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Mythbust

There’s no free trade zone from Iceland to Turkey

by Sam Ashworth-Hayes | 03.05.2016

Myth: There is a “European Free Trade Zone” which stretches “from Iceland to Turkey”.

InFact: Countries like Albania get only second rate access to the single market, which the Leave camp wants us to quit.

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Vote Leave supremo Michael Gove has a message for the British people: Don’t worry about the scary Remain talk about damage to trade, because there will be no damage. Britain will stay in the “European Free Trade Zone” which stretches “from Iceland to Turkey”.

“All European nations have access” to it, Gove assures us, and “after we vote to leave we will remain in this zone”. Only Belarus sits outside of this happy grouping.

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There is indeed a trade bloc, mostly free of barriers, that stretches from Iceland in the North West to the Russian and Turkish borders in the East. It’s called the single market, and it’s the construct that Gove wants us to leave.

Outside this single market, there are a few countries mentioned by Gove, such as Albania, Bosnia, Serbia and Ukraine, that enjoy largely tariff-free trade..  But tariff-free does not mean “barrier-free”. There are still regulatory barriers to trade, and costly rules-of-origin procedures to be followed.

Most importantly, tariff-free trade in goods does not mean liberalised trade in services. That is limited to the members of the single market. Countries on the outside are not so lucky; Switzerland does not have a passport for its banks, and has limited access to the single market for services. The same goes for Albania. Turkey has no special access at all.

This article is an adaptation of a piece that previously appeared on InFacts.

Edited by Geert Linnebank

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