Brexit is such a big a problem it's easy to overlook those other gritty policy problems. Here, two MPs talk business and exports—what are their priorities?by Antoinette Sandbach , Bill Esterson / September 13, 2018 / Leave a comment
The Brexiters’ mantra “F*ck business” isn’t good enough
Antoinette Sandbach Conservative MP for Eddisbury, member of the Business select committee
As our departure from the EU approaches, it is important to have clear priorities, particularly when it comes to the future of trade. For 500 years we have been a trading nation. It is essential that this continues.
While some Brexiteers fantasise about a UK freed from the EU’s shackles, business people I meet are deeply concerned about a drop in trade after Brexit. We have 40 free trade agreements through the EU and hundreds of additional treaties with 168 different countries that must be renegotiated.
These concerns are often met with an unequivocal and blunt reaction: “f*ck business”. It is entirely understandable that deal preservation is not nearly as sexy as deal making but striking new trade deals should not be at the expense of the benefits which we currently enjoy—as they will not make up for the loss.
Our present arrangements are incredibly complex. The EU’s common market allows a free movement of capital and services that no free trade deal could ever achieve.
We also have a unique customs arrangement: our manufacturers benefit from one of the most complex and efficient international supply chains in the world. When we talk about trade preservation, we must factor in the benefits of these arrangements.
A Government paper, which was forced into publication in January 2018, analysed the impact of different EU-UK deals. It found that that the impact of moving from the EEA-type scenario to a FTA-type scenario is a 3.2 per cent hit to GDP.
We frequently hear that the US will make up for lost ground. Setting aside whether the Trump administration would sign such a deal, the analysis suggests a US-UK deal would increase UK GDP by 0.2 per cent in the long-term, not enough to make up for the drop in EU trade.
The response is that we must look to new and developing markets. However, the estimates again suggest that an ambitious FTA agenda, including with TPP countries, ASEAN, China, India, Australia and New Zealand would not be enough, adding a mere 0.1-0.4 per cent of GDP. All these new trade deals could therefore provide a total long-term increase of 0.2-0.7 per cent…