Hard Brexiteers, egged on by their cheerleaders at Legatum and the Telegraph have of late been changing their tune.
They have gone from saying ‘of course we will get a free trade with the EU’ to ‘Its probably for the best if we don’t get a deal and trade solely on WTO terms’.
To facilitate this fantasy, they point to countries like the USA who supposedly do trade with the EU on such terms and say – they trade with the EU just fine, why couldn’t we (the UK)?
In a previous blog we looked at some of these countries to find out if they do trade with the EU on WTO rules alone – and unsurprisingly, they don’t. Each major economy that is commonly cited has a web of bilateral agreements which go beyond the ‘WTO baseline’.
We aren’t saying that the UK couldn’t duplicate these extra agreements – far from it. Some might even be relatively quick to replicate – however Whitehall has its hands full at the moment and is likely to have its hands full for the foreseeable future.
On the site today is an article by MEP William Dartmouth who it says is on the International Trade Committee in the European Parliament.
This article is full of inaccuracies, but since we haven’t got all day to list them we will stick to one or two key passages:
“On trade, leaving aside the maze of statistics, there is one simple fact. The UK is the biggest market for wine produced in Australia in terms of volume.
Australia sells us more wine than they do any other country. Wine that is produced in Australia competes, on price, with wines produced in Spain, France and even Bulgaria. But Australia does not have a trade agreement with the European Union. Far less is there unconditional free movement, or any right to settle for Australians in the European Union. Nonetheless, Australia has access to the EU markets including the United Kingdom, without a trade agreement and without freedom of movement, sufficient to sell this wine produced on the other side of the world more than 9,000 miles away.
In the event of no deal, we in the UK would have similar access to EU markets without a trade agreement, but trading under World Trade Organisation rules. Trading under World Trade Organisation rules is how Australia trades with the EU’s 27 member states, as does China, as does the United States, as do six of the top ten exporting countries to the EU – and 11 of the top 20.”
We have already explained that China and the USA don’t trade with the EU on WTO rules alone. But what about Australia?
Surely if UKIP’s spokesman on trade, who is on the International Trade Committee in the European Parliament says they trade with the EU on WTO rules it must be fact?
A two minute google search revealed the following:
Not content to trade with each other on WTO rules alone, Australia and the EU signed a European Union–Australia
Partnership Framework in 2008.
They have also signed a Mutual recognition Agreement between the EU and Australia.
In addition the EU and Australia have signed an agreement on trade in wine. See: https://www.wineaustralia.com/getmedia/83f8a051-04e4-4496-86d4-b86f66c35558/Australia-European-Community-Agreement.pdf
Even though they have negotiated these additional measures which go above and beyond standard WTO rules, neither side is happy with trading under these conditions, and so are in the process of negotiating a free trade agreement.
If the UK was to leave the EU without a deal, to trade on WTO terms, it would be extremely harmful to the British economy despite what the ill-informed and ignorant say.
Although we could and will sign new agreements with countries such as Australia who have indicated they would like to sign one with the UK this will take time and lengthy negotiations.
Returning to the EU, Mr Barnier has offered us two options – a Canada-style deal or a Norway style deal. The UK must make a decision NOW and make it work. If you want a sensible approach to Brexit, read this.