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Day of reckoning approaches

by Frank Schnittger Wed Sep 19th, 2018 at 10:56:46 AM EST

We're now moving into the Brexit negotiation end-zone with EU leaders trying to give Theresa May as much cover as they can ahead of the Conservative and Labour Party conferences from September 23rd to October 3rd.  After that they will expect significant concessions form the UK side particularly on the Irish border back-stop to clinch a deal.

But the UK side is singing an altogether different tune and are doubling down on their reneging on last December's deal on the backstop. They claim that allowing N. Ireland to remain within the Customs Union would shatter the constitutional integrity of the UK, and that "no British Prime Minister would agree to this".

For the Irish government, this represents a particularly difficult dilemma, because a "no deal" Brexit - now being re-branded as a "World Trade rules Brexit" - could be just as damaging to the Irish economy as to the UK. Something has to give, and the UK is betting that the Irish government, or EU support for the Irish position, will be the first to fold.

It's a bit of a fool's errand to try and guess how Leo Varadker and his government. will react in that scenario. He is currently riding high in the polls chiefly because of what is seen as a robust and sure-footed response to Brexit so far. An orthodox conservative neo-liberal on the economy and a liberal on social issues, he leads Fine Gael, the least nationalist party in the state. But Sinn Fein and Fianna Fail are sure to make hay if he is seen as being weak on the border issue.

In one sense he can't go wrong by taking a hard line on the border: conservative and moderate non-nationalist voters have nowhere else to go if Fine Gael takes an uncharacteristically hard line. But Fianna Fail and Sinn Fein will also be the first to blame him if the negotiations stall and a no deal Brexit looms. They are unprincipled enough to blame him regardless of the outcome in what is always likely to be (at best) a damage mitigation exercise.

The other thing Varadker has going for him is that he is likely to become the focus of a sustained hate campaign in the British media if he is seen as standing in the way of "their" Brexit deal. Nothing unites Irish people more than an attack by the British establishment or media on one of their own.

The question is will the EU27 maintain their solidarity with Ireland when the prospect of "no deal" becomes a reality. Up until now that solidarity has been exemplary, although there have been suggestions that an Irish concession on corporate taxation, and particularly on a European digital tax will be expected as a quid pro quo.

My best guess is that it is simply inconceivable to UK Tories that Ireland and the EU27 will not fold when faced with the reality of what a no deal Brexit will entail. Boris Johnson has described the border issue as an insignificant gnat which can be sorted out by technology and even Barnier has requested more details on North South trade in order to see whether a "trusted trader" scheme might be feasible as a way of avoiding customs controls at the border.

I would suspect no one will be too concerned if some UK goods leak across the border in private cars or small vans provided these are not then re-packaged and re-invoiced as "Irish" exports to the rest of the EU. The issue is how the EU can avoid British originating goods using Ireland as a back door to the European market by the container load. Would customs checks at Irish sea and air ports be sufficient to avoid this risk, and how would this impact on bone fide Irish exports to the EU?

Some fudge seems likely, if only to get a minimal deal over the line so that more permanent arrangements can be negotiated during the transition period. What I am less sure about is whether such a fudge would pass muster in the House of Commons. Boris Johnson & co. seem to be only looking for an opportunity to tear the whole house of cards down, almost regardless of the consequences. For them, there has to be an opportunity to clinch a better deal later on: otherwise how can he topple May and achieve power?

Logically he should wait until after March 29th. when the economic consequences of Brexit start to become clearer, and May's popularity wanes still further. But would the Winston Churchill in him not want to be the Prime Minister, waving the flag, as Big Ben intones Brexit hour? Never discount the power of ego in politics.

A "Trusted trader" scheme would involved licensing registered companies to import or export goods on the basis that they have systems in place to declare and pay duty on goods as they arrive at their destination rather than at any border crossing - in much the same way as companies pay VAT or duty on alcohol as part of their normal tax compliance procedures. Apparently the EU is considering monitoring such a system by putting barcodes on each container load destined fr an EU market.

The barcode on a container solution works ok provided no one changes what's inside the container! Presumably the barcode would be linked to a database containing an inventory of what's inside the container. Few companies have the systems in place to generate an inventory per container load - most invoices contain orders for one customer which can be but a small part of a container load or indeed consist of many container loads.

But you often don't know how many containers or what proportion of a container is required to load the goods until you actually start loading them. At best someone might guess what goods have ended up in what container, but if a customs official opens up a container and checks contents against inventory who is to say any discrepancies aren't balanced out by the contents of other containers?

What is the difference between customs fraud and merely having put some goods in a different than expected container - something handled on the shop floor by fork lift drivers without access to any logistical database... Very few companies have logistical systems capable of handling container level inventories - Tesco, Guinness, some big pharma companies perhaps. It works for very high volume single product shipments, or container loads all destined for the one customer.

But don't expect your average small company operating across the border to implement such systems. NOT GOING TO HAPPEN...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Sep 19th, 2018 at 12:28:16 PM EST
umm, no.

Anyway, the upshot is that Tory gov won't cooperate in customs inspections.

Because it's infested with malicious people, I have remarked previously.

Diversity is the key to economic and political evolution.

by Cat on Wed Sep 19th, 2018 at 04:03:13 PM EST
[ Parent ]
The UK is not negotiating in good faith and never will.  They see any gesture towards a working solution as weakness and a sign they can get what they want because they want it.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Wed Sep 19th, 2018 at 04:07:54 PM EST


is hypnotic.

Diversity is the key to economic and political evolution.
by Cat on Wed Sep 19th, 2018 at 04:16:09 PM EST
[ Parent ]
Calling for "democratic consent" (no, really):

Theresa May plots assault on EU's Ireland Brexit demands - Politico EU

On this, the U.K. is prepared to negotiate -- but only if there are new democratic safeguards for Belfast, according to two senior U.K. officials.

"There will have to be some democratic consent (a key element of the Good Friday Agreement)," said one senior U.K. official.


A senior EU diplomat said the EU is "lukewarm" about the U.K.'s Northern Irish "consent" proposal, which is yet to be formally presented. The concern in Brussels and other EU capitals is that allowing Belfast's "consent" for future rule changes would be a hostage to fortune which could make the crisis caused by Belgian region Wallonia refusing to ratify the EU-wide trade deal with Canada look tame by comparison. The EU will not allow a situation where a third country can hold up its own regulatory changes.

Are Northern Ireland's leaders really "reliable partners?" asked one EU27 diplomat.

Northern Ireland, after all, has now been without a ruling executive for longer than Belgium was without a government in 2010-2011 -- and there is no sign of this changing before Britain leaves the EU in March. "London is going to have to make this decision," the diplomat said.

by Bernard on Wed Sep 19th, 2018 at 04:15:15 PM EST
< wipes tears >

Diversity is the key to economic and political evolution.
by Cat on Wed Sep 19th, 2018 at 04:17:48 PM EST
[ Parent ]
I'm no specialist of the Good Friday Agreement (I'm sure Frank can help), but it looks to me like it is creating quite a number of specific regulations, laws, etc... for Northern Ireland that are quite different from the rest of the UK. Yet no British PM, to my knowledge, has claimed they "could never accept" such disparities.

To be fair, I'm not expecting consistency from the Brexiters either.

by Bernard on Wed Sep 19th, 2018 at 04:21:53 PM EST
[ Parent ]
There are divergences between N. Ireland and GB on abortion rights, same sex marriage, agricultural regulations and on "devolved matters" within the remit of the Stormont regime, if there is one. This concern about divergence is entirely related to the Tory's dependency on the DUP, and will pass very quickly when than dependency ends.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Sep 19th, 2018 at 04:45:48 PM EST
[ Parent ]
I don't thing Ireland would have any difficulty with a proposal that any backstop would require some kind of "democratic consent" in N. Ireland. After all N. Ireland voted 56%-44% to remain in the EU and all parties claim they want an open border with the south.

The more interesting question is whether the DUP would buy this proposal - as any vote could expose their minority position on all EU related matters.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Sep 19th, 2018 at 04:33:26 PM EST
[ Parent ]
well, there's yer rub, right there. The DUP are a massive electoral minority on economic matters in Ulster, yet somehow retain a crushing control of Ulster politics.

If Ulste wants to have a voice that is minded for its future it must abandon the voice of the 16th century. Cos all they can say is "NO"

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed Sep 19th, 2018 at 08:36:31 PM EST
[ Parent ]
The DUPs control is enabled in part by Sinn Fein's refusal to take up their Westminster seats.
by ectoraige on Fri Sep 21st, 2018 at 02:01:44 PM EST
[ Parent ]
Wariness of `perfidious Albion' complicates Brexit talks
One undercurrent that influences thinking, not just among Irish officials but throughout the EU, is the notion of "perfidious Albion". This is something that goes back centuries and was famously articulated in the 19th century by Lord Palmerston who declared that England didn't have friends it only had interests.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Sep 20th, 2018 at 07:43:14 AM EST
Today's nicely timed rumour is that the agricultural ministry is busy fighting the trade ministry who intend to use the powers under the EU repeal act to remove EU food standards after March in order to allow a US trade deal.
by Colman (colman at eurotrib.com) on Thu Sep 20th, 2018 at 08:40:24 AM EST
[ Parent ]
Gerard Brady:  ‏ @GerardBrady100 Sep 18

The chart below shows the evolution of real wages in Ireland & the UK over the past decade. It really is exceptional how poor the UK performance has been relative to us, despite an enormous financial crisis. Also, that divergence since the Brexit vote!

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Sep 20th, 2018 at 09:06:41 AM EST
30 day expiry

30 day expiry

Gerard Brady, The geography of Irish joblessness, April [2018?]
applying "place based intervention" to long-term unemployment in Ireland

Diversity is the key to economic and political evolution.
by Cat on Fri Sep 21st, 2018 at 12:53:52 AM EST
[ Parent ]
Financial parasites have never understood the utility of investment in machinery or humans. Everything is about predation of the rich by the richer, they have no interest in wage slaves cos they've simply not got enough money to bother with.

Our government have been in thrall to the banksters and associated knaverie for 40 years

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Fri Sep 21st, 2018 at 06:39:31 AM EST
[ Parent ]

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