Brexit update: Trump, India, Leaks

Published 11.17.2016
Brexit has the potential to substantially change the European market, hence the process, such as it is, is being monitored here.

If this reporting is correct (always a risky assumption), then 10 Downing Street made no allowance for a Trump victory. Farage isn’t a Tory, so it’s not clear to this observer why he should have special status. He’s a Trump partisan for sure, and he has met with Trump post election.

All signs point to India becoming a huge market for western goods— but the transition won’t be quick. India has real problems, and a problematic history with Britain. Plus, India is trying to get an agreement with the EU. Britain has become much less friendly to Southeast Asians who want to come to Britain and study and work. That will be a real sticking point.

However, May's India trip was a bust. Britain isn’t the economic powerhouse it once was. And while it was a large part of Europe's economy, it is not larger than all the rest of Europe. Thirty-three British industrialists traveled with May in hopes of wrangling a new market.

The prospect of a revived “special relationship” with India was one slightly Orientalist leitmotif of the victorious Leave campaign. Great Britain hardly needs these cantankerous continentals, the Leavers argued; the grateful nations of the Commonwealth -- and especially its most populous and dynamic component, India -- would once again open their bustling bazaars to British goods, easily making up for any lost markets in Europe.

The real competition isn't the rest of Europe though, it's Asia, plus the fact that India wants to develop its domestic market for its own goods.

Britain has a lot going for it, and less regulations should help, but again, it’s the immigration issue that stymies progress.

Yet currently, citizens of countries like India have to jump through hoops for British visas, which take ages to get and are far more expensive than their European or American equivalents. In recent years, Whitehall has disallowed Indian companies from transferring employees in and out and has made it drastically more difficult for foreign students in British universities to look for work after they finish their degrees. The number of Indian students dropped 10 percent last year as a result.

India isn’t going to increase its trade with Britain so long as these conditions remain. And since those conditions and more were a big part of the “Leave” selling points… May is stuck between a rock and hard place.

Leak, but not a Wikileak

A memo was leaked to the British press regarding the Brexit plan of May's government. The memo has been disavowed. The alleged memo said that there is no plan for Brexit, which it seems a fairly obvious point. The Tories didn’t expect to have to do it, and never made a plan to do so. But by now, one would think they’d have something in mind, but again this observer wouldn’t be able to point to any evidence.

Post leak, May is under pressure to actually prove that she has a plan. May refuses to do so, saying that giving a running commentary would ruin negotiations. That sounds very much akin to saying there has to be a public and private position if you want to get anything done. Just as Clinton was reported to say in leaked emails, but was excoriated for.

On Tuesday, Mrs. May’s office responded angrily to a memo written by Deloitte LLP and published in the Times of London that said the government didn’t have a coherent plan and Britain would need six more months to decide what it wants to achieve from Brexit.

No surprise that most Britons don't think the government is doing a good job with Brexit.

A poll published Wednesday by Ipsos Mori found that 48% of the public think the government is doing a bad job at handling Britain’s exit from the EU, and 37% said it is doing a good job. The rest said they didn’t know.

2016 has been a terrible year for pollsters though, so maybe these numbers don't matter. Then there's this from Boris Johnson, which seems impossible on its face.

Foreign Secretary Boris Johnson, in an interview with a Czech newspaper on Tuesday, said the U.K. wanted to maintain free trade with the EU while leaving its customs union, which applies customs duties, import quotas and other tariff barriers on goods entering the bloc.

And then there’s the court case that’s ongoing that says she has to go to Parliament to get permission to invoke Article 50. Actually, it’s potentially more complicated than that, May might have to get Parliament to overturn the existing law authorizing joining the EU, and then pass a second Act to invoke the article.

There is a Brexit induced hole in the Brit budget. On the surface, the British economy has not seemed to feel any Brexit effect. That illusion is about to end.

Philip Hammond will admit to the largest deterioration in British public finances since 2011 in next week’s Autumn Statement when the official forecast will show the UK faces a £100bn bill for Brexit within five years.

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