connect with us

Sunday Telegraph: Hard Brexit could help secure trade deals worth double EU agreements, say Eurosceptics

Date: 30 10 2016

Britain can secure trade deals worth twice the amount of those signed by the European Union if it adopts a more extreme form of Brexit, leading Eurosceptics have said.

Change Britain, a group co-founded by Michael Gove and endorsed by Boris Johnson, has discovered that 14 countries have publicly expressed interest in an agreement after Brexit.

The nations have economies that total around £17 trillion – twice the size of those countries who already have a trade deal with the EU.

However, the UK can only capitalise on that potential if they decide to opt out of the customs union, the group warns.

Lord Digby Jones, the former CBI head who served as Gordon Brown’s trade minister, said the move would allow Britain to export to “millions more customers”.

It comes as two new reports suggest that the City of London can thrive after Brexit despite the concerns of leading financial institutions.

Leave Means Leave, a pro-Brexit group, says the financial sector could save £12bn a year from cutting EU red tape while the Legatum Institute, a think tank, says the importance of passporting has been “overstated”.

A row is currently raging in the cabinet about whether Britain should pull out of the EU customs union, which allows goods to circulate freely without checks.

Leading Eurosceptics such as Liam Fox, the International Trade Secretary, favour leaving the customs union because it would give Britain the freedom to secure its own trade deals.

However more pro-EU figures who fear the impact on trade with the EU and added complexity on the Northern Irish border from bringing back customs checks oppose the move.

New analysis from Change Britain, a Brexit campaign group launched after the referendum, shows the size of opportunity on offer if Britain opts for a cleaner break with the EU.

In total, 14 countries have publicly stated they want a free trade deal with the UK, according to the group, including China, Brazil, India, Argentina and Australia.

Many of the countries have not secured deals with the EU, which critics say has consistently proved itself to be a poor trade negotiator, partly because of its size.

This month a flagship deal with Canada seven years in the making almost collapsed when the little-known Belgian region of Wallonia vetoed the move, though it now appears to be back on track.

Justin Trudeau, the Canadian Prime Minister, will finally travel to Brussels to sign the free trade deal known as the Comprehensive Economic and Trade Agreement (CETA) on Sunday.

Countries that have expressed interest in a post-Brexit trade deal have a combined GDP of £16.8tn, according to researchers for Change Britain – a huge potential export market for Britain.

The EU has secured trade deals with many more countries but struggled to strike agreements with bigger nations, according to the research. The combined GDP of countries with trade deals with the EU is just £7.2tn.

The researchers concluded: “While the EU is in discussions with some major economies – including Canada and the United States – recent events have shown how the EU cannot be relied upon to agree to a free trade deal due to the shortcomings in its decision-making process.

“The need for every member state – and in some instances regional sub-parliaments – to approve a free trade deal makes for an unstable process. Even if the EU institutions agree to a trade deal, one small region has an effective veto over a free trade agreement.”

Lord Jones, who served as a trade minister under Labour, said: “By leaving the Single Market we are of course taking back control of our borders and our courts, but of vital importance we will take back control of trade policy.

“We can strike trade deals with the rising economies of the 21st century, many of whom have already signalled their intentions to begin negotiations.

“This will allow British business to export to millions more customers and create thousands of new jobs throughout the UK. We should grasp this opportunity with both hands.”

However critics are likely to warn that leaving the customs union would under British businesses exporting into the EU and create chaos at the Northern Irish border.

There are concerns in the Northern Ireland Department given some companies source parts from across both sides of the border without the need for any checks.

In a separate development, two new reports suggest that the City of London can thrive after Brexit despite the concerns of leading financial institutions.

Leave Means Leave says the country’s financial sector can get an annual boost of up to £12bn after leaving the EU by designing regulation that is more appropriate to the UK.

They also claim the benefits of so-called passporting, which allows banks to trade freely across the EU, have been “overstated” and say it would be “extraordinary” if a deal was not struck.

Meanwhile the Legatum Institute, a think tank that has been analysing the impact of Brexit, says in its report that the City can “survive” without passporting.

It points to the “strengths” already existing in Britain’s financial services industry and says “independence from EU laws and regulation” will be beneficial.

“Independence from EU laws and regulation will then enable the UK make beneficial trade deals with partners around the world that will liberalise trade in services to the benefit of the wider economy,” the report says.

30th October 2016, Telegraph