No sensible person would pay good money for an option to buy something they are never likely to need.

If a neighbour who owns a clapped-out tractor, say 25 years old, offers you an option to buy it next year at a bargain price, would you pay €100 or even €50 today for the option to buy?

It depends on whether the option is one you might possibly exercise. If you just do not want a clapped-out tractor at any price, why pay for the hassle? The option is worthless if you cannot imagine that you would ever exercise it.

How many people voted Leave so they could eat genetically modified food, or treat animals carelessly?

In its implementation of the chosen ‘hard Brexit’ option, the United Kingdom's government is doing something along those lines – incurring serious cost for an option which it is most unlikely ever to use. When push comes to shove, the United Kingdom is unlikely to exploit its new-found freedom to diverge dramatically from EU product standards, including standards for food products. But a host of form-filling and compliance costs has been, or will be, inflicted on British producers and on importers from other European countries which could have been avoided had there been a willingness to accept the existing European regime.

Who really believes that Britain intends to relax food safety requirements, or animal welfare standards, as it has acquired the freedom to do in refusing to adhere to the EU rules on these matters? How many people voted Leave so they could eat genetically modified food, or treat animals carelessly?

Animal welfare

Whatever else one might feel about the rationality of voters who opted for Brexit, including farmers by a margin of two to one, there is no doubting the sincerity of British public opinion on these issues. The British have been wholehearted supporters of European policy on animal welfare, for example, and their politicians and officials have often been instigators of policy change in Brussels.

In pursuit of ‘sovereignty’, Boris Johnson’s government has declined to go along with the European Union’s current sanitary and phytosanitary (SPS) regime because it would have entailed compliance with interpretation by the European Court of Justice.

Even though these are rules to which the British public appear to have no objection.

Just imagine if the government went along to the House of Commons with a specific proposal to accommodate imports of beef from non-EU countries which permit growth promoting injections into cattle. Aside from the ructions in parliament, retailers would compete to reassure customers that they would keep this stuff off the shelves. As for animal welfare, the sensitivity of the British public on this issue is long established.

Compliance and quality

The UK departed the European Union formally on 31 January 2020, but there have been delays in the everyday consequences for business and consumers. Special arrangements apply to Northern Ireland, but full import controls have yet to be deployed in Britain on inbound trade from Europe and there will be compliance costs with conformity assessment.

Throughout Europe, the CE mark has become familiar as proof of compliance with product standards. The UK plans to introduce a new system called UKCA which will be needed to sell goods in Great Britain, while the CE mark will be required to sell in the EU. There will also be a UKNI mark for Northern Ireland firms selling in Great Britain and firms could have to contend with two, or even three, sets of form-filling obligations, a lesson to come on the reality of non-tariff trade barriers.

The shortage of vets, caused in part by the ending of free labour movement, will add further cost for those trading agricultural products

Phased controls

In March, the government deferred to autumn phases two and three of its Border Operating Model, controls intended to begin in April and July. From 1 October, there will be checks on agri-food and feed documentation, a further tranche of controls on 1 January 2022, and a final stage, covering live animals and plant products, in March. Only then will the full consequences of Brexit, including costly non-tariff barriers even where there are no tariffs, be fully visible. The shortage of vets, caused in part by the ending of free labour movement, will add further cost for those trading agricultural products.

Comment

The UK government chose a ‘hard’ version of Brexit, enabling it to quit the single market, thus escaping oversight from the European Court and the perceived affront to its sovereignty. But that sovereignty will, it would appear, not be exercised in pursuing material departures from European standards in food or in manufacturing.

For manufactures, many of the standards are effectively universal and no medium-sized economy would find it attractive to go it alone. Notwithstanding the free trade agreement negotiated with great fanfare late last year, the UK has departed the EU’s single market, leaving a tangle of cost-increasing non-tariff barriers not all of which have yet hit home. When they do, the price gets paid for an option unlikely to be exercised.