As is traditional for this time of year, and more in hope than expectation, my top ten trade / Brexit hopes for 2021...

1 - The UK Government ditches the unnecessary secrecy and engages much more openly with business, NGOs etc about their priorities, and reflects them

Brexit. UK-EU talks. Let's try to explain why we're in such a state, of increased risk of no deal, moving away from the fish and playing fields which are the detail but not the answer, to differing philosophies and divorce parallels that might just help... 1/

First, with apologies to those concerned, we need to go beyond those saying this is the inevitable path to deal / no-deal. Half of them will be right and I'll definitely be wrong (don't worry, I'm hedged in wine bets), but it wasn't inevitable, typical, or necessary. 2/

I'll also ignore the content of any deal, which has been clear for months, the UK compromises on level playing field, the EU on fish. Something so obvious really isn't the fundamental issue. Could, as some not noted for their perspicacity have said, be done in an afternoon. 3/

Some truth in the idea that flounces and playing the tough cop are a part of trade negotiations. But equally as we're in about the 5th pass of these, I think it has ceased to be helpful. Either side could already have cut the deal having shown their toughness. 4/

Some fundamentals then, that we've forgotten. First, the trade deal that will lead to much less free trade than before. The incentive structures, the ability to create a win-win, are inevitably going to be different to a normal deal. 5/

How to make sense of the increasing number of UK-EU trade disruption stories?

In short - outside of a single market product checks and people working restrictions are inevitable. And outside a customs union you will have tariffs and / or rules of origin.

Detail ---> 1/

The UK decided to leave a Customs Union. Within that Customs Union, no tariffs, just a common external tariff or preferential rates for bilateral deals or developing countries. Hence, distribution hubs in one country for all make a lot of sense. 2/

Outside a Customs Union our choice was tariffs under WTO rules or remove them subject to rules of origin with a deal. We chose the latter, but it means we can't just import from China, rebadge, and get zero tariffs from the EU. As we could until December 31. 3/

Net result of being outside of the Customs Union - it no longer makes sense for the UK to be a distribution hub for the whole of Europe. Particularly when so many neighbouring countries remain in it. No trade deal changes that. 4/

Now, product checks, of the sort causing problems for food exporters (see Scottish seafood). In the single market, we shared regulations, so a safe product in the UK was safe in France. No inspections. We chose to leave that system, as we want to change some regulations. 5/

The first working day of the new UK-EU relationship. We're going to hear a lot this year from all sides (remain and Brexit in UK, EU, etc) using any possible scrap of evidence. But what we need to look for is trends, over time, so a few to think about in this thread... 1/

Obvious disruption or reduction to UK-EU trade flow. Here we may be thinking e.g. of a permanent 10% fall in traffic, or regular queues, or indeed no change. And apart from goods, the same with individual travel, for work, residence etc... 2/

As a reminder we're not expecting permanent scenes like those of the week before Christmas when borders were closed. But 5-10% reductions in UK-EU traffic would not seem to be out of line with economic forecasts of a hit to the UK economy. 3/

Then we'll need to look at whether UK-EU trade is being substituted by UK-non EU trade. This probably should happen to a degree, and in theory efficiencies could come this way. But its also possible that all UK trade falls, with the UK no longer an EU entry point. 4/

Inward investment is another key post-Brexit indicator. There isn't a single obvious data set here, but the impression of the last four years has been a fall off in manufacturing, but not in services, particularly tech. Continuation would suggest economy tilting to services. 5/

One of the root causes of the Govt's Brexit difficulties is that it has overpromised.

We can, it is said, reclaim our sovereignty, with the freedom to make our own rules, and, at the same time, retain many of the advantages of EU membership. 1/14

The reality is that we cannot.

Unless we agree to certain standards and rules (and there is scope to argue about which rules), there will be borders, and checks, and tariffs. 2/

There will always be a relationship between rights (eg tariff free access to EU/UK markets) and responsibilities (eg abiding by level-playing field commitments). 3/

A 'good' outcome for the UK, in the Govt's view, would involve access gains (eg fewer border checks) without corresponding obligations (or with weak, or difficult-to-enforce obligations). 4/

The chances of this sort of 'good' outcome are low. The EU looks likely, in the face of the threats in the Internal Market Bill and now the Finance Bill, to insist on rigorous governance provisions. [Also, such provisions are the foundation of the single market.] 5/

I’m going to reproduce @3days3nights posts here for backup and to do a full unroll afterwards. All credit goes to him! - P1

Your regular reminder that Brexit is going badly because the UK has still to decide what the purpose of leaving the EU is

1/

#EUref came about as piece of party mgt by Cameron, rather than as culmination of considered and structured debate about UK's place in the world

2/

Yes, we talked a lot (A LOT) about 'Europe' and the EU, but primarily as a function of lots of other things

A touchstone of dissent, if you will (h/t @PaulAdamTaggart)

3/

Referendum campaigns on both sides were simply about getting people to vote their way, not efforts to set out settled plans of What Comes Next

"Vote for us and everything will be dandy" is not a plan

4/

That might have been alright if post-vote there had been a national discussion on how to proceed in an inclusive manner, but instead the political logic pointed to trying to capture the meaning of it all to serve particular agendas

All very majoritarian, as per

5/

As we continue to recap our work for the #VIADUCT_EU project over the years, take a look below at our thirteen VIADUCT Newsletters!

These are where we kept our network and you up to date of all our activities

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Our first newsletter kicked off the #VIADUCT_EU project with an editorial from our project leaders @FundaTekin17 of @IEP_Berlin and Wolfgang Wessels of @UniCologne

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In this early newsletter, @tomas_weiss wrote a fascinating piece on relations between the EU and Turkey after PESCO

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Check out Meltem Müftüler Baç's editorial here on the future of the EU-Turkey partnership in the early days of the #VIADUCT_EU project

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"Arranging EU-Turkey cooperation in the era of transactional leadership" was the title of the @FIIA_fi Senior Research Fellow @ToniAlaranta's editorial in this #VIADUCT_EU Newsletter

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The important difference between AstraZeneca's relationship with the UK and with the EU, and the reason it has fallen behind schedule on 50m vaccine doses promised to the EU, is that the UK agreed the deal with AZ a full three months before the EU did - which gave...

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What is frustrating for AZ is that the extra talks with the European Commission led to no material changes to the contract, but wasted time on making arrangements to make the vaccine with partner sites. The yield at these partner sites has been lower than expected. The problem...