Trade has long been the lifeblood of the economy of the United Kingdom. It brings economic growth, and is the only proven long-term way to increase prosperity and improve the quality of life for everyone.
Over the past three centuries the concept of free trade has developed, with Britain progressively eliminating tariffs on imported goods. Free trade has been one of, if not the, greatest gifts Britain has given to the world.
This does not mean all “free trade” agreements are equal however, or everything called a “free trade agreement” enables actual free trade. Membership of the EU means all trade agreements must be negotiated by the European Commission – on behalf of all EU Member States.
Sadly, the resulting terms have not always been the best for Britain. As anyone acquainted with the general incompetence of the European Union will be able to guess, the Commission has proven to be downright abysmal at negotiating trade agreements, as well as taking many years to do so, and even when they do, they are almost always very far from the original concept of free trade.
The Remain camp often extoll the virtues of the EU’s trade deals, pointing to the past deal with South Korea back in 2011, and the upcoming deals with Canada and America (CETA and TTIP). However, on closer examination it’s clear the EU’s record is frankly appalling.
The EU boasts it has signed 56 trade agreements with non-EU countries and there is much scaremongering about how Britain will be able to replace these trade deals post Brexit.
Leaving aside for the moment the solution of replacing the current deals by simply signing almost identical ones with these 56 countries – a process which should take nothing more than a short phone call – the nub of the matter is these trade deals are simply not that important to Britain.
Of the 56 current EU trade agreements, 32 of them are with countries outside the top 100 economies in the world, and only 11 are within the top 50. For many of these countries, trade with the EU is limited; there is no significant data available, making evaluation of the actual monetary worth of these deals rather difficult. But it can be safely assumed they do not contribute much to the British economy because of their incredibly small value.
To claim the EU has been a success in negotiating important trade deals in the British interest is nonsense, especially when we compare it to the success of EFTA. EFTA stands for the European Free Trade Association and comprises of Norway, Switzerland, Lichtenstein and Iceland. It is the organisation the UK founded in 1960 as an alternative to the then European Economic Community.
We left EFTA under former Prime Minister Edward Heath to join the EEC – leaving was one of the greatest mistakes in modern British history.
EFTA is a free trade association not a customs union like the EU. Its members can arrange their own free-trade agreements without having to involve and seek approval from the others. This explains how Iceland has managed to secure a free trade agreement with China, despite having a total population less than the city of Bristol.
It is also as a collective a far better negotiator than the EU. Whilst EFTA has fewer trade agreements numerically speaking, the ones it does have are of much greater importance. It already has an agreement with Canada, agreed over 7 years ago, including service provisions that the CETA proposal lacks!
The EU on the other hand will never manage to secure a trade deal with China, as its 28 Member States will never agree on what the deal itself should cover. The French will demand protection for their films, champagne and cheese etc., the Italians for their fashion labels and the Germans for their cars.
All this ridicules the claims from the Remain side that we will only be able to negotiate trade deals as a member of the EU. If Iceland (115th in world economic rankings) can agree a trade deal with China, it stands to reason the UK (the 5th largest economy in the world) would be able to do so.
The lack of progress on the China deal is only one of the failings in EU trade deals. Despite the Remain side’s continual claims the European Commission is making significant progress on free trade agreements, this could not be further from reality.
It is true the European Union is in “negotiations” with India over a free trade agreement, but it has been “in negotiations” for over 9 years, having had only one meeting in the past two years! Even this meeting was not a trade-focussed discussion; it was only part of a much larger summit on EU-India relations.
It is clear the EU has failed to agree a trade agreement with India, but this is not Britain’s fault, it is France that continually vetoes any progress through a desire to protect its film and agricultural industries from Indian competition. Why the prosperity of the British people is being limited by bizarre French demands to protect inefficiency is just one of the many confusions of EU’s trade policy, all to the detriment of Britain.
The failings of the EU do not mean EFTA membership is the best for Britain – or indeed any other currently existing option such as the Norway or Switzerland option. We can and will have something far better, a truly ‘British Option’ – designed bespoke for British needs.
Simply due to our economic status as the 5th largest economy in the world, and our being the Eurozone’s largest export market, there will be a trade deal which is best for us! The idea the European Union will cut off its nose to spite its face in such a dramatic fashion is absurd. The British option may well take a form similar to EFTA with majority access to the Single Market, indeed many of the options discussed such as those based on the WTO, would also involve majority ‘Single Market’ access.
Whatever happens, European trade will continue as it is not governments that do business, but people and consumers. It will not suddenly become uneconomical for Germany to buy our medical products and for us to buy their cars. Trade between Britain and Europe will continue to flourish. It is our trade with the rest of the world which needs work – and it is there where the EU completely fails us.
The only way to rectify the failings of the EU is to once again put the British government back in charge of negotiating Britain’s own trade deals and not the European Commission. British-led trade deals will focus on the issues which truly matter to the British economy – including securing free trade in services, something the EU has failed with – even within the ‘Single Market’.
They will care about our British national interest. The City of London will be protected from disastrous European banking laws. Most importantly, there will be an emphasis not only on securing tariff reductions on goods – which make up only 11% of GDP and less than half of all exports – instead the emphasis will be on British services, aiming to grow what our economy depends on and making life better for British people.
We know there are important global politicians out there who will be eager to do trade deals with Britain post Brexit, including John Howard, the former leader of Australia, Jason Kenney and Ildefonso Guajardo – men considered potential future leaders of the Canada and Mexico respectively.
Jason Kenney went even further, saying that a Canada-UK trade deal could be completed even before the CETA deal between the EU and Canada; due to all the hold-ups the EU continually creates. We would soon secure free trade agreements with the countries which matter to Britain. Freed from the demands of the EU States – such as France – we could quickly progress in negotiations with India, China and Australia and work towards greater British prosperity.
The claims the EU gives Britain clout in trade negotiations is a ludicrous idea – instead it gives us problems, confusion and ineptitude. The EU is not the champion of free trade Britain needs to promote our interests and prosperity, it only prevents British prosperity. To once again become a true trading nation with a global outlook we must Get Britain Out of the EU as soon as possible.
Ryan Fiske is a Research Executive at Get Britain Out
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