Exposed: the harsh reality of Brexiteers’ trade deal fantasy

  • It is already clear to us that a divided parliament cannot give the last word on Brexit. It must be for the country as a whole in a people’s vote.

  • Chuka Umunna MP, Sir Vince Cable MP and Rt Hon Anna Soubry MP

The ideologists of Brexit have clung for the longest time to the argument Britain’s trade prospects will be transformed by leaving the EU, as we would have both a “deep and ambitious” free trade agreement with our largest export market and gain marvellous new freedoms to negotiate bilateral trade agreements of our own round the world.

But outside their bubble this strategy lies in tatters. There is almost no one who believes there is a serious prospect of such a trade deal being struck with our erstwhile European partners while the government rules out remaining in Europe’s economic area.

It is only by keeping one foot in the camp that we would get similar trade rights and benefits to those we have now. Parliament needs to address this in the coming weeks when it consider the Lords’ amendments to the Withdrawal Bill.

As for global trade deals, reality has begun to sink in as President Trump declares his enthusiasm not for trade deals, but trade wars, and while those countries with whom, through the EU, we have existing trade deals sense weakness and move to press home their own demands.

As the new report, Trade-Offs: the harsh reality of going-it-alone as ‘Global Britain’ published by Open Britain today makes clear, if we are willing to make what, in many cases, would be unpalatable concessions then perhaps we may, eventually, get some new trade deals outside the EU.

But the wait will be long, and the price will be high. And it is hard to imagine that anything we do get would not also have been available — and on better terms — if we stayed inside both the customs union and the European economic area.

The report analyses the prospects of deals with the US, China, India, Australia, New Zealand and the states of the Persian Gulf. Each one of these has been identified by Brexit’s enthusiasts as a target, but for each there will be unique difficulties in getting any trade treaty done.

For the US there is the obvious question of whether it is ever going to be possible to reach agreement with a protectionist president who has just imposed tariffs on our steel exports for “national security” reasons. That’s before we grapple with letting chlorine-washed chicken into our supermarkets or allowing US pharma to run wild in the NHS.

China is unlikely to be interested in opening its services to real competition, India will insist on a much more liberal immigration regime for its IT specialists and, like Australia, is likely to be unmoved, or even repelled, by appeals to the imperial past.

In the Gulf any deal could ensnare us in regional power-rivalries and while New Zealand might be willing, eventually, to sign a deal, such an agreement could threaten Welsh and Cumbrian hill farming. Given New Zealand has an economy around half the size of Singapore’s, it is sensible to ask whether that would be worth the effort and the pain.

Yet it is what these countries have in common that should really worry us: experience and distance.

Minding the gap matters in trade. Even the nearest countries considered — in the Gulf — are never likely to be part of the complex and integrated supply chains on which modern high-tech manufacturing depends. There aren’t any roll-on, roll-off ferries to the US, either.

Throwing away our strength in Europe in the hope that Donald Trump will be nice to us seems eccentric at best, reckless at worst.

When parliament votes on membership of Europe’s economic area and customs union in the coming weeks the choice will be presented by some as being between a popular will established in June 2016 and a tone-deaf elite.

But the reality is, as the pollster Peter Kellner has recently pointed out, it is those who pretend nothing has changed in the last two years who are now deaf to the people’s will.

Concern about the potentially devastating damage a botched Brexit could do to the livelihoods of families who are “just about coping”, is rising and entirely legitimate.

Even then the vote in the Commons will not end the matter. It is already clear to us that a divided parliament cannot give the last word on Brexit. It must be for the country as a whole in a people’s vote.