A quick UK-EU free trade deal is possible

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A quick UK-EU free trade deal is possible

Ben Somervell (who has his own blog HERE) explains why a bilateral UK-EU free trade agreement need not take as long as previous European free trade agreements.

We often hear from remain voters, that a free trade agreement (FTA) with the EU will take seven years as Canada’s Comprehensive Economic and Trade Agreement (CETA) did. However, I am confident that a bilateral UK-EU FTA does not need to take anywhere near as long. Here’s why.

Unlike all other countries seeking FTAs with the EU, we have the unique advantage of currently having no tariffs, quotas or unnecessary customs or trade barriers with the EU to negotiate away. With Canada’s FTA with the EU the first four years were largely spent on human rights, on dispute settlement and on negotiating away the quotas, customs barriers and 16,500 tariffs between Canada and the EU. This will not be the case with the UK as we have no tariffs or quotas to negotiate away and as we already have 100 per cent legal and regulatory equivalence with the EU. The EU’s FTA with the South Korea took about three and a half years to negotiate and Hong Kong’s FTA with the EU took just two years and ten months. Under Tony Abbott’s leadership, Australia negotiated three new FTAs in just one year. Australia negotiated its own free trade agreement with South Korea in just six months, Japan took only eight months and China took 13 months. Even Karel De Gucht, the EU’s Trade Commissioner from 2010 to 2014, has said a UK-EU FTA said ‘I am reading everywhere that it takes five, six, seven, eight years to do a trade negotiation. Yes, that’s true but it’s not for technical reasons, it’s because you can’t get an agreement. Technically you could make an agreement within a very reasonable period of time because we know each other’. The EU’s own current Trade Commissioner, Cecilia Malmström, has herself said that the EU will strike a FTA with the UK ‘for sure’ and the President of the European Council, Donald Tusk, made it clear in his reply letter to the letter invoking Article 50 that the EU is also aiming for a FTA with the UK. Latvia’s Prime Minister has said that a UK-EU trade deal is possible within the two-year Article 50 window. The leaders of Belgium and France have very recently put pressure on the European Commission (EC) for it to progress sooner onto negotiating a FTA with the UK.

It would be much simpler, both for the UK and the EU, for us to go from minimal customs checks, zero tariffs and quotas to minimal customs checks, zero tariffs and quotas (to retain the status quo) than it would be to go from minimal customs checks, zero tariffs and quotas to tariffs, quotas and extra customs checks. John Redwood has pointed out that not a single EU member state has said it wants tariffs to be introduced.

We have a second unique advantage of already having 100 per cent legal and regulatory equivalence with the EU as we have been an EU member state ever since 1973. We will still have that 100% equivalence on 1st April 2019 due to the so-called “Great Repeal Bill” (European Union (Withdrawal) Bill). No other country seeking a FTA with the EU has already had 100 per cent equivalence when trade negotiations began. We also the third unique advantage of already being, by far and away, the EU’s largest single market and most important export destination in the entire world. In 2015, we had a huge £60bn trade deficit in goods with the EU. In 2015 the EU exported £290bn worth of goods to the UK and 5-6 million EU jobs rely on exports to the UK. Why would the EU put these jobs and this trade and profit at risk by unnecessarily delaying a FTA or by unnecessarily wasting 7 years on an FTA which could be done much more quickly? This is another unique advantage as the incentive to continue existing, mutually-beneficial trade (and the disincentive of losing this already-existent, mutually beneficial trade) is significantly greater than starting from scratch and having little/no trade before as is the case with all other countries seeking FTAs with the EU. The EC’s Chief Brexit Negotiator, Michel Barnier, himself enforced this and showed his desire for a Brexit deal when he tweeted the following on 7th July this year: “In a classic negotiation ‘no deal’=status quo. ‘no deal’=return to distant past, which we all should avoid”.

The Hungarian Prime Minister himself said on 6 July that no Brexit deal at all on 1 April 2019 would mean ‘big trouble’ and a ‘nightmare scenario’ for Europe. Even Michel Barnier has himself admitted that no Brexit deal would be ‘bad’ for the EU.

Many remain voters make the argument that the EU will refuse to offer us a good FTA as this would incentive other member states to leave the union and that the EU will instead punish us for leaving and make an example out of us. This argument contains a number of significant flaws. Firstly, the EU is very much limited in their capacity to punish us – there are no tariffs worldwide on services and the average World Trade Organisation (WTO) most-favoured nation (MFN) tariff on goods is less than five per cent. The leaders of the EU have repeatedly stated that they’re not going to punish us. Secondly, the UK is and has always been completely different from all of the other EU member states. We originally had our membership application vetoed twice as it was thought that the protectionist nature of the EU wouldn’t suit us (it hasn’t) and we consequently joined later than some other member states. We’ve always been significantly more Eurosceptic than all of the other member states as was shown in the rebellion over the Maastricht Treaty. Even the former President of the EC, Jacques Delors, said in 2012 ‘The British are solely concerned about their economic interests, nothing else […] If the British cannot support the trend towards more integration in Europe, we can nevertheless remain friends on a different basis. I could imagine a form such as a free-trade agreement’. Thirdly, the EU already has FTAs with more than 50 non-EU countries which don’t require the freedom of movement of people or annual payments and the EU didn’t stop themselves from signing these deals in case it might incentivise member states to vote to leave the union. If the EU refuses to give us a good FTA, it could back-fire as it may well make British voters even more Eurosceptic and anti-EU. The initial and rather arrogant response of some EU figures to Brexit has already caused some people such as Conservative MP Ben Bradley to convert to the Brexit cause (you can read his story here). As Daniel Hannan MEP has pointed out, it’s extraordinary that remain voters constantly use this punishment argument whilst also simultaneously arguing that the EU is an ‘irenic peace project’ which is all about brotherhood. This punishment argument implies that the only glue that holds the EU together is the fear of what might happen if one of its member states democratically votes to leave. This is much less like an ‘irenic peace project’ based on brotherhood and much more like the Soviet Union and its relationship with its “satellite states” in Eastern Europe. As the Soviet Union’s last Premier, Mikhail Gorbachev, himself put it: ‘The European Union is the Soviet Union in western clothes’.

It’s worth bearing in mind the facts about the most unlikely and worst-case scenario of the UK leaving the EU with no deal at all. Firstly, we are currently one of the EU’s largest and only net contributors and there will be a sizeable hole in its budget when we officially leave the EU. The House of Lords’ EU Financial Affairs Committee has stated that the UK would have no legal obligation to pay the EU any so-called Brexit “divorce bill”, which could ease the EU’s budget problems at least in the short-term, if we were to leave without a deal. Secondly, 6 of the EU’s 10 most important trading partners trade with the EU on WTO tariffs. Thirdly, we already conduct 56 per cent of all of our trade (our trade with the 163 or so non-EU countries) on WTO tariffs. Only six per cent of UK firms ever export to the EU and only 44 per cent of our trade is conducted with the EU and this has fallen from 54.8 per cent in 1999. 60 per cent of our services exports go to non-EU countries and the amount we export to non-EU countries will undoubtedly increase significantly once we leave the EU and the customs union as we can then negotiate our own bilateral free trade agreements with them for the first time since 1972. 70 per cent of the UK economy is domestic, 17 per cent is exports to non-EU countries and only 13 per cent is exports to the EU. The EU’s share of global GDP (PPP) is significantly shrinking – it was 30 per cent in 1980 but was just 17 per cent in 2015. Over the next 10-15 years, the EC has itself stated that 90 per cent of global economic growth will come from outside of Europe altogether. The fastest growing economies such as China and India are outside of Europe altogether and non-EU countries such as Switzerland have free trade agreements with many of them. We’ll be able to strike FTAs with these 163 countries (over 90 per cent of the world’s economies) once we’ve officially left the EU and its customs union. As of 31st July last year, 27 non-EU countries with a combined GDP of over £40 trillion reportedly already wanted to sign new trade deals with the UK once it leaves the EU and this potential market rather dwarfs the EU’s internal market which is worth about £12 trillion. Fourthly, as we have such a large trade deficit with the EU (£60bn in 2015) and as the EU exports much more to us than we export to them, the EU would, in total, have to pay twice as much in tariffs on their exports to us (£12.9bn per year) as we would on our exports to them (£5.2bn per year) as recent research from Civitas has shown. Even if you add up all of the tariffs the EU could put on all of our exports to them, it is equivalent to less than half of our annual net EU membership fee. There are no tariffs on services worldwide and the average most-favoured nation tariff on goods exports to the EU is less than five per cent and it’s just 2.3 per cent for non-agricultural products. The devaluation of the value of the pound since the referendum has made our goods exports significantly more competitive and has resulted in the first rise in UK exports since 2016. The referendum merely brought forward an already-inevitable devaluation in the value of the pound which both the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) said saw as over-valued in the first place as Jacob Rees-Mogg has pointed out. This devaluation alone rather dwarfs an average MFN tariff of less than five per cent. Finally, the Government has been and still is preparing for all possible outcomes of the Brexit negotiations, including no deal at all. Conversely, Michel Barnier unwisely refuses to imagine the UK leaving the EU without a deal. This refusal is reflected in what Jeremy Browne, the City of London Corporation’s Special Representative to the EU, said recently ‘it’s also quite noticeable that the EU, I think, is not doing sufficient planning on terms of worst-case scenarios at their end in terms of, you know, would Britain not pay an exit fee [if we were to leave with no deal]?’.

Therefore, voters should be much more optimistic about a potential FTA with the EU and should realise that the EU would be very unwise to cut its nose off to spite its own face by trying to punish us, even though it has only a very limited capacity to do this.

 

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  • Ben Somervell
    Ben Somervell
    Ben Somervell is a Burkean conservative and a social, moral and fiscal conservative. He strongly supports Britain's exit from the European Union, its internal market and its customs union as well as our withdrawal from the European Arrest Warrant and the European Convention on Human Rights. He is primarily interested in theology and UK politics. He has his own blog at: https://bensomervellsbrexitblog.wordpress.com/
    • Sarah Newey

      Brilliant <3

    • Darnell Jackson

      Outstanding

    • digitaurus

      Hilarious. The EC has no incentive whatsoever to offer a free trade deal to the UK other than the need to fill the big fat hole in their budget occasioned by our departure. Even then they would rather have (some of) the money rather than give us anything – hence their stand on agreeing the divorce terms before discussing a trade deal. We blustered that we would resist this (“biggest fight of the summer … they can go whistle …” etc) but we then folded instantly like a cheap suit. Individual countries might be a little more nervous about the impact on their own trade with the UK but there don’t seem to be any significant nations that feel they have enough at stake to support us. The EC (and the 27) have been extremely clear – they will offer us an awful deal (big payment, transition period with free movement maybe with a slight fudge that the 27 will also get, end state undefined “negotiated agreement” many years down the line). We will be left with the decision whether to accept or leave with no deal.

      Instead of these wet articles offering some pious hope that the EC will be nice to us because they could be (they won’t) we should stop wasting our time with these negotiations. They are not where the action is. The UK needs to go hammer-and-tongs on negotiating free trade agreements with the USA, Canada, China, the 60 we currently have EU FTAs with, etc. Ignore the “no negotiation until you leave” rule – the clock is ticking to a defined exit date so the arguments for preventing such negotiations are moot. Likewise, we need to lay out our stall for why we will be a compelling business destination in the future – presumably some kind of a “Singapore / Hong Kong of Europe” deal – corporate tax rates lower than Ireland, highly attractive tax structures for financial businesses etc.

      If we are to have any significant leverage over the EU then we have to make the “no deal” scenario as attractive as possible – not least because the “no deal” box is where we are going to end up.

      • Ben

        1. I’ve explained the incentive in detail above.
        2. Actually the EU did back down on the scheduling of Brexit talks – originally the Trade Commissioner said no trade talks until you formally leave the EU at the end of March 2019 but now they’re due to start in just 4 months’ time in November. As Article 50 states, we have no say over the scheduling and timetabling of the Brexit talks. Divorce talks don’t have to be concluded or completed before trade talks can begin – “sufficient progress” must be made on the divorce/settlement issues before trade talks can begin. The two processes are then carried out in parallel. The leaders of France and Belgium recently asked the Commission to start trade talks sooner. The EC recently broke it’s pledge to not talk about trade until October when it talked about quotas with relation to the Northern Irish border which was inevitable and was reported by Politico. “Nothing is agreed until everything is agreed” as Donald Tusk wrote, responding to Theresa May’s letter incoming Article 50.
        3. Boris Johnson was only referring to the ridiculous, unofficial and leaked €100bn figure for the so-called Brexit “divorce bill” when he said the EU could “go whistle” for it. Johnson is not the Prime Minister or the Brexit Secretary. Even the E.C.’s own lawyers have admitted that a €100bn bill would be legally impossible to enforce”. The IEA says the figure should be no higher than €30bn but the EU’s released no official figure so far. Remember, if we leave with no deal, we have no legal obligation to pay the EU a penny and this gives us huge leverage. It’s not really an “exit fee” as such as, in the long-run, we’d have had to have paid the exact same amount anyway, we’re just settling the accounts and honouring our committments and international obligations.
        4. Leaving the EU without ever invoking Article 50 and just by repealing the European Communities Act, 1972 would violate EU law (the Lisbon Treaty says the Article 50 is the only legal way to leave) and international law (please see the Vienna Convention on treaties). It wouldn’t give us time to plan or prepare for leaving with no deal which the 2-year window and a potential subsequent transitional period provide. The transition should be clearly defined and time-limited and shouldn’t involve single market or customs union membership. It’d allow businesses here and abroad to adapt and for us to prepare new immigrations and customs systems. The Government and all of its departments are and have been preparing for all possible outcomes, including no deal.
        5. I agree that the benefits of Brexit are entirely contained within us as a country and that a free trade deal with the EU would, in the words of John Longworth and Richard Tice, be merely the cherry on top of the icing of the Brexit cake.
        6) I wrote on article on no deal here: http://www.studentvoices.co
        7) Nothing in EU law forbids us from bilaterally and formally negotiating our own independent free trade deals with non-EU countries while we’re members, so long as these deals aren’t signed, ratified or don’t come into effect while we’re members. “Lawyers for Britain” agree with you and I on this issue. We should already be tapping into that global trade potential of over £40 trillion now rather than just informally scoping the outlines of potential deals. I recently wrote to the International Trade Secretary, Liam Fox, urging him to start formal trade talks with non-EU countries now.

      • Ben

        Theb European Commission’s Chief Brexit Negotiator, Michel Barnier, himself tweeted on 6th July this year: “In a classic negotiation ‘no deal’=status quo. #Brexit ‘no deal’=return to distant past, which we all should avoid”.

        • digitaurus

          Thanks for engaging. Let’s focus on an issue we agree on: the desirability of an FTA with the EU (or something that is as close as possible to one). As it stands, both the EC and the EU nation states themselves have no intention of negotiating an FTA with the UK in the near future on anything other than ‘Norway’ terms (i.e. acceptance of the ‘four freedoms’, payment of a large annual subscription, automatic acceptance of all new regulations etc). They have signalled repeatedly. Their behaviour is entirely rational because they see their payoffs from the various outcomes differently to your description of them. Specifically, they see a very large negative cost to them if the UK is perceived to have negotiated a ‘good’ outcome. This penalty – in their minds – outweighs the negatives associated with no negotiated agreement which are for the EC and nation states, respectively: a large hole in the EC budget and a reduction in advantageous trade volumes. We may think they have calculated the payoffs wrongly (you and I certainly do) but it’s their calculation, not ours. The EU approach historically has been to announce their calculations and the resulting position and stick to them relentlessly even if they are wrong headed. This is what they did with Greece. (This approach is partly a result of the lack of flexibility engendered by having 27 nation states with hard-to-reconcile views).

          How can we change their perceived payoffs and therefore change their behaviour? One approach is to appeal to ‘sweet reason’. We sit down with them and explain how our departure doesn’t put the whole EU project at risk. We point out to them that they have a lot to gain from free trade with the EU etc. This approach is generally a weak one though it can work sometimes in the context of a strong relationship. We use it quite a lot in our daily lives. The Greece negotiation (and some others) have demonstrated that it is pretty ineffective with the EU; if you really don’t like the look of the deal they are offering you need to do something different.

          Negotiation theory (courtesy of Roger Fisher & William Ury) tells us how to ‘change the game’ without relying purely on persuading them to see things differently. In this case, we need to work hard away from the negotiating table to improve our BATNA – what ‘no deal’ looks like to us. This can be achieved by negotiating free trade agreements with other key economies (not least the USA) and restructuring our regulatory regime to make us an attractive ‘offshore’ base for businesses in Europe. This will change the payoffs for the constituents we really should care about – the business community (pace Hammond).

          We are headed for a ‘no deal’ / ‘bad deal’ binary outcome, just as Greece faced. Our only rational move in this scenario is to make ‘no deal’ as attractive as possible.

          • Ben

            1. I’ve explained the incentive in detail above.
            2. The Government and all of its departments are and have been preparing for all possible outcomes, including no deal.
            3. I agree that the benefits of Brexit are entirely contained within us as a country and that a free trade deal with the EU would, in the words of John Longworth and Richard Tice, be merely the cherry on top of the icing of the Brexit cake.
            4. I wrote on article on no deal here: http://www.studentvoices.co
            5. Nothing in EU law forbids us from bilaterally and formally negotiating our own independent free trade deals with non-EU countries while we’re members, so long as these deals aren’t signed, ratified or don’t come into effect while we’re members. “Lawyers for Britain” agree with you and I on this issue. We should already be tapping into that global trade potential of over £40 trillion now rather than just informally scoping the outlines of potential deals. I recently wrote to the International Trade Secretary, Liam Fox, urging him to start formal trade talks with non-EU countries now

            • digitaurus

              1. It doesn’t matter what you think their incentives (payoffs) are. It is what they think that drives their behaviour. If you are making the claim that they are bluffing (i.e. they see the payoffs the same way you do but are hiding this for tactical reasons) then please go ahead and say this explicitly and I will engage with that argument.
              2. The Government and all its departments are in a shambles right now. I know it and I presume you know it too if you have spent any time around Whitehall recently.
              3. We differ on the overall benefits of Brexit but that’s not relevant here. The ‘Pottery Barn’ rule is now in force.
              4. Perhaps you could summarise here the points that are relevant to this discussion
              5. I hope they listened.

            • Ben

              1. No, I don’t think the EU are bluffing. Even Michel Barnier himself has made it clear that he wants a deal and thinks one is vital from the EU’s point of view – look at his recent tweet which I quoted above. The Prime Minister of Hungary also made this clear recently when he said no Brexit deal would mean “big trouble” and a “nightmare scenario” FOR EUROPE.
              4. Brevity has never been one of my strengths but it’s only a short article – about 1,000 words in all.
              5. I hope so too.

            • digitaurus

              So many people across the spectrum – from “have cake and eat it” Brexiteers such as yourself and Johnson, “softer Brexit” socialists like Corbyn, through to some ardent Remainers – you have all convinced yourselves that a deal is possible with the EU that entails something that approximates to a FTA. It’s a delusional fantasy. By holding out this pious hope the electorate is being conditioned to expect that something will be delivered that cannot be delivered – just as was the case for Greek crisis. I don’t understand the political or economic implications of this.

            • Ben

              It seems to me that we should aim for a mutually-beneficial FTA but make it abundantly clear that we can both survive and manage without one and that we’ll walk away from talks if our red lines aren’t met. Most leavers want a quick FTA with the EU and so do almost all remainers.

            • Ben

              1. What exactly do you mean by a “cake and eat it” Brexit?
              2. The fact that a UK-EU free trade deal is possible is indisputable. It is possible and our 3 unique advantages make such a FTA more straightforward than most others with the EU.
              3. A deal is also rational and logical as Barnier and Hungary’s PM have clearly stated.

            • digitaurus

              1. A “cake and eat it” Brexit is a Brexit that contains a FTA with the EU that does not involve Norway-style conditions (acceptance of the ‘four freedoms’, payment of a large annual subscription, automatic acceptance of all new regulations etc).
              2. Of course it is possible and of course it would be straightforward – we are currently 100% compliant with the single market. It’s just never going to be on the table for the UK; you are mis-calculating how they perceive the payoffs in the negotiation.
              3. Barnier (and Hungary’s PM for what it’s worth) are anxious to do a deal with the UK. The EU was likewise anxious to do a deal with Greece. The deal that they are prepared to do with you, however, is not the kind of deal that you are going to be anxious to do with them.

              Quote: “It seems to me that we should aim for a mutually-beneficial FTA but make it abundantly clear that we can both survive and manage without one and that we’ll walk away from talks if our red lines aren’t met. Most leavers want a quick FTA with the EU and so do almost all remainers.”
              Sorry – we will not be offered a FTA on terms that are going to be easy to accept – they will be Norway-style terms. We are therefore probably going to be surviving and managing without one. We will either be walking away from talks or we will be caving in humiliatingly to their terms.

              Pretty much everybody on this side of the channel would like a quick FTA with the EU (though acceptability of terms differs widely between groups). The EC doesn’t want one (unless it comes with the money for their budget hole) and the EU nation states will only go with one on Norway-style terms – possibly with some tweaking on free movement of peoples which would apply to the 27 countries as well.

            • Ben

              Also, Peter Lilley who is an intelligent and experienced Eurosceptic and MP who has been Secretary of State for Trade and Industry, President of the Board of Trade, Financial Secretary to the Treasury, Economic Secretary to the Treasury and Shadow Chancellor made exactly the same point as John Redwood MP on tariffs. I doubt he’s also got the wrong end of the stick.

            • digitaurus

              Here is a quick summary for you of the economics of a tariff. https://faculty.washington.edu/danby/bls324/trade/tariff.html

              As I have already pointed out, in all cases, tariffs have no effect on governments or supra-national organisations like “the EU”; the EU doesn’t pay us anything.

              If the UK is a relatively small customer for a product (as a proportion of global trade), then tariffs have no effect at all on the foreign (EU) producer. Tariffs are just a transfer from UK consumers to UK government and to UK-based producers.

              If the UK is a relatively large customer for a product (as a proportion of global trade), then tariffs add a component of transfer from the foreign EU producer business to the UK government. Unfortunately, these businesses are not at the negotiating table and their influence on the negotiation is small and indirect (via their nation state governments). Only German industry really has sufficient clout to make a difference and that bird has already flown. The consensus seems to be that they will compensate for the loss by greater focus on other growing/large export destinations (China/Asia, S America, USA etc.).

              I hope this helps clarify why “the EU would, in total, have to pay twice as much in tariffs on their exports to us as we would on our exports to them” is not correct – and the fact that we have “a huge trade in goods deficit with the EU” provides us with little leverage in this negotiation.

            • Ben

              So you’re seriously saying that a former Secretary of State for Trade and Industry doesn’t understand how tariffs work?

            • digitaurus

              I agree that it seems unlikely. It’s perhaps more likely that you didn’t correctly interpret what Peter Lilley was saying. However, if you want to point me to the original source, I will be happy to read it myself.

            • Ben

              In the following video (at: https://youtu.be/cpF_UjAfiG4?t=359), Peter Lilley (Secretary of State for Trade and Industry and President of the Board of Trade from 1990 to 1992) says “We will get £12.3 billion of revenues if we apply the Common External Tariff to imports from the EU. Our exporters will pay some £6.5 billion of tariffs on their exports to the EU and so we would have ample money to compensate any exporters who were not sufficiently benefitted by a 15% devaluation and still have billions of pounds to reduce general taxation”.

            • digitaurus

              I don’t see much wrong with what Peter Lilley said, other than as outlined in detailed comments below and the wrinkle that I believe WTO rules restrict the ways in which you can compensate exporters directly. His statement is pretty consistent with the Washington University briefing I linked for you and with what I summarised for you.

              A detailed analysis:

              “We will get £12.3 billion of revenues if we apply the Common External Tariff to imports from the EU”. He is not saying we will get this money from the EU, just that the imports come from the EU. A tariff is a purely domestic tax. The UK government takes the money from the importer (e.g. the car dealer, supermarket etc) who passes it on to the UK consumer in the form of higher prices for the imported goods. See the Washington University briefing for the net effect.

              “Our exporters will pay some £6.5 billion of tariffs on their exports to the EU…”. It is actually the importers within the EU who will be paying the EU tariffs, so this isn’t precisely correct, but he is at least avoiding any suggestion that the UK government is paying the tariff.

              “and so we would have ample money to compensate any exporters…”. The situation is actually ‘better’ than he implies. Tariffs would constitute a £12.3 billion increase in domestic tax revenue for HMG with no offsetting payments to the EU (the £6.5 billion is paid by importers of UK goods residing in the EU). So the UK government will have an extra £12.3 billion to play with.

            • Ben

              To be perfectly honest, I still don’t quite understand what you see as the distinction between what I wrote in this article on tariffs and what Peter Lilley said in the video I sent you. What precisely is it which you see as being wrong with what I have written on tariffs in this article. What in particular do you think I should correct ? Thanks again.

            • Ben

              1. In that case, I’m *NOT* a “cake and eat it” Brexiteer. I and think we should aim for a bilateral Hong Kong-style FTA with the EU. Hong Kong which doesn’t have our 3 unique advantages and is only the EU’s 7th most important export destination (not its first as we are) negotiated it’s FTA completely from scratch in just 2 years and 10 months. However, I am clear that a UK-EU FTA would merely be the cherry on top of the icing of the Brexit cake.
              2. I don’t understand why Brexiteers like you, Sir James Dyson and Lord (Nigel) Lawson are so keen to pre-empt the Brexit talks and to talk down our chances of getting a good FTA just as many remainers are. We are not Greece and, in almost every way, Greece couldn’t have been in a weaker state and couldn’t have had less leverage in it’s talks. We, however, have a huge trade in goods deficit with the EU and all of its member states, we’re their largest single market and are fourth largest economy on the planet. We couldn’t have more leverage.

      • Ben

        1) I’ve explained the incentive in detail above.
        2) Actually the EU did back down on the scheduling of Brexit talks – originally the Trade Commissioner said no trade talks until you formally leave the EU at the end of March 2019 but now they’re due to start in just 4 months’ time in November. As Article 50 states, we have no say over the scheduling and timetabling of the Brexit talks. Divorce talks don’t have to be concluded or completed before trade talks can begin – “sufficient progress” must be made on the divorce/settlement issues before trade talks can begin. The two processes are then carried out in parallel. The leaders of France and Belgium recently asked the Commission to start trade talks sooner. The EC recently broke it’s pledge to not talk about trade until October when it talked about quotas with relation to the Northern Irish border which was inevitable and was reported by Politico. “Nothing is agreed until everything is agreed” as Donald Tusk wrote, responding to Theresa May’s letter incoming Article 50.
        3) Boris Johnson was only referring to the ridiculous, unofficial and leaked €100bn figure for the so-called Brexit “divorce bill” when he said the EU could “go whistle” for it. Johnson is not the Prime Minister or the Brexit Secretary. Even the E.C.’s own lawyers have admitted that a €100bn bill would be legally impossible to enforce”. The IEA says the figure should be no higher than €30bn but the EU’s released no official figure so far. Remember, if we leave with no deal, we have no legal obligation to pay the EU a penny and this gives us huge leverage. It’s not really an “exit fee” as such as, in the long-run, we’d have had to have paid the exact same amount anyway, we’re just settling the accounts and honouring our committments and international obligations.
        4) Leaving the EU without ever invoking Article 50 and just by repealing the European Communities Act, 1972 would violate EU law (the Lisbon Treaty says the Article 50 is the only legal way to leave) and international law (please see the Vienna Convention on treaties). It wouldn’t give us time to plan or prepare for leaving with no deal which the 2-year window and a potential subsequent transitional period provide. The transition should be clearly defined and time-limited and shouldn’t involve single market or customs union membership. It’d allow businesses here and abroad to adapt and for us to prepare new immigrations and customs systems. The Government and all of its departments are and have been preparing for all possible outcomes, including no deal.
        5) I agree that the benefits of Brexit are entirely contained within us as a country and that a free trade deal with the EU would, in the words of John Longworth and Richard Tice, be merely the cherry on top of the icing of the Brexit cake.
        6) I wrote on article on no deal here: http://www.studentvoices.co.uk/2017/07/why-no-brexit-deal-is-better-than-bad.html?m=1
        7) Nothing in EU law forbids us from bilaterally and formally negotiating our own independent free trade deals with non-EU countries while we’re members, so long as these deals aren’t signed, ratified or don’t come into effect while we’re members. “Lawyers for Britain” agree with you and I on this issue. We should already be tapping into that global trade potential of over £40 trillion now rather than just informally scoping the outlines of potential deals. I recently wrote to the International Trade Secretary, Liam Fox, urging him to start formal trade talks with non-EU countries now.

      • Ben

        Thanks for commenting.
        Firstly, we have no say over the scheduling and timetable of the Brexit negotiations as Article 50 states. It’s important to note that talks on separation/divorce issues don’t have to be concluded before trade talks begin – “sufficient progress” must be made by October this year and then the divorce talks and trade talks are carried out in parallel. As it says in the reply letter to the Article 50 letter, “Nothing is agreed until everything is agreed”. The leaders of France and Belgium recently urged the Commission to start trade talks sooner and the E.C. has already talked trade with regard to quotas and the Northern Irish border as was inevitable and as Politico has reported.
        Secondly, Boris Johnson was only referring to the unofficial and leaked figure of €100bn when he said the EU could “go whistle”. He’s not the Brexit Secretary or the Prime Minister anyway and so has no direct power with regard to Brexit anyway. Even the EC’s own lawyers have said that such a bill of €100bn would be “legally impossible to enforce”. The IEA says the bill should be no more than €30bn. Remember, however, that if we leave with no deal, we’d have no legal obligation to pay the EU a penny as the House of Lords’ Financial Affairs Committee has stated. This gives us huge leverage due to the hole in the EU’s budget.
        I strongly disagree with you on a UK-EU FTA. We have a huge trade deficit in goods with the EU (€60bn in 2015) and I highly doubt the EU would put €290bn of exports and 5-6 million EU jobs at risk simply to try to preserve a supranational political ideal. The EU is really built on competing national interests and there is a huge incentive to preserve already-existent trade – we’re the EU’s most important export destination in the whole world. Michel Barnier reinforced my point when he tweeted: “In a classic negotiation ‘no deal’=status quo. #Brexit ‘no deal’=return to distant past, which we all should avoid”. He also admitted that no deal would be “bad” for the EU. Hungary’s Prime Minister said that no deal would mean “big trouble” and a “nightmare scenario” for Europe. I’ve explained the rest in my article.
        However, I very much agree with you that “no deal is better than a bad deal”. All Government departments are and have been for a while preparing and planning for all possible outcomes, including no deal. 6 of the EU’s 10 most important trading partners trade with it on WTO rules without a free trade deal. In fact I wrote an article on this very topic. You can read it here: http://www.studentvoices.co.uk/2017/07/why-no-brexit-deal-is-better-than-bad.html?m=1
        For the reasons I explained above, I think we could both survive and manage with no deal which would, in many ways, punish the EU more than us. The key thing to remember is that once we have left the EU, we can tap into a new potential international market worth over £40 trillion, compared with the EU’s mere £12 trillion. As John Longworth has said, the benefits of Brexit are contained within us as a country and we will accrue them regardless of whether or not there is a Brexit deal and regardless of the contents of any Brexit deal. As John Longworth and Richard Tice both say, a free trade deal with the EU would merely be the cherry on the icing of the Brexit cake.
        There is nothing in EU law which forbids formal trade negotiations with non-EU countries. The rule is that any trade deals cannot be signed, ratified or come into effect before we have formally left the EU at midnight on 29th March 2019. Lawyers for Britain also agree with you and I on this. In fact, I recently wrote a letter to the International Trade Secretary, urging him to start formal trade talks with non-EU countries now rather than just informally scoping out the outlines for trade talks as his Department is currently doing.
        I think I am right in saying that you think we should immediately leave the EU, it’s single market and it’s customs union by repealing the European Communities Act, 1972 now without ever invoking Article 50 of the Treaty of Lisbon. This course of action would violate European law (the Lisbon Treaty, which the UK Parliament ratified, says Article 50 is the only legal way of leaving the EU) and international law (please see the Vienna Convention on treaties). Also, we’ll have to get a new immigration system and customs system amongst many other things in place before we officially leave and the two-year Article 50 window with the subsequent transition gives us an opportunity to do this. I think that we shouldn’t be members of the EU, the single market or the customs union during the transitional period/implementation phase. During the phase, we should settle the finer details of our trade deal with the EU and bring in our new customs and immigration systems.

    • Mojo

      Why is none of this information pushed at the remain camp. It should be all over the BBC, ITV and channel 4. Whether they like it or not. The government should perhaps take out an advertisement which tells the country the truth. Or maybe they should send every household a ‘Leaflet of Truth’ with a government website that can be accessed for validation. After all we get all sorts of other leaflets coming through the door. We have just had a voting registration leaflet. The second one this year!!!!

      • Ben

        Thanks for commenting and your kind words. Yes I think a lot of the media need to be more realistic on Brexit now and spend more time reporting good economic news since Brexit in a neutral light.
        Yes I had hoped that the Prime Minister might have made a positive case for Brexit during the General Election campaign but unfortunately she didn’t. She campaigned and voted to remain so I suppose it was always going to be difficult for her to positively and enthusiastically make the case for Brexit. That is why I opposed her leadership bid in the first place and wanted a long-term clean Brexiteer such as John Redwood to lead the country. Dr Liam Fox was the only long-term, genuine clean Brexiteer who ran and the Adam Werritty scandal and his relative obscurity led to him being eliminated early on.
        The democratic decision to leave has already been made and we all need to unite, get behind it and fight together as a country for the best possible Brexit deal while simultaneously making the case for a truly global Britain and free trade on an international level. Thanks again.

      • Flatdog

        Umm… The BBC is paid by the EU.

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