EU Referendum


Brexit: unrealistic expectations


09/11/2020




If nothing else, this article about Trump citing the Sunday Express, demonstrates the effect of telling your target audience what it wants to hear.

The article describes the activities of Patrick Basham, a Washington DC-based individual who runs the relatively obscure Democracy Institute thinktank. The man has spent 2020 publishing US election polling in conjunction with the Sunday Express, claiming to have a unique approach that "only looks at people identifying as likely voters instead of just registered to vote", with the aim of identifying shy Trump voters.

The result has been that the Sunday Express has – largely unnoticed in the UK – gained a substantial online audience in the US as a result of publishing polling showing substantial leads for Trump. These articles, the Guardian says, proved massively popular with the president's supporters, driving a large number of clicks towards the Express website.

Certainly, clinical analysis that doesn't shore up belief systems, and tends to the Cassandra-style of reporting - telling people what they most definitely don't want to hear – doesn't get anything like the same following, which is presumably why there is so little of it these days.

The trouble is that these purveyors of populist sentiment rarely have any shame. When proved wrong, they simply tend to repackage themselves, and offer a different set of nostrums to the gullible. Collective memories are short and there are always plenty of people willing to be deceived.

We are, I suspect, going to see this dynamic play out over the next few months in respect of a UK trade deal with the United States which, with the election of Joe Biden, seems less likely than if Trump had kept the presidency.

As it stands, there are plenty of false prophets who, over the past years, have been willing to talk up the chances of a lucrative deal – lucrative, that is for the UK – which will go some way to offsetting the losses from positioning ourselves outside the EU's Single Market.

To that extent, the success of Biden will provide a useful alibi for those pundits who were so confidently asserting that a US trade deal was just a matter of time. Now, they can claim that the unpredictability of US politics has intervened in such a way that they could not possibly have predicted, thus walking away with their reputations as soothsayers intact, even though they have always been selling snake oil.

To strengthen their respective alibis, they can also cite the progress of the Internal Market Bill – as the Financial Times and the Guardian are doing, suggesting that Biden will use this as an excuse (reason) for not proceeding with negotiations which are already underway.

The Telegraph, however, relies on a much simpler formula, suggesting that Biden simply isn't interested in talks, and will not prioritise them in the first 100 days of his presidency, preferring instead to concentrate on domestic issues.

The paper also suggests that Biden faces hurdles appointing his US trade representative, who would lead the talks from the US side, given that the Republicans could hold the Senate, which must vote through appointments.

Then, it says, there is a technical problem, in that the president loses the power to negotiate trade deals in July 2021. Failure to hit that deadline, we are told, leads to major uncertainty, as the power reverts to Congress.

But what has been long neglected, in what are essentially political assessments of the likelihood of success, are the more fundamental social and legislative issues which make the US and the UK (in or out of the EU) very different countries.

In this analysis on product safety regulations, for instance, we see a very different approach to the assessment of risk in one particular field. Although a little dated, it would seem that the principles still apply, to the extent that harmonising regulation via the mechanism of a trade deal could prove very difficult.

Most people will be familiar with the "chlorinated chicken" controversy, but not so many understand that this stems from a fundamental difference in the approach to food safety, which doesn't just extend to poultry products.

After a series of lethal outbreaks of E. Coli O157, for instance, the US implemented a "zero tolerance" policy in raw beef, which can only be achieved by the application of post-slaughter antibacterial treatment. This approach is prohibited under EU law, which prefers a regime focused on prevention, reinforced by extensive microbiological testing.

As the Canadians have found, simultaneously servicing US and EU markets then becomes extremely difficult – if not impossible. Processing to suit one market automatically renders product illegal in the other. The only way round is to have separate facilities to service each market.

Then, traders have found, the demand for specific meat cuts differs in each of the markets, which means that there are no great economic advantages in gearing up specifically to service one or the other. The money is in taking advantage of both – something the regulatory system does not allow.

Given a UK-US deal, we would undoubtedly experience the same problems, having to choose between the US and EU markets. But we would also find that, if we accepted US meat products, processors would have to go to extraordinary lengths to ensure that they were excluded from manufactured products sold to the EU. Doubtless, the EU would also impose rigorous (and expensive) border checks.

Furthermore, post-slaughter antibacterial treatments would not be the only problem. Antibiotic residues and differences in what are accepted as approved veterinary drugs, could make trans-Atlantic sales very difficult indeed. These problems alone could stop a trade deal dead in its tracks.

But the problems do not stop there. In terms of vehicle safely, US cars tend to major on rollover risk, while EU standards are stricter on protection from front and side impacts. There are also significant differences in pedestrian safety standards.

Since such standards have a material effect on overall vehicle design, in many cases it is not possible simply to bolt-on EU/UK safety standards to an American vehicle, or vice versa. This makes the process of agreeing a trade deal to cover automobiles extremely difficult.

Even personal protective equipment, apparently similar in the different legislatures, are sometimes subject to fundamentally different testing regimes. What would pass EU law would not necessarily conform with US standards. Some US equipment is not acceptable in the EU/UK.

Yet these are only some of the examples of differences between the UK and the US. They and others reflect the reality of trading with the US, where technical differences create more intractable barriers than politics. Most likely, comprehensive trade deals have not been progressed with the US precisely because of the multifarious technical differences across a range of tradable products.

On that basis, expectations of a comprehensive post-Brexit trade deal with the US always were somewhat unrealistic. While the Trump bombast may have misled Tory ideologues into thinking otherwise, his grasp of detail is no better than Johnson's – or some of his advisors.

A deal with the US will be difficult, on technical grounds alone. The election of Biden, in that respect, doesn't make any difference and even if he was suddenly to become a trade enthusiast, all the technical problems would remain.

Thus, I think we must assume that the US is not going to bail us out from the Johnsonian Brexit nightmare, any time soon.

Also published on Turbulent Times.