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David Henig Profile picture
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28 Oct, 8 tweets, 2 min read
Important that the government does seriously consider what would happen to us in a trade war with the EU.
Important to remember though that the UK government really doesn't want to invoke Article 16, and it is an article of faith to them that being seen to be tough is necessary to get what we want from the EU.

Given the potential consequences of triggering Article 16 include a trade war with the EU and diplomatic conflict with the US we aren't in a strong position. Though I suspect government ministers may not say as much.
Anyway, probably more performative signalling to the EU having little effect on them but quite a lot on any business tempted to invest in the UK. Hence why Johnson downplayed this do much at the investment summit.
Also worth recalling from this morning the absolute absence of trust in the UK government among those living in Northern Ireland. UK government continues to have a very weak hand.
This is less surprising (and more business as usual)

Also a trade war covering 50% of our trade would soon render yesterday's budget figures over optimistic. Hence why this looks like (not very good) negotiating tactics. But the UK government could talk itself into something silly and damaging.
A UK government threatening to damage its own economy in the name of a part of the country that almost entirely mistrusts it would seem to be close to peak Brexit.

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More from @DavidHenigUK

David Henig Profile picture
29 Oct
At least Scotland isn't independent yet so we're not completely surrounded.
On balance Ireland siding with France and the UK with Poland just made everything worse. Especially as ultimately Poland won't help us, enough of their own issues.

Not necessarily enthusiastic backing though. And on such subtleties does a third country which wants to achieve something in Brussels rely.
Read 16 tweets
David Henig Profile picture
29 Oct
I love* the way the Brexit ultras are now saying that a row over fishing with France proves we're right to try and start a trade war over the ECJ role in the Northern Ireland protocol...

* - I lied. I don't love it at all.
We had to deal with French political showboating as EU members, and we'll have to deal with it outside (as they will ours). C'est la vie, that's just the way it goes.

On balance it would be best not to turn every fishing boat incident into a potential trade war. Interests.
Oh, and can we skip the 'dispute settlement in trade deals' stuff that I hear across the Brexit / remain aisle. That's a formality rarely used. It ultimately always comes down to the political and official relationships, so better work on those.
Read 5 tweets
David Henig Profile picture
29 Oct
This is important. With the UK government veering between disinterested and hostile towards the EU, business will need to try its best to influence the many matters which will inevitably affect them. The US example is a decent one. ft.com/content/6b4b90…
It again raises the question of what is in the best interests of the UK, a minimal and hostile relationship with the EU driven by those who regard the bloc as a historical abomination or worse, or something more constructive based on our interests. Which will still never be easy.
The fact is the EU and member states do not care much about third countries, but third countries have to care about the EU to the extent of trade and other interdependencies, regulatory power, and global issues. Tough but essential to try to lobby and influence.
Read 4 tweets
David Henig Profile picture
28 Oct
Do I really have to do another set of tweets tomorrow about the stupidity and futility of a government not entirely united and particularly untrusted threatening a trade war with our nearest large economy and a diplomatic incident with our self declared closest ally? Really?
Just. So. Tedious. And damaging. Got to say my patriotism doesn't extend to trashing my own country, but perhaps that's where I'm getting it wrong.

Oh, and that's another UK hosted summit to be overshadowed by our threats towards others.

Diplomacy. Something we used to do.
There is a better way to behave towards neighbours that threaten to damage yourself if they don't do what you want. Ain't a Brexit thing. Just common sense. Build relationships rather than trashing them. And look after fragile peace in your own country.
Read 4 tweets
David Henig Profile picture
28 Oct
As COP26 approaches my weekly @BorderlexEditor column discusses the thorny topic of the EU's proposed Carbon Border Adjustment Mechanism. Essential climate measure that should happen tomorrow or WTO illegal unilateralism? More the first... borderlex.net/2021/10/27/per…
@BorderlexEditor The debate on carbon border adjustment seems to start in the wrong place - WTO legality. The better question is whether we should prevent shifts of production caused by underpricing carbon, to which the answer should be a clear yes for anyone serious about climate change.
Once we establish the principle of carbon pricing, then the EU's action in bringing forward a CBAM proposal is welcome in forcing the issue to be seriously addressed. Their scheme might need tweaks, multilateral would be better. But something beats nothing.borderlex.net/2021/10/27/per…
Read 4 tweets
David Henig Profile picture
28 Oct
I would argue that the primary reason for sluggish UK exports is that for four years we have been suffering from low investment in, and exclusion from, European supply chains. Honda closing, aircraft engine demand slowing, doesn't help. ft.com/content/beec0a…
There is nothing in current UK trade or economic policy that will make much of an impact on exports, because they are primarily focused on removing tariff barriers to bulk exports, and that's not in the top few of problems we actually face.
The number one question for future UK trading performance is what the role is for countries which opt out of regional supply chains in a global economy largely dominated by regional and global supply chains. On balance that looks to be a struggle in goods, better in services.
Read 5 tweets

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