The following is a guest post by Roger Helmer. Roger was a MEP representing the East Midlands from 1999-2017, and is a former chairman of The Freedom Association.
We’re accustomed to hear Michel Barnier (and others in Brussels) insist that the UK can’t “cherry-pick” its trade agreement with the EU. It’s a term they seem to apply to anything short of total acceptance of the acquis communautaire, since almost by definition any agreement will address some issues and not others. Yet Monsieur Barnier is the biggest cherry-picker of them all. He has said he’d be prepared to offer the UK a Free Trade Deal (FTA) on goods, but not on services.
Well of course he would. The EU has a massive trade surplus in goods with the UK -- £95 billion in 2017, according to the Commons Library briefing. So free trade in goods is massively to Brussels’ advantage. On the other hand the UK has a much smaller surplus in services with the EU -- £28 billion. So an FTA in services would benefit Britain – but far less than the EU’s benefit on goods. Any sensible British negotiator might have said “OK – we’ll talk about an FTA covering goods and services, even though that’s a huge concession on our part, given Brussels’ overall trade surplus with the UK. But you can’t cherry-pick goods, which work in your favour, and exclude services, which work in our favour”.
Perhaps Dominic Raab would like to put this to Mr. Barnier. And while I’m thinking about what we should have negotiated – and should still negotiate -- I have some further suggestions for Dominic Raab.
Northern Ireland: The Prime Minister in a rare moment of lucidity said that no British PM could accept an outcome that created a border in the Irish Sea, or left Ulster partly under an EU regulatory régime, but then she accepted a “back-stop” position which says we accept the special status for Northern Ireland unless we can think of something better in the meantime. I’m sure that Theresa May would argue that she only accepted the back-stop because she was confident that another solution would be found, and she wanted to move forward on other issues. But the message in Brussels is that the back-stop is acceptable (Westminster may take a different view). All Barnier has to do is to reject all other proposals (he’s good at that) and wait for the dismemberment of the United Kingdom.
Northern Ireland is a non-issue that has been weaponised by Brussels – and May has fallen for it. We should now explicitly take the NI back-stop off the table, saying that in no circumstances will we contemplate any proposal that jeopardises the integrity of the UK. Cross border trade between NI and the Republic is small, and can be easily managed by methods that have been proposed and which work elsewhere. The issue cannot be allowed to hold the UK hostage.
£39 billion: We should not have offered any payment in the first place. But as we have, we must be crystal-clear that any “divorce settlement” is absolutely contingent on a fair and satisfactory trade deal. Despite the slogan “Nothing is agreed until everything is agreed”, it seems that Brussels is already building our Danegeld into its budgets. It would be merely courtesy to confirm, for the avoidance of doubt, that the offer is conditional – very conditional.
Legal issues: May promised to give us back control over our own laws, yet her Chequers package – her “Yellow Paper” – leaves us subject to the EU rulebook and ECJ adjudication across much of our economy. This will not do. As Shakespeare put it, “This England … is now bound in with shame, With inky blots and rotten parchment bonds. This England, which was wont to conquer others, hath made a shameful conquest of itself”. This cannot stand. We must be clear that we will make our own laws, and our own regulations, and if the EU wants a free trade deal (as it will), it must talk mutual recognition, not common rules. Otherwise, as President Trump points out, the USA will have to talk trade terms with the EU, not the UK, and we saw where that went last time we tried it, with TTIP.
Immigration: We must be clear that EU citizens will have exactly the same rights on the same criteria as other would-be immigrants. It is intolerable that Commonwealth citizens have poorer rights than EU citizens, that we accept an unskilled Bulgarian ahead of an Indian dentist or a Canadian academic. On the other hand we (and Brussels) should be open to a reciprocal visa-waiver arrangement with our largest trading partner.
External tariffs: Some talk of staying in the EU Customs Union, others of creating a new customs union between the UK and the 27. But either way that means that UK import duties are set by Brussels, undermining a key objective and a key benefit of Brexit. We must have full freedom to set tariffs. We wouldn’t let China or the USA tell us what our tariffs should be – we must not let Brussels do so either.
WTO deal: We have allowed Remainers to build up the “threat” of a no-deal Brexit to absurd proportions, considering that most world trade goes on very well on WTO-related terms. More for us than for Brussels, we must stop speaking of “crashing out” – and challenge MSM commentators when they use the term. Call it breaking free, going global, the WTO option, but not crashing out. Be in no doubt that the WTO option, exit without a trade deal and without a divorce settlement, will cause great distress in Mr. Barnier’s office.
It’s both easy and difficult to write about Brexit right now. Easy because so much is happening that demands comment. But difficult, because of the huge number of uncertainties and possible but unpredictable scenarios. But I should like to draw attention to one road-block (to a deal, though not necessarily to Brexit) which seems to attract little comment. We all know that any deal has to be ratified by Westminster, and also by all the 27 remaining EU member-states. This will be difficult – I foresee many countries raising unrelated issues and demanding action as a price for supporting the Commission’s proposal. Of course Spain will raise Gibraltar, but Hungary and the Visegrad countries may raise immigration, Italy may talk deficit limits, and so on.
It was shocking to see hundreds of Westminster MPs, elected on manifesto commitments to leave the EU and its Customs Union, voting to call for a new customs union with the EU. Shocking, but also deeply ironic, as it is clear that Brussels won’t accept much if anything from the Prime Minister’s “Yellow Paper”, so it is futile for Westminster to agonise over the details of it at this time.
It seems increasingly unlikely that given the current parliamentary deadlock, the government would be able to get any proposal through the House. What, then, is the best that Brexiteers can hope for? We should recall that Barnier has already offered the UK a Free Trade Deal, more or less along Canadian lines. The fly in the ointment is the Irish border; Barnier’s FTA proposal is accompanied by a condition that there be no Irish border, which in his terms means either that Ulster alone stays aligned to the EU (the “Border down the Irish Sea”), or the whole of the UK remains so aligned. Clearly neither of these conditions is acceptable. But leaving that aside, an FTA is what eurosceptics have been demanding for decades.
So – let us hope that we leave on March 29th 2019, with “no deal”, or in other words on WTO terms, which as many commentators, not least Liam Halligan and Roger Bootle have said, should hold no fears for us. We then tell Mr. Barnier that we are ready to talk about a Canada-style deal at any time (and be assured, he will rapidly come under intense pressure from EU industry to do so – the car-makers and wine growers will be lobbying in force). He will raise, again, the NI border issue. We will say that we undertake not to create a hard border – if the EU and/or Mr. Varadkar wish to create such a border, on their own heads be it. But we will press ahead with the “max fac” proposals which have already been tabled.
We also might want our government at least to contemplate the “zero tariff” option recommended by Ambrose Evans-Pritchard. https://www.telegraph.co.uk/business/2018/06/27/way-escape-brexit-debacle-now-rip-trade-barriers/ I should be glad to see the reaction of continental wine-makers if Australian and South American wines came into the UK free of import duty.
So far, Brussels has contrived a situation where all the pressure is (or seems to be) on the UK to make concessions. After a global, WTO-rule Brexit, the pressure will be on Barnier and Brussels to make a deal to protect the EU’s exports to its largest foreign market. And that pressure will be intense.
All views expressed in contributions by named authors are their own and may not reflect the views of The Freedom Association.