Happy days: at last “Global Britain” and its leading advocate Liam Fox have a real benchmark against which to prove themselves. Brexiters have long been boasting of what great trade deals will be done once we leave the EU. Now, the organisation they have derided as useless, protectionist and slow-moving has struck an Economic Partnership Agreement (EPA) with the world’s third- largest economy, Japan, a country with which Britain has an especially close relationship. So it is time for the international trade secretary to step up to the plate.
Parliament should soon demand that Fox explain, in detail, how he expects to beat the EU’s deal with Japan. Saying that Britain will be able to match it will not be good enough: we could have done that simply by staying in the EU. In doing so, we would have saved ourselves the cost of recruiting hundreds of trade negotiators and spared the 1,000-plus Japanese companies that have invested in the UK all the uncertainty and increased transaction costs that will come if Britain leaves the single market and customs union.
Not all the details of the EPA have been released yet. But, based on news reports in both Europe and Japan, the two sides have agreed to:
- Eliminate the EU’s 10% tariff on car imports from Japan over a seven-year transition period while Japan removes barriers to car imports from Europe
- Scrap EU tariffs on electronic goods immediately the EPA comes into force and end the 14% tariff on imports of TVs after five years
- Abolish Japanese tariffs on some foodstuffs from the EU, including pasta and chocolate, over 10 years
- Create a low-tariff import quota for European mozzarella, Camembert and other soft cheeses, to be phased in
- Remove or reduce other industrial tariffs on both sides
- Open up Japan’s public procurement market to European firms
Not bad for an organisation that is supposedly crippled by having to serve the lowest common denominator among its 28, soon to be 27, members. The breakthrough with Japan follows the EU’s completion of a path-breaking trade and investment deal with Canada, another G7 economy, and one with South Korea.
Parliamentarians should demand that Fox not only specify where Britain stands to do better with Japan but also to provide a full list of the countries with which he expects it to leap ahead of its lumbering former EU partners.
The trade secretary could be asked where Britain actually stands in the queue to strike a deal with the US, and what his attitude will be when the US announces its widely expected tariffs on imports of steel, on national security grounds, in coming weeks. What will his view be of US proposals to export more chlorine-washed chicken and hormone-rich beef to our shores?
If he mentions India among his candidates for beneficial deals, Fox can be asked what approach the government intends to take towards Delhi’s demands for a greatly increased number of work visas and to its rather more restrictive approach to imports of whisky than the one Margaret Thatcher successfully negotiated with the Japanese in the 1980s, while Britain was of course an EU member.
Finally, if he dares to bring up the subject of China, Fox can be asked to explain why it is that Germany’s exports to that country are already far larger than the UK’s, despite the absence of an EU-China free trade agreement. Indeed, China has overtaken the US and France to become Germany’s largest trading partner.
Fox could try his old argument that this is because British business is too fat and lazy. That would be a sure-fire way to sour the sweeter relations that the government, chastened by the election, is seeking to establish with business.
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Edited by Alan Wheatley
Oh dear, oh dear, all the Brexit arguments unravelling as we type. Our productivity is lower than anyone in the G7 including the Italians (and probably many others), and now all those countries we were going to do these wonder “free trade” (is there actually such a thing?) deals seem to be dropping off the table faster than Dr Fox can put them there. With German trade rising in all the countries he is so certain he can do “better” deals with, I suspect the threat of a loss of 7% of their car sales to Britain will not be that serious. Add to the misery, the Media damaging our image everywhere, and sowing distrust, and then our legal system is called into question when the Chief Justice suggests that rulings made in the ECJ and taken into our very own “Common Law” should stand.
And then we have one of the Brexit Ministers recorded saying the EU must be “torn down”. No wonder M. Barnier is warning that he is preparing for a British walkout. I suspect he is correct in his assessment that the impact will be very bad for Britain, and bad, but not disastrous for the EU.
I’m left wondering why, if Japan can agree this deal with the eu without being a member of it, why can’t the U.K. Have this same relationship with the eu?
Well this agreement is not even close to being in the single market as it (for example) doesn’t contemplate passporting for financial services nor the elimination of all (yes all) tariffs on all products, or the possibility of setting up your business domiciled in the EU and operate freely in Japan as you would from inside the EU (in terms of all legal requirements, labour costs, etc ..). Besides, politics will get in the way when reaching a UK-EU agreement as the EU has all incentives to play hard on the UK. The later will probably mean that the said agreement will take a long time to negotiate, for example CETA took 7 years. Yes, some EU industries and countries will be affected by the disruption of Brexit, but again, politics will be more important than economic interest; besides, from the rest of the EU perspective, the UK is not as important as an export/import market as a share of the total imports and exports as the EU27 is for the UK.
I am beginning to entertain a serious thought that it would do the UK good if it went to the dogs. It would serve them right. It would a good lesson, a lesson that has been needed for some time now. It would teach those UK idiots who voted for and insisted on Brexit. Yes, learn from your mistakes seems the only way for the UK.