FORGET NEW TRADE DEALS FOR YEARS, SAYS DAVID DAVIS
Brexit Secretary surrenders the main economic benefit of Brexit
On Friday, David Davis gave a speech to the US Chamber of Commerce. He had flown to Washington direct from Brussels, following his negotiation ‘wrap-up’ press conference with the EU’s Michel Barnier.
David Davis clearly stated that the UK would not be able to implement any new trade deals for years after the UK leaves the EU.
We ran the speech live-streamed on our site, because politicians often say much more in a foreign country than they would ever say at home – particularly in off-scripted answers to questions after the speech. This proved to be the case.
We commented at the time, but no mainstream news organisation picked up the story, so here we are laying everything out very clearly. It’s important.
Mr Davis was asked about the timetable and practicalities of the UK having a free trade deal with the United States. Here is his answer, in verbatim form, and then translated into simpler written English.
David Davis Verbatim:
“What happens if we end up here with what I call an implementation period, other people call transition phases and so on? What I would say to you is my expectation is that we would not have an implementation into force during a transition period or during an implementation period, because that would be building a big loophole in Europe’s (sic) common external tariff barrier.
“But we could certainly conclude the negotiation and we could certainly be ready to go on Day One once it’s over, so in timetable terms that’s how it goes. Now that’s not er…. er…. very much out of line with what would be the timetable anyway.
“Between us we’re big, complex economies with huge volumes of existing trade but even bigger volumes of potential trade so you must expect the deal we do to be quite complex and quite extensive, so I don’t think, although it’s a technical limit on it, I don’t think it will actually prove to be a real limit.”
Summarized into plain English:
“No trade deal with the US can start until after the ‘implementation’ or ‘transition’ period, because the EU won’t allow it.”
David Davis and other senior members of the government are all now talking as though a ‘transition’ or ‘implementation’ period is a decision they have taken. In other words, it’s government policy.
Furthermore, from his answer above, it’s clear he has accepted that no trade deals can come into effect until AFTER any transition period of 2-3 years. This means that the trade deals which Dr Liam Fox is working on will not be able to start until 2021-2022.
Last month we analysed one of the Brexit papers which the UK government sent to the EU, called ‘Future Customs Arrangements – A Future Partnership Paper’.
Here is the dramatic highlight from that analysis:
The key problem isn’t what the government’s new document says about customs arrangements. The key problem is what it says about timing.
Here is the most important part to read:-
“Our ultimate customs arrangement will depend on our negotiations with the EU. However, under either approach, both the UK and EU Member States would benefit from time to fully implement the new customs arrangements, in order to avoid a cliff-edge for businesses and individuals on both sides. The Government believes a model of close association with the EU Customs Union for a time-limited interim period could achieve this. It would help both sides to minimise unnecessary disruption and provide certainty for businesses and individuals if this principle were agreed early in the process. The Government would need to explore the terms of such an interim arrangement with the EU across a number of dimensions. The UK would intend to pursue new trade negotiations with others once we leave the EU, though it would not bring into effect any new arrangements with third countries which were not consistent with the terms of the interim agreement.”
THIS ISN’T BREXIT, IT’S CARRYING ON WITH THE EU
IT MEANS NOT BEING ABLE TO TRADE FREELY WITH THE REST OF THE WORLD
IT MEANS ALL OF THE PAIN AND NONE OF THE GAIN
SO, TRADING FREELY WITH THE REST OF THE WORLD ON BREXIT?
The government’s position paper to the EU says NO.
The Secretary of State for Leaving the EU says NO.
It appears to be the current government policy to surrender the main economic benefit of Brexit, for many years.
We happen to think this is one of the more serious stories we’ve run in the last couple of months. And yet we suspect it might not be widely read.
The ability for the UK to strike its own trade arrangements with countries globally is one of the big benefits of leaving the EU. These countries are queueing up.
How on earth can the UK government talk so glibly as if it’s now a fait accompli that we have to wait until the end of some yet-to-be-determined transition period after 2019?
We genuinely do not believe that people yet realise that this is the government’s policy. Our editor was even speaking to a very senior pro-Brexit politician the other day, who did not think that this had been agreed.
We offer a simple challenge. If any member of the government would like to show how we have got this wrong, we will happily publish their answer in full. We would love to be proved wrong on this.
Final point: we really would like to support the government fully in its discussions and negotiations to secure a clean, efficient Brexit. We do not publish very many critical stories at all, but this is one where we feel we must speak out. What do you think?