Department for International Trade Under Threat of Closure

The BBC’s Norman Smith is reporting that Liam Fox’s Department for International Trade “has been told to drop everything else and just focus on No deal planning as the most likely outcome.” Lots of Brexiteers are cheering this news…

Guido thinks they are cheering too soon. Presumably the calculation now is that either we head toward no deal… or the new deal that passes a Commons vote with Labour backing hinges on membership of the EU’s customs union, and therefore the department will be shut down as surplus to requirements.

There are about 80 members of the ERG. May’s deal lost by 230. Either the clock runs down to no deal, which would require steel heretofore unseen in the PM, or Number 10 folds to the demands of our Remain voting parliament, and commits to a customs union. Bleak.

UPDATE: A DIT insider confirms that the Department is now focusing heavily on no deal preparations. It appears to be less of a surprise to the staff there than it is to the press…

UPDATE II: Another DIT source also confirms that DIT is now focused on no deal preparations, although this is only an intensification of the work they have already been doing for years to prepare for all eventualities. They point out that the Department would still have a role to promote British exports even if the undesirable situation of a customs union arose…

How Did Someone Who Thinks We Should Stay in the Customs Union End Up Running DIT?

Former Department for International Trade permanent secretary Martin Donnelly’s anti-Brexit speech today has been seized upon by Remainers and given top billing by the Today programme. Donnelly’s latest whinge is nothing new – he essentially says this morning that we should stay in the single market and customs union, just as he did three months ago. Not that that’s stopping the BBC and Remain media from treating it as new information. The more pertinent question is how on earth did someone who thinks we should stay in the customs union end up in charge of a department the whole point of which is to sign trade deals outside the customs union? 

The reaction on Whitehall this morning is more one of rolled eyes than surprise. A former Eurocrat, Donnelly was never rated, neither by ministers nor Jeremy Heywood. Indeed they tried to push him out repeatedly pre-referendum before he finally took a knighthood and left. Donnelly tells you all you need to know about the civil service being stuffed full of Remainers trying to undermine the process… hardly helpful for his former colleagues.

Former DIT Perm Sec Now Writing For Pro-EU Spin Shop

The public pronouncements of former top civil servants liberated from office tell you all you need to know about how Whitehall is stuffed full of ultra-Remainers opposing Brexit. Sir Martin Donnelly was Permanent Secretary for the Department of International Trade until last year. He has just written an article for InFacts, the mad pro-EU spin shop. InFacts‘ own website makes clear on its homepage that it wants to ‘Stop Brexit’. Does Donnelly agree with this? A very odd forum for a mandarin in charge of a department directly involved in delivering Brexit. 

In his article Donnelly paints a very pessimistic picture of what would happen if the UK leaves the single market – i.e. Brexit. He has form on this, in November he said we should join the EEA. Donnelly then talks about the problems that would arise “if” the UK leaves the customs union. Eh? This man was in charge of the Department for International Trade. The whole point of his department is to sign trade deals outside the customs union. Did he not believe the UK would be leaving the customs union when he was perm sec? How did he ever get the job?

Trump Wants Farage to Be British Ambassador

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Nigel says “I’m very flattered by the comments and I have said since I met the president-elect that I would like to do anything I can to act in a positive way to help relationships between our two countries.” An ill-tempered Downing Street has put out the line that “There is no vacancy. We have an excellent ambassador to the US.” Which is as factually true as it is unimaginative.

There are however rather a lot of vacancies in the Department for International Trade for trade negotiators. There is no doubt that for Nigel Farage the doors of the highest offices in Washington D.C. will open. It would be a self-defeating waste of a national asset to not give Nigel a transatlantic role. Theresa May should ignore the collective hissy fit of the commentariat and make him Sir Nigel Farage, Her Majesty’s Special Envoy for Trade to the United States of America…

South Korea’s Single Market Trade

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Our series on EU trade with non-members of the Single Market; the US, China and Japan brought lots of whining from Remainers. One of their arguments for why this was not a valid indication that EU-UK trade will be fine is that these were examples from the three biggest economies in the world outside the Single Market. The implication was that of course big economies trade successfully with the EU, the UK has not got the same clout. Despite the fact that the UK will be the next biggest economy outside the EU.

So for our next example we chose a smaller economy, South Korea, with a GDP approximately half that of the UK, so presumably with far less clout. It also has the disadvantage of being 5000 miles from the EU rather than just 26 miles down a tunnel away. It is also out side that ever so important Single Market common regulatory area.

As a proportion of GDP Korea’s annual two-way trade with EU countries is 13.5% (almost $200 billion). This is a little under the UK’s 17% on the same basis. Despite having an economy half the size of the UK, the Koreans and the EU signed a free trade agreement in 2010 and a large number of import duties have been progressively slashed. Here we have it, a small country on the other side of the world, outside of the single market trading only slightly less with the EU then we do now…

Japan’s Immigration-Free EU Trade

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Here’s yet another reminder that non-members can have free access to the so-called ‘Single Market’. Japan trades $164 billion annually with the EU and yet the CIA World Factbook estimates it will have net migration of zero this year. It pays no annual fee for access to the common regulatory regime and keeps control of its Island’s borders. It’s a modern day miracle.

China’s Free Access to Single Market

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Here’s another reminder that trade flows freely in and out of the so-called ‘Single Market’ even if you are a non-member. China trades over half-a-trillion dollars annually with the EU and pays no annual fee for access to the common regulatory regime. Obviously China has no problem with controlling immigration from Eastern Europe, nor does it see its national sovereignty constantly frittered away by qualified majority voting and foreign judges ruling over Chinese citizens. How do they cope?

EU Trades Trillions Outside Single Market

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People who really should know better are fetishising the EU ‘single market’. The single market is essentially a common regulatory regime. It is not necessary to be in the single market to trade across borders with EU member states. In fact the USA manages to do nearly two trillion dollars of trade with the EU annually without paying a penny for access to the ‘single market’, without having to accept uncontrolled immigration from Eastern Europe or being subject to any loss of sovereignty. Bear this in mind when you read hysterical articles in the newspapers… 

27 Countries Seeking UK Trade Deals

BREXIT TRADE MAP

The above map shows all the countries in which government officials or prominent business figures have declared a desire to secure a post-Brexit trade deal with Britain. Out of the 10 largest economies in the world, just two (France and Italy) have not yet made moves for a deal. Every continent on earth is represented, with 27 countries already signalling their intentions:

Australia
Argentina
Bolivia
Brazil
Canada
Chile
China
Colombia
Ecuador
Germany
Ghana
Iceland
India
Ireland
Japan
Kenya
Korea (Republic of)
Mexico
New Zealand
Pakistan
Paraguay
Peru
Suriname
Switzerland
United States
Uruguay
Venezuela

The total GDP of all of these countries is nearly $50 trillion dollars – 67% of global GDP. In comparison, the EU’s GDP of $16 trillion equates to just 22%. Britain is open for business and Guido will be updating this map over the coming weeks and months. Over to you, Dr Fox…

Developing Countries Turning to Britain Post Brexit

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The East African Economic Partnership Agreement (EPA) with the EU has for the last 10 years held countries like Tanzania and Kenya ransom, punishing these largely agricultural economies for failing to sign up to new agreements. Last week, Kenya feared another hit to its blooming flower industry after rumours of Tanzania getting cold-feet about signing a collective trade agreement in October.

At the same time the EU deal was thrown into question last week, Britain took the stage with China to announce stronger trade cooperation with Kenya. 56% of black tea and 27% of fresh produce comes to the UK from Kenya, with flowers being a particular boon, so any deal would be welcome. For less developed countries being drawn into the EU deal, the “Everything but Arms” initiative already means they can export produce into Europe duty-free and quota-free. Larger economies like Kenya can always sign their own, separate agreement with the EU if they want, not tied down to the wishes and demands of their neighbours, or they can continue with the EPA. As Kenyan professionals have already pointed out, there is another choice…

First Picture of Liam Fox’s Plush New Department

liam fox office

Good to see Dr. Fox already getting to grips with the new job…

UPDATE: A spokesman for Liam Fox gets in touch:

“This sign was not put up by Dr Fox or his staff but obviously by someone having a laugh. It is nice to see that people around Parliament have a good sense of humour.”

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