LeaveHQ, 01/03/2016  
 



In his first intervention in the referendum debate, Peter Mandelson, the Labour peer and former Trade Commissioner, claims that the UK could not only lose access to the single European market but could also lose the EU’s preferential trading status in foreign markets if the UK pulls out of the European Union. He also asserts that British exporters would face trade tariffs of up to 20 per cent on goods such as cars, whisky, pharmaceuticals and fashion sold around the world.

In retaliation, he warns, the UK might also have to raise tariffs on imported goods – pushing up the cost of foreign imports – while new trade deals are agreed. This he claim “would be harder” than those in favour of Brexit think, as after years in the EU the UK has “no real trade negotiating capacity”.

Now, unless Lord Mandelson's appointment to the EU was largely a political sinecure to keep him out of the way (we couldn't possibly comment), it is unlikely that a man of his stature and reputed intelligence could be this ignorant. From an MP or MEP, perhaps yes, we could write it off as run of the mill stupidity, but not so here. What we are looking at here is a grotesque distortion. 

Firstly we note that magic word "could". If we leave the EU, all sorts of things could happen, but in this case, the probability of such occurring is next to, if not, absolute zero. 

The only way this could happen is if we left the single market as well as the EU and left unilaterally without invoking Article 50 of the Lisbon Treaty. To do that would require a repeal of Section 2 of the European Communities Act, which last time we checked requires one of those parliamentary vote things. Given how obviously suicidal this is, nobody sane would propose it, and if they did, parliament would rightly block it. 

That means we will leave via Article 50. For tariffs to go up, we would have to leave the EU without first having secured a free trade deal. Mandelson has it that the UK has “no real trade negotiating capacity” - which is wholly offensive - but if that is true then it speaks to just how corrosive our EU membership is.

But then the whole point of leaving by Article 50 (apart from it being the legal instrument we've agreed to) is that it is the only instrument that compels the EU to negotiate an exit settlement. In this, it is more than reasonable to assume that neither the EU nor the UK wants to see an end to the relationship on less than amicable terms. To leave without a trade agreement at the very least would cause a toxic shock that would have far reaching ramifications for both parties, as well as knocking confidence in the still fragile Euro.

Therefore, we start from the position that all parties are negotiating in good faith, will necessarily be risk averse, and will seek to conclude an agreement as quickly as possible to remove uncertainty. Everybody wants this done with the least amount of fuss, the least amount of uncertainty and maximum continuity of trade. 

As many have now pointed out, including Mandelson, a bespoke agreement inside two years (as mandated under Article 50) is just not going to happen. That means, we will look at as many existing legal constructs as possible. The EU will not be keen to replicate the tangled mess of the Switzerland model, nor will it be in any hurry to engineer any special UK exemptions lest it precipitate more member states voting to leave the EU.

In that regard, it is most likely that the European Economic Area will be the default option. It addresses the matter of leaving the EU while ensuring continuity, while requiring no special exemptions not already enjoyed by non-EU EEA members. That means the single market is protected. 

This will likely be accepted without challenge in that as much as neither side wants any headaches, it will also be negotiated by a government that doesn't actually want to leave - so will opt for the relationship that most resembles EU membership.

But this is all familiar territory to those who have read our comprehensive Brexit plan. What makes us double-take is a subtlety in Mandelson's words where he says the "UK might also have to raise tariffs on imported goods – pushing up the cost of foreign imports – while new trade deals are agreed". This makes us wonder whether Lord Mandelson is actually startlingly ignorant as well as dishonest. 

The point being that we do not actually leave the EU until Article 50 negotiations are concluded and a settlement ratified. Therefore there is no gap between EU membership and the new settlement. Moreover, we are able to rely on the principle in international law of presumption of continuity - as he of all people should know. We retain third party agreements. 

In any case, the EU has a common external tariff that it must apply to all non-EEA members (his scenario). If we matched it in reciprocation, as Mandelson suggests, under WTO non-discrimination rules, we have to impose tariffs on all our other trading partners worldwide. That creates havoc, so we end up not imposing tariffs on the EU while they impose tariffs on us. That is why unilateral withdrawal would not be on the table - and that is why there is really no such thing as the WTO Option. It's just not an option whichever side suggests it. 

And so, making estimations broadly in line with the political realities, with single market access intact, there is no justifiable reason to give credence to anything Lord Mandelson has said. Put simply, he is a liar using the prestige of his former title to distort the debate and deceive voters. It's easy to see how he was the architect of New Labour - who took political lying to new heights and pioneered it to an art form.

But then having gone through this process of elimination we can now say that an off-the-shelf solution is the most realistic and politically achievable - and we can dispense with all the silly scaremongering about what could happen. Stronger In repeats the claim that we don't know what out looks like. Well as it happens, it rather looks like we do. 

What it does mean is that we retain freedom of movement, we still pay into the EU budget (albeit considerably less) and we get no immediate deregulation. That said, it means we get control of fishing and agriculture back along with energy and environment policy, a veto on new rules and regulations and as per the whole point of this exercise, we are out of the EU. 

There are limitations to this option, but as we continue to spell out, Brexit is a process not an event. There are pitfalls, but also a great many freedoms and future opportunities. Over the coming months, we will be outlining what those are. 

While this will not immediately satisfy Brexit hardliners, they should note that in the first instance we would be out of the EU, and out from under the rule of what is essentially the supreme government for Europe. That alone would be reason to celebrate. But it doesn't stop there. 

Adding our weight to Efta, we then have sufficient clout and leverage to renegotiate the EEA agreement at a later date, including freedom of movement, where we would be kicking at an open door. Those are negotiations we would never get while we remain in the EU, especially not after this referendum and the sham reforms of David Cameron. 

What we can say is that Brexit is not going to cause the sky to fall it, it can be done amicably and most probably will be, after which we can begin the process of reforming our relationship not only with the EU but also the global institutions where we have been operating in the shadow of the EU under its control. 

That may take many years, but will likely see a revitalised civil and diplomatic service and a renewed interest in political affairs beyond our shores. There is everything to gain and not much to lose. There is certainly no need for fear - and there is every reason to doubt the sincerity and integrity of Peter Mandelson.






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