Thom Hartmann is one of America’s most prominent progressive talk show hosts. His latest book, The Hidden History of the Supreme Court and the Betrayal of America was publisher by Berrett-Koehler recently.
I know that some listeners are in the UK, but most aren’t, and for you in the majority, although you’ve probably heard of Brexit, you mightn’t really be sure why it is such a big and difficult issue. It is a big and difficult issue, but the fact that it is a big and difficult issue makes it difficult to explain.
I’m not going to bore you to death here with all the details, but I have come across one fairly simple example of why it is so difficult. Cows. The reason – or one of the reasons anyway – is cows.
I’ll explain why in a minute, but first some basics. The EU is a huge trading bloc, currently 28 nations, with several more trying to get in, and one trying to get out – the UK. They are separate countries, but for trading purposes they work as one. If your business in one country wants to sell something to a customer in another country, you just put it on the back of a truck and send it to them. No extra paperwork, no taxes.
Tariffs with other countries are the same for all 28. They have to be. It wouldn’t be possible to have one tariff for Chinese goods going to France and another for Chinese goods going to Germany, because then you could just bring it into the one with the lower tariff and send it to the other.
Product standards are the same as well, so that you can make a product or component in one country and put it on the back of a truck and send it to any of the others. It’s been like that for more than 25 years.
Many people in Britain want to leave the EU so that they can set their own tariffs and product standards independently. That would mean that the UK and the EU would have to put up tariff barriers and product standards checks between each other, but that’s what the UK wanted and that’s their right. But it’s causing a lot of unexpected problems, because the people who proposed this didn’t really think that they would win the 2016 referendum, and didn’t really think through any solutions to problems, the big and difficult problems it would cause.
And because they are big and difficult problems, they are difficult to explain to anyone, let alone to understand, which is why people are getting very frustrated with the process. And I’m not going to bore you to death by trying to explain the all, but I’ll give one example. That’s where the cows come in. They are Irish cows.
And everyone likes them. Everyone especially likes the butter and cheese that their milk makes. All that rain and green grass makes it taste good. It’s put in products that are sold all over Europe, even in some beverages that are sold around the world. But one things that the cows don’t know, that you should know.
Ireland is divided. When Ireland became independent about 100 years ago, part of the island remained under British control, as part of the UK. That’s what UK stands for, United Kingdom of Great Britain and Northern Ireland. Some people in Northern Ireland like it that way, others not so much. That’s caused a lot of problems in the past, but one reason why it wasn’t such a problem in recent decades is because of the way that border became invisible. A division that still lets people live, work and trade anywhere they want isn’t that much of a division.
The Republic of Ireland, the much larger independent part is far more economically advanced, and that’s where those premium dairy products come from. They are so popular that their factories have a huge demand for milk, and they buy a lot of it from Northern Ireland. Northern Ireland is happy to have this marked, because it’s quite a poor area, income levels are about half that of the Republic, and the North relies much more heavily on agriculture.
And, like I said, there’s no tariffs, no border checks, no problem, if you want to sell a product like milk or anything else from one EU country to another, which is technically what they are doing, even though most people in Ireland don’t really see it like that.
Then comes Brexit. Because Northern Ireland is legally part of the UK, it’s leaving the EU as well. And so are their cows. That’s a big problem.
The EU doesn’t import milk products. It’s not impossible, but the tariff to import each liter or gallon of milk is about five times bigger than the profit margin for producing that milk, so actually it is impossible, and WTO rules mean that just can’t be changed. That’s bad for the dairy factories in the Republic of Ireland, but it’s a catastrophe for the dairy farmers in Northern Ireland. One-third of all their milk goes to those factories in the Republic.
They really can’t export their milk anywhere else, milk isn’t the sort of product that you can put in shipping containers unprocessed, and Northern Ireland just doesn’t have the industrial base to process it.
I guess they could build it, but building up an industry like that takes years, if not decades. Farmers can’t tell the cows to wait that long to get milked. Farmers can’t even afford to keep feeding their cows if they have nowhere to sell their milk. This bit is not big and difficult to understand, it’s pretty simple. If the UK does what’s called a no-deal Brexit, Northern Ireland farmers would have to shoot one third of the cows immediately.
The thing that is big and difficult to understand, is that almost everything in the European economy is cows. Not cows exactly, but the same idea, just much more complicated. What I mean that no products are made anywhere. Almost everything is made everywhere. Every business, in the last quarter of a century has become intricately intertwined in a web of suppliers and customers right across those 28 countries.
Sure, there are a few businesses in Britain that don’t buy any components or services from other EU countries, and only sell within Britain, but they are a tiny minority. In the UK, almost everyone’s job is, metaphorically, cows. And everything that anyone buys, it’s cows all the way down. And, if trade barriers spring up between the UK and the rest of the EU, all those cows will be lined up and shot.