Total Pageviews

Wednesday, 4 March 2020

Brexit, trade issues and the coronavirus: 3 strikes out?

In 2016, Mrs. May, the former UK PM, stated that "Brexit means Brexit". Today, some people fear that Brexit means "Singapore-on-Thames" (eg, FTGuardian-2019my March 1 blog). I expect that Brexit will become another example of domestic nationalism and foreign globalism. Moreover, any future change in the UK government will not change this.

China was the first (major) country to introduce this unlikely hybrid of domestic nationalism and foreign globalism. This hybrid can only be successful if (very) few countries adopt it. If the UK and USA move in a similar direction, this hybrid is doomed to fail. The more countries opt for domestic nationalism, the less remaining room for foreign globalism.

The ongoing UK threat of a "no-deal" is - most likely - bluff, if only following these statistics:
"The EU, taken as a whole is the UK’s largest trading partner. In 2018, UK exports to the EU were £291 billion (45% of all UK exports). UK imports from the EU were £357 billion (53% of all UK imports)." (researchbriefings.parliament.uk). Note: bold markings by LO.
Hence, several (less politicized) English media have concluded that the UK needs the EU-27 more than that the EU-27 need the UK (eg, BBC-2018, my 2018 blog).

The closed EU-27 front can perhaps only be explained by their threat assessment. It is in the interest of several global players to break-up the EU following Brexit. Even the 45th US president is one of those players (eg, Guardian-2016Telegraph-2017Globe and Mail-2018Guardian-2019Express-2019Newsweek-2019).

“Brexit, trade issues and now the coronavirus are causing global uncertainty. Uncertainty causes [businesses and consumers] to freeze.” This quote sums up the challenges in the choice for domestic nationalism (+) and foreign globalism (--). Global just-in-time supply chains are now revealing their vulnerabilities (eg, automotiveBig Techpharmaceutics).

Being struck 3 times in a row leaves a lasting impression. Something similar happened to me in 2018. After the 3rd incident, I signed a contract to sell my house the very next day. No more doubts. Global supply chains now face their day of reckoning because these are (very) vulnerable to political risks (eg, Brexit, tradewars) and operational risks (eg, Coronavirus disruption).

"Baseball is almost the only orderly thing in a very unorderly world. If you get three strikes, even the best lawyer in the world can't get you off." A quote by Bill Veeck (1914-1986), an American Major League Baseball franchise owner and promoter.

Follow You Follow Me (1978) - ... and then there were three .... - Genesis


Note: all markings (bolditalicunderlining) by LO unless stated otherwise.

No comments:

Post a comment