Simanaitis Says

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NO DEAL BREXIT AND THE AUTOMOBILE

GLOBALISM VERSUS NATIONALISM are concepts lurking in Brexit, Britain’s withdrawal from the European Union. Brexit is based on a June 23, 2016, referendum in the United Kingdom, its outcome a fairly close 52/48 on the matter. Subsequently, on March 29, 2017, Britain invoked Article 50 of the Treaty on European Union, thus starting the clock to its exiting the EU officially at 11 p.m., March 29, 2019.

Image from BBC News, November 17, 2018.

There are scads of Brexit details, many of them regulatory and trade minutia; others, like the Irish/UK customs border, are rather more problematic. The phrase “No Deal Brexit” describes what could occur in four months, should these complex negotiations be left unresolved.

The London Review of Books, November 8, 2018, addressed this in “What Would It Be Like?,” by Swati Dhingra and Josh De Lyon, both at the London School of Economics. Obviously, the LRB article is Brit-focused, but it also serves as something of a parable about globalism, nationalism, and the automobile.

Here are quotes from the article, combined with tidbits from my usual Internet sleuthing. Little did I know, at the onset, that I’d find the Brexit nationalistic net casting wide, snagging Cambridge Analytica and Steve Bannon.

Prices. “In the case of No Deal,” Dhingra and De Lyon wrote, “barriers of trade would increase sharply, causing the cost of imports to rise further. Many imports are of parts needed for production taking place in the UK, so the cost of production and therefore prices would also rise.”

Industrial Policy. “The government has issued 105 technical papers on how to prepare for No Deal.” If nothing else, the paper industry should thrive.

Image from Surviving Mexico.

Tariffs. “UK exports to the EU would face the same tariff rates as any other country with which the EU doesn’t not have a trade agreement. In sectors such as agricultural, these tariffs are very high; in others they are quite small.” Consider Trump’s dairy squabbles with Canada, and the complexities of joint U.S./Canadian automaker facilities.

Non-Tariff Barriers. “The EU has a system of mutual recognition of standards and regulations…. Without a deal, customs and regulatory checks would be required between the UK and the EU-27. The cost … would be high for businesses and government. For example, non-tariff barriers between the EU and U.S. are estimated to add 20 percent to the cost of goods and services.”

Trade Balances. “The economic gains … with non-EU countries will, it is estimated, be substantially outweighed by the economic costs of separation…. This is unsurprising since the UK’s volume of trade with the EU is large, relative to other countries.”

For example, British trade with China and India, now less than five percent of the UK balance, “would need to grow at a rate of 400 percent to make up for the expected reduction in exports to the EU under No Deal.”

A 29-Mile Queue. A great deal of Britain’s EU trade has traveled through Dover. “Currently, as few as two lorries out of 180 are checked. Research suggests that an extra two minutes spent at the border by each vehicle could more than triple the queues on nearby major roads to 29 miles, resulting in almost five-hour delays.”

Image from bbc.com.

Just-in-Time Quandaries. “Many businesses, particularly in manufacturing, depend on complex cross-border supply chains and ‘just-in-time’ parts delivery…. Notable examples include aerospace firms such as Airbus, major car manufacturers such as Nissan, Toyota, Jaguar Land Rover, BMW, Ford, and Vauxhall, and car parts suppliers such as GKN.”

“Honda, for example, uses 350 trucks to carry two million components to its Swindon plant [80 miles west of London] each day.”

Steve Bannon, Cambridge Analytica, and Nationalism. The New Yorker, November 17, 2018, has an article by Jane Mayer: “New Evidence Emerges of Steve Bannon and Cambridge Analytica’s Role in Brexit.”

Steve Bannon, former Trump advisor. Image by Mark Peterson/Redux from The New Yorker, November 17, 2018.

Jane Mayer writes, “The e-mails, which date back to October 2015, show that Bannon, who was then the vice-president of Cambridge Analytica, an American firm largely owned by the U.S. hedge-fund billionaire Robert Mercer, was in the loop on discussions taking place at the time between his company and the leaders of Leave.EU, a far-right nationalist organization.”

This long and complex sentence certainly connects a lot of dots. ds

© Dennis Simanaitis, SimanaitisSays.com, 2018

One comment on “NO DEAL BREXIT AND THE AUTOMOBILE

  1. Gordon Craig
    November 19, 2018

    This is just as I’ve feared all along, a right wing mash up going back decades of preparation for the advancement of Nationalism on a global scale.

    Its been 20 years since I’ve visited, but remember helping my cousins on their farm in the Trossachs north of Stirling, Scotland sort and cull their cattle herd for transport to France one day. Dirty, and somewhat dangerous as each creature had to be tagged on the ear with its own passport. and weighed, cross checked with the delivery manifest. This was conducted in a small corral with probably 35 head milling about, agitated by the ear puncture, not that much fun. Eventually 20 were selected and hobbled as they funneled up a ramp into a waiting lorry. It was a thorough PITA to accomplish but it got done because it was a feasible market to be in and a major portion of the farm income that year. These were the years when the farm was running 75 head of cattle and 250 sheep, in retrospect a level field marketplace, everyone got their share and a bit earned over, and somewhere in France people ate la bouef. (sp)

    The cattle are long gone now, the sheep count down to 50, and Ross uses his heavy equipment to install cell phone repeating stations, when and if he can get the work. Meantime, who gets to eat?

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