The free trade case for Brexit is folly

And crucially, it is new. Eurosceptics never used to buy into it

September 07, 2017
A demonstration against Brexit outside the palace of Westminster. Photo: NurPhoto/SIPA USA/PA Images
A demonstration against Brexit outside the palace of Westminster. Photo: NurPhoto/SIPA USA/PA Images

“First of all, leaving the EU gives us back control of our trade policy, and gives us the opportunity to maximise returns from free trade.” These words were spoken by David Davis on 11th July last year.

Post-Brexit, getting trade deals with countries the world over has become the new mantra. The prime minister’s visit to Japan last week brought this into sharp focus. But getting new trade deals (and getting them quickly) seems to have become not just a consequence of Brexit but a reason for doing it. What is puzzling is where the desire for an “independent trade policy”—as Brexiteers call it—has come from so suddenly.

Under its Common Commercial Policy (CCP), the EU has exclusive competence to conclude trade deals: its member states do not have that power. This was in the treaty before the UK joined. And it is entirely consistent with having an EU single market. The idea that the UK will "win back" powers to conclude free trade agreements after Brexit is therefore correct, unless complicated by whatever transitional arrangements are put in place with the EU. So far, so good.

But just as the UK was in years past at the forefront of driving the single market agenda, successive UK governments have previously always been supportive of the CCP.

The predominant British view has traditionally been that the EU acting together carries a collective weight more than the UK or any other member state alone. This therefore amplified UK influence. The Balance of Competences Review in 2013 (remember that?) found no widespread evidence that change was required and concluded that operating outside the EU framework would not be hugely beneficial.

Looking back, we find this enthusiasm put explicitly to the public. For example, the Conservative 1992 manifesto prioritised the opportunity for the UK’s six-month EU presidency to push for EU-led trade and cooperation agreements with Eastern Europe. There was no obvious scepticism regarding the CCP from the party which is now pushing ahead with Brexit.

“The Vote Leave manifesto did mention free trade deals after Brexit—but only as the fifth point in the section on economy and trade”
In the past, the CCP has not even been a particular bugbear for Eurosceptics. Before the referendum and stretching back to Maastricht, it is hard to find the CCP as part of any of their arguments. If it is so essential for the UK to regain these powers, we would expect the argument to have been a familiar refrain from Eurosceptics, alongside complaints about the Working Time Directive, Common Agricultural and Fisheries Policies, metrification and so on. The Referendum Party (remember that?) in 1997 was, according to Zac Goldsmith, founded by his father due to his opposition to EU law applying in the UK and the supposed assault on “ancient English civil liberties.” Nothing to do with global trade.

UKIP’s manifesto in 2005 only mentioned strengthening trade relationships with countries around the world (but without saying why the UK cannot currently do so). Its 2010 manifesto—since disowned—mentioned this only in relation to regaining the “dormant” seat at the WTO.

Fast forward a few years. David Cameron’s 2015 Europe speech launching his renegotiation actually praised the Commission’s “new trade strategy that reflects the agenda that Britain has been championing for years including pursuing massive trade deals with America, China, Japan and ASEAN.” Of course, Cameron was hardly a committed EU enthusiast but a self-defined ‘practical Eurosceptic’. But that the PM could make such a statement at all is revealing. There was no hint of trying to gain back powers. Quite the opposite.

In the run-up to the referendum itself, the Vote Leave manifesto did mention the power to make free trade deals after Brexit—but this was only the fifth point in the section on economy and trade. Hardly prominent. The only consistency—now and in the past—we find in opposing the CCP is from the anti-EU left, who oppose it for the same reasons they oppose membership of the single market. TTIP is a case in point. But even this opposition was far less vociferous than in other member states and from groups (such as the Greens) who are pro-EU but opposed to the contents of that particular deal. Many right-wing Eurosceptics seem to not have been too bothered by its contents and seemingly would rush into similar terms if it was re-badged as a UK-US deal.

There appear to be three reasons why taking back control of trade policy has suddenly become both a necessity and rationale.

First, it has become bound up in the idea that anything done by the EU is cumbersome and inefficient. Just as EU regulation (even of the single market) has become to be spoken of as not a necessary evil but simply evil, deals concluded by the EU are substandard because they have to satisfy 28 member states and can be vetoed by any one of them (as we saw with the Walloon Parliament on the Canada deal). But this misses the point. Any form of comprehensive, bilateral deal takes a very long time: there is no evidence of any “quick” deals between major economies. And the more ambitious the deal, the longer it takes. The fact that the EU’s internal ratification process is lengthy is something of a red herring.
“The hastiness to reassure that foreign governments will be ready to offer a ‘deal’ ignores some basic realities”
Second, it has equally become a rallying cry for the UK to rediscover a perceived lost identity as a trading nation. The promise for many is of leading a global agenda for free trade, or—for some—environmental standards and workers’ rights. But again, the kind of agreements which are breezily assured to come the UK's way post-Brexit are nothing like the UK had in the pre-EU past. And, as has been pointed out repeatedly, nothing under the CCP prevents the UK from trading with other economies already. It has not yet been made explicit what the UK can expect to gain which goes beyond what the EU as a whole might.

Third, showing that the UK is able to deliver on new deals where the EU has failed or stalled would be the best and most concrete measure of Brexit-related success for a domestic audience and internationally. The “told you so” factor, perhaps.

But this comes with very big risks.

The UK government is severely limited in its operational capacity to negotiate multiple new deals, and by the need to first sort out the exit and future arrangements with the EU.

The latter was very much clear from the PM’s words in Japan last week. Receiving warm words from governments around the world about the future is all very well—but would we hardly expect anything less when a PM or other minister pays a visit. An indication that a country would be willing to look at a new deal with the UK post-Brexit is not a substitute for a dozen rounds of complex trade negotiations over several years at least. And just as the UK is getting warm words about the future, likely so is the EU. We ignore this at our peril.

The hastiness to reassure that foreign governments will be ready to offer a “deal” ignores some basic realities. We would not expect the UK government to simply sign quick deals without debate (chlorinated chicken, anyone?)—so why do we expect this of other countries, particularly democratic ones? Will the foreign government promising a deal still be in power when the time comes to sign it in a few years’ time? Is any consideration given to domestic political opposition in the other country? Why is so much emphasis placed on concluding a deal “because it makes commercial sense” (if that was the case, surely Brexit would never have happened)? Why is there an assumption that “copying across” or “rolling over” agreements with the EU will happen when there is no precedent anywhere in the world for doing so?

Unless and until some of these basic questions are answered, it seems a pity that the CCP has been sacrificed on the altar of “taking back control” when it is likely to do anything but.