Today, I will show you a crafty scheme to make German taxpayers pay for your French cheese and wine. It’s called a hard Brexit. Which is now looking more likely.
Another week, another Brexit deal falls by the wayside. You might say that Theresa May’s most recent proposal had a chequered past anyway.
If it was all a ploy to get rid of Boris Johnson and David Davis, it worked nicely.
Now for the real deal? May is reportedly considering fixing the UK’s WTO default position instead of making a deal with Brussels.
By making Britain’s trading rules with the world reasonable, we should be able to trade with the EU reasonably too. Why have a separate policy for EU nations specifically?
More on that below. But first, a more personal note.
Preparations to found the Dunkirk Buyers Club continue. Smuggling on the EU UK border could prove big business in years to come. Stop throwing away your crooked cucumbers and start cultivating.
If you’ve been reading Capital & Conflict for long, you’ll know I had expected the English Channel to be my biggest source of smuggling revenue in the Brexit future.
Given the French agricultural industry’s EU subsidies, I was looking forward to stashing artificially cheap cheese and wine in a dingy and setting sail for Dover from Dunkirk.
But it looks like Ireland could prove a more profitable smuggling route. That venture, which I’ve decided to call the Derrylin Tunnelling Company, has received some surprising support at the highest political level.
In fact, Irish Taoiseach Leo Varadkar has been so supportive of the future smuggling industry, you’d think he’s an early investor in my scheme.
Just consider his recent comments – they’d be considered market manipulation if the Derrylin Tunnelling Company was listed on the stock exchange.
The Taoiseach told the world that British planes will not be able to fly over Ireland under a hard Brexit. And Ireland’s borders will be clogged with veterinary officials doing inspections.
This has opened up people and pet smuggling opportunities for the Derrylin Tunnelling Company that I could only dream of.
If your Belfast-based horse needs to race in Limerick next year, and you don’t want to pay for the required permits to cross the border, or don’t feel like queueing, just let our customer service team know.
The Taoiseach also spoke of his fears of a traffic jam on the M25. Lorries trying to get to the continent will be slowed down by border controls, he predicted.
If you think Varadkar cares about Londoners’ commute times in the slightest, you must be joking. Instead, he’s signalling the need for other, more efficient and cheap trading routes. You just smuggle everything across, for example. Out of sight of the CCTV cameras that’ll be monitoring the border. It’ll be fast, efficient and tariff free.
In Moldova, there is a concentration of Land Rovers at the border to facilitate this sort of thing. It’s acknowledged, understood and considered perfectly normal to smuggle things like cigarettes. Everyone benefits.
But that’s about to change. When I was there last, the owners and drivers of the Land Rovers were agitating against the EU’s free trade imperialism, which threatened to create a trade deal that’d rob Moldovan smugglers of revenue.
Inside the EU, the smugglers have the governments restricting trade for them, creating revenue streams instead!
As in Moldova, we might have to bribe a few government officials to get goods, people and pets flowing across borders seamlessly. But I don’t think anyone either side of the border has any incentive whatsoever to turn snitch. What’s the point of restricting trade?
If the EU insists on building a wall on the Northern Ireland border to stop the smuggling, paid for by the Mexicans, then we’ll just tunnel underneath it. Hence the name Derrylin Tunnelling Company.
Tunnelling the Derrylin Wall would also avoid another one of Varadkar’s key concerns by using up minimal airspace: “You cannot have your cake and eat it. You can’t take back your waters and then expect to use other people’s sky.”
I wonder what Varadkar would think if Britain didn’t just prevent fishing in British waters, but stopped all boats heading for Ireland too…
Varadkar’s fears for delays in the port of Rotterdam, which he also mentioned, are overstated. Ports love nothing more than imposing the higher costs of doing business on their customers. It’s their business model. The only thing stopping them from passing on the costs of borders will be smugglers like me, undercutting them.
What about the political problems of Ireland? There could be more Troubles in Derrylin like in the 70s and 80s if the border goes hard.
I don’t understand this problem, but smuggling is the obvious solution. Economic incentives and trade tend to foster peace between people, even when their governments are going at it. Just take the Israeli Palestine conflict.
While some Palestinians throw rocks at the Israelis shooting at them, their cousins work as labourers building Israeli houses on occupied land. Money gets at the root of all evil, chops it up and makes an Irish stew.
For now, I’m still a little sceptical of a hard Brexit ever happening. Smuggling is unlikely to prove more profitable than duty free shopping.
But there is one simple warning sign to look out for if you’re worried about a hard Brexit. And an easy way to profit if it does happen.
If you had seen John F Kennedy’s Press Secretary Pierre Salinger buying 1,200 Petit Upmann Cuban cigars on the eve the Cuban blockade was announced, you might’ve known something was up. And you could’ve made an absolute killing on the black market by mopping up any inventory he left behind.
So if you see Michel Barnier shopping for Glenfiddich, see Theresa May’s bodyguards scrunching their noses at a cheesy smell that seems to follow her around Westminster, or see Leo Varadkar investing in property either side of the Northern Irish border, you’ll know something is up. And start buying cheese and wine.
Or perhaps I’ve got it backwards…
The alternative Brexit
Over on Sky, Tory MP and Brexiteer Owen Paterson pointed out that a hard Brexit which left Britain in control of it its trade policy presents an opportunity, not a threat.
Some of us work in export industries that sell goods and services to the EU. If they impose their default tariffs on us, those industries would be hurt.
The EU companies that sell to the UK have similar concerns about Britain’s tariffs on their products.
But why do they expect such tariffs? Why would Britain impose tariffs on EU products where there weren’t any before?
There are plenty of reasons not to. Some of us are exporters, but all of us are consumers. We all benefit from cheap goods coming into the UK. Imposing tariffs make them more expensive. It’s a dumb thing to do that would alienate every British consumer – which is everyone.
Instead, we should allow EU subsidies, that we no longer pay for, to reduce the cost of our French food and wine. Imagine German taxes subsidising your French dinner!
As Paterson pointed out, if the UK were to cut its WTO tariffs, we would open up Britain to trade from around the world, not just from the EU.
By escaping the EU mandated tariffs on products from the US and Australia, UK consumers could see their offerings in supermarkets boom and prices tumble.
Sounds good to me…
The premise of tariffs these days is to maintain protections that are already in place which some businesses have come to rely upon, and to fight trade wars. Neither argument applies to trade with the EU.
We don’t want to start a trade war and no trade war policies are in place with the EU, so no industries rely on them.
All of this makes perfect sense. But politics makes no sense. The EU would never allow such free trade to exist with a former EU member. And so it would allow its own trade war policies to kick in with the UK.
But perhaps that’s just the point. If Britain treated the EU as a free trade partner, with no border controls, then the EU would be left with no argument to stand on for its own policies.
Any trade problems would be the result of EU policies and obsessions – nothing to do with UK policy and nothing that UK policy could do anything about.
Who needs a trade agreement when you can just trade freely?
If the EU does apply its vast tariffs to UK exports, the Derrylin Tunnelling Company pledges to support British industry by smuggling their goods into the EU.
Until next time,
Nick Hubble
Capital & Conflict
Category: Brexit