Talk of rotting food at Calais is hysterical: instead, no deal would see the EU calmly dismantle Britain’s industries over time
Instead, the EU’s response to a no deal will be strategic: opening up advantage, sector by sector, calmly and patiently dismantling the UK’s leading industries over the course of a decade. They will eat the elephant one bite at a time. The problem with abandoning the rules of the international order is that you no longer enjoy their protection.
A no-deal Brexit would hand the EU enormous power: it would decide how and when to introduce new frictions between the UK and the single market, giving sufficient time for firms like Airbus, Nissan or AstraZeneca to relocate production. As recent decisions have demonstrated, even seemingly fixed capital investment is more mobile than many Brexiters imagine.
The EU would set out a timeline over which it would introduce compliance and rules of origin checks on the UK’s most competitive exporting sectors. It is not hard to imagine checks on automotive parts from 2021, pharmaceuticals from 2022 and aerospace from 2023, alongside constantly shifting sands of equivalence for financial services. This would allow firms an orderly departure from the UK to the single market. It will be a steady drift away from the UK, not an avalanche. Moreover, the absence of any agreement would mean lasting uncertainty that would deter future investment. The UK is particularly exposed in this regard: our serious lack of competitiveness is demonstrated by persistently large trade deficits. This means the UK is heavily reliant on foreign investment – the “kindness of strangers” – which would likely collapse. It is not hard to imagine a future government going cap in hand to the IMF for a bailout.
Those same Brexiters who have marched from failure to failure with no loss of enthusiasm still bizarrely believe that the UK could pocket the £39bn divorce bill while pursuing trade deals around the world. Yet the EU would, calmly and rationally, place tariffs on UK trade until it had collected what it is owed. And the damage to trade with the single market could not be replaced by new trade deals – in addition to the EU27, the UK has the benefits of trade deals with 40 other countries through the EU, all of which would evaporate overnight in no deal. That requires 67 deals to be signed just to stand still.
www.theguardian.com/commentisfree/2019/feb/07/no-deal-brexit-medieval-siege-eu-britain-industries
Sounds pretty reasonable. And scary.