October 24, 2017

WTO prep key to Brexit talks

WTO prep key to Brexit talks

The government must prepare itself for a ‘no deal’ WTO solution post-Brexit to strengthen our hand at the EU negotiating table, argues John Redwood. 

I am glad the government is going full ahead with showing how the WTO option can work for the UK, and will do what it takes to make sure we trade and do business after March 2019 if there is no deal. That is a sensible contingency plan, as well as a good negotiating strategy.

It is quite clear from the different tone of remarks coming from Mrs Merkel, the Commission and elsewhere within the EU that they are very worried at just how popular the WTO model is with many UK voters. Brexit voters understand that this model delivers us full control over all our money from March 2019 with no additional payments, full control over all our laws including the laws transferred from the EU with the end of all ECJ jurisdiction, and full national control of our borders from day one out of the EU. That is what we wanted from Brexit. That is what “taking back control” was all about.

The wider partnership agreement that the UK wants mainly revolves around adding a free trade agreement to that list of advantages from simple exit. The debate is going to be over how much damage should we allow to the many advantages of just leaving in order to secure that free trade agreement. Some seem to think it is worth billions in extra payments, and worth keeping some ECJ involvement. I don’t agree.

I suggest the government starts from a different perspective. It should remind the EU that a deal will only be acceptable if it is indeed better than the WTO “no deal” option. That does not leave scope for giving money away we do not owe, or for accepting continuing EU jurisdiction. So first secure the WTO choice, then I suspect the EU will be more willing to seek tariff free trade which we know it wants. We do not need to pay to trade, especially when it is much more import than export. We certainly do not need to pay for talks.

Some say we do need a transition period after we have left. There is sufficient time to put in place all that is needed to conduct our EU trade on the same basis as we currently conduct our non-EU trade under WTO rules before we leave. That should be the government’s overriding practical aim for the next seventeen months. We will only need some implementation period beyond March 2019 if we have an Agreement reached late in the negotiations that requires something different from WTO border arrangements.

I am receiving numerous messages to get on with Brexit and keep to the March 2019 deadline to leave.

4.84 avg. rating (96% score) - 38 votes
John Redwood MP
John Redwood MP

John Redwood is the Member of Parliament for Wokingham in Berkshire. He was formerly Secretary of State for Wales in Prime Minister John Major’s Cabinet. He is currently Co-Chairman of the Conservative Party’s Policy Review Group on Economic Competitiveness.

  • ratcatcher11

    What you should have added as a postscript is a welcome to any country that wishes to leave the EU and free trade with Britain especially Poland, Hungary, Greece, Italy, Denmark, Sweden, Holland and the Czech Republic. That would have concentrated a few minds in Brussels.

  • Bosanova

    A fair point to put to the negotiation teams might be: how much did Canada pay for CETA? I expect that, since trade deals should be mutually beneficial, they paid nothing. A reasonable starting point for trade talks, now let’s stop this nonsense of ECJ jurisdiction and divorce payments.

  • JulianTheSceptic

    The EU has no right to bully us over money we do not owe. Legally it and its members commit to respecting the UN Charter. This requires negotiating in good faith and avoiding economic and political coercion – confirmed by UN Resolution 2625, which is binding as a Charter interpretation.

    The EU is also a member of the WTO and bound by its commitments. It accepts that it is also bound by the goals of treaties such as GATT. WTO case law (cf. ‘Turkey textiles’ case) requires regional unions to be about boosting trade between members and NOT CREATING ADVERSE EFFECTS for other WTO members (e.g. the UK after Brexit).

    It is also agreed EU Presidency policy for our negotiating period (2017-18) to seek ambitious balanced and comprehensive free trade agreements, so no way that we won’t get one. Look up the ‘Trio presidency programme’ document POLGEN83 on eu2017.ee

  • MrVeryAngry

    Yup.

  • janetjH

    When your very generous pay packet depends on you not understanding–you don’t understand.

  • Masakatsu Agatsu

    I suspect and hope that they are saying this to them; by constantly undermining the negiotiating position of the UK, it is the Quislings in our Parliament and their enablers in the media who are the problem.

  • Ken

    Germany can see the folly of a lot of what the EU does – they are already working to strengthen relations with Russia, seeing it as a major growth market for their goods as well as their pre-eminant energy supplier. The EU is fracturing – Germany is pursuing it’s own course, the Visigard countries are increasingly turning their backs to Brussels – having experienced the yoke of Soviet oppression in living memory, they can recognise it in the EU and Spain and Italy are fracturing.

  • Ken

    Whatever the WTO deal looks like, it should include significant tax cuts for businesses – in fact the cuts should more than compensate for potential tariffs under WTO rules. If we can do this, it will trigger a jump in companies coming to the UK to trade into the EU as well as persuading existing companies to maintain a strong presence here. If business feels they’re winning by staying here, they will stay here. At all costs, the UK has to be a winner and it has to be seen to win from Brexit.

  • fred finger

    For me it is clear that the duplicitous EU project/commission have only the ambition but to scupper Brexit one way or another. So here are my points:

    1) What are the chances of getting a deal past the r27, UK Parl, EU Parl.
    2) The negotiations need a win – win situation. No such situation exits, the UK priority is a fair trading deal, the EU commissions position is for the EU project not to be derailed. If one gains the other loses. A deal that works for both is unachievable.
    3) If there is a transition period, then what is the trading deal during that period. If no deal is struck before Brexit, then during the transition period we are on third country trading terms.
    4) The EU (Commission, France, Germany ) seems to want a very large payment of Danegeld.
    5) The EU is made up of many factions, will we be able to satisfy such a disparate group?
    6) Art 50 is controlled by QMV, will the deal if it includes our trading arrangement, be QMV. Trading and treaties have always been unanimous agreement; does ar 50 overide that.

  • NickG

    Spot on.

    The whole approach should be to negotiate from the assumption of the UK going to WTO terms in March 2019 and force the onus onto the EU to provide something better.

    The government has been bad at getting ahead of the narrative, past the cacophony of remoaners within, in the media – especially the state broadcaster – and the opposition on this.

  • Bosanova

    Perfectly sensible analysis. Let’s just get on with arranging our affairs under WTO rules. Should that cause the EU to have an uncharacteristic moment of clarity about what that means for them then so much the better, but let’s not hold our breath.
    For me Brexit was about sovereignty. With that secured Brexit offers so many economic opportunities it’s hard to know where to start. May must not be allowed to squander these opportunities just to stay chums with the idealogues of the EU.

  • MrVeryAngry

    Oh she can understand all right. It is just that she does not want to understand.

  • Richard (another one)

    I like reading J.R.’s stuff for some practical, no-nonsense respite from the almost never-ending doom and gloom that we are usually bombarded with. The question is, why aren’t our “negotiators” saying this stuff to M. Barnier? What exactly is it that they find so intimidating about those clowns from Brussels?

  • Richard (another one)

    Do you think she’ll be able to understand it? After all, she works for the B.B.C.

  • Malcolm

    I suspect that the EU will soon be faced with fire fighting on more than just the Brexit front as the situation in Spain escalates into what could yet be effective civil war and Italian states in the north of the country start also to stir against rule from Rome.

    A sensible tariff free trade deal with the EU is obviously a desirable outcome but to judge from the history of the EU, which moves at a pace that makes a sloth look positively athletic, it is unlikely to be agreed in the 2 year timescale allowed under Article 50. It is important that the UK doesn’t then fall into the trap of extending negotiations during a so-called transition which would be a continuation of membership in all but name. We should revert to WTO while continuing to talk about the trade deal; it may even be that the consequences of such a change in trade arrangements will concentrate a few minds on the continent and oil some wheels.

  • Landphil

    Could a copy of this excellent analysis please be sent to Jo Coburn at the BBC Daily Politics, who spent her recent interview with John Redwood constantly interrupting him and failing to understand the basic operation of WTO rules.

  • Stuart Fairney

    Exactly correct and erudite as ever. We really do have an alternative with the WTO and yet we are negotiating like a drowning man asking for a place on a life raft.

    I would also note that the EU, want, indeed they need Brexit to fail. A successful and prosperous UK outside of the EU is their death knell. Other countries would see UK success and compare it to their own moribund failure and also seek to leave. The EU as a concept is their life’s work, and judging by the poisonous briefing going on, they will do anything to protect to protect it.

    The EU want and need Brexit to fail. We should never forget this when dealing with them.

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