No, its that the EU exports more to us than we do to them that's the nub of it. I doubt if either wants to get into a trade war or cutting noses off to spite face.
'Project fear' was always nonsense as was 'Cake and eat it', isn't it time we left these behind now surely!
I thought that the prosecco/German car industry BS will come out at one point.
This argument has 1 major flaw. For the UK to make Brexit work then it must sign multiple trade deals. There's no point leaving the EU only to keep its same standards and rules. Now that will require the UK to cut corners on standards else there's no way in hell a small market like the UK can ever sign better trade deals then the EU. So lets say that the UK buys 30% of its beef from Ireland. That beef is of the highest standard which means its very expensive compared to the hormone induced/maggot ridden 'food' bought from the US, which will flood the UK following a trade deal with the US. Thus the Irish farmers market share in the UK is set to shrink to the ridiculous irrespective whether the UK signs an FTA with the UK or not. As Brexiteer no 1 (and only?) economist Patrick Minford said the only way for Brexit to work would be to lower tariffs on everything which would concurrently end the manufacturing/farming industry in the UK. Using such logic then I can't see the Irish farmer succeeding in a market were even the locals will be failing using such same high standards.
Then there's the other two other main categories of things that the EU sells to the UK
a- perishable goods. Due to its geographical location the UK will have no choice but to buy them from the EU irrespective on whether they sign an FTA or not. That's not a problem for the EU which can ignore British produce and buy from somewhere else
b- high end products. Which strictly speaking isn't a real issue either. Those who can afford a Ferrari will still buy a Ferrari irrespective whether the UK decide to slap a 30% tariff on it or not
Thus such leverage is pretty much gone.
Lets go in the detail of what activating article 50 means. Article 50 focuses on the country's withdrawal from the EU. In simpler terms it gives the UK the opportunity to settle its bills and to give an indication of what sort of future relationship it wants with the EU. Due to the GFA such withdrawal not only goes into EU territory but also into international treaties as well. Both parts is a bone of contention with Brexiteers.
A- They weren't happy to settle the bills as that strips the UK from its main leverage
B- Because of the GFA they can't push for a no deal Brexit as that would require the UK to crush out on WTO rules which in turn would mean hard borders in Ireland.
Basically a no deal Brexit was off the table from the start simply. If the UK is stupid enough to agree to pay for its bills without getting anything in exchange (not even the time needed to negotiate other FTAs) ie satisfying Option A, it would still fail to fulfill B. The result to that would be that the UK would portray itself as an unreliable business partner who can change its mind on everything even on delicate international deals such as the GFA
The Brexiters tried to turn this huge disadvantage into an advantage by tying the withdrawal agreement to a half botched trade deal. That goes beyond the scope of Article 50 + it would risk breaching the EU's HUGE red line ie the integrity of the single market. Which leads to me asking you two questions. Have you ever wondered why the EU takes ages to sign an FTA and why it had turned bigger markets (ex the US) down? The answer to that is basically the same. The integrity of the single market represent the EU's biggest asset, something worth protecting far more then anything else. It means a huge and protectionist market were members (and a very short list of trusted and reliable friends) can sell their products freely while concurrently keeping other competitors at arm's length. Through the single market the EU controls who and how countries trade, it can ensure a level playing field between member countries while monitoring the standards of what comes into such market. A loophole in such system would risk upsetting the balance into the single market to the detriment of its members. For example imagine if the UK is allowed to repackage cheap hormone induced/maggot ridden/chlorinated 'food' and then sell it into the single market as beef. That has the potential to be far more damaging then losing the UK's market which is set to shrink for the reasons mentioned above + recession
There will be no trade wars because a market of 65m can never compete with that of an entire continent, especially since the former is set to become poorer + it depends on selling its goods/services to that continent far more then the EU depends on selling its good/services to that country. If the UK doesn't pay its 39b then that would give the EU the casus belli it needs to go tough on the UK. Meanwhile the UK inability to keep the terms of the GFA will give the message that the UK is an unreliable partner to deal with and a horrible neighbour