Post-brexit trade delusions: Africa edition

Theresa May is starting to remind me of a 80’s film, weekend at Bernie’s, the plot of which was how two low level employees are stuck with pretending their boss isn’t dead, or else assassins will kill them. Not a great film (it has one joke that wears thin pretty quickly), but an apt metaphor for Theresa May dragging around her Chequers deal, unwilling or able to admit its bleeding demised and joined the choir invisible, because if she does that will be the end of her.

But for brexit to work both she and the hard brexiters still have to prove that life outside the single market can bring benefits to the UK. That we’re better off out than in, a question Corbyn refused to answer last week – six times!

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Theresa May’s Chequer’s deal, its just resting!

So, having realised that the kebab model ain’t going to work and having googled the south sea bubble and realised that South America isn’t a mysterious continent full of riches, that idea too has been ditched. And with New Zealand, the US and Australia leading opposition to the UK’s WTO proposed quota’s post-brexit, that suggests no empire 2.0. As a result now they are pinning their hopes on Africa, with May and Fox jetting off to set up trade deals….with the world’s poorest continent….which has a combined GDP less than that of France. Hardly sounds like they’ll be buying many UK cars! And via the EU of course the UK already HAS a host of trade deals with Africa that it will lose at the end of March 2019.

Furthermore trade with Africa is something that presents a bit of dilemma. On the one hand it is generally agreed that trade is the best way Africa can grow its economy and develop itself out of poverty. However, the issues with corruption in the continent means there is always a risk that money won’t trickle down to the people who need it the most. And least we forget a lot of Africa’s problems stem from past trade deals which screwed over the locals to the benefit of Western countries and a handful of the wealthy elites in Africa. So the devil is very much in the detail in any trade deal with Africa.

However, the hints coming from the brexiters seem to indicate that they plan the very worst of the exploitative trade deals of the past. They are talking about using aid for example as a carrot to subsidise the sale of British goods. What’s wrong with that? Well because it means locals (again, some of the poorest people in the world) paying over the odds for equipment they might be able to buy cheaper elsewhere, with corrupt local politicians often creaming off their share of the take (or simply sell the equipment on to a foreign buyer and pocket the profits). And it often comes with the further price tag of the locals having something thrust upon them (e.g. they lose their water supply to the benefit of a foreign owned farm growing cash crops).

And the brexiters also talk about getting “cheap food from Africa. Or to translate that into practical on the ground consequences, they want to take the food out of the mouths of starving children just so UK shoppers can save a few penny’s. If the UK starts buying more food, be it cash crops or worse the very food the locals rely on to survive, then this pushes up food prices in Africa. And it doesn’t have to go up by much to become unaffordable to locals.

Furthermore, there’s a number of practical reasons, why most countries are restrictive in their trade with Africa. For example the issue of disease, most notably foot and mouth. As I pointed out before its endemic in certain parts of the world, most notably Africa. If the UK starts trading in meat products (or feed) with Africa we’d lose our disease free status meaning UK farmers would lose access to many international markets. And recall a past outbreak of foot and mouth in the UK, an event the farming sector is still reeling from, was caused by someone violating these very rules. So all in all it doesn’t sound like a great idea.

Conjectured-foot-and-mouth-disease-status-in-2010-with-regional-foot-and-mouth-disease

Foot and mouth disease is endemic in most of Africa

And hand in hand with free trade goes freedom of movement. If a African entrepreneur who wants to say, set up a new car brand (I met someone at a conference a few years ago and this was his goal) and he wants to export to the UK, or get finance through UK banks, he and his staff are going to be able to get in and out of the UK without having to apply for visa’s two months in advance (after filling in an 85 page form and paying £500 a pop) and having them turned down or delayed for no apparent reason. So any such trade deals would only work if the UK is prepared to open up its borders with Africa.

And the UK will not have Africa all to itself. Both China and India are actively investing in Africa and they can both make far better offers than any deal the UK could offer. Indeed, one of the brexiters big ideas is to lower the import tariffs into the UK to zero. Ya, ok but you do realise that under WTO rules all the other countries are legally obliged to keep the tariffs on UK imports at the WTO levels until an agreement can be reached. If the UK has already lowered its tariff’s what possible incentive do these other countries have to negotiate the lowering of their tariffs?

The brexiters seem to forget that the “exciting” trade deals they got in the past, which they signed on the deck of the Royal yacht Britannia, they only got those because they had the Royal Navy backing them up (and pointing the guns of warships at the city!). These days its a little different. Go into a trade negotiation now, even with African countries, and you are facing off against an army of lawyers and expert trade negotiators. Many of these negotiators will be Western educated (Oxford, Harvard school of law, LSE, PSE, etc.) and grizzled veterans of multiple past trade negotiations (of which the UK has almost no recent experience). The idea that the UK is going to get a better deal than the EU has managed, even against smaller African countries, is somewhat dubious.

And if the plan is to resort to the robber baron tactics of the past, Empire 2.0 and all of that, well like I said China and India are now backing these countries up. You’ll be facing off against global economic powerhouses….with two of the world’s largest armies.

And speaking of which, on brexit related matters, we have stories about how impractical and expensive stockpiling medicines and food will be, of the massive drop in nurses (the nurses union are now so worried about the shortfall that they are backing a 2nd referendum), farm workers (as well as fears of food shortages) and the likely impact of brexit on research (as well as the fact the UK will be frozen out of the Galileo navigation system). As experts have pointed out the government’s recent post-brexit advice is to go away and buy software (which doesn’t exist), hire a bunch of lawyers to fill out the tons of documents you’ll need to export (hardly practical for a small business)….then bend over and kiss your arse goodbye. Oh and if you live in Northern Ireland, talk to the Irish government (which is kind of like getting on a BA flight and the pilot saying “I have no idea what all these buttons do, you might want to find someone from Ryanair”).

Plus we now have clashes between French and UK boats over fishing rights (worth noting the boat actually doing the ramming below is a British registered trawler who has been found guilty of fishing offences before), probably a foretaste of what’s to come post-brexit.

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A British boat rams a French fishing boat off the coast of France as the Scallop wars start

And what’s the government’s solution to all of this? The go-to Daily Mail/Express solution to every problem, call in the army! Who’ll be parachuted in to protect fishermen (who again are the ones doing the ramming!), distribute food, fuel and medicine post brexit….and presumably pick fruit, staff hospitals and do scientific research (while riding on Unicorns one assumes!). I think Tories played with their action man figures a little too much as a child!

And I just got back from Ireland and it came up in idle conversation how a number of the UK chain which have gone belly up recently are actually still up and running in Ireland, including Maplin and ironically enough Poundland (ya while they’ve gone broke in the UK, they are still in business in Ireland even though we joined the Euro two decades ago!). The media agonises over what could possibly be causing this crisis in the high street, the internet? The weather? Changing tastes?…or maybe its because some dickheads decided to vote for brexit, causing a 25% drop in the value of the pound, which if your importing stock from abroad, means your costs just went up 25% pushing many firms into the red.

Like I’ve said before brexit is now the official state religion of the UK. The CEO of a company could jump off the roof of a building wearing a sweatshirt that said brexit killed my business and land in front of a UK journalist or politician and they’d put his death down to an unfortunate accident with gravity.

But all in all it appears even the brexiters are resigned to the fact that brexit is going to render the UK worse off. Its an unspeakable heresy they can’t dare speak, so they need to at least make sure there’s some positives they can point too. So when all the factories closing and millions are unemployed and certain food items have become harder to find than in Venezuela, they can at least point out, oh but look pork is now 3p cheaper per kg, aren’t we reaping the rewards of brexit…. just ignore the stories about food riots in Africa or a foot and mouth outbreak in Sussex and eat your brexit tripe.

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2 thoughts on “Post-brexit trade delusions: Africa edition

  1. Pingback: Salzburg and the sound of brexit madness | daryanblog

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