2016 June 29 Wednesday
Can Britain Manage To Do Brexit?

The European Union does not want other countries to follow in the UK's wake, Therefore the EU will seek ways to maximize Great Britain's pain from EU withdrawal while minimizing the EU's pain from the same. Ideally the EU would like to see Britain give up the attempt.

I think the EU has some advantages and tactics it can use to make the cost of Brexit fall much more heavily on Britain:

  • If Britain's withdrawal causes a drop in trade between Britain and the EU the drop will be larger per British citizen than per EU citizen because the British are fewer in number.
  • The EU can select industries to be hit by higher tariffs based on the ease with which the production in Britain can be shifted to the continent. Britain loses economy of scale on any product that gets blocked from trade between Britain and EU by EU-imposed tariffs.
  • Britain has a much larger diplomatic job to do to work out the withdrawal. The EU already has trade agreements with various nations around the world. Britain lost its own such agreements when it joined the EU. Now Britain has to negotiate lots of agreements.
  • Britain's own elites (notably including diplomats who will have to do the negotiating) aren't going to be eager to work hard to negotiate new terms for Britain with the EU and with other nations around the world.
  • The elites in Britain's traditional ally the United States would like to see Britain fail in its attempt at EU exit. So the government of the USA will probably drag its feet at negotiating new trade deals with Britain.

What Britain needs is some leaders who can rally around them civil servants and business leaders who are eager to negotiate new terms for Britain in the world economy and who are also eager to capitalize on various forms of flexibility that Britain gains from Brexit. What I think British leaders could do to nullify the EU's attempts to punish it:

  • Rapidly negotiate trade deals with other major countries (Brazil, India, Canada, Australia, Japan, China if possible, USA if possible, maybe even Russia) that take automatically effect upon Brexit. The more deals it makes the stronger its negotiating hand will grow with Brussels. I would even go so far as to argue that it should negotiate those deals and only then invoke EU article 50.
  • Develop alternative financial regulations that will attract financial firms to Britain (and think about Bitcoin/Blockchain and other alternative payment mechanisms in this context).
  • Identify the most innovation-hostile EU regulations and craft replacement regulations to go in effect upon Brexit.
  • Identify industries in continental Europe that could be enticed to relocate to a more friendly regulatory and tax regime in Britain.
  • Change immigration policy to brain drain the world. Do not allow in lower skilled workers but make it very easy for the very brightest and highest skilled workers to be brought it. Make Britain a desirable place for companies to set up research and product development facilities.
  • Grant stronger privacy rights for corporate data in corporate data centers. Make Britain a desirable place to build very large data centers.

If Britain very rapidly codifies all the changes that take place upon Brexit well in advance it will actually create a large business constituency for Brexit. Businesses that discover they will stand to gain from Brexit will then become boosters for Brexit.

To make this work the British government should ask British companies to each draft proposals for changes they would like that would become possible once Brussels no longer calls the shots. For example, lots of product standardization regulations could be repealed that the EU passed to make many products all the same across countries. Allow more diversity and ease of exploration of alternative solutions to problems.

Share |      By Randall Parker at 2016 June 29 08:46 PM 

Brett Bellmore said at June 30, 2016 3:15 AM:

It appears that the British stock market has already completely recovered from the Brexit drop. So quite a few somebodies apparently think this won't be bad for the British economy.

bob sykes said at June 30, 2016 5:07 AM:

If the British elite manages to overturn the Brexit vote, Nigel Farage will be the next Prime Minister, and the UKIP will replace all of the Tories and many Laborites. Overall, a good thing, to be heartily desired.

Black Death said at June 30, 2016 6:01 AM:

A free-trade union of the major English-speaking nations - the UK, Ireland, Canada, the US, Australia and New Zealand - wouldn't be a bad idea. Free travel and free trade among these nations, and that would be all. No Brussels-style bureaucracy, no separate foreign policies, no new regulations. Tell the foundering EU to go to hell.

Mercer said at June 30, 2016 1:55 PM:

The UK should not let the EU dictate UK immigration policy. The UK can get its way if it is firm if this is true:

"Both Germany and France send 7 percent of their exports to and get 4 percent of their imports from the U.K., with cars being the biggest source of exports for both. The U.K. absorbs 10 percent of French car exports and 13 percent of German ones."

more here:


The EU will realize it is much tougher for its other members to leave because they are tied to the Euro currency and leaving the Euro would cause a banking crisis in any member that tried to leave.

chris said at June 30, 2016 10:56 PM:

"brain drain the world"

Problem with this is those that come won't hold loyalty to the British people and hence would become future voters against British sovereignty and ironically pro-EU/globalist.

The only possible exception would be if they only brain drain Anglo/British whites from the other Anglo nations of US, Aus, NZ and Canada. Maybe bring in all the white south africans too so that the blacks can have that country all to themselves.

chris said at June 30, 2016 11:51 PM:

"Free travel and free trade among these nations."

As an Australian I wouldn't want all your minorities coming here. We don't need any Ferguson race riots.

Rico Zamman said at July 4, 2016 3:51 PM:

We should do away with all "free trade" because there's simply no such a thing. Have you tried to export or import anything on your own lately? Do you know about the costsof belonging to the club and all the obstacles they'll set before you? It's a club for the few. The rest are low-paid employees. In fact all wage earners in the world are way underpaid whether they are clerks, social workers, teachers, janitors or drivers. I say let's reverse the nasty trend and go back to protectionism in order to restore things back a bit. No more free trade agreements, because they only serve a few. Over 40 years of free trade has only brought more poverty, wars and destruction in the world and therefore migrations.

Rico Zamman said at July 4, 2016 3:56 PM:

In recent years, representatives from 34 countries have been working to expand the North American Free Trade Agreement (NAFTA) to Central America, South America and the Caribbean.

The Free Trade Area of the Americas (FTAA) is another example of the free-market fundamentalism that has created a global race-to-the-bottom that threatens the environment, families' livelihoods, human rights, and democracy.

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