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The petroleum industry in Middle Eastern countries has come a long way, and its early history was marked by several hard-earned benchmarks in 1927, the Kirkuk oil field was discovered in Iraq. But it was the 1930s oil discoveries in Bahrain, Saudi Arabia and Kuwait that put the vast part of Arabian lands on the world's petroleum map and brought American oil companies to this strategic region.Abu Naft: Father of PetroleumMajor Frank Holmes (1874-1847), known in the modern Arab history as “Abu Naft” (Father of Oil), a British-New Zealander gold miner, an army officer, and oil entrepreneur who obtained oil concessions in Saudi Arabia, Kuwait and Bahrain in the 1920s.Major Frank Holmes (1874-1947), a tough and patient British-New Zealander, also has an Arabic title: "Abu Naft," the "Father of Petroleum." Although he served in the British navy during World War I, Holmes was originally a mining engineer who had worked in gold mines around the world. He was convinced that the Middle East possessed rich oil resources and was committed to profit from this oil trade. In 1920, Holmes helped set up the Eastern and General Syndicate in London to develop oil ventures in the Middle East. Years later, when he was asked how he, a non-geologist, could be so confident of the Middle East's oil riches while some eminent geologists had voted against such ventures, Holmes pointed to his nose and said, "This was my geologist!"In 1922, Holmes went to Arabia to negotiate an oil concession with Sultan Abdul Aziz Ibn Saud (1880-1953) who then ruled the eastern parts of the Arabian Peninsula. At that time, the British exerted a dominant influence in Middle Eastern affairs, and Ibn Saud received funds from the British High Commissionaire Sir Percy Cox (1864-1937) to side with the British against the Ottoman Turks. Incidentally, in 1922, Cox was also meeting with Ibn Saud to discuss his kingdom's borders with Kuwait which was resolved by the formation of a Neutral Zone between the two countries. Cox was alarmed by Holmes' presence in Arabia and, hoping that the Anglo-Persian Oil Company (later British Petroleum) would gain an oil concession in Arabia, discouraged both Holmes and Ibn Saud from signing any oil deal. As it happened, an American- Lebanese Ameen Rihani (1876-1940), was also Ibn Saud's guest and was following the events with interest. Rihani, as later discussed in his book Ibn Saoud of Arabia (1928), resented Cox's colonialist attitude and recommended Holmes' deal to the Sultan.In 1923, Ibn Saud awarded a concession to Holmes to explore for oil in the eastern Al-Hasa region in return for a rental payment of £2,500 a year. The Eastern and General Syndicate thus began its ill-equipped exploration in a very remote region. They hired a Swiss geologist Arnold Albert Heim (1882-1965) who visited Arabia in 1924, and two years later, submitted a report to the effect that drilling in the region would be "pure gamble." In 1927, Holmes silently halted the company's activities in Al-Hasa and discontinued paying the annual rent without formally canceling the agreement. There was no rush: The Anglo-Persian Company had also come to the same negative conclusion that there was no oil in Arabia, and this would later cost them dearly.It Began in BahrainHolmes had moved to the small island of Bahrain (665 square km in size) in the Persian Gulf. Back in 1908, Guy E. Pilgrim of the Geological Survey of (British) India had reported on the stratigraphy and oil seepages of the island, but Sheikh Hamad al-Khalifa (1874-1942) of Bahrain was more interested in water. Holmes drilled artesian water wells in Bahrain; in return, the Sheikh awarded an oil concession to the Eastern and General Syndicate in 1925. But the Syndicate was then in financial trouble. Holmes went to London to raise funds and even offered the concession to the Anglo-Persian and Shell, but no company was willing to listen to him, and as one English businessman later recalled, "People ran when they saw Holmes coming."Equipped with an attractive geological report and oil-saturated rock samples from Bahrain, Holmes went to the U.S. in search of the "big New York Sheikhs." Only one company, the Gulf Oil Corporation, was interested in the deal; and they first dispatched a geologist, Ralph Rhoades, to confirm the geological report. Rhoades recommended drilling immediately. In 1927, The Gulf Oil accepted to purchase Holmes' concession and appointed him as their manager in Bahrain.But soon troubles emerged. Following the oil discovery in Iraq (Mesopotamia, then part of the Ottoman Empire) in 1927, the Turkish (later Iraq) Petroleum Company was restructured as a consortium of several companies including the Anglo-Persian, Royal Dutch-Shell, the French Oil Company, the American group, and "Mr. Five Percent" Calouste Gulbenkian (1869-1955) - an Armenian-Turkish-British businessman who had brought all these companies together. During a meeting in 1928, Gulbenkian drew a red line on a map of the Middle East showing the boundaries of the former Ottoman Empire, and according to this Red Line Agreement, no member of the Iraq Petroleum consortium would operate independently within the thus defined territory. The Gulf Oil was a signatory to the Red Line agreement, and Bahrain was included in that territory. The Iraq Petroleum consortium was not interested in any venture in Bahrain and did not allow the Gulf Oil to act on its own, either. Therefore, the Gulf Oil sold its Bahrain concession for $50,000 to the Standard Oil of California (Socal) which, in 1929, established a Canadian subsidiary, the Bahrain Petroleum Company (Bapco), to run their operations in Bahrain with Holmes still as their man in the field. Bapco, with the help of U.S. Secretary of State, obtained the British government's non-objection to their exploration work in Bahrain.In October 1931, Socal/Bapco drilled a well on an anticline structure, called Jabal Dukhan, "Mountain of Smoke" because of a nearby seepage, near the town of Awali. On June 1, 1932 the well struck light crude (38 degrees API gravity flowing at 9,600 barrels a day) in a limestone reservoir of Cretaceous age (Wasia Group) at depths of 600-750 meters.In 1934, Bahrain produced 39,000 tons (285,000 barrels) of oil and began its export. Two years later, a refinery with a capacity of 10,000 barrels per day was built on the island. Bahrain's original concession gained its government 3.5 rupees (14%) per ton of produced oil, but this share increased to 10 rupees (19%) in 1950. Two years later, a 50-50 profit-sharing agreement was signed, and Bahrain was then producing 11 million barrels annually (30,000 bopd).The Anglo-Persian's chairman, Sir John Cadman (1877-1941), was furious to see that Bahrain had slipped out of his hands, even though this island sheikhdom was under British Protectorate. His geologists had made a serious mistake: They had only considered the Oligocene-Miocene reservoir rocks, similar to the 1908 Persian oil field, which were outcropped in Bahrain. But the Bahrain pay zones were from older sediments.One Socal geologist, Fred A. Davies, had a visionary idea: Reservoirs similar to those of Bahrain also lay underground in the Arabian Peninsula, only 32 kilometers to the east. He persuaded his home office in San Francisco to explore onshore ArabiaHarry St. John (“Jack”) Bridger Philby (1885-1960), also known as Sheikh Abdullah (after he became a Moslem), a British colonial officer, born in Sri Lanka and served in India, and later became an eminent geographic explorer, writer and businessman in the Arabian Peninsula. He helped the American company Socal to obtain an important oil concession in Saudi Arabia in 1933. Author of many books on Arab lands and history, he died in Beirut.|Enter Jack PhilbyIn 1932, having conquered, unified and named the country of Saudi Arabia, Ibn Saud enthroned as the King with Riyadh as his capital. But his state faced huge financial problems. The Western world was in the Great Economic Depression, and Arabia's traditional revenue from pilgrims to Mecca was dwindling. Ibn Saud had a British friend, Harry St. John Bridger "Jack" Philby (1885-1960), who, in 1925, had given up his career at the Indian Civil Service to pursue business and geographic exploration in Arabia. He detested British colonialism in the Middle East, and out of his fondness for Arab culture, Philby had even become a Muslim - given the name of Abdullah by the Saudi king himself.In his posthumous book The Arabian Oil Ventures (1964), Philby recalls that in the autumn of 1930 during a car drive in the desert, he persuaded Ibn Saud to utilize his country's hidden oil resources. The following year, Philby introduced an American millionaire and philanthropist, Charles R. Crane, to the King in the town of Jeddah where Philby had an automobile trading company. Crane, an expert in irrigation, had made a successful business of planting Egyptian dates in California. Ibn Saud was interested in finding artesian water in his country. Out of his gratitude to the King's hospitality, Crane commissioned his engineer in Yemen, Karl Twitchell, to investigate water prospects in Saudi Arabia. Twitchell's 1932 report had no good news for water prospects, but it pointed out the importance of oil seeps in the Al-Hasa region. Indeed, Twitchell returned to the U.S. with Ibn Saud's blessing to invite American oil companies to invest in Arabian oil exploration.After the 1932 Bahrain discovery, Socal was sending messages to Holmes in Bahrain to set up meetings with the Saudi King for an oil concession. But knowing that he was a (un)wanted man in Saudi Arabia because of his failed 1923 concession Holmes was reluctant to get involved in Saudi Arabia once again.Meanwhile, Francis Loomis, a former United State Department's diplomat and Socal's advisor on foreign relations, had sent a letter to Philby in 1932 to seek his help to obtain an oil concession in Saudi Arabia. During a luncheon party in Washington D.C. in late 1932, Loomis happened to meet Twitchell. Shortly later, Socal's manager M.E. Lombardi hired Twitchell as an advisor and dispatched him along with their lawyer Lloyd Hamilton to the Saudi kingdom. The two men and their wives arrived in Jeddah on a ship on February 20, 1933. They contacted Philby and secretly put him on Socal's payroll as an advisor. Philby, nonetheless, wanted to obtain a better bargain for his friend the King, and therefore, urged the Anglo-Persian and the Iraqi Petroleum (which were both under British influence) to send a negotiator for an oil bid. The British sent Stephen Hemsley Longrigg (later author of Oil in the Middle East). Longrigg, as Philby soon found out, was authorized to pay no more than £6,000 for the concession. The American team was willing to pay more. After long negotiations, it was agreed that Socal would pay £35,000 in gold upfront (including the first year's rent of £5,000), a second loan of £20,000 after eighteen months, rental fee of £5,000 a year, and a royalty of 4 shillings per ton of oil produced. The concession, valid for 60 years, was signed on May 29, 1933 by L.N. Hamilton and Saudi finance minister Abdullah al-Sulaiman al-Hamdan who had been advised by King Ibn Saud: "Put your trust in god and sign." On August 25, 1933 Karl Twitchell and Abdullah Sulaiman counted, one by one, 35,000 gold sovereigns Socal officials had purchased from London's black market and had shipped to Jeddah. (In 1951, Twitchell published his informative book on Saudi Arabia.)Max Steineke, an American petroleum geologist who led the discovery of the Dammam oil field in Saudi Arabia in 1938. Socal’s Chief Geologist in Saudi Arabia from 1934-1946, he was awarded the prestigious Sidney Powers Memorial Medal by the American Association of Petroleum Geologists in 1951, only a year before his death. Steineke was not only an excellent geologist but also a friendly and popular person with Arabs.Dammam No. 7In the autumn of 1933, Socal founded the California Arabian Standard Oil Company as its subsidiary to operate in Saudi Arabia, and sent its geologists, R.P. "Bert" Miller, S.B. "Krug" Henry, J.W. "Soak" Hoover, Thomas Koch, Art Brown, and Hugh Burchfield to the country. Escorted by Saudi soldiers and guides, these geologists began reconnaissance mapping of the eastern Arabia. They identified the Dammam Dome, about 8 kilometers from the port village of Dammam. This anticline structure was locally called Jabal ("Hill") Dhahran. In the spring of 1934, the company sent a Fairchild 71 airplane for aerial mapping, and its pilot, Dick Kerr, was a geologist himself. In the fall of 1934, a very able field geologist Max Steineke joined the geologists' team in Saudi Arabia, becoming the chief geologist two years later (he held this position until 1946).After months of mapping "jabals" (rocky hillocks) in the concession area, the geologists decided to drill their first well, Dammam No. 1, on the western slope of Jabal Dhaharan. The operation was led by Guy S. Williams (driller) and Floyd W. Ohliger (petroleum engineer). The well was spudded in on April 30, 1935; by December it had penetrated the Eocene "Bahrain zone" with only minor shows of gas and oil; the drilling thus stopped at a depth of 976 m.Dammam No. 2 was drilled in February 1936 but struck salty water only. Number 3 vomited highly viscous sulfur-rich oil (good enough for covering the desert roads the men were building). Number 4 (707 m deep) and No. 5 (630 m deep) were both dry. Number 6 was never drilled because Max Steineke had found a better site, Dammam No. 7, for drilling. Number 7 was spudded in on December 7, 1936, and Steineke was optimistic and confident about this well.In the spring of 1937, while the drilling was going on, the first American wives and children came to Dhahran and air-conditioned cottages were setup for the American families. On December 31, 1937 Dammam No. 7 blew out, and a jet of gas sent the rig high in the air. This was a bad news on a New Year's Day for the company officials back home, but Steineke pressed on: "Dig a bit deeper." On March 4, 1938 (nearly three years after Dammam No. 1), 1,585 barrels of oil - the black gold that Socal and the Saudis were waiting for so long - began to flow out of the well. The oil flow increased to 3,690 barrels three days later, and the well was completed at 1441 m deep at the Upper Jurassic Arab zone. This 130-m thick carbonate reservoir (with a porosity of 20-25%) yielded good quality oil - having 34-35 degrees API gravity and 1.5% sulfur content.In 1939, a 63- km pipeline was laid from the Dammam field to the port of Ras Tanura. (A year later, a small 3000-barrel refinery was also built at Ras Tanura). On May 1, 1939 King Abdul Aziz Ibn Saud made a grand visit to the Socal tankerD.G. Scofield at Ras Tanura that was to carry the first oil cargo from Ras Tanura. By the end of 1939, Saudi's oil export amounted to 521,000 tons (3.9 million barrels; i.e. 10,700bopd).On May 31, 1939 Socal's representative William J. Lenahan succeeded in signing a supplement agreement with the King, extending the concession from 830 thousand square km. to 1.14 million square km; in return, £140,000 (in gold) was paid to the Saudi government, the rental fee increased to £25,000 a year, £100,000 was promised if new oil field discovery were made, and per ton royalty remained the same as before. (These terms underwent further changes in later decades.)In 1936, the Texaco Company (Texaco) bought 50% interest in the California Arabian Standard Oil Company. In 1944, the company's name changed to Aramco (Arabian American Oil Company). In 1948, Standard Oil of New Jersey and Socony-Vacuuum (both now ExxonMobil) bought interests in Aramco. In 1980, the Saudi government completed the phased purchase of Aramco's assets (25% in 1973 and 60% in 1974), and thus began a new life for "Saudi Aramco" (Saudi Arabian Oil Company).In 1982 (after 45 years), Dammam No. 7 was shut in, having produced 32 million barrels of oil (averaging about 2000 bopd).Meanwhile in KuwaitIn 1921, Sheikh Ahmad al-Jaber al-Sabah (1885-1950) became the Amir of Kuwait (an Arabic word meaning "fortress close to water"). Pearl export traditionally supplied Kuwait's major revenue, but by 1930 a Japanese businessman, Kokichi Mikimoto, had established a successful trade of artificially-cultured cheap pearl. Kuwait was thus in dire need of money, and oil, especially after the Bahrain discovery, offered a lucrative opportunity.Kuwait lay outside the Red Line Agreement; therefore, the Gulf Oil was free to operate in that country. Moreover, the Gulf Oil was supported by a powerful American diplomat and oilman - the 77-year-old Andrew Mellon who was then the U.S. ambassador in London and viewed himself as the godfather of the Gulf Oil (for one thing, Gulf's chairman William Mellon was his nephew). Nevertheless, the British still had a considerable influence over Kuwait and did not wish to loose Kuwait's oil even though there was less demand for oil during the Great Depression of the 1930s. From 1930-32, the Gulf Oil and the Anglo-Persian approached the Amir of Kuwait independently for an oil concession, and the Sheikh was more than glad to play one side off against another in order to secure a better bargain. But once Cadman realized that the Amir was more inclined to make a deal with the Gulf Oil's representative Major Frank Holmes, he was convinced that both companies should unite as one buyer and offer one deal.In 1933, Holmes and the Anglo-Persian representative Archibald Chisholm agreed to establish a 50-50 joint venture in London called the Kuwait Oil Company. On December 23, 1934 Sheikh Ahmad signed an oil concession (covering the entire 15,800 square km of Kuwait for 75 years) to this new company and appointed Major Holmes as his representative in London. The Sheikh received in Indian rupees an equivalent of £35,700 upfront (Rs. 47,000), an annual rental fee of £7,150 (Rs. 95,000), and the royalty of three rupees per ton of oil produced with an annual minimum of Rs. 250,000. This was, of course, far less than what the Sheikh had hoped for. (In 1950, Kuwait entered into a 50-50 profit sharing agreement, and in the 1970s, the Kuwait Oil Company was nationalized)In 1935, geologic exploration started in Kuwait, and on May 31, 1936, the first well was spudded in at Bahrah, but even at depth of 2,442 m the well proved to be dry. The company then decided to conduct a seismic survey of Kuwait. A second location for drilling was selected near a famous bitumen seep in the Burgan area, about 42 kilometers south of Kuwait City. Drilling began on October 16, 1937, and sediments below 1000 m had oil shows. On February 23, 1938, at a depth of 1120 m, the drill hit a high-pressure sand zone (Middle Cretaceous Burgan Formation) from which oil and gas erupted to the surface (oil flow rose to 4,343 barrels a day and had 32.5 degrees of API gravity). The well was controlled with great difficulty and completed on May 14th. Subsequent drills proved the Burgan anticline structure to be one of the largest oil fields in the Middle East.A New EraAlthough oil exploration and production in Arabian lands were halted during World War II to avoid German occupation of the oil fields, the industry grew rapidly after World War II. The 1938 oil discoveries in Saudi Arabia and Kuwait (now 70 years ago) with the involvement of American oil companies opened a new era in the economic and geopolitical history of the Middle East; these stories also illustrate a dramatic chapter in the history of petroleum industry.

The UK can leave the EU with a no deal brexit but it will damage the UK economy and make 95% of the people of the UK poorer for at least nine years as the UK will need to restructure the economic infrastructure. The UK leaving the EU with a No deal Brexit and trading on World Trade Organisation rules with the consequences of a no deal Brexit now that Europe’s economy (& the world's economy) is in turmoil during the pandemic is that when the UK reverts to World Trade Organisation rules then Australia, New Zealand, and Canada will try to achieve free trade with the UK on their terms meaning that the trade would be conducted in US Dollars($), Australian Dollars, New Zealand Dollars, and Canadian Dollars, but not GB pounds(£).List of countries by external debt - Wikipedia (List of countries by external debt - Wikipedia)If there is a no deal Brexit then there will be a run on the GB pound(£) as the UK's external debt is US $ 8 Trillion. The exchange rate could end up at GB £5 to US $1.If the UK leaves the EU with a No deal Brexit it means that the UK is not a member of the EU Customs Union and the UK will not have full and free access to the EU Single Market. That means if the UK is not a member of the EU Customs Union then it loses its EU Financial Passport. The EU Financial Passport allows the UK the freedom to exports intangible service products to any of the EU countries. Once this EU Financial Passport is taken away from the UK the UK intangible service products exports will be automatically blocked and thus the UK will lose £200 Billion of taxable income a year.When that happens the non-EU countries will also block all UK’s intangible service products exports which amounts to £300 Billion because now which Margaret Thatcher used to boast about UK having access to the EU Single Market but has now gone kapput that the UK will not have full free access to the EU Single Market so there will be capital flight from the City of London of trillions of US Dollars($) and Euros leaving the of foreign investment so the Moody’s Credit Rating of the UK will go from AAA to DDD and this would cause a run on the GB pound(£) of £5 to US $1.Under World Trade Organisation(WTO) rules the UK cannot stop the importation of chlorinated chicken from the USA, hormone injected lamb from New Zealand, hormone injected beef from Australia, and cheap tobacco from Africa. The maximum tariffs the UK can charge on agricultural products from fellow WTO members is 6.5%. If the UK did try to stop imports because they are deemed to below the UK’s standards then all the WTO member countries will impose sanctions on UK goods with the support of the WTO which will cause a run on the GB pound(£).Brexit Prompts 7,500 City Jobs, $1.6 Trillion to Leave U.K.Supermarkets are not compelled to take chlorinated chicken from the USA exporters but they will sell them because there will be a demand for them. Chlorinated chicken from the USA can sell for 50% cheaper then UK chicken, Hormone injected lamb from New Zealand sells for 75% less then UK lamb, hormone injected beef from Australia sells 50% then UK beef. You cannot stop people in the UK to buy kangeroo steak from the supermarket shelves.The Americans will say genetically modified food and chlorinated chicken hasn’t done us any harm! You try to restrict these imports you will bankrupt the UK economy!If there is a No deal Brexit then there will be a run on the GB pound(£) as the UK's external debt is US $ 8 Trillion. The exchange rate could end up at GB £5 to US $1.The Americans will say genetically modified food and chlorinated chicken hasn’t done us any harm! You try to restrict these imports you will bankrupt the UK economy!Cancer warning over US pork imports that will flood Britain (Cancer warning over US pork imports that will flood Britain)The US Dollar($) is a universal currency and not the GB pound(£). 95% of international trade is conducted in US Dollars($). Brent Crude oil is priced and paid in US Dollars($). So if a oil importer in the UK wants to import crude oil he has to exchange GB pounds(£) for US Dollars($) to then buy crude oil. But each time he exchanges GB pounds(£) for US Dollars($) the GB pound(£) depreciates in value against the US Dollar($) and if it US Dollars($) are not exchanged for GB pounds(£) there will be a run on the GB pound(£).In order to buy imported goods it has to be paid in US Dollar($) as the GB pound(£) is not a universal currency. So you can buy US Dollar($) in GB pound(£) at $1.30 for £1 one week and $1.25 for £1 in another week. If the UK leaves the EU with a No deal Brexit there will be a run on the GB pound(£) as UK wholesalers buying imported products by buying US Dollar($) in exchange for GB pound(£) but it is not reciprocated so in less than 3 months the exchange rate will be £5 for US $1.If you had done your research all 28 EU countries are members of WTO. All 28 EU countries are in the EU Customs Union which runs independently and have completely separate rules to that of the WTO. The EU do not allow imports of genetically modified foods. The EU do not allow imports of hormone injected meats. The EU can set any quotas and any tariffs on non-EU countries. The WTO countries can only set a maximum tariff of 6.5% on agricultural products to fellow WTO member countries.If the UK leaves the EU with a No deal Brexit then the UK will automatically join the World Trading Organisation(WTO) by default so the USA can export chlorinated chicken to the UK 50% cheaper than UK chicken. Australia can export hormone injected beef to the UK 50% cheaper than UK beef. New Zealand can export hormone injected lamb to the UK 75% cheaper than UK lamb and the UK cannot block these exports!If there is a No deal Brexit the World Trade Organisation(WTO) comes into force. The UK will then have to give a confidence and concession schedule whereby they list the amount of goods they are prepared to import per year. Then the rest of the members of WTO which about 164 countries will be given 3 months to object. But 20 countries which includes USA, Canada, Brazil, Russia, Australia, Argentina, and New Zealand within one hour will put their objections to the UK’s confidence and concession schedule. Then they have to await for the WTO Adjudication for four years. In the meantime they will flood the UK’s economy with cheap food and cars which is mainly paid in US Dollars($), Euros, Chinese Yuan, Japanese Yen, and gold from the UK’s Treasury reserves which will start to deplete. This will destroy both the the UK’s farming and car industry.Under International Law intangible service products have no legal protection so the UK will be losing on a yearly basis taxable income of US $700 Billion of hard currency of US Dollars($).If the UK leaves the EU with a No deal Brexit the UK’s Financial industry will relocate to either Paris or Frankfurt as their Moody’s Credit rating is AAA while the UK’s will be BBB. The UK’s Service Industry will relocate to Dublin.60% of the components of UK’s manufactured products are from outside th UK and has to be paid for in US Dollars($).Lloyds Insurance of London will also relocate maybe to New York Wall Street. To insure huge amounts of money for those NASA equipment Lloyds of London needs to have trillions of US Dollar($) reserves that would take flight from the City of London if the UK leaves the EU with a No deal Brexit.The UK can only produce 60% of its foodstuff to feed the UK’s population and has to import the remaining 30% of its foodstuff from the EU and 10% from the rest of the world and it has to be paid in Euros and US Dollars($).The WTO Option is an approach to Brexit much favoured by some groupings. It is an approach where the UK leaves the EU without having negotiated any trade agreements with the EU, either within the framework of Article 50 negotiations, or on the margins. Instead, it relies entirely on multilateral WTO agreements covering trade-related matters.The general thrust of the WTO Option argument is that: "Were the UK to leave the EU, it would continue to have access to the EU's markets, as World Trade Organisation rules prevent the EU from imposing unfair, punitive tariffs on UK exports". In reality, the WTO rules only afford very limited protection against discrimination, and then only in respect of tariffs - which are no longer central to trade matters.As the WTO site itself says, "by their very nature RTAs (Regional Trade Agreements — as is the EU) are discriminatory", and, under WTO rules, an amount of discrimination against third countries (and that would include the UK) is permitted. The WTO observes:Modern RTAs, and not exclusively those linking the most developed economies, tend to go far beyond tariff-cutting exercises. They provide for increasingly complex regulations governing intra-trade (e.g. with respect to standards, safeguard provisions, customs administration, etc.) and they often also provide for a preferential regulatory framework for mutual services trade. The most sophisticated RTAs go beyond traditional trade policy mechanisms, to include regional rules on investment, competition, environment and labour.The crunch issue here is the "preferential regulatory framework". Unless goods seeking entrance to the EU Single Market (i.e. British exports) conform to the regulations which comprise the framework, they are not permitted entry. Thus, the assertion that, if the UK left the EU, "it would continue to have access to the EU's markets …", is simply not true. And ,  to spell it out,  if it's not true, it's false.With or without tariff issues being resolved ,  which are actually irrelevant to the access issue , the claim is false. Tariffs do not prevent access to a market. They simply impose a tax on entry. The actual barrier is the regulatory conformity,  what is known generally as a non-tariff barrier (NTB) or, sometimes, as technical barrier to trade (TBT).Nevertheless, it is generally recognised that, in order to access the Single Market, goods must comply with EU rules. Conformity is the way of overcoming the NTB. But what advocates of the WTO option have not realised is that there is more to it than that . Much more. Potential exporters not only have to ensure their goods conform, they must provide evidence of their so doing. This requires putting the goods through a recognised system of what is known as "conformity assessment".We are at this point entering serious nerd territory. If your eyes are beginning to glaze over, all we can say is welcome to the world as it really is. It has taken years of mind-numbing, tedious study to understand this amount of detail, and either you know it, or you don't. If you don't, you are going to make serious mistakes. And that is just what the WTO Option advocates have done. In a moment we’ll see why their mistakes are not so much serious as catastrophic.And, for all that, the fundamentals are quite simple. The point about the Single Market is that border checks have been eliminated. The common rules are monitored by relevant national authorities and there is mutual recognition of standards. Thus, if you so desire, you can load a truck with grommets in Glasgow and ship them all the way to Alexandroupoli on the Turkish border, with just the occasional document check.But the moment we leave the EU, this stops. Your component manufacturer may still comply with exactly the same standards, but if the product requires independent testing , any testing houses and the regulatory agencies are no longer recognised. The consignment has no valid paperwork. And, without it, it must be subject to border checks, visual inspection and physical testing.What that means in practice is that the customs inspector detains your shipment and takes samples to send to an approved testing house (one for the inspector, one for the office pool, one for the stevedores and one for the lab is often the case). Your container inspection is typically about £700 and detention costs about £80 a day for the ten days or so it will take to get your results back. Add the testing fee and you’re paying an extra £2,000 to deliver a container into the EU.Apart from the costs, the delays are highly damaging. Many European industries have highly integrated supply chains, relying on components shipped from multiple countries right across Europe, working to a "just in time" regime. If even a small number of consignments are delayed, the whole system starts to snarl up.Then, as European ports start having to deal with the unexpected burden of thousands of inspections, and a backlog of testing as a huge range of products sit at the ports awaiting results, the system will grind to a halt. It won't just slow down. It will stop. Trucks waiting to cross the Channel at Dover will be backed up the motorway all the way to London.For animal products exported to the EU, the situation is even worse — if that is possible. Products from third countries (which is now the UK) are permitted entry only through Border Inspection Posts (BIPs). Only at these can they be inspected and, if necessary, detained for testing. But, for trade between the UK and EU member states, the capacity of BIP is entirely inadequate. Until more capacity has been provided, trade in these products stops dead — say goodbye to a £9 billion export trade.If the way out of the country becomes blocked, very quickly the return route gets blocked and incoming trade from the EU starts suffering. In the UK, goods from the EU are no longer delivered. Trade slows. Manufacturers which depend on imported components start struggling and then have to close. And while the naysayers talk about losing three million jobs if we leave the EU, we are looking at twice that and more — seven or eight million jobs are at stake.At this point, you might say, “But how can this possibly happen?”The WTO Option advocates will tell you that countries such as China, the United States and Australia all trade with the EU without formal trade agreements, and therefore operate under WTO rules. They don't have these problems so why would the UK? The answer, however, is remarkably simple. These countries don't rely solely on WTO rules.What the WTO Option advocates have done is make a very basic but fatal mistake. They’re so obsessed with tariffs, they haven’t begun to focus on non-tariff barriers. Thus, by and large, they are only looking at trade agreements dealing with tariffs — a sub-set of international agreements which are registered with the WTO. But there are many different types of agreement and many which involve trade, either directly or indirectly, which are not registered with the WTO. These, for our WTO Option advocates, remain under the radar. To them, they are invisible.Yet one of the most important types of trade agreement is the Mutual Recognition Agreement (MRA) on conformity assessment. This gets round the problem of border checks, as the EU will then recognise the paperwork on product testing and conformity certification. Throw in an agreement on Customs cooperation — to ensure that official paperwork and systems mesh — and you are on your way to trouble-free border crossings.China has a Mutual Recognition Agreement on Economic Operators, signed in May 2014, the United States has one on conformity assessment which runs to 81 pages, agreed in 1999. Australia has one on conformity assessment.All of these are outside the remit of the WTO but they are nonetheless trade agreements, and vital ones at that. But look then what the think-tank Global Britain — another WTO Option advocate — is doing. "As an example", it writes, "Australia has no trade agreement with the EU…". It then goes on to cite an EU web page, which actually tells us:The EU and Australia conduct their trade and economic relations under the EU-Australia Partnership Framework of October 2008. This aims, apart from cooperation on the multilateral trade system and trade in services and investment issues, to facilitate trade in industrial products between the EU and Australia by reducing technical barriers, including conformity assessment procedures.What is the EU-Australia Partnership Framework, if not (inter alia) a trade agreement? In the detail, it sets the framework for the all-important MRA on conformity assessment. One MRA runs to 110 pages, with an amendment running to a further 20 pages.There are, in fact, 82 agreements between the EU and Australia, of which 18 are bilateral. There are 65 between the EU and China, of which 13 are bilateral. Between the EU and the United States, there are 135, of which 55 are bilateral. As regards trading agreements, not only is Global Britain incorrect in its assertions, its authors apparently don’t even read their own reports.Such is the importance of agreements such as the MRAs that the UK would have no option but to seek a deal with the EU, for which there is a facility within Article 50. But, the moment it sought such deals, it would no longer be relying exclusively on WTO rules. It would now be seeking bilateral agreements along the lines of the so-called "Swiss option". This comes with as many problems as the WTO Option, if not more, not least the length of time it would take to agree a Swiss-type arrangement (10 years or more?)…And that's assuming the EU wants another complex Swiss-type arrangement, which it doesn't.One can say, unequivocally, that the UK could not survive as a trading nation by relying on the WTO Option. It would be an unmitigated disaster, and no responsible government should allow it. The option should be rejected.What are you going to say to the car owners that they have to pay £5 per litre of petrol if the UK leaves the EU with a No deal Brexit?What are you going to say to the 6 million to 8 million workers that they are going too be made unemployed if the UK leaves the EU with a No deal Brexit?Threat of 4 Million U.K. Unemployed Piles Pressure on Sunak (Threat of 4 Million U.K. Unemployed Piles Pressure on Sunak)Manufacturers warn of UK ‘jobs bloodbath’ (Manufacturers warn of UK ‘jobs bloodbath’)Brexit vote hits leave areas the hardest (Brexit vote hits leave areas the hardest)What are you going to say to the shoppers that will find their weekly shopping prices increase by a 100% if the UK leaves the EU with a No deal Brexit?What are you going to say to the UK Pensioners who in real term see their pension shrink by 75% if the UK leaves the EU with a No deal Brexit?Michel Barnier schools Mark Francois on the Brexit deal he backed in the House of CommonsWhat are you going to say to the UK Wholesalers who to pay GB £5 for US $1 if the UK leaves the EU with a No deal Brexit as the US Dollar($) is the universal currency and is used in 95% of international trade transaction?How is the UK going to recover US $700 Billion of taxable income in valuable US Dollars($) a year from the intangible service product exports if the UK leaves the EU with a No deal Brexit?

Anything done without “checks” or “restrictions” would be problematic. However no-one is advocating for CANZUK to be implemented without “checks” or “restrictions”. CANZUK Freedom of Movement would be based on the Trans-Tasman Travel Arrangement already existing between Australia and New Zealand. Under this more pragmatic travel arrangement, strict criminal checks are carried out and those who show up with red flags may be declined authorisation for travel. There is also limitations when it comes to social security claimants for starters, one must reside in the country for up to 2 years before they are eligible to claim. These two things may sound familiar to those in the UK, as it is almost the exact “concessions” David Cameron tried and failed to negotiate with the EU on the run up to the EU referendum. These concessions got completely rejected by the European Commission and the British people hence voted for Brexit.Socio-Economic CompatibilityThe four CANZUK countries have a very similar socio-economic level. Here is population, GDP and GDP/capita. As can be seen GDP/Capita is roughly on parity meaning there are reciprocal opportunities in the four CANZUK countries.Population wise the UK is about the sum of Canada and Australia. New Zealand is the smallest country. However New Zealand already has the Trans-Tasman agreement with Australia which it is mainly satisfied with. It also has a substantially lower population density so is unlikely to feel the same infrastructure issues the United Kingdom experienced, with the South East of England in particular having a high population density.All four countries share a common culture and common language. As a consequence of this, it is very unlikely for an expat to feel foreign in another CANZUK country or for them to be regarded as foreign in that CANZUK country. All four countries have a similar low level of crime rate.This is unlike the Economic circumstance of the Ascension EU countries with some of these countries having a vastly lower GDP/capita than the UK upon joining the EU, a different language which few British had any previous exposure to and a higher crime rate that collectively led to effectively a “one-way” employment opportunities. The socio-economic circumstance have vastly increased in most of these countries in recent years however.British expats to the EU, USA and CANZIf we use British emigration as a metric of British sentiment towards other countries and normalise by their population.The EU26 (population ~500 million) host about 1/4 of British expats compared to CANZ (population ~ 70 million) who host about 1/3 of British expats and the USA (population 330 million) who host about 1/7 of British expats. Normalising for population, Brits favour the CANZ countries who have a shared language, similar political system and similar culture about 10 fold over the EU26 who have a different language, different political systems and a substantially different but not totally dis-similar culture. In the EU26 Spain accounts for almost half of British Expats and most of the rest are in Western Europe with the exception of Cyprus which is a Commonwealth country. CANZ countries are also preferred over the USA again approximately by 10 fold. The USA has a shared language, a similar political system and culture but both of these substantially deviate when compared to the CANZUK countries. Common examples referenced are the USA’s approach in policing and in healthcare provision.It is very unlikely that CANZUK expats will ghettoise communities and workplaces in other CANZUK nations, where locals feel excluded. Although EU expats generally integrate well in the UK, particular those with high skilled jobs. Segregation has happened in some factories and communities due to a large number of people moving on mass from the same country and defaulting to their native language which Brits don’t understand. This is also true when Brits emigrate to the EU for example in Spanish coastal areas although perhaps there has been less resentment to it as a lot of Europeans can understand the English language. This one-way language barrier has also led to Brits perhaps feeling more foreign in an EU country than an EU citizen feels in the UK. A bit paradoxical but this in addition to the economic situation has led to more emigration from the EU to UK than vice versa.Public SupportIn January-March 2018 CANZUK International Polled the CANZUK public sample size 13688 to ask whether or not they supported CANZUK Freedom of Movement they found an approximate 2/3 support across all regions that they polled. Latest Poll Shows Significant Public Support For CANZUK Free Movement. The associated CANZUK Freedom of Movement Petition has gathered in excess of 270,000 signatures.Political Compatibility and Natural AlignmentAs well as the common spoke language, the four CANZUK countries speak the same political language and all four have a very similar political structure based on Common Law. The CANZUK countries have a similar respect for the rule of law, democracy, human rights and already share a Monarch. The Australian Lowy Poll for instance showed that the United Kingdom was the Global Power that Australians trusted the most, with 90 % of Australians trusting the United Kingdom and 45 % of them trusting the United Kingdom a great deal. The United States lagged far behind with only 40 % trusting the United States and 15 % of them trusting the United States a great deal. This same poll found that the three countries the Australians rank most warmly in the world are the 3 other CANZUK countries and they rank these 3 countries substantially higher than any other country. Australian Lowy Institute Poll.Following Brexit, the two most popular policies are named and based on policies of two of the other CANZUK countries, these are “the Australian Points Based Immigration System” and the “Canada Style Trade Deal”. This means the United Kingdom will closely align to Australian Border Security, and closely align with Canada when it comes to balancing trade and sovereignty when it comes to the EU.To highlight the natural alignment of the UK with the other CANZUK countries. Australia recently followed a dispute between the UK and the EU over warning labels for example on cigarette packaging. The Australian government simply said to the UK, why bother with this dispute, you might as well just use all of our labels, they are in the same language and our standards are so closely aligned, you can even use our designs free of charge BBC News Brexit: How 'no deal' could change tobacco warnings.The EU is seen by the UK as too bureaucratic and this is often seen to slow down innovation and artificially ramp the cost of consumer prices. Last year Australia had carried out a series of field tests for safety of silicone products and this was reinforced by Canadian field tests which drew the same conclusion PPI Silicones Paper 2018. While most in the United Kingdom would trust the findings of the other 2 CANZUK countries, the tests were rejected by the bureaucratic EU. The paper concludes:We conclude that the European approach is more likely to slow down innovation in materials and should not be adopted by non-EU countries. The hazard-based regime in Europe creates not just a regulatory problem, but an economic one, because innovation in materials has historically been an important source of economic and job growth, and is likely to be so in the future – if the regulators allow it. The question now remains: Will other nations adopt the risk-based approach used in Canada and Australia or the precautionary approach employed in Europe? Based on our analysis, the Canadian and Australian approach strikes the best balance of protecting human health and the environment, while fostering product innovation and economic growth.As a consequence of the high level of trust politically between the CANZUK countries as well as their natural alignment there is no need for the formation of an artificial parliament to compromise for the marginal political differences and marginal differences in standards between the four countries. Compare this to the formation of the European Union where a European Parliament which was required to stitch together 28 countries with vastly differing political systems and political outlook.The media of the four countries in many ways already treats the four countries as they are one. Australian media for instance reports on political issues on New Zealand and the United Kingdom as if both are just additional states of Australia. The media is also critical of the other countries and politics and treats the other countries elections almost as if they are voting in them. Likewise the UK media reports issues in Australia, New Zealand and Canada as if they are constituents of the UK. The UK citizenship tests even includes a question asking if the other three countries, the Isle of Mann or Wales are constituent parts of the UK. This is an indication to how close the countries are politically and also regarding the strength of people to people and family links.Border SecurityThe United Kingdom released a policy paper on the UK’s Secure Border post Brexit. Here they essentially copy the Australian and Canadian Policies again reflecting the natural alignment between the four CANZUK countries. Although they only mention adding CANZ passports to e-gates at all British ports and do not mention the Trans-Tasman Travel Arrangement. We can deduce from the aligned policies should CANZUK freedom of movement take place based on the Trans-Tasman Travel Arrangement:Each CANZUK country would have an Electronic Travel Authorisation system whereby border security will perform a basic background check. If red flags are found, for instance a severe criminal record then the other CANZUK country will have a right to authorise or decline your travel. The CANZUK country would also reserve the right to deport you if you committed a serious crime in their country.The Trans-Tasman agreement does not allow for Social Security claims unless you have lived in the CANZUK country for two years. The other CANZUK country would have a right to deport you if you cannot sustain yourself.CANZUK freedom of movement would only apply to CANZUK passport holders and the four countries citizenship tests and requirements are already very similar. The tests includes proficiency in a native language (English or French) and an understanding of the countries culture and an acceptance of the countries values (which as discussed is very similar to the other CANZUK countries). This could be tightened up where necessary to ensure a minimum standard the four countries are happy with.For a non-CANZUK passport holder, permanent status in Canada or settled status in the UK would not mean anything for the other CANZUK countries. You would instead be treated as a citizen of the country corresponding to the passport that you hold. Of course this can lead down to a path of citizenship via the citizenship test mentioned above.An illegal migrant or refugee to New Zealand does not have right of entry to Australia under the Trans-Tasman agreement. Right of travel in this case would be under the discretion of the other CANZUK country via the Electronic Travel Authorisation. No CANZUK country would have the right to apply migrant quotas to another CANZUK country. This again was something that the EU looked to overstep.The UK Border got updated in May 2019 to reflect a Global Britain with close ties to CANZ + Singapore Commonwealth countries that are low risk when it comes to overstaying, the EU/EEA, the USA, Japan and South Korea (strategic allies in North America and Asia-Pacific). Visitors from these countries will be allowed to visit the UK using its e-gates for up to 6 months. This UK Border Update reflects British people to people links with all these countries unlike the previous border controls.Political Compatibility and Foreign Policy on the World StageJoint Statement from the UK, Australia and Canada on Hong KongConcern at introduction of national security legislation for Hong KongThe foreign policy of the four countries is very highly aligned, so much that they are sending joint foreign policy statements for example the recent statement regarding China and Hong Kong.On the World stage, the UK is highly dependent on the EU as a trade partner. However it is Brexiting the EU and looking for newer partners. Notably before Brexit the UK done only about half its trade with the EU and the trade with the rest of the world was increasing at a higher rate than trade with the EU. This is due to emerging markets particularly in Asia-Pacific, South America and Africa. The UK is a nation that looks to liberalise Global Free Trade but pushes for high standards and human rights without trying to absolutely harmonise everything (EU approach).The political situation between Australia and China is always a bit of a love/hate relationship. Politically Australians don’t like Chinese politics in terms of the Chinese Communist Party (CCP) however they do want China to open up more and they do want access and trade with the Chinese market. Australia is a nation that looks to liberalise Global Free Trade but pushes for high standards and human rights without trying to absolutely harmonise everything (EU approach). Unfortunately the current political situation between Australia and China seems to be souring and there is more talk of making Australia more self-sufficient and less dependent on China. New Zealand is more or less in the same boat.In Canada, since the election of Donald Trump there has been the need to renegotiate the North Atlantic Free Trade Agreement (NAFTA) on slightly worse terms since Donald Trump was elected on an America First platform. Therefore the UK-USA Free Trade Deal currently being negotiated is going to be of high interest to Canadians. Both countries are significant when it comes to Canadian trade. Moreover in terms of food standards and healthcare, Canada is much more similar to the UK so if the UK gets a better deal with the USA, Canada should be able to push the same thing. Likewise if the UK gets a Canada Plus deal with the EU, Canada should be able to up terms. Canada is a nation that looks to liberalise Global Free Trade but pushes for high standards and human rights without trying to absolutely harmonise everything. The Canadian Conservative Party have also stated that the Canada, Australia, New Zealand and United Kingdom Alliance is their flagship, game-changing foreign policy. The last Canadian election lead to a minority Liberal government meaning the Conservative opposition is relatively strong and will to some extent push Canadian foreign policy.