Despite the lack of motivation after Brexit, David Frost is still bullish

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The slogan “Complete Brexit” won strong votes in 2019 because it promised to shut down to the public after three years of intense and exhausting national battles.

These three words-and the related promise to “unleash Britain’s potential”-appeared on the cover of the Conservative Party manifesto with a photo of Boris Johnson giving the country a thumbs up. The message is clear: it’s time to move forward.

But this week, as the UK’s first year of leaving the EU single market is coming to an end, it is difficult to find the post-Brexit momentum promised two years ago.

The situation in Northern Ireland is over, but based on This week’s headlines It is likely that next year will continue to be the source of rising tensions.

Trade Secretary Anne-Marie Trevelyan stated that the government “absolutely does not intend” to trigger Article 16 before Christmas. Maros Sefcovic, the EU’s Brexit negotiator, expressed fatigue comfirmed Negotiations may now be delayed until 2022.

This is obviously better than complete bankruptcy, but as Lord David Frost himself has often said, resolving the differences on the Northern Ireland issue is a necessary prerequisite for the normalization of relations with the EU. It feels far away.

If it is necessary to prove the extent to which the Northern Ireland Agreement has affected the relationship between the EU and the United Kingdom, Germany’s new government alliance agreement particularly proves this point. Reference needs To ensure that the UK “fully complies” with the agreement it signed.

But Frost also issued a long-term warning that the government is determined not to downplay its Brexit vision. Despite the pressure from companies facing problems caused by high-level non-tariff barriers set up by trade groups from developed economies at the door of the UK.

The threshold is high. The discussion of “zero tariffs, zero quotas” free trade agreements may remind people of the concept of “free flow” trade, but the reality (such as Excellent and readable paper Catherine Barnard and Emilija Leinarte of the University of Cambridge Law School explained that) are closer to “WTO rules” or “no agreement” than generally understood.

As they have observed, the Trade and Cooperation Agreement (TCA) is very empty. It has few provisions on services, mutual recognition of mutual standards, mobility for young people and skilled workers, or agreements on agricultural products that cause a significant proportion of headaches at the border.

They wrote: “The result is that in terms of eliminating technical barriers to trade, the content provided by TCA is more than what all parties should abide by under the WTO rules without an agreement.”

For any government, this is always a big step— The Office of Budget Responsibility continues to forecast Brexit will have a long-term impact of 4% of the UK’s GDP (twice the pandemic)-but forecasts are only predictions, so at the same time, the government will continue to have a more optimistic view of the future.

in his speech At the Margaret Thatcher Trade Conference this week, Frost insisted that the UK was right to refuse to allow the UK to be “closer to the EU track” of a milder version of Brexit. Then, he seemed to suppress the hopes of some business people that a resolution in Northern Ireland could initiate the process of resolving some of the shortcomings in the British trade and cooperation agreement.

“As far as I know, many people… Over time, I want us to return to that situation. This can’t be right,” he said.

Therefore, Brexit will not go backwards. Rather, Frost promised to focus on domestic innovation, a more favorable regulatory environment, and a global trade agreement, while in his own words, to overcome the “power of entropy, laziness, and vested interests.”

Recalling Margaret Thatcher’s vision, that is, “a do-it-yourself country, an up-and-coming Britain”, Frost said that in the days of joining the European Union, the United Kingdom seemed to have lost this Spirit. However, he said: “Brexit is bringing it back.”

This is a tempting story for Brexitists.Interestingly, Johnson was His infamous “Peppa Pig” speech Delivered an opening speech to CBI, expressing appreciation to “kitchenware and hair dryer manufacturers” who were asked to try to reinvent the medical ventilator during the “dark times” of the pandemic. However, in reality, plan Much better at providing fast headlines Than ventilator.

At the grassroots level, the regulatory autonomy and the spirit of what Frost and Johnson praised in their speeches has received mixed reviews from the business community because The British version before Brexit From chemical manufacturers to medical device manufacturers, they have all explored.

This week it Is the construction industry (The key to achieving the net zero and upgrade agenda) It wrote to warn the government of the consequences of its plan to introduce the UKCA quality mark to replicate the EU CE mark.

As Peter Caplehorn, CEO of the Building Products Association, said, the lack of a British institution to test British standards (windows, glass, sealants, etc.) means that the company will spend millions of dollars in the short term, but In the long run, “we are concerned that UKCA will stifle innovation, reduce product range and [put] Over time, costs will face upward pressure.”

Beverage industry Also write a warning Part of the shortage of labor and truck drivers caused by Brexit has increased the delivery time from 3 days to 15 days five times, and urged the government to extend its Christmas visa program to allow more truck drivers to enter.

Perhaps in the minds of the government, these complaints—usually rejected as a necessary part of “recovering control”—are only those of “vested interests”, or they are too detailed to be ignored.

But for local businesses, especially small businesses with meager profits and limited staff, Frost’s “spirit of what I can do” that Brexit is reviving has to spend a lot of energy to fight the supply-side headwinds. At the very least, the decision to establish the largest barrier with the EU will not help.

It can be expected that politicians’ campaigns are based on vision rather than reality, but Boris Johnson (or anyone) in the next general election still needs voters to feel that the current government is indeed trying to “unleash the potential of Britain.” Not to kill it.

Brexit figures

Johnson Administration-and Frost In a speech at the Thatcher meeting -It has been pointed out that the value of restoring control over international trade policy is the main benefit of Brexit.

Despite the facts Point out At the hearing of the Special Committee on International Trade this week, the long-term benefits of the trade agreement to the UK’s GDP are minimal. For New Zealand and Australia, the government’s own estimate is about 0.01% or 0.02% estimate.

These gains obviously do not help offset the negative impact of the establishment of such a huge trade barrier with Europe-even if the OBR’s prediction of a 4% long-term impact has proved to be exaggerated.

One way to try to screen out the impact of Covid-19 and other factors is to measure the UK’s trade with the “clone” UK that has not yet withdrawn from the EU, based on modeling the trade performance of other developed economies such as the US and Germany. Greece, New Zealand and Sweden.

This is the above chart generated by John Springford of the Center for European Reform (CER), which is referenced by OBR in its work. October update.

After Brexit readers, he shared the latest version of the British model here. It found that in September 2021, the single market and customs union leaving the EU reduced the trade in goods between the UK and the world by £8.5 billion, or 11.2%.

Monthly trade data fluctuates greatly, but since May 2021, the model shows that the impact on UK trade is between 11% and 16%, which is similar to the predictions of the OBR and Theresa May government before Brexit.

Springford said it is an imprecise science to translate the “hit” from trade into an accurate estimate of the impact of per capita GDP (a key measure of living standards). Compared with the UK remaining in the European Union, the forecast range is a 2% to 9% decline in GDP.

Before the pandemic, CER estimated that the impact of the devaluation of the British pound and abandoned consumption and investment reduced GDP by 1% to 3%. Adding to this number and the impact of reduced trade after the exit of the single market, Springford said, “There are good reasons to worry” that OBR’s estimate of a 4-5% reduction in economic size is “approximately correct.”

So far, these economic consequences have been largely shrugged by voters, who did feel relieved to “complete Brexit” and then were swallowed by the pandemic. This is also true, because no one lives in Springford’s “clone” UK, and most people will not miss the economics they can theoretically enjoy.

Regardless of whether anyone links economic issues to Brexit, Springford believes that 4-5% is “a major event” that has already affected taxation, causing Chancellor of the Exchequer Rishi Sunak to compare other situations Raise taxes.

Regardless of whether voters attribute the weak economic performance to the Brexit policy, the current government faces the risk that the long-term squeeze in living standards (driven in part by its Brexit choice) will eventually fall on the Prime Minister. In front of the door.

Do you work in an industry affected by the UK’s withdrawal from the EU’s single market and customs union? If so, how does this change hurt you and your business—even beneficial?Please keep your feedback [email protected].

Finally, four stories not to be missed

Brexit does not seem to have caused City of London A serious injury, but Helen Thomas believes that it caused slow bleeding. She said that while early predictions of hundreds of thousands of jobs proved to be exaggerated, changes are taking place.with There are worrying moments ahead.

No matter what happens Michel Barnier? In his latest column, Gideon Rahman Investigation Why has the direction of the former European Commissioner changed strangely, now Barnier is running for the president of France, but what does his story tell us about European politics?

As you can see above, this week I wrote about how to British construction industry It warned that the new UKCA safety and quality mark after Brexit could lead to shortages of key construction products and materials and undermine the government’s escalation agenda. Learn more about their concerns, And their letter to Kwasi Kwarteng, Commercial Secretary.

Germany With a new government, our European Express newsletter Valentina Pop (Valentina Pop) has Delve into the new 178-page German alliance agreementShe explained why it is more like evolution than revolution.You can sign up for European Express here.

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Swamp notes — Expert insights into the intersection of money and power in American politics.register here

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