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Thu, 9 April 2020

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The UK needs to be prepared to exploit the extraordinary benefits of global free trade

The UK needs to be prepared to exploit the extraordinary benefits of global free trade
3 min read

The EU needs to recognise the mutual advantage of coming to a comprehensive Free Trade Agreement with a friendly neighbour, says Owen Paterson MP.


Today is, of course, a splendid and significant day in our history. Despite the doom-laden predictions of Project Fear and the torrents of abuse from an ever more radicalised Remainer rump, the determination of Leave voters to see their democratic wishes implemented has won out. We are leaving the EU, honouring the largest democratic mandate ever given in British history. 

From today, the dynamics of our negotiations with the EU change. It is no good the EU continuing its game of making Brexit seem so unpalatable or impossible that we prefer to Remain. Instead, it now needs to recognise the mutual advantage of coming to a comprehensive Free Trade Agreement with a friendly neighbour. 

The advantages for the EU are obvious. The EU’s net goods exports to the UK are over £94bn. The UK economy is bigger than 18 EU Member States combined. It would be ridiculous not to come to a pragmatic arrangement with a neighbour of that size.

The EU must also recognise that the UK has a huge range of options to forge new trading partnerships if the EU chooses to be obstinate. The UK has unique links with a number of important global blocs, from the Anglosphere, CANZUK and the CPTPP, to the Commonwealth whose population exceeds 2.4 billion. There is palpable enthusiasm in the US for a trade deal with the UK. For the UK, tariff-free access to US goods – including food, clothing and footwear – would see prices fall sharply to world prices. Household bills could drop 20 per cent, benefiting all consumers and particularly those on the lowest incomes, many of whom voted Conservative for the first time in December.

For its own sake, therefore, it is vital that the Government pursues the US and other deals as a priority. The benefits to consumers could be tangible and immediate.

But that approach would also be an important wake-up call for the EU. If prices in the UK come down to world prices, the EU will have to match them or put its trade surplus in serious jeopardy. Why would UK consumers continue to buy European goods at inflated prices when cheaper, high-quality alternatives are available elsewhere?

It remains to be seen whether that pragmatism will emerge in the weeks ahead. I hope it does and, if so, I look forward to the zero-tariff, zero-quota Free Trade Agreement which ensues in all our best interests. But if it does not, then the UK needs to be fully prepared to exploit the extraordinary benefits of global free trade with bold, enduring and prosperous relationships across the world.

 

Owen Paterson is Conservative MP for North Shropshire. He was Secretary of State for Northern Ireland between 2010 and 2012, and for DEFRA between 2012 and 2014.

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