Why should I invest in your country?

This is a question that government money creation (aka MMT) has to take on board if you are a net deficit country (without using US reserve currency!) such as the UK.

When we import about 40-60% of our food – indeed, the last figure is more relevant in the hungry gap period of April and early spring– just when we are due to leave the EU.

And with an existing almost 7% trade deficit we are, actually playing with fire.

Not that we are not capable of withstanding this – probably, as long as the UK has the Rule of Law, it will survive. But the UK’s reputation for political stability has undoubtedly taken a hit – why would, as recent statistics suggest they do not, foreign investors now want to invest?

In effect we need foreign investors, in either our physical assets or our financial ones, because we need food.

So we need to keep close our food suppliers –  as they are both the most reliable, and indeed the closest and nearest. This effectively is the EU.

And all those fine, shiny new trade agreements will of course be modelled on existing EU trade agreements.

And the EU has, perhaps accidentally, discovered how valuable they are. So that is why they rather wish the UK good luck in renegotiation them.

“Why should I invest in your country?” is a devastatingly important question, when your food depends on it.

The answer to that question – I can see no other – has to be the Rule of Law.

If we do indeed leave the EU with anything that calls this in to doubt we are no longer likely to be functioning as a country.

That is why the Good Friday Agreement, which includes the European Convention on Human Rights, goes to the very basis of Brexit.

It is, in any case, as I understand it, an international treaty.

Not only our Human Rights but potentially our ability to eat, actually depend on the Rule of Law.

When we have way more difficult local challenges, Brexit has engendered unnecessary – but very, very demanding times.

Comments

  1. Sean Danaher -

    The GFA is indeed an international treaty lodged at the UN. The DUP of course were not signatories and have always hated it. There were rumors over the weekend that the UK wanted to reopen the agreement, a complete nonstarter but some kite flying I suspect.

    The UK has other advantages not least the University sector and world class research. It is exceptionally good at the top end. Where it fails is lower down at the FE college level. It’s very poor as compared to say Germany with its Fachhochschule system.

    The rule of law is extraordinarily important and the UK retains an excellent reputation, which I suspect will be badly damaged by a no-deal Brexit.

  2. Peter May -

    Thanks for your confirmation about the GFA.
    Agree very much that our rule of law reputation would be badly damaged by a no-deal Brexit.
    And this is proposed by a CONSERVATIVE government! what irony…

  3. Peter Dawe -

    Question. It is repeatedly stated that the GFA required there to be no border between NI and RI. My understanding is the UK govt has no intention of enforcing a border, But the EU is insisting that RI implements one if there is no agreement.

    Wouldn’t this make the RI the breaker of the agreement, not the UK?

    Honest question

    1. Peter May -

      No I suggest not. In allowing the UK to crash out without an agreement the UK would have, I think, broken the GFA. Legislation says we leave on 29th March but it doesn’t say we leave without any agreement. Therefore in my opinion leaving without any agreement is illegal.
      (WTO regulations require controls).

      1. Sean Danaher -

        Indeed WTO regulations indeed require controls. This was an entirely foreseeable problem from well before the Referendum. There are rumours that in the case of a hard border Ireland will take the UK to the court of arbitration in the Hague for breach of the GFA.

        The assumption in Ireland is that the UK has never taken the border issue seriously because either a) Ireland is a small country and it could be simply bullied into submission or b) make vague waffley comments, kick the can down the road and renege on their promises within a few years.

        Plan a is not working so they are trying plan b. The likelihood of this working is close to zero – there is nearly zero trust of UKGov.

  4. Peter Dawe -

    Neither comment answers my question.

    1. Peter May -

      Why not?!

  5. Peter Dawe -

    Neither answer looks at the RI’s position in it imposing a border

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