Home » Politics » ‘Will be like North Sea oil boom!’ Expert highlights Britain’s unexpected Brexit victory
‘Will be like North Sea oil boom!’ Expert highlights Britain’s unexpected Brexit victory
June 24, 2021
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Eurointelligence Director Wolfgang Munchau said the litmus test to establish the true success of Brexit will be trade flows emerging from Britain’s freedom from EU data laws. Mr Munchau argued the GDPR regulations, imposed by Brussels on EU member states, which the UK could potentially abandon, are the crucial element missed out by anti-Brexit proponents that will prove Brexiteers right.
The EU expert said data trade could bring an economic boost to the UK comparable to the North Sea oil in the 1980s.
He said: “The test of Brexit will come from regulatory divergence.
“Data is probably the single biggest factor – underestimated by the trade specialists because data trade is not an officially recognised category.
“So here is our speculation: if the UK manages to extricate itself from the EU’s overly-burdensome data protection laws, it could reap economic windfalls on a scale of North Sea oil in the 1980s.
“There are many other regulatory issues that will matter too, including for financial services. But we reckon that the data environment is going to be the big one.
“Economists think about trade of physical goods in terms of gravity.
“The closer you are to another country, the more you trade with it.
“The argument against Brexit followed on the same lines: if you destroy your trading relationship with the EU, you will not make up for the losses by trading more with Asia and the Americas.
“But Brexit – like EU membership before – is a long-term decision, so that’s the time horizon over which you need to measure the impact.
“In the long run, data trade will become more important – and data are not subject to gravity.”
The EU and the UK are still locking horns over the Northern Ireland protocol included in the Brexit Withdrawal Agreement.
The UK has applied for an extension to a grace period allowing chilled meats to continue being shipped from Great Britain to Northern Ireland after the end of this month, when the current arrangements are due to expire.
Downing Street said yesterday it had received no reply to its formal request for an extension and that work between the two sides was “ongoing”.
However, Cabinet minister George Eustice signalled talks with Brussels on a protocol grace period for chilled meats were heading in the right direction.
Mr Eustice told LBC Radio: “I think we are getting some positive indications and it’s always our view that it’s better if we can reach agreement with the European Union on these things.
“It didn’t make any sense to simply say that there’s a ban on the sale of sausages to Northern Ireland, we’re still in dialogue with the European Union about some longer-term solutions on the wider issues around export health certificates.
“While those are ongoing, I think it makes sense for them, just for a few more months, to leave the current arrangement we have in place.”
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The protocol keeps Northern Ireland in the single market to avoid a land border but unionists have expressed fears the Protocol is separating the region from the rest of the UK, with it effectively drawing a border down the Irish Sea.
Suppliers in Great Britain are reluctant to export goods into Northern Ireland due to the increase in paperwork post-Brexit while supermarkets have warned of decreasing choice on their shelves as they struggle to get hold of products since the Protocol came into force in January.
The UK has threatened to unilaterally suspend parts of the deal if it continues to cause problems – something that would trigger a retaliation by Brussels.
One of the impacts of the deal is that deliveries of chilled meats – including sausages and burgers – could be effectively banned from crossing the Irish Sea from Great Britain to Northern Ireland at the end of the month if there is no continuation of the grace period.
The EU’s ambassador to the UK said it was “encouraging” London had requested an extension rather than act unilaterally, as it had done previously, in a possible sign that relations were becoming “more constructive” since the divorce.
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Giving evidence to the Lords European Affairs Committee, Joao Vale de Almeida said Brussels was turning its “regulations upside down to try and find a solution” to issues with the implementation of the Protocol.
As a way around the current so-called sausage wars, he argued the UK could temporarily follow EU rules on fresh food products until infrastructure solutions, such as advances in technology, are available to avoid checks in Northern Ireland.
“We made a proposal to the United Kingdom, as you know, to have an encompassing SPS (sanitary and phytosanitary) veterinary agreement that in our calculation will move away 80% of the controls,” Mr Vale de Almeida told peers on Thursday.
“We even said that, in an exceptional way, we are willing to consider this agreement as being a temporary one because we understand on the British side the intention of negotiating and eventually agreeing free trade areas with other countries, that may imply some change in your own sanitary stance.
“What is the advantage of this kind of agreement? It would not only remove the checks at the border but also allow time for the infrastructure that is needed in Northern Ireland to be built.”