LeaveHQ, 22/08/2017  

Guest blogger, Oliver Norgrove
The summer ahead of our Brexit trade talks was supposed to be a period symbolising some sort of progress, not a camouflaging of deceit. If recent comments and proposals are anything to go by, the government doesn’t appear to realise that the provisions of Article 50 allow only for a two year period, barring extension by unanimity. We are wasting valuable time trying to reconstruct arrangements and agreements that are provided in ready-made fashion by the Single Market.

This was made hugely apparent by last week’s hilarious position paper on proposals for future Customs arrangements, and then again today with an especially hopeful outline of the continuity and availability of goods in both the UK and EU post-Brexit. To those of us with a clue, these plans are poor attempts at hiding the cold, harsh reality that membership of the EEA offers Britain secure and comfortable trading terms.

Within the confines of the EEA, we don’t need to beg, plead and over-promise as we currently are. That David Davis thinks he can waltz into Brussels with proposals that emulate the benefits of the EEA, such as the ‘free and frictionless trade’ promised in today’s paper on continuity with trade in goods, is pure fantasy.

What is more frustrating is how blatantly the Department for Exiting the European Union is chirpsing with the idea of Single Market membership without actually admitting it. It is almost as if the EEA might actually represent an amicable, workable compromise. Not just economically, but also in standing in conjunction with domestic political interest. Brexiteers need to recognise that 52-48 is a relatively small gap that can, in theory, be closed or widened given any changes to the external political environment.

Apparent too is an arrogance which seems to ignore the legal implications of leaving a Treaty. On Brexit day, the UK becomes, by virtue of withdrawal, a third country, and thus subject to border and documentary checks not previously necessary. This is to ensure continuation of the enforcement of standards.

“The UK believes our future relationship should be built from our commonalities and longstanding trust in each other’s systems, as it does not benefit either party to ignore our unique starting point”, states the government in yet another example of our wishful thinking approach to Brexit negotiations. This treacherous road will lead only to massive political and economic disappointment. The knock-on effects for the Conservative Party could be disastrous.

Seeking not to be outdone by government incompetence, Patrick Minford, Leave’s woefully inept representative in the glamorous world of economics, is back on the scene to parade us with his stagnant, unreformed opinions about the merits of the WTO option. I have rubbished his ideas more conclusively here, but it is always worth going over the consequences of the Brexit debate’s most dangerous contribution.

In a new report by Economists for Free Trade (a concept barely addressed by tariff removal) entitled ‘From Project Fear to Project Prosperity’, Minford claims that a WTO Brexit, the hardest there is, will bring an economic boost to the country in the region of £135bn. Luckily, it has been widely discredited so far, and I imagine the same will happen when the full report is released in the autumn.

The worry here is that, since Minford nestled himself into a tiny little enclave during the referendum debate, he still retains substantive support amongst Leave voters, who (just as I did) latched onto him as a rare ally amongst both academics and economists. His influence is already there to see. I watch in despair as Leavers share news articles reporting on his (note, solitary) assertions, using them as evidence that Brexit can do no harm to the economy. The truth, though, very much lies with the reverse.

There is no economically perfect Brexit, but the Norway option is the one most capable of promoting stability and the WTO option the least. Leaving the EU, avoiding trade settlements and relying instead upon GATT/WTO rules for trade does not, contrary to Minford’s claims, create any kind of free trade cornucopia. It actually leads us down a path of holdups, excess red tape and stunted trade flows. Exactly the threat to jobs that Project Fear actually had a point about.

If you don’t believe me, take a look at how many major or productive economies trade with the EU using only the explicit terms of the WTO. The answer is none of them. And this is so for very good reasons. Becoming an independent WTO member means, firstly, that the EU will be legally required to impose tariffs upon us in accordance with our status as ‘Most Favoured Nation’ (MFN). WTO rules over discrimination are clear: duties applied to a member must be applied in uniform fashion to all.

And, no, this will not lead to retaliation. If the UK decided to respond with the imposition of tariffs on the EU, it would need to do so to all other WTO members, again for the purpose of equal treatment. An unacceptable prospect therefore posed by the WTO option is a protectionist race to the bottom. But, aside from tariffs, which aren’t the be-all-and-end-all of trade discussion, we need also mention those ever-threatening non-tariff barriers.

By opting for the WTO option and thus diverting from bilateral negotiations with the EU, the UK will not have specific agreements in place, known commonly as Mutual Recognition Agreements (MRAs), to be able to deal with documentary checks and customs holdups. Once out, we are a third country, meaning our drivers and shippers will need to provide evidence that transported goods meet agreeable standards. Here we will have huge problems. It is no wonder that so many global powers focus on trade agreements which target customs cooperation; it is such a minefield for modern trade.

But, these technicalities, important though they are, do not interest Minford and the wasteland of Leave supporting commentators and agencies. Slap ‘£135bn economic boost’ onto the BBC News website and voila, that’s all you need to spin an important story. The whole thing is a camouflaging of deceit, and there appears to be no end to it. Minford is at least a manageable problem; it is the government who will in the end look utterly ludicrous in wasting its time trying to replicate the EEA through an FTA and a series of transitional deals.

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