Remaining in the European Union will be better for the Scotch whisky industry, says Ivan Menezes.
The texts started coming in from my wife when I was in Japan. ‘We’re moving to Scotland… or Ireland.' My daughter, who I had always considered a paragon of innocence, was demonstrating a remarkable mastery of Anglo-Saxon demotic with her Instagram posts. Brexit was a reality. My Japanese friends expressed amazement.
The next day, the country’s press contained interviews with industrialists, all of whom were saying they would have to consider whether to close their UK operations and move them to Europe. (Irony alert no.1: included in this were Hitachi and Nissan, both based in Sunderland, which voted Leave).
For light relief, on the flight back, I watched The Revenant. A man mauled, betrayed, left for dead trying to find a path through a new, strange and hostile landscape. No matter where you looked, there was Brexit.
What will happen? The blithe suggestion that we simply become like Norway or Switzerland is unlikely. This would necessitate that Britain would still have to pay into the EU budget and accept freedom of movement. As the Brexit campaign was rooted in the quasi-racist allegation that immigrants were stealing ‘our jobs’, you can imagine what the political repercussions of such a move might be. (Irony alert no.2: Switzerland and Norway have higher per capita levels of immigrants than the rest of the EU).
Keep calm and sail on: meandering the rocky waters post-Brexit has turned into an ironic up-stream battleAll of the EU laws which have become UK laws will have to be unravelled. Treaties will need to be renegotiated. In a perceptive piece in the London Review of Books, Sionaidh Douglas-Scott wrote: ‘Parliament will have to vote in favour of all of this, which cannot be taken for granted. There will be huge gaps in the law, because much EU law is, in the legal jargon, directly effective, which means if the treaties no longer apply, the law no longer applies. So in many important areas…the UK will have to formulate its own replacements very quickly.’
Can Britain even start to disentangle EU law from the British legal system and simultaneously renegotiate every free trade deal? No. It’s accepted that we have insufficient negotiators. The people who told us not to listen to experts now need… experts (that’s irony alert no.3 folks).
As we have been part of the EU for 40 years, we didn’t need a huge number of specialists to work on trade deals. Meanwhile (irony alert no.4), the Government’s brilliant austerity programme has cut departments to the bone so there will be insufficient civil servants to administer all of the revised regulations (nice work Gideon).
What then might this mean for Scotch? The major firms came out for Remain, as did the Scotch Whisky Association (SWA), which has been its diplomatic self since the result was announced. ‘Keep calm and sail on,’ is the message even if we are heading towards the rapids like Hugh Glass in The Revenant.
Remember, it is the EU that has helped to recently ease tariff levels and, in recent times, negotiate trade agreements for Scotch with South Korea, Vietnam and Colombia. There are ongoing negotiations with many others, including India and China. All of that will now be handed to the (non-existent) UK mediators and civil servants.
Nicola Sturgeon could be in a strong political position if she plays her post-Brexit cards right
As a result of Brexit, Scotch could be looking at higher tariffs being imposed across the EU and conceivably will have to renegotiate all others. As a piece in the FT from 22 April underlined, Britain will now have to negotiate with the EU to allow goods (such as Scotch) into Europe tariff-free, (aka the Turkish option). As the article pointed out, while Britain might want this option, there is no guarantee the rest of the EU will agree. It concluded: ‘Via the EU, Britain currently has favourable terms with at least 60 nations. These would have to be revisited.’ All of this could impact negatively on Scotch’s global presence.
What does it mean for Scotland as a whole? The only politician I can see who is emerging from the current chaos with a clear-headed strategy is Nicola Sturgeon, who has everything to gain if she handles the situation carefully. As Douglas-Scott points out: ‘In order for EU law to cease to apply domestically, provisions in the devolution statutes, such as the Scotland Act 1998, will have to be repealed to remove the requirement that these legislatures comply with EU law.
‘But the Sewel Convention states that devolved legislatures must give their consent to the repeal, and Nicola Sturgeon has made clear this will not be forthcoming.’
Could this be a bargaining chip for Sturgeon either to start negotiations to ensure Scotland (and conceivably Northern Ireland) stay in the EU, while England leaves (aka the reverse Greenland option), or to push for a second independence referendum? Perhaps. What is clear is that Brexit has further frayed the ties that bind together what is now laughably called the United Kingdom.
Scotland, it strikes me, by voting remain has already taken a huge stride down the road to full independence, while remaining within the EU. Should another referendum take place, expect the £4bn raised by the whisky industry to play a more prominent role. The ‘Scotland’s oil’ gambit has faltered. ’Scotland’s whisky’ however, has a tempting ring to it.
The Scotch whisky industry voted for Remain in both referendums. It won one. Now that momentum appears to be swinging behind Scottish independence within Europe, the industry needs to reconsider its options – and future.
Most commentators agree that all of this will take time, but that is the very thing we don’t have.
All the while, the roar of the rapids gets louder.
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