Of course, the one bank holiday which fell outside of lockdown would have the worst weather. But we hope that all our subscribers have been managing to enjoy themselves, despite the early onset of autumn.
It seems that the next two weeks will see the last big push of the UK’s Brexit negotiations. Will there be a deal or will there not be? Michel Barnier says nothing can be agreed until the UK makes clear its policy on state aid post-Brexit; the UK government says it will not be forced into declaring its policies on an EU timeline.
It is hard to say what will really happen in these last few weeks, as both sides up the rhetoric to try and make any failure look like the other’s fault. The essential thing to remember is that the EU cannot expect the UK to concede more than is usual in a Free Trade Agreement. Britain cannot be expected to sign up to longer term political alignment: no other FTA makes such demands.
If the EU is reasonable, a minimal free trade deal, which does not commit the UK to long term alignment with the EU, will be the ultimate outcome. This is the best outcome for the UK, leaving us free to agree new trade deals and to conduct our political affairs as we wish. Our future relations with the EU can be amicable but detached.
The next set of talks begins on 7 September. We shall be watching this space.
BfB co-editor Graham Gudgin has been appointed to the Modelling Review expert panel of the Department of International Trade, chaired by Prof Tony Venables. The panel will review the modelling of new trade agreements.
On the website this week
The economics of COVID-19, by Paul Sheard
In reviewing the global economic response to the Covid pandemic Paul Sheard of the Harvard Kennedy School makes the important, indeed vital, point that concerns about printing money reflect outdated thinking and that debt does not need to be repaid.
“A rising stock of government debt does not impose a “burden” on our grandchildren. For one thing, government debt never has to be repaid in the way that households or companies are on the hook for their debts.”
Key point this week
Playing the Blame Game
Slow progress on a potential trade deal remains the order of the day, with Germany taking talks off the table at the next EU summit for lack of progress, and more general EU pessimism as to the prospect of the UK shifting its position. Naturally, this supposed pessimism is in fact a negotiating tactic, designed to engage British public opinion against the government. The worn-out story from Brussels remains, unsurprisingly, the same – British obstinacy hurtling the country towards the brink of No Deal disaster because of hardline Tory Europhobia etc etc. The tale nonetheless remains a misleading one. As the Guardian relates, the EU’s negotiating strategy is to not have talks on ‘easier’ areas until the ‘difficult’ ones are done – hence why Brussels refused to consider the draft agreement handed to them by David Frost at the end of last week. Of course, what this amounts to is an attempt to control the flow of negotiations, and thus to stall out the UK with no compromise over fish and the level playing field in the hope that Boris Johnson’s administration caves in out of desperation. Rather than obstinacy on the UK’s part, it is at least as much the stubborn insistence on the part of the EU’s negotiators that Britain should submit to unnecessary level playing field conditions from Brussels. Yet this is the last thing the government should consider. Many of the considerations outlined by Paul’s Sheard’s article last year for the website regarding the advantages of a WTO Exit before negotiating the future relationship still hold. In fact, the UK now make clear that it is happy for talks to continue into 2021 if necessary, with a No Deal Brexit at the start of the year, in order to enable negotiations from a less politicised – and thus more constructive – position.
The Wisdom of the ‘Mad Monk’
Remainers are predictably splenetic about the likely appointment of former Australian Prime Minister Tony Abbott to a position on the UK’s board of trade. Yet besides their distaste for Abbott’s politics, the former PM is a good choice as an ambassador for Global Britain. Like Boris Johnson a pragmatic convert to Brexit and himself British-born, Abbott seems to enjoy a decent relationship with his former colleague and current Australian PM Scott Morrison, despite some tension between the two at the end of Abbott’s leadership in 2015. Negotiations with Australia thus ought to be advanced by the presence of a former leader. The appointment also sets a positive note in negotiating deals with the other ‘Five Eyes’ states (New Zealand, America and Canada), and further demonstrates Britain’s commitment to its application to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), reassuring Japan and other allies in the Pacific region. Making these deals successfully also strengthens our hand in Europe. It shows the EU that the UK has options elsewhere, and demonstrates to Brussels the futility of trying to stonewall the UK in the hope that Britain will fold for a deal at any cost.
In other news, contrary to alarmist headlines, it seems unlikely that the departure of Shinzo Abe poses any significant risks for Britain’s ambition to join the TPP or trade negotiations more broadly. The candidates to replace are all drawn from the same center-right political background, and the geopolitics of the situation remain the same: Japan with the rest of the developed Pacific nations is anxious for a counterweight to a rising China and hopes that a trade partnership with Britain will aid the regional balance of power.
Key Points is compiled by a Cambridge PhD student.
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Discussion also continues over on Facebook.
How you can help
There is much about Brexit still to be decided. Our MPs listen to their constituents. Do continue to send them links to our articles, especially on matters relevant to your constituency – for example, in rural areas, articles on the threat to British agriculture. Alternatively, make an appointment to speak to them at their next surgery. Let them know what you want post-Brexit Britain to look like.
As Boris Johnson said in in his post-election address, it is also time for unity and reconciliation. Keep reading our posts and share links to our quality content to help others understand how leaving the EU will be good for the UK economy and for our own democratic governance. We aim to educate our critics to think differently and more positively about the long-term impact of Brexit.
An Oxbridge PhD Student
Dr Graham Gudgin
Economist, Centre for Business Research, Judge Business School University of Cambridge
Professor Robert Tombs
Emeritus Professor of French History, University of Cambridge