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1960s show post-Brexit trade deals won’t be easy

by David Hannay | 12.04.2016

Supporters of Britain leaving the EU are pretty coy about the trade relationships we would be able to build up from outside, perhaps because they cannot agree amongst themselves what they want. But they do assert with the greatest conviction that it would be alright on the night. With the rest of the EU we would be like kittens in a basket with free trade assured, third countries would rush to do deals with us, our role in the world would be enhanced not damaged.

The experience of the 1960s, the last decade when Britain operated on its own, is hardly encouraging. We tried then to negotiate a European free trade area instead of joining their customs union and were rebuffed. We tried to cooperate on sectoral issues like patents and went round and round in circles getting nowhere. In the big multilateral trade negotiation, the Kennedy Round we had to hover outside the door as the deals were cut between the main players (the US, the EEC and Japan) and then had to accept those deals with little chance to alter them. And that was a Britain responsible for a higher proportion of world trade and the world economy than it is now.
Fast forward to 2016. Is it really likely that 27 EU member states, themselves considerably damaged by our decision to leave and extremely anxious not to encourage their own Eurosceptics, would hand us a free trade agreement tailor-made to our requirements? And why should third countries many of them already negotiating free trade deals with the EU, the largest single market in the world, give any kind of priority or special treatment to a medium-sized, mature economy which could no longer offer them a gateway into the EU and which had just spurned their advice to stay in the larger grouping?

No doubt this kind of assessment will be dismissed as yet another example of Project Fear. It is not. It is simply the sort of risk analysis which any company or other institution would carry out before even contemplating a fundamental shift in its business model. What makes the Brexiteers think they are exempt from that..

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Edited by Hugo Dixon