Brexit

by wj

I see that the U.K. and the E.U. have finally reached a deal on Brexit.* From this side of the pond, it looks like Brexit ends up being all about image and minimally about substance. Consider.

U.K. Prime Minister Boris Johnson says: “We’ve taken back control of our laws and our destiny. We’ve taken back control of every jot and tittle of our regulation in a way that is complete and unfettered.” And yet, it’s a free trade deal, and the U.K. had to give commitments to assure a “level playing field” with the E.U.

What does that mean? It means that the U.K. cannot undercut the E.U.'s strict environmental and labor laws, nor grant outsize state subsidies to British businesses. That is, the U.K. cannot do things that would give British sectors unfair advantages over European competitors. It just won’t have any say in what those environmental and labor laws are. So no surprise that some of the arch-Brexiteers in Johnson’s own party are signaling that they may oppose the deal. After all, what the true believers are actually getting here is, for them, the worst of both worlds.

Also, thousands of British businesses that have never had to fill out a customs form will now have to do so every time they sell something over the border. Bet they’ll be really thankful for that. Not to mention the additional barriers faced by the services sector (some 80% of the U.K. economy).

Also unhappy: the Unionists in Northern Ireland, who Johnson basically threw under the bus when it comes to the border with Ireland in order to get a deal.

Perhaps most unhappy, the xenophobes, who wanted all them foreigners out. Anyone from the E.U. who has been in the U.K. for a least one day out of the past 5 years can apply for “settled status” and stay for up to 5 more years. And anyone who has been in the U.K. more than 5 years can apply for “settled status” and remain permanently. “Settled status” also means they can bring their families in as well.

But hey, at least the Brexiteers can say they have gained something. Even if all the “benefits” are image. While all of the costs are real.

* Despite overwhelming evidence, this isn’t a blog just about politics in the US.

Comments

[Lurker]

Even more imporatantly, EU did not agree on any mutual visa regulations on investor visas or expert visas. The British had proposed a scheme which would have let essentially any upper middle class person from UK to have free working rights in EU, while limiting the rights of the poor people to seek empoloyment in Great Britain. Now, this is left to individual member states' regulation, and in general, the British are treated on equal basis with Senegalese or Pakistani immigrants seeking work permits.

BTW, the settled status thing not part of this deal. That has already been legally agreed upon in the Withdrawal Agreement.

[wj]

Lurker, thanks for the clarification on "settled status."

[CharlesWT]

While painful in the short term, the U.K. could do very well if it did away with subsidies and declared unilateral free trade. The U.K.'s exports to the EU have been declining in recent years and trade outside the EU is becoming increasingly more important. The incoming US administration should make the U.K. a free trade partner.

[wj]

Charles, that's a huge IF. Hard to see a British government doing away with subsidies. Even the Brexit fans aren't opposed to subsidies in general, just to subsidies which go elsewhere.

[CharlesWT]

Perhaps some Thatcherite style bandaid ripping is needed...

[liberal japonicus]

Thatcherite style bandaid ripping

Spoken like a life long Reason reader. I realize I'm coming at this from a particular place, but it seems to me that you can draw a straight line from Thatcher to Brexit with Saatchi to the Brexit Bus and fostering the Eurosceptics, with a heaping serving of 'there is no society'.

[CharlesWT]

Thatcher rubbed a lot of people the wrong way including, in the end, her own party. But the U.K. was in a much better economic condition when she left office than when she became prime minister. That entailed ripping the bandaids off conditions that had been allowed to fester for decades.

[CharlesWT]

Spoken like a life long Reason reader.

Pretty much. I started reading it a few years after the first issue in 1968.

[CharlesWT]

A short, evenhanded video covering Thatcher's role as Prime Minister.

Margaret Thatcher: Britain’s Greatest Prime Minister… or its Worst?

[liberal japonicus]

Pretty much. I started reading it a few years after the first issue in 1968.

see, told ya!

You may disagree, but almost all of the economic liberalization measures that are attributed to Reagan that I believe Thatcher glommed on to were founded in the Carter admin, it's just that when you have sociopaths run the government, it is to be expected that liberalization is going to be run as a grift.

At any rate, I perfer to take the line of the Chinese historian who was asked if the French Revolution was a good or a bad thing and he said well, it was too soon to tell...

[CharlesWT]

Although Carter had some shortcomings as a president, several things got deregulated or liberalized during his term. Just in time for the benefits to show up in the Regan administration. Airlines, trucking, and beer among them.

To the horror of many, not only the well-off but any old schmo could travel by air. The cost of shipping by truck dropped significantly making businesses like Amazon possible. And the US went from having some of the worse beer in the world to some of the very best.

[wj]

Although Carter had some shortcomings as a president, several things got deregulated or liberalized during his term. . . . Airlines, trucking, and beer among them.

To the horror of many, not only the well-off but any old schmo could travel by air.

Obviously you were not in California in the two decades before Carter. Flights from the Bay Area to LA were about $10. Any old schmo could afford that. Ever an impoverished college student like me.

[CharlesWT]

Intrastate flights may have been subject to CAB regulations.

[CharlesWT]

Found it.

"Due to Civil Aeronautics Board (CAB) regulations governing interstate air transportation, smaller airlines and start up carriers were often able to find niche markets in their home states and were not subject to CAB exemption to cross state lines."
Intrastate airline

[CharlesWT]

...may not have been...

[wj]

And yet all the interstate airlines charged the same low rate. TWA, PanAm, etc. And they were under Federal regulation.

[Nigelb]

What incentive do countries have to sign trade deals with you if you have zero tariffs ?

[CharlesWT]

Whatever the low rate was then, it's a lot less now.

"In 1974 the cheapest round-trip New York-Los Angeles flight (in inflation-adjusted dollars) that regulators would allow: $1,442. Today one can fly that same route for $268. " [2011]
Airline Deregulation Act

[Nigel]

The DUP aren’t that unhappy about the deal - economically it could be very good indeed for NI, as it gets effectively to stay within the EU single market.

Which gives them a substantial advantage over the rest of the UK.

It’s the Scots who are most pissed off, since they voted substantially against Brexit. They might greatly have preferred NI’s arrangements.

[wj]

[Northern Ireland] gets effectively to stay within the EU single market.

Which gives them a substantial advantage over the rest of the UK.

But also means they are effectively out of the UK market. Which separation I would expect the more fervent Unionists to have a problem with. But perhaps they are less twitchy now than they were during the Troubles.

[Don K]

Yeah, the CAB allowed the interstate airlines to match the intrastate fares of PSA and AirCal for purely intrastate travel on tickets purchased in California. If you wanted to fly LAX-SFO as part of a trip from, say, NYC, you paid the normal fare, unless you wanted to buy a separate ticket LAX-SFO while staying in Los Anegeles.

I'd say airline dereg was good for travelers, good for the airlines, good for aircraft builders, and bad for airline employees.

[Don K]

Oh, and deregulation revealed how much service people are willing to pay for, and the answer is not much.

[Nigel]

But also means they are effectively out of the UK market.

Not really.
Certainly there will be a significant amount of paperwork which was t there before, but inasmuch as anyone ever can , they just about get the best of both worlds.

Note that the DUP are not significantly oppos8ng the deal.

Merry Christmas all (or at least all for whom it is a thing) btw.

[CharlesWT]

Courtesy of Uncle Sam, I was on a number of flights before deregulation. Since the airlines weren't allowed to compete on ticket price, they competed on amenities. The stewardess had to look sexy, dress sexy, and maintain their ideal weight or get fired.

[Nigel]

Stewardesses = amenities ?

Jeez.

[wj]

Stewardesses = amenities ?

Jeez.

It was another time.

[CharlesWT]

Well, it was in the '60s - '70s.

Southwest Airlines commercial circa 1972

Braniff had a TV commercial to accompany their “Air Strip” ads

Sex Sells Seats: Vintage Airline Advertising

[wj]

With sexism, as with racism, it is helpful to occasionally step back from looking at what still needs to be done. And see just how far we have come. In the memories of folks still living. If only to avoid dispair at how slowly we sometimes seem to progress.

[Michael Cain]

It’s the Scots who are most pissed off, since they voted substantially against Brexit. They might greatly have preferred NI’s arrangements.

I admit to looking towards the Scottish general election in May with a sort of sick fascination.

I've read Charlie Stross's blog for years. He's gone from an opponent of independence to a reluctant supporter.

[novakant]

From what I can gather by following experts who have read the deal, two of the most important aspects are:

1.) It's a very thin deal, many issues are simply yet to be resolved, I.e the haggling will continue indefinitely (cf. Switzerland / Turkey)

2.) The whole thing will be reevaluated every
5 years, so again more haggling and political shifting are to be expected.

So it's a mistake to view those deal as defining the future relationship in a static way. It's more the establishment of a framework for continuous negotiations in the future, i.e. they kicked the can down the road to avoid a disaster.

But there's of course much more detail:

https://twitter.com/AntonSpisak/status/1343519072416362498?s=19

[novakant]

And here:

https://twitter.com/davidallengreen/status/1343198887700541440?s=19

and here:

https://twitter.com/RaoulRuparel/status/1343245806716014593?s=19