During the Commons debate on CU, several MPs have related conversations with constituents who often said they were happy with the commercial relationship with the EU, but unhappy with the political union.
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What I realized is that the Leave campaign was promising that the 2 things could be separated. Furthermore they created the ambiguous narrative that the SM and CU that came with the membership, together with FoM, could be replaced by an FTA between the UK and EU.
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This would have eliminated the requirement for FoM.
This promise was based on a fundamental ambiguity.
That Free Trade is the same as Frictionless trade.
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This promise was based on a fundamental ambiguity.
That Free Trade is the same as Frictionless trade.
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What we understood now is that this is simply not true.
Free Trade is about tariffs, frictionless trade is another thing altogether. It allows the creation of integrated supply chains in the automotive industry.
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Free Trade is about tariffs, frictionless trade is another thing altogether. It allows the creation of integrated supply chains in the automotive industry.
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It enables the trade of highly perishable goods for pharma and food industries.
It reduces the need for and costs of warehouses for stocking components. It reduces the costs of customs posts and checks. It reduces the cost of checks for incoming goods.
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It reduces the need for and costs of warehouses for stocking components. It reduces the costs of customs posts and checks. It reduces the cost of checks for incoming goods.
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The Remain campaign failed to explain this crucial difference.
The only place in the world which has frictionless trade is the EU.
Any other trading block linked by FTAs lacks frictionless trade. E.g. US and Canada.
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The only place in the world which has frictionless trade is the EU.
Any other trading block linked by FTAs lacks frictionless trade. E.g. US and Canada.
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This is because frictionless trade is the result of eliminatining internal borders. The miracle that the EU created was to allow frictionless trade, which was once possible only WITHIN the borders of a single national entity, into something possible BETWEEN nations.
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The instruments to achieve this are both the CU and the SM.
Only by combining the abolition of tariffs (CU) with agreed regulation of product standards (SM), frictionless trade can be achieved even between bordering nations.
FoM simply follows from that.
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Only by combining the abolition of tariffs (CU) with agreed regulation of product standards (SM), frictionless trade can be achieved even between bordering nations.
FoM simply follows from that.
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This is why there is still a problem in the Brexit camp at understanding the economic red lines.
The EU cannot accept a third country to enjoy frictionless trade while outside the CU and SM.
But are perfectly happy to have an FTA that drops all tariffs.
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The EU cannot accept a third country to enjoy frictionless trade while outside the CU and SM.
But are perfectly happy to have an FTA that drops all tariffs.
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What HMG has recently realized, is that what would cause immense damage to the economy, is nothing to do with trade per se, but such trade ceasing to be frictionless.
The public instead is still uninformed of the fact that no FTA can ever achieve frictionless trade.
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The public instead is still uninformed of the fact that no FTA can ever achieve frictionless trade.
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Therefore when talking to Leavers please explain:
THERE IS A BIG DIFFERENCE BETWEEN TARIFF FREE AND FRICTIONLESS TRADE.
TARIFF FREE WE CAN ACHIEVE OUTSIDE THE EU, BUT A LARGE PART OF UK BUSINESS DEPENDS OF FRICTIONLESS TRADE, WHICH CANNOT BE ACHIEVED OUTSIDE OF THE EU.
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THERE IS A BIG DIFFERENCE BETWEEN TARIFF FREE AND FRICTIONLESS TRADE.
TARIFF FREE WE CAN ACHIEVE OUTSIDE THE EU, BUT A LARGE PART OF UK BUSINESS DEPENDS OF FRICTIONLESS TRADE, WHICH CANNOT BE ACHIEVED OUTSIDE OF THE EU.
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This is also relevant to this discussion, focussing on Irish border:
