The Guardian, Nissan and the WTO

guardian-nissan

 

Aditya Chakrabortty writes this morning on the deal between the May government and Nissan in quite astonishing terms. May has apparently promised to ‘subsidise Nissan’ against the cost of any potential Tariff barriers that will operate after Brexit between the UK and EU.

This amounts to welfare for the corporations, he says. At the same time he writes that the government refuses to say what kind of taxpayers money has been offered to Nissan, proving that in essence he has absolutely no evidence for the assumptions he is making.

But in Guardian land, it is not evidence that is pursued, it is the emotion of the reader channelled against this ‘evil Tory’ government and Brexit. It’s simply bias reinforcement, read the comments section to get a feel for the readership. Why the Guardian is even regarded as a Newspaper I’m not quite sure. Like the Daily Mail, it’s largely a n outlet for partisan outrage.

Chackrabortty hasn’t done his research properly. So here I will attempt to complete that task for him.

If he had bothered to read the WTO Agreement on Subsidies and Countervailing Measures, Chakrabortty would know that his entire article is built on a false premise: That Government can compensate companies or provide state aid in the way he describes to subvert the tariff system. It cannot.

Quite simply, what he infers in his article is absolutely impossible – and as a journalist, he could have done the research (all 5 minutes of it for an educated Google user) that would turn up the Agreement itself, and then read the first page of it, to realise that there was likely to be an issue with his proposition. But when you’re trying to provoke outrage, the facts are not important. Which is exactly what the Guardian and its readership usually accuses the red tops of, twisting facts to suit the story.

The Nissan Deal:

Nobody knows exactly what was discussed between the government and Nissan, but I can at least outline the possibilities here, and the extent of what would be permissible.

Firstly, cash grants and subsidies will not be on offer, and certainly not as compensation for any raised tariffs. At the same time, no tax exemption will be offered either, because that is also classed as illegal state aid (just as it would be inside the EU). There might be some investment in education and training, but of course this can be held to be benefiting an area rather than a company, and might apply to all companies in the nation or area.

The most likely initial offer to Nissan would have been on e of reassurance: An intent to stay within the Single Market if it is possible, but at the very least to retain the regulatory framework for the motor industry that currently exists.

Secondly, there would have been a reassurance over the customs procedures that would be aimed for in the post Brexit environment, in that the current developments on Rules of Origin would be continued and there would be no regulatory divergence. For work done to finished products brought into the UK for the intent of re-export (a starter motor once fitted to a car is still a starter motor), the existing system will apply (Ad Valorem).

What May can also assure Nissan is that her negotiating stance is not going to be a danger to the ‘Just in time’ business model that prevails in motor manufacturing. There isn’t going to be gridlock at the ports, and each shipment isn’t going to be subject to import checks or heavily increased processes. Nothing substantive will change.

Lastly, she could assure Nissan that there would be no difficulty in bringing in skilled workers from the EU. Where there is a necessity for highly trained staff, there will be no additional test for entry and work permits. Free movement of the skilled will simply not be curtailed in any way after Brexit. This was always going to be the case anyway and nobody who campaigned for Leave or Remain could have reasonably thought otherwise.

The UK is good for business

Nissan is in the UK because it offers the right environment for its production base – we have the skilled workforce, the infrastructure, the legal structure and the employment and trade laws that make it a good proposition to remain. That’s not some kind of immoral Thatcherite ‘sweetener’ – it’s just common sense. What Nissan was assuring itself was almost certainly that this would not change that policy is likely to be favourable to retaining the current business environment.

The Guardian should try to return to its roots as a quality newspaper, or it will face the same fate as the Independent.

 

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