After Brexit – the UK’s trading landscape
Sir, – With just over four months left until it is scheduled to leave the EU, I thought it might be timely to examine the different potential trade outcomes for a post-Brexit UK, as previously proffered by Brexiteers.
First, it has been suggested that the UK enter into an arrangement akin to the Schengen Area Agreement (European Free Trade Association). The Schengen Area Agreement was signed by participating countries in June 1985 but not adopted by the EU until May 1999, under the provisions of the Treaty of Amsterdam. Ironically, the UK government of the day opted out of this agreement for reasons of border security, albeit that the Lords Committee on the European Communities recommended on March 2nd, 1999, that the UK join. Such an arrangement is now seen is some quarters as a post-Brexit trade solution.
Second, a “Canada-style” free trade agreement with the EU has also been presented as a solution. In context, negotiations for the Canada-EFTA Free Trade Agreement (with Iceland, Norway, Switzerland and Liechtenstein, all of which combined have an inferior GDP than the UK by circa $1.5 trillion in 2017) commenced in 1999 and only came into effect on July 1st, 2009. Negotiations in respect of the Canada-South Korea Free Trade Agreement began in 2005 and only came into effect on January 1st, 2015. Specifically, the Canada-EU Comprehensive Economic and Trade Agreement took seven years to agree and implement.
Third, an argument has been advanced that, after March 29th, 2019, the UK can simply trade on World Trade Organisation rules until such time as more beneficial trade deals can be negotiated with individual countries. On July 24th, 2018, the UK government provided a formal submission to the WTO, comprising 164 countries and included import tariffs on indigenously produced goods to protect relevant industries from cheaper foreign imports, as is normal. It was intended that the EU and UK would divide the current quotas between them, as separate member states, according to the historical flows of trade in each product, in what was described as a “technical rectification”, to effectively fast-track the submission. However, it has been reported that circa 20 WTO members have objected to this approach, including the US, China, Russia, New Zealand and Australia requiring individual negotiations with each objector prior to the UK submission being accepted.
On the principal of new trade deals, it is worth highlighting that, under EU rules, the UK is specifically prohibited from negotiating independent trade deals until it leaves the EU on March 29th, 2019. To date, the UK government has been limited to holding consultations with the US, the Trans-Pacific Partnership, Australia and New Zealand, the latter two having begun in July and terminated in October 2018, as per the UK Department of Business, Innovation and Skills website.
Obviously, Theresa May’s Chequers Plan has garnered the most attention in the past week or so.
However, as widely held in the media among seasoned political commentators, it is very likely that the Chequers Plan will not survive a House of Commons vote.
Finally, there is the option of a hard Brexit which some prominent Brexiteers favour for such supercilious reasons as “calling the EU’s bluff” and an allusion that the UK is a country of stoic resilience in the face adversity. Neither of those arguments, if they can be termed as such, carry any practical or realistic economic weight and are hubristic in the extreme.
To summarise, at least five trading separate scenarios have been advanced by the Leave in a post-Brexit UK. On the other side of the debate, there is one option. Remain in the EU with all current EU trade deals in place. – Yours, etc,
A chara, – A recent headline in this newspaper stated that “Theresa May deserves neither our pity nor our admiration” (Kathy Sheridan, Opinion & Analysis, November 21st).
Perhaps. I doubt, in any case, if she wants either.
However, given her commitment to getting the draft Brexit deal through – a deal most commentators seem to agree is one that ticks all the right boxes from this country’s point of view – she is surely deserving of our support. – Is mise,
Rev PATRICK G BURKE,