Brexit, May's Way is Worst Way: Eight Hardball Cards

Daniel Lacalle takes Theresa May to the woodshed over her handling of Brexit. I agree with Lacalle on all but one point.

In a Mises wire, Daniel Lacalle explains May’s Way Is Not The Only Way.

In a nutshell, May’s Brexit is the worst solution for Leavers and Remainders. It tries to please Remainders, who are obviously not satisfied as they want a full reversal of the EU exit.

In essence, the plan is the worst of both worlds. Leaves the UK with all the perceived negatives that led to a “Yes” vote in the referendum and none of the alleged benefits of staying in the European Union.

May’s way is not the only way. The UK should deliver a strong Brexit proposal that creates certainty, that eliminates the excessive costs and regulations. There is a reason why the EU has a “Canadian” or “Norwegian” solution because they were created ad-hoc for those countries. May fails to recognize the strengths of the UK to achieve a specific “British solution” that is good for both parties. She seems to accept at face value that the EU rules, those that the EU itself bends at will, are untouchable.

This political crisis adds uncertainty to business, gross capital formation, and job creation, but also diminishes the UK government’s influence on crucial international matters. Instead of delivering a message of strength, May has delivered a message of uncertainty.

I would have preferred the UK to stay in the EU and be a driving force for change and renovation, for freedom. But Brexit happened. And now the government is putting the economy at risk by creating an unnecessary political crisis that may affect many important sectors, while ignoring the results of the vote.

Brexit should have been a serious warning to the increasingly interventionist European Union to change its ways and should have been negotiated swiftly from the position of strength that the UK had as the second largest net contributor to the EU. It should have been a fantastic opportunity for both the EU and the UK to thrive. Instead, May has done the job for Brussels showing the European Union is an unchangeable entity, like the Hotel California where “you can check out anytime you like, but you can never leave”.

May’s “my way or the highway” plan has strengthened the EU’s stubborn resistance to change.

May's Way, the Worst Way

May's way is not the only way is accurate but fails to sum of the problem. May's way is the worst way more accurately sums up the current situation.

Lacalle was a bit too polite with his title.

Point of Disagreement

On what point do I disagree with Lacalle?

It a point that is irrelevant at the moment. I was in favor of Brexit. The EU is a slow, colossal, bureaucratic mess that take near-unanimity to do most anything, and absolute unanimity on some things.

For example, France will never agree to end subsides that protect inefficient farmers. That one point alone is why it took the EU 10 years to negotiate a deal with Canada.

Water Over the Dam

That's water over the dam now.

May's tactic has been to bow down to the EU instead of playing hardball. Se has a huge number of cards to play, and in this regard, Trump helped.

Eight Hardball Cards

  1. Iran sanctions hurt the EU, especially Germany.
  2. Trump clearly has it in for German autos.
  3. The German auto industry is already on the ropes over diesel emissions.
  4. The EU is hugely impacted by Trump's trade war with China.
  5. If the UK walks, the EU will lose the $39 billion Brexit fee.
  6. The UK can close fishing rights and take control of its waters.
  7. Germany cannot afford to get into multiple simultaneous trade wars with the US, China, and UK.
  8. The UK can further lower business taxes.

Think about that last point until it sinks in.

The UK is one of Germany's biggest export recipients.

Prepared to Walk

This is no time for May to cave into to nonsensical EU demand.

Rather, this is the time from May to lay those eight cards on the tables and say "We are prepared to walk. What are you going to do about it?"

Mike "Mish" Shedlock

Comments (10)
No. 1-10
flubber
flubber

UK will most likely take an early hit being the first country to exit the EU, but better to be first than to be last. At least the UK will have a head start in making deals with other countries. The EU will try to punish the UK as much as they can to attempt to deter any other 'rogue' countries from trying to exit. If it was me, I would exit and not pay any penalties and start from scratch. Let the EU come after me.

In regards to German cars...I see so many BMWs, Audis, Porches, and Mercedes in my neighborhood, you'd think I was living in Stuttgart. I drive a 2008 Toyota.

Kinuachdrach
Kinuachdrach

As the old song says, "Breaking up is hard to do". And May was clearly the wrong person for the job. But the rest of the Conservative Party are a bunch of wets, to quote Mrs. Thatcher. This is what happens when people are so afraid of Political Correctness that they will refuse to remove an incompetent, simply because she is a woman and therefore untouchable.

We also have to remember that the Brexit vote for separation from the EU squeaked through on a very narrow margin. Separation may indeed be in the best long-term interests of the UK -- but there is inevitably going to be a period of pain upon separation, and a lot of Brits are not prepared for that pain.

pi314
pi314

What UK needs is a billion dollar businessman prime minister to play hard ball in negotiations with EU. LOL.

Stuki
Stuki

To get anywhere useful, the UK needs to just leave.

"Negotiation" is noting more than nonsensical aggrandizement of a bunch of useless, taxfeeding twits. "The UK" and "The EU" has nothing to negotiate. The interactions between, and goals of, millions of Brits and Continentals, are way to complicated to be captured by one central "negotiation."

Negotiation "may" work when goals are clear and simple, and the parties themselves are at the table. Watering rights allocation between two Western ranchers, employment contracts etc. Make things much mushier than that, and "negotiation" is little more than feelgood dog-and-pony, providing a grandstand for look-at-mees on the make. Even something as comparatively clear cut as negotiated surrenders at the end of wars, rarely works anymore, now that the parties are larger and more multifaceted than relatively unanimous warrior tribes.

Instead, as always, do the low cost, low effort, quick, thing: Walk. Route around. THEN smaller, individual parties, with a clearer view of, and greater stake in, their own situation, can start negotiation from what will be solid, settled ground.

pietro
pietro

"May's tactic has been to bow down to the EU instead of playing hardball ...."

If you mean that in the sense she is genuine in her negotiations then I think you are wrong there. Take a step back and look at exactly what May has done, not what she says. First she did absolutely nothing constructive for months. Then she ceded the initiative in negotiations to the EU and never once attempted to wrest it back. Then she declared our (the UK) willingness to pay danegeld to the EU while never mentioning the billions we have invested in EU assets to which we should still be able to benefit from. Then she went to Brussels and undermined her negotiating team in face to face talks. Then she took the arch Remainer and self-confessed 'never Brexit' Olly Robins as her principal Brexit advisor. Then she effectively put that same person in overall charge. Then she ambushes the Cabinet with an unworkable plan almost certainly authored by Robbins that satisfied no one on either side as a fait accompli while declaring 'my plan or no Brexit at all'.

No, it is quite clear to me as a Briton that Theresa May never intended to see Brexit happen at all in any meaningful way.

AndrewUK
AndrewUK

Exactly. May is a Remainiac and is surrounded by that ilk. The disgraceful way she cut the ground from under David Davis proved that. Brexit has become a 'mess' because she and the Civil Service along with a large rump of her party (and a rump of the opposition) want it to be so because they hope to reverse it.

ML1
ML1

EU imports much more things to UK than UK imports things to EU so May is giving Germany and France and other EU countries with much larger exports to UK than imports from UK a gift with her "white flag of surrender" opening offer where UK will follow even the maddest of EU directives regarding things and get NOTHING in return. . UK should NOT promise to follow EU directives but UK should be free to do whatever they want and this could include allowing products manufactured to EU standards and directives to enter UK only IF UK gets a good deal from EU otherwise. . For internal UK markets it would be much better for UK to have their own standards so that UK manufacturers would have an advantage over EU manufacturers in UK markets and UK could for example give USA manufactured products also an easy way to UK markets without needing to fulfil EU directives so UK could make a really good trade deal with USA and same with Canada, Australia, India, New Zealand, Japan, China and all the other countries in the world. UK producers importing to EU could of course follow EU directives to get their products to EU markets. . UK should have a customs system where manufacturers that bring parts from EU have their own customs worker working so the customs process is done at the factory instead of at the border. Small purchases say to 500 pounds should be customs free provided that EU also recipirocate. There should be NO hard border between Ireland and Northern Ireland for individuals but there should be spot checks of some people and checks for trucks and vans bringing stuff over the border unless the company had joined the customs official at the factory program. Ireland and UK could also make an agreement between them for no checks and no customs at the border if they wanted and EU would be motivated to give permission. . Since UK tourists travel so much and are important economically for many countries the travelling should be no problem between UK and EU and visa freedom would continue and UK is already OUT of the Schengen treaty and has passport controls to elsewhere in EU (like Ireland too) so there is no problem in that regards. . Trade with UK-EU could be tariff free like it is now but IF UK would charge WTO tariffs and be charged WTO tariffs by EU this would bring billions every year to UK government even after UK government paid all tariffs for all UK firms exporting to EU. . If May did NOT waive the white flag straight away by promising to follow EU directives on products then German industry and French industry would be keeping Merkel's and Macron's feet to the fire to make sure there is a good deal with UK because they export so much to UK. . When it comes to services UK can easily access EU markets through daughter companies in EU countries so there is no problem in this. . As her first white flag May already promised to pay 40+ billion euros worth of money to EU and if there is not a good deal then UK should cancel this promise and let Merkel and Macron explain to German and French tax payers why they have to pay the 40 billion Euros because Germany and France allowed some incompetent EU negotiator to try to be tough guy against UK. . May is too much led by her advisors and actually May's advisors like ex-communist Olly Robbins wrote May's "white flag of surrender" plan to follow EU directives on things as the opening offer behind the previous Brexit minister David Davis which was inexplicable incompetence from May and betrayal of all her government. I get the feeling from May that she is trying to hide her own cluelessness and is therefore controlled by her advisors which are incompetent ex-communists.

Pater_Tenebrarum
Pater_Tenebrarum

Absolutely correct, she is a remainer and by doing the worst possible deal, she hopes to ultimately achieve a complete reversal of Brexit. The plan seems to be to deliver such a terrible outcome that they can later say "see, Brexit doesn't work, we must rescind it".