Tuesday, 27 September 2016

There's something wrong in paradise

Have you ever been excited about going to see a band but when you got there it was, well, all a bit lacklustre?  Maybe the vocals were off, maybe they were just boring and charmless, or maybe you found their presentation a bit pretentious.  Sin of all sins, perhaps they performed their new long player in its entirety and in sequence, opting not to play any of your favourite hits from yesteryear.  Personally, if I like the band I will pretty much always enjoy the show because liking the band usually means I like the personalities in the band.  I'll overlook pretty much any minor fault on the night.  Not playing my favourite songs, however, is a heinous musical crime on a par with "Imagine" by John Lennon.  Hmm, no, much worse than that.  What was the worst thing ever perpetrated by a 20th century despot?  Yes, exactly, as bad as that! That's why I love the Leave campaign so much: they just regurgitate the hits that we all know and love.  It almost pains me to report that there is something wrong in paradise.


This post is going to be a dissection of a recent interview with a leading Brexit campaigner.  I really just want to highlight once again the muddled thinking that lay behind the Leave campaign.  Despite the passing of four months, burdened with the reality of making this work, they still get it wrong every time in almost every way possible.

No, it's not Ed"Stewpot" Stewart off the radio.  He is deceased. Meet Tim Martin, head of Wetherspoons UK.
Meet Tim Martin, the head of the ghastly Wetherspoons pub chain and leading Brexiteer.  If I was going full-on Morrissey I would say his drinking establishments were vile and hateful.  Maybe hateful is a bit strong.  To be honest, vile is also a bit too much. And ghastly. They're not really ghastly.  They're just shit. Yes, let's stick with that.  Shit. Anyway, Tim Martin gave the Brexit campaign £200,000 and decorated his pubs with Leave beermats and posters in the run up to the referendum.  Coincident with a recent financial report, Mr Martin has taken the opportunity to blast the press once more with his wisdom on trade deals.  He even popped up on Bloomberg news. You can watch a video of his interview here.  It is filled with nuggets of  stupidity that I shall now proceed to dissect. To save you from the horror that I endured I have transcribed the juiciest parts of the interview.  Let's start with the following quote at 2.18 on the timeline:
  
"When we leave the EU the tariffs that we pay on non-EU wine will be eliminated, we hope, so that the price of wine will go down" 

Before we even begin on this just take a look at the Wetherspoons website and see what drinks are on offer. That's right, you see a lot of EU produce on there.  First off, Prosecco is definitely from the EU because it is made in sunny Italy and depends on special grapes found there. Let's look at the vodkas.  No, not drink the vodkas. Pay attention!  Look, we need to stay sober for this. 6 of 7 vodkas listed are distilled in the EU, while the remaining "Chase" vodka is actually produced in the UK (euuww, that's like drinking Swiss whisky or Irish Schnapps).  Why would they sell EU vodkas?  Maybe they want to keep their prices down by avoiding product that suffers from a large import tariff.  Hey, I love San Miguel beer, don't you?  That's lucky because this Spanish-produced beer is the featured lager at Wetherspoons.  Did I mention that it is brewed in Spain?  Let's finish this off by looking at the wines.  Only two (one from Chile, one from South Africa) are listed so I decided to look at the drinks list of a specific Weatherspoons.  Purely at random I chose The Counting House in Glasgow.  In all there are 18 wines listed with 7 sourced in the EU.  I don't know about you, but I'd say Wetherspoons will be hit hard if goods sourced in the EU are suddenly subject to import tariffs.  If I was head of Wetherspoons I might think twice about whether my business interests are aligned with my political goals.

Why is Tim Martin so sure that the tariffs on non-EU wine will be eliminated? Eliminated!  I mean, he doesn't get to decide that, does he?  I'm pretty certain this won't happen whether we have a hard or a soft landing.  The reason is that a post-Brexit UK will have to lay out its stall with the World Trade Organisation (WTO) before agreeing any trade deal with anyone.  Under WTO trading rules no country can treat any other in a discriminatory way.  In essence, you lay out your tariffs and publish them for  all to see.  As you can imagine, clarity is important here.  The tariff on every conceivable kind of good or service will need to be decided, agreed and then set in stone with the WTO.  Every nation in the WTO will trade with the UK under this agreement unless they formally enter into a separate trade deal that supercedes it.  This process could actually take years to complete. Until it is fully implemented nobody will enter into a separate trade agreement with the UK because they won't know if it will be better or worse than under WTO trading.  Personally, I can't imagine that Guatemala will be high on David Davis's list of trade deals so the tariffs on Ron Zacapa Rum will be subject to whatever our WTO agreement dictates for all time.  Now, the UK might decide to scrap tariffs on everything and flood the UK with cheap imports.  This is great news if you are a connoissuer of Guatemalan rum.  It would be great news for Tim Martin and seems to be what he is expecting from the UK government.  There are coherent arguments for that economic path but it kind of knocks all of David Davis's putative trade deals into a cocked hat because then we have nothing to trade with on behalf of exporters.  This path is the very definition of unilateral disarmament. Why would anyone enter into a trade deal with the UK if they already have everything they want without needing a trade deal?  I really don't see this scenario happening because the public are expecting big announcements on trade deals.  Remember, it was a central theme of the Leave campaign.  Boris Johnson even thought about building an enormous ship so he could sail around the world signing international trade deals.  It would have been like that Christmas special of Only Fools and Horses where they tried to smuggle diamonds from Amsterdam in a leaky boat. With not-hilarious consequences.

One interesting thing in all of this is that the UK currently trades under the WTO tariffs set out by the EU.  If we leave the EU and then change our tariff barriers we might find ourselves the recipients of a whole slew of legal cases from other WTO nations. Not surprisingly, they are going to be a bit annoyed if we suddenly make it harder to export to the UK.  It would be perfectly natural for that to be brought to court because it could be argued that the UK has broken a long-standing agreement.  The least controversial path for the UK is to simply adopt the WTO tariffs agreed by the EU.  What happened to taking back control?  Tim Martin has most definitely not considered this as a possible outcome.  Don't worry, he has his top fave hits to fall back on if his new album is a flop.

Wetherspoons seem to be banking on a WTO deal that specifically sets zero tariff barriers on all alcohol imports from all WTO nations.  Hmm, doesn't seem likely, does it?  Maybe Tim thinks he can get there with trade agreements.  Sadly for him, he has literally no idea whatsoever if they will be more of less favourable for alcohol imports.  To lower the costs of his business in a significant way he will need trade deals that favour significant wine-producing countries outside the EU.  At a guess, I'd say New Zealand, US and Australia might be good targets.  If you regularly drink at Wetherspoons then you definitely want to add South Africa and Chile to the list.  Oh, and Guatemala and Puerto Rico if you like cheap rum.  How long will these deals take to implement?  How complex will they be?  Will the abundance of cheap booze be foremost in the minds of the negotiating teams? After all, history tells us that alcohol is always subject to significant taxation at the border.  Can you imagine the Prime Minister giving a press conference extolling the virtues of all the cheap booze that we are about to enjoy?  I'm not feeling hopeful that the outcome will be favourable for Wetherspoons drinkers.  Apart from anything else, the most sigificant cost of any bottle of alcohol is UK tax.   Leaving the EU won't change that.

Later on in the interview (skip forward to 3.32), Tim Martin seems to say that we don't even need trade deals at all.   Everything I wrote in the last paragraph was a compete waste of my time and yours. I left it in for dramatic effect. Sorry about that.

"We haven't got a trade deal with the US, we haven't got one with China, we haven't got one with India, and particulary the US is an enormous trading partner. It doesn't cause a problem, we can trade under WTO rules. " 

Hmm, this interview has taken a staggering turn, hasn't it?  He is actually banking his business on a WTO agreement that specifically sets zero tariffs on imported alcohol from every single country in the WTO that produces any kind of pisswasser whatsoever.   Did David Davis tell him this would happen?  Liam Fox?  Boris Johnson?  A rasping voice in his head?  A man in one of his pubs at closing time?  Let's not forget that to lower his prices he needs an import tariff that beats zero because that is the deal he currently has with the EU.  He will never, ever get that again no matter how many times he says it to the unquestioning automatons at Bloomberg. 

But, anyway, this is all nonsense because leaving the EU won't change our current trade agreement with the US or with India, unless the UK takes the view that cheap imported booze from WTO nations is a top priority.  The EU does have a limited agreement with China so he is right to say that will be affected but not in the sense that he thinks.  In this case, we will be losing access to a trading partner because we are leaving the EU.  Maybe he hopes that one day he will be able to import a lot of cheap Chinese wine and gin and whisky.  Geez, is Wetherspoons really that bad these days? Literally any drink with alcohol in it will do?
 
Right at the end of the interview he starts blabbering on about democracy, as though the EU had no democracy whatsoever, and makes the point that successful economics require democracy.   

"If we get more democracy, which we will get, if we leave, if and when we, when we leave the EU, it will improve our economic performance."

Whether we will get more or less democracy after the UK exits the EU is open to discussion but he could have improved his delivery if a little tear had formed in his eye at this point.  No matter, we can't all be good at amateur dramatics.  He seems to forget that Germany and Denmark and Sweden and Finland are all in the EU. Are they not economically successful?  Have they not made a success of EU membership?  The post-Brexit drop in the value of the British pound means that the GDP of France now outstrips that of the UK.  Is that a sign of economic success?  "Necessary but not sufficient", is the phrase we are all silently mouthing. Perhaps the UK lacks the  personal wealth of other EU nations because of our deficiencies in education and planning and investment and taxation. Take your pick.  Personally, I blame the poor quality of pub management.

I'm just going to end with the obvious point that democracy takes many forms.  There is representative democracy and there is direct democracy and there are multiple ways of weighting votes with second and third preferences, then there is democracy at council level, and there is democracy at European level.  You know what, it is all democracy.  The weakness with democracy is when nobody bothers turning up to vote and politicians are elected with tiny turnouts and can never claim to represent their constituency.  Mr Martin, you can't blame the EU for that.  Maybe if you and your cohorts hadn't gone around spreading anti-EU rhetoric left, right and centre like a muck-spreader gone rogue we'd still have EU democracy to add to everything else.  Besides, if you really think that the EU is less democratic than Westminster then this must be a measurable and definable quantity.  How might that be calculated or measured?  Which properties of the democratic process can be weighted and accumulated and what methods will you apply for your measure of democratic quantity? Which democratic attributes are numerically lacking in the EU relative to Westiminster?  Oh, I see, you just don't like the EU.  Why didn't you just say that?

The same muddle and confusion is repeated and repeated and repeated by the remnants of the Leave campaign.  Playing fast and loose with the truth might be expected during a political campaign but that is over now.  Four months have passed.  This is the time for facts and reality and rational thinking.  None of the Brexiters have demonstrated that they are able to do that.  Nobody at Bloomberg News has demonstrated that, either.  The same could be said for almost every national newspaper and news outlet. There is almost no significant voice pointing any of this out to the people who need to get their thinking straight. My shrill rantings lost in the wilderness aren't going to change any of this rampant idiocy, either.  Bloody heck, what a mess.

Let's finish off with a top, anthemic Leave smash hit.  Now, this one is a proven crowd-pleaser usually left  for the encore.   Everyone sings along, jumping up and down to the crazy beat, waving their Union Jack lighters in the air.  Tomorrow is forgotten, the moment is all that matters.  Here we go. Get ready.  Gabba gabba hey.  Eins, zwei, drei, vier.  Boris Johnson still believes access to the European single market can be achieved without adopting the central tenets of the EU.  Bloody heck, what a mess.

Over and out,

Terry

PS I know I said no more posts about trade deals.  I'm fickle that way. Next time I will be posting about pensioners.  Howzat for brinksmanship!

Urgent Update:  Oops, only 3 months have passed since the EU referendum.  Send a boy to do a man's job and see what happens.

 

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