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.