Brexit agreement negotiated

Britain and the EU have agreed on a final exist deal.

Deutsche Welle has an early explainer here, Brexit going forward: Who are the winners and losers? 12/25/2020

Short version: the tiny fishing industry that accounts for about 0.1% of the British economy is happy. Exporters are generally not. People in Northern Ireland and Scotland are assessing their options.

Prime Minister Boris Johnson not surprisingly thinks he did an awesome job on the negotiations, Brexit deal: Boris Johnson announces UK and EU trade deal BBC News 12/24/2020:

The Irish Times gives an early rundown on the main features of the deal: Devil in the detail: Here’s the main elements of UK-EU Brexit deal 12/24/2020.

Libby Brooks looks at some of the implication for Scotland, Now Brexit is sealed, Scotland plunges into battle for the narrative Guardian 12/25/2020: "Since then the increase in support for independence has occurred among remain and leave voters, as a surge this year saw independence support reaching as high as 58% in the polls, attributed in part to the SNP leader, Nicola Sturgeon’s impressive management of the pandemic."

Andrew Woodcock notes, "By striking a deal, the two sides avoid having to switch onto World Trade Organisation terms on 1 January, which would have required tariffs on imports and exports ranging from 10 per cent on cars to 40-80 per cent on meat products and an average 18 per cent on foodstuffs." (Brexit: What is in Boris Johnson’s EU trade deal? Independent 12/24/2020)

Martin Kettle assesses the deal in Boris Johnson has 'got Brexit done'. With a deal that will please no one Guardian 12/24/2020: "Leaving the EU was an emotionally charged political proposition, not an economic one. It was a desire rooted in a vision of British sovereignty richly marinaded in a heady mix of nostalgia and bogus victimhood, fanned by Britain’s media, and which made the enormous error of confusing sovereignty with power."

Labour's loss this week

There will be a lot of analysis of Thursday's British election and varying and conflicting lessons drawn from it.

Here are two different perspectives from The Independent:

General election result: Nearly twice as many Labour voters defected over Jeremy Corbyn's leadership than party's Brexit stance, poll finds 12/13/2018

Jon Stone, General election: How Labour really lost seats in Leave-voting areas 12/13/2019:

... the story [of the election outcome] is one of a Tory surge, often sustained from an initial one in 2017, rather than a complete Labour collapse of anything other than extra voters gained in 2017 [compared to their votes in 2015]. In some cases, the Labour share is marginally lower than the historic average since 1997, but this is not a defining factor: in most places it is more or less the same. What’s changed is the Tories are well up.

If we look at the overall vote shares of the parties, this is actually fairly obvious. Labour seems to be heading for around 33 per cent of the vote ... not far down on what it won in 2005 when it won a majority (35 per cent) and better than it won in 2010 and 2015, but lower than 2017. But Boris Johnson’s Tories appear to be on course for a historically huge share of the vote.

There are some implications of this. One is that the idea that voters have somehow historically “abandoned Labour” in its traditional heartlands ... any more than they did in 2005, 2010, or 2015 –is not really correct. Rather, in most cases, a temporary boost that Jeremy Corbyn won in 2017 has unwound. More research will be needed to understand better why this happened in 2019 compared to 2017 – it may have been that negative stories about Jeremy Corbyn stuck more. But the fact that these losses are overwhelmingly in Leave areas, while Remain areas stood firm or even were added to Labour’s collection, suggests there is some kind of Brexit connection. Labour went into the election promising another referendum and the Tories hammered home the message that the party wanted to “block Brexit”. [my emphasis]

The exit polls indicating more Labour defectors citing Corbyn's leadership as a more important factor than the voting statistics Stone cites aren't necessarily incompatabile explanations. Given the Leave-related voting patterns, it's safe to assume that Leavers also had a low opinion of Jeremy Corbyn.

Labour voters were divided over Brexit in a way the Tory base was not. If Labour straight-up endorsed Leave, they had to worry about losing Remain voters. So they adopted a Mugwump position that they would hold another election on Brexit. And the result was that they notably bled Leave voters in some traditionally Labour districts. While the Tories got a large turnout with their pro-Brexit, nationalist position.

We can always fault the losing party for being insufficiently persuasive. Austrian political commentator Natascha Strobl had some impassioned thoughts in a German-language tweet thread in which she argues that Labour scattered its election pitch across a variety of themes, while the Tories pounded on the Brexit issue. But it's hard to see how Labour could have threaded the Brexit needle more successfully. (Or, in the case corporate Demcorats in America, blame on the Russians and whatever left-leaning politician they a re irritated about at the moment.)

And in America, the usual suspects were drawing the usual lessons:

One lesson from the UK: if the Democrats don't stop their hard-left slide, they'll suffer the same fate as Labour. If they don't move off their support for mass immigration, they're toast. Ditto the wokeness. Left Twitter is not reality.

— Andrew Sullivan (@sullydish) December 12, 2019

To me, this vote was an even more substantial endorsement of Brexit than the original referendum, which was non-binding and was a perfect vehicle for an "I'm feeling grumpy" protest vote. This one gives a clear parliamentary majority to a party that made immediate Brexit its central issue in the campaign.

That doesn't mean that Johnson's government can actually get Brexit accomplished. Actually leaving the EU without serious economic disruptions and internal consequences (Northern Ireland, Scotland) requires some serious political leadership, "serious" not being the first quality that comes to mind with Boris Johnson. Also, to get substantial beneficial concessions from the EU, the British Prime Minister would have to be willing to go down to the wire with the threat of a hard Brexit. Johnson hasn't yet shown he has the stomach for that.

How damaging is Brexit likely to be for Britain's economy?

Paul Krugman doesn't see economic catastrophe as a likely result of Brexit (What to Expect When You’re Expecting Brexit New York Times 01/16/2019):

This wouldn’t be the economic deliverance some Brexiteers envisioned, but maybe the more important point here is that the effects of Brexit after a few years have passed don’t look catastrophic. How confident can we be that it wouldn’t be too bad? Quite confident, because other countries have managed decently without customs unions despite close economic ties to a much larger neighbor.

Put it this way: A post-Brexit U.K. would be to the E.U. pretty much as Canada was to the U.S. before the U.S.-Canada Free Trade Agreement (which came a few years before NAFTA.) In fact, even the share of cross-border trade in G.D.P. would be similar. And Canada wasn’t a howling wasteland.

This doesn't mean that he thinks Brexit is a sensible or desirable thing, or that it won't have negative economic consequencies. "However, while the long-run effects of Brexit would probably be moderate (although 3 percent of G.D.P. is actually a big deal compared with the effects of most economic policies), the short run could be much worse - both for Britain and for the E.U." (my emphasis)

Obviously, a final Brexit agreement hasn't been reached yet. But the options have narrowed to basically the EU's offer or a no-deal Brexit. Former Greek Finance Minister Yanis Varoufakis has some experience negotiating with the EU. And he recently assessed Britain's options in the remaining negotiations, Run Down the Brexit Clock Project Syndicate 01/16/2019.

This is also an interesting a plausible observation about the EU's negotiating strategy:

... we should also note the fantasies of the Eurocrats, who have behaved at every step of this process as if Britain were Greece, and could be bullied into capitulation. Minor gestures could have saved Remain in 2016; a bit of flexibility, a bit less determination to impose humiliating terms, might have led to a soft Brexit now. But it was arrogance all the way."

And none of this should divert attention from how demagogic and reckless the claims of the Leavers have been. Simon Wren-Lewis writes (Why the UK cannot see that Brexit is utterly, utterly stupid Mainly Macro 01/28/2019):

... what is really remarkable is the way what this vote was for has gradually mutated over time. Just before the vote, the Leave campaign talked of many ways of leaving, with Norway (which is in the EEA) as one option. They did this for a simple reason: every time Leavers came up with a feasible way of leaving other Leavers did not like it. Yet within little more than a year Leavers were declaring that the vote was obviously to leave both the Customs Union and Single Market. During the referendum campaign the Leave side talked about the great deal they would get from the EU, but within two years many of the same people were seriously pretending that voters really wanted No Deal. A vote for the ‘easiest’ deal in history has become a vote for no deal at all, apparently.

In much the same way, as Alex Andreou notes, what was once described as Project Fear transforms in time into ‘the people knew they were voting for that’. Claims there will be no short term hit to living standards made before the referendum has now become people knew there would be a short term cost. (Remember Rees-Mogg told us that short term means 50 years.)

Meanwhile warnings from important UK businesses become an excuse to talk about WWII, yet again. What people from outside the UK can see that too many inside cannot is how the case for Leaving has become little more than xenophobia and nationalism. [my emphasis]

Kojo Koram has an intriguing look at the evolution of Brexit nationalism, Britain's Blindness Dissent 02/06/2019:

Brexiteers are trying to convince the public that a no-deal Brexit is not a crisis but actually an opportunity for national liberation. ...

Understanding the sacrifice underpinning national liberation provides a glimpse into the mindset of Brexiteers currently exploiting this rhetoric. As the UK prepares for post-Brexit hardship, experts trying to warn of the economic disruption that would follow a no-deal crash must understand that their warnings are not only being dismissed as “project fear” but also being reframed by Brexiteers as a “a blessing in disguise,” with a no-deal crash being presented as an opportunity for the “suffering which would unite & bring us together.” The Brexit argument once promised that Britain would immediately be showered in wealth if it left the EU, but now the Times is publishing articles arguing that “Brexit offers a prized return to the Blitz spirit.” Those confused by such statements need to recognize that a period of post-Brexit suffering in order to get to a glorious future is actually desired by some Brexiteers, an almost libidinal longing for the chance for Britain to prove it’s resilience by exhausting the EU’s capacity for pain. [Brexiteer Nigel] Farage recently wrote how “a WTO deal with tariffs on both sides would, on the face of it, be a very bad deal for Brussels” and if Britain could withstand the turmoil that might follow, external pressures on the EU, such as the upcoming European elections, would force the Europeans to eventually capitulate and allow Britain to exit the EU on its own terms.