A former WTO deputy director general says that the trade and investment reality post-Brexit has not been fully understoodby Roderick Abbott / July 30, 2019 / Leave a comment
Prospect published an article in July which was deeply shocking to someone like myself, who has spent the whole of his career in the international trade world. It was deemed necessary to put a series of fundamental questions to prominent experts, and this suggested that a distressing level of ignorance exists in Westminster about international trade, despite the historical record of the UK as a central pillar of the GATT (General Agreement on Tariffs and Trade) and World Trade Organisation over the last 70 years.
The tragedy is that Britain has been throughout its history a proud trading nation. And after World War II, together with the United States, set up the global institutions which still serve us today.
Later, its membership of the European Union helped to reduce barriers to trade with neighbours, through negotiation over time.
If you believe the UK government, you would assume that Britain aspires to play a leading role in the trade world after Brexit. However, it may be at risk of throwing its achievements away. A no-deal, WTO outcome in particular would inflict immense damage. Having contributed to the development of the World Trade Organisation, there now seems to be no understanding in Britain of how it actually works.
The desire to exit from free trade with the EU, the UK’s major market for goods and services, defies all rational explanation. You would also lose the benefit of free trade with other third countries under existing EU agreements. Three years after the referendum, there are fewer people who still believe in the revival of Britain’s historic greatness—and many more who see a decline in their living standards.
Comments by leading politicians in the UK trade debate reveal a picture riddled with confusion and fantasy. Michael Gove’s belief in 2016 that “all European nations have access to a free trade zone stretching from Iceland to Turkey” is an early and notable example of a fake fact; and his point that “after we vote to Leave we will remain in this zone” is also untrue, one of the myths that have become ingrained in the minds of political figures.
Others assert that the EU will want to negotiate a new deal with the UK because, in the words of Boris Johnson, “they’ve got the incentive of the money” (the divorce bill), and know that the UK is ready to leave with no deal and come out on WTO terms. These statements convey a basic misunderstanding of what the…