A bit of a mess


leaveThe European Trade Commissioner, Cecilia Malmstrom spoke on Thursday evening of our impending departure from the European Union and announced guidance regarding the process we would need to follow as a nation. Following a meeting of the European Council which comprises the leaders of the other 27 nations that make up the EU, and taking legal advice regarding the various European treaties she has disclosed that we cannot negotiate terms with our EU partners until after we have left the Union. In the period between our leaving the EU and us concluding negotiations with them we will be treated as a ‘third country’ and our trade with the members will need to take place under WTO terms which are deemed to be far less attractive to businesses than what we have currently enjoy. However this cannot take place until we have enacted article 50 of the Lisbon Treaty and there is a two year delay between our formal declaration and our departure. While we remain members of the EU the rules of membership prevent us from negotiating unilaterally with nations outside of the EU. Whilst some people will argue for us to ignore these rules now we are leaving, if we jeopardise our relationship with the EU as we leave, we may find we will pay a cost of longer negotiation time and lost opportunities when we do begin our discussions.

The Canadian trade deal, which is in its seventh year of negotiation is not a good example of how long trade deals need to take to agree with the EU, as our trading rules are already in line with the EU and therefore one would expect a much quicker turnaround. However negotiations always take time, even in the best of situations. This means that until article 50 is enacted we will have uncertainty regarding the direction of travel being taken by our Government, and then a 2 year period when we will trade ‘as usual’ within the EU, but with the clock ticking towards more uncertainty for an unknown period beyond that, possibly as short as 2 more years, but easily longer than that. The man who was head of the civil service at the beginning of the coalition Government believes that the negotiations will take much longer than 2 years to conclude. At least 2 of the candidates for the leadership of the Conservative party including Theresa May have stated that they do not intend to enact article 50 until 2017 at the earliest. This means that with a very short window of stability whilst the article 50 clock ticks down, the overall period of uncertainty which began 10 days ago may not end until 2023 or even 2025. The Business I work for in the Wealden area relies extensively on buying goods that come from Europe or the USA, albeit to sell in our domestic market. We know that one of our European suppliers has already been holding internal discussions about how to price their goods for the UK market in the light of the vote, and our US suppliers are simply following the currency devaluation.  These conditions are not good for our business, a matter which we would usually try to take up with our Conservative MP but she seems preoccupied with other matters. What an awful mess we are in and we made it ourselves!

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About ianchisnall

I have a passion to see public policy made accessible everyone who want to improve the wellbeing of their communities. I am interested in issues related to crime and policing as well as in policies on health services and strategic planning.
This entry was posted in Economics, EU Referendum, Parliament and Democracy and tagged , , , , . Bookmark the permalink.

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