Eurosceptics blithely say that one of the advantages of quitting the EU is that Britain could negotiate free trade deals with the rest of the world. But a cool examination of the interests of our main potential trading partners suggests it wouldn’t be easy to nail down new deals. In fact, we’ d be worse off in each case.
Item 1: The US is currently negotiating the TTIP with the EU. Its trade representative has said it wouldn’t be keen on pursuing a separate free trade deal with Britain if we quit the EU. Too much trouble with Congress.
Item 2: Brazil. The EU is currently negotiating with Mercosur, which includes Argentina as well as Brazil. If the UK tried to go it alone, Argentina would put the Falkland Islands back on the agenda. Without that, there would be no deal.
Item 3: Canada, South Korea and Mexico. The EU has free trade deals here, so the UK would have to play catch-up, which could take many years.
Item 4: India and Japan. The EU is negotiating with them already. An independent UK would have to play catch-up here too, to get nothing more, possibly less.
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Item 5: Developing African, Pacific and Caribbean countries. The EU has preferential trade and aid deals with 79 of them, including former UK colonies. Britain would have a complex task of catch-up here with many small countries.
Item 6: Australia and New Zealand. Both are negotiating with the EU. This would be their priority rather than a UK solo deal. So another catch-up prospect.
Item 7: Russia. It wants recognition for its pet Eurasian (customs) Union, and wants a mere opening of negotiations for prestige. But Russia is deeply protectionist and does not do free trade with any major economy. So there’s no deal here for either the UK or the EU.
Item 8: China. The EU is currently negotiating an investment agreement. This might be followed by a free trade agreement. But there are major problems for either the EU or the UK alone: the huge importance of state controlled enterprises with murky subsidisation practices; and overcapacity in key industries, notably steel as we can see already. The UK alone would be much less able to take a tough line over these issues. Better maybe not be alone in the room with China.
The above analysis doesn’t even include Britain’s most important trading relationship, with the EU itself. That accounts for nearly half our trade. The UK would struggle to maintain full access to its single market if we quit the EU.
Overall, if one looks at trade, the choice between remaining in the EU or leaving is a no-brainer.
Michael Emerson is an associate senior research fellow at the Centre for European Policy Studies.
Edited by Hugo Dixon