Tuesday, May 28, 2024
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Kathy Gyngell:  We need to work harder on securing free trade outside the EU


British politicians led the country into Europe with the majority of us having no idea of what we were progressively being signed up to.

Now we risk the same happening in reverse.   We are dangerously close to sleepwalking out of Europe without any debate as to how this should be done – in the  best interests of UK trade and therefore prosperity.

The chances of a referendum after the 2015 election are high. In the void created by another hung parliament, with no single political party winning an absolute majority Ukip will have a strong chance of insisting on it.  They do not have to be partners in a coalition to enter the type of confidence and supply deal described here.

The chances are also higher than ever before that the British public will vote to get out.  That is what the most recent Survation Poll predicts.

Some 47 per cent would vote to get “out”, it finds, while just 34 per cent would vote to stay “in” leaving 19 per cent undecided. Among those likely to cast their vote, the gap is starker – 49 per cent opting to leave, 35 per cent wanting to stay and 17 per cent undecided.

So are we, as a country, prepared for this? Do we know how we want to get out?

I don’t think so.

Is anyone in government addressing how we should go about managing this extremely challenging and complex political and diplomatic process  or, assuming an out vote, how to protect  exporters and their trade from higher, more difficult tariffs and the uncertainties of change?

The answer, I suspect, is no one.

If there is an inter-departmental group of experts beavering away between the Cabinet Office, the Foreign Office and the Department of Business, Innovation and Skills (unfortunately we no longer have a Department of Trade) doing a SWOT analysis on our options, it is very secret.

As to the general public, if I am anything to go by, most have only the haziest of ideas about what these options are. The more informed will be vaguely aware that the ‘free trade area’ models for ‘getting out’ are Norway and Switzerland, as blogged on by Daniel Hannan MEP.

Of the differences between them, or of what negotiating a similar agreement for the UK would entail, most people remain in blissful ignorance. A quick search on Google would tell them that Switzerland is the Eurosceptics’ preferred model.  This was about the  state of my knowledge until I went to a discussion at the Centre for Policy Studies the other week.  Until then I had not heard about the downside of the Swiss approach – after all why would the average Eurosceptic want to highlight this?

Nor had I heard a rather persuasive third option – one put by Ronald Stewart Brown, Director of the Trade Policy Research Centre (TPRC). He advocated convincingly, from my layman’s perspective at least, the case for ‘staying in Europe for trade’*.

It is true that I am not versed in the basic concepts of trade policy, so you may say who are you to judge. Indeed. Well to assess his argument for yourselves, look here at his recent post on CapX and here.

It seems to me, however, that Mr Stewart Brown has it right on a number of fundamentals and his case should be listened to.

For, firstly, unless we address the question of how we would negotiate withdrawal the In or Out debate is almost vacuous. That unfortunately, he said, is the level “of most discussion on the matter among opinion formers both in Parliament and the media”.

Secondly, if Whitehall is poorly equipped to negotiate with Brussels on the terms of our withdrawal from the EU because of its essentially passive expertise in trade policy, which he suggests it is,  it begs the question of whether it really has “the mind-set or knowledge, let alone the capability, needed to negotiate seriously with the EU?”

Thirdly, if the former is the case this is why we cannot afford to “let the unattainable best be the enemy of the attainable good”. We must be pragmatic.

Fourthly,  the Eurosceptic ideal of a Swiss-type free trade agreement with the EU would involve us in a negotiation of EU/free trade agreement tariffs and rules that would take many years to achieve and be nothing short of a nightmare in the process.

The Swiss, even according to their advocate, Dan Hannan, took three years to plod through 120 sectoral agreements.  I for one wonder whether the Brits would have their efficiency and stamina.

Fifthly, negotiating to Stay in Europe for Trade  (for trade only) would avoid this.   Nor would it hold back UK trade with the rest of the world, with whom our exports are already rising, against the declining trend of our exports to the EU.

It would also enable a seamless transition from our present basis of trade with it. The alternative is all UK goods exports to the EU being  subject to EU tariffs – unless they were certified as complying with the applicable EU rules of origin. This I suspect could be the nightmare that our exporters dread, though these may well be the same people who otherwise cannot wait to rid themselves of the shackles of the EU.

The full case made by the TPRC I have barely touched upon here. Their thinking through our exit trade wise deserves much more attention than I can give it.

My concern  is that if their advice is not attended to now, urgently, we risk the blind (politicians) leading the blind (public) out of Europe, just as they led us into it.


* The position of The Trade Policy Research Centre is that it would greatly prefer the UK to remain in the EU if the UK can negotiate an acceptable basis for continuing membership. But without knowing how to leave the UK cannot negotiate effectively.

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Kathy Gyngell
Kathy Gyngell
Kathy is Editor of The Conservative Woman. She is @kathygyngelltcw on GETTR and is back on Twitter.

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