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David Henig Profile picture
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9 Jan, 4 tweets, 1 min read
Reading of the difficulties around trade from Britain to Northern Ireland and EU I am reminded of US trade colleagues before 2016 complaining about EU customs difficulties. And an MEP from before the single market saying half their work was trying to resolve trade issues.
I'm also reminded that saying the EU was a difficult market to trade with was regarded as Euroscepticism in 2016 but being an EU lover in 2020. I do wonder how much damage will have caused by the UK government only listening to those 'experts' claiming improbable solutions.
Ask any of the EUs neighbours - it is a difficult market to do business with. But it is large and nearby, so you have to trade with it. And by the way more distant large markets aren't that easy either.
Oh yes, the "I export no problem" folk. Well good to know. But for a large number of products and services exporting to the EU just got a lot harder, and it wasn't easy to other markets already.

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More from @DavidHenigUK

David Henig Profile picture
10 Jan
This is mostly about the difference between being in a single market and customs union, and a 'free trade agreement', plus the fact UK-EU trade is set up for the first and went into the second under-prepared. theguardian.com/politics/2021/…
So you can (and should) be in a permanent negotiation with major trade partners to ease trade issues, but that ultimately can't return you to the trade flows we had before December 31 under this structure of relations, and we shouldn't pretend otherwise. Image
Nor can we make up for the increase in trade barriers to the EU with agreements with other countries, for the rise in barriers to trade in moving from SM / CU to FTA is much greater than the easing of trade barriers between FTA and WTO.
Read 5 tweets
David Henig Profile picture
8 Jan
How to make sense of the increasing number of UK-EU trade disruption stories?

In short - outside of a single market product checks and people working restrictions are inevitable. And outside a customs union you will have tariffs and / or rules of origin.

Detail ---> 1/
The UK decided to leave a Customs Union. Within that Customs Union, no tariffs, just a common external tariff or preferential rates for bilateral deals or developing countries. Hence, distribution hubs in one country for all make a lot of sense. 2/
Outside a Customs Union our choice was tariffs under WTO rules or remove them subject to rules of origin with a deal. We chose the latter, but it means we can't just import from China, rebadge, and get zero tariffs from the EU. As we could until December 31. 3/
Read 19 tweets
David Henig Profile picture
7 Jan
An "instinctive free trader" overseeing the largest rise in trade barriers in living memory, and "pro-migration at heart" while dramatically curtailing these rights in Europe. So could the main similarity with Trump be power for its own sake on this reading?
The problem with the reading of Johnson as a socially liberal politician is it isn't remotely the policy he's putting into practice, whatever the rhetoric. He isn't much bothered by the constitution or parliamentary scrutiny. But of course right now Trump association is toxic.
The fair assessment of Johnson and Trump is there are plenty of populist similarities, but ultimately Johnson is cleverer, marginally less shameless, and certainly less incendiary when it comes to open racists. And that matters a lot.
Read 4 tweets
David Henig Profile picture
7 Jan
Update. We had indeed taken seamless borders for granted.
Just to be clear. The new GB to Northern Ireland or Calais border processes can be improved. But not eliminated. Or ever completely predictable. And that will over time have economic consequences.
Exports of Scottish seafood always looked vulnerable to post Brexit border checks, sadly this is so far the case. The UK government could seek some extra agreement, but it would cost in some way.
Read 5 tweets
David Henig Profile picture
7 Jan
Genuinely jaw dropping that such large companies were unaware of what was going to happen. Also reflects something which didn't happen - the recruitment of trade policy specialists by large UK companies.
To be blunt, it was known by mid December 2019 that frictionless UK-EU trade was going to end. If UK based companies with significant EU trade didn't realise this would have consequences for them then big questions need to be asked of their leadership.
(I and others in trade twitter are available at exorbitant rates)
Read 5 tweets
David Henig Profile picture
7 Jan
Remember, we haven't seen trade barriers go up on such a major trade route in modern history. We didn't know what would happen.

My initial thought is we're seeing how quickly adjustments are made in modern supply chains, starting not surprisingly with fast moving consumer goods.
Similarly another fast moving market, financial services, saw big changes to trade on what was in effect Brexit day one. Other markets with sunk investments are likely to take more time to adjust. scottishfinancialreview.com/2021/01/04/lon…
So there's a trade adjustment, less UK-EU trade almost certainly, not fully compensated with more UK-global trade, and then there will be a UK economy adjustment to this, likely to take some time. But this also means continued investment uncertainty.
Read 5 tweets

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