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Tuesday, October 15, 2019

How Johnson's free trade deal is bad for the UK

Over in the Independent, Sean O'Grady argues that Boris Johnson's mooted free trade with the EU will add significant bureaucratic burdens on business, and inevitably lead to lower competitiveness, less trade, fewer jobs and less investment. It is effectively a hard Brexit.

He says that a free trade agreement expressly does not mean that the UK retains all of the free frictionless access it currently enjoys. The ability for businesses to transport goods across Europe unimpeded and of professional people to practise anywhere within the EU without having to secure new qualifications, will all disappear:

The only guaranteed outcome is that the goods made in Yorkshire would be free of any tariffs (import taxes) or quotas on their importation to any of the EU’s 27 remaining member states. That’s it. Some goods now flowing freely would be prohibited if they failed to meet EU type approval, or failed “rules of origin” tests (eg if they were, in reality, say 90 per cent American or Chinese in value) or otherwise were discriminated against by the EU (assuming it is lawful under global trade rules).

The British architect, meanwhile, would have to obtain an additional professional qualification in, say, Ireland to practise across the EU. He or she might lose the right to residence and healthcare in an EU state, or to live in one country and work in another. There would be delays at borders, more red tape, more costs and more incentive for businesses to operate inside the EU and outside the UK rather than attempt the hazardous business of trying to cross so many barriers for their goods and services the pan-European staff who help to make them.

So that is why, in reality, the cuddly-sounding free trade deal would make life far harder for British businesses and workers, and is not at all the equivalent of free access to European markets, as was promised by at least some of the proponents of Leave during the 2016 referendum campaign, and since. It would not be as tough as trading on World Trade Organisation (WTO) terms, as some no-dealers argue for; but in all other respects the UK would be deprived of instant frictionless access to the largest single market for goods and services on the planet, one approximately 10 times larger than the UK. It may or may not be worth it to “take back control” over sovereignty – money, borders, immigration and courts – but that is the essence of the choice.

This deal will be a disaster for the UK economy and for business and should be voted down. We cannot secure a better deal that we have at present.
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