Brexiteers should cheer on Brussels as it strikes free trade deals with Australia and New Zealand

When it comes to free trade, the EU’s interests and Britain are the same
When it comes to free trade, the EU’s interests and Britain are the same Credit: Victoria Jones/PA

Britain should take advantage of the European Union’s reinvigorated trade policy, given fresh impetus by the election of Donald Trump, to strike its own free trade agreements after Brexit.

On Tuesday, the EU gave European Commission negotiators the green light to start trade talks with Australia and New Zealand.

Brexiters have in the past rightly criticised the ponderous years-long pace of EU trade negotiations but they should now cheer on Brussels as it secures agreements with the likes of Japan, Mexico, Singapore, and Canada.

The bloc’s trade credentials were in tatters before the referendum. The EU failed to get the Transatlantic Trade and Investment Partnership (TTIP) signed off before the end of the Obama administration. Years of talks had become a lightning rod for popular discontent and anger over free trade deals across Europe, including in Britain.

The bloc’s deal with Canada, seven years in the making, was embarrassingly almost derailed at the last moment by the regional Belgian parliament of Wallonia, which threatened to veto the whole deal.

The CETA trade agreement needed to be ratified by all 28-member states, which in Belgium’s case meant it had to be backed by the comparatively tiny parliament for French-speaking Wallonia as well as its other regional parliaments.

The game-changer was the election of Donald Trump in 2016, which effectively killed off the TTIP negotiations.  His protectionist America First policy drove the EU to compromise to get deals done and dusted rather than rely on the grinding process of drawn-out talks to win concessions.

When the president pulled the US out of the nascent Trans-Pacific Partnership trading bloc, the EU was able to exploit that uncertainty to sign a deal in principle with Japan. Australia and New Zealand are also prospective TPP members.

Mr Trump’s fiery rhetoric against the NAFTA deal with Canada and Mexico - themselves signed up to unratified TPP - cemented CETA and enable the EU to update its trade deal with Mexico in a relatively short one and a half years.

Trade has become the EU’s proxy battleground with Mr Trump.  It sided with the UK, helping to save thousands of jobs in Northern Ireland, after the president threatened huge tariffs against Canadian aircraft maker Bombardier.

It is preparing rules to prevent European companies from abiding by US sanctions on Iran and protect them from US court judgements after Mr Trump withdrew America from the denuclearisation agreement with Tehran.

Brussels fears that Mr Trump will have a corrosive influence on what it calls the multilateral world order.  His threat of slapping tariffs on EU steel imports on the grounds of national security breaks WTO rules, in the view of the European Commission, and could encourage other leaders to do the same.

Fighting that move and shoring up the global trading order with new deals is in Britain’s interests, especially as the vision of Global Britain striking trade deals relies on countries playing by WTO rules and not arbitrarily flaunting those norms.

Britain will remain an attractive market after Brexit and countries including Australia, which was our largest trading partner before the UK joined the EEC in 1973, want to sign free trade deals with us.

It is fair to argue that the EU, by its far larger market, will have more leverage than Britain in future trade negotiations and there are fears Britain will have to accept less favourable terms than the EU.

But those who argue that a no deal Brexit, a return to WTO terms, is better than a bad deal with the EU must surely feel no qualms about a similar situation with any other country in the world, where existing trade links are far weaker.

Theresa May should utilise close ties with Australia's prime minister Malcolm Turnbull
Theresa May should utilise close ties with Australia's prime minister Malcolm Turnbull Credit: HANNAH MCKAY/ Reuters

Britain has not negotiated its own trade deals for more than 40 years because the European Commission is the sole negotiator for the EU. It can also not begin formal trade negotiations until after Brexit on 29 March 2019.

Rather than make it more difficult for “Global Britain” to make its own deals, the EU’s free trade negotiations both complete and ongoing provide time-saving foundations on which inexperienced British negotiators can build.

The UK can, if it can convince its negotiating partners, cherry-pick parts of EU deals it likes and ignore those it doesn’t.  It can ignore the EU’s overtly protectionist stance over agriculture, which it is expected to maintain in the talks with Australia.

Britain’s trade team will only need to consider British interests and be freed of the EU’s cumbersome burden of considering 28 national concerns such as, for example, those held dear by Spanish manchego producers or French accountants among many, many others.

That flexibility cuts both ways and there are suspicions that Australia’s enthusiasm for a quick deal with Britain is simply to use any UK concessions as leverage in its talks with the EU.

The EU’s announcement on Tuesday that talks would begin with Australia and New Zealand sparked fears that Britain would miss out on similar deals after it leaves the bloc.

Such concerns, proudly paraded by pro-Remain newspapers pouring scorn on the Commonwealth, are short-sighted and ill-informed.

They are also not shared by the British government, which will be supportive of the EU’s trade efforts even after Brexit because it is in the national interest and because there is a strong economic and moral case for it.

When it comes to free trade, the EU’s interests and Britain are the same, whether the UK ultimately stays in the customs union after Brexit or, as the government insists, leaves to be free to strike its own deals.

 

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