The Political Economy Review 2017

Primarily, the government has been deluding itself that Britain can have 'the exact same trading benefits outside the EU' to quote the Secretary of State for leaving the European Union, David Davis. This is simply not true, especially as the Prime Minister has ruled out staying in the world's largest trading bloc, not to mention the prospect of 'no deal'. Furthermore, the European Commission has made it clear that Britain won't enjoy the same benefits of being inside the Union once it has left, so it is clear that Mr Davis' vision won't go down well in negotiations. Secondly, Mrs May's mantra that 'no deal is better than a bad deal' is not only fiction but also very dangerous for the UK economy. As I will explain later, a 'cliff-edge' Brexit will mean a major economic shock for the UK economy, much worse than we have seen to date. Not only this; the cabinet itself seems confused about the consequences of 'no deal'. The Chancellor has recently warned of the dangers, stating 'no deal' would indeed be a 'very, very bad deal'. It appears to me rather contradictory that a 'very, very bad deal' is better than a 'bad deal'. Walking into the negotiations as the bully threatening to walk out doesn't seem to be the best way to secure a 'deep and special partnership between allies'. Furthermore, the government's version of megaphone diplomacy is not only outdated and arrogant, but not helpful in terms of the negotiations. Accusing Europe of interfering in the general election, characterising herself as a 'bloody difficult woman' and threatening to undercut her European partners by creating an unregulated tax-haven off the coast of Europe doesn't strengthen her hand but only antagonises already tough/emotion-driven negotiations. Moreover, I don't believe the Brexiteers' utopian 'Brexit deal' is at all plausible; it is clear that the UK has the weaker hand in the negotiations. On a simple level, there are 27 of them (including major global players - France, Germany, Italy etc.) and only 1 on the other side. In addition, the very nature of Article 50 of the Lisbon Treaty ensures that the leaving state is in a weak position. According to the former Italian Prime Minister Giuliano Amato who wrote it, it was intended to be a 'punishment mechanism' to discourage such a move; he also added that 'when it comes to the economy, they have to lose'. Article 50 is unrealistically restrictive and has no mention of a 'future relationship', so Britain will have to flirt its way to securing a deal upon which 27 member states will agree, which the UK government most certainly is not doing. Furthermore, one of the UK's greatest weaknesses is that, fundamentally, it lacks the manpower; there is a significant shortage of trade negotiators and analysts on the British side (the main reason being that Brussels has negotiated on Britain's behalf for nearly half a century and hence it has not needed its own negotiators). Recruited civil servants do not compare with Brussels' team of negotiators. Britain's weakness is greatly contrasted with the newly-found strength in the EU; some Eurocrats are predicting a more prosperous Europe post-Brexit. All 27 remaining member states unanimously backed the Commission to negotiate on their behalf in minutes (the most unified the Union has been in quite a while), the Eurozone's economy is back on track and the newly-elected French President Emmanuel Macron brings greater confidence in Brussels. Recent events have brought this contrast into sharp relief. Macron has secured a massive mandate for his pro-European stance with his landslide victory in the French parliamentary elections (securing 350 out of 577 seats), and indeed the UK general election, where there were no winners (except perhaps Michel Barnier and the Commission negotiating team), has resulted in the weak and wobbly Conservative Party scrambling to hold on to power. Theresa May is still (at time of writing) trying to secure a deal with 10 DUP members to ensure she has a workable majority in parliament. This is not only terrifying for the future of Northern Ireland (as I will explain later) and an embarrassment for the Tories, but a further weakness in Britain's negotiating position, as there is a real risk that Parliament could reject the Brexit bill in 2 years' time. Frankly, if she can't negotiate with Arlene Foster, how does she have any hope with the European Commission with a spring in its step? We also know that the 2-year deadline is totally unrealistic. The EU has never secured a trade deal in this timescale (on average, comprehensive free trade deals take 4-5 years to negotiate), let alone a deal this complex


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