, and the role of the ECJ. Canada's free trade agreement, only enables Canada to sell a range of agreed goods to the EU, free of tariffs, in the same way that goods are sold free of tariffs inside the EU Customs Union. But, in order to get that agreement, Canada had to agree to a set of standards and other rules and regulations, in relation to that range of specific goods, just as the EU had to do in respect of its exports to Canada. Neither can just send any old goods to the other with or without tariffs. And, the same is true with Britain. If Britain wants a free trade deal with the EU, it will have to agree to accept EU rules on the standards for such goods, and on the rules and regulations pertaining to their production. This is the whole point about regulatory alignment. The point is that Britain has wanted the right to diverge its regulations from those of the EU, whilst retaining the same rights to export those goods to the EU, and also without tariffs. That was never going to happen. 

Moreover, the EU was never going to give the UK a deal like Canada, because Britain is on the EU's border; in Ireland physically on its border. Also the deal with Canada increases trade and reduces costs between them, but any EU-UK trade deal will result in less trade, and greater costs than already exists. The EU does not have to worry that capital is going to relocate to Canada to avoid EU regulations, but it does in relation to Britain. That is why the EU is insistent on the points about state aid, and on regulation. Britain's perfidy in relation to the Withdrawal Agreement, and the UK Internal Markets Bill, as well as its proposals to introduce Free Ports where all sorts of fly by night and shady businesses are allowed to set up shop, and flout rules, gives the EU more than ample reason to distrust UK intentions in that regard. Its not that the EU fears the UK's plans for “state aid” as such. Why would it, its Britain that has been the champion of the small state, and red in tooth and claw free market competition, and devil take the hindmost. Britain has not even used current state aid provisions, inside the EU, to provide short term assistance to struggling industries. No, what the EU knows is that the Tories would use any such leeway simply to provide assistance to chosen businesses to compete unfairly with it. 

And fisheries provides an interesting lesson. The contribution of fishing to the UK economy is minimal. If the fishing industry disappeared tomorrow the economy would not notice it. From an economic standpoint, allowing defence of fishing to get in the way of a trade deal makes no sense. Britain would benefit far more from a deal where fishing disappeared, but where it had better access to EU markets, than denying itself such access simply to protect fishing. For one thing, if Britain tries to exclude EU fishing fleets, and does not get a trade deal, it will find great difficulty selling the fish it catches, when they have large tariffs imposed on them, because the majority of that fish is sold in Europe not Britain. 

So, why are the Tories making a big thing about fishing? The reason is that the Tories hung their Brexit hat on questions like fishing. Fishing for them became totemic of the drive for national sovereignty. The right to exclude others from your waters was a symbol of the implementation of that sovereignty. The trouble was that the reality of implementing that political sovereignty was economic harm, and a consequent loss of real sovereignty. No country can exercise its political sovereignty unfettered, because it always has to weigh the consequences of doing so to its economy. In short the ability to exercise political sovereignty is always constrained by your economic power. At the extreme, you can exercise political sovereignty in the form of autarky, like North Korea, but only at the expense of cruelly impoverishing your people, who then have to be suppressed by the use of huge amounts of physical oppression. 

In addition, the Tories have made a big thing about fishing, because having made it totemic of their claims about national sovereignty, they picked up political support, and parliamentary seats in those coastal areas where fishing is seen as important. In other words, the Tories are failing to strike a deal, by insisting on their position on fishing, not out of any national interest, but purely out of their own narrow party political interest. They know that when they capitulate on fishing, a lot of the rhetoric around national sovereignty goes down the pan, and with it all of the nationalistic argument for Brexit itself, but they also know that they lose face in all those coastal areas where they picked up votes and MP's. 

But, ultimately, fishing is a minor issue, that is merely a symbol of the main problem facing Britain. It needs a deal, and a deal is only possible on the basis of accepting EU Single Market rules. That leaves Britain in the position that it has to basically remain inside the EU for all intents and purposes (BRINO), but without the political involvement it had as an actual EU member. In other words it has shot itself severely in the foot. It could choose to have no deal, but then, in the case of a crash out it would face immediate chaos and catastrophe of a kind that would bring down the government, or in the case of a negotiated no deal, whereby it has no trade deal, but agrees to remain inside various EU regulatory bodies for Aerospace, Euratom, pharmaceuticals and so on, it would simply face a more prolonged death agony. 

So, the Tories need a deal, whatever their bravado about no deal being better than a bad deal. So, either Boris will capitulate yet again, and sign up to something that essentially means staying inside the Single Market, or else he will kick the can down the road, seeking an extension of the Transition Period, so that Britain does remain inside the EU framework, but without political involvement. In essence, it means giving them space to allow Brexit to wither on the vine.