Today I appeared on Inside Politics on Sky News. The interview was about Brexit and focused on No Deal.
‘No Deal’ is not to be feared. The key aspect to making it work is to have prepared fully for it. This is crucial for both the government and the business world.
A ‘No Deal’ needs to be divided into the trade component and the non-trade component. The preparatory work should include mutual recognition agreements and statutory instruments. Currently the scale of preparation by the government is opaque.
That being said trading under World Trade Organisation rules governs our trade with 112 countries. It also governs much of global trade. Although trade deals can, naturally, remove any frictions – tariff or otherwise, it must be remembered that one does not need a trade deal to trade, but needs a product or service others wish to buy.
We can apply our existing EU schedules to begin with.. Thus initially we can adopt existing tariff structures. Meanwhile those firms that wish to access the single market can still do so, as access is not granted by the EU but available to all countries. The terms under which the UK will do so in the future is still to be determined.
There are existing legal international agreements – particularly on trade – that will help us trade under a ‘No Deal’. Examples include the WTO Trade Facilitations Agreement and the WTO Technical Barriers to Trade Agreement. In contrast the proposed UK Withdrawal Agreement has one-sided EU legal agreements that will constrain us.
On Inside Politics I outlined the challenge with the present proposal – it is wrong to call it a deal . It is a divorce settlement. It will limit our future room for manoeuvre on domestic economic and financial policy and in our ability to deepen our trading relationships across the globe. It will ensure the UK is a rule taker in terms of the future relationship with the EU.
Overall it will constrain our future sovereignty.