Thursday, 14 July 2016

David Davis in his Own Words

Something simple today – background on the Secretary of State for Exiting the EU, David Davis.

David Davis in his Own Words

David Davis is a former Shadow Home Secretary, and is MP for Haltemprice and Howden.

On Twitter pre-referendum:

(1/2) The PM says trust the experts - the same experts who failed to spot the financial crash in 2008 and ERM in 1992?

(2/2) The PM says “if you’re going to build a house you ask an expert”. But you wouldn’t ask experts whose house had fallen down.

(1/2) The biggest issue over coming years will be managing Brexit, improving UK trade position, controlling borders and enhancing democracy

(2/2) That needs vision, optimism, energy and drive – that is why I am backing @BorisJohnson for Conservative leader

(1/5) The PM claims the EU is fast at making trade deals. This is not true.

(2/5) The EU is very slow on trade deals. Took EU 6 years to reach deal with Singapore, USA just 2. S Korea deal took EU 3 years, US just 1

(3/5) Canada deal with EU has taken 9 years and may still founder. EU has no deal with China, India, US or Japan.

(4/5) Medium sized countries like South Korea, Singapore and Switzerland are all much better at doing trade deals

(5/5) Outside the EU we will be able to sign more trade deals more quickly that better suit our economy

Mr Juncker will be visiting Britain next week - remember that this is the man who said that British “deserters” would face “consequences”.

On Trade Deals

After Brexit, the pressures on the countries that make up the EU will be different. Free trade with Britain is in all their interests. This is particularly true of the most powerful leader in Europe, Angela Merkel. Her economy is dependent on exports, particularly of manufacturers, and especially of cars. Britain is the second largest and fastest growing car market in Europe. Audi, BMW, Mercedes, and Volkswagen alone are over 25% of the British market, with the UK buying one million cars from Germany every year.

They cannot afford the threat being levelled at Britain, so called “WTO terms”, because they would involve a 10% levy on all car imports. A German Chancellor would have to avoid this, particularly in an election year. In Europe, what a German Chancellor wants, a German Chancellor generally gets.

Indeed the first calling point of the UK’s negotiator in the time immediately after Brexit will not be Brussels, it will be Berlin, to strike the deal: absolute access for German cars and industrial goods, in exchange for a sensible deal on everything else.

Similar deals would be reached with other key EU nations.

France would want to protect the £3bn of food and wine it exports to the UK. We have seen the sort of political pressure French farmers are willing to bring to bear when their livelihoods are threatened, and France will also be holding a general election in 2017.

Italy will deal to protect its billion-pound fashion exports. And Poland its multi-billion pound manufacturing and electronics exports.

Trade negotiations are exercises in mutual self-interest. They are not power plays, or coercions, particularly now the WTO default rules are in place. Without the emotional politics of the EU in play, there is no reason whatsoever to expect that most countries in the world would not actively want a free trade agreement with the UK.

On Article 50

The ideal outcome, (and in my view the most likely, after a lot of wrangling) is continued tariff-free access. Once the European nations realise that we are not going to budge on control of our borders, they will want to talk, in their own interest. There may be some complexities about rules of origin and narrowly-based regulatory compliance for exports into the EU, but that is all manageable.

But what if it they are irrational, as so many Remain-supporting commentators asserted they would be in the run up to the referendum?

This is one of the reasons for taking a little time before triggering Article 50. The negotiating strategy has to be properly designed, and there is some serious consultation to be done first. Constitutional propriety requires us to consult with the Scots, Welsh, and Northern Irish governments first, and common sense implies that we should consult with stakeholders like the City, CBI, TUC, small business bodies, the NFU, universities and research foundations and the like. None of them should have any sort of veto, but we should try to accommodate their concerns so long as it does not compromise the main aim. This whole process should be completed to allow triggering of Article 50 before or by the beginning of next year.

In this process, we should work out what we do in the improbable event of the EU taking a dog in the manger attitude to Single Market tariff free access, and insist on WTO rules and levies, including 10 per cent levies on car exports. Let us be clear: I do not believe for a moment that that will happen, but let us humour the pre-referendum Treasury fantasy.

In that eventuality, people seem to forget that the British government will be in receipt of over £2 billion of levies on EU cars alone. There is nothing to stop us supporting our indigenous car industry to make it more competitive if we so chose.

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