Ninety per cent of global economic growth will come from outside the EU in the years ahead and the EU now accounts for less than half of the UK’s overall trade. So our future trade deal with the EU must allow us to strike out and form fruitful relationships with these emerging powerhouses of the global economy.
Nevertheless, we have a strong established trading relationship with Europe and it makes sense for both sides for it to continue in as seamless a manner as possible. Our partners in Europe are our closest trading partners and we need to build a solid foundation for future trade and prosperity for the benefit of all UK and EU citizens.
Today, we are getting a glimpse of what the future economic partnership with the EU could look like. International trade policy experts, led by Shanker Singham, have drafted a proposed Comprehensive Free Trade Agreement (FTA) between the UK and the EU. It promises to be the most advanced and liberalising FTA ever developed – and the first serious attempt to put the detailed future economic relationship between the EU and UK on paper.
The Withdrawal Agreement is just the first part of the Brexit negotiations. Once we leave the EU on 29th March, trade talks begin. So it’s important we start to show the public what a comprehensive, advanced FTA looks like – and what its benefits are.
As a businessman, I can only full engage with something when I can see what it is. The publication of a draft FTA today gives me, and every other business person, the opportunity to examine how it would impact on their business – and what changes, if anything, they’d like to see. This is a conversation that starts today.
We’re all so used to being within the EU’s Customs Union and Single Market arrangements that we’ve forgotten what having an independent trade and regulatory policy might look like in practice.
I often hear people bemoaning the fact that trade deals can take years to negotiate, but we’ve got to remember that the parties to this particular trade deal are in a unique position: the UK and EU start with zero tariffs and no quantitative restrictions, which eliminates the most contentious and time-consuming aspects of trade agreements.
Importantly, this FTA builds on the EU’s original offer of a comprehensive FTA with the entirety of the United Kingdom. It reduces trade and regulatory barriers, including behind the border barriers, minimises disruption to businesses and consumers across Europe and the UK and, just as importantly, preserves the UK’s ability to strike trade deals around the world and to make changes to domestic regulation.
It will allow us to negotiate a UK-US FTA, to join the Comprehensive and Progressive Trans Pacific Partnership (CPTPP), a new international trade grouping of 11 countries, including the major economies of Japan and Canada.
This FTA is based in large part on agreements the EU has already concluded with third countries including, for example, CETA (between Canada and the EU); the Japan-EU Trade Agreement; the EU-New Zealand Meat Products Agreement; and the US-EU Insurance Covered Agreement – as well as EU commitments in the WTO, OECD and other international organisations.
The Free Trade Agreement between the UK and the EU promises to be the most comprehensive in scope and depth ever developed, making it a firm foundation for the future economic relationship with our nearest neighbours. My hope is that business engages positively in this important debate about our future prosperity.
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