A no-deal Brexit would be "wonderful for Britain", explained the Prime Minister, yesterday. We are leaving with a no-deal on WTO terms, unless a breakthrough is achieved, within days.
Aussie rules no longer OK. Boris Johnson made no reference to an "Australian" deal. Former Prime Minister Malcolm Turnbull had warned the PM to be careful "what you wish for".
"It will be pretty disappointing, I think you will find out. Australia's relationship with the EU, is not one that Britain would want."
It is not one that Australia wants either but it may well be the one we end up with. The navy has been put on standby to board foreign fishing boats and make arrests, if French transgressions arise in the New Year. Four patrol ships are to be deployed, with Royal Marine helicopters, ready to offer, abseil assist.
France has over 80% of the cod quota in the channel. Twenty-two frigates were deployed in the last cod war with Iceland. Now we can better understand, perhaps, why the Prime Minister is planning to build the largest navy in Europe.
"President Macron explained, "I am not asking to have my cake and eat it. All I want is a cake, that's worth its weight (in cake), because I won't give up my share (of the cake)". Prime Minister Johnson explained, the EU want us to behave like twins. "They get a haircut, we have to get a haircut. They buy an expensive handbag, we have to buy an expensive handbag."
Working in international trade we are always conditioned to avoid idioms and similes. It just leads to puzzled looks and confused stares. No wonder the negotiations have been dragging on and on. Meet the French demands, let them eat cake and salted cod from the Baltics.
Boris Johnson should have the confidence to understand he does not have to get a haircut, just rearrange the bits he has got. If he doesn't want to buy a handbag, he will have to use some other object to swing at Johnny Foreigner.
Camiilla Cavendish writing in the Times today suggests "the Tories have fallen prey to magical thinking. Hard trade-offs, are wished away, without a clear vision for prosperity if there is no deal". Matthew Parris in the Times claims the cabinet "don't actually believe in a painless Brexit or the sunlit future they have promised to deliver."
The evidence is mounting of the problems ahead. Bank shares have taken a battering. Supermarkets face a £3 billion shock to prices. Bottlenecks at the ports. Honda called a halt to production this week, as just in time deliveries didn't make it on time.
The car industry will produce less than one million cars this year. 1.7 million were manufactured in 2016, the year of the vote to leave the EU. Toyota has warned there will be no build of electric vehicles in the UK until 2034. Any decision dependent on the outcome of trade talks (and the success of direct shipments from Japan).
Liz Truss this week announced the decision to slash tariffs on the US products. EU tariffs had been imposed on ketchup and orange juice. The move designed to ease the way for a reduction in the US tariffs on Scotch Whisky. The move is guaranteed to alienate the Airbus lobby group in Europe. The measures had been imposed in response to unfair subsidies to Boeing in the USA. Great timing. One day those Airbus wings will just fly away.
Motor and aerospace, farming and pharma, just some of the industries facing severe challenge and setback in the event of a "wonderful" no deal. The Prime Minister may believe we will be free "to do whatever we want, any old time" but in reality the options will be severely limited ... "You can't always get what you want ...
The Saturday Economist
John Ashcroft publishes the Saturday Economist. Join the mailing list for FREE weekly updates on the UK and World Economy.
|The Saturday Economist|
The material is based upon information which we consider to be reliable but we do not represent that it is accurate or complete and it should not be relied upon as such. We accept no liability for errors, or omissions of opinion or fact. In particular, no reliance should be placed on the comments on trends in financial markets. The presentation should not be construed as the giving of investment advice.