Small business in particular struggling with new Brexit red tape. Entirely predictable, and a function of a world trade system distorted against smaller traders. Stay with me a short while as Brexit threadmeister and story author @pmdfoster may say... 1/ ft.com/content/13f0f1…
The nub of the issue is the extra costs for most exports, whether this is paperwork or meeting different regulatory requirements. A fixed cost per exported load inevitably adds a higher percentage cost to small than larger business... and they may lack expertise. 2/
You'll note that in the EU, with virtually no paperwork or differing regulations, the costs of exports are similar for smaller and large companies - though even there there is a big company bias, because who can afford to lobby for friendly regulations? 3/
The same unfortunately typically applies to trade deals. If you are Nissan and threaten to leave the country without the right deal you have more clout than a small cheesemaker. As we see. But is it just the EU that is over-bureaucratic? Sadly not... 4/
One of the best UK business groups on trade policy @BritAmBusiness (and yes you can quote me @EmanueAdam) has a new report out on a UK-US trade deal and SMEs. It shows opportunities. But unfortunately problems unlikely to be solved. 5/ babinc.org/wp-content/upl…
The US regulatory system is just as prescriptive and difficult as the EU one, as suggested in this clip from the BAB report. And no trade deal the US has ever done has helped this, because USTR guard the independence of regulators fiercely. Hopes to change this in TTIP failed. 6/
So what of dedicated SME chapters in trade agreements, pioneered by the EU and enthusiastically adopted by the UK (here clipped from foreword to the BAB report by @GregHands)? Well, you'd rather have them than not. But their focus looks rather limited. 7/
I recall discussing limitations of a proposed trade agreement SME chapter with the EU Commission in 2015. That information is nice, but to make a difference you need to tilt the balance towards SMEs, for example implementing a dedicated small business issue resolution service. 8/
Suffice to say we still haven't really seen a good trade agreement SME chapter from EU or UK. Some SMEs trade well, in services with fewer clear barriers, niche high value goods, or as part of multinational supply chains. But too many struggle. 9/
But finishing with Brexit, once again we have to face new long term trading realities, that small business will be particularly disadvantaged by the end of seamless trade. Government could choose to do more to help, but so far SMEs are not their priority. 10 / end
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The usual reminder to annoy partisans that more than one thing can be true at a time. AstraZeneca can have failed to deliver, the Commission handle it badly and panic, the EU still not be on the verge of collapse, the UK successful on vaccines, and still not guaranteed success.
Oh, and a supportive media or at least a very good media management operation *really* helps a government.
Many warning signs should be flashing that Ministers will see one success (so far) and use how they think that worked as a straitjacket for a future economic policy of self sufficiency at odds with how the global economy actually works. When it was (again) global collaboration.
In so far as we can tell so far (and we can't, but let's try) the UK's vaccine success has been based on offering large sums of money to multinationals to set up here, and using trans-national research networks in support. I suspect that model is only marginally transferrable.
Attracting the multinationals who direct global supply chains is important, but there is inevitably global competition and we just opted to put barriers up to a lot of trade multinationals care about. Though less so in pharmaceuticals.
Very good, and what those of us who had worked with contracts largely thought - that the story was rather messier than the 'incompetent Commission brings EU to verge of collapse' suggested by those who always say 'incompetent Commission brings EU to verge of collapse'
Classic EU Commission playbook - threaten those seen to be in some way in breach, in the hope of being able to deliver a better result. Often successful but quite possibly at a cost of both public reputation and business innovation.
As for the UK, its been said plenty of times that there are opportunities in regulatory nimbleness, though they are each marginal economically because it is about doing the same as the EU but quicker. But also, the vulnerability to the big neighbour is obvious.
Feeling like those who jumped on the AstraZeneca bandwagon did so unwisely. Many repeat offenders.
Starts to feel like an entirely normal case of over promising and contractual ambiguity, made toxic by urgency, heightened emotion and regional politics.
You might be surprised how ambiguous government - business contracts can be (and trade agreements for that matter). And therefore that you never want to go to dispute if you can help it.
From a UK point of view it would be wise not to assume the EU is always wrong, and not to make a habit of telling them how wrong they are. Because there's always the risk this will come back to hurt us.
Almost as if the Prime Minister and government haven't been telling the truth about the absence of checks between Northern Ireland and Great Britain. bbc.co.uk/news/uk-northe…
I'm beginning to think a lot more people should have been following trade twitter before December 31 because this was another known issue the UK government chose to ignore.
What you need to know now from trade twitter is that the UK-EU agreement will not be the subject of tweaks or renegotiations until both sides want it to be, and the chances are right now neither want that, so we are stuck with the text we have.
Pretty clearly the current UK government wants to pretend the EU isn't our neighbour and largest trade partner. We want to be a Pacific power. Does the US respond wearily and point us back to Europe or encourage anything the UK can helpfully do? Tricky diplomatic issue.
In trade key UK advisers have long dreamed of the UK leaving the European regulatory area and joining the US in battle against EU regulation. That could be good for US agriculture interests, but bad for existing trade disputes with the EU. Again, how does the US respond?