The classic small town / global trade story that few seem to understand and fewer (none?) have an answer for. What happens when a global multinational shuts the main manufacturing plant in a small town? ft.com/content/c85a6b…
Approximately 70-80% of trade is driven by global supply chains, with large companies in all sectors making key decisions with far reaching consequences. How governments influence such decisions is not entirely clear. But the impacts we see as outbursts of frustration and more.
The likelihood is we will see continued closures of manufacturing plants in the UK in years to come, as barriers to EU trade rise and we are too far from potential growth markets in Asia. Our role as specialist services supplier may sustain, but that's not rebalancing.
I'll be writing more about global trade and the UK's place in this in 2021, as I hope will others. Because we need a lot more thinking on the subject, going beyond Brexit or WTO reform or other more fashionable subjects.
A few comments asking about if distance is such a factor why we import so much from China. Firstly, we don't. Fewer than 10% of goods imports. Second, predominantly cheaper electrical products where they now have global competitive advantage. Our strengths are different.
Very important to understand the UK's global economic position. Probably best in the world for services on a per capita basis. Very good at complex manufacturing / with enabled services, but a lot of competition in that field regionally and globally.
Anyway, Barnoldswick is near my old manor, even if nobody else has ever heard of it. Also, little known, is disputed territory between Lancashire and Yorkshire. And finally, an area where one local pursuit is or at least used to be pram races. So an important story.
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So, deal or no-deal? I'm afraid it looks gloomy. Too many outstanding issues, a political context that is not conducive to compromise, and a tunnel leaking like mad. Quite possibly forming between them a vicious cycle. So, is this it? I suspect not... 1/n
Recall, this UK-EU negotiation is attempting to put in place an agreement unusually extensive (haulage, aviation, security, as well as trade) in a record timescale (9 months start to implementation) at a time of pandemic. That was always optimistic. 2/
A process driven EU against a naive yet overconfident UK in a short timeframe was also never going to be easy. In particular the UK's sole evident negotiating strategy, to say we'll walk away, is still in overdrive, making compromise harder. 3/
Think we knew this already. Question is whether there is a next UK offer which is acceptable, and what the package would be around this. That's what will presumably be discussed in the next 24 hours.
Worth recalling - we don't know the detail of what the UK offered on fish, the conditionality, phasing and more. You would think the EU has now set up the opportunity for a final UK offer, but as ever hard to tell. Big 24 hours to come though.
Sure enough. The UK offer was not as generous as reported. No-deal chances just rose again.
One thing though - be careful about leader level calls helping to unlock a situation. They could be for negotiators to demonstrate that their political instructions are to go no further, or to present politically a new proposal. It could be good news as well. We still wait.
Joined up thinking latest. A government determined to make a sovereignty point about fishing no matter the implications (and having refused to trade off fishing for market access elsewhere).
But fishing is what Brexit means innit? Actually every time someone pops up here to tell me what Brexit means it always seems to mean something different. Suppose that's the beauty of a notion of 'control', means lots of things to lots of different people.
Anyway that decision not to extend and to take talks to the wire really worked to take the pressure off the UK... 🤦♂️
Fashionable opinion is still that the PM folds. That he sees sense. Might happen. It just hasn't so far.
Seems broadly sensible as far as I can tell. But can't believe something like this has not already been considered by both sides. Suspect therefore the issue is more that there has been little political pressure put on both sides to accept this kind of deal.
If we think of October 2019 the pressure was on the UK government to deal, to break the impasse of Parliament, have a new election and win a majority, and on the EU to find a N Ireland solution. This time a deal reduces future barriers but isn't considered essential by either.
If anything both sides are this time determined not to be the one that compromises their red lines. The EU because that is their trade deal modus operandi and also because of various domestic pressures, the UK because of 'sovereignty'.