The myth that a “no deal” Brexit will bring catastrophe to the UK is at last being shown up for the fiction that it truly is. “Remain” stalwarts are not giving up easily, however, and continue to peddle falsehoods of the deepest dye in their desperation to renege on the referendum result, and keep Britain in the EU customs union and single market – come hell or high water!
Their doom-laden utterances have become tediously familiar, and we know what to expect whenever we hear from Mark Carney, Christine Lagarde, Mario Draghi, Dominic Grieve, Philip Hammond, Keir Starmer, or that brigade of failed has-beens – Major, Heseltine, Clarke, Blair, Mandelson, all aided and abetted by the BBC, CBI, FT, Economist, New Statesman, Evening Standard (viz. Osborne) and, of course, that redoubtable meddler Justin Welby, Archbishop of Canterbury – plus the host of other forecasting wizards who share the uncanny knack of being able to predict the exact opposite of what actually happens.
These miserable obsessives conveniently ignore the protections for the UK that will stay in place post-Brexit under international law. Failure to secure a free trade deal with the EU simply means that we shall trade with EU countries on terms set out by the World Trade Organisation (WTO) – an option usually pooh-poohed with contempt by Remain pundits as a recipe for chaos.
The WTO oversees a system of trade rules for 164 member-countries that together account for no less than 98 per cent of all global trade. Under its “General Agreement on Tariffs & Trade” (GATT), tariffs on manufactured goods traded between the UK and EU would remain low at an average of about 3 per cent.
According to David Collins, Professor of International Economic Law, City Law School, University of London, exiting the EU customs union will allow the UK to boost its trade with countries around the globe. Under WTO rules we can conclude preferential arrangements with any nation with which we negotiate a “Free Trade Agreement” (FTA). The EU itself has over 60 FTAs with other countries, some of which have already declared their intention to offer the UK terms as good, or better, than those already agreed with the EU.
In fact the WTO option is an entirely acceptable, eminently workable alternative to a trade deal, and it would leave the UK truly able to walk away.
Non-tariff regulation threats
As for the threat of non-tariff barriers, the UK intends to retain conformity with EU health & safety regulations after we leave. The existing low risks to the public in UK products will therefore not change – and there will be no legal grounds for excluding our goods from EU markets. Arbitrarily imposed border inspections would be prohibited under WTO rules and agreements. Indeed, the WTO explicitly prohibits the use of non-tariff barriers for protectionist purposes.
The WTO has introduced a new “Trade Facilitation Agreement” that obliges the EU to ensure that its borders are as frictionless as possible using modern technology on pre-arrival document processing and electronic payment systems. It is now forbidden to use complex internal regulations to discriminate against foreign products. A respected international tribunal with a high rate of compliance enforces this rule, and the European Court of Justice cannot overrule it.
Irish Border ploy
The EU raised the Irish border issue to force the May administration into capitulation on customs union membership, and if her withdrawal agreement gets through Parliament in January, they will have succeeded.
As for the Backstop, it is a palpable hoax conjured up as a deterrent to any future EU exits. In reality, no one wants it or has any intention of imposing it. Both Britain and the EU have made it clear that they would never, on their own initiative, impose a hard border, as indeed have the Irish. Even the UK Revenue authorities have confirmed that it would be unnecessary, and that the whole issue can be dealt with away from the border. Assertions by Remainers that the issue would bring back the IRA are grossly irresponsible.
But please note Brussels’ real motive in all this, which has little to do with Ireland. It is a device to prevent any other EU members from exercising self-determination by deciding to leave in the future. Just look at a map of the 27 countries making up the European Union, and you will see that there are close to 100 borders. Think about the threat of intractable mayhem inflicted by customs officials at “the border”, based on an Irish precedent, and you will understand why they are making such a mountain of this molehill.
While the Director-General of the WTO, Roberto Azevedo, has announced that he is looking forward to having the UK back as an independent champion of free trade, BBC “Newsnight” on 11th December provided a classic illustration of media determination to “no-platform” a guest who holds any view that threatens the doomsayers’ line. Indeed, John Redwood must have rued his acceptance of the invitation.
Challenged by Kirsty Wark (at her smug know-it-all worst) to justify a “no deal” position, he was not permitted to complete one single sentence, eventually letting his frustration show by suggesting that allowing her guests to speak might be a good idea so that viewers are better able to make up their own minds.
We are by now quite used to hearing phrases that insult our intelligence like “crashing out”, “cliff edge”, “the clock is ticking”, “lorry parks in Kent”, “people will die”, coupled with the hysterical claims of shortages of essential medical products – such as the insulin the Prime Minister needs to control her diabetes.
As it happens, this provides a useful example. Insulin, like most products, is traded between companies, not governments. It is sold to UK companies by a Danish company in the EU and put on a plane or boat for arrival in this country, and there is nothing to prevent that continuing after March 29.
In the highly improbable event that EU officials act illegally and somehow manage to punish one of their own resident businesses by preventing it from shipping products to the UK, we would get the PM’s insulin from the USA, or it could come via Norway and then be sold on to the UK. Nor is there any reason to fear that Britain would put up a barrier against Danish insulin reaching a UK business after 29 March.
Here’s the point: businesses, not governments, deal successfully with this type of complication on a daily basis – governments don’t do business; they provide the obstructions.
What about UK exports to the EU? Fairy tales like “M20 to Dover gridlocked with lorries” is based on the idea that restrictions imposed in Calais will prevent our goods getting easily into France and other EU destinations. This, despite the fact that every local official in Calais has already declared that the feared restrictions will not be applied. In any case only 6% of UK exports leave via Calais and, as noted by Lord Bamford, Chairman of JCB, there are 120 other commercial cargo ports able to take up the slack if Dover can’t handle everything.
But think it through: if Macron were daft enough to attempt to block UK exports into the EU, thousands of French and German autoworkers whose “just-in-time” routines are disrupted, would be thrown out of work, faced by a shutdown of their manufacturing plants. Even a nut like Macron is unlikely to inflict such a monstrous act of self-harm.
The UK’s Department of International Trade is in discussions with several countries with which the EU has failed to make trade deals, such as the USA. As 90 per cent of future world GDP growth is expected to arise outside the EU, it is obviously important for the UK to look beyond the EU, which in any case accounts for less than half of our overall trade.
As I have been reminding readers over and over, the UK will no longer be required, as we currently are under EU Customs Union rules, to impose tariffs on imports from developing countries of grains, tropical fruit, building materials, cloth and other products we don’t produce ourselves. These tariff-free imports will reduce prices for UK consumers, while allowing developing countries to trade out of poverty rather than rely on handouts that often serve to enrich their corrupt leaders instead.
Once outside the EU we shall be able to complete trade deals faster, not being encumbered by the EU’s interminable and wearisome ratification process that involves approval by 27 member states.
Seems like a no-brainer, doesn’t it?
By relying on so-called “negotiators”, basically dyed-in–the-wool “remain” politicians and civil servants anxious to keep their jobs at any price, our government has irreparably undermined its own position by giving the Brussels mafia the impression that we are desperate to kowtow to their demands in servile deference to their growing intransigence. In attempting to extract a deal, any deal – even the 585-page “withdrawal” agreement – at any cost, we have been relegated into a nation of wounded supplicants.
Ironically, it is the EU that has most to fear from having a pro-competition, free trade economy on its doorstep. So expect more panicky verbal flatulence to emanate from Brussels while the UK shows its determination to maximise WTO trade advantages.
As Professor Collins points out, our new Trade Remedies Authority has been set up to address disputes, and our ports will soon be ready to handle any minimal custom checks that are needed.
Mutual goodwill – the expected norm
Most trade negotiations have the simple aim of allowing mutual interests to be maximised by the trading itself, regardless of differences in political ideology. Mutual goodwill is therefore a given.
This may be a statement of the obvious, but it doesn’t apply to European leaders who have been proclaiming a very different aim – not mutual benefit, but rather to make Britain suffer for having the gall to leave the club. President Juncker of the Commission has said that our post-Brexit economy must not be allowed to grow faster than the eurozone; while President Tusk of the Council has confessed that his demands are aimed to frighten us into begging to come back in.
Even Macron’s predecessor, Hollande insisted that Britain must be penalised for daring to leave, and Merkel warned German industry that it must accept disruption of trade with the UK for the higher good of damaging Britain.
But please don’t fear these cowering wimps. As noted by Tony Lane, former head of International Trade Policy at the DTI, the advantages of WTO rules come without strings. They leave Britain free to develop trade relations worldwide. Lord Bamford has publicly proclaimed that there is nothing to fear from a no-deal Brexit under which we shall trade on WTO terms. His company, JCB, is the largest manufacturer of construction equipment in the UK and exports 75% of everything it makes, while also importing components from all over the world. For JCB, this 2-way trading arrangement happens every day as a matter of routine.
His message for British business at large is that next March we should be prepared for some initial disruption – but “businesses will adapt. It will not be the end of the world.”