So we now know that its going to be a no deal brexit and that basically means the Tory policy is the same Trump’s – build a wall in the English channel and expect someone else to pay for it (spoiler alert, they won’t!). However there is a problem here, both for the Tories and Trump. Walls don’t actually work and can lead to the worst of both worlds.
The likelihood is that what we will see after January 2021 is long queues at Dover and Folkstone leading to serious delays and possible shortages of supplies in shops. How serious these shortages are is hard to guess, but it will not correct itself quickly, sporadic shortages of certain items (one week no eggs, next week lots of them but no flour, etc.) will be something we have to get used to, because that’s sort of the price you pay for having such border checks. As I’ve discussed before, this was the reality in the time before the single market.
Supermarkets and retailers plan their orders months in advance. They will have already started work on their Christmas stock. This is how they are able to have what you need or want on the shelves at the correct time (e.g. first decent day of sun, there’s barbecue stuff, first frosty morning, de-icing kits and snow shovels). While they can plan ahead for some certain predictable events, the trouble is that if the demand side of things causes supplies to sell out quicker than expected (as recently happened during the pandemic) its going to be harder to restock in a hurry (due to the border delays) and it will cost more money to do so, pushing up prices.
And when it comes to costs we are not just talking about tariffs, but the cost of paying for a truck to sit in a queue for several hours (or possibly for the driver to have to overnight as he’s gone over his hours). Then there is the cost of paying someone to fill out all that paperwork, estimated at £200 per item in a truck (so if you have boxes of 50 different items in the back of one truck, that’s £10,000 on paper work to move one truck across the border). Those costs will have to be borne by someone.
And that doesn’t just mean customers, it also means costs to the government and ultimately tax payers (those border facilities cost money to build and maintain, border guards don’t work for free). Indeed it has been estimated that the costs of establishing a border, as well as numerous regulatory agencies and then administering all of that, will cost far more than the UK ever paid to Brussels during its entire period of EU membership. And this doesn’t include the loss of trade or the economic damage caused by brexit.
And no, we can’t all buy everything off British suppliers. They won’t be able to produce enough to meet demand. Inevitably if everyone tries to order say, British tomatoes, the price will soar. And retailers know their customers, they know what will sell and what won’t. Hence they will not stock fruit and veg that’s the wrong colour or shape, which is why the EU had all those rules about bendy banana’s (to ensure suppliers didn’t find themselves in the situation where a supermarket rejects their entire stock for some arbitrary reason). Which is why the UK will need to come up with similar rules (then pay someone to administer them).
But here’s the problem, border controls don’t work. Inevitably people will start to circumvent them. Don’t underestimate people’s ingenuity in circumventing a disliked bureaucracy. This was, after all, the reality pre-single market. If you went to France on holiday, you made sure to fill the car boot with French wine on the way back. If going to visit relatives in the UK you’d bring over a big suitcase full of contraband, which you’d then fill up for the return journey. And truck drivers who cross borders regularly will start carrying a few “special delivery” boxes (any items that is expensive or scarce post-brexit) tucked away in the back of their truck. Professional smugglers will set up their one operations as soon as they see a way of making a profit (and that £10k a truck load, not including the savings from dodging tariffs and taxes, is going to be mighty tempting). This puts UK companies in the worst of both worlds, unable to export easily and facing competition from foreign produce that is smuggled in with no regulation, taxes or tariff’s.
Bottom line you can’t search every single car or truck, enough will leak in to cause problems. Take the Berlin wall. Now that’s a proper wall (Trump’s wee fence seems pretty tame in comparison) with literally an army guarding, operating under shoot to kill orders. But it didn’t work. Smuggling of people out through check points still occurred, as did the smuggling of goods into the GDR. This combination of loss of trade thanks to those strict border controls, smuggling of items into the GDR and a brain drain, is why the GDR collapsed. And speaking of which, brexit itself has already caused a brain drain with applications for EU passports soaring by up to 2000% in some cases.
This is why the European single market came into existence in the first place. Countries thought they were playing a protectionist game of beggar thy neighbour, when they were actually playing a game of beggar thy self. This required common rules, which the EU was set the task of administering. Of course, as I’ve discussed before, perhaps the flaw of many free trade deals (or the single market) has been to adopt a very neo-liberal model, rather than one that actually works to protect jobs and the environment.
But either way, trade deals with the US or other blocks will also require common rules, just ones the UK has little say in (as the US will decide those rules, not the UK). Plus the supply lines to the these parts of the world are quite long and I can’t see much business going their instead of the EU (it will still be quicker and cheaper to just have a driver queue at Calais than wait a week or two for cargo to cross the Atlantic…plus most transatlantic trade goes through Rotterdam!).
And supermarkets have already indicated they will refuse to stock certain US items such as Chlorine washed Chicken, GM foods or crops grown with heavy use of pesticides. They are doing this because they recall that there was a consumer revolt in Europe a few years back, during which such products were rejected. The EU’s labelling rules (which the US has suggested should be dropped) were brought in specifically to deal with this issue. The same process will just play out again. Supermarkets will be reluctant to stock such items. And customers, aware of the new labelling laws (and thus anything that is made with US ingredients needs to be looked on with suspicion), will just not buy anything that so much as touches America (even items currently on sale in the UK), making the trade deal counter productive.
What’s Trump going to do? Send the marines into UK supermarkets to force Texas made Cornish pasties into people’s trolleys at gunpoint. And Americans will probably still be reluctant to buy British meat (which is more expensive) given the whole mad cow business (I recall overhearing an American commenting on that, so yes that’s still a thing). Is Boris going to parachute Royal Marines (in redcoats one assumes) into American restaurants and force people to eat British steaks (and while they are at it, how about paying some taxes on your tea?…course technically it will now be Britain who will be subject to taxes without representation).
And the same is true of immigration controls. Firstly, they don’t work, even if the wall can deter crossing (and it won’t), they’ll just go around it via border check points….or just take a flight to Las Vegas or Florida and pretend to be on vacation. Like the Berlin wall, its an expensive act of security theatre.
Meanwhile the UK, aware of migrants paddling across the channel, is proposing to send multi-million pound warships out to intercept them, invade French territorial waters and drop them off…likely resulting in a French warship entering British waters to drop them off in Dover, as the French have made clear that the price of brexit is that you can’t send migrants back.
Why oh why do all these migrants want to come to the UK? Is it because France is racist? Well, no more than the UK is racist. The issue here is that the UK (much like the US) has for years presented itself as a “world beating” land of milk and honey. And unsurprisingly many refugees, particularly those from ex-British colonies, then see it as the obvious bolt hole in the event of issues back home. After all, its how the current home secretary got here (ironically she’s a refugee herself!). So its a little late to start complaining.
Beside which, the number of jobs in an economy is not a fixed constant, it varies depending on economic activity. Strict border controls, reduces economic activity and thus leads to more unemployment. And it has been proven that migrants add more jobs than they take away.
In fact strict border controls can actually be counter productive. Put yourself in the shoes of a greedy, ethically challenged businessman. You want to get a leg up on your competitors, so you predominantly hire undocumented migrants. They will work for a much lower salary (possibly less than minimum wage) you don’t have to pay for their healthcare, pension, etc., and its a lot less likely they will unionise or go to the authorities to raise concerns about workplace safety or poor hygiene standards. Of course, once your competitors figure out what you are up to, they too will copy this model and in the end American workers (or British workers) will effectively be driven out of an entire industry.
This is pretty much what’s already happened to a number of US industries, such as the meat packing industry. And if anything Trump’s wall, or the brexiters immigration controls, will just mean more of the same. Indeed, one could argue that the it gives some business owners (such as a certain hotel baron with a habit of hiring undocumented workers) a perverse incentive in maintaining the status quo. Because if you ever actually managed to control immigration, they’d lose most of their workforce. While if immigration controls were ever relaxed, they’d face demands for a proper salary (as well as back pay) and workers would start bringing up their rights (as well as levelling the playing field for American workers).
So a better strategy would be to deflect public attention with some security theatre, while crippling ICE, by for example forcing them to devote most of their agents to patrolling and guarding a pointless border wall that actually does little to stop immigration, or sending them off to Portland to harsh some demonstrators.
Of course this is exactly why the EU did away with immigration controls for workers in the first place. They realised it wasn’t doing anybody any favours and was actually counter productive. And south America too has adopted a similar approach when it comes to the movement of labour between their countries.
Similarly, there are cases where strict protectionism can increase smuggling, by making it more lucrative for people to do it, meaning more will be willing to take the risk (or just bribe officials). After all this is the entire basis behind the drugs trade and people smuggling.
In short, right wing populism only looks like a good idea if you’ve recently had a lobotomy, or are ignorant of world economic history since the end of world war 2 (which is part of the problem, most brexiters are ignorant of history beyond the dambusters raid). The brexiters and republican policy amounts to relearning those lessons of history via the school of hard knocks with the same predictable outcomes.