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The IEA’s prescription for Brexit

Some critics of Leavers from the EU like to claim that Leavers don’t spell out the details of what Leave would mean, although that always struck me as disingenuous. Even so, it is good that the Institute of Economic Affairs has issued a paper on what a pro-liberty, pro-free market Brexit will look like:

“We have looked at Brexit in the wrong way, and in so doing we have hampered our ability to get a good deal with the EU. We must execute an independent trade and regulatory policy in order to capture gains from this process, and also to ensure that we have a better framework for negotiations with the EU. This plan offers comprehensive approach which shouldn’t be considered a ‘Plan B’, but rather a ‘Plan A+’ for Brexit.”

So says Shanker Singham, the Director of the IEA’s International Trade and Competition Unit, and co-author of the new IEA paper.

There is a lot of detail to chew over, but this is pretty manageable and sensible from where I can see it. The proposals ought, surely, to be studied closely by government ministers and it would be indeed scandalous if they have not been before. And that, of course, is the worry: Theresa May has, perhaps only now, come to a realisation that a “Brexit in name only” fudge is electoral suicide and a no-go diplomatically.

As an aside, three separate people, all Remainers, told me over the weekend that they were so disgusted by the blank refusal of EU heads of state to even bother considering May’s Chequers plan that it has made them feel that, if a referendum were held again, they’d vote Leave. These views are those of Londoners who work closely with the City, and have been the sort giving the EU the benefit of the doubt in the past. They no longer do so. That’s important.

32 comments to The IEA’s prescription for Brexit

  • XC

    I haven’t been following this very very closely from the Caribbean part of ‘Merica (Florida) but what’s confused me from the beginning is how very weakly the UK has approached the bargaining part of the breakup.

    The EU has a GDP of $13T (+/-) and the UK is about $3T so on the face of it, the UK has a lot more to lose, and that’s how they seem to be approaching it.

    But the UK is a big enough chunk (I bet) of the EU’s trade that a “hard Brexit” would topple some of the weaker states, driving the EU into recession. Maybe the UK too, hard for me to even guess.

    But my point is, both sides have a lot to lose so the pressure to negotiate the best outcome should be pretty great.

    I get that you have to stir in ego and politics, but still.

    -XC

  • Dalben

    Citizens of the various countries have a lot to lose. EU bureaucrats with jobs for life don’t have to worry.

  • Runcie Balspune

    disgusted by the blank refusal of EU heads of state

    Quelle surprise!

    Why don’t Remainers understand the reason most Leavers want to leave is due to this stubborn bullying attitude of the EU, every time something like this happens (as in when Cameron tried to “do a deal” before the referendum) it makes the leaver element even more ingrained.

  • Why should we trust the IEA? They don’t even have consonants!

  • The Pedant-General

    But there remains (wrong word I know) the issue of the Irish border.

    My (flippant, poorly researched) going in position is “Call their bluff” – make the EU stick up a hard border if it wants to: we’re happy to remain open for business. Make sure that’s it’s the EU side that has all the bureaucracy and delay and that people feel relieved to be through onto our side where they see nice welcoming people. Then sit back and watch Eire vote to leave…

    What’s the IEA view?

  • George Atkisson

    How about sendIng the EU a bill for Britain’s expenses in saving their collective buttocks in the Second World War. Plus interest. Request a formal thank you. Otherwise close the border to Europe and declare that the EU and its laws/rules/regulations are null and void. Tell the Remainers to piss off, sod off, and die off. We could lend you our President for a week.

  • Fraser Orr

    I have said it before — Britain should get into NAFTA. It isn’t too late. Expand it to include AusNZ. Britain is on its back from a negotiating point of view, and normally Trump would eat them for lunch, but he is SO pro Britain that he will give them a good deal. FFS, all you Brits need to do is to get Prince Andrew to play a round of golf with him in St Andrews and give him a tour of Buck house and he will bend over backwards to give you a great deal. I mean, just imagine, Prince Andrew actually being useful for once!

    He has already said “zero tariffs/tariff like barriers” are his goal. Imagine the impact on the world if an expanded NAFTA could be transformed into a big super low tariff block? The world economy would explode with growth and the EU would come crawling on their knees to Britain to get a piece of the action.

    The goal of the EU negotiations is to crush Britain so that no other uppity little state would dare leave again. This despite the fact that it is economically advantageous to the EU to get a decent deal with Britain. However, the negotiations are done by politicians not businessmen, and the goal is therefore political not economic. So crush Britain is the goal. Mrs. May seems utterly oblivious to this vital fact. However, if she did a deal with NAFTA and others it would be clear that Britian could not be crushed, at which time economic interests would prevail, and Britain would actually end up with a decent deal with the EU anyway.

    However, May is negotiating based on completely wrong assumptions about her interlocutor, and is therefore going to get her, and Britain’s, ass handed to her.

    However, because the British people think Trump is rude and boorish, and because Mrs. May can’t seem to think beyond the EU, what is probably going to happen is that Britain will leave like a scolded child, kicked out of the house, and crossed out of the will, instead of leaving the family nest to discover the magical and boundless opportunities the world presents to her.

    And to compound it, not only will her gross incompetence (and frankly the hostility of the British people) leave you with a dreadful deal, the worst of being in the EU with the worst of being out, this will be followed up with the compounding blow of the Tories getting trounced by a bunch of utterly nutty socialists. I think you are going to long for the 1970s.

    Long term it will be better for Britain, but my god, these factors are going to make it a REALLY long time.

  • Clovis Sangrail

    What Fraser said!
    The British still seem to think they can virtue-signal their way to nirvana by pointing at Trump and saying “He’s rude!He has no decorum! Isn’t he embarrassing?”
    Why the hell can’t we recognise a positively-inclined ally and pounce on the opportunity that he, and the majority of Americans, offer us?

  • Philippe Hermkens

    If you are out of the Single Market, if you have a Free Trade Association, you will have checks at the border to see if you respect the rules (quality, environment norms, no GMO s, etc …) and pay taxes (VAT, tariffs, ..)

    It is very easy to understand. It costs a lot of money. It means delays, ..

    Short term, it is a nightmare for businesses..

    That you export to the EU or to the US or to India or whatever

    Long term, with Jeremy Corbyn, you will eat grass

    For the rest, long term, it could be the nirvana of a prosperous, free trade , low taxed U.K.

    It is not difficult to imagine that in comparison with France or Italy ..

  • CaptDMO

    How many times, in ALL of history, has The Institute of Economic Affairs been correct in it’s long term forecasts? Even “secretly”, or by accident?
    In the U.S., we have a lot of Federal, State, and other award winning economists with BRILLIANT CVs, and horrendous “resumes”, and yet, they STILL demand “respect” outside of their cloistered academic “theories”.

  • The British still seem to think…

    Stop it. Seriously, ‘The British’ does not think anything and neither do ‘The Americans’ or ‘The Nigerians’.

  • How many times, in ALL of history, has The Institute of Economic Affairs been correct in it’s long term forecasts?

    Quite often actually. The IEA are good lads.

  • Mr Ed

    However, May is negotiating based on completely wrong assumptions about her interlocutor, and is therefore going to get her, and Britain’s, ass handed to her.

    I think that is too generous, imagine Vidkun Quisling ‘negotiating’ with Berlin in late 1941, and add a bit of fawning.

  • >As an aside, three separate people, all Remainers, told me over the weekend that they were so disgusted by the blank refusal of EU heads of state to even bother considering May’s Chequers plan that it has made them feel that, if a referendum were held again, they’d vote Leave.

    I don’t suppose they’re going to go as far as saying, “We were wrong, and you were right all along?” More on this here:
    https://hectordrummond.com/2018/09/24/a-sorry-would-be-nice/

  • Flubber

    I’m amazed Trump hasn’t ordered the 101st Airborne to invade given GCHQ’s involvement in the Steele Dossier and the Russian Collusion nonsense.

    Only a couple of days ago, Trump said that two governments had begged him not to declassify docs that would expose their involvement. Those two governments being us and the Aussies.

    I find it frankly staggering that May is so boneheaded in her attitude to Trump.

  • XC

    @Flubber – we’d send the Boy Scouts or perhaps the Second Florida Crackerhead Volunteer Infantry.

    We are pretty geared up over here….

    Hell, we got two guys in Naples what own actual working WWII Spitfires that they fly for fun. Cracker Air Force!

    -XC

  • bobby b

    “Hell, we got two guys in Naples what own actual working WWII Spitfires that they fly for fun.”

    Yeah, but these are white-haired guys who drive in the left hand lane of the freeway at forty-two miles per hour and wear Spandex black socks with their expensive shorts, so I hope they have some pilots on hand.

    😆

  • Chip

    Trump is a godsend during the Brexit negotiations. He loves the UK and wants to reverse the cold relations of the Obama years. May could be leveraging Trump’s expressed interest in a trade deal with the UK to weaken the EU’s position.

    But what does she do? Insults the US leader, gratuitously, at the same time the EU is insulting her.

    She’s appallingly dense.

  • Fraser Orr

    @Mr Ed
    I think that is too generous, imagine Vidkun Quisling ‘negotiating’ with Berlin in late 1941,…

    I’m a firm believer that one should not attribute to mendacity that which can be explained by stupidity.

    @Chip
    But what does she do? Insults the US leader, gratuitously, at the same time the EU is insulting her.

    In fairness to her I think she had no choice. I am reminded of Berclow banging on about how he wasn’t going to allow Trump to speak to Parliament, before Trump or anyone had even indicated a desire to do so. Shocking when you think of some of the monstrous idiots who inhabit that place.

    It seems to me that the mood in Britain is one of “Trump is a monstrous, uncouth threat to democracy and all that is decent and good”, and that leaves her with little ability to effect an trade deal without the support of the British people. So, much as I have great disdain for Mrs. May, I am reminded of the old saying that a people get the government they deserve. And they usually get it good and hard.

    Of course the denizens of this place are excepted from such comments, but, AFAIK, only a tiny fraction of the British public would not be horrified with some of the crazy, Crazy, CRAZY views expressed here.

  • Mr Ed

    FO

    the mood in Britain is one of “Trump is a monstrous, uncouth threat to democracy and all that is decent and good”,

    May I FTFY?

    the mood in Britain’s Wankerati political and chattering classes is one of “Trump is a monstrous, uncouth threat to democracy and all that is decent and good”,

  • RouĂ© le Jour

    As an aside, three separate people, all Remainers, told me over the weekend that they were so disgusted by the blank refusal of EU heads of state to even bother considering May’s Chequers plan that it has made them feel that, if a referendum were held again, they’d vote Leave.

    I don’t know how many times the EU has to restate it’s position, but it has made it perfectly clear: The UK will not benefit in any way by leaving the EU (otherwise other serfs will hanker for freedom as well). As a consequence of this their negotiating position is simply this, you may “leave” if you wish, but you must still pay your contributions, obey our rules and do as we tell you.

    It doesn’t matter how much midnight oil May burns coming up with a cunning compromise, if there is any chance the UK will benefit from it, it will be rejected.

  • Paul Marks

    The first thing that must be done is to stop using this stupid media word “Brexit” – it we are discussing independence that is the word that should be used.

    Independence means that the laws of a foreign power (the European Union – or anyone else) shall not have legal force INSIDE the United Kingdom.

    We need to stop paying money to the European Union (certainly not the 39 billion Pounds that Mrs May had offered them) and declare that European Union law is no longer the law of this land – the opposite of the policy of Mrs May which is to “incorporate” all existing European Union regulations into British law and, by the “Common Rule Book”, also accept all FUTURE European Union regulations as the law of this land.

    The fact that the policy of Mrs May of accepting all existing and future European Union regulations as the law of this land is described as “Brexit” shows that the word “Brexit” is useless, indeed harmful. I repeat – if we are discussing the independence of the United Kingdom from the European Union then independence is the word that must be used.

    Would a free trade “Canada style” agreement with the European Union be worth giving them 39 billion Pounds? I do not know – but I do know that Mrs May has NOT tried to get one. Mrs May is AGAINST the independence of this country – the lady is a “Remainer”, she wishes the United Kingdom to remain under the laws of the European Union (past, present and future).

    Unlike J.P. I see no evidence at all that Mrs May has “perhaps only now, has come to a realisation…..” – the position of Mrs May does not actually seem to have changed at all. The lady seems to remain committed to keeping the United Kingdom under the legal authority of the European Union – accepting all past and future regulations of the European Union as the law of this land. I would like to believe that the meeting in Salzburg was a “Road to Damascus” experience for Mrs May and that she is now converted to the cause of British independence – but there is no evidence of this. Indeed Mrs May does not even talk about independence – the lady uses the word “Brexit”, a word that is totally and absolutely meaningless.

  • rapscallion

    @Chip “She’s appallingly dense”

    She isn’t that good Chip.

    @RouĂ© le Jour. Indeed, Didn’t Juncker say quite openly when he was invited to Downing Street just after the referendum that “Brexit cannot be a success”. Straight from the horses mouth so to speak, and nobody was paying any attention.

  • I find it frankly staggering that May is so boneheaded in her attitude to Trump. (Flubber, September 25, 2018 at 1:15 am)

    She’s pretty thick about a lot of things; why would Trump be different?

    three separate people, all Remainers, told me over the weekend that they were so disgusted by the blank refusal of EU heads of state to even bother considering May’s Chequers plan that it has made them feel that, if a referendum were held again, they’d vote Leave.

    There is some very slight and early evidence that it is giving May herself just a bit of the Neville Chamberlain post-Munich-hangover experience. (Even if so, it’s worth recalling that Neville did not handle the rest of 1939 and the beginning of 1940 particularly well.)

  • I find it frankly staggering that May is so boneheaded in her attitude to Trump.

    She is not very bright & lives within a completely self-referential bubble, so hardly surprising really. The Tory Party is not called the Stupid Party for nothing.

  • the lady uses the word “Brexit”, a word that is totally and absolutely meaningless

    Just about everyone uses it, Paul, because the term is widely understood to just mean “The UK leaving the EU” & is not politically loaded beyond that, so not a hill worth dying on.

  • Paul Marks

    Perry – “Brexit” does not, in practice, mean anything. That is why Mrs May likes the word – hence her “Brexit means Brexit” which is the same as “Potiuzx means Potiuzx”.

    If we dare not even use the word “independence” what chance is there that we will actually achieve independence? No chance at all – none whatever. All existing and future European Union regulations will continue to be the law of this land. We will have “Brexit” (which does not mean anything), but we will not be governed by our own laws – we will not be independent of the European Union, we will be governed by the European Union.

  • Clovis Sangrail

    I take Perry’s admonition without complaint. Generalisations about nations are generally mistaken. Nevertheless, I think it is a larger section of the population than just the enlightened ones who think “Trump is a monstrous, uncouth threat to democracy and all that is decent and good”. I am constantly surprised on talking to otherwise (apparently) sensible people to find that they have swallowed this line.

  • Perry – “Brexit” does not, in practice, mean anything.

    It mean the UK leaving the EU. Sorry mate, but it does. It is a bit like the word ‘death’: that word is silent on what form death takes, but it really does mean something, and in a similar fashion, so does ‘Brexit’ 😆

  • EdMJ

    What are the Samizdats thoughts on a CANZUK alliance?

    “Canada and Australia are medium-sized countries, with values, constitutions, legal systems and political cultures as close to the UK’s as any country in the world. If we add in New Zealand, we get a nice acronym: CANZUK…”

    “CANZUK would certain have that. Between them these four countries would control a surface area of more than 18 million square kilometres, the largest in the world, exceeding even Russia’s 17 million. Their combined population, at 128 million, would be the world’s 10th largest, just ahead of Japan. Their combined military spending of around US$110 billion would be the world’s third largest, behind the U.S. and China but well ahead of Russia.
    At US$6.5 trillion in combined GDP, the CANZUK countries would constitute the fourth-largest group in the world, behind the U.S., EU and China. At nearly two-thirds the combined GDP of China, no one could deny that a CANZUK economic grouping would be economically significant. Total global trade of these four countries would be over US$3 trillion, versus around US$4.8 trillion for the U.S., US$4.2 trillion for China, or US$1.7 trillion for Japan. These are big numbers by global standards. There is no question that, working together, the CANZUK countries would be one of the world four top powers, with their own unique values and objectives to project.”

    https://www.canzuk.co.uk/single-post/2016/09/26/Yes-we-Canzuk-A-post-Brexit-possibility

  • staghounds

    Since before the referendum results were finished, I’ve been saying that the refusal of the politicians to do as they were told would expose the fact that the people of Britain are not sovereign over their government.

    Little did I expect that it would expose the fact that their government does not even want to be sovereign over itself, preferring to obey foreign powers instead.

    Sad.

  • Mr Ed

    Ed MJ

    CANZUK sounds like a recipe for a race to the bottom with the various SJW political factions striving to be the most woke. NZ and Canada are too far left, getting involved with Australia might mean us being ruled by that Welsh lady who was PM recently, or with Canada the estimable M Trudeau jnr, and it leaves us still with a French problem. However, it still looks better than anything on the table from Mrs May in terms of economics, as it could be a simple free-trade area with mutual recognition of products and no tariffs. There’s a good mix of manufacturing and primary production, and wine.

    NZ wont want our defence as we have nukes, so they can eff off afaic, they are effectively neutral but without the Swiss swagger and preparation, and rely on being forgotten about or too far away to bother. I’m not sure if Australia would want to rely on the UK for defence, even if it’s the only country we’ve nuked AIUI, albeit by consent.

    Canada, our most steadfast ally in history if you disregard Portugal, do they have any defence needs? They can’t defend themselves from Russia or the US, and can rely on the US being the great force for good it generally has been and the impossibility of attacking Canada without giving the US cause to interfere.