More hyperbole from the London Evening Standard

Today’s leader column in the Daily Osborne London Evening Standard ends with this:

"There is no escaping the simple economic truth: outside of a customs union, the cost of the things we buy will go up. The opportunities for British firms to sell abroad will be reduced. Britain will have consciously engaged in the biggest act of protectionism in our history."

According to Guido, George Osborne has been rarely seen at the Standard since November. He is too busy on the US lecture circuit and doing whatever else he does in his numerous roles. So it is possible that Osborne is not responsible for the garbage published today, although it does have more than the fainest whiff of the man who will not rest until Theresa May's body is chopped up in bags in his freezer. If you get an invitation to dine with the Osborne's, think twice before accepting! 

Let us remind ourselves why were are leaving the customs union. It is because we want the ability to strike trade deals around the world. The EU is cumbersome and bureaucratic. It is has a poor track record in striking deals. And even when it does strike deals, to try and keep all member states happy is not an easy task, and the deals that are struck are not necessarily in the UK's best interests. 

The EU's Common External Tariff makes the costs of many things more expensive for all citizens of EU member states. As a free trading nation once again, we can reduce or even abolish certain tariffs that will make food and clothing cheaper. 

In 2016, UK exports to the EU were £236 billion (43% of all UK exports). UK imports from the EU were £318 billion (54% of all UK imports). The UK had an overall trade deficit of £82 billion with the EU in 2016. A surplus of £14 billion on trade in services was outweighed by a deficit of £96 billion on trade in goods. The share of UK exports accounted for by the EU has fallen over time from 54% in 2006 to 43% in 2016. 

All the figures above are contained in a House of Commons briefing paper published in December last year. 

If the EU insists on punishing us for having the temerity to leave its blessed institution, businesses will find new markets around the world. The EU has more to lose if it imposes tariffs. Even the most enthusiastic Europhile has to understand that.  

If there is no bespoke agreement, then the default position would be that the UK, a member of the World Trade Organisation (WTO), would trade under WTO rules. The UK would face the EU Common External Tariff as EU exporters would face the tariffs adopted by the UK. Trade can thrive under this regime, given favourable commercial circumstances.

As the economist Ruth Lea has said, "Preferential trade deals may oil the wheels of international commerce, but their importance should be kept in perspective. If the commercial circumstances are adverse, trade will not thrive, irrespective of special trade agreements." 

For the Standard to say that the opportunities for British firms to sell abroad will be reduced, and that Britain will have consciously engaged in the biggest act of protectionism in our history, is hyperbole. It's the sort of rubbish we heard during the referendum campaign - hence my observation that it has more than a whiff of Osborne about it. 

The long term economic rewards far outweigh the negatives. Freeing ourselves from the customs union and looking to strike deals with emerging markets is hardly protectionism. It is the opposite. The future's bright, the future's global. 

Watch this video from Freedom Association Council Member, Daniel Hannan MEP

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